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) 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 the Closing, and as additional consideration for the Company Merger and the other Transactions, Pubco shall issue or cause to be issued to each Participating Securityholder such Participating Securityholder’s Earnout Pro Rata Share of the Aggregate Earnout Shares, which shares shall be subject to forfeiture in accordance with the following schedule (such shares, the “Earnout Shares”):
(i) upon the occurrence of Milestone Event I, one-half (1/2) of the Aggregate Earnout Shares shall be fully vested and no longer subject to forfeiture; and
(ii) upon the occurrence of Milestone Event II, the remaining one-half (1/2) of the Aggregate Earnout Shares shall be fully vested and no longer subject to forfeiture; or
(iii) upon the occurrence of a Subsequent Transaction at any time during the Milestone Event Period, all of the Aggregate Earnout Shares shall be fully vested and no longer subject to forfeiture.
(b) For the avoidance of doubt, (i) the Participating Securityholders shall be entitled to be fully vested in the applicable Earnout Shares upon the occurrence of each Milestone Event or a Subsequent Transaction; provided that each Milestone Event or a Subsequent Transaction shall only occur once, if at all, and in no event shall the Participating Securityholders be entitled to receive more than the Aggregate Earnout Shares; and (ii) to the extent that any Milestone Event or a Subsequent Transaction does not occur in accordance with the terms of this Agreement during the Milestone Event Period, any Earnout Shares that would otherwise be fully vested under this Agreement as a result of the occurrence of such Milestone Event shall instead be forfeited and cancelled without the payment of any consideration in respect thereof.
(c) The Pubco Common Stock price targets set forth in the definitions of Milestone Event I, Milestone Event II shall be equitably adjusted to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into shares of Pubco Common Stock), reorganization, recapitalization, reclassification, combination, merger, sale or exchange of shares or other like change with respect to shares of Pubco Common Stock occurring after the Closing.
Earnout. (a) After the Closing, subject to the terms and conditions set forth herein, the Company Stockholders shall have the contingent right to receive up to an aggregate maximum of 19,000,000 shares of Purchaser Common Stock (subject to adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), as additional consideration from the Purchaser based on the performance of the Purchaser Common Stock, as follows:
(i) In the event that the VWAP of the Purchaser Common Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “First Share Price Target”) for twenty (20) out of any thirty (30) consecutive Trading Days during the period beginning on the Closing Date and ending on the 36-month anniversary of the Closing Date (such period the “Earnout Period”), then, subject to the terms and conditions of this Agreement, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 5,000,000 Earnout Shares and the Sponsor shall be issued 1,000,000 Earnout Shares (the “First Earnout Share Payment”).
(ii) In the event that the VWAP of the Purchaser Common Stock equals or exceeds $17.50 per share (as adjusted for stock splits, stock dividends, combinations, reorganizations and recapitalizations) (the “Second Share Price Target”) for twenty (20) out of any thirty (30) consecutive Trading Days during the Earnout Period, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 7,000,000 Earnout Shares and the Sponsor shall be issued 1,000,000 Earnout Shares (the “Second Earnout Share Payment”).
(iii) In the event that the VWAP of the Purchaser Common Stock equals or exceeds $20.00 per share (as adjusted for stock splits, stock dividends, combinations, reorganizations and recapitalizations) (the “Third Share Price Target”, and together with the First Share Price Target and the Second Share Price Target, the “Share Price Targets”) for twenty (20) out of any thirty (30) consecutive Trading Days during the Earnout Period, the Purchaser shall issue to each of the Company Stockholders such Company Stockholder’s Pro Rata Share of 7,000,000 shares of Purchaser Common Stock and the Sponsor shall be issued 1,000,000 Earnout Shares (the “Third Earnout Sha...
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) 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. (a) Payment of Preliminary Earn-Out Payment.
(i) On the Earn-Out Payment Date (as defined below), if the Preliminary Earn-Out Ratio (as defined above) is equal to or greater than 11%, the Purchaser shall at its election (which shall be exercised in writing delivered to the Funds no later than the first day of the Trading Period; if no such notice is received by the Funds prior to the first day of the Trading Period the Purchaser shall be deemed to have elected to pay cash) either (i) pay to the Funds by wire transfer in immediately available funds to one or more bank accounts designated by the Funds an aggregate amount of cash or (ii) issue shares of Purchaser Common Stock in the manner and number calculated as provided in paragraph (ii) below (the "Preliminary Earn-Out Payment") equal to the Preliminary Earn-Out Payment Amount (as defined below).
(ii) The number of shares of Purchaser Common Stock to be issued to the Funds in payment of the Preliminary Earn- Out Payment calculated pursuant to Section 2.1(a)(i) above shall be fixed based on the twenty "Trading Days" (the "Trading Period") weighted average (based on the average daily volume) "Closing Price" of the Purchaser Common Stock during the period ending three Trading Days prior to the relevant date of payment. The "Closing Price" of any day shall mean the last reported sale price, regular way or in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, of the Purchaser Common Stock, or, if not then listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Company Purchaser Common Stock are listed or admitted to trading or, if such Purchaser Common stock are not then listed or admitted into trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter 13 7
Earnout. (a) After the Closing, subject to the terms and conditions set forth herein, the Designated Share Recipients rights to receive some or all of the Earnout Escrow Property may vest and no longer become subject to potential forfeiture based on the performance of Pubco and its Subsidiaries, including the Company and the Target Companies, during the period commencing after the Closing and ending on the fiscal year ending June 30, 2022 (the “Earnout Period”) if the requirements as set forth in either Section 2.5(a)(i) or (ii) are met. Each Designated Share Recipient Share shall receive its share of the Earnout Escrow Shares based on the proportion of the Earnout Shares allocated to such Designated Share Recipient in Annex II.
(i) In the event that the Revenue for the Earnout Period as set forth in the audited consolidated income statement of Pubco filed with its Form 20-F or Form 10-K (the “Earnout Revenue”) is equal to or greater than One Billion Four Hundred Million Renminbi (RMB 1,400,000,000) (the “First Tier Revenue Target”), but less than One Billion Seven Hundred Fifty Million Renminbi (RMB 1,750,000,000),while maintaining a gross margin at or greater than Eighty-Five percent (85%), then, subject to the terms and conditions of this Agreement, the Designated Share Recipients’ rights to receive Ten Million (10,000,000) Earnout Exchange Shares of the Earnout Escrow Property (the “First Tier Earnout Payment”) shall vest and shall no longer be subject to forfeiture and Five Million Earnout Exchange Shares will be forfeited. In all other cases, the First Tier Earnout Payment will be forfeited.
(ii) In the event that the Earnout Revenue is equal to or greater than One Billion Seven Hundred Fifty Million Renminbi (RMB 1,750,000,000) (the “Second Tier Revenue Target”, and together with the First Tier Revenue Target, the “Earnout Target”), while maintaining a gross margin at or greater than Eighty-Five percent (85%), then, subject to the terms and conditions of this Agreement, the Designated Share Recipients’ rights to receive Fifteen Million (15,000,000) Earnout Exchange Shares of the Earnout Escrow Property (the “Second Tier Earnout Payment”, and together with the First Tier Earnout Payment, the “Earnout Payments”) shall vest and shall no longer be subject to forfeiture. In all other cases, the Second Tier Earnout Payment will be forfeited. For avoidance of doubt, the Earnout Targets are mutually exclusive. If the Second Tier Revenue Target is met, the Designated...
Earnout. As additional consideration for the Interests, Buyer shall pay to Seller the following amounts (individually, an “Earnout Payment” and, collectively, the “Earnout Payments”) if and to the extent due pursuant to this Section 2.05:
(a) If prior to October 31, 2012 (the “Facility Increase Termination Date”), the Aggregate Commitments under the Buyer Debt Facility (excluding Commitments provided by Seller) equals or exceeds $100 million, whether through the addition of commitments from Persons not a Lender under the Buyer Debt Facility Agreement as of the Closing Date that are institutional lenders primarily engaged in the business of lending (“Prospective Lender”) or the assignment of Commitments by Seller or the other Lenders to Prospective Lenders (the “Facility Increase”), then Buyer shall pay, or cause to be paid, to Seller an additional $10,820,000, by wire transfer of immediately available funds to such bank account as shall be designated in writing by Seller, within fifteen (15) days following the consummation of such Facility Increase. If (I) a Facility Increase has not been consummated on or prior to October 31, 2012, (II) Buyer is in discussions with one or more Prospective Lenders and (III) Buyer’s chief executive officer certifies that he believes in good faith that continued discussions with one or more such Prospective Lenders will lead to Commitments meeting the thresholds set forth above on or prior to November 21, 2012, then the Facility Increase Termination Date will be extended to November 21, 2012. If the Facility Increase has not occurred prior to the Facility Increase Termination Date, no Earnout Payment will be earned or owed under this Section 2.05(a). In connection with the foregoing, Buyer will (or will direct the administrative agent under the Buyer Debt Facility Agreement to) (A) call each of the Prospective Lenders listed on Section 2.05 of the Disclosure Schedules (each, a “Designated Prospective Lender”) and invite them to participate as Lenders in the Buyer Debt Facility under the Buyer Debt Facility Agreement; (B) make senior management of the Acquired Companies reasonably available to meet with any Designated Prospective Lenders; (C) assist the agent in preparing materials/making available materials to be delivered to any Designated Prospective Lenders that indicate interest; and (D) consent to, accept and include any Designated Prospective Lenders as a Lender under the Buyer Debt Facility Agreement. In connection with the fo...
Earnout. (a) Except as set forth in Section 2.5(i), then at the time specified in Section 2.5(b), Section 2.5(d), Section 2.5 (f) , and Section 2.5(h) below, as applicable, the Purchaser shall pay, as part of the Purchase Price due hereunder, to the Members in the proportions set forth on Schedule 2.2(a), an earnout payment or earnout payments, if earned, pursuant to the formula below (each or together hereinafter referred to as the “Earnout Payment”). It is the intention of the parties that in calculating each Earnout Payment, the Company be evaluated as it existed prior to the purchase herein contemplated, and therefore, all expenses attributed in any way to Purchaser’s overhead shall be excluded from the calculation of EBITDA. Furthermore, if Purchaser causes the Company to incur one or more expenses (not related to Purchaser’s overhead) that are not consistent with the past practices of the Company consistently applied, including but not limited to, opening a new office, developing a new line of business, or developing a new product line (each an “Extraordinary Expense” and collectively “Extraordinary Expenses ”), then provided that F▇▇▇▇▇▇ and Diamond remain employed by the Company (a) Purchaser shall, prior to incurring the expense, discuss such action with the F▇▇▇▇▇▇ and Diamond and (b) once the aggregate total of all Extraordinary Expenses exceeds (i) $75,000 in the aggregate during the First Calculation Period, (ii) $150,000 in the aggregate during the Second Calculation Period, (iii) $150,000 in the aggregate during the Third Calculation Period, or (iv) $75,000 in the aggregate during the Fourth Calculation Period, promptly notify F▇▇▇▇▇▇ and Diamond in writing that such thresholds have been exceeded. F▇▇▇▇▇▇ and Diamond, acting jointly, shall have ten (10) days from the date of each such notice to object in writing to some or all of such Extraordinary Expenses. The Extraordinary Expenses to which F▇▇▇▇▇▇ and Diamond timely and properly object shall be referred to herein as the “Objectionable Expenses” and all other Extraordinary Expenses shall be referred to as “Accepted Expenses.” Any Accepted Expenses shall be subtracted from the total of the Extraordinary Expenses and thereafter each time the Purchaser causes the Company to incur one or more additional Extraordinary Expenses that, when added to the Objectionable Expenses for such period, cause any of the thresholds set forth above to be exceeded, the Purchaser shall again promptly notify F▇▇▇▇▇▇ and ...