Overhead Contribution Clause Samples
The Overhead Contribution clause defines how indirect costs, such as administrative expenses and general business operations, are allocated or reimbursed in a contractual relationship. Typically, this clause specifies a percentage or formula for calculating the portion of overhead costs that a contractor or service provider can charge to a project, ensuring these necessary but non-direct expenses are covered. Its core function is to provide transparency and fairness in cost allocation, preventing disputes over what constitutes reimbursable overhead and ensuring both parties understand the financial structure of the agreement.
Overhead Contribution. AC agrees to provide to RKO the following amounts as contribution towards overhead: (a) $125,000 payable upon the signature hereof ("1st Overhead Payment"); and (b), subject to subsection C. below, $250,000 payable on the date that is thirty (30) days after the date of the payment in (a) ("2nd Overhead Payment"). The following shall be applicable to each of the 1st and 2nd Overhead Payment:
A. Each of the 1st and 2nd Overhead Payments shall be deemed loans to RKO carrying an interest rate equal to the then applicable prime rate of Bank of America and such amount shall be deemed to be a 12-month loan to RKO unless otherwise repaid or credited as provided in subparagraphs 10.D and E below.
B. The 1st Overhead Payment shall be mandatory and RKO's obligations under this Agreement, shall in all cases be conditioned upon RKO's timely receipt of such payment.
C. The 2nd Overhead Payment shall be made at AC's sole discretion, provided that: (i) AC agrees to provide RKO with at least seven (7) business days notice of its intent to make such overhead payment; and (ii) upon RKO's timely receipt of such payment, AC shall thereafter for the next thirty (30) day period ("Lockup Period") be provided with the exclusive right to close its deal pursuant to the terms hereof, RKO agreeing that upon receipt of the 2nd Overhead Payment RKO will refrain from discussing m y sale or refinancing of RKO for a period equal to the Lockup Period. In the event that the Closing has not occurred as of the expiration of the Lockup Period, and AC wishes to extend the Lockup Period for another thirty (30) day period ("Extended Lockup Period"), then it may do so (but only once) by notifying RKO of its intention to do the same and delivering to RKO on no less than seven (7) business days notice of its intent to make such payment and thereafter making a payment equal to the amount of the 2nd Overhead Payment (the "Extension Payment") no later than the date that is thirty (30) days after the due date of the 2nd overhead payment. For avoidance of doubt it is agreed by the parties that failure of AC to make the 2 d Overhead Payment shall terminate this Agreement, except with respect to the obligations of RKO under subsection 10.A above.
D. At the Closing, the loans representing each of the 1st and 2nd Overhead Payments (and the Extension Payment, if applicable) shall be cancelled and applied towards the purchase price of RKO to reduce the amount actually paid at Closing to the members.
E. The foll...
Overhead Contribution. For good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, Company agrees to provide Producer with the following amounts (the “Overhead Contribution”):
(a) Two Hundred Fifty Thousand U.S. Dollars ($250,000), payable in six (6) equal installments over the course of the first year of the Term (as defined below), with the first installment payable on the Effective Date and each additional installment payable on the date that is two (2) months after the payment date for the prior installment; and
(b) Two Hundred Fifty Thousand U.S. Dollars ($250,000), payable in six (6) equal installments over the course of the second year of the Term, with the first installment payable on the one (1) year anniversary of the Effective Date and each additional installment payable on the date that is two (2) months after the payment date for the prior installment.