Earnout Clause Samples
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Earnout. (a) After the Closing, subject to the terms and conditions set forth herein, the Company Equity Securityholders shall have the contingent right to receive additional shares of GigCapital5 Common Stock based on the performance of QTI Holdings if the requirements as set forth in this Section 3.07 are achieved. At the Closing and immediately prior to the Effective Time, GigCapital5 shall deliver to the Exchange Fund the Merger Consideration Earnout Share Pool. The Merger Consideration Earnout Shares shall be allocated among the Company Equity Securityholders in accordance with this Section 3.07.
(b) Promptly upon the occurrence of any triggering event described in Section 3.07(c) below, or as soon as practicable after QTI Holdings becomes aware of the occurrence of such triggering event or receives written notice of such triggering event, QTI Holdings shall prepare and deliver, or cause to be prepared and delivered, a written notice to the Exchange Agent (a “Release Notice”), which Release Notice shall set forth in reasonable detail the triggering event giving rise to the requested release and the specific release instructions with respect thereto (including the number of Merger Consideration Earnout Shares to be released from the Exchange Fund and the identity of the person to whom they should be released). The Merger Consideration Earnout Shares that are to be released from the Exchange Fund and distributed to the Company Equity Securityholders shall be distributed to such Company Equity Securityholders in accordance with their respective Pro Rata Shares. For the avoidance of doubt, any Merger Consideration Earnout Shares to be released and distributed pursuant to this Section 3.07 shall be distributed and released as shares of GigCapital5 Common Stock.
(c) The Merger Consideration Earnout Shares shall be released and delivered as follows:
(i) promptly following the date on which QTI Holdings files its annual report on Form 10-K with respect to its fiscal year ended December 31, 2023 (the “2023 Form 10-K”) with the SEC, an aggregate of 2,500,000 Merger Consideration Earnout Shares (the “2023 Earnout Shares”) will be released from the Exchange Fund and distributed to the Company Equity Securityholders in accordance with their respective Pro Rata Shares if, and only if, on or prior to such filing date, the Company has obtained a formal FDA clearance for breast cancer screening with respect to its breast scanning systems, which remains in full force and effect...
Earnout. (a) Sponsor hereby agrees that if, at the end of the Earn-Out Period no Earn-Out Vesting Event shall have occurred, then Sponsor shall, no later than ten (10) Business Days following the end of the Earn-Out Period, contribute, transfer, assign, convey and deliver to PubCo, and PubCo shall acquire and accept from Sponsor all of Sponsor’s right, title, and interest in, to and under, the Earn-Out Shares, for nil consideration (such Earn-Out Shares so contributed, transferred assigned, conveyed and delivered to PubCo by Sponsor, the “Earn-Out Forfeiture Shares”).
(b) PubCo and Sponsor acknowledge and agree that (i) each Earn-Out Forfeiture Share, when so contributed, transferred assigned, conveyed and delivered to PubCo by Sponsor in accordance with Section 7.2(a), shall be and be deemed to have been (x) surrendered and forfeited to PubCo by Sponsor for nil consideration and (y) cancelled by PubCo immediately upon surrender and forfeiture and cease to be issued and outstanding; and (ii) any other PubCo Shares which are not Earn-Out Forfeiture Shares shall continue to be issued and outstanding and owned by Sponsor for its own account.
(c) In addition to and not in place of the transfer restrictions set forth in Article V (and, for the avoidance of doubt, not limited by the exceptions or conditions set forth therein), subject to the consummation of the Initial Merger and the Acquisition Merger, Sponsor covenants and agrees that it shall not, during the period commencing on the Acquisition Effective Time and ending on the earlier to occur of (i) an Earn-Out Vesting Event or (ii) the last day of the Earn-Out Period (the “Earn-Out Restricted Period”), effect, undertake, enter into or publicly announce any Transfer with respect to any Earn-Out Shares. For the avoidance of doubt, Sponsor shall retain all of its rights as a shareholder of PubCo with respect to the Earn-Out Shares during the Earn-Out Restricted Period, including, without limitation, the right to vote any Earn-Out Shares that are entitled to vote, the right to appoint a proxy with respect to any vote of any Earn-Out Shares, and the right to receive any dividends or distributions in respect of such Earn-Out Shares. The foregoing restrictions in this Section 7.2(c) shall not apply to (i) Transfers of Earn-Out Shares in the event of completion of an Unqualified Liquidation Event; or (ii) Transfers required by Law. If any Transfer is made contrary to the provisions of this Section 7.2(c), such purported Tra...
Earnout. (a) The Company Stockholders and the Engaged Option Holders shall be entitled to receive their pro rata portion of such number of Company Contingent Shares, fully paid and free and clear of all Liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions (each, an “Company Earnout Condition”):
(i) 7,000,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $12.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date;
(ii) 2,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $15.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date; and
(iii) 1,250,000 Company Contingent Shares if the closing price of the Surviving Pubco Common Stock equals or exceeds $18.00 per share on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the Closing Date and no later than 60 months following the Closing Date.
(b) Each Company Earnout Condition will be evaluated on a stand-alone basis, without reference to any other Company Earnout Condition. If a Company Earnout Condition is satisfied, within five (5) Business Days after the last trading day in such thirty-day period, Surviving Pubco shall instruct the Exchange Agent to issue the Company Contingent Shares earned therefrom to each Company Stockholder and Engaged Option Holder in such amounts equal to each Company Stockholder’s and Employee Option Holder’s Applicable Percentage multiplied by such number of Company Contingent Shares corresponding to the applicable Company Earnout Condition (the “Earnout Instruction”), with no action being required on the part of the Company Stockholders.
(c) Until the Company Contingent Shares are issued in accordance with this Section 4.04, (i) the right to receive any Company Contingent Shares is not transferable except by operation of Law relating to descent and distribution, divorce and community property of such Company Stockholder or Engaged Option Holder, and does not constitute an equity or ownership interest in Surviving Pubco, and (ii) the Company Stockholders and Engaged Option Holders shall not have any rights as a shareholder of Su...
Earnout. (a) At or prior to the Closing, ACAH and Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to ACAH and the Company), as escrow agent (the “Escrow Agent”), shall enter into an escrow agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to ACAH and the Company (the “Escrow Agreement”), pursuant to which ACAH shall issue in the name of the Earnout Pre-Closing Company Securityholders and deposit with the Escrow Agent 30,000,000 ACAH New Common Shares less the number of ACAH New Common Shares that would otherwise be subject to Earnout RSUs issuable to all Eligible Holders in accordance with Section 2.4(c) (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH) (as adjusted, the “Earnout Shares”) to be held, along with any other dividends, distributions or other income on such Earnout Shares (collectively, the “Earnout Escrow Property”), in a segregated escrow account and disbursed therefrom in accordance with the terms of this Section 2.4 and the Escrow Agreement.
(b) Except as otherwise provided in Section 2.4(c), as additional consideration for the Merger, within fifteen (15) Business Days after the occurrence of a Triggering Event during the Earnout Period, ACAH shall issue or cause the Escrow Agent to disburse to each Company Equityholder, in each case as of immediately prior to the Effective Time (other than holders of Dissenting Shares, if any, and Company Options) (collectively, the “Earnout Pre-Closing Company Securityholders”), the number of ACAH New Common Shares (rounded down to the nearest whole ACAH New Common Share) equal to the product of such Earnout Pre-Closing Company Securityholders Earnout Pro Rata Share multiplied by 15,000,000 (which shall be equitably adjusted on account of any subdivision, stock split, reverse stock split, stock dividend, combination, reclassification or similar equity restructuring transaction or any changes in the ACAH New Common Shares as a result of a merger, consolidation, reorganization, recapitalization, business combination or similar transaction involving ACAH). Notwithstanding anything to the contrary contained herein, (i) i...
Earnout. (a) BNC shall cause the Agency to pay to Sellers in accordance with Section 2.5 additional consideration up to a maximum aggregate amount of $8,500,000 (the "Earnout"), based on the EBITDA, if any, generated by Milne ▇▇▇▇▇ in the future as follows:
(i) For each consecutive twelve (12) month segment of the sixty (60) month period commencing on the last day of the month in which the Closing occurs (each such twelve-month segment, an "Earnout Period") that Milne ▇▇▇▇▇ generates EBITDA of more than $2,500,000, then BNC shall cause the Agency to pay the Sellers a fixed minimum Earnout amount (the "Base Earnout") of $1,700,000 plus an Earnout premium (the "Earnout Premium") equal to 50% of the amount by which EBITDA for such Earnout Period exceeds $2,500,000; provided, however, (A) that the sum of the Base Earnout and Earnout Premium for each Earnout Period shall not exceed an aggregate of $3,400,000, and (B) the amount of the Earnout Premium for the particular Earnout Period shall be credited against and reduce the remaining balance of the Earnout that may be earned in future Earnout Periods, in inverse order of payment. For example, if EBITDA for each of the five Earnout Periods is $4,000,000, then the sum of the Base Earnout and Earnout Premium payable for each of the first three Earnout Periods would be $2,450,000, the Base Earnout payable for the fourth Earnout Period would be $1,150,000 (with no Earnout Premium payable for the fourth Earnout Period), and the remaining balance of the Earnout that may be earned in the fifth Earnout Period would be $0.00, such that no Earnout payments would be payable with respect to the fifth Earnout Period.
(ii) For each Earnout Period that Milne ▇▇▇▇▇ generates annual EBITDA less than or equal to $2,500,000 but more than $2,000,000, BNC shall cause the Agency to pay to Sellers a Base Earnout of $1,360,000 for that Earnout Period;
(iii) For each Earnout Period that Milne ▇▇▇▇▇ generates annual EBITDA less than or equal to $2,000,000, then neither BNC nor the Agency shall pay any Base Earnout or Earnout Premium to the Sellers for that Earnout Period;
(b) Within 20 days after the end of each Earnout Period, BNC shall deliver to the Sellers' Representatives a notice (the "Earnout Notice") specifying (i) the EBITDA for such Earnout Period, (ii) the Base Earnout and Earnout Premium then due, if any, and (iii) the remaining balance of the Earnout that may be earned in future periods, if any, showing in reasonable detail the compu...
Earnout. (a) Subject to the terms and conditions of this Section 2.4, the Buyer may become obligated to pay an Earn-Out Payment to Sellers as provided in Schedule 2.4 of this Agreement (the “Earnout Principles”). The Earnout Principles are hereby incorporated by reference into this Agreement and shall be deemed to be included in and a part of this Agreement.
(b) Not less than ninety (90) days following the Earnout Date (as defined in the Earnout Principles), the Buyer shall prepare and deliver to the Sellers’ Representative a statement (an “Earnout Statement”) that sets forth in reasonable detail its calculation of the Target Revenue Percentages (as defined in the Earnout Principles) for the Earnout Period. In the event S▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (i) dies during the Earnout Period, or (ii) is no longer employed by the Buyer during the Earnout Period then, in the case of clause (i), B▇▇▇▇ ▇▇▇▇▇▇▇▇, and, in the case of clause (ii), the Sellers’ Representative, shall, as applicable, be permitted reasonable access during normal business hours upon reasonable advance notice to review the Company’s books and records relating to the determination of the Earnout, subject to the proviso in the following sentence. Sellers’ Representative and its accountants shall be permitted reasonable access during normal business hours upon reasonable advance notice to review the Company’s books and records used in the preparation of the Earnout Statement, provided that the Sellers’ Representative and its accountants shall not have access to any such books or records if the provision thereof would, in the good faith judgment of the Buyer, (i) result in the loss of, or jeopardize, the attorney-client, attorney work product or any other similar legal privilege, (ii) result in a breach of the terms and conditions of any Contract to which the Company or any Affiliate thereof is a party or otherwise bound, or (iii) violate applicable Law. If the Sellers’ Representative has any objections to any Earnout Statement, the Sellers’ Representative shall deliver to the Buyer a written statement setting forth its objections thereto (an “Earnout Objections Statement”) with reasonable supporting detail as to any such disputed items. If an Earnout Objections Statement is not delivered to the Buyer within thirty (30) days after delivery of the Earnout Statement to the Sellers’ Representative, such Earnout Statement shall be final, binding and non-appealable on the parties hereto and all other Persons. If an Earnou...
Earnout. (i) The Sellers will be entitled to receive a contingent purchase price payment of up to $1,000,000 (the "EARNOUT") in accordance with the provisions of this section 2(e). The Earnout shall be payable with respect to the Company's fiscal year ending December 31, 1998 and the amount of the Earnout payment for such fiscal year will be equal to two times the amount (if any) by which the Company's Adjusted EBITAM for such fiscal exceeds $2,200,000; PROVIDED, HOWEVER, that in no event shall the Earnout amount for such fiscal year be more than $1,000,000. The amount of the Earnout to be received by each Seller shall be the Seller's Company Pro Rata Share thereof.
(ii) Within a reasonable time after the conclusion of the fiscal year ending December 31, 1998, but no later than 30 days following the end of such fiscal year, the Purchaser shall deliver to the Sellers' Representative a written notice which shall set forth an estimate of the amount of the Company's Adjusted EBITAM for such fiscal year and an estimate of the Earnout (if any) earned and all calculations made in the determination of such amounts (the "DETERMINATION NOTICE"). The chief financial officer of the Purchaser shall certify the amounts determined and calculations made as set forth in the Determination Notice are true and correct to the best of his knowledge and belief.
(iii) The Earnout shall be payable as follows. 75% of the Earnout (if any) for any such fiscal year will be paid within three business days of the Sellers' Representative's receipt of the Determination Notice, by wire transfer of immediately available funds to an account or accounts designated by the Sellers' Representative in writing. The remaining Earnout (if any) will be paid upon the final determination of the Adjusted EBITAM Statement for the fiscal year ending December 31, 1998 in accordance with this section 2(e), by wire transfer of immediately available funds to an account or accounts designated by the Sellers' Representative in writing. If the amount of the Earnout that is ultimately determined to be payable pursuant to section 2(e)(vi) is less than the amount paid based upon the Determination Notice, then the Sellers shall repay the difference within three business days after such determination.
(iv) For purposes of this Agreement, "ADJUSTED EBITAM" for the Company's fiscal year ending December 31, 1998 means the unaudited net income (excluding extraordinary gains or losses) of the Company (including IMP) for the twelve...
Earnout. (a) Following the Closing, and as additional contingent consideration for the Mergers and the other Transactions, within ten (10) Business Days after the occurrence of an Earnout Event, PubCo shall issue or cause to be issued to such shareholders of the Company (the “Earnout Participants,” as listed on the Schedule I attached hereto) pro rata the following additional shares of PubCo Ordinary Shares (which shall be equitably adjusted for share subdivisions, share consolidations, share dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to PubCo Ordinary Shares occurring on or after the date hereof, the “Earnout Shares” as set forth on Schedule I), upon the terms and subject to the conditions set forth in this Agreement and the other Ancillary Agreements:
(i) upon the occurrence of Earnout Event I, a one-time issuance of 15,000,000 Earnout Shares; and
(ii) upon the occurrence of Earnout Event II, a one-time issuance of 20,000,000 Earnout Shares.
(b) For the avoidance of doubt, the Earnout Participants shall be entitled to receive Earnout Shares upon the occurrence of each Earnout Event.
(c) No Earnout Shares issuable pursuant to this Section 2.8, if any, shall be released to any Company Shareholder who is required to file notification pursuant to the HSR Act or under any applicable antitrust or other competition Laws of any non-U.S. jurisdictions (collectively, “Foreign Antitrust Laws”) until any applicable waiting period pursuant to the HSR Act or Foreign Antitrust Laws has expired or been terminated (provided, that any such Company Shareholder has notified PubCo of such required filing pursuant to the HSR Act or Foreign Antitrust Laws in connection therewith following reasonable advance notice from PubCo of the reasonably anticipated issuance of Earnout Shares).
Earnout. In further consideration of the purchase of sixty-five percent (65%) of the Assets Related Business, Prime agrees to pay Moadel the amount (if any) specified below, in accordance with the provisions below. Any amounts payable pursuant to this Section are in addition to payment of the Purchase Price pursuant to Section 1.1, and no amount of the Purchase Price shall reduce amounts payable under this Section.
(a) The net income for Newco shall be calculated for the twelve consecutive calendar months ending on the one-year anniversary of the Closing Date, using the same methodology and principles reflected in the calculation of Base Net Income (as hereinafter defined) shown on Schedule 4.6 attached hereto (the "First Anniversary Net Income"). If the First Anniversary Net Income exceeds Base Net Income by at least twenty percent (20%), Prime agrees to pay Moadel an amount equal to the result obtained by (A) dividing the Purchase Price by five (5) and (B) multiplying such quotient by 9.75% (the "First Anniversary Earnout").
(b) The net income for Newco shall be calculated for the twelve consecutive calendar months ending on the two-year anniversary of the Closing Date, using the same methodology and principles reflected in the calculation of Base Net Income shown on Schedule 4.6 attached hereto (the "Second Anniversary Net Income"). To the extent that any one of the following requirements are met, Prime agrees to pay Moadel the respective amount determined as follows (the "Second Anniversary Earnout," and together with the First Anniversary Earnout, the "Earnout Payments"), with the understanding that a Second Anniversary Earnout, if any, will only be paid with respect to one of the following three alternatives, even if the requirements for more than one of the alternatives are satisfied:
(i) If Second Anniversary Net Income exceeds First Anniversary Net Income by at least twenty percent (20%) and a First Anniversary Earnout was due and payable in accordance with Section 4.6(a), then Prime agrees to pay to Moadel an amount equal to the result obtained by (A) dividing the Purchase Price by five (5) and (B) multiplying such quotient by 22.75%.
(ii) If (a) Second Anniversary Net Income exceeds First Anniversary Net Income by less than twenty percent (20%), (b) Second Anniversary Net Income exceeds Base Net Income (as hereinafter defined) by at least forty percent (40%), and (c) a First Anniversary Earnout was due and payable in accordance with Section 4.6(a), then ...
Earnout. (a) As part of the Purchase Price, the Buyer shall pay or cause to be paid to the Seller the Earnout Amount as determined in accordance with this Section 2.9 (the “Earnout Payment”), upon the later to occur of (x) thirty-one (31) days after the delivery by the Buyer Sub of the Earnout Statement pursuant to Section 2.9(d) or (y) ten (10) days following the resolution of all disputed matters properly included in an Earnout Statement Objection Notice in accordance with Section 2.9(e). The Earnout Payment shall be paid by wire transfer of immediately available funds pursuant to wire transfer instructions provided by the Seller to the Buyer Parent at least two Business Days prior to the date the Earnout Payment is required to be paid.
(b) The amount of the Earnout Payment (the “Earnout Amount”) shall be equal to the greater of (1) the product of (x) 2.26 times (y) the Average North American Excess, and (2) $0. For example, if the Average North American Excess is $25.0 million, the Earnout Amount would be $56.5 million (2.26 x $25.0 million).
(c) Within ninety (90) days following each of December 31, 2012 and December 31, 2013, the Buyer Sub shall prepare and deliver to the Buyer Parent and the Seller Representative a statement reflecting its good faith calculations of the EBITDA and the North American Excess for the preceding calendar year. The statement shall be prepared in accordance with this Agreement and GAAP and shall be accompanied by any financial statements of the North American Business used in calculating EBITDA, all of which shall be certified by the Chief Financial Officer (or officer of equivalent or similar position) of the Buyer Sub. The Buyer Parent and the Seller Representative may discuss the calculation of EBITDA and the North American Excess and make any mutually agreed changes, but the failure to do so shall not prejudice the rights of any Party pursuant to this Section 2.9.
(d) Within ninety (90) days after December 31, 2014, the Buyer Sub shall prepare and deliver to the Buyer Parent and the Seller Representative a statement (the “Earnout Statement”) setting forth its good faith calculation of the EBITDA and the North American Excess for the 2012, 2013 and 2014 calendar years (which, for the avoidance of doubt, may be different than those provided under Section 2.9(c)), the Average North American Excess and the Earnout Amount. The EBITDA and the North American Excess for the 2012, 2013 and 2014 calendar years shall be prepared in accorda...