Earn-Out. (a) Promptly following the finalization of Parent’s audited financial results for the year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt of the Earn-Out Notice, Seller (and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount. (b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitrator.
Appears in 1 contract
Earn-Out. (a) Promptly following As promptly as practicable after the finalization first and second anniversaries of Parent’s audited financial results for the year ended on December 31, 2021 last day of the calendar month that includes the Closing Date (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earneach 12-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the month period immediately prior to each such date being herein referred to as an “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt of Period,” the Earn-Out Notice, Seller (and Period ending on such first anniversary being herein referred to as the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s “2009 Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM Period” and the Earn-Out Determination, which shall become final and binding Period ending on such second anniversary being herein referred to as the Parties. If Seller does not agree that the “2010 Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 thirty (30) Business Days thereafter, the Purchaser shall deliver to the Sellers’ Representative a certificate signed by the Chief Financial Officer or similar officer of the Purchaser setting forth the Gross Profit with respect to the Diagna Customers for the relevant Earn-Out Period (the “Earn-Out Statement”). Each respective Earn-Out Statement shall be prepared based upon amounts used in preparation of the unaudited income statement of the Purchaser as of the last day of the appropriate Earn-Out Period, which such unaudited income statement shall be prepared in accordance with GAAP (as in effect on the Closing Date) applied consistently with the unaudited income statement of the Company for the period ending March 31, 2008.
(b) Within thirty (30) days after receipt of each Earn-Out Statement (the “Earn-Out Objection Period”), the Sellers’ Representative by written notice to the Purchaser may object to any items shown thereon, setting forth in such notice (the “Earn-Out Objection Notice”) the Sellers’ Representative’s objection in reasonable detail and the Sellers’ Representative’s proposal or proposals with respect to the calculation of any items shown thereon. Within twenty (20) days following timely delivery of the PartiesEarn-Out Objection Notice, the Purchaser and the Sellers’ referral Representative shall attempt, in good faith, to resolve all disputes between them concerning the Earn-Out Objection Notice. If the Purchaser and the Sellers’ Representative cannot resolve such disputes within such twenty (20) day period, then all disagreements will be submitted for resolution to the Independent Accountant. Purchaser and Seller shall each furnish Promptly, but not later than twenty (20) days after the dispute has been submitted to the Independent Accountant such work papersAccountant, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items determine (based solely on presentations by the applicable definitions and other terms in this Agreement Sellers’ Representative and the presentations by Purchaser and Sellerto the Independent Accountant, and not by independent review. The ) only those items in dispute and will render its report as to its resolution of the dispute such terms and resulting calculations of the items set forth in such Earn-Out Statement. In determining each disputed item, the Independent Accountant may not assign a value to such item greater than the greatest value for such item claimed by either party or less than the lowest value for such term claimed by either party. For the purposes of the Independent Accountant’s calculation of the Gross Profit, the amounts to be included shall be the appropriate amounts from such Earn Out Statement as to items that are not in dispute, and the amounts determined by the Independent Accountant shall be final and binding on as to items from the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear Objection Notice that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party are submitted for resolution by the Independent Accountant. In The Sellers’ Representative and the event Purchaser shall cooperate with the Independent Accountant in making its determination and such determination shall be conclusive and binding upon the parties hereto. The costs and fees related to such determination by the Independent Accountant, including the costs relating to any negotiations with the Independent Accountant with respect to the terms and conditions of any court proceedings arising out such Independent Accountant’s engagement, will be paid by the Purchaser and the Sellers on an inversely proportional basis, based upon the relative portions of the amounts in dispute that have been submitted to the Independent Accountant for resolution that ultimately are awarded to each of the Purchaser and the Sellers (e.g., if $100,000 is in dispute, and of that amount the Independent Accountant awards $75,000 to the Purchaser and $25,000 to the Sellers, then the Purchaser will be responsible for 25%, and the Sellers 75%, of the costs and fees of the Independent Accountant).
(c) If the Sellers’ Representative does not deliver an Earn-Out Objection Notice during the Earn-Out Notice Objection Period, then the prevailing party Sellers shall be entitled deemed to recover its attorneyshave accepted the Earn-Out Statement for the relevant Earn-Out Period. The Earn-Out Statement, either (i) as accepted by the Sellers’ fees Representative pursuant to the preceding sentence, (ii) as agreed to by the Purchaser and other costs incurred the Sellers’ Representative, or (iii) as adjusted by the Independent Accountant pursuant to the Section 2.03(b), will be final and binding and will be referred to as the “Final Earn-Out Statement” for the relevant Earn-Out Period (the Final Earn-Out Statement for the 2009 Earn-Out Period being herein referred to as the “2009 Final Earn-Out Statement” and the Final Earn-Out Statement for the 2010 Earn-Out Period being herein referred to as the “2010 Final Earn-Out Statement”).
(d) For the ▇▇▇▇ ▇▇▇▇-▇▇▇ Period, within fifteen (15) days following the delivery of the 2009 Final Earn-Out Statement, the Purchaser will pay to the Sellers, as an adjustment to the Purchase Price, the amount, if any, payable based on the 2009 Gross Profit as set forth in the 2009 Final Earn-Out Statement determined in accordance with Annex III attached hereto (the “2009 Earn-Out Payment”).
(e) For the ▇▇▇▇ ▇▇▇▇-▇▇▇ Period, within fifteen (15) days following the delivery of the 2010 Final Earn-Out Statement, the Purchaser will pay to the Sellers, as an adjustment to the Purchase Price, the amount, if any, payable based on the 2010 Gross Profit as set forth in the 2010 Final Earn-Out Statement determined in accordance with Annex IV attached hereto (the “2010 Earn-Out Payment”).
(f) All payments made to the Sellers by the Purchaser pursuant to Section 2.03(d) and Section 2.03(e) (collectively, the “Earn Out Payments”) shall be made by wire transfer of immediately available funds to the Purchase Price Bank Account (to be distributed by the Sellers’ Representative among the Sellers in accordance with each such Seller’s Applicable Percentage of such amount).
(g) Notwithstanding anything else herein to the contrary, in no event shall the aggregate payments by the Purchaser pursuant to this Section 2.03 exceed a maximum of $1,100,000.00 for any Earn-Out Period or $2,200,000.00 in the aggregate for both Earn-Out Periods.
(h) During the Earn-Out Objection Period and while any dispute that is the subject of an Earn-Out Objection Notice is pending, the Purchaser shall (i) provide to the Sellers’ Representative and his authorized representatives reasonable access during normal business hours to the books, records and employees of the Company, the Purchaser, and each Affiliated Medical Practice and (ii) cooperate with reasonable requests of the Sellers’ Representative and/or his authorized representatives with respect to information requested by them in connection with such proceedingstheir review of the amounts set forth in the Earn-Out Statements (including, without limitation, by providing on a timely basis copies of the Purchaser’s work papers used in the calculation of the amounts set forth on the Earn-Out Statement).
(i) Within fifteen (15) days after the end of each calendar month during the 2009 Earn-Out Period and the 2010 Earn-Out Period, Purchaser shall provide Sellers’ Representative with a statement showing a good faith estimate of (i) the amount of Gross Profit earned during the prior month and (ii) the cumulative Gross Profit earned during the applicable Earn-Out Period. For the avoidance of doubt, the Independent Accountant Such statement shall act as an expertbe provided for informational purposes only, and shall not be deemed an acknowledgment or admission of the accuracy of the calculations set forth thereon or otherwise be construed as a waiver of the Purchaser’s right to deliver an arbitratorEarn-Out Statement that differs from such statement or the Sellers’ Representative’s right to object to the calculation of the amounts set forth in any Earn-Out Statement or any other rights of the Purchaser or the Sellers’ Representative.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Virtual Radiologic CORP)
Earn-Out. (a) Promptly following the finalization of Parent’s audited financial results As additional consideration for the year ended on December 31Company Membership Interests, 2021 Buyer shall pay (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”cause to be paid) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt of the Earn-Out Notice, Seller (Amount if and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedingsearned. For the avoidance of doubt, in no event shall the Independent Accountant Earn-Out Amount exceed $5,000,000 and in no event shall act more than one payment of the Earn-Out Amount be payable to Seller.
(b) Within forty-five (45) days after completion of the audited financial statements of Buyer and its Subsidiaries for the fiscal year ending December 31, 2026, Buyer shall deliver to Seller a statement (the “Earn-Out Statement”) setting forth in reasonable detail (i) the 2026 Contribution Profit and (ii) the Earn-Out Amount, if any. The Earn-Out Statement shall be subject to the same dispute resolution mechanism as if it was the Closing Statement, with the same timelines and procedures contained in Section 2.5, applied mutatis mutandis.
(c) Buyer shall promptly (but in any event within ten (10) Business Days following the final determination of the Earn-Out Amount) pay, by wire transfer of immediately available funds, to Seller the Earn-Out Amount (as finally determined). The Seller intends to report the Earn-Out Amount using the installment method. All payments pursuant to this Section 2.8 shall be treated as an expertadjustment to the Purchase Price for all foreign, federal, state and local income Tax purposes to the extent permitted under applicable Law.
(d) During the Earn-Out Period:
(i) Buyer and its Affiliates shall not as an arbitratorintegrate the Business into any other business of Buyer or its Subsidiaries without the prior written consent of M▇. ▇▇▇▇▇; provided, that B▇▇▇▇ and M▇. ▇▇▇▇▇ may discuss the transition of certain products to the Company’s manufacturing facilities, any such arrangement to be set forth in a Transition Agreement; and (ii) Buyer shall not take any actions with the primary intent or purpose of reducing or avoiding the Earn-Out Amount payable to Seller. Notwithstanding the foregoing, during the Earn-Out Period, Buyer shall not, without the prior written consent of M▇. ▇▇▇▇▇, cause or permit the Company to incur marketing expenses in excess of $2,594,682.00.
Appears in 1 contract
Sources: Securities Purchase Agreement (Laird Superfood, Inc.)
Earn-Out. Seller shall be entitled to receive the Earn-Out Amount, as finally determined in accordance with this Section 1.6, if any, as deferred payment of additional Purchase Price, pursuant to the terms and conditions set forth below:
(a) Promptly following No later than January 31, 2014, Buyer shall prepare and deliver to Seller a report (the finalization “Proposed Earn-Out Determination Report”), together with reasonable supporting documentation, setting forth the calculation as of Parent’s audited financial results for the year ended on December 31, 2021 2013 of the total Monthly Recurring Revenue from (i) the existing customers of the ITO Business listed on Schedule 1.6(a) hereto (such customers and their successors and permitted assigns, collectively the “Existing Customers”), (ii) any services Seller or any of its Affiliates purchase directly from Buyer or its Affiliates for use by Seller or any of its Affiliates, (iii) Seller or any of its Affiliates’ resale of services of Buyer or its Affiliates from and after the date of this Agreement pursuant to that certain Master Services and Reseller Agreement, by and between Savvis Communications Corporation and Seller, dated July 14, 2011 (the “Measurement DateMSRA”), and in (iv) the Monthly Recurring Revenue of Buyer under the Subcontract; provided that any event no later than April 30, 2022, Purchaser Monthly Recurring Revenue related to Existing Customers that is included under clause (i) shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred only be included for purposes of clause (the “Earn-Out Determination”i) and shall provide written notice not duplicated for purposes of such determination to Seller, which notice shall include the Realized CM clause (as defined below) (the “Earn-Out Notice”iii). Upon receipt of the Earn-Out Notice, Seller (and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to shall have ninety (90) days (the amount “Review Period”) following receipt of the Realized CM or Purchaser’s Proposed Earn-Out Determination within 30 days following Purchaser’s delivery Report during which to notify Buyer of any dispute of any item (the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct “Disputed Item”) contained in such Proposed Earn-Out Determination Seller Report, which notice shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing identify each Disputed Item and set forth in reasonable detail the nature of the disagreement asserted), and all undisputed amounts basis for Seller’s dispute with respect to such calculation shall thereupon become bindingDisputed Item (the “Objection Notice”). During the Review Period, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve its respective representatives, including their accounting advisors (collectively, “Seller and Seller’s Advisors”) shall have reasonable access during normal business hours (and until such disputes within 30 days after time as the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Proposed Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve Report is deemed the disputed items within the Final Earn-Out Reconciliation PeriodDetermination Report pursuant to this Section 1.6), to all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicablerecords, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, working papers and other documents and information relating to the unresolved disputed items Proposed Earn-Out Determination Report and its preparation. Such access shall include, but not be limited to, any such records, working papers and other information prepared by accountants and other advisors to assist Buyer in the preparation or review of the Proposed Earn-Out Determination Report (provided that Seller and Seller’s Advisors agree to customary and reasonable confidentiality restrictions with respect thereto) and, where reasonable, the right to take copies of all such documentary material, along with such other information and assistance as the Independent Accountant Seller and Seller’s Advisors may reasonably request, including access to Buyer’s employees and advisors. The Independent Accountant To the extent Seller and Seller’s Advisors require access to Buyer’s employees, advisors and premises for such purpose, Seller and Sellers’ Advisors shall resolve the disputed items based solely on the applicable definitions and other terms first contact Jens Teagan, Vice President of Corporate Development at Savvis Inc. or his designate or as otherwise directed in this Agreement and the presentations writing by Purchaser and Seller, and not by independent reviewcoordinate such access with him or her. The resolution of At any time during the dispute and resulting calculation by the Independent Accountant shall be final and binding on the PartiesReview Period, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party Seller shall be entitled to recover agree with any or all of the items set forth in Proposed Earn-Out Determination Report. To the extent Seller believes, at any time during the Review Period, that Buyer has failed to fulfill its attorneys’ fees disclosure and other costs incurred access obligations under this Section 1.6(b), Seller may bring an Action against Buyer seeking equitable remedies (including specific performance or injunctive relief) in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitrator.accordance with
Appears in 1 contract
Sources: Asset Purchase Agreement (Ciber Inc)
Earn-Out. (a) Promptly following As part of the finalization of Parent’s audited financial results for the year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022Purchase Price payable hereunder, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred pay to Seller $3,000,000 (the “Earn-Out DeterminationPayment”) and in cash as an earn-out payment to be determined as follows:
(a) The Earn-Out Payment shall provide written notice be based on the outstanding principal balance (including Poolable Advances) of Mortgage Loans that are issued by the Company into GNMA HMBS pools for securitization of Mortgage Loans for the six-month period ending on December 31, 2013, as set forth on the production reports produced by management of the Company for such period. If the Company issues a number of such determination Mortgage Loans during such six-month period with an aggregate outstanding principal balance (including Poolable Advances) of at least $659,389,000, Purchaser shall pay to SellerSeller $3,000,000 in cash in accordance with Section 3.5(b) below.
(b) No later than 30 days after the end of the period on which an Earn-Out Payment is based or the Closing occurs, which whichever is later, Purchaser will deliver to Seller a notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”)) setting forth Purchaser’s calculation of the outstanding principal balance (including Poolable Advances) of Mortgage Loans that were issued by the Company into GNMA HMBS pools for securitization of Mortgage Loans for the applicable period. Upon receipt If Seller is entitled to the Earn-Out Payment, Purchaser shall make the Earn-Out Payment within 10 Business Days after delivery of the Earn-Out Notice, . If Seller (and is not entitled to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Payment, and Seller disagrees with the Purchaser’s calculation, Seller shall notify Purchaser no later than 15 days after the Earn-Out Notice is delivered of its objections and the basis therefor in reasonable detail. Failure of Seller to notify Purchaser of disagreement with the matters set forth in the Earn-Out Notice within 15 days after delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no be concurrence. If an objection is made, Purchaser and Seller will negotiate in good faith to reach an agreement regarding the matters in dispute. Purchaser shall provide Seller and its Affiliates and their authorized Representatives with reasonable access to the Realized CM relevant books, records, facilities, employees and representatives of the Company reasonably requested by Seller to evaluate and assess the calculation of the Statements, in each case subject to the terms and conditions set forth in Section 6.2. If Seller and Purchaser are unable to resolve such dispute within 30 days, the disputed item(s) shall be submitted to a neutral and impartial, nationally recognized certified public accounting firm. If the report of such accounting firm concludes that Seller is entitled to the Earn-Out DeterminationPayment, which Purchaser shall become final and binding make such payment within 10 Business Days of the issuance of the report, plus interest on such amount from the Parties. If Seller does not agree that date the Earn-Out Notice contains Payment would have originally been required to have been made up to but excluding the correct Earn-Out Determination date on which such payment is made at a rate per annum equal to the Federal Funds Rate as of the Closing Date, calculated on the basis of a year of 360 days and the actual number of days elapsed. Any payment under this Section 3.5(b) shall be made by federal funds wire transfer of immediately available funds to the account(s) of Seller, which account(s) shall be identified by Seller shall promptly (but not later than 30 days after to Purchaser as soon as practicable following the delivery determination of the amount of the Earn-Out NoticePayment.
(c) give written notice Purchaser shall cause the Company to Purchaser of operate in the pre-Closing Ordinary Course, without accelerating or delaying or otherwise deviating in any objections thereto (describing in reasonable detail material respect from the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred historical securitization practices prior to the Independent Accountant. The Independent Accountant shall be directed to render a written report on Closing Date, from the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicableClosing Date through December 31, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g2013.
(d) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubtdoubt and notwithstanding anything to the contrary in this Agreement, (i) Purchaser shall have the Independent Accountant shall act as an expert, and not as an arbitrator.right to set off the amount of any payments owed to Seller pursuant to this Section 3.5 against any indemnification payment owed to a Purchaser Indemnified Party in accordance with Article X.
Appears in 1 contract
Earn-Out. Payment(a)
(a) Promptly As promptly as practicable following the finalization of Parent’s audited financial results for the year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Period (and in no event later than July 31, 2028), the Company shall deliver to Seller a written statement setting forth its good faith calculation of Total Net Sales and whether the Earn-Out Consideration Event has occurred Payment is payable to Seller based on such calculations (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined belowtogether with reasonably detailed supporting calculations) (the “Earn-Out NoticeStatement”). The Earn-Out Statement shall include summary calculation schedules of Total Net Sales for line of Business Products. In the event of any objection and dispute Seller may have with such written statement, such objection and dispute shall be resolved pursuant to, and upon the timing of, the procedures set forth in Section 2.4(b) and Section 2.4(c) as applied to such objection and dispute mutatis mutandis. Upon final agreement on Total Net Sales and the Earn-Out Payment and receipt in writing of wire transfer instructions from Seller in the event of the Earn-Out NoticePayment being payable, Seller the Company shall no later than ten (and 10) Business Days following the date on which the Company receives such wire transfer instructions pay, or cause to be paid the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amountEarn-Out Payment.
(b) If Purchaser does not receive any Upon the written objections from request of Seller, the Company shall as soon as reasonably practicable (but no earlier than one hundred and twenty (120) days following the completion of the 2027 Fiscal Year or 2028 Fiscal Year) provide to Seller a good faith calculation of Net Sales (together with reasonably detailed supporting calculations) with respect to the amount of 2027 Fiscal Year and the Realized CM or Purchaser’s 2028 Fiscal Year.
(c) Notwithstanding anything else herein, the Earn-Out Determination within 30 days following Purchaser’s delivery Payment shall be funded solely from the operating cash flows of the business and operations post-Closing of the Company and in no event shall the Earn-Out Payment be funded from any capital contribution from any direct or indirect investor in Buyer. In no event shall any interest accrue on, or be payable with respect to, any portion of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and Payment.
(d) During the Earn-Out DeterminationPeriod, which Buyer shall become final use commercially reasonable efforts to maximize aggregate Net Sales for the overall Business; provided that in no event shall Buyer or its Affiliates be obligated to (i) make any incremental capital expenditures (including growth or expansion capital expenditures) or contribute additional capital to the Company, (ii) incur any Indebtedness, or (iii) take or refrain from taking any action that would reasonably be expected to adversely impact the profitability of the Business.
(e) Seller acknowledges, agrees and binding understands, on behalf of Seller and Seller’s Affiliates: (i) after the Parties. If Seller does not agree Closing, each Buyer Indemnified Party has the right to operate the Company (and all components of its business) in the manner each of them believe to be prudent and to make any and all decisions with respect to the Company (and all components of its business) that any of them, in their respective sole discretion, believe are reasonable and in the best interests of the Company, including to change the operations and policies of the Company from those conducted or in place prior to the Closing; (ii) subject to compliance with Section 2.9(d) above, no Buyer Indemnified Party is obligated to otherwise operate the Company (or any component of its business) in any manner in order to achieve, increase, or maximize the amount of Net Sales or devote any capital, personnel or other resources in order to do so; (iii) achievement of any amount of Net Sales is speculative, there is no assurance that sufficient Net Sales will be achieved for the Earn-Out Notice contains Payment to be paid, and no Person has promised or projected any amount of Net Sales, nor has any representation or warranty, expressed or implied, been or will be made with respect thereto (all of which and reliance thereon is disclaimed); (iv) nothing in this Agreement will restrict any Person from engaging in any business or opportunity either with or without the correct Earn-Out Determination Seller shall promptly Company or acquiring, entering into joint ventures, investing in or otherwise cooperating with other Persons, including any Competitor or any other Persons that may have interests adverse to or otherwise compete, directly or indirectly, with the Company; (but not later than 30 days after v) the delivery of contingent right to receive the Earn-Out Notice) give written notice to Purchaser Payment, if any, shall not be represented by any form of any objections thereto (describing in reasonable detail the nature of the disagreement asserted)certificate or other instrument, is not transferable, and all undisputed amounts with respect does not constitute an equity or ownership interest in Buyer or any of its Affiliates (including the Company post-Closing); and (vi) neither Seller nor any of its Affiliates shall have any rights as a securityholder of Buyer or any of its Affiliates (including the Company post-Closing) as a result of Seller’s contingent right to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within receive the Earn-Out Reconciliation Payment hereunder.
(f) Upon a consummation of a Sale of the Company occurring in the Earn-Out Period, all unresolved disputed items the Company shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, practicable (but in no event later than 30 days following five (5) Business Days thereafter) pay, or cause to be paid, to Seller the Parties’ referral to Accelerated Earn-Out Payment solely out of the Independent Accountant. Purchaser and Seller shall each furnish to proceeds payable in such Sale of the Independent Accountant such work papers, schedulesCompany, and other documents and information relating upon payment of such Accelerated Earn-Out Amount, neither Buyer nor any of its Affiliates (including the Company post-Closing) shall owe any further obligation or liability to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution Seller or any of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and its Affiliates for any Earn-Out Consideration due shall be paid in accordance with Section 2.9(gOut.
(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined Any information received by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred Seller in connection with such proceedings. For the avoidance performance of doubta party’s obligations pursuant to this Section 2.9 shall be deemed Business Confidential Information, the Independent Accountant shall act as an expert, and not as an arbitratorsubject to Seller’s obligations pursuant to Section 6.17(a)(i).
Appears in 1 contract
Earn-Out. (a) Promptly following The Merger Consideration includes the finalization right to receive contingent consideration, which shall be paid to the Participating Holders (other than holders of Parent’s audited financial results Company Preferred Shares and the holders of Company Warrants), in the manner described in Section 1.6, and at the times and if, and only if, the conditions to such contingent payments described in this Section 1.10 are satisfied.
(b) The Per Share Year 1 Earn-Out shall be paid if, and only if, the Final Bookings for the year ended December 31, 2006 (“CY2006”) are greater than $50 million. The Per Share Year 2 Earn-Out shall be paid if, and only if, the Final Bookings for the year ended December 31, 2007 (“CY2007”) are greater than $100 million. The Per Share Stretch Earn-Out shall be paid if, and only if, the Final Bookings for CY2007 are greater than $135 million.
(c) As soon as practicable, but in any event within forty-five (45) days following the end of each calendar quarter during the period beginning on the Closing Date and ending on December 31, 2021 2007, Parent shall determine the Bookings for such calendar quarter and the year-to-date Bookings as of the end of such calendar quarter (the “Measurement DateQuarterly Bookings Report”), and deliver notice of such determinations, together with worksheets and data that support the Quarterly Bookings Report and summary financial data regarding the financial performance of the Company Business during such periods, to the Stockholder Representative. Each of Parent and the surviving entity of the Upstream Merger shall provide the Stockholder Representative with reasonable access to the personnel and books and records of Parent applicable to the Company Business for the purpose of discussing the Quarterly Bookings Report and reviewing the same. The Stockholder Representative may dispute the amount of Bookings for a calendar quarter reflected in any the Quarterly Bookings Report and, except for the first Quarterly Bookings Report delivered after the Closing Date, not the amount of year-to-date Bookings reflected in the Quarterly Bookings Report; provided, however, that the Stockholder Representative shall have notified Parent in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute, within thirty (30) days of the Stockholder Representative’s receipt of such notice. In the event no later than April 30of such a dispute, 2022Parent and the Stockholder Representative shall attempt to reconcile their differences. If Parent and the Stockholder Representative are unable to reach a resolution within twenty (20) days after receipt by Parent of the Stockholder Representative’s written notice of dispute, Purchaser Parent and the Stockholder Representative shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred submit the items remaining in dispute for resolution to an independent accounting firm to be mutually agreed upon by the parties (the “Earn-Out DeterminationAccounting Firm”), which shall, within thirty (30) and shall provide written notice days of such submission, determine and report to the Stockholder Representative and Parent upon such remaining disputed items, and the determination of Bookings for such period shall be final, binding and conclusive on the Participating Holders, the Stockholder Representative and Parent. The determination of Bookings for a period that has not been challenged, has been reconciled, or has been determined by the Earn-Out Accounting Firm pursuant to Sellerthis Section 1.10 is referred to herein as the “Final Bookings.” The fees and disbursements of the Earn-Out Accounting Firm shall be allocated equally between Parent and the Participating Holders (other than the holders of Company Preferred Shares or Company Warrants therefor) (the portion of such fees and disbursements allocated to the Participating Holders shall be deducted from the contingent consideration to be paid to such holders under this Section 1.10).
(d) Subject to the resolution of any disputes pursuant to Section 1.10(c), which notice the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out and the Per Share Stretch Earn-Out, as the case may be, shall include be paid by Parent in accordance with Section 1.6 within fifteen (15) days after the Realized CM date of receipt by the Stockholder Representative of Parent’s determination of Bookings for the applicable period.
(e) Parent shall have the right, in its sole discretion, at any time prior to January 31, 2008, to make a payment in full of the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out and the Per Share Stretch Earn-Out, or any combination of the foregoing. In the event that Parent elects to do so, upon delivery of the applicable payment in full to the Participating Stockholder having the right to receive the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out or the Per Share Stretch Earn-Out, as defined belowthe case may be, Parent shall have satisfied in full its obligations hereunder in respect of such contingent consideration.
(f) In the event that a Company Sale occurs prior to the determination of Final Bookings for CY2006, Parent shall make payment in full (regardless of the amount of Bookings for CY2006 as of such date) to each Participating Holder of the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out and the Per Share Stretch Earn-Out no later than immediately prior to the effectiveness of such Company Sale. In the event that a Company Sale occurs following the determination of Final Bookings for CY2006 but before the determination of Final Bookings for CY2007, Parent shall, no later than immediately prior to the effectiveness of such Company Sale, pay to each Participating Holder (i) any earned but unpaid amount of the Per Share Year 1 Earn-Out and (ii) the full amounts of the Per Share Year 2 Earn-Out and Per Share Stretch Earn-Out (in each case, regardless of the amount of Bookings for CY2007 as of such date). In the event that a Company Sale occurs following the determination of Final Bookings for CY 2007, Parent shall, no later than immediately prior to the effectiveness of such Company Sale, pay to each Participating Holder any earned but unpaid amount of the Per Share Year 2 Earn-Out and Per Share Stretch Earn-Out. Following payment in full of the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out and the Per Share Stretch Earn-Out, as applicable, in accordance with this Section 1.10(f), Parent shall have satisfied in full its obligations hereunder in respect of such contingent consideration.
(g) During the period (the “Earn-Out NoticePeriod”) commencing on the Effective Time and ending on December 31, 2007 (or such earlier date upon which the Per Share Year 1 Earn-Out, the Per Share Year 2 Earn-Out and the Per Share Stretch Earn-Out have been paid in accordance with this Agreement):
(i) Parent shall, at the reasonable direction of ▇▇▇▇ ▇▇▇▇▇▇ (provided he is employed by Parent or a subsidiary of Parent) or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (provided he is employed by Parent or a subsidiary of Parent). Upon receipt , hire employees for the Company Business and terminate the employment of any employee of the Company Business; provided that such hiring and termination of employment shall be conducted in accordance with (A) the applicable policies and procedures of Parent and applicable law and (B) the operating expense budget for the Company Business set forth in Schedule 1.10(g), which shall be subject to adjustment based on the actual Bookings during the Earn-Out NoticePeriod as follows: at the conclusion of each calendar quarter the JBoss Management Board (as defined in clause (iv) below) will review the operating results of the Company Business and, Seller to the extent Bookings have exceeded the expected Bookings for such period as set forth in Schedule 1.10(g), the JBoss Management Board will determine if an increase in operating expenses is appropriate (the target increase in operating expenses from the amount set forth in Schedule 1.10(g) will be 15% of the amount by which Bookings exceeded the expected Bookings) and to the extent reasonably requestedBookings are equal to or less than the expected Bookings for such period as set forth in Schedule 1.10(g), its Representativesthe JBoss Management Board will determine if a decrease in operating expenses is appropriate (the target decrease in operating expenses from the amount set forth in Schedule 1.10(g) will be given reasonable access upon reasonable notice to Purchaser’s (or 10% of the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to amount by which the information and calculations used to calculate Bookings are less than the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amountexpected Bookings).
(bii) If Purchaser does not receive any written objections from Seller to Parent shall cause (A) the amount employees of the Realized CM Company Business primarily engaged in research and development relating to products and services for the Company Business to report to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (provided he is employed by Parent or Purchasera subsidiary of Parent) and (B) the employees of the Company Business primarily engaged in sales and marketing of products of the Company Business to report to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (provided he is employed by Parent or a subsidiary of Parent);
(iii) Parent shall not establish sales incentive compensation for its sales representatives that is intended to compensate such sales representatives for sales of Parent’s Earn-Out Determination within 30 days following Purchaser’s delivery of products that are competitive with the Company Business’ JBoss product during the Earn-Out Notice Period on terms that are more favorable than the terms on which such sales representatives are compensated for sales of the Company Business’ JBoss products and services;
(iv) ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (provided, in each case, he is employed by Parent or a subsidiary of Parent) and a senior technology employee of Parent (to Seller then Seller be designated by Parent) shall be deemed meet in person or by telephone conference on a quarterly basis, as the “JBoss Management Board,” to have no objection discuss matters related to the Realized CM Company Business;
(v) Parent shall maintain such books and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items records with respect to the applicable calculation and determination Company Business as promptly as practicableshall be reasonably necessary to perform its obligations under this Section 1.10 in all material respects; and
(vi) Subject to Section 1.10(e), but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller Parent shall each furnish to the Independent Accountant such work papersnot sell, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution exchange or dispose of any material asset or assets of the dispute Company Business if the effect of such sale, exchange or disposition would be to materially and resulting calculation by adversely impair the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage ability of the fees and expenses of the Independent Accountant equal Company Business to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitratorachieve Bookings.
Appears in 1 contract
Sources: Merger Agreement (Red Hat Inc)
Earn-Out. Seller shall be entitled to additional purchase consideration of up to Five Hundred Thousand Dollars ($500,000), if earned, as follows:
(a) Promptly following Not later than one hundred twenty (120) days after the finalization end of Parent’s audited financial results for the year fiscal years of Buyer ended on December 31, 2021 (the “Measurement Date”)2002 and 2003, and in any event no later than April 30, 2022, Purchaser Buyer shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt of the Earn-Out Notice, Seller (and deliver to the extent reasonably requestedRepresentative a calculation, its Representativesset forth in reasonable detail, of Buyer's Pre-Tax Profit (hereinafter defined) will be given reasonable access upon reasonable notice for each such fiscal year. Each such calculation is referred to Purchaser’s (or as the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount"PRE-TAX PROFIT CALCULATION."
(b) If Purchaser does not receive any written objections from Seller The Representative shall be entitled to review each Pre-Tax Profit Calculation in order to confirm the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 information reflected therein. The Representative shall complete its review as promptly as possible, but in no event later than fifteen (15) days following Purchaser’s delivery receipt of a Pre-Tax Profit Calculation.
(c) If, within fifteen (15) days (or such shorter period) following receipt by the EarnRepresentative of a Pre-Out Notice Tax Profit Calculation, the Representative objects to Seller then Seller any part thereof, the Representative shall be deemed to have no objection to notify Buyer in writing (the Realized CM and the Earn-Out Determination"OBJECTION NOTICE"), which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing specifying in reasonable detail the nature of the disagreement asserted)objections. If the Representative does not deliver an Objection Notice within such 15-day period, and all undisputed amounts with respect to such calculation Pre-Tax Profit Calculation shall thereupon become binding, be deemed final and conclusive binding. If the Representative does timely deliver an Objection Notice, the Representative and Buyer shall promptly seek to agree upon any disputed matters. If full agreement is not reached within ten (10) business days following the Parties and enforceable in date of the Objection Notice, the parties shall jointly designate a court firm of lawindependent certified public accountants having no past or current affiliation with the Representative, absent manifest error Seller, Buyer or fraud. Purchaser and Seller shall negotiate in good faith any of their respective Affiliates to resolve any disputes and agree upon disputed matters in accordance with this Section and, if the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser parties cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report jointly agree on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 designation of such firm within twenty (20) business days following the Parties’ referral date of the Objection Notice, the parties shall jointly request the American Institute of Certified Public Accountants promptly to designate a firm of independent certified public accountants having no past or current affiliation with the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papersRepresentative, schedulesSeller, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably requestBuyer or any of their respective Affiliates. The Independent Accountant shall resolve firm so designated shall, within thirty (30) days thereafter, determine all unresolved issues between the disputed items based solely on the applicable definitions Representative and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid Buyer in accordance with Section 2.9(g) hereofGAAP, as qualified by the definition of "Pre-Tax Profit" set forth below, and certify in writing the resolution thereof to the Representative and Buyer. PurchaserThe costs and expenses of such firm shall be borne equally by the Shareholders, on the one hand, and the SellerBuyer, on the other hand. The Pre-Tax Profit Calculation, shall bear that percentage of with such changes as are agreed upon between the fees Representative and expenses of the Independent Accountant equal to the proportion (expressed Buyer or as a percentage and so determined by the Independent Accountantindependent accounting firm appointed pursuant to the terms hereof, shall be deemed final and binding. All references in other sections of this Agreement to a Pre-Tax Profit Calculation shall mean such Pre-Tax Profit Calculation as shall have become final and binding in accordance with this Section.
(d) The Earn-Out, if any, to be paid to Seller shall be determined as follows:
(i) If the Pre-Tax Profit for each of the two fiscal years of Buyer ended December 31, 2002 and 2003 is less than zero, Company shall not be entitled to any Earn-Out.
(ii) If the Pre-Tax Profit for Buyer's fiscal year ended December 31, 2002 is greater than zero, Buyer shall pay to the Representative, on behalf of Seller, no later than April 30, 2003, a cash payment equal to thirty-three percent (33%) of such Pre-Tax Profit.
(iii) If the dollar value Pre-Tax Profit for Buyer's fiscal year ended December 31, 2003 is greater than zero, Buyer shall pay to the Representative, on behalf of Seller, no later than April 30, 2004, a cash payment equal to thirty-three percent (33%) of such Pre-Tax Profit.
(iv) Notwithstanding the disputed amounts determined foregoing, in favor of the other party by the Independent Accountant. In the no event of any court proceedings arising out of shall the Earn-Out Notice exceed Five Hundred Thousand Dollars ($500,000) in the prevailing party aggregate.
(e) For purposes of this Section 2.10, with respect to any fiscal year of Buyer, "PRE-TAX PROFIT" shall be entitled to recover its attorneys’ fees mean Buyer's net income from operations before federal, state, local and other costs incurred foreign income taxes, determined in connection accordance with such proceedings. For GAAP, excluding the avoidance effect of doubt, the Independent Accountant shall act as an expert, and not as an arbitrator.following items:
Appears in 1 contract
Earn-Out. (a) Promptly following On or prior to March 31, 2022, Buyer shall (i) deliver or cause to be delivered to Seller (A) the finalization audited consolidated balance sheet of Parent’s audited financial results the Acquired Companies as of December 31, 2021 and the related statements of income, cash flows and stockholders’ equity of the Acquired Companies for the fiscal year then ended (in each case, after giving effect to the Pre-Closing Restructuring as if it had been completed as of December 31, 2020 and including any related notes and the related reports of the independent public accountants), and (B) a statement (the “Earn-Out Statement”) setting forth in reasonable detail (1) the Adjusted Consolidated EBITDA for the fiscal year ended on December 31, 2021 (the “Measurement Date2021 EBITDA”) and (2) its calculation of the Earn-Out Amount (which calculation shall be based on the 2021 EBITDA and otherwise in accordance with the earn-out calculation example set forth on Section 2.6(a) of the Seller Disclosure Schedules), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full (ii) within five (5) Business Days after delivery of the Earn-Out Consideration Event Statement, pay (or Partial cause to be paid) to Seller, by wire transfer of immediately available funds to an account of Seller designated in writing by Seller to Buyer at least two (2) Business Days prior thereto, an amount equal to the Earn-Out Consideration Event has occurred Amount (as determined in accordance with clauses (i) through (iii) of Section 2.6(d) hereof) set forth on such Earn-Out Statement. After delivery of the Earn-Out Statement and other documents contemplated by this Section 2.6(a) to Seller, Buyer shall (i) provide Seller and its Representatives, upon reasonable advance notice, with reasonable access during normal business hours to the books and records (including relevant work papers and other back-up support for each calculation included therein) used to prepare the Earn-Out Statement and the employees and accountants of the Buyer or the Acquired Companies involved in the preparation thereof and (ii) reasonably cooperate with Seller and its Representatives, including the provision on a reasonably timely basis of all information reasonably requested by Seller and its Representatives in connection with their review of the Earn-Out Statement.
(b) In the event that Seller, in good faith, disputes any of the calculations in the Earn-Out Statement, Seller shall, on or prior to the date which is forty-five (45) days following the date on which Buyer delivers or causes to be delivered the Earn-Out Statement and other documents contemplated by Section 2.6(a) to Seller (the “Earn-Out DeterminationObjection Deadline”) ), prepare and shall provide deliver to Buyer a written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) dispute (the “Earn-Out Dispute Notice”), which Earn-Out Dispute Notice shall identify, and provide a reasonably detailed explanation of, the basis upon which Seller has delivered such Earn-Out Dispute Notice. Upon Buyer’s receipt of the Earn-Out Dispute Notice, Buyer and Seller (and shall attempt to resolve in good faith the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or matters contained in the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination Dispute Notice within 30 thirty (30) days following Purchaserafter Buyer’s delivery receipt thereof (the “Earn-Out Resolution Period”). If Buyer and Seller reach a resolution with respect to such matters on or before the final day of the Earn-Out Notice to Seller then Seller Resolution Period, the Earn-Out Statement prepared by Buyer (as modified by such resolution) shall be deemed to have no objection to be the Realized CM and the “Final Earn-Out Determination, which shall become final and binding on Statement” for purposes of the Partiespayment (if any) contemplated by Section 2.6(d). If (i) Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery notifies Buyer in writing of its acceptance of the Earn-Out Notice) give written notice to Purchaser of any objections thereto Statement (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation PeriodAcceptance Notice”), the applicable calculation and resulting Realized CM and ) or (ii) an Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser canDispute Notice is not resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred delivered to Buyer prior to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out expiration of the Earn-Out Notice Objection Deadline, the prevailing party Earn-Out Statement prepared by Buyer shall be entitled deemed to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For be the avoidance “Final Earn-Out Statement” for purposes of doubtthe payment (if any) contemplated by Section 2.6(d) on the earlier of (x) the date on which Buyer receives the Earn-Out Acceptance Notice, the Independent Accountant shall act as an expertif applicable, and not as an arbitrator(y) the expiration of the Earn-Out Objection Deadline.
Appears in 1 contract
Sources: Quotas Purchase Agreement (Compass Minerals International Inc)
Earn-Out. (a) Promptly following As promptly as practicable after the finalization of Parent’s audited financial results for the one year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt anniversary of the Earn-Out Notice, Seller (and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicableClosing Date, but in no event later than ninety (90) days thereafter, Buyer shall deliver to Seller a statement of income (loss) of the Business as operated by Seller, Buyer or its successors or assigns (the “Earn-Out Income Statement”) for the period starting on (x) if the Closing Date occurs on or before the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of such month or (y) if the Closing Date occurs after the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of the month immediately following the Closing Date (the date referred to in (x) or (y), the “Earn Out Start Date”) until the last fiscal day of the month that is twelve months after the Earn Out Start Date (the “Earn-Out Period”), including, without limitation, a calculation of EBITDA (as defined below) for the Earn-Out Period. The Earn-Out Income Statement shall be prepared in accordance with the Accounting Standards applied in a manner consistent with the preparation of the Interim Statements. The portion of such statement covering the year ended December 31, 2006 shall be included in the consolidated financial statements audited by Buyer’s accounting firm. During the Earn-Out Period, Buyer shall use commercially reasonable efforts to operate the Business in the Ordinary Course of Business in a commercially reasonable fashion (including by not taking any action or making any operational changes having the principal purpose of reducing EBITDA) and shall maintain books and records adequate to permit an audit of the Business as a stand-alone division. Without limiting the generality of the foregoing, Buyer agrees and covenants that, during the Earn-Out Period, (i) Buyer will not divert any business opportunity relating to the Products, customers or sales of Products from Buyer to any of Buyer’s Affiliates or other business divisions; (ii) Buyer will continue to manufacture Products so long as, in Buyer’s good faith judgment, sufficient demand exists for such Products (and if Buyer determines that sufficient demand does not exist, Buyer will provide supporting documentation, such as written communication from customers, to that effect), in order to meet such demand; and (iii) all sales of Products, whether effected by Buyer or an Affiliate of Buyer, will be included in the calculation of EBITDA; provided, however¸ that none of the obligations in clauses (i) through (iii) above shall apply to any products of a type that Buyer can demonstrate was manufactured by Buyer or an Affiliate of Buyer prior to Closing.
(b) Following the one year anniversary of the Closing Date, each of Buyer and Seller shall give the other party reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Earn-Out Income Statement. Seller shall have 30 days following the delivery to Seller of the Earn-Out Income Statement during which to provide written notice to Buyer of any dispute of any item contained in the Earn-Out Income Statement (the “Earn-Out Objection Notice”), which notice shall set forth in reasonable detail the basis for such dispute and Seller’s calculation of EBITDA for the Earn-Out Period. If Seller fails to provide an Earn-Out Objection Notice to Buyer within such 30-day period, the Earn-Out Income Statement shall be conclusive and binding on the Parties’ referral . In the event that Seller shall provide an Earn-Out Objection Notice to Buyer within such 30-day period, Buyer and Seller shall cooperate in good faith to resolve the dispute as promptly as possible and agree upon a mutually satisfactory income statement which reflects EBITDA for the Earn-Out Period. If Seller timely provides an Earn-Out Objection Notice to Buyer, and if Buyer and Seller are unable to resolve such objections within 30 days of Buyer’s receipt of the Earn-Out Objection Notice, Buyer and Seller shall submit the items remaining in dispute to the Independent Accountant; provided, however, that the Independent Accountants shall be limited to selecting either the EBITDA amount reflected on Buyer’s Earn-Out Income Statement or the EBITDA amount reflected on the Earn-Out Objection Notice submitted by Seller. Purchaser If issues are submitted to the Independent Accountants for resolution, (A) Buyer and Seller shall each furnish or cause to be furnished to the Independent Accountant Accountants such work papers, schedules, papers and other documents and information relating to the unresolved disputed items issues as the Independent Accountant Accountants may reasonably request. The request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountant shall resolve Accountants any material relating to the disputed items issues and to discuss the issues with the Independent Accountants; (B) Buyer and Seller shall instruct the Independent Accountants to make their determination based solely on such materials presented by Buyer and Seller (i.e., not on the applicable definitions basis of an independent review) and other terms to resolve the dispute with respect to each such specified item and amount in accordance with the Accounting Standards, applied in a manner consistent with the preparation of the Interim Statements, and in accordance with the definition of EBITDA set forth in this Agreement and Agreement; (C) the presentations by Purchaser and Seller, and not by independent review. The resolution determination of EBITDA for the dispute and resulting calculation Earn-Out Period by the Independent Accountant Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon thereafter as practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of the Independent Accountants shall be borne (x) by Seller if the Independent Accountants select Buyer’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Income Statement, or (y) by Buyer, if the Independent Accountants select Seller’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Objection Notice. The Earn-Out Income Statement, either as agreed to by Buyer and Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding on and shall be referred to as the Parties, absent manifest error or fraud and any “Final Earn-Out Consideration due Income Statement” for the respective Earn-Out Period. Any amounts to be paid pursuant to §2.7(d) below shall be paid in accordance with Section 2.9(gwithin fifteen (15) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage days of the fees and expenses determination of the Independent Accountant equal Final Earn-Out Income Statement for such Earn-Out Period.
(c) No objection may be raised and no adjustment may be proposed to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined any entry or item contained in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice Income Statement or the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred calculation of EBITDA (as defined below), except on the grounds that such item or entry is not in connection accordance with the provisions of this Agreement or the Accounting Standards, applied in a manner consistent with the preparation of the Interim Statements, or that such proceedings. item or entry contains a mathematical error.
(d) For the avoidance Earn-Out Period, Buyer shall pay to Seller, as an adjustment to the Purchase Price, in immediately available funds to a United States bank account designated to Buyer by Seller in writing at least two (2) Business Days prior to the date of doubtsuch payment, the Independent Accountant product (the “Earn-Out Amount”) of (i) the excess, if a positive number, of (A) EBITDA for the Earn-Out Period over (B) the Earn-Out Threshold (as hereinafter defined), multiplied by (ii) 5; provided, however, that in no event shall act the Earn-Out Amount exceed $10,000,000. The “Earn-Out Threshold” shall initially mean $5,000,000, subject to adjustment as an expert, and not as an arbitratorprovided below.
Appears in 1 contract
Earn-Out. (a) Promptly following the finalization of Parent’s audited financial results for the year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt of the Earn-Out Notice, Seller (and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly As soon as practicable, but in no event later than 30 ninety (90) days after the last day of the Earn Out Period, the Purchaser shall prepare and deliver to the Shareholders (i) a statement of income of the Company for the Earn Out Period (the "Earn Out Financial Statement"), which shall be reviewed by ---------------------------- the Purchaser's Accountants and accompanied by their report of their review, and (ii) a certificate from the Chief Financial Officer of the Purchaser (the "EBIT ---- Certificate") setting forth in reasonable detail the Purchaser's calculation of ----------- the Company EBIT Amount (as defined on Annex III). The Earn Out Financial --------- Statement shall be prepared in accordance with GAAP applied on a basis consistent with the Annual Financial Statements (to the extent that GAAP was applied properly) and the Company EBIT Amount shall be calculated as set forth on Annex III. The Purchaser and the Shareholders shall use commercially --------- reasonable efforts to confer with one another during the preparation of the Earn Out Financial Statements.
(b) The Shareholders (together with the Shareholders' accountant) shall be entitled to review and, if applicable, object to the Company EBIT Amount for a period of thirty (30) days following the Parties’ referral Shareholders receipt of the Earn Out Financial Statement and the EBIT Certificate. The Company EBIT Amount set forth on the EBIT Certificate shall become final and binding upon the parties hereto on the thirty-first day following delivery of the Earn Out Financial Statement and the EBIT Certificate unless the Shareholders give written notice prior to such date to the Independent AccountantPurchaser of their disagreement with the Company EBIT Amount (an "EBIT Notice of Disagreement"). Any EBIT Notice of Disagreement shall --------------------------- specify in reasonable detail the nature of any disagreement so asserted. If a timely EBIT Notice of Disagreement is received by the Purchaser, then the Company EBIT Amount set forth therein (as revised in accordance with clause (i) or clause (ii) below) shall become final and binding upon the parties hereto on the earlier of (i) the date on which the Purchaser and Seller the Shareholders resolve in writing any differences they have with respect to any and all matters specified in the EBIT Notice of Disagreement, or (ii) the date on which any and all matters in dispute are finally resolved in writing by the Arbitrating Accountants. The date on which the Company EBIT Amount becomes final and binding pursuant to this Section 1.6 is called the "EBIT Final Determination Date". ----------------------------- During the thirty (30) days immediately following the delivery of any EBIT Notice of Disagreement, the Purchaser and the Shareholders shall each furnish seek in good faith to resolve in writing all differences that they may have with respect to the Independent Accountant matters specified in such work papersEBIT Notice of Disagreement. At the end of such thirty (30) day period, schedulesthe Purchaser and the Shareholders shall submit to the Arbitrating Accountants for review and resolution any and all matters that remain in dispute and that were included in any EBIT Notice of Disagreement, as well as its calculation of the Company EBIT Amount, revised as such party deems necessary or appropriate at the time of such submission. The Arbitrating Accountants shall be required to reach a final, binding resolution of all matters that remain in dispute and provide its own calculation of the Company EBIT Amount, whereupon that calculation of the Company EBIT Amount submitted to the Arbitrating Accountants by either the Purchaser or the Shareholders that is closest to the Arbitrating Accountant's calculation thereof shall be the final calculation of the Company EBIT Amount. The Arbitrating Accountant's resolution of such dispute and calculation of the Company EBIT Amount shall be (a) in writing, (b) furnished to the Purchaser and the Shareholders as soon as practicable after the items in dispute have been referred to the Arbitrating Accountants, (c) made in accordance with this Agreement, and other documents (d) conclusive and information relating binding upon the parties to the unresolved disputed items as the Independent Accountant may reasonably requestthis Agreement. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and SellerCompany EBIT Amount, and not by independent review. The resolution of the dispute and resulting calculation as determined by the Independent Accountant Arbitrating Accountants, shall be become final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, parties hereto on the one hand, date the Arbitrating Accountants deliver their final resolution to the Purchaser and the Seller, on Shareholders. The parties hereto shall endeavor in good faith to cause the other hand, shall bear that percentage Arbitrating Accountants to so deliver their final determination within one hundred and eighty (180) days after the date of receipt by the Shareholders of the fees Earn Out Financial Statements and the EBIT Certificate. Each party hereto shall pay his, her or its own fees, costs and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedingsthe discussion and negotiation of any and all disputes that may arise as to the determination of the Company EBIT Amount; provided, however, that the fees and disbursements of the Arbitrating -------- ------- Accountants shall be borne one hundred percent (100%) by the party whose determination of the Company EBIT Amount was not closest to the Company EBIT Amount as determined by the Arbitrating Accountants.
(c) the Earn Out Amount exceed the Maximum Earn Out Amount). For If the avoidance Company EBIT Amount as finally determined pursuant to Section 1.6(b) is less than or equal to the Minimum EBIT Target Amount, then the Earn Out Amount shall be deemed to be zero and neither the Purchaser nor the Shareholders shall have any payment obligation to the other under this Section 1.6. Any payment pursuant to this Section 1.6 shall be deemed to be an increase in the amount of doubtthe Purchase Price and shall be made to the Shareholders in accordance with the percentages set forth on Schedule 1.3, as soon as practicable following the Independent Accountant shall act as an expertEBIT Final ------------- Determination Date, and by the Purchaser's wire transfer of immediately available funds to the account or accounts designated to the Purchaser by the Shareholders in writing not as an arbitratorlater than three (3) Business Days following the EBIT Final Determination Date.
Appears in 1 contract
Earn-Out. (a) Promptly following As promptly as practicable after the finalization of Parent’s audited financial results for the one year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt anniversary of the Earn-Out Notice, Seller (and to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicableClosing Date, but in no event later than ninety (90) days thereafter, Buyer shall deliver to Seller a statement of income (loss) of the Business as operated by Seller, Buyer or its successors or assigns (the “Earn-Out Income Statement”) for the period starting on (x) if the Closing Date occurs on or before the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of such month or (y) if the Closing Date occurs after the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of the month immediately following the Closing Date (the date referred to in (x) or (y), the “Earn Out Start Date”) until the last fiscal day of the month that is twelve months after the Earn Out Start Date (the “Earn-Out Period”), including, without limitation, a calculation of EBITDA (as defined below) for the Earn-Out Period. The Earn-Out Income Statement shall be prepared in accordance with the Accounting Standards applied in a manner consistent with the preparation of the Interim Statements. The portion of such statement covering the year ended December 31, 2006 shall be included in the consolidated financial statements audited by Buyer’s accounting firm. During the Earn-Out Period, Buyer shall use commercially reasonable efforts to operate the Business in the Ordinary Course of Business in a commercially reasonable fashion (including by not taking any action or making any operational changes having the principal purpose of reducing EBITDA) and shall maintain books and records adequate to permit an audit of the Business as a stand-alone division. Without limiting the generality of the foregoing, Buyer agrees and covenants that, during the Earn-Out Period, (i) Buyer will not divert any business opportunity relating to the Products, customers or sales of Products from Buyer to any of Buyer’s Affiliates or other business divisions; (ii) Buyer will continue to manufacture Products so long as, in Buyer’s good faith judgment, sufficient demand exists for such Products (and if Buyer determines that sufficient demand does not exist, Buyer will provide supporting documentation, such as written communication from customers, to that effect), in order to meet such demand; and (iii) all sales of Products, whether effected by Buyer or an Affiliate of Buyer, will be included in the calculation of EBITDA; provided, however ¸ that none of the obligations in clauses (i) through (iii) above shall apply to any products of a type that Buyer can demonstrate was manufactured by Buyer or an Affiliate of Buyer prior to Closing.
(b) Following the one year anniversary of the Closing Date, each of Buyer and Seller shall give the other party reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Earn-Out Income Statement. Seller shall have 30 days following the delivery to Seller of the Earn-Out Income Statement during which to provide written notice to Buyer of any dispute of any item contained in the Earn-Out Income Statement (the “Earn-Out Objection Notice”), which notice shall set forth in reasonable detail the basis for such dispute and Seller’s calculation of EBITDA for the Earn-Out Period. If Seller fails to provide an Earn-Out Objection Notice to Buyer within such 30-day period, the Earn-Out Income Statement shall be conclusive and binding on the Parties’ referral . In the event that Seller shall provide an Earn-Out Objection Notice to Buyer within such 30-day period, Buyer and Seller shall cooperate in good faith to resolve the dispute as promptly as possible and agree upon a mutually satisfactory income statement which reflects EBITDA for the Earn-Out Period. If Seller timely provides an Earn-Out Objection Notice to Buyer, and if Buyer and Seller are unable to resolve such objections within 30 days of Buyer’s receipt of the Earn-Out Objection Notice, Buyer and Seller shall submit the items remaining in dispute to the Independent Accountant; provided, however, that the Independent Accountants shall be limited to selecting either the EBITDA amount reflected on Buyer’s Earn-Out Income Statement or the EBITDA amount reflected on the Earn-Out Objection Notice submitted by Seller. Purchaser If issues are submitted to the Independent Accountants for resolution, (A) Buyer and Seller shall each furnish or cause to be furnished to the Independent Accountant Accountants such work papers, schedules, papers and other documents and information relating to the unresolved disputed items issues as the Independent Accountant Accountants may reasonably request. The request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountant shall resolve Accountants any material relating to the disputed items issues and to discuss the issues with the Independent Accountants; (B) Buyer and Seller shall instruct the Independent Accountants to make their determination based solely on such materials presented by Buyer and Seller (i.e., not on the applicable definitions basis of an independent review) and other terms to resolve the dispute with respect to each such specified item and amount in accordance with the Accounting Standards, applied in a manner consistent with the preparation of the Interim Statements, and in accordance with the definition of EBITDA set forth in this Agreement and Agreement; (C) the presentations by Purchaser and Seller, and not by independent review. The resolution determination of EBITDA for the dispute and resulting calculation Earn-Out Period by the Independent Accountant Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon thereafter as practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of the Independent Accountants shall be borne (x) by Seller if the Independent Accountants select Buyer’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Income Statement, or (y) by Buyer, if the Independent Accountants select Seller’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Objection Notice. The Earn-Out Income Statement, either as agreed to by Buyer and Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding on and shall be referred to as the Parties, absent manifest error or fraud and any “Final Earn-Out Consideration due Income Statement” for the respective Earn-Out Period. Any amounts to be paid pursuant to §2.7(d) below shall be paid in accordance with Section 2.9(gwithin fifteen (15) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage days of the fees and expenses determination of the Independent Accountant equal Final Earn-Out Income Statement for such Earn-Out Period.
(c) No objection may be raised and no adjustment may be proposed to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined any entry or item contained in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice Income Statement or the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred calculation of EBITDA (as defined below), except on the grounds that such item or entry is not in connection accordance with the provisions of this Agreement or the Accounting Standards, applied in a manner consistent with the preparation of the Interim Statements, or that such proceedings. item or entry contains a mathematical error.
(d) For the avoidance Earn-Out Period, Buyer shall pay to Seller, as an adjustment to the Purchase Price, in immediately available funds to a United States bank account designated to Buyer by Seller in writing at least two (2) Business Days prior to the date of doubtsuch payment, the Independent Accountant product (the “Earn-Out Amount”) of (i) the excess, if a positive number, of (A) EBITDA for the Earn-Out Period over (B) the Earn-Out Threshold (as hereinafter defined), multiplied by (ii) 5; provided, however, that in no event shall act the Earn-Out Amount exceed $10,000,000. The “Earn-Out Threshold” shall initially mean $5,000,000, subject to adjustment as an expert, and not as an arbitratorprovided below.
Appears in 1 contract
Earn-Out. (a) Promptly following As part of the finalization of Parent’s audited financial results for the year ended on December 31, 2021 (the “Measurement Date”), and in any event no later than April 30, 2022Purchase Price payable hereunder, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred pay to Seller $3,000,000 (the “Earn-Out DeterminationPayment”) and in cash as an earn-out payment to be determined as follows:
(a) The Earn-Out Payment shall provide written notice be based on the outstanding principal balance (including Poolable Advances) of Mortgage Loans that are issued by the Company into GNMA HMBS pools for securitization of Mortgage Loans for the six-month period ending on December 31, 2013, as set forth on the production reports produced by management of the Company for such period. If the Company issues a number of such determination Mortgage Loans during such six-month period with an aggregate outstanding principal balance (including Poolable Advances) of at least $659,389,000, Purchaser shall pay to SellerSeller $3,000,000 in cash in accordance with Section 3.5(b) below. 18
(b) No later than 30 days after the end of the period on which an Earn-Out Payment is based or the Closing occurs, which whichever is later, Purchaser will deliver to Seller a notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”)) setting forth Purchaser’s calculation of the outstanding principal balance (including Poolable Advances) of Mortgage Loans that were issued by the Company into GNMA HMBS pools for securitization of Mortgage Loans for the applicable period. Upon receipt If Seller is entitled to the Earn-Out Payment, Purchaser shall make the Earn-Out Payment within 10 Business Days after delivery of the Earn-Out Notice, . If Seller (and is not entitled to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Payment, and Seller disagrees with the Purchaser’s calculation, Seller shall notify Purchaser no later than 15 days after the Earn-Out Notice is delivered of its objections and the basis therefor in reasonable detail. Failure of Seller to notify Purchaser of disagreement with the matters set forth in the Earn-Out Notice within 15 days after delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no be concurrence. If an objection is made, Purchaser and Seller will negotiate in good faith to reach an agreement regarding the matters in dispute. Purchaser shall provide Seller and its Affiliates and their authorized Representatives with reasonable access to the Realized CM relevant books, records, facilities, employees and representatives of the Company reasonably requested by Seller to evaluate and assess the calculation of the Statements, in each case subject to the terms and conditions set forth in Section 6.2. If Seller and Purchaser are unable to resolve such dispute within 30 days, the disputed item(s) shall be submitted to a neutral and impartial, nationally recognized certified public accounting firm. If the report of such accounting firm concludes that Seller is entitled to the Earn-Out DeterminationPayment, which Purchaser shall become final and binding make such payment within 10 Business Days of the issuance of the report, plus interest on such amount from the Parties. If Seller does not agree that date the Earn-Out Notice contains Payment would have originally been required to have been made up to but excluding the correct Earn-Out Determination date on which such payment is made at a rate per annum equal to the Federal Funds Rate as of the Closing Date, calculated on the basis of a year of 360 days and the actual number of days elapsed. Any payment under this Section 3.5(b) shall be made by federal funds wire transfer of immediately available funds to the account(s) of Seller, which account(s) shall be identified by Seller shall promptly (but not later than 30 days after to Purchaser as soon as practicable following the delivery determination of the amount of the Earn-Out NoticePayment.
(c) give written notice Purchaser shall cause the Company to Purchaser of operate in the pre-Closing Ordinary Course, without accelerating or delaying or otherwise deviating in any objections thereto (describing in reasonable detail material respect from the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred historical securitization practices prior to the Independent Accountant. The Independent Accountant shall be directed to render a written report on Closing Date, from the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicableClosing Date through December 31, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g2013.
(d) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubtdoubt and notwithstanding anything to the contrary in this Agreement, (i) Purchaser shall have the Independent Accountant shall act as an expert, and not as an arbitrator.right to set off the amount of any payments owed to Seller pursuant to this Section 3.5 against any indemnification payment owed to a Purchaser Indemnified Party in accordance with Article X.
Appears in 1 contract
Sources: Stock Purchase Agreement
Earn-Out. (a) Promptly following Following the finalization Closing, at such time as provided in this Section 2.12, the Pioneer Parties shall pay to the Representative, in accordance with Section 2.12(c), with respect to the Earn-out Period, an amount, if any, calculated as follows (an illustrative calculation of Parent’s the Earn-out Amount is set forth on Schedule C): if the Actual Gross Profit Amount during the Earn-out Period is greater than the Earn-out Threshold, the Pioneer Parties shall pay or cause to be paid to the Representative on behalf of the Company Members and the UAR Holders, in the aggregate, in accordance with this Section 2.12, an amount equal to (such amount, the “Earn-out Amount”) the product of (A) the Maximum Earn-out Amount multiplied by (B) the lesser of (1) one or (2) the Percentage of Target Gross Profit Amount Achieved.
(b) For purposes of determining whether any Earn-out Amount is due to the Company Members and the UAR Holders, no later than thirty (30) days after the issuance and release of the audited consolidated financial results statements for the Company for the fiscal year ended on ending December 31, 2021 (2018, which audited consolidated financial statements shall be prepared in accordance with the “Measurement Date”)Accounting Principles, and in any event no later than April 30, 2022, Purchaser Pioneer Investment shall determine whether or not deliver to the Representative a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred written statement (the “Earn-Out Determinationout Statement”) setting forth in reasonable detail the calculation of the Actual Gross Profit Amount, together with reasonable supporting documentation thereof. The Pioneer Parties shall take all commercially reasonable steps to cause the above-referenced audited consolidated financial statements of the Company to be completed and delivered on a timely basis. Following the delivery of the Earn-out Statement to the Representative, Pioneer Investment and the Surviving Entity shall provide afford the Representative and its representatives the opportunity to examine the Earn-out Statement and such supporting schedules, analyses, workpapers and other underlying records or documentation as are reasonably requested and necessary and appropriate. Pioneer Investment, the Surviving Entity and their respective representatives shall cooperate with the Representative in such examination, including providing answers to reasonable questions asked by the Representative and its representatives and promptly making available to the Representative and its representatives any copies of records reasonably requested and necessary and appropriate. If, within thirty (30) days following delivery of the Earn-out Statement to the Representative, the Representative has not delivered to Pioneer Investment written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out out Objection Notice”). Upon receipt ) setting forth in reasonable detail the reasons for which the Representative does not agree with the calculation of the Actual Gross Profit Amount set forth in the Earn-Out Noticeout Statement, Seller then the Earn-out Statement and the determination of whether payment of an Earn-out Amount is due based on such Earn-out Statement shall be binding and final for all purposes of this Agreement. If, based on the Actual Gross Profit Amount, an Earn-out Amount is due, such Earn-out Amount shall be due and payable as provided in Section 2.12(c). If the 30 Representative delivers an Earn-out Objection Notice within such thirty day (30) period, then the Representative and Pioneer Investment shall try to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice resolve any differences in their respective positions with respect to PurchaserPioneer Investment’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount calculation of the Realized CM or Purchaser’s Earn-Out Determination Actual Gross Profit Amount. If the Representative and Pioneer Investment are unable to agree upon the calculation of the Actual Gross Profit Amount within 30 thirty (30) days following Purchaserafter the Representative’s delivery of the Earn-Out out Objection Notice to Seller Pioneer Investment, then Seller shall the matter to be deemed to have no objection to resolved (the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Periodout Dispute”) shall be submitted for resolution to the Referee within the following five (5) Business Days (it being understood that such Referee shall be selected in the same manner as provided in Section 2.11(b), ). Pioneer Investment and the applicable Representative shall each provide to the Referee and the other Party a statement of its position as to calculation of the Actual Gross Profit Amount and resulting Realized CM and whether an Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court out Amount is due within fifteen (15) days from the date of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred referral to the Independent AccountantReferee. The Independent Accountant Referee shall be directed to render make a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no any event later than 30 within thirty (30) days following after the Parties’ referral date on which the dispute is referred to the Independent AccountantReferee, by determining the Actual Gross Profit Amount; provided, that the Actual Gross Profit Amount as determined by the Referee may not be greater than the greatest value for Actual Gross Profit Amount claimed by any Party or less than the smallest value for Actual Gross Profit Amount claimed by any Party. Purchaser and Seller If any objections are submitted to the Referee for resolution, each Party shall each furnish to the Independent Accountant Referee such work papers, schedules, workpapers and other documents and information relating to the unresolved disputed items such objections as the Independent Accountant Referee may reasonably requestrequest and are available to that Party or its subsidiaries (or its independent public accountants) and will be afforded the opportunity to present to the Referee any material relating to the determination of the matters in dispute and to discuss such determination with the Referee. The Independent Accountant shall resolve In the disputed items based solely on event a dispute is submitted to the applicable definitions Referee in connection with the determination of the Actual Gross Profit Amount, the costs and other terms expenses of the Referee will be borne by the Parties in this Agreement such proportion as is appropriate to reflect the relative benefits received by the Pioneer Parties and the presentations by Purchaser Representative on behalf of the Company Members and Seller, and not by independent review. The the UAR Holders from the resolution of the dispute and resulting calculation by Earn-out Dispute. The decision of the Independent Accountant Referee shall be final and binding on for all purposes of this Agreement and the Earn-out Statement shall be revised, if necessary, to reflect such decision and the Earn-out Statement and thereupon the calculation of the Actual Gross Profit Amount and whether any such Earn-out Amount is due shall be final and binding for all purposes of this Agreement. Such determination by the Referee shall be conclusive and binding upon the Parties, absent fraud or manifest error or fraud and error. With respect to any Earn-Out Consideration out Dispute referred to the Referee, the Referee shall not be authorized or permitted to (A) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the Earn-out Dispute in accordance with this Section 2.12(b) or (B) apply any accounting methods, treatments, principles or procedures other than the Accounting Principles. If at any time Pioneer Investment and the Representative resolve their dispute, then, notwithstanding the preceding provisions of this Section 2.12(b), the Referee’s involvement promptly shall be discontinued and the Earn-out Statement shall be revised, if necessary, to reflect such resolution and the Earn-out Statement and thereupon the calculation of the Actual Gross Profit Amount and whether any Earn-out Amount is due shall be paid final and binding for all purposes of this Agreement.
(c) When the Earn-out Statement becomes final and binding in accordance with Section 2.9(g) hereof. Purchaser2.12(b), on if there is any Earn-out Amount owed to the one hand, Company Members and the SellerUAR Holders, on then the other hand, Pioneer Parties shall bear that percentage of first pay the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out portion of the Earn-Out Notice out Amount owed to ▇▇▇▇▇▇▇ pursuant to the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For ▇▇▇▇▇▇▇ Engagement Letter set forth on Company Disclosure Schedule 3.13 (the avoidance of doubt“▇▇▇▇▇▇▇ Earn-out Amount Fee” and, the Independent Accountant shall act as an expertEarn-out Amount less the ▇▇▇▇▇▇▇ Earn-out Amount Fee, and not as an arbitrator.the “UAR/Company Member Earn-out Amount”), within fifteen
Appears in 1 contract
Earn-Out. In addition to the Purchase Price paid at Closing and any Inventory Adjustment, SELLER shall also be entitled to receive from BUYER an additional payment (the "Earn-Out Payment") on the following terms and conditions:
(a) Promptly following If the finalization Net Sales by BUYER and any of Parent’s audited financial results its Affiliates of the Products in the countries in which the Products are sold as of the Closing Date, or in which the Products have been presented for possible sale and which are listed on SCHEDULE 2.3(a), as determined by BUYER in accordance with its standard accounting procedures, which are described on SCHEDULE 2.3(b), exceeds any of the year levels set forth on SCHEDULE 2.3(b) (the "Sales Levels") for each of the calendar years ended on December 31, 2021 2001 and 2002 (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full "Earn-Out Consideration Event or Partial Periods"), BUYER will make an Earn-Out Consideration Event has occurred Payment for the respective year based upon the Sales Level achieved in that year calculated as provided in SCHEDULE 2.3(b). BUYER shall prepare or cause its regular outside accountants to prepare a statement of Net Sales for each such calendar year (the “Earn-Out Determination”"Annual Statement") and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt together with a calculation of the Earn-Out NoticePayment for such year, Seller which statement and calculation shall be delivered to SELLER within forty-five (and 45) days following the end of each applicable calendar year. In addition to the extent reasonably requestedforegoing, BUYER shall provide to SELLER, within forty-five (45) days following the end of each quarterly period during the Earn-Out Periods (excluding, however the last quarter of such calendar year), a statement of Net Sales for such quarterly period prepared from BUYER'S books and records in its Representatives) will customary manner. Such quarterly statements shall be given reasonable access provided for SELLER'S information only, and shall not bind BUYER or its accountants in their preparation of the Annual Statements and their calculation of the Earn-Out Payment. SELLER or its representatives shall have the right to inspect the books and records of BUYER, at BUYER'S principal office, upon reasonable notice and at a mutually convenient time, as SELLER may reasonably require in order to Purchaser’s (or verify the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to accuracy of any such access) during business hours for the limited purpose of verifying such amountstatements delivered by BUYER.
(b) If Purchaser does SELLER shall have thirty (30) days to review the Annual Statement (as well as the accountants' work papers related thereto) and calculation and to object thereto in writing; provided, however, that such objection may only go to whether the calculation was carried out in conformity with BUYER'S standard procedures, and may not receive any written objections from Seller go to the amount validity of such procedures. If the Realized CM parties are unable to resolve SELLER'S objections to the Annual Statement and calculation within fifteen (15) days after SELLER submits such objections to BUYER, they or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery either of them shall submit a statement of unresolved differences together with a proposed calculation of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection Payments to the Realized CM Accountants for a binding and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly nonappealable determination to be rendered within thirty (but not later than 30 30) days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraudsubmission. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the All fees and expenses of the Independent Accountant equal Accountants incurred in such capacity shall be billed to the proportion (expressed as a percentage and determined shared equally by the Independent AccountantSELLER and the BUYER.
(c) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the no event of any court proceedings arising out of shall the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred Payment exceed (i) $4,000,000 for any calendar year, or (ii) $6,500,000 in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitratortotal.
Appears in 1 contract
Sources: Asset Sale Agreement (Chattem Inc)
Earn-Out. (a) Promptly following Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable to the finalization operation of Parent’s audited financial results the Business for the year ended period commencing on December 31, 2021 the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full "Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred Period"), as follows:
(b) Within ninety (90) days of the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out Notice”). Upon receipt end of the Earn-Out NoticePeriod, Buyer shall provide Seller (and with appropriate supporting documentation) with its calculation of the "net sales" attributable to the extent reasonably requestedBusiness for such period, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or as well as a calculation of the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours "operating margin" for the limited purpose of verifying Business for such amountperiod.
(bc) If Purchaser does not receive any written objections from Seller For purposes of this Agreement, the "operating margin" for the Business with respect to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller Period shall be deemed to have no objection calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Realized CM and Business for such fiscal year.
(d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Determination, which shall become final and binding Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Parties. If Seller's audited financial statements at June 25, 2002.
(e) The amount of the "earn-out" payable by Buyer to Seller does not agree that shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Notice contains the correct Period: Operating Margin Percentage of Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitrator.---------------- ----------------------
Appears in 1 contract
Sources: Asset Purchase Agreement (United Natural Foods Inc)
Earn-Out. (a) Promptly following the finalization of Parent’s audited financial results Buyer shall keep separate accounting books and records for the year ended on December 31, 2021 (Company for all periods applicable to the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full calculation of the Earn-Out Consideration Event or Partial Amount, which accounting books and records shall be in accordance with GAAP, consistently applied in accordance with applicable requirements of law applicable to Buyer. Sellers’ Representative shall be entitled, upon reasonable prior notice and at reasonable times and in accordance with reasonable confidentiality requirements specified by Buyer, to review such accounting books and records and to make and retain copies thereof and extracts therefrom solely for the purpose of the calculation of the Earn-Out Consideration Event Amount, all in a manner consistent with applicable requirements of law applicable to Buyer.
(b) Buyer shall deliver to Sellers’ Representative within sixty (60) days after the first day of the first calendar month after the sixth anniversary of the Closing a notice (a “Buyer’s Earn-Out Notice”) containing the calculation of the Company’s Earn-Out Amount. Unless Sellers’ Representative, within forty-five (45) days after the delivery to him of such Buyer’s Earn-Out Notice, delivers a notice to Buyer stating that Sellers’ Representative objects to any item or computation in connection with the calculation therein, and specifying in reasonable detail the basis for such objection, such calculation as set forth in such Buyer’s Earn-Out Notice shall be binding upon the parties. If Sellers’ Representative and Buyer are unable to agree upon such calculation within thirty (30) days after any timely notice of objection has occurred been given by Sellers’ Representative to Buyer, the Settlement Accountants shall resolve the disputed items or computations and determine the Earn-Out Amount, if any, based on its resolution of the disputed items or computations within thirty (30) days after its acceptance of its appointment. Any determination by the Settlement Accountants shall be binding upon the parties. The fees, costs and expenses of the Settlement Accountants selected in the event of a dispute shall be borne in a manner consistent with that set forth in Section 2.03(d)(ii).
(c) Subject to any amounts to be deducted or withheld pursuant to Section 10.07, Buyer shall pay such Earn-Out Amount, if any, within ten business days after Sellers’ Representative’s acceptance of, or the final resolution by the Settlement Accountants of, such amount by wire transfer of immediately available funds to a bank account in the United States designated by Sellers’ Representative in writing.
(d) If prior to the sixth anniversary of the Closing (the “Earn-Out DeterminationPeriod”) and Buyer shall provide written notice sell the business of the Company to an unaffiliated third party such determination that after giving effect to Sellersuch sale, which notice (x) neither Buyer nor an Affiliate of Buyer shall include own at least a majority of the Realized CM capital or voting stock of the Company or (as defined belowy) all or substantially all of the assets of the Company shall have been transferred to one or more Persons who are neither Buyer nor an Affiliate of Buyer (the such event, an “Early Trigger Earn-Out NoticeTransaction”). Upon receipt , then the following provisions shall apply:
(i) In the case of an Early Trigger Earn-Out Transaction which occurs during the Earn-Out NoticePeriod, Seller (and Buyer shall pay to Sellers the extent reasonably requestedGain on Sale; provided, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or however, that the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount portion of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice Gain on Sale payable to Seller then Seller Sellers shall be deemed to have no objection to the Realized CM and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days after the delivery of the Earn-Out Notice) give written notice to Purchaser of any objections thereto (describing in reasonable detail the nature of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days exceed Twenty Million Dollars ($20,000,000). “Gain on Sale” shall mean the portion of the Enterprise Value which exceeds the sum of (x) $316,500,000, plus (y) all capital invested in the Company following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations Closing by Purchaser and Seller, and not by independent review. The resolution Buyer and/or any Affiliate of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitratorBuyer.
Appears in 1 contract
Earn-Out. (a) Promptly following the finalization of Parent’s audited financial results As additional consideration for the year ended on December 31Contemplated Transactions, 2021 (the “Measurement Date”), and Buyer shall pay Seller the contingent price payments set forth in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred this Section 1.5 (the “Earn-Out Determination”) and shall provide written notice of such determination to Seller, which notice shall include the Realized CM (as defined below) (the “Earn-Out NoticeOut”). Upon receipt The amount of the Earn-Out Notice, Seller (and will equal 5% of EBIT for the Business solely with respect to the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours Existing DMAs for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of the Earn-Out Notice to Seller then Seller shall be deemed to have no objection to the Realized CM years ending December 31, 2006, 2007, 2008, 2009 and the Earn-Out Determination, which shall become final and binding on the Parties. If Seller does not agree 2010; provided that the Earn-Out Notice contains for 2006 shall begin to accrue on the correct Earn-Out Determination Seller shall promptly (but not later than 30 days day after the delivery of Closing Date. Buyer shall pay Seller the Earn-Out Notice) give written notice payments annually within 10 days of MasTec filing its 10-K for the respective fiscal year by wire transfer of next day funds to Purchaser an account or accounts designated by Seller. For purposes of any objections thereto (describing in reasonable detail this Agreement, “EBIT” means the nature Net Income of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items Business solely with respect to the Existing DMAs for the respective twelve-month period in the applicable calculation fiscal year, plus (a) income Taxes deducted in determining Net Income, and determination as promptly as practicable(b) any interest on indebtedness incurred to finance the acquisition of the Assets contemplated hereby (including, but in no event later than 30 days following without limitation, any original issue discount). For purposes of this Agreement, “Net Income” means, for any of the Parties’ referral foregoing periods, the net income (or loss) of the Business solely with respect to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papersExisting DMAs, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Seller, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid determined in accordance with Section 2.9(g) hereofGAAP consistent with MasTec’s other Advanced Tech Service Group divisions and as set forth in Schedule 1.5; provided however, that Net Income shall not be adjusted for any intra-company transfers to or from the Business with respect to MasTec or its Affiliates unless those transfers relate to a business transaction between the Business and MasTec or its Affiliates that would have occurred in the ordinary course of conducting business had Buyer not acquired the Assets. PurchaserFor purposes of clarification, on Net Income shall only be derived from the one handoperation of the Business in the Existing DMAs and only to the extent the Business is being conducted in such Existing DMAs during the applicable period, from the services the Business is offering in the Existing DMAs, and from customers (i.e., DirecTV) that the Seller, on the other hand, shall bear that percentage Business is generating orders from as of the fees date of this Agreement. Any revenue and expenses resulting from new customers, new DMAs or new services shall not be included in the definition of Net Income; however, MasTec shall pay M▇. ▇▇▇▇▇▇▇▇ a bonus if earned pursuant to the terms of the Independent Accountant equal to Executive Employment Agreement from the proportion (expressed successful oversight of such new customers, DMAs or services as a percentage and determined any such incremental oversight responsibilities may be assigned by the Independent Accountant) of the dollar value of the disputed amounts determined MasTec in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitratorreasonable discretion.
Appears in 1 contract
Earn-Out. (a) Promptly following During the finalization period beginning on the Closing Date and ending on the earlier of Parent’s audited financial results for the year ended on December 31(i) April 9, 2021 (the “Measurement Date”)2024, and (ii) the date on which all of the Company’s obligations under the Zoetis License have been completed and discharged in any event no later than April 30full (such period, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Earn-Out Consideration Event has occurred (the “Earn-Out DeterminationPeriod”) and shall provide written notice ), Parent will, upon receipt by the Surviving Corporation of any payment pursuant to the Zoetis License from time to time, promptly pay to the Paying Agent, for distribution to the Holders (such amounts to be allocated among the Holders in accordance with each Holder’s Pro Rata Share of such determination amount), an amount equal to Seller(x) 85% of such payment, which notice shall include less (y) the Realized CM amount, if any, of all direct expenses in excess of the Budgeted Zoetis Expenses incurred by the Surviving Corporation or Parent in connection with the performance of the Company’s obligations under the Zoetis License since the Closing Date or the calculation of the last such payment, as applicable (as defined below) (such net amount with respect to each such payment, if a positive amount, an “Earn Out Payment”, and collectively with all payments under this Section 3.07(a), the “Earn-Out NoticePayments”).
(b) Parent shall use commercially reasonable efforts (after giving effect, to among other things, the business of the Surviving Corporation) to cause the Surviving Corporation to perform all of the Company’s obligations under the Zoetis License in such a manner as to maximize the revenues of the Surviving Corporation under the Zoetis License, provided that nothing in this Section 3.07 shall require Parent or the Surviving Corporation to make any expenditure or incur any expense in excess of the Budgeted Zoetis Expenses unless Parent determines, in good faith, that the payments reasonably expected to be received under the Zoetis License will exceed such amount of expense in excess of the Budgeted Zoetis Expenses; and provided, further, that Parent shall not be required to cause the Surviving Corporation to take any action, or omit to take any action, that would reasonably be expected to be adverse to the business of the Surviving Corporation, which, for the avoidance of doubt, would not include any expense contemplated in the Zoetis Budget and any action expressly related thereto. Upon Promptly following the Closing, Parent shall appoint a representative of Parent or Surviving Corporation (who shall initially be ▇▇▇▇ ▇▇▇▇▇▇), who shall liaise with ▇▇▇▇▇▇▇▇ ▇▇▇▇ regarding the same.
(c) From and after the completion of the first full calendar month following the Closing Date, and subject to compliance with all confidentiality requirements of the Company pursuant to the Zoetis License and any related confidentiality agreements, Parent shall, or shall cause the Surviving Corporation to, deliver to the Holder Representative a monthly report within 15 Business Days of the last day of such calendar month setting out the expenses incurred by the Surviving Corporation and Parent in connection with the performance of the obligations of the Company pursuant to the Zoetis License for the period since the Closing Date or the date of the last such report, as applicable.
(d) If at any time, and from time to time, during the Earn-Out Period, Parent or the Surviving Corporation determines not to make an expenditure or incur an expense in excess of, or expected to be in excess of, the Budgeted Zoetis Expenses (an “Unbudgeted Zoetis Expense”) in accordance with Section 3.07(b), it shall promptly notify the Holder Representative in writing of such determination and provide a reasonable, good-faith estimate of the total amount of such Unbudgeted Zoetis Expense. Neither Parent nor the Surviving Corporation shall have any liability to the Holder Representative or any Holder for any inaccuracy or misstatement pertaining to such estimate or if the actual expenses necessary to complete the performance of the Zoetis License differ from Parent’s or the Surviving Corporation’s good-faith estimate provided to the Holder Representative pursuant to this Section 3.07(d). If, within 10 Business Days following delivery by Parent or the Surviving Corporation of a notice of an Unbudgeted Zoetis Expense as set out in this Section 3.07(d), the Holders deliver the full amount of the Unbudgeted Zoetis Expense to the Surviving Corporation, Parent will cause the Surviving Corporation to apply such amount against the Unbudgeted Zoetis Expense and shall make the corresponding expenditure or incur the corresponding expense, as applicable.
(e) Within 15 Business Days of Surviving Corporation’s receipt of any and all payments under the Zoetis License, Parent will pay or cause Surviving Corporation to pay to the Paying Agent, for distribution to the Holders, by wire transfer of immediately available funds, the respective Earn-Out Payment payable under Section 3.07(a). Within 15 Business Days following the end date of the Earn-Out NoticePeriod, Seller (and Surviving Corporation will pay to the extent reasonably requestedPaying Agent, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related for distribution to the information and calculations used Holders (such amounts to calculate be allocated among the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose Holders in accordance with each Holder’s Pro Rata Share of verifying such amount), the amount, if any, equal to the sum of the following:
(i) any Earn-Out Payment not previously paid out under the prior sentence, if any, payable pursuant to Section 3.07(a);
(ii) the amount, if any, by which the Budgeted Zoetis Expenses exceeded the aggregate amount actually incurred by the Surviving Corporation and Parent in the discharge of the Company’s obligations under the Zoetis License; and
(iii) the amount, if any, by which any amount paid by the Holders to the Surviving Corporation or Parent in respect of any Unbudgeted Zoetis Expenses exceeded the aggregate amount of the expenses actually incurred by the Surviving Corporation and Parent in respect of such Unbudgeted Zoetis Expenses.
(bf) If Purchaser does not receive any written objections from Seller to the amount Each of the Realized CM or Purchaser’s Earn-Out Determination within 30 days following Purchaser’s delivery of Parties agrees that (A) the Earn-Out Notice to Seller then Seller Payment and the payment of the amounts considered under Section 3.07(e)(i) and (ii) shall be deemed to have no objection treated as adjustments to the Realized CM Purchase Price by the Parties for Tax purposes, except to the extent otherwise required by Law, and (B) it will take commercially reasonable steps to structure the Earn-Out DeterminationPayment, which if any, and the payment of the amounts under Section 3.07(e)(i) and (ii), if any, in a tax-efficient manner, provided that any such structure shall become final and binding on be subject to the approval of each of the Parties. .
(g) If Seller does not agree that the Earn-Out Notice contains the correct Earn-Out Determination Seller shall promptly (but not later than 30 days i) any Parent Indemnitee has any claim for indemnifiable Losses pursuant to this Agreement or any Ancillary Document of which any amount remains unpaid after the delivery of the Earn-Out Notice15 Business Day period set out in Section 9.06(a), or (ii) give written notice Parent or any Affiliate thereof is entitled to Purchaser payment from Holders in respect of any objections thereto (describing in reasonable detail the nature amount payable under Section 3.06(b)(ii)(B) and 11.02 of the disagreement asserted), and all undisputed amounts with respect to such calculation shall thereupon become binding, final and conclusive upon the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation Period”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within the Earn-Out Reconciliation Period, all unresolved disputed items shall be promptly referred to the Independent Accountant. The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable calculation and determination as promptly as practicable, but in no event later than 30 days following the Parties’ referral to the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedules, and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and that remains unpaid within 10 Business Days of written request therefor, then Parent shall have the presentations by Purchaser and Sellerright to withhold, and not by independent review. The resolution of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and to cause Surviving Corporation to withhold from any Earn-Out Consideration due shall be paid in accordance with Payment or other payment otherwise payable by Parent or Surviving Corporation pursuant to this Section 2.9(g) hereof. Purchaser, on the one hand3.07, and set off against the Sellersame, on the other hand, shall bear that percentage amount of the fees and expenses such unsatisfied claims in satisfaction of the Independent Accountant equal to the proportion (expressed such portion of such claim as a percentage and determined is represented by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of the Earn-Out Notice the prevailing party shall be entitled to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For the avoidance of doubt, the Independent Accountant shall act as an expert, and not as an arbitratoramount so withheld.
Appears in 1 contract
Earn-Out. (a) Promptly following In addition to the finalization of Parent’s audited financial results for Preliminary Purchase Price, Seller will be entitled, pursuant to the year ended on December 31terms set forth in this Section 2.07, 2021 (to the “Measurement Date”), and in any event no later than April 30, 2022, Purchaser shall determine whether or not a Full Earn-Out Consideration Event or Partial Amount for each Earn-Out Consideration Event has occurred Year, if any.
(b) No later than 30 days after the date on which Buyer receives the audited financial statements in respect of the DVU Transferred Entities for the applicable Earn-Out Year, Buyer will prepare and deliver, or cause to be prepared and delivered, to Seller a calculation, together with reasonable supporting documentation, of the (i) EBITDA, (ii) Earn-Out CapEx, (iii) Earn-Out EBITDA and, to the extent applicable, (iv) Earn-Out Amount, in each case for the immediately preceding Earn-Out Year, prepared in accordance with the terms of this Agreement (the “Earn-Out DeterminationCalculation”) and shall provide written notice together with a statement of the capital invested by Buyer in the DVU Transferred Entities for such Earn-Out Year.
(c) Seller may dispute the Earn-Out Calculation (or any element thereof) by notifying Buyer in writing, setting forth in reasonable detail the particulars of such determination to Sellerdisagreement, which notice shall include including the Realized CM (as defined below) basis therefor (the “Earn-Out NoticeObjection”). Upon , within 45 days of Seller’s receipt of the Earn-Out Notice, Seller (and Calculation. Any item or amount as to which no dispute is raised in the extent reasonably requested, its Representatives) will be given reasonable access upon reasonable notice to Purchaser’s (or the applicable Purchaser Designee’s) relevant books, records, workpapers and personnel related to the information and calculations used to calculate the Realized CM (subject to customary confidentiality, hold harmless or release agreements related to such access) during business hours for the limited purpose of verifying such amount.
(b) If Purchaser does not receive any written objections from Seller to the amount of the Realized CM or Purchaser’s Earn-Out Determination Objection will be final, conclusive and binding on the Parties for all purposes hereunder, unless such item or amount is by its nature adjusted in connection with the matters raised in the Earn-Out Objection. In the event that Seller does not deliver a Earn-Out Objection to Buyer within 30 such 45 day period, Seller will be deemed to have accepted Buyer’s calculation of the EBITDA, Earn-Out CapEx and Earn-Out EBITDA for the applicable Earn-Out Year. In the event that an Earn-Out Objection is timely delivered, Buyer and Seller will use their respective commercially reasonable efforts for a period of 45 days following Purchaserafter Buyer’s delivery receipt of the Earn-Out Notice Objection, or such longer period as the Parties may agree in writing, to Seller then Seller shall be deemed to have no objection to the Realized CM and resolve any disagreements set forth in the Earn-Out Determination, which shall become final and binding on the PartiesObjection. If Buyer and Seller does not agree that are unable to resolve such disagreements within such 45 day period (or such longer period as the Parties will have agreed in writing), then the Parties will resolve all disputes in accordance with Section 2.06(d), Section 2.06(e) and Section 2.06(f).
(d) If the Earn-Out Notice contains the correct Calculation (as finally determined pursuant to Section 2.07(c)) reflects an Earn-Out Determination Seller shall promptly Amount: (but not later i) that is less than 30 days after the delivery of or equal to the Earn-Out NoticeThreshold, then no payment to Seller will be required pursuant to this Section 2.07(d), or (ii) give written notice that is more than the Earn-Out Threshold, then Buyer will pay or will cause to Purchaser of any objections thereto (describing in reasonable detail the nature be paid to Seller, 12.5% of the disagreement assertedamount by which Earn-Out Amount exceeds the Earn-Out Threshold. Notwithstanding the foregoing, in no event will Buyer be obligated to pay any Earn-Out Amount over and above a maximum aggregate amount of $20,000,000 (the “Purchase Price Cap”). For purposes of illustration only, and all undisputed amounts with respect if the Earn-Out Amount for an Earn-Out Year equals $8,000,000, then Buyer would pay or cause to such calculation shall thereupon become binding, final and conclusive upon be paid to Seller an amount equal to $375,000.
(e) For any payments Buyer is obligated to pay (or cause to be paid) pursuant to this Section 2.07 (the Parties and enforceable in a court of law, absent manifest error or fraud. Purchaser and Seller shall negotiate in good faith to resolve any disputes and agree upon the resulting calculations in such statement. If Seller and Purchaser resolve such disputes within 30 days after the applicable written notice of objection is delivered by Seller to Purchaser (any such period, an “Earn-Out Reconciliation PeriodPayment”), the applicable calculation and resulting Realized CM and Earn-Out Determination shall Buyer will pay or cause to be adjusted accordingly and shall thereupon become binding, final and conclusive upon all Parties and enforceable in a court of law, absent manifest error or fraud. If Seller and Purchaser cannot resolve the disputed items within paid the Earn-Out Reconciliation PeriodPayment, all unresolved disputed items shall be promptly referred as an adjustment to the Independent AccountantPurchase Price, in cash to Seller within ten Business Days after the Earn-Out Amount for the Earn-Out Year is finally determined pursuant to Section 2.07(c). The Independent Accountant shall be directed to render a written report on aggregate Earn-Out Payments paid by Buyer for the unresolved disputed items Earn-Out Period will not exceed the Purchase Price Cap.
(f) During the Earn-Out Period: (i) all business of Buyer and the DVU Transferred Entities with respect to the applicable calculation and determination University as promptly as practicable, but in no event later than 30 days following conducted at the Parties’ referral to Closing must be transacted through the Independent Accountant. Purchaser and Seller shall each furnish to the Independent Accountant such work papers, schedulesDVU Transferred Entities, and cannot be transacted through any other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and Affiliate of Buyer or other terms in this Agreement Person (unless Buyer and the presentations by Purchaser and SellerDVU Transferred Entities agree to consolidate the earnings of such entities or such joint ventures or similar arrangements, and not by independent review. The resolution if applicable, for purposes of the dispute and resulting calculation by the Independent Accountant shall be final and binding on the Parties, absent manifest error or fraud and any Earn-Out Consideration due shall be paid in accordance with Section 2.9(g) hereof. Purchaser, on the one hand, and the Seller, on the other hand, shall bear that percentage of the fees and expenses of the Independent Accountant equal to the proportion (expressed as a percentage and determined by the Independent Accountant) of the dollar value of the disputed amounts determined in favor of the other party by the Independent Accountant. In the event of any court proceedings arising out of calculating the Earn-Out Notice Payments); (ii) Buyer will not do or omit to do anything (and will cause the prevailing party shall be entitled DVU Transferred Entities not to recover its attorneys’ fees and other costs incurred in connection with such proceedings. For do or omit to do anything), the intention of which action or omission (but, for the avoidance of doubt, disregarding the Independent Accountant shall act as effect of any such action or omission) is to hinder or prevent the DVU Transferred Entities from generating sufficient EBITDA in an experteffort to circumvent the payment of an Earn-Out Payment; and (iii) Buyer will not, and will cause the DVU Transferred Entities not to, with respect to the University, engage in related-party or Affiliate transactions on terms which are not generally consistent with, or which are materially less favorable to the DVU Transferred Entities in the aggregate compared to, terms that would reasonably be expected to be obtained by the DVU Transferred Entities in an “arms-length” transaction with an unaffiliated third party.
(g) If, during the Earn-Out Period, (i) there is a Sale of the University and (ii) the aggregate Earn-Out Payments made to Seller are less than the Purchase Price Cap, Buyer will pay, or will cause to be paid, an accelerated Earn-Out Payment to Seller as follows: 12.5% of (A) any amount by which the proceeds received by Buyer in such Sale of the University exceed the capital invested by Buyer in the DVU Transferred Entities after the Closing Date (as reported to Seller in writing in each Earn-Out Calculation) and (B) an arbitratoramount equal to 15% compounded annual rate of return of Buyer and its Affiliates on the aggregate cost of the DVU Equity Interests purchased by Buyer on or after the Closing Date, which accelerated Earn-Out Payment will not exceed the Purchase Price Cap less any Earn-Out Payments made to Seller prior to the Sale of the University.
(h) Notwithstanding anything to the contrary contained in this Agreement, any amounts owing or owed to Buyer or any Buyer Indemnitees by Seller pursuant to Article IX shall be offset against any Earn-Out Payments payable by Buyer to Seller under Section 2.07.
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Sources: Stock Purchase Agreement (Adtalem Global Education Inc.)