Common use of Earnings Threshold Clause in Contracts

Earnings Threshold. (a) Except as otherwise agreed in writing by the parties, the parties hereby establish a five (5) year cumulative EBT earnings before taxes (“EBT”) threshold of NINETEEN MILLION AND NO/100 DOLLARS ($19,000,000.00), THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) in each Contract Year, as defined in Section 3.2 below (the Threshold”) for the Term of this Agreement, which shall be distributed among the parties following the end of each Contract Year as set forth in Section 3.1(b) and following the end of the Term as set forth in Section 3.1(c). If this Agreement is terminated before the expiration of the Term, the Threshold shall be adjusted on a prorated basis. By way of example, if this Agreement is terminated three years three months into the Term, the Threshold would be adjusted from NINETEEN MILLION AND NO/100 DOLLARS ($19,000,000.00) to TWELVE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($12,350,000.00), and the distribution schedule set forth in Section 3.1(b) shall be adjusted accordingly. (b) Pursuant to Section 3.1(a), distribution payments, if any, between Cargill and TAI shall be made at the end of each Contract Year as set forth in this Section 3.1(b). In the event that the annual EBT of the Facilities is greater than THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) per Contract Year, any amount in excess of THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) shall be distributed equally between the parties. In the event that the actual annual EBT of the Facilities is less than -TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500, 000.00) per Contract Year, Cargill will pay TAI fifty percent (50%) of any shortfall between the actual annual EBT and TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00), if any, up to a maximum total of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) per Contract Year. At the end of each Contract Year, TAI shall provide to Cargill an estimate of EBT for the then completed Contract Year by the end of the third business day in June. Payment due to Cargill or TAI shall be made by wire transfer on or before June 30th of each year. (c) At the end of each Contract Year, the parties will conduct a true-up of the distributions and payments for the Contract Years of the Term to date to ensure that any excess over the Threshold of the actual cumulative EBT of the Facilities is shared equally by the parties. Alternatively, if the actual cumulative EBT of the Facilities is below the cumulative minimum EBT threshold, then Cargill shall only be responsible for fifty percent (50%) of any difference between the actual cumulative EBT of the Facilities and the cumulative minimum EBT threshold subject to the $400,000 maximum per Contract Year. Any true-up payments shall be made by wire transfer on or before June 30th of each Contract Year. The following table and examples are set forth below to illustrate how the annual and cumulative distribution payments will be calculated in accordance with this section 3.1: Cumulative EBT Loss Share Threshold $2.5 M $5 M $7.5 M $10 M $12.5 M Cumulative EBT Gain Share Threshold $3.8 M $7.6 M $11.4 M $15.2 M $19 M Cumulative Max Loss $400,000 $800,000 $1.2 M $1.6 M $2 M The distribution payment, if any, at the end of a Contract Year, will be based on the cumulative EBT results using the table above and taking into consideration any distribution payments made in previous years. Example 1: If EBT in Contract Year 1 is $10 M, TAI would make a distribution payment to Cargill of $3.1 M ($10M - $3.8M x 50%) and if EBT for Contract Year 2 is $0, Cargill would make a true-up distribution payment to TAI of $1.9 M to TAI because the cumulative EBT would be only $2.4 M and Cargill’s excess gain share after 2 Contract Years would be $1.2 M ($10M - $7.6M x 50%). Example 2: If EBT in Contract Year 1 is $3 M, no distribution payments will be made for that Contract Year and if EBT in Contract Year 2 was $0, then Cargill would make a true-up distribution payment to TAI of $800,000 ($5M - $3M x 50% but capped at $800k).

Earnings Threshold. (a) Except as otherwise agreed in writing by the parties, the parties hereby establish a five (5) year cumulative EBT earnings before taxes (“EBT”) threshold of NINETEEN MILLION AND NO/100 DOLLARS ($19,000,000.00), THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) in each Contract Year, as defined in Section 3.2 below (the Threshold”) for the Term of this Agreement, which shall be distributed among the parties following the end of each Contract Year as set forth in Section 3.1(b) and following the end of the Term as set forth in Section 3.1(c). If this Agreement is terminated before the expiration of the Term, the Threshold shall be adjusted on a prorated basis. By way of example, if this Agreement is terminated three years three months into the Term, the Threshold would be adjusted from NINETEEN MILLION AND NO/100 DOLLARS ($19,000,000.00) to TWELVE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($12,350,000.00), and the distribution schedule set forth in Section 3.1(b) shall be adjusted accordingly. (b) Pursuant to Section 3.1(a), distribution payments, if any, between Cargill and TAI shall be made at the end of each Contract Year as set forth in this Section 3.1(b). In the event that the annual EBT of the Facilities is greater than THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) per Contract Year, any amount in excess of THREE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($3,800,000.00) shall be distributed equally between the parties. In the event that the actual annual EBT of the Facilities is less than -TWO –TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500, 000.00) per Contract Year, Cargill will pay TAI fifty percent (50%) of any shortfall between the actual annual EBT and TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00), if any, up to a maximum total of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) per Contract Year. At the end of each Contract Year, TAI shall provide to Cargill an estimate of EBT for the then completed Contract Year by the end of the third business day in June. Payment due to Cargill or TAI shall be made by wire transfer on or before June 30th of each year. (c) At the end of each Contract Year, the parties will conduct a true-up of the distributions and payments for the Contract Years of the Term to date to ensure that any excess over the Threshold of the actual cumulative EBT of the Facilities is shared equally by the parties. Alternatively, if the actual cumulative EBT of the Facilities is below the cumulative minimum EBT threshold, then Cargill shall only be responsible for fifty percent (50%) of any difference between the actual cumulative EBT of the Facilities and the cumulative minimum EBT threshold subject to the $400,000 maximum per Contract Year. Any true-up payments shall be made by wire transfer on or before June 30th of each Contract Year. The following table and examples are set forth below to illustrate how the annual and cumulative distribution payments will be calculated in accordance with this section 3.1: Cumulative EBT Loss Share Threshold $2.5 M $5 M $7.5 M $10 M $12.5 M Cumulative EBT Gain Share Threshold $3.8 M $7.6 M $11.4 M $15.2 M $19 M Cumulative Max Loss $400,000 $800,000 $1.2 M $1.6 M $2 M The distribution payment, if any, at the end of a Contract Year, will be based on the cumulative EBT results using the table above and taking into consideration any distribution payments made in previous years. Example 1: If EBT in Contract Year 1 is $10 M, TAI would make a distribution payment to Cargill of $3.1 M ($10M - $3.8M x 50%) and if EBT for Contract Year 2 is $0, Cargill would make a true-up distribution payment to TAI of $1.9 M to TAI because the cumulative EBT would be only $2.4 M and Cargill’s excess gain share after 2 Contract Years would be $1.2 M ($10M - $7.6M x 50%). Example 2: If EBT in Contract Year 1 is $3 M, no distribution payments will be made for that Contract Year and if EBT in Contract Year 2 was $0, then Cargill would make a true-up distribution payment to TAI of $800,000 ($5M - $3M x 50% but capped at $800k).