Earnout Covenants Clause Samples
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Earnout Covenants. (a) Following the Closing and until the expiration of the Earnout Period, Buyer shall, and shall cause its Subsidiaries and other Affiliates and any assignees or successors in interest of any of the foregoing to:
(i) maintain the existence of the Business separately within one or more Subsidiaries of Buyer;
(ii) operate the Business and provide resources to the Business in a manner that is reasonably consistent with the manner in which Buyer operates and provides resources to Buyer’s other businesses;
(iii) maintain separate Books and Records for the Business including to allow for determination of EBITDA;
(iv) except as required to comply with applicable Law, operate the Business in good faith and not take any action a primary purpose of which is to reduce or impair the Earnout Amount or the achievement thereof;
(v) not cause the Business to enter into any Contract with Buyer or any Affiliate of the Buyer that is not commercially reasonable or is otherwise materially disadvantageous to the Business relative to the terms that would be obtained at such time from an independent third party on arms’-length terms;
(vi) not impose any corporate overhead, surcharge or related expense on the Business except as specifically set forth in Schedule 1.10(a)(vi);
(vii) provide, at least twice in each calendar year during the Earnout Period, Seller and any accountants or advisors retained by Seller with reasonable access, during normal business hours, upon reasonable advance notice, to the relevant Books and Records of the Business to the extent reasonably necessary to examine the financial books and records of the Business, to make such inspections and copies of such Books and Records as they may reasonably request, and to discuss such matters with the relevant personnel of Buyer and its Affiliates responsible for the preparation of such financial books and records; provided, that the independent accountants of Buyer and its Affiliates shall not be obligated to make any work papers available to Seller or its representatives unless and until Seller or such representative has signed a customary agreement relating to such access to work papers in form and substance reasonably acceptable to such independent accountants; provided, further, that any such access shall be conducted at Seller’s sole cost and expense, in accordance with applicable Law (including applicable Law relating to employment or privacy issues), under supervision of Buyer’s or its Affiliates personnel and...
Earnout Covenants. During the period from the Closing through the end of the Third Earn-Out Period, unless a Change of Control (as defined below) has occurred and the acquiring or surviving Person in such transaction shall not have assumed all of Guarantor’s obligations under this Agreement as provided in Section 2.1(c)(iii) below, Guarantor shall, and shall cause Buyer, the Company and its Subsidiaries to refrain from (A) selling, transferring, assigning or otherwise disposing of material assets or material contracts of the Company or any of its Subsidiaries to any third party, provided, however, that the sale, transfer, assignment or other disposition of aircraft in the ordinary course of business consistent with past practice shall not be deemed to be a breach of this clause (A); (B) intentionally taking any actions intended to (1) reduce, accelerate or delay Company Revenue or (2) avoid payment or reduce the amount of any Earn-Out Consideration; (C) making or permitting any changes to its ownership, capital structure, capitalization or shareholder governance which would cause Guarantor, Buyer or the Company not to be a “Citizen of the United States” as that term is defined in 49 USC § 40102; and (D) entering into or permitting to exist any covenants or restrictions, whether in documents pertaining to Indebtedness or otherwise, that specifically restrict payment of any Earn-Out Consideration or compliance with this Agreement or that are in conflict with the provisions of this Agreement other than as may be required by the Debt Financing.
Earnout Covenants. (i) Subject to the terms of this Agreement, subsequent to the Closing, Acquirer shall have sole discretion with regard to all matters relating to the operation of the Surviving Corporation; provided, that from Closing through (and including) December 31, 2020, Acquirer agrees to (i) conduct the business of Acquirer (and its Subsidiaries, including the Surviving Corporation) in good faith with respect to the achievement of the Earnout Consideration and (ii) not to take any action with the intent or purpose of avoiding or reducing the Earnout Consideration.
(ii) Acquirer shall maintain the Company’s personnel staffing on a current headcount basis with respect to the following functional areas:
(A) Three (3) sales and marketing personnel, consisting of a sales manager, an inside sales representative and a marketing manager, or equivalent;
(B) Two (2) quality assurance personnel; and
(C) Three (3) engineers, each at the level of a staff engineer or a senior engineer or equivalent, and with requisite skills to develop and support the Eligible Products.
Earnout Covenants. (a) During the Earn-Out Period, Aemetis shall (A) maintain the separate corporate existence of EdenIQ and its subsidiaries and operate such entities as an independent division of Aemetis (the “EdenIQ Division”) and conduct the business of EdenIQ and its subsidiaries exclusively through such EdenIQ Division, (B) maintain separate books and records of the EdenIQ Division, which books and records will be sufficient to calculate Free Cash Flow, and (C) provide Cameron Cast or any of his successors (the “EdenIQ Manager”) with general authority for the operation of the EdenIQ Division and primary responsibility for day-to-day operations of the EdenIQ Division, including decision making authority over branding matters, personnel, facilities and pricing (including discounts). The EdenIQ Manager shall report directly to the Chief Executive Officer of Aemetis. For purposes of this Section 7.3(a) “EdenIQ Manager” shall be any of the individuals listed on Exhibit B, provided however, that such individual shall only be eligible to become an EdenIQ Manager if (i) Cameron Cast is no longer the EdenIQ Manager, and (ii) such individual is an employee, consultant, officer or manager solely of the EdenIQ Division.
(b) If, during the Earnout Period, Aemetis or any of its subsidiaries takes any action the intent and actual effect of which is to divert from the EdenIQ Division to Aemetis or any of its subsidiaries (other than the EdenIQ Division) income of EdenIQ that would have been received in the ordinary course of the business by the EdenIQ Division, then Free Cash Flow shall be determined as if such cash had been received by the EdenIQ Division for purposes of calculating the Earnout Bonus payments.
(c) Upon (i) the exclusive license or other disposition of any material assets of the EdenIQ Division, or a disposition of any entity constituting part of the EdenIQ Division, in each case to a third party through one or more transactions or series of transactions (including any asset sale, sale of equity interests, merger or otherwise), (ii) or a material breach of the covenants set forth in this Section 7.3, or (iii) a change of control of Aemetis (each of the events described in subsections (i)-(iii), an “Acceleration Event”), the maximum Earnout Bonus shall be deemed immediately earned and Aemetis shall pay to the Payments Administrator (for further distribution to the Holders) such amount. Notwithstanding the foregoing, an Acceleration Event shall not take place under Sect...
Earnout Covenants. During the Earnout Covenant Period, Buyer shall operate the Company as a separate profit center, business unit or division which will maintain separate books and records sufficient for the calculation of Revenue and Gross Margin; provided, that Buyer may, at its discretion, move or integrate the finance, information technology and legal functions of the Company that constitute cost centers of Buyer and its Affiliates (including, after the Closing, the Company), and may move or integrate other functions so long as no such move or integration would reasonably be expected to adversely affect Revenue or Gross Margin. During the Earnout Covenant Period, Buyer shall, subject to Section 2.8(e)(vi), ensure that the Company is provided the funds set forth in the Budget. As used herein, “Budget” means the Budget set forth in Section 2.8(e) of the Disclosure Schedule. Without limiting the foregoing, during the Earnout Covenant Period:
Earnout Covenants. Subject to Section 2.6(d), Buyer shall conduct and manage its business (including, with regard to the Company) in good faith and Buyer shall also act in good faith in the best interests of Buyer’s business (including the Company) with regard to any action that it takes or omits to take after the Closing that could be reasonably expected to impede the opportunity of the Holders to be entitled to receive, pursuant to this Section 2.6, the maximum Earnout Amount for each Earnout Period. From and after the Closing, neither Buyer nor its Subsidiaries (including the Company) will have any obligation to conduct their respective businesses
(i) outside of the Ordinary Course of Business or (ii) in a manner that disadvantages the long term growth of Buyer and its Subsidiaries (including the Company) in favor of short term earnings or maximizing the Earnout Amounts; provided that, Buyer will not take (and will cause the Company not to take) any action the primary intent or purpose of which is to impede or delay payment of the Earnout Amounts.
Earnout Covenants. (a) The parties hereto agree that, for the benefit of the Equityholders, Parent (including any of its subsidiaries and affiliates) and the Surviving Corporation shall, during the Earn Out Period:
(i) use commercially reasonable efforts (x) to obtain Regulatory Approval, including, without limitation, FDA Approval for the Earn Out Product; and (y) to continue the Development (as hereinafter defined) and enhancement of the Earn Out Product; and
(ii) use commercially reasonable efforts to Commercialize (as hereinafter defined) the Earn Out Product.
(b) Parent shall invite a representative of the Equityholders (initially designated as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) to attend all meetings of the Board of Directors of Parent in a nonvoting observer capacity (the “Observer”) and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and, provided further, that Parent shall reserve the right to withhold any information and to exclude such representative from any meeting or any portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between Parent or the Surviving Corporation and their respective counsel or would result in disclosure of trade secrets or similar proprietary information to such representative, the disclosure of which in the good faith judgment of the Board of Directors would have a material adverse effect on Parent or the Surviving Corporation. The Observer shall be entitled to receive $1,000 for each Board of Directors’ meeting attended and reimbursement for the Observer’s reasonable out-of-pocket expenses in the manner contemplated in Section 11.01(c) below. The Observer shall submit a statement to the Equityholders’ Representative for payment and reimbursement hereunder. The Equityholders’ Representative shall reimburse such fees and expenses in accordance with the procedures set forth in Section 11.01(c). The covenants set forth in this Section 6.07(b) shall terminate immediately upon the earlier of (i) the two year anniversary date of the Market Launch or (ii) the five year anniversary date of the Closing Date. After the termination of the aforementioned observation rights and during the Earn Out Period, Parent shall permit the Equi...
Earnout Covenants. It is expressly acknowledged and understood by the parties hereto that the inclusion of the provisions related to the Earnout Shares are principal terms of this Agreement and the opportunity to receive the Earnout Shares constitutes substantial consideration for the Seller’s willingness to execute this Agreement and consummate the transactions contemplated hereby. Therefore, Buyer, on behalf of it and each of its Affiliates, hereby covenants and agrees, until the end of the Measurement Period not to take any steps or actions, or omit to take any steps or actions, the primary purpose of which is to avoid the achieving or paying of any Earnout Shares. Without limiting the foregoing, nothing in this Agreement is meant to preclude Buyer or its Affiliates from operating its business in accordance with its standard policies and procedures and all Laws applicable to Buyer.
Earnout Covenants. The Purchaser agrees to comply with the following covenants commencing with the Closing Date and ending upon the earlier of (i) April 1, 2003, and (ii) satisfaction of all amounts due and owing under the Earnout Agreement.
(a) The Purchaser shall not directly, or indirectly through any of its Subsidiaries, own or operate a Rail Transportation Business east of the Mississippi River other than the Company and an Acquired Business. For purposes of this Agreement, an "Acquired Business" is a business or company, or group of related businesses or companies, acquired in a single transaction and designated as an "Acquired Business" by the Purchaser. The Purchaser shall be entitled to designate only one Acquired Business and such Acquired Business shall not own in the aggregate more than 100 railcars. For purposes of this Section, "Rail Transportation Business" shall mean the business of transporting biosolids, incinerator ash and/or soils by intermodal rail for landfilling or for land application or beneficial reuse. The Purchaser shall allow the Company the option to provide Rail Transportation Business services to Synagro and its Subsidiaries (other than any Acquired Business) with respect to transportation originating east of the Mississippi River on the same terms as proposed to be provided by a third party, unless otherwise precluded by contract, Governmental Authority or lack of Company capacity. The Acquired Business shall be entitled to replace railcars no longer in use with similar railcars but shall be precluded from increasing the aggregate number of railcars owned by the Acquired Business by more than 10% of the number owned at the time Purchaser acquires the Acquired Business. An Acquired Business shall be able to bid on new contracts utilizing its railcars to replace lost contracts, provided that those contracts are for services consistent with the business of such Acquired Business. There shall be no restrictions on the Acquired Business with respect to any business not utilizing its railcars.
Earnout Covenants