Common use of Earnout Statement Clause in Contracts

Earnout Statement. 2.1 Unless an Acceleration Event (as defined in Section 3 hereof) shall have occurred, as promptly as practicable after the end of each Earnout Period, the Sellers’ Committee will cause an income statement of Stealth for such Earnout Period and a statement setting forth the Sellers’ Committee’s calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period (collectively, as may be revised by the Sellers’ Committee’s accountants, the “Preliminary Earnout Statement”) to be prepared, and will cause its accountants to review (and revise if necessary) the Preliminary Earnout Statement and to prepare a report based on such Preliminary Earnout Statement and the provisions of this Agreement pertaining to the determination of Actual Pre-Tax Income, as so reviewed (and revised in necessary), setting forth its calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period. As promptly as practicable, but no later than sixty (60) days after the end of such Earnout Period, the Sellers’ Committee will cause the Preliminary Earnout Statement together with the report of Stealth’s accountants as to the Actual Pre-Tax Income for such Earnout Period to be delivered to the Buyer. The income statement to be prepared as part of each Preliminary Earnout Statement (each “Preliminary Income Statement”) shall (x) fairly present in all material respects the pre-tax income of Stealth for such Earnout Period in accordance with generally accepted accounting principles (“GAAP”) applied on a basis consistent with those used in the preparation of the income statement of Stealth for the one-year period ended December 31, 2004 as prepared by Micronetics’ auditors and previously delivered to the Sellers’ Committee (the “December 31, 2004 Income Statement”), (y) include line items substantially consistent with those in the December 31, 2004 Income Statement, and (z) be prepared in accordance with accounting practices consistent with those used in the preparation of the December 31, 2004 Income Statement; provided, however, that the Preliminary Income Statement shall exclude the effect of any application of so-called “push down” and purchase accounting to the transactions contemplated by the Stock Purchase Agreement. Whenever used in this Agreement, the term accounting practices includes accounting methods and policies. The cost of the preparation of each Preliminary Earnout Statement shall be borne equally by the Sellers.

Earnout Statement. 2.1 Unless an Acceleration Event On or before the date that is ninety (as defined in Section 3 hereof90) shall have occurred, as promptly as practicable after days following the end of each the Earnout Measurement Period, the Sellers’ Committee will Surviving Entity (i) shall deliver or cause to be delivered to the Stockholders an income statement audited consolidated balance sheet and audited consolidated statements of Stealth income, equity and cash flows for such the Company for the Earnout Period Measurement Period, prepared in accordance with the Accounting Principles, and (ii) shall calculate and deliver or cause to be calculated and delivered to the Stockholders a statement setting forth the Sellers’ Committee’s calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period (collectively, as may be revised by the Sellers’ Committee’s accountants, the an “Preliminary Earnout Statement”) to be prepared, and will cause its accountants to setting forth in reasonable detail the Surviving Entity’s good faith calculation of Operating Profit for the Earnout Measurement Period. The Stockholders may review (and revise if necessary) the Preliminary each Earnout Statement and may make inquiries of the Surviving Entity, the Company and their respective Representatives, and the Surviving Entity and the Company will make available to prepare a report based on such Preliminary the Stockholders, as reasonably requested, reasonable access to personnel and Representatives of the Company or the Surviving Entity involved in preparation of the Earnout Statement and access to all books, work papers, schedules or records of the provisions of this Agreement pertaining Company, the Surviving Entity or their Representatives that are within their possession or control, in each case to the determination of Actual Pre-Tax Incomeextent necessary to evaluate the Earnout Statement. If, as so reviewed (and revised in necessary), setting forth its calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period. As promptly as practicable, but no later than within sixty (60) days after following receipt of the end final Earnout Statement setting forth the Surviving Entity’s calculation of such the Operating Profit for the Earnout Measurement Period, the Sellers’ Committee will cause the Preliminary Earnout Statement together with the report of Stealth’s accountants as Stockholders do not deliver to the Actual Pre-Tax Income for such Earnout Period to be delivered to the Buyer. The income statement to be prepared as part Surviving Entity written notice of each Preliminary Earnout Statement a dispute (each “Preliminary Income Statement”) shall (x) fairly present in all material respects the pre-tax income of Stealth for such Earnout Period in accordance with generally accepted accounting principles (“GAAP”the following sentence) applied on a basis consistent with those used respect to the calculations set forth in the preparation of Earnout Statement, then the income statement of Stealth Operating Profit for the one-year period ended December 31, 2004 as prepared by Micronetics’ auditors Earnout Measurement Period set forth in the Earnout Statement shall be deemed to be the final Operating Profit for the Earnout Measurement Period for all purposes under this Agreement and previously delivered the Surviving Entity shall promptly pay or cause to be paid to the Sellers’ Committee (the “December 31Stockholders, 2004 Income Statement”), (y) include line items substantially consistent with those in the December 31, 2004 Income Statement, and (z) be prepared in accordance with accounting practices consistent with those used their respective Pro Rata Shares, the applicable Earnout Payment, if any, for the Earnout Measurement Period as set forth in the preparation Earnout Statement. If the Stockholders provide the Surviving Entity a written notice of dispute that objects to the December 31Surviving Entity’s calculation of Operating Profit for the Earnout Measurement Period, 2004 Income specifying the basis for such objection in reasonable detail and sets forth the proposed modification to such Earnout Statement, such dispute shall be resolved in the same manner as any dispute regarding the Post-Closing Statement in accordance with the provisions of Section 2.6(c); provided, however, that the Preliminary Income Statement shall exclude the effect of any application of so-called “push down” and purchase accounting to the transactions contemplated by the Stock Purchase Agreement. Whenever used in this Agreement, the term accounting practices includes accounting methods and policies. The cost of the preparation of each Preliminary Earnout Statement Payment shall be borne equally by made no later than five (5) Business Days after the Sellersdate the Operating Profit for the Earnout Measurement Period and Earnout Payment are finally determined (the “Earnout Payment Date”), without deduction or offset.

Earnout Statement. 2.1 Unless an Acceleration Event (as defined in Section 3 hereofa) shall have occurredSubsequent to the Closing, as promptly soon as practicable after practicable, but in any event within five (5) days, following the end filing of the Purchaser’s annual financial statements on SEC Form 10-K for each of fiscal years 2023, 2024 and 2025 (each, an “Earnout PeriodYear”), the Sellers’ Committee will cause an income statement of Stealth for such Earnout Period and a statement setting forth the Sellers’ CommitteePurchaser’s calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period chief financial officer (collectively, as may be revised by the Sellers’ Committee’s accountants, the “Preliminary CFO”) will prepare and deliver to the Purchaser Representative and the Company Representative (each, a “Representative Party”) a written statement (each, an “Earnout Statement”) to be preparedsetting forth the CFO’s determination in accordance with the terms of this Section 1.11 of the Revenue Target and EBITDA Target for such Earnout Year based on the financial statements included in such Form 10-K, and whether the Earnout Recipients are entitled to receive Earnout Shares for such Earnout Year. Each of the Purchaser Representative and the Company Representative will cause have fifteen (15) days after its accountants receipt of an Earnout Statement to review (it. To the extent reasonably required to complete their respective reviews of such Earnout Statement, the Purchaser and revise if necessary) its Subsidiaries will provide each of the Preliminary Purchaser Representative and the Company Representative and their respective Representatives with reasonable access to the books and records of the Purchaser and its Subsidiaries, their respective finance personnel and any other information that the Purchaser Representative or the Company Representative reasonably requests relating to the determination of the revenue and EBITDA and the amount of Earnout Shares awarded for such Earnout Year. In addition, and without limiting the foregoing, upon request of either the Purchaser Representative or the Company Representative, the CFO shall provide a written statement setting forth in reasonable detail the calculation of Revenue Target and EBITDA Target, as set forth in the applicable Earnout Statement and reasonable documentary support reflecting the basis of such calculation. Either the Purchaser Representative or the Company Representative may deliver written notice to prepare a report based the CFO (by providing notice to the Purchaser to the attention of the CFO) and the other Representative Party on or prior to the fifteenth (15th) day after receipt of an Earnout Statement specifying in reasonable detail any items it wishes to dispute and the basis therefor. If the Purchaser Representative or the Company Representative fails to deliver such Preliminary written notice within such fifteen (15)-day-period, then such Representative Party will have waived its right (and, with respect to the Company Representative, the right of the Company Stockholders, and with respect to the Purchaser Representative, the right of the Purchaser or its Subsidiaries) to contest such Earnout Statement and the provisions of this Agreement pertaining to the determination of Actual Pre-Tax Income, as so reviewed (and revised in necessary), setting calculations set forth its calculation therein of the Actual Pre-Tax Income Revenue Target or EBITDA Target, or the number of Stealth Earnout Shares awarded for such Earnout Period. As promptly as practicable, but no Year; in such case any applicable Earnout Shares will be issued by the Purchaser not later than sixty the tenth (6010th) day after receipt of the relevant Earnout Statement. If either the Purchaser Representative or the Company Representative provides the CFO and the other Representative Party with written notice of any objections to the Earnout Statement in such fifteen (15)-day-period, then the Company Representative and the Purchaser Representative will, for a period of twenty (20) days following the date of delivery of such notice, attempt to resolve their differences and any written resolution by them as to any disputed amount will be final and binding for all purposes under this Agreement, and any applicable Earnout Shares will be issued by the Purchaser within five (5) days after the end date of such Earnout Periodwritten resolution. If the Company Representative and the Purchaser Representative do not reach a final resolution within such twenty (20) day period, then upon the written request of either Representative Party (the date of receipt of such notice by the other Representative Party, the Sellers’ Committee “Independent Expert Notice Date”), the Representative Parties will cause refer the Preliminary Earnout Statement together with the report of Stealth’s accountants as dispute to the Actual Pre-Tax Income Independent Expert for such Earnout Period to be delivered to final resolution of the Buyer. The income statement to be prepared as part of each Preliminary Earnout Statement (each “Preliminary Income Statement”) shall (x) fairly present in all material respects the pre-tax income of Stealth for such Earnout Period dispute in accordance with generally accepted accounting principles (“GAAP”) applied on a basis consistent with those used in the preparation of the income statement of Stealth for the one-year period ended December 31Section 10.4. For purposes hereof, 2004 as prepared by Micronetics’ auditors and previously delivered to the Sellers’ Committee (the “December 31, 2004 Income Statement”), (y) include line items substantially consistent with those in the December 31, 2004 Income Statement, and (z) be prepared in accordance with accounting practices consistent with those used in the preparation of the December 31, 2004 Income Statement; provided, however, that the Preliminary Income Statement shall exclude the effect of any application of so-called “push down” and purchase accounting to the transactions contemplated by the Stock Purchase Agreement. Whenever used in this Agreement, the term accounting practices includes accounting methods and policies. The cost of the preparation of each Preliminary Earnout Statement shall be borne equally by the Sellers.

Earnout Statement. 2.1 Unless For each Earnout Payment (other than an Acceleration Event Accelerated Earnout Payment), within ninety (as defined in Section 3 hereof90) shall have occurred, as promptly as practicable after days of the end of each the Earnout PeriodPeriod relating thereto, the Sellers’ Committee will cause an income Buyer shall deliver to Seller a written statement of Stealth for used to calculate such Earnout Period and a statement setting forth the Sellers’ Committee’s calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period (collectively, as may be revised by the Sellers’ Committee’s accountants, the “Preliminary Earnout Statement”) to be prepared, and will cause its accountants to review (and revise if necessary) the Preliminary Earnout Statement and to prepare a report based on such Preliminary Earnout Statement and the provisions of this Agreement pertaining to the determination of Actual Pre-Tax Income, as so reviewed (and revised in necessary), setting forth its calculation of the Actual Pre-Tax Income of Stealth for such Earnout Period. As promptly as practicable, but no later than sixty (60) days after the end of such Earnout Period, the Sellers’ Committee will cause the Preliminary Earnout Statement together with the report of Stealth’s accountants as to the Actual Pre-Tax Income for such Earnout Period to be delivered to the Buyer. The income statement to be prepared as part of each Preliminary Earnout Statement Payment (each an “Preliminary Income Statement”) shall (x) fairly present in all material respects the pre-tax income of Stealth for such Earnout Period in accordance with generally accepted accounting principles (“GAAP”) applied on a basis consistent with those used in the preparation of the income statement of Stealth for the one-year period ended December 31, 2004 as prepared by Micronetics’ auditors and previously delivered to the Sellers’ Committee (the “December 31, 2004 Income Statement”), and shall promptly supply to Seller documentation and materials supporting the Earnout Statement upon request by Seller. Within twenty (y20) include line items substantially consistent days after receipt of such Earnout Statement (the “Objection Period”), Seller may deliver to Buyer a written statement (an “Objection”) setting forth requests for further information and/or any disagreement with those such calculation. If Seller does not submit an Objection the Objection Period, then the Earnout Payment(s), as set forth in the December 31Earnout Statement from Buyer and based on the written calculation provided, 2004 Income Statementshall be final and deemed binding upon the parties. If Seller does not deliver an Objection, and (z) Buyer shall pay, or cause to be prepared paid, such Earnout Payment to Seller in accordance with accounting practices consistent with those used in the preparation this Section 2.6 after completion of the December 31Objection Period, 2004 Income Statement; providedbut in no event later than thirty (30) days thereafter, howeverwhich shall be made by wire transfer of immediately available funds an amount equal to any such Earnout Payment. If after endeavoring in good faith the parties are unable to resolve the amount of Earnout Revenue, the parties shall promptly thereafter retain an independent accounting firm of recognized international standing that is not the Preliminary Income Statement shall exclude auditor of either the effect Seller or Parent or Buyer (the “Arbiter”) to resolve any remaining disputes related to the amount of Earnout Revenue. The dispute, including the amount of any application Earnout Revenue, shall be decided by such Arbiter within thirty (30) days of so-called “push down” and purchase accounting submitting such dispute to the transactions contemplated by the Stock Purchase Agreement. Whenever used in this Agreement, the term accounting practices includes accounting methods Arbiter and policies. The cost of the preparation of each Preliminary Earnout Statement shall be borne equally by the Sellersconclusive and binding on Seller and Buyer and Parent.