Earn-Out Consideration Clause Samples
The Earn-Out Consideration clause defines the terms under which additional payments may be made to the seller after the closing of a transaction, based on the future performance of the acquired business. Typically, this clause outlines specific financial targets or milestones—such as revenue or EBITDA—that must be met within a set period for the seller to receive these contingent payments. By linking part of the purchase price to post-closing results, the clause helps bridge valuation gaps between buyer and seller and incentivizes continued strong performance of the business.
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Earn-Out Consideration. (a) The Sponsor, the Company and NAC hereby agree that following the Closing, in addition to the consideration to be received pursuant to the BCA, ParentCo shall be required to issue to the Sponsor additional ParentCo Common Shares as follows:
(i) Six Hundred Twenty Five Thousand (625,000) ParentCo Common Shares, in the aggregate, if any time prior to or as of the second anniversary of the Closing (the “First Deadline”) the VWAP is greater than or equal to Twelve Dollars ($12.00) over any twenty (20) trading days within any thirty (30) trading day period (the “First Earn-Out Target”) (such 625,000 ParentCo Common Shares, the “First Level Earn-Out Consideration”).
(ii) Six Hundred Twenty Five Thousand (625,000) ParentCo Common Shares, in the aggregate, if any time prior to or as of the date that is thirty (30) months after Closing (the “Second Deadline”) the VWAP is greater than or equal to Fourteen Dollars ($14.00) over any twenty (20) trading days within any thirty (30) trading day period (the “Second Earn-Out Target”, and, together with the First Earn-Out Target, the “Earn-Out Targets”) (such 625,000 ParentCo Common Shares, the “Second Level Earn-Out Consideration” and together with the First Level Earn-Out Consideration, the “Earn-Out Consideration”). For the avoidance of doubt, each of the First Level Earn-Out Consideration and Second Level Earn-Out Consideration is issuable only once in accordance with the terms of this Section 5(a) and the maximum amount of Earn-Out Consideration is 1,250,000 ParentCo Common Shares, in the aggregate.
(b) If any of the Earn-Out Targets set forth in Section 5(a) shall have been achieved, within five (5) Business Days following the achievement of the applicable Earn-Out Target, ParentCo shall issue the applicable Earn-Out Consideration to the Sponsor.
(c) If a Change of Control of ParentCo occurs (i) prior to the First Deadline, then the full Earn-Out Consideration issuable pursuant to Section 5(a) that remains unissued as of immediately prior to the consummation of such Change of Control shall immediately vest and the Sponsor shall be entitled to receive such Earn-Out Consideration prior to the consummation of such Change of Control and (ii) after the First Deadline but prior to the Second Deadline, then the Second Level Earn-Out Consideration issuable pursuant to Section 5(a) that remains unissued as of immediately prior to the consummation of such Change of Control shall immediately vest and the Sponsor shall be enti...
Earn-Out Consideration. Subject to the terms and conditions of this Agreement, the Purchaser will pay, or will cause the Company to pay, to Nyrstar the earn-out consideration in respect of the Earn-Out Period (the “Earn-Out Consideration”) as additional consideration for the sale of the Company pursuant to the Share Purchase Agreement, which obligations will be guaranteed by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5, the Earn-Out Consideration will be determined and paid as follows:
(a) the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company during the Earn-Out Period, calculated and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;
(b) with respect to the initial fiscal year of the Earn-Out Period during which the Trigger Date has occurred, the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company from the Trigger Date to the last date of this initial fiscal year;
(c) with respect to the final fiscal year of the Earn-Out Period, the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of the Company from the first date of this final fiscal year to the Earn-Out Period End Date;
(d) no Earn-Out Consideration will be payable with respect of any Free Cash Flow of the Company after the expiry of the Earn-Out Period;
(e) the Company will calculate the Earn-Out Consideration within 90 days of the end of a relevant fiscal year of GPS during the Earn-Out Period; and
(f) the Earn-Out Consideration will be paid to Nyrstar within 105 days of the end of a relevant fiscal year of GPS during the Earn-Out Period, provided that:
(i) the Purchaser must, in the manner contemplated by clause 3(c) of the Share Purchase Agreement, withhold amounts payable to Nyrstar on account of Earn-Out Consideration, and any amounts so withheld will be treated as having been paid to Nyrstar on account of the Earn-Out Consideration; and
(ii) the Purchaser or the Company will be entitled to withhold payment of amounts on account of the Earn-Out Consideration in the manner contemplated by, and otherwise subject to the provisions of, the Share Purchase Agreement.
Earn-Out Consideration. 2.5.1 During the Earn-Out Period, in each Earn-Out Year where the EBITDA Adjusted of any of the Operating Corporations is positive, the Purchaser shall pay as part of the Purchase Price an amount equal to twenty percent (20%) of the sum of the positive EBITDA Adjusted of each Operating Corporation with a positive EBITDA Adjusted (each an "Earn-Out Payment" and, in aggregate over the Earn-Out Period, the "Earn-Out Consideration"), it being understood that the aggregate Earn-Out Consideration for the entire Earn-Out Period shall not exceed TWELVE MILLION EUROS (€12,000,000). Agreement of Purchase and Sale of Shares /24
2.5.2 Notwithstanding the foregoing, but subject to Sections 2.5.3 and 2.5.4, the Vendors will only be entitled to the full Earn-Out Consideration if the following remedial actions have been taken ultimately before the end of the first Earn-Out Year:
2.5.3 If prior to the end of the first Earn-Out Year, the Management Agreement of either D▇▇▇ ▇▇▇ ▇▇▇▇▇ or I▇▇▇▇▇ Brands is terminated by Biostrand for any other reason than a "For Cause by Company" event (as defined in the Management Agreement), Section 2.5.2 will cease to apply.
2.5.4 In light of the actions to be taken on the basis of Section 2.5.2, the Purchaser shall take all actions, furnish all documents [Content relates to confidential matters of the parties.] and provide all such support as may be required or reasonably requested to enable the Operating Corporations to complete such remedial actions prior to the end of the first Earn-Out Year. For greater clarity, any costs relating to the implementation of the remedial actions to be taken on the basis of Section 2.5.2 shall be borne exclusively by the respective Operating Corporations only. The Parties shall meet at regular intervals and at least on a monthly basis to discuss the status of implementation and confirm the completed and outstanding items. In the event all remedial actions have been taken, the Purchaser shall confirm so in writing to the Vendors within three (3) Business Days following completion of the last action or following the date on which it was notified hereof by the Vendors (as the case may be), such confirmation not to be unreasonably withheld, conditioned or delayed. In the event the majority of but not all of the remedial actions have been taken by the end of the first Earn-Out Year, the remediation period shall be extended once with 3 months or any other extension period(s) agreed upon between the Parties. Pendi...
Earn-Out Consideration. Following the Closing, Purchasers shall pay or cause Newco to pay to APIL the Earn-Out Consideration, in accordance with the terms of Exhibit E.
Earn-Out Consideration. 2.1 As additional consideration for the Sale Shares, the Buyer shall pay to the Sellers (Earn-out Payment) an amount equal to 42.5% of EBITDA in respect of the Financial Period ending on the Reference Date, such payment to be calculated and paid in accordance with the remaining provisions of this Schedule.
2.2 For the purpose of calculating the Earn-Out Payment the Reference Date shall, subject to paragraph 2.3, be 31 July 2018 unless ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall elect for 31 July 2016 or 31 July 2017 to be the Reference Date and such election has been made by notice in writing to the Buyer within the 3 month period following either 31 July 2016 or 31 July 2017. For the avoidance of doubt there may only be one Reference Date and one Earn-Out Payment.
2.3 In the event that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall resign as chief executive officer of the Company during the Earn-Out Period then, unless a Reference Date has already been fixed pursuant to and in accordance with paragraph 2.2, the Reference Date shall be the 31 July next following the effective date of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ceasing to be the chief executive officer of the Company.
2.4 Any Earn-out Payment that the Buyer is required to pay pursuant to this Schedule shall be paid to the Sellers in cash in £ sterling within 10 Business Days of the amount of the Earn-Out Payment being agreed or determined in accordance with the provisions of this Schedule. Payment of any Earn-Out Payment in accordance with this clause shall be a good and valid discharge of the Buyer’s obligation to pay the sum in question and the Buyer shall not be concerned to see the application of the monies so paid.
2.5 Except as permitted under paragraph 8 of this Schedule, the Earn-Out Payment shall be paid without deduction set off or counter claim and if not paid in full on the due date the Earn-Out Payment shall bear interest at the rate of 4% per annum above the base lending rate of Lloyds Bank for the time being from the due date until the date of actual payment of the Earn-Out Payment.
Earn-Out Consideration. (i) If the consolidated earnings before taxes (the "EBT") of the Company for the twelve months ending December 31, 1998, increased by amounts in respect of those items set forth on Schedule 2.5 that affected net income during the period from January 1, 1998 through the Closing Date, decreased by the amount of UniCapital corporate overhead allocated to the Company and the amount earned from New Programs for the period from the Closing Date through December 31, 1998 (the "Adjusted 1998 EBT"), exceeds the consolidated EBT of the Company for the twelve months ending December 31, 1997, increased by the add-backs set forth on Schedule 2.5 and inclusive of the amount earned from New Programs in 1997 (the "Adjusted 1997 EBT"), then the Stockholders shall be entitled to receive one-half of the difference between the Adjusted 1998 EBT and the Adjusted 1997 EBT. Notwithstanding the foregoing, the Stockholders shall be entitled to receive that portion of the Adjusted 1998 EBT attributable to New Programs.
(ii) For each $1.00 by which the Adjusted 1998 EBT falls short of Adjusted 1997 EBT, the Stockholders shall remit to UniCapital from the 1998 Shortfall Escrow, within 10 days after notice of such determination, $6.00 in shares of UniCapital Stock, valued at the IPO Price (the "1998 Shortfall"), but not to exceed $3,600,000.
(b) If the consolidated EBT of the Company for the year ending December 31, 1999, decreased by the amount of UniCapital corporate overhead allocated to the Company and the amount earned from New Programs (the "Adjusted 1999 EBT", and together with the Adjusted 1997 EBT and the Adjusted 1998 EBT, the "Company EBT"), exceeds the greater of Adjusted 1998 EBT and Adjusted 1997 EBT, then the Stockholders shall be entitled to receive one-half of the difference between (i) the Adjusted 1999 EBT and (ii) the greater of the Adjusted 1998 EBT and the Adjusted 1997 EBT. Notwithstanding the foregoing, the Stockholders shall be entitled to receive 100% of the Adjusted 1999 EBT attributable to New Programs.
(c) The Stockholders shall be entitled to receive the (x) EBT of the Company for the year ending December 31, 2000 attributable to New Programs adjusted for the amount of UniCapital corporate overhead allocated to the Company and (y) three (3) times the Company's share of the average EBT of the Real Estate Venture for the fiscal years ending December 31, 1998, 1999 and 2000.
(d) The EBT of the Company for the years ending December 31, 1998, December 31, 1999...
Earn-Out Consideration. (a) The Sponsor, the Company and NAC hereby agree that following the Closing, in addition to the consideration to be received pursuant to the BCA, ParentCo shall be required to issue to the Sponsor an additional One Million Two Hundred Fifty Thousand (1,250,000) ParentCo Common Shares, in the aggregate (the “Earn-Out Consideration”), if any time prior to or as of the second anniversary of the Closing, the VWAP is greater than or equal to Thirteen Dollars ($13.00) over any twenty (20) trading days within any thirty (30) trading day period (the “Earn-Out Target”).
(b) If the Earn-Out Target set forth in Section 5(a) shall have been achieved, within five (5) Business Days following the achievement of the Earn-Out Target, ParentCo shall issue the Earn-Out Consideration to the Sponsor.
(c) If a Change of Control of ParentCo occurs prior to the second anniversary of the Closing and the Earn-Out Consideration that is issuable pursuant to Section 5(a) remains unissued as of immediately prior to the consummation of such Change of Control, the Earn-Out Consideration shall immediately vest and the Sponsor shall be entitled to receive the Earn-Out Consideration prior to the consummation of such Change of Control.
(d) The Earn-Out Consideration and the Earn-Out Target shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into ParentCo Common Shares), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to ParentCo Common Shares, occurring on or after the date hereof and prior to the time the Earn-Out Consideration is delivered to Sponsor, if any.”
Earn-Out Consideration. (a) If earned in accordance with this Section 3.9, the Parent shall make the following additional aggregate payment (the “Earn-out Consideration”) to the Shareholders, divided among them in accordance with the Distribution Schedule. If the Gross Revenue for the period commencing March 1, 2013 and ending February 28, 2014 or such earlier date on which the aggregate Earn-out Consideration earned under this Section 3.9 equals $5,000,000 (the “Measurement Period”) is equal to or less than $7,200,000, the Earn-out Consideration shall be $0. If the Gross Revenue for the Measurement Period is greater than $9,005,054, the aggregate Earn-out Consideration shall be $5,000,000. If the Gross Revenue for the Measurement Period is greater than $7,200,000 but less than $9,005,054, the aggregate Earn-out Consideration shall be equal to 2.77 multiplied by an amount equal to (i) the Gross Revenue for the Measurement Period (rounded down to the nearest dollar) minus (ii) $7,200,000. Forty percent (40%) of the aggregate Earn-out Consideration earned in accordance with this Section 3.9 shall be paid by the issuance of that number of shares of Parent Series E Preferred Stock (rounded down to the nearest whole share) equal to the quotient obtained by dividing (x) the dollar amount of Earn-out Consideration payable in Parent Series E Preferred Stock hereunder by (y) the Agreed Stock Consideration Value and the remaining aggregate Earn-out Consideration shall be paid in cash to the Shareholders, divided among them in accordance with the Distribution Schedule.
(b) As used herein, “Gross Revenue” shall mean the Parent’s and its Subsidiaries’ (including the Surviving Corporation’s) revenue (including any Appropriate Revenue Credit credited under Section 3.9(h)) of the Business from the sale of the Lighthouse 360 Product determined in accordance with the principles set forth on Schedule FS hereto. The determination of Gross Revenue shall exclude (i) all of the Parent’s and its Subsidiaries’ (including the Surviving Corporation’s) revenue other than that of the Business from the Lighthouse 360 Product and (ii) revenue of any new businesses acquired by the Parent or any of its Subsidiaries after the date hereof.
Earn-Out Consideration. (a) During the period beginning on the Closing Date and ending on the seven-year anniversary of the Closing Date,
(i) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $14.00, Buyer shall cause the Partnership to issue 10,714,285 Common Units to the Contributor;
(ii) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $16.00, Buyer shall cause the Partnership to issue 9,375,000 Common Units to the Contributor;
(iii) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $18.00, Buyer shall cause the Partnership to issue 13,888,889 Common Units to the Contributor; and
(iv) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $20.00, Buyer shall cause the Partnership to issue 12,500,000 Common Units to the Contributor (each issuance of Common Units pursuant to clauses (i), (ii), (iii) or (iv) above, an “Earn-Out Payment” and all Earn-Out Payments, collectively, the “Earn-Out Consideration”).
(b) In the event that the Partnership shall issue any Common Units in satisfaction of an Earn-Out Payment, Buyer shall issue to the Contributor, a number of shares of Buyer Class C Common Stock equal to the number of Common Units so issued and the Contributor shall separately pay Buyer an amount of cash equal to the number of shares of Buyer Class C Common Stock received multiplied by the par value of such shares. The right to receive the Earn-Out Consideration shall be transferrable on a share-by-share basis by the Contributor to the same extent that the Common Units and shares of Buyer Class C Common Stock received by the Contributor pursuant to this Agreement are transferrable by them; provided that the Contributor and such transferees shall deliver notice to Buyer indicating the Common Units and shares of Buyer Class C Common Stock such transferee may be entitled to receive and an undertaking to indemnify Buyer and its Affiliates in the event of any dispute among any Contributor or any such transferee or other Affiliate of the Contributor or transferee with respect to any such transfer or the Common Units and/or shares of Buyer Class C Common Stock to be delivered in accordance therewith.
(c) Notwithstanding anything to the contrary herein, (i) the Contributor shall not be entitled to receive a particular Earn-Out Payment on more than one occasi...
Earn-Out Consideration. Subject to the terms and conditions set forth in this Section 3.4(d), if the Parent Trading Price on the Closing Date is less than $10.90 per share, the Stockholder shall be entitled to receive from Parent additional consideration based on the performance of the Company following the Closing in an aggregate amount up to $14,025,000 (the “Maximum Earn-Out Payment”), paid, calculated and determined in the manner set forth in this Section 3.4(d).
(i) If the Company’s EBITDA for the twelve (12)-month period ending December 31, 2024 (the “2024 EBITDA”) exceeds the 2024 EBITDA Target, Parent will pay the Stockholder an amount (the “Earn-Out Payment”) equal to the product of (A) the 2024 EBITDA minus the 2024 EBITDA Target, multiplied by (B) 0.75; provided, however, that in no event shall the aggregate Earn-Out Payment exceed the Maximum Earn-Out Payment. For the avoidance of doubt, if the 2024 EBITDA is less than the 2024 EBITDA Target or the Parent Trading Price on the Closing Date equals or exceeds $10.90 per share of Parent Common Stock, then no Earn-Out Payment will be made. The Earn-Out Payment, if payable, will be paid by Parent to the Stockholder by wire transfer of immediately available funds to an account designated by Stockholder, within five Business Days after the final determination of the 2024 EBITDA as set forth in Section 3.4(d)(ii).
(ii) By the earlier of (A) the date which is fifteen (15) days after the completion of the audit of Parent’s 2024 fiscal year and (B) April 30, 2025, Parent shall (1) prepare or cause to be prepared in good faith (a) the Company’s consolidated statements of income for the year ended December 31, 2024 (the “Earn-Out Financial Statements”), and (b) a statement setting forth in reasonable detail the 2024 EBITDA (as derived from the Earn-Out Financial Statements) and the resulting Earn-Out Payment, if any (collectively, the “Earn-Out Deliveries”), and (2) deliver the Earn-Out Deliveries to the Stockholder.
(A) At any time during the thirty (30)-day period beginning on the date of the delivery of the Earn-Out Deliveries to Stockholder (the “Review Period”), Stockholder may deliver to Parent in writing its objections, if any, to the determinations set forth in the Earn-Out Deliveries (the “Notice of Objection”); provided, such Notice of Objection shall specify the items in the Earn-Out Deliveries disputed by the Stockholder and shall describe in reasonable detail the nature and dollar amount of any disagreement so asserted...