Calculation of Earn-Out Payments Sample Clauses
The Calculation of Earn-Out Payments clause defines how additional payments to the seller, contingent on the future performance of the acquired business, will be determined after a transaction. Typically, this clause outlines the specific financial metrics or targets—such as revenue or EBITDA—that must be met, the time period over which performance is measured, and the method for calculating the resulting payment. By providing a clear formula and process for determining earn-out amounts, this clause helps prevent disputes and ensures both parties understand how post-closing compensation will be handled.
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Calculation of Earn-Out Payments. The aggregate amount of the Earn-Out Payments due under Section 1.5(b), subject to adjustment pursuant to subsection (b)(iv), for each calendar year shall be based upon annual Total Net Sales, as follows :
(1) If Total Net Sales for a calendar year are less than or equal to $50,000,000, the Earn-Out Payment for such year shall be an amount equal to [*****] of the Total Net Sales for such year.
(2) If Total Net Sales for a calendar year are greater than $50,000,000 but less than or equal to $100,000,000, the Earn-Out Payment for such year shall be an amount equal to [*****] of the first $50,000,000 of Total Net Sales for the year, plus [*****] of Total Net Sales for the year in excess of $50,000,000.
(3) If Total Net Sales for a calendar year are greater than $100,000,000 but less than or equal to $150,000,000, the Earn-Out Payment for such year shall be an amount equal to [*****] of the first $50,000,000 of Total Net Sales for the year, plus [*****] of Total Net Sales for the year in excess of $50,000,000 but less than or equal to $100,000,000, plus [*****] of Total Net Sales for the year in excess of $100,000,000.
(4) If Total Net Sales for a calendar year are greater than $150,000,000 but less than or equal to $200,000,000, the Earn-Out Payment for such year shall be an amount equal to [*****] of the first $50,000,00 of Total Net Sales, plus [*****] of Total Net Sales for the year in excess of $50,000,000 but less than or equal to $100,000,000, plus [*****] of Total Net Sales for the year in excess of $100,000,000 but less than or equal to $150,000,000, plus [*****] of Total Net Sales for the year in excess of $150,000,000.
Calculation of Earn-Out Payments. (a) During the Earn-Out Period, Calavo shall provide to the Sellers’ Representative, at Calavo’s expense, no later than the monthly meeting of the Board of Directors of Calavo (which in no event shall be later than 30 days after the end of each calendar month), monthly statements providing in reasonable detail information regarding the operation of the Business and the EBITDA and Revenues achieved by the Business for the twelve-months ended with the prior calendar month and the twelve-months ended with the two months immediately preceding such month, together with any other information reasonably necessary to permit the Sellers’ Representative to assess progress toward the achievement of the Earn-Out Triggers and the Benchmark (each, an “Earn-Out Statement”). Each Earn-Out Statement will be prepared in accordance with Financial Statement Principles. Purchaser shall maintain such accounting records, ledgers, books and other documents as may be necessary to prepare such statements and make such records, ledgers, books and other documents available to the Sellers’ Representative upon his request after reasonable notice and during normal business hours.
(b) In the event of any objection by the Sellers’ Representative with respect to the determination of the EBITDA, Revenues or the Earn-Out Payment payable for the Earn-Out Period, the Sellers’ Representative shall give written notice to Calavo of the existence of such objection and the Parties will attempt to resolve any disputed items in good faith for a period of 30 days from the receipt of such written notice. If the Sellers’ Representative does not deliver a written objection within 30 days after his receipt of an Earn-Out Statement, then the calculation of the EBITDA, Revenues and the Earn-Out Payment payable for the Earn-Out Period as set forth in the applicable Earn-Out Statement shall be deemed to have been accepted.
(c) Failing resolution pursuant to Section 2.15(b) within 30 days after receipt of the written notice of objection from the Sellers’ Representative, then either Calavo or the Sellers’ Representative may submit any unresolved disputed items with respect to the amount of EBITDA, Revenues or the Earn-Out Payment payable for the Earn-Out Period for binding resolution to the Independent Accounting Firm. Calavo and the Sellers’ Representative shall direct the Independent Accounting Firm to, within 30 days following such submission, resolve the unresolved objections and such resolution shall be fi...
Calculation of Earn-Out Payments. Annual aggregate Earn-Out Payments will be calculated by using the Earn-Out Payment Table attached hereto as Exhibit C, as follows:
Calculation of Earn-Out Payments. Subject to the terms and provisions of this Section 2.7, Buyer shall pay to the Sellers (in accordance with their Pro Rata Share) (i) the applicable “Earn-Out Payment 1” set forth in Column B of Table 1 below, if and only if, the Company Group shall have generated an aggregate amount of Actual EBITDA attributable to the Business for the 12-month period beginning on January 1, 2026 (such period, the “Measurement Period 1”) that falls within the applicable “Targeted EBITDA Range” set forth opposite such amount in Column A of Table 1 below; and (ii) the applicable “Earn-Out Payment 2” set forth in Column B of Table 2 below, if and only if, the Company Group shall have generated an aggregate amount of Actual EBITDA attributable to the Business for the 12-month period beginning on January 1, 2027 (such period, the “Measurement Period 2”) that falls within the applicable “Targeted EBITDA Range” set forth opposite such amount in Column A of Table 2 below (collectively, the “Earn-Out Payments”). For the avoidance of doubt, the maximum amount payable by Buyer to Sellers, (A) with respect to Earn-Out Payment 1 is $1,500,000 and (B) with respect to Earn-Out Payment 2 is $1,500,000. For purposes of this Agreement, “Actual EBITDA” means, with respect to any Measurement Period, the net income before interest, income taxes, depreciation and amortization of the Company Group for such period, determined in accordance with the same principles, methods, practices, categories, estimates, judgments and assumptions used to calculate the Targeted EBITDA Ranges set forth below (the “EBITDA Methodologies”), which EBITDA Methodologies are set forth on Exhibit D. $1,500,000 or greater $ 1,500,000 $1,450,000 up to (but not including) $1,500,000 $ 1,350,000 $1,400,000 up to (but not including) $1,450,000 $ 1,200,000 $1,350,000 up to (but not including) $1,400,000 $ 1,050,000 $1,300,000 up to (but not including) $1,350,000 $ 900,000 $1,250,000 up to (but not including) $1,300,000 $ 750,000 $1,200,000 up to (but not including) $1,250,000 $ 600,000 $1,150,000 up to (but not including) $1,200,000 $ 450,000 $1,100,000 up to (but not including) $1,150,000 $ 300,000 $1,050,000 up to (but not including) $1,100,000 $ 150,000 Less than $1,050,000 $ 0 $1,725,000 or greater $ 1,500,000 $1,667,500 up to (but not including) $1,725,000 $ 1,350,000 $1,610,000 up to (but not including) $1,667,500 $ 1,200,000 $1,552,500 up to (but not including) $1,610,000 $ 1,050,000 $1,495,000 up to (but not includin...
Calculation of Earn-Out Payments. (a) As soon as reasonably practical and in any event not later than one hundred (100) days after the end of a financial year of the Parent (the financial year of the Parent currently ends on March 31 of each year) for an Earn-Out Period, the Purchaser shall deliver to the Sellers its good faith calculation of the amount of the applicable Earn-Out Payment for the applicable Earn-Out Period (each an "Earn-Out Statement"), together with all reasonably relevant supporting documentation. The final determination of an Earn-Out Statement shall be determined in accordance with Section 1.10.
(b) Any payment of an Earn-Out Payment to be made pursuant to Section 1.8 shall be made within 10 Business Days after the applicable Earn-Out Statement has been finally determined pursuant to Section 1.10, and no interest shall accrue on the amount of any such payment, unless such payment has not been made within the ten (10) day period, in which case it shall bear interest following the expiration of the ten (10) day period at a rate per annum equal to the then prevailing Bank Rate (in which case all accrued interest will be payable in cash).
Calculation of Earn-Out Payments. The Earn-Out Payments (if any) shall be calculated as follows:
(a) up to $[***] (the “Anthem Earn-Out Payment”), which shall be earned as follows: (i) $[***] (the “First Anthem Earn-Out Payment”) shall be earned upon achievement of the First Anthem Milestone and (ii) the remaining $[***] (the “Second Anthem Earn-Out Payment”) shall be earned upon achievement of the Second Anthem Milestone; and
(b) up to $[***] (the “Consolidated Earn-Out Revenue Payment”), which shall be earned as follows: (i) $[***] (the “First Consolidated Earn-Out Payment”) shall be earned upon the achievement of the First Consolidated Milestone and (ii) the remaining $[***] (the “Second Consolidated Earn-Out Payment”) shall be earned upon the achievement of the Second Consolidated Milestone. To the extent the Second Anthem Milestone is not achieved but the full amount of the Company’s 2019 Forecast Consolidated Revenue Target is achieved and at least $[***] of Anthem Revenue is recognized in Fiscal 2019, then the Second Anthem Milestone shall be deemed to be achieved and, notwithstanding Section 1.12(b), the Second Anthem Earn-Out Payment shall be earned. Each Earn-Out Payment, less the applicable Contingent Transaction Fees, shall be paid by Buyer to the Exchange Agent or the Surviving Corporation, as applicable, in accordance with Section 1.10(d), within sixty (60) days after the achievement of the First Anthem Milestone, Second Anthem Milestone, First Consolidated Milestone and/or Second Consolidated Milestone, as applicable. The applicable Contingent Transaction Fees for each Earn-Out Payment shall be paid to the Surviving Corporation for payment to ▇▇▇▇▇▇▇▇▇ Associates LLC. The Parties agree to treat any Earn-Out Payment as additional consideration for the Company Securities for applicable Tax purposes.
Calculation of Earn-Out Payments. If Newco achieves or exceeds a Milestone, Newco shall pay One Hundred Thousand Dollars ($100,000) (an “Earn Out Payment”) to the Company. If Newco achieves less than the EBITDA target for each Milestone but more than eighty percent (80%) of such target, the Earn Out Payment shall be equal to a percentage of the Earn Out Payment calculated on a straight line basis through one hundred percent (100%) of the EBITDA target for each Milestone, so that one percent (1%) of the Earn Out Payment shall be paid if Newco achieves eighty percent (80%) of the EBITDA target for such Milestone, fifty percent (50%) of the Earn Out Payment shall be paid if Newco achieves ninety percent (90%) of the EBITDA target for such Milestone, up to one hundred percent (100%) of the Earn Out Payment being paid if Newco achieves or exceeds the EBITDA target for such Milestone.
Calculation of Earn-Out Payments. (a) Subject to Sections 1.10(b) through 1.10(g) below, the Earn-Out Payments shall be calculated as follows:
(i) $20,000,000 (the “First Earn-Out Payment”) if the Company’s Recurring Revenue for the First Year is equal to or exceeds $24,000,000 (the “First Year Revenue Target”), $10,000,000 of which will be paid in advance on the Closing Date (the “Pre-Paid Amount”) and the remaining $10,000,000 to be paid within 90 days after the end of the First Year;
(ii) $20,000,000 (the “Second Earn-Out Payment”) to be paid within 90 days of the end of the Second Year if the Company’s Recurring Revenue for the Second Year is equal to or exceeds $42,500,000 (the “Second Year Revenue Target”); and
(iii) $10,000,000 (the “Third Earn-Out Payment”) to be paid within 90 days of the end of the Third Year if the Company’s Recurring Revenue for the Third Year is equal to or exceeds $62,500,000 (the “Third Year Revenue Target”).
(b) Subject to Sections 1.10(c) and 1.10(d), the First Earn-Out Payment will not be paid if less than 75% of the First Year Revenue Target is met in the First Year, and (b) to the extent at least 75% but less than 100% of the First Year Revenue Target is met in the First Year, the amount of the First Earn-Out Payment will be calculated as follows: (i) achievement of 75% of the First Year Revenue Target will result in 7.5% of the First Earn-Out Payment being earned; with (ii) the amount of the First Earn-Out Payment increasing ratably from a 7.5% payout up to a 100% payout of the Second Earn-Out Payment to the extent First Year Recurring Revenue exceeds 75% of the First Year Revenue Target. For example, if 80% of the First Year Revenue Target is met in the First Year (i.e., if Recurring Revenue is $19.2 million), the amount of the First Earn-Out Payment will be $5,200,000.
(c) In the event the Company’s First Year Recurring Revenue is finally determined pursuant to Section 1.11 to be less than $18,000,000, Buyer will be entitled to clawback from the Participating Equityholders the entire amount of the Pre-Paid Amount by delivery of written notice to the Representative no later than ten (10) days following the final determination of the First Year Recurring Revenue pursuant to Section 1.11. If such notice is not timely delivered, Buyer’s right to clawback the Pre-Paid Amount shall terminate. In the event Buyer provides notice of the exercise of its right to clawback the Pre-Paid Amount, and subject to Article 8, the Participating Equityholders shall pay t...