Common use of Liquidation Fee Clause in Contracts

Liquidation Fee. In the event of a Change of Control, liquidation, dissolution, or winding up on the Company occurring prior to an IPO (a “Deemed Liquidation Event”), as described in Section 4.2.2 of the Company’s Certificate of Incorporation, as amended and restated (the “Certificate”), which is consummated during the term of this Agreement, the Company shall pay to Executive on the closing of such Deemed Liquidation Event a cash bonus (the “Liquidation Bonus”), in the same form or forms of payment and in the same proportions paid by the purchaser(s) to the holders of the Company’s equity securities upon the transaction, whether such distribution is at closing or a delayed distribution pursuant to the application of any escrow, earn-out or other similar arrangement. The Liquidation Bonus shall be calculated as follows: (i) For a Deemed Liquidation Event in which the assets or funds available for distribution to the holders of the Company’s capital stock following the payment of all expenses and indebtedness of the Company (the “Available Funds”) is less than or equal to $30,000,000, the Liquidation Bonus shall be $100,000; and (ii) For a Deemed Liquidation Event in which the aggregate Available Funds is greater than $30,000,000, the Liquidation Fee shall be an amount equal to the greater of (A) $100,000 or (B) an amount equal to one percent (1%) of the difference between the Available Funds and $30,000,000.