Common use of Earn-Out Amount Clause in Contracts

Earn-Out Amount. For a three (3) year period following the Closing Date, (the "Earn Out Period"), Buyer shall pay to the Company (in accordance with Exhibit A) ten percent (10%) of the amount of the increase in contribution profit of the Business over the Baseline Amount based on the sale of the Company's products (the "Earn Out Amount") commencing on the first day of the month following the Closing Date and ending on the last day of the twelfth (12th) month thereafter and continuing on each consecutive twelve (12) month period thereafter for a period of three (3) years (the "Yearly Earn Out Period"). The contribution profit shall be determined by calculating the gross sales of the Company's products less cost of goods sold, direct product promotional expenses, discounts, allowances, product returns, coupons, rebates, commissions and freight (the "Earn Out Calculation"). The "Baseline Amount" is $2,000,000. In determining the contribution profit of the Company, there shall be no allocation of Buyer's general and administrative expenses.

Earn-Out Amount. For a three (3) year period following the Closing Date, (the "“Earn Out Period"”), Buyer shall pay to the Company (in accordance with Exhibit A) ten percent (10%) of the amount of the increase in contribution profit of the Business over the Baseline Amount based on the sale of the Company's ’s products (the "“Earn Out Amount"”) commencing on the first day of the month following the Closing Date and ending on the last day of the twelfth (12th) month thereafter and continuing on each consecutive twelve (12) month period thereafter for a period of three (3) years (the "“Yearly Earn Out Period"”). The contribution profit shall be determined by calculating the gross sales of the Company's ’s products less cost of goods sold, direct product promotional expenses, discounts, allowances, product returns, coupons, rebates, commissions and freight (the "“Earn Out Calculation"”). The "“Baseline Amount" ” is $2,000,000. In determining the contribution profit of the Company, there shall be no allocation of Buyer's ’s general and administrative expenses.