Earnout Clause Samples
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Earnout. The Earnout Amount shall be calculated, determined and paid in the following manner:
(a) Within 60 days after the end of the Earnout Period, Purchaser shall prepare in good faith and deliver to Sellers’ Representative a written statement showing in reasonable detail the calculation of Net Sales for the Earnout Period and the Earnout Amount payable, if any (the “Earnout Statement”).
(b) In the event of any objection by Sellers’ Representative with respect to the determination of the Net Sales or the Earnout Amount payable, Sellers’ Representative shall, within 60 days after its receipt of the Earnout Statement, give written notice to Purchaser of such objection showing in reasonable detail the calculation thereof (an “Earnout Dispute Notice”). Purchaser and Sellers’ Representative shall thereafter attempt to amicably resolve any disputed items set forth in such Earnout Dispute Notice. If Sellers’ Representative does not timely deliver an Earnout Dispute Notice, then the calculation of the Net Sales and the Earnout Amount as set forth in the Earnout Statement shall be deemed to have been accepted and shall be final and binding on all parties hereto.
(c) If, for any reason, Purchaser and Sellers’ Representative cannot resolve any disputed items indicated in an Earnout Dispute Notice within 30 days of the date of delivery of the Earnout Dispute Notice, then such unresolved items shall be resolved by the Referee in the manner provided in Section 2.03(c) above, mutatis mutandis, except as modified herein. The Referee shall issue a written report which shall include a revised Earnout Statement as adjusted (i) pursuant to any resolutions to objections agreed upon by Purchaser and Sellers’ Representative and (ii) pursuant to the Referee’s resolution of the unresolved objections. The Referee shall review only those matters specified in the unresolved objections and shall make no changes to the Earnout Statement, except as are required to resolve the unresolved objections. The award of the Referee shall set out the final Earnout Statement, shall be final and binding on all parties hereto, and may be enforced in any court of competent jurisdiction. The parties agree that the procedure set forth in this Section 2.06 for resolving disputes with respect to the Earnout Statement shall be the sole and exclusive method for resolving any such disputes.
(d) In connection with the preparation of the Earnout Statement, and until the final resolution of the Earnout Statement, Pu...
Earnout. (a) At the Closing, as part of the Aggregate Merger Consideration, each holder of Company Common Units shall be entitled to receive the Earnout Rights in accordance with Section 3.01(b)(i) and the Payment Spreadsheet.
(b) Following the Closing, if, at any time during the period commencing on the Closing Date and ending at 11:59 PM Eastern time on December 31, 2026:
(i) The VWAP of the WinVest Common Stock equals or exceeds $15.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the “First Level Earnout Target”), then as soon as commercially practicable and in any event within ten (10) Business Days following the achievement of the First Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 shares of WinVest Common Stock (the “First Level Earnout Shares”);
(ii) The VWAP of the WinVest Common Stock equals or exceeds $17.50 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the “Second Level Earnout Target”), then as soon as commercially practicable and in any event within ten (10) Business Days following the achievement of the Second Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 shares of WinVest Common Stock (the “Second Level Earnout Shares”); and
(iii) The VWAP of the WinVest Common Stock equals or exceeds $20.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the “Third Level Earnout Target”), then as soon as commercially practicable and in any event within ten (10) Business Days following the achievement of the Third Level Earnout Target, the holders of the Earnout Rights as of the date of such achievement shall be entitled to receive, and WinVest shall cause the issuance to such holders, pro-rata in accordance with their ownership percentage of Earnout Rights, 2,000,000 shares of WinVest Common Stock (the “Third Level Earnout Shares”).
(c) For the avoidance of doubt, the Earnout Targets may all be satisfied over the same period of Trading Days or any other periods that have overlapping Trading Days, and if each Earnout Tar...
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) Twelve and one-half percent (12.5%) of the Purchaser Ordinary Shares to be issued by Purchaser to the Sellers as Exchange Consideration in the Share Exchange (such Purchaser Ordinary Shares, subject to equitable 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, and together with the Earnout Earnings thereof, the “Earnout Shares”) (which if all Shareholders become Sellers, would be an aggregate of two million (2,000,000) Purchaser Ordinary Shares), allocated among the Sellers pro rata based on their respective Pro Rata Shares, shall be placed in escrow pursuant to Section 3.6(b) hereof and each Seller shall have the right to receive its Pro Rata Share of such Earnout Shares in accordance with the terms of this Section 3.6. All of the Earnout Shares shall vest and be payable from the Escrow Account to the Sellers in accordance with their respective Pro Rata Shares in the event that the consolidated gross revenues of Purchaser and its Subsidiaries (including the Company Group) during the three (3) fiscal quarter period beginning on October 1, 2024 (the “Earnout Period’), as reported in the Purchaser’s quarterly reports on Form 10-Q and/or annual report on Form 10-K as filed with the SEC (the “Gross Revenues”), equals or exceeds Fifteen Million U.S. Dollars ($15,000,000) (the “Full Earnout Target”). In the event that the Gross Revenues are less than the Full Earnout Target, but greater than Seven Million Five Hundred Thousand U.S. Dollars ($7,500,000) (the “Minimum Earnout Target”), a fraction of the Earnout Shares, expressed as a percentage, equal to (i) (A) the Gross Revenues minus (B) the Minimum Earnout Target, divided by (ii) (A) the Full Earnout Target less (B) the Minimum Earnout Target shall vest and be payable from the Escrow Account to the Sellers in accordance with their respective Pro Rata Shares. Any Earnout Shares that do not vest pursuant to this Section 3.6(a) based on the Gross Revenues (the “Surrendered Earnout Shares”) shall be surrendered by the Sellers (based on their respective Pro Rata Shares) to the Purchaser, and the Purchaser shall promptly cancel any such Surrendered Earnout Shares that it so receives. The Purchaser hereby agrees that during the Earnout Period, it will (i) not change its fiscal quarter from a calendar quarter, and (ii) report its consolidated revenues and ot...
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) 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. (a) After the Closing, subject to the terms and conditions set forth in this Section 4.4, the Company Shareholders set out in Exhibit F (the “Earnout Shareholders”) shall have the right to receive in the aggregate up to a maximum of an additional 4,000,000 Purchaser Class A Ordinary Shares (subject to equitable 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”). The Earnout Shareholders’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) in the event that, between one (1) month after the Closing Date and the date that is twenty-four (24) months after the Closing Date, the VWAP of the Purchaser Class A Ordinary Shares over any twenty (20) Trading Days within any thirty (30) Trading Day period is greater than or equal to $15 (“Earnout Event 1”), then the Earnout Shareholders shall be entitled to receive 1,000,000 Earnout Shares, with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(ii) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the first full fiscal year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $50,000,000 (“Earnout Event 2”), then the Earnout Shareholders shall be entitled to receive 1,000,000 Earnout Shares, with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iii) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the second full financial year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $100,000,000 (“Earnout Event 3”), then the Earnout Shareholders shall be entitled to receive 2,000,000 Earnout Shares, less any Earnout Shares previously issued in connection with Earnout Event 2, such that any Earnout Shares already issued under Earnout Event 2 shall not be reissued under this Section 4.4(a)(iii), with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iv) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the...
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) On the Closing Date, Parent shall deposit all of the Escrowed Earnout Shares with the Escrow Agent, to be held in an escrow account for the purpose of distributing such shares to the Company Stockholders upon the achievement of certain targets, as described in this Section 2.8, provided that 7.5% of such Escrowed Earnout Shares shall be part of the Escrowed Indemnity Shares and placed in a separate escrow account in satisfaction of the indemnity set forth in Article VII hereof in accordance with Section 2.10 hereof. The Escrowed Earnout Shares shall be allocated to the Company Stockholders in accordance with Section 2.6(c) of the Company Disclosure Statement and in accordance with the terms and conditions of this Section 2.8 and an agreement to be entered into at the Closing between Parent, the Escrow Representative, and Continental Stock Transfer & Trust Company (the “Escrow Agent”) (or another escrow agent mutually agreed to by Parent and the Company), in customary form and substance as reasonably agreed to by Parent and the Company (the “Escrow Agreement”).
(b) On the Closing Date, the Sponsors shall deposit 1.25 million shares of Parent Common Stock (the “Escrowed Sponsor Earnout Shares”) as set forth in Section 2.8(b) of the Parent Disclosure Statement with the Escrow Agent, to be held in an escrow account for the purpose of distributing such shares to the Sponsors upon the achievement of the First Target (as defined in Section 2.8(c)). The Escrowed Sponsor Earnout Shares shall be allocated to the Sponsors in accordance with Section 2.8(b) of the Parent Disclosure Statement and in accordance with the terms and conditions of this Section 2.8.
(c) Subject to Section 2.8(f) hereof, if between the first and the fifth anniversaries of the Closing Date, the Share Price of Parent Common Stock equals or exceeds $20.00 per share (the “First Target”) for 20 trading days within any 30 trading day period, then within ten Business Days after the achievement of such target, Parent and the Escrow Representative shall instruct the Escrow Agent to release (i) the First Tranche of Escrowed Earnout Shares (which amount may be reduced by up to 7.5% of such shares (the “First Target Indemnity Shares”) pursuant to Article VII hereof and the Escrow Agreement), which shares shall be allocated to the Company Stockholders in accordance with Section 2.6(c) hereof and Section 2.6(c) of the Company Disclosure Statement (the “First Target Shares”) and (ii) the Escrowed Sponsor...
Earnout. (a) Following the Closing, as additional consideration for the Company interests acquired in connection with the Merger, within five (5) Business Days after the occurrence of a Triggering Event, the Purchaser shall issue or cause to be issued to the Eligible Company Security Holders, based on their respective Pro Rata Earnout Shares, with respect to such Triggering Event the following shares of Purchaser Common Stock (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to Purchaser Common Stock occurring after the Closing) (the “Earnout Shares”) constituting the Earnout Consideration (which Earnout Shares, for the avoidance of doubt, shall be issued as shares of Purchaser Common Stock to all Eligible Company Security Holders based on their respective Pro Rata Share), upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Documents:
(i) upon the occurrence of Triggering Event I, a one-time issuance of an aggregate of 1,000,000 Earnout Shares;
(ii) upon the occurrence of Triggering Event II, a one-time issuance of an aggregate of 1,000,000 Earnout Shares; and
(iii) upon the occurrence of Triggering Event III, a one-time issuance of an aggregate of 1,000,000 Earnout Shares.
(b) For the avoidance of doubt, the Eligible Company Security Holders with respect to a Triggering Event shall be entitled to receive Earnout Shares upon the occurrence of each Triggering Event; provided, however, that each Triggering Event shall occur only once, if at all, and in no event shall the Eligible Company Security Holders collectively be entitled to receive more than an aggregate of 3,000,000 Earnout Shares pursuant to this Section 1.21.
(c) If, during the Earnout Period, there is a Change of Control, (A) the Purchaser shall issue 3,000,000 shares of Purchaser Common Stock (less any Earnout Shares issued prior to such Change of Control pursuant to Section 1.21(a)) to the Eligible Company Security Holders with respect to the Change of Control, and (B), thereafter, this Section 1.21 shall terminate and no further Earnout Shares shall be issuable hereunder.
(d) The Purchaser Common Stock price targets set forth in the definitions of Triggering Event I, Triggering Event II and Triggering Event III and in Section 1.21(c) shall be equitably adjusted for stock splits, reverse st...