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.
Appears in 2 contracts
Sources: Share Purchase Agreement (Great Panther Silver LTD), Share Purchase Agreement (Great Panther Silver LTD)
Earn-Out Consideration. Subject to certain exceptions, during the terms period between the Closing and conditions the third anniversary of this the Closing, holders of Energy Vault Common Stock and Energy Vault Equity Awards as of immediately prior to the Effective Time are eligible to receive up to 9,000,000 additional Combined Company Common Stock in the aggregate in three equal tranches of 3,000,000 Earn Out Shares, respectively, upon the occurrence of Triggering Event I, Triggering Event II and Triggering Event III, respectively. Additionally, at the Closing, approximately 15,000,000 shares of Novus Common Stock will be issued to the Subscribers upon the closing of the PIPE. Following the consummation of the Business Combination, the Proposed Certificate of Incorporation (as defined in the section titled “Proposal No. 2 — The Charter Proposals”) will be filed with the Office of the Secretary of State of the State of Delaware. For more information about the Business Combination Agreement and the Business Combination, see the sections titled “Proposal No. 1 — The Business Combination Proposal” and “The Business Combination Agreement.” The obligations of Energy Vault, Novus and Merger Sub to consummate the Business Combination, including the Merger, are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following conditions: • The Energy Vault Requisite Approval in favor of the adoption of the Business Combination Agreement and the Merger and all other transactions contemplated by the Business Combination Agreement, shall have been obtained; • The Stockholder Proposals shall have been approved and adopted by the Purchaser will pay, or will cause the Company to pay, to Nyrstar the earn-out consideration in respect requisite affirmative vote 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 Novus’s stockholders in accordance with the Share Purchase Agreement. Subject to clause 2.5proxy statement/prospectus, the Earn-Out Consideration will be determined DGCL, the Novus organizational documents and paid as follows:
(a) the Earn-Out Consideration will be determined as being equal to 15% rules and regulations of NYSE; • The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Free Cash Flow Registration Statement shall be in effect and no proceedings for that purpose shall be pending before or threatened by the SEC; • No governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Business Combination, including the Merger, illegal or otherwise prohibiting consummation of the Company during Business Combination, including the Earn-Out Period, calculated Merger; • All required filings under the HSR Act shall have been completed and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;
any waiting period (band any extension thereof) with respect applicable to the initial fiscal year consummation of the Earn-Out Period during which Business Combination under the Trigger Date has occurredHSR Act shall have expired or been terminated; • All consents, approvals and authorizations set forth in the Earn-Out Consideration will be determined as being equal to 15% Business Combination Agreement shall have been obtained from and made with all governmental authorities; • The sale and issuance by Novus of Novus Common Stock in an aggregate amount required under the Business Combination Agreement shall have been consummated in accordance with the terms of the Free Cash Flow Subscription Agreements; and • The listing of shares of Combined Company Common Stock on NYSE, or another national securities exchange mutually agreed to by the parties, as 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 Closing 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.
Appears in 2 contracts
Sources: Business Combination Agreement, Business Combination Agreement
Earn-Out Consideration. Subject The Shareholders and SEU Holders shall be entitled to the terms and conditions of this Agreement, the Purchaser will pay, or will cause additional consideration as follows:
(a) If the Company to pay, to Nyrstar the earn-out consideration in respect of Business Unit Revenue for the Earn-Out Period (the “Earn-Out Considerationout Period Revenue”) as additional consideration is more than five percent (5%) greater than the Company Business Unit Revenue for the sale prior one (1) year period (the “Base Period Revenue”), then each Shareholder and SEU Holder shall be entitled to receive his or her Proportionate Share of $833,333.33 for every one tenth of one percent (.1%) by which the Company Earn-out Period Revenue exceeds the Base Period Revenue. In no event shall the consideration payable pursuant to the Share Purchase Agreementpreceding sentence exceed an aggregate of Twenty-Five Million Dollars ($25,000,000). The consideration, which obligations will be guaranteed by GPS in accordance with if any, payable pursuant to this Section 2.5 is referred to as 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;out Consideration.”
(b) with respect As soon as practicable after completion of the Earn-out Period, and in any event no later than ninety (90) days thereafter, Buyer shall prepare (or cause to be prepared) and deliver to the initial fiscal year Transaction Representative (i) a calculation of the Earn-Out Period during which Revenue, (ii) a calculation of the Trigger Date has occurredBase Period Revenue, (iii) relevant backup schedules reasonably sufficient to allow review of Buyer’s calculation of the Earn-Out Consideration will be determined as being equal to 15% out Period Revenue and the Base Period Revenue, and (iv) a statement of the Free Cash Flow amount, if any, of the Earn-out Consideration to be delivered to the Shareholders and the SEU Holders; and concurrent with such deliveries, Buyer shall (A) pay ninety-two and one half percent (92.5%) of the Earn-out Consideration, if any, as shown on such statement to Buyer’s paying agent, with instructions to pay such amount to the Shareholders and the SEU Holders in accordance with their respective Proportionate Shares, and (B) deposit seven and one half percent (7.5%) of the Earn-out Consideration, if any, as shown on such statement with the Escrow Agent pursuant to the Escrow Agreement. Unless the Transaction Representative shall, in accordance with the provisions of subsection (c) below, challenge Buyer’s determination of the Earn-out Period Revenue, the Base Period Revenue and/or the Earn-out Consideration within 30 days after the delivery of Buyer’s calculation thereof, Buyer’s determination shall be binding upon the Shareholders, the SEU Holders and the Transaction Representative. The Transaction Representative shall be granted reasonable access during business hours to the books, records and accounting work papers of the Company from to conduct its review of such the Trigger Date to Earn-out Period Revenue and the last date Base Period Revenue. Such access shall be at such times and in such a manner as shall not unreasonably interfere with Buyer’s operation of this initial fiscal year;the Company’s business.
(c) In the event that the Transaction Representative disputes the calculation of the Earn-out Period Revenue, the Base Period Revenue and/or the Earn-out Consideration, the Transaction Representative shall notify Buyer in writing by delivery of a notice (an “Earn-out Dispute Notice”) within 30 calendar days after delivery of Buyer’s calculation of the Earn-out Period Revenue, the Base Period Revenue and/or the Earn-out Consideration, which Earn-out Dispute Notice shall set forth in reasonable detail the basis for such dispute. In the event of such a dispute, Buyer and the Transaction Representative shall act in good faith to reach agreement on the disputed items or amounts in order to determine the Earn-out Consideration. If Buyer and the Transaction Representative are unable to resolve the dispute within 30 calendar days after delivery of the Earn-out Dispute Notice, then any remaining items in dispute shall be submitted to the Accounting Arbitrator for final and binding resolution in accordance with the procedures set forth in Section 3.3(b), mutatis mutandis. For avoidance of doubt, any dispute as to Section 2.5(e) shall be resolved in accordance with Section 12.15.
(d) Within 14 days of the resolution of any dispute or the Transaction Representative’s failure to deliver an Earn-out Dispute Notice on a timely basis, Buyer shall (i) pay ninety-two and one half percent (92.5%) of the Earn-out Consideration, if any, to Buyer’s paying agent (to the extent in excess of the amount, if any, paid pursuant to Section 2.5(b)), with instructions to pay such amount to the Shareholders and the SEU Holders in accordance with their respective Proportionate Shares, and (ii) deposit seven and one half percent (7.5%) of the Earn-out Consideration, if any, with the Escrow Agent (to the extent in excess of the amount, if any, paid pursuant to Section 2.5(b)) pursuant to the Escrow Agreement.
(e) By their adoption of this Agreement, the Shareholders and the SEU Holders agree and acknowledge that Buyer may make from time to time such business decisions as it deems appropriate, in its sole discretion, in the conduct of the business of the Company following Closing. The Shareholders and the SEU Holders will have no right to claim any lost earn-out or other damages as a result of such decisions so long as the actions were not taken by Buyer for the principal purpose of decreasing the amounts payable under this Section 2.5. From the Closing Date until the conclusion of the Earn-out Period, Buyer shall not (and, where applicable, shall cause the Company not to) sell or liquidate or otherwise dispose of (i) the Company or (ii) all or substantially all of the Company’s assets (including any then held outside the Company within the Company Business Unit), in each case to an unaffiliated third party, unless Buyer arranges for the successor, transferee or assignee, if any, to agree to be bound by the provisions of this Section 2.5 as if it were Buyer.
(f) Notwithstanding any other provision in this Section 2.5, if at the time any Earn-out Consideration would otherwise be payable to the Shareholders and the SEU Holders Buyer has made any claim for indemnification (i) under Section 10.2(b) through (h), (ii) under Section 10.2(a) based upon a breach of any Company Fundamental Representation or (iii) based upon a claim of fraud, which claim has not previously been satisfied (an “Unsatisfied Claim”), then, if the sum of (A) the amount of such Unsatisfied Claim plus (without duplication) (B) the aggregate amount of Losses claimed by Buyer with respect to any pending claims under Article 10 (the aggregate amount of the claims under clauses (A) and (B) are hereinafter referred to as the “Total Pending Claims”) would reduce the aggregate amount of the Escrow Funds, if any, to zero ($0), then Buyer may offset that portion of the Earn-out Consideration otherwise payable by Buyer by the amount by which that portion of the Total Pending Claims attributable to the Unsatisfied Claim that would reduce the Escrow Funds to an amount of less than zero ($0) (or, if the actual amount of the Unsatisfied Claim has been determined under Article 10, the actual Losses with respect to such claim as so determined). One hundred percent (100%) of any remaining balance of the Earn-out Consideration remaining after such offset shall be paid to Buyer’s paying agent, with instructions to pay such amounts to each Shareholder and SEU Holder in accordance with their respective Proportionate Shares. If, after the final resolution of any such Unsatisfied Claim, the amount of Losses to which Buyer is entitled to indemnification from such offset Earn-out Consideration is less than the amount of such offset, such excess portion of the previously offset Earn-out Consideration, together with interest thereon from the date of such offset until the date of such excess is paid to the paying agent at the rate in effect from time to time under the Escrow Agreement with respect to the final fiscal year of the Earn-Out PeriodEscrowed Funds, 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 shall be paid to Nyrstar within 105 days of the end of a relevant fiscal year of GPS during the Earn-Out PeriodBuyer’s paying agent, provided that:
(i) the Purchaser must, with instructions to pay such amounts to each Shareholder and SEU Holder 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 Agreementaccordance with their respective Proportionate Shares.
Appears in 1 contract
Earn-Out Consideration. (a) Subject to paragraph 53(b) and paragraph 53(c) below, in 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 event 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 thatout Revenue:
(i) is equal to or more than the Purchaser must2023 Threshold but less than £[***], in the manner contemplated by clause 3(cEarn-out Consideration will be an amount equal to the aggregate of:
(A) of £1,750,000; plus
(B) the Share Purchase Agreement2023 Contribution Amount; or
(ii) is equal to or more than £[***] million, withhold amounts the Earn-out Consideration will be an amount equal to £3,500,000.
(b) If the Earn-out Revenue is less than the 2023 Threshold, no Earn-out Consideration shall be payable.
(c) No Earn-out Consideration shall be payable to Nyrstar on account the Sellers in excess of £3,500,000 which shall be the maximum aggregate amount of Earn-Out Consideration, and any amounts so withheld out Consideration payable to the Sellers.
(d) The Buyer will be treated as having been paid to Nyrstar on account notify the Sellers’ Representative in writing of the Earn-Out Consideration; andout Payment Date and on that Earn-out Payment Date discharge its obligation to pay the Earn-out Consideration (at its absolute discretion) either:
(i) in cash by electronic funds transfer (for same day value) to the Sellers’ Solicitor’s Account;
(ii) by the Purchaser issuance of Earn-out Stock, or a combination thereof. For the Company will purposes of this paragraph, each Earn-out Stock shall be entitled valued at an amount equal to withhold payment the VWAP Price.
(e) The Earn-out Stock shall be credited as fully paid and issued on terms that they rank equally in all respects with the other shares of amounts on account that class of the Buyer in issue at the date of allotment.
(f) Each Seller’s share of the Earn-Out out Consideration is as stated in column (7) of Schedule 1 (Sellers’ details ) and the Earn-out Consideration shall be paid or issued (as applicable) in the manner contemplated by, same proportions as near as may be (fractional entitlements being disregarded and otherwise subject payable in cash to the Seller), save that if the Buyer reasonably believes that the issuance of the Earn-out Stock to one or more Sellers (“Non Stock-Eligible Sellers”) would cause the Buyer to be in breach of any applicable law or regulation then it may, without prejudice to the proportions applied to the issuance of Earn-out Stock and payment in cash (as applicable) of the Earn-out Consideration to all other Sellers, settle the Non Stock-Eligible Sellers’ entitlement to the Earn-out Consideration wholly in cash.
(g) Each Seller who is to receive Earn-out Stock in satisfaction of their share of the Earn-out Consideration, severally:
(i) acknowledges that the Earn-out Stock will not be registered under the Securities Act by reason of a specific exemption from the registration provisions ofof the Securities Act, the Share Purchase Agreement.availability of which depends upon, among other things, the accuracy of the FiscalNote Security Holders’ warranties as expressed in Schedule 4, Part 3 (FiscalNote Securities Warranties);
(ii) acknowledges and agrees that the certificates (or book-entry shares) evidencing the FiscalNote Security, or any other securities issued in respect of such FiscalNote Security upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall bear the following legend (in addition to any legend required under applicable state securities laws):
Appears in 1 contract
Sources: Sale and Purchase Agreement (FiscalNote Holdings, Inc.)
Earn-Out Consideration. Subject to Within the terms and conditions later of this Agreement, (x) ninety (90) days following the Purchaser will pay, or will cause the Company to pay, to Nyrstar the earn-out consideration in respect conclusion of the applicable Earn-Out Period or (y) fifteen (15) days following the final determination of Gross Revenue for the applicable Earn-Out Period in accordance with the provisions of the foregoing Section 2, Buyer shall pay to Parent (on behalf of the Seller Companies), by wire transfer of immediately available funds, an amount of cash determined as follows (the “Earn-Out Consideration”) as additional consideration for the sale of the Company pursuant ):
a. 2022 Earn-Out Period.
i. if Gross Revenue earned with respect to the Share Purchase Agreement2022 Earn-Out Period equals or exceeds the 2022 Target, which obligations will be guaranteed by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5, then the Earn-Out Consideration will for the 2022 Earn-Out Period shall be determined and paid as follows:an amount equal to $10,000,000;
(a) ii. if Gross Revenue earned with respect to the 2022 Earn-Out Period is less than the 2022 Target then the Earn-Out Consideration will for the 2022 Earn-Out Period shall be determined as being an amount equal to 15% of the Free Cash Flow of the Company during the $0.
b. 2023 Earn-Out Period, calculated and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;.
i. if (bx) Gross Revenue earned with respect to the initial fiscal year of the 2022 Earn-Out Period during which was equal to or exceeded the Trigger Date has occurred2022 Target and (y) Gross Revenue earned with respect to the 2023 Earn-Out Period equals or exceeds the 2023 Target, then the Earn-Out Consideration will for the 2023 Earn-Out Period shall be determined as being an amount equal to 15% of the Free Cash Flow of the Company from the Trigger Date to the last date of this initial fiscal year$20,000,000;
ii. if (cx) Gross Revenue earned with respect to the final fiscal year of the 2022 Earn-Out PeriodPeriod was less than the 2022 Target and (y) Gross Revenue earned with respect to the 2023 Earn-Out Period is less than the 2023 Target, then the Earn-Out Consideration will be determined as being equal to 15% of for the Free Cash Flow of the Company from the first date of this final fiscal year to the 2023 Earn-Out Period End Date;
shall be an amount equal to $0; iii. if (dx) no Gross Revenue earned with respect to the 2022 Earn-Out Consideration will be payable Period was equal to or exceeded the 2022 Target, but Gross Revenue earned with respect of any Free Cash Flow of to the Company after the expiry of the 2023 Earn-Out Period;
Period is less than the 2023 Target or (ey) Gross Revenue earned with respect to the Company will calculate 2022 Earn-Out Period was less than the 2022 Target, but Gross Revenue earned with respect to the 2023 Earn-Out Period equals or exceeds the 2023 Target, then the Earn-Out Consideration within 90 days of for the end of a relevant fiscal year of GPS during the 2023 Earn-Out PeriodPeriod shall be an amount equal to: ; and
(f) provided that notwithstanding anything to the contrary herein, in no event shall the aggregate Earn-Out Consideration will be paid to Nyrstar within 105 days in respect of the end of a relevant fiscal year of GPS during ▇▇▇▇ ▇▇▇▇-▇▇▇ Period and the 2023 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 AgreementPeriod exceed $30,000,000.
Appears in 1 contract
Sources: Purchase Agreement (Allscripts Healthcare Solutions, Inc.)
Earn-Out Consideration. Subject Upon the achievement by StatusOne of the performance criteria (the "Performance Criteria") set forth in that certain Earn-Out Agreement by and between American Healthways and the Stockholder Representative attached hereto as Exhibit B (the "Earn-Out Agreement"), American Healthways shall deliver to the terms and conditions Stockholder Representative on behalf of this Agreement, the Purchaser will pay, or will cause holders of the Company Class C Common Stock an amount up to pay, to Nyrstar Twelve Million Five Hundred Thousand Dollars ($12,500,000) (the earn"Base Earn-out consideration in respect Out Amount"). For purposes of the Earn-Out Period (Agreement, the “Escrow Payout shall be referred to as the "Contingent Earn-Out Amount" and may be earned and shall be payable to the recipients of the Class A/B Merger Consideration in accordance with the terms of the Earn-Out Agreement. Together with the Base Earn-Out Amount, the Contingent Earn-Out Amount shall be referred to as the "Earn-Out Consideration”) as additional consideration for ." The Earn-Out Consideration shall be payable in cash and/or shares of common stock, par value $.001 per share, of American Healthways (the sale "AMHC Common Stock"), at the sole discretion of the Company pursuant to the Share Purchase AgreementAmerican Healthways, which obligations will be guaranteed by GPS all in accordance with the Share Purchase terms set forth in the Earn-Out Agreement. Subject If the shares of AMHC Common Stock are unregistered, American Healthways agrees to clause 2.5file an S-3 registration statement (provided that if American Healthways is not then eligible to register for resale such shares on Form S-3, such registration shall be on another appropriate form determined by American Healthways) (the "Registration Statement") with the Securities and Exchange Commission not later than thirty (30) days after the date on which the Earn-Out Consideration will be determined and paid as follows:
(a) is payable in accordance with 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 terms of the Earn-Out Period during Agreement, which Registration Statement shall cover the resale from time to time of the shares. American Healthways will use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended (the "Securities Act"), as promptly as possible after the filing thereof and will use its commercially reasonable efforts to maintain the effectiveness of such Registration Statement until the earlier of (i) the date on which all of the shares of AMHC Common Stock issued as Earn-Out Consideration included in the Registration Statement have been sold or (ii) the date on which the Trigger Date has occurredshares of AMHC Common Stock issued as Earn-Out Consideration may be sold under Rule 144(k) under the Securities Act. Anything to the contrary herein notwithstanding, American Healthways may postpone for a reasonable period of time (not to exceed one period of up to ninety (90) days in any twelve (12) month period) the resale of shares pursuant to the Registration Statement if American Healthways determines in the good faith judgment of its board of directors that the resale of shares pursuant to the Registration Statement (a) could reasonably be expected to have an adverse effect on any plan or proposal by American Healthways or any of its subsidiaries with respect to any financing, acquisition, recapitalization or reorganization which is material to American Healthways or other transaction which is material to American Healthways or (b) could require the disclosure of material non-public information, the disclosure of which could reasonably be expected to be adverse to the best interests of American Healthways and its stockholders. Notwithstanding anything contained herein to the contrary, in no event shall the aggregate amount of Earn-Out Consideration exceed Seventeen Million Five Hundred Thousand Dollars ($17,500,000). If any amounts become due to the holders of the Class C Common Stock under this Section 2.7 and the Earn-Out Consideration will Agreement, the Stockholder Representative shall direct such funds or shares to be determined as being equal deposited in the Trust Account, for distribution by the Trustees to 15% the StatusOne Stockholders and the holders of the Free Cash Flow Options in amounts proportionate to the Class C Merger Consideration to which they may be entitled under the terms 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 AgreementTrust.
Appears in 1 contract
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 As additional consideration for the sale of the Company pursuant transactions contemplated hereby, Buyer shall pay or cause to the Share Purchase Agreement, which obligations will be guaranteed by GPS paid such amounts as determined in accordance with the Share Purchase Agreement. Subject to clause 2.5, the Earn-Out Consideration will be determined and paid this Section 2.07 as follows:
(a) Within 135 days following the completion of each of the Companies’ fiscal years ending on December 31, 2023 and December 31, 2024 (each such fiscal year, an “Annual Earn-Out Period”), Buyer shall deliver to Seller its good faith calculation of (i) the Company Revenue for such Annual Earn-Out Period and (ii) the resulting calculation of the Earn-Out Consideration will be determined as being equal Payment with respect to 15% of the Free Cash Flow of the Company during the such Annual Earn-Out Period, determined in accordance with this Section 2.07, together with supporting documentation (including, for the avoidance of doubt, the audited financial statements on which such calculation is based) describing in reasonable detail how the Company Revenue and the resulting Earn-Out Payment with respect to such Annual Earn-Out Period were calculated or otherwise determined (each, an “Earn-Out Statement”). The Earn-Out Statement shall be prepared in accordance with this Section 2.07 and paid at the end definitions of each relevant fiscal year “Company Revenue” and all other defined terms used in this Section 2.07.
(b) Seller shall have 45 days after delivery of GPS during an Earn-Out Statement (the “Earn-Out Review Period”) within which to review such Earn-Out Statement and Buyer’s calculation of the Company Revenue and the resulting calculation of the Earn-Out Payment, in each case, for the applicable Annual Earn-Out Period;. If Seller shall disagree with any of Buyer’s calculations contained in such Earn-Out Statement, Seller shall notify Buyer of such disagreement in writing within the Earn-Out Review Period, and shall provide in such notice of disagreement a description in reasonable detail of the basis for the disagreement and its good faith calculations of the dollar amount of the disputed items (an “Earn-Out Dispute Notice”). During an Earn-Out Review Period and until Buyer fully complies with its obligations under this Section 2.07 to make an Earn-Out Payment or it is finally determined in accordance herewith than an Earn-Out Payment is not required to be made, in each case with respect to the Annual Earn-Out Period to which the Earn-Out Review Period pertains, Buyer shall provide Seller and its Representatives with reasonable access to all relevant information and personnel of the Companies and Buyer and all of the Companies’ and Buyer’s documents and work papers (including those of the Companies’ accountants and auditors) used in or for the preparation of the applicable Earn-Out Statement, and Buyer shall cause the personnel of the Companies to cooperate with Seller and its Representatives in connection with their review of the Earn-Out Statement, in each case, as Seller or such Representative reasonably requests in connection with their review of such Earn-Out Statement, and subject to entry into customary confidentiality and access letters if requested; provided that (i) all such access shall occur during normal business hours, with reasonable notice and in a manner that does not unreasonably interfere with the conduct of the business of the Buyer and its Affiliates (including the Companies) and (ii) Buyer shall not be required to provide or cause to be provided access to or disclose or cause to be disclosed information where such access or disclosure would jeopardize the attorney-client privilege, contravene any Applicable Law or contravene any confidentiality undertaking (provided, further, however, that Buyer shall, and shall cause its Affiliates (including the Companies) to, use commercially reasonable efforts to provide alternative, redacted or substitute documents or information in a manner that would not result in the loss of the ability to assert attorney-client, work product or other privileges, violate any Applicable Law or such applicable agreement). If Seller timely delivers an Earn-Out Dispute Notice, Buyer and Seller shall, for a period of 30 calendar days (or such longer period as they may mutually agree) following Buyer’s receipt of such Earn-Out Dispute Notice (the “Earn-Out Resolution Period”), cooperate in good faith and use commercially reasonably efforts to attempt to resolve in writing their differences with respect to the matters set forth in the Earn-Out Dispute Notice and resolution that is mutually agreed by Seller and Buyer in writing shall be final, conclusive and binding on the parties hereto. If, at the conclusion of the Earn-Out Resolution Period, any amounts remain in dispute, then any such remaining disputed items shall, at the written request of either Buyer or Seller, be submitted to an Auditor for resolution. Buyer and Seller shall promptly provide their assertions regarding such disputed items in writing to the Auditor and to each other. The Auditor shall be instructed to act in accordance with the standards, requirements and limitations set forth in Section 2.06(c), which shall apply mutatis mutandis to a dispute submitted to the Auditor pursuant to this Section 2.07(b), except that the Auditor shall make its determination in a manner consistent with this Section 2.07 and the definitions of “Company Revenue” and all other defined terms used in this Section 2.07, as applicable. Any determination made by the Auditor pursuant to this Section 2.07 shall be final, conclusive and binding on Buyer and Seller for purposes of this Section 2.07 absent fraud or manifest error. The fees, costs and expenses of such review and report by the Auditor pursuant to this Section 2.07(b) shall be borne pro rata as between the Seller, on the one hand, and the Buyer, on the other hand, in proportion to the final allocation made by the Auditor of the disputed items submitted to the Auditor in relation to the claims made by the Seller and Buyer, such that the prevailing party pays the lesser proportion of such fees, costs and expenses. If Seller does not deliver an Earn-Out Dispute Notice with respect to any Earn-Out Statement in accordance with this Section 2.07(b), the Earn-Out Statement delivered by Buyer pursuant to Section 2.07(a) and the calculation of the Company Revenue and Earn-Out Payment as set forth therein shall be final, conclusive and binding on Buyer and Seller for all purposes of this Section 2.07.
(c) The earn-out amount payable with respect to each Annual Earn-Out Period shall be as follows (each, an “Earn-Out Payment” and, collectively, the “Earn-Out Payments”):
(i) for the Annual Earn-Out Period ending on December 31, 2023 (the “2023 Earn-Out Period”):
(A) if the Company Revenue is less than $135,500,000 (the “2023 Earn-Out Threshold”), the Earn-Out Payment in respect of such Annual Earn-Out Period shall be $0.
(B) if the Company Revenue is greater than or equal to the 2023 Earn-Out Threshold but less than $138,000,000 (the “2023 Earn-Out Maximum”), the Earn-Out Payment in respect of such Annual Earn-Out Period shall be (x) $22,500,000 plus (y) an amount equal to the product of (I) $2,500,000 multiplied by (II) a fraction (which shall not be greater than one (1) nor less than zero (0)), (a) the numerator of which is the amount by which the Company Revenue for such Annual Earn-Out Period exceeds the 2023 Earn-Out Threshold and (b) the denominator of which is $2,500,000 less (z) any Prior Excess DCA Payments.
(C) if the Company Revenue is greater than or equal to the 2023 Earn-Out Maximum, the Earn-Out Payment in respect of such Annual Earn-Out Period shall be (y) $25,000,000 less (z) any Prior Excess DCA Payments.
(ii) for the Annual Earn-Out Period ending on December 31, 2024 (the “2024 Earn-Out Period”):
(A) if the Company Revenue is less than $150,000,000 (the “2024 Earn-Out Threshold”), the Earn-Out Payment in respect of such Annual Earn-Out Period shall be $0.
(B) if the Company Revenue is greater than or equal to the 2024 Earn-Out Threshold but less than $155,000,000 (the “2024 Earn-Out Maximum”), the Earn-Out Payment in respect of such Annual Earn-Out Period shall be (x) $22,500,000 plus (y) an amount equal to the product of (I) $2,500,000 multiplied by (II) a fraction (which shall not be greater than one (1) nor less than zero (0)), (a) the numerator of which is the amount by which the Company Revenue for such Annual Earn-Out Period exceeds the 2024 Earn-Out Threshold and (b) the denominator of which is $5,000,000 less (z) any Prior Excess DCA Payments that haven’t been deducted from the Earn-Out Payment in respect of the 2023 Earn-Out Period pursuant to clause (z) of each of Sections 2.07(c)(i)(B) and 2.07(c)(i)(C).
(C) if the Company Revenue is greater than or equal to 2024 Earn-Out Maximum, the Earn-Out Payment in respect of such Annual Earn-Out Period shall be (y) $25,000,000 less (z) any Prior Excess DCA Payments that haven’t been deducted from the Earn-Out Payment in respect of the 2023 Earn-Out Period pursuant to clause (z) of each of Sections 2.07(c)(i)(B) and 2.07(c)(i)(C).
(d) Except if such Earn-Out Payment is $0, and subject to Section 2.07(f), promptly following the date on which the Earn-Out Payment payable in accordance with Section 2.07(c) with respect to each Annual Earn-Out Period is finally determined in accordance with Section 2.07(b), and in any event within three Business Days of such date, Buyer shall pay, or cause to be paid, by wire transfer of immediately available funds in accordance with the wire transfer instructions designated in writing by Seller to Buyer, such Earn-Out Payment. For the avoidance of doubt, the maximum amount Buyer may pay pursuant to this Section 2.07 shall be $50,000,000 in the aggregate, comprised of a maximum amount of $25,000,000 for each Annual Earn-Out Period, in each case, less any Prior Excess DCA Payments.
(e) Any payments made pursuant to this Section 2.07 shall be treated as additional consideration and as an adjustment to the Purchase Price for U.S. federal income tax purposes and consistently with the provisions of Section 7.10.
(f) In the event that a Change of Control occurs prior to when the Earn-Out Payment payable in accordance with Section 2.07(c) with respect to the initial fiscal year 2023 Earn-Out Period has been finally determined in accordance with Section 2.07(b), (i) upon and concurrently with the consummation of such Change of Control, Buyer shall pay, or cause to be paid, by wire transfer of immediately available funds in accordance with the wire transfer instructions designated in writing by Seller to Buyer, (x) $50,000,000 less (y) any Prior Excess DCA Payments (and any amount actually received by Seller pursuant to this sentence shall be deemed to be an “Earn-Out Payment” for purposes of the calculation of the “Deferred Consideration Cap” pursuant to the Deferred Consideration Agreement) and (ii) upon the satisfaction in full of Buyer’s obligations under the immediately preceding clause (i), Buyer’s obligation to make any Earn-Out Payments pursuant to this sentence shall terminate. In the event that a Change of Control occurs after 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;
(cPayment payable in accordance with Section 2.07(c) with respect to the final fiscal year of 2023 Earn-Out Period has been finally determined in accordance with Section 2.07(b) but prior to when the Earn-Out PeriodPayment payable in accordance with Section 2.07(c) with respect to the 2024 Earn-Out Period has been finally determined in accordance with Section 2.07(b), (i) upon and concurrently with the consummation of such Change of Control, to the extent not already paid, Buyer shall pay, or cause to be paid, by wire transfer of immediately available funds in accordance with the wire transfer instructions designated in writing by Seller to Buyer, (x) the Earn-Out Payment due pursuant to this Section 2.07 with respect to the ▇▇▇▇ ▇▇▇▇-▇▇▇ Period plus (y) $25,000,000 less (z) any Prior Excess DCA Payments (and any amount actually received by Seller pursuant to this sentence shall be deemed to be an “Earn-Out Payment” for purposes of the calculation of the “Deferred Consideration Cap” pursuant to the Deferred Consideration Agreement) and (ii) upon the satisfaction in full of Buyer’s obligations under the immediately preceding clause (i), Buyer’s obligation to make any Earn-Out Payments pursuant to this Section 2.07. Notwithstanding the foregoing, in no event shall the sum of the (i) Deferred Consideration, (ii) the 2023 Earn-Out Payment and (iii) the 2024 Earn-Out Payment exceed $320,000,000 in aggregate.
(g) Notwithstanding anything in this Agreement to the contrary (but subject to the last sentence of this Section 2.07(g)), Seller acknowledges and agrees that (i) from and after the Closing, Buyer, the Companies and their Affiliates shall have the right to operate their respective businesses, including the Business, in the absolute and sole discretion of Buyer, the Companies and their Affiliates and may make all decisions with respect to the Companies and the Business (including decisions with respect to commercial viability of a product, development budgets and costs and the potential market for products) in the absolute and sole discretion of Buyer, the Companies and their Affiliates, (ii) Buyer, the Companies and their Affiliates have no obligation to operate the Companies or the Business solely in order to achieve any Earn-Out Payment or to maximize the amount of any Earn-Out Payment, (iii) the Earn-Out Payments contemplated herein are speculative and are subject to numerous factors outside the control of the Companies and its Affiliates, (iv) there is no assurance that Company Revenue for any Annual Earn-Out Period will be determined such that any Earn-Out Payment will be required to be paid in accordance herewith and neither the Companies, the Business nor their Affiliates, has promised or projected that Company Revenue for any Annual Earn-Out Period will be such that any Earn-Out Payment will be required to be paid in accordance herewith, (v) neither the Companies nor their Affiliates owe any fiduciary duty to Seller, (vi) the contingent right of Seller to receive any Earn-Out Payment is not an investment in the Companies or their Affiliates and such contingent right shall not, in and of itself, entitle Seller to any rights as being equal to 15% a shareholder or equityholder of the Free Cash Flow of Companies or their Affiliates, (vii) the Company from parties intend that solely the first date express provisions of this final fiscal year Agreement will govern all of their rights and obligations, if any, with respect to the Earn-Out Period End Date;
Payments contemplated by this Section 2.07 and (dviii) Seller shall have no right to claim or assert any lost Earn-Out Consideration will be payable with respect Payment or other damages pursuant to this Agreement or otherwise, including pursuant to this Section 2.07, as a result of any Free Cash Flow conduct, decisions or other actions or inactions of the Company after Companies or their Affiliates (other than Seller’s right to claim or assert a breach of Buyer’s or the expiry Companies’ obligations pursuant to Sections 2.07(a), (b), (c) and (d)). To the fullest extent permitted by Applicable Law, Seller hereby waives any fiduciary duty of the Companies or any of their Affiliates to such Seller arising out of the transactions contemplated by this Agreement. Notwithstanding the foregoing, Buyer shall not, and Buyer shall cause the Companies and its and their respective Affiliates not to, take any action, or omit to take any action, the primary purpose or primary intent of which is to circumvent, reduce, delay, avoid or manipulate the payment to Seller of any payments contemplated by this Section 2.07.
(h) Buyer acknowledges that the agreements contained in this Section 2.07 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, Seller would not enter into this Agreement. Accordingly, if Buyer fails promptly to pay any amount due pursuant to this Section 2.07 on the occurrence of such Earn-Out Period;
(ePayment being due in accordance with Section 2.07(c) the Company will calculate the and such Earn-Out Consideration within 90 days Payment has been finally determined in accordance with Section 2.07(b), it shall also pay any costs and expenses incurred by Seller in connection with enforcing this Agreement (including by legal action), together with interest on the amount of such unpaid fee, costs and expenses, at a rate per annum equal to 5% from the end of a relevant fiscal year of GPS during the Earn-Out Period; and
(f) the Earn-Out Consideration will date such fee, cost or expense was required to be paid to Nyrstar within 105 days of (but excluding) the end of a relevant fiscal year of GPS during the Earn-Out Period, provided that:payment date.
(i) the Purchaser must, in the manner contemplated by clause 3(c) For purposes 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 ofthis Section 2.07, the Share Purchase Agreement.following terms shall have the following meanin
Appears in 1 contract
Earn-Out Consideration. Subject (a) At the Closing, Holdco shall cause the applicable Pro Rata Portion of the Unvested Earn Out Shares issuable to the terms Company Stockholders and conditions the holders of this Agreementthe Exchanged Company Options to be issued to such Company Stockholders and holders of the Exchanged Company Options at the Second Effective Time (all Unvested Earn Out Shares, 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-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-The Unvested Earn Out Consideration will be determined and paid Shares shall vest as follows:
(ai) upon the Earn-Out Consideration will be determined as being equal to 15% occurrence of Triggering Event I, 1,000,000 of the Free Cash Flow Unvested Earn Out Shares shall vest to the Company Stockholders and the holders of the Exchanged Company during Options in accordance with each such Person’s Pro Rata Portion (the Earn-“Triggering Event I Earn Out PeriodShares”);
(ii) upon the occurrence of Triggering Event II, calculated 1,000,000 of the Unvested Earn Out Shares shall vest to the Company Stockholders and paid at the end holders of the Exchanged Company Options in accordance with each relevant fiscal year such Person’s Pro Rata Portion (the “Triggering Event II Earn Out Shares”);
(iii) upon the occurrence of GPS during Triggering Event III, 1,000,000 of the Earn-Unvested Earn Out PeriodShares shall vest to the Company Stockholders and the holders of the Exchanged Company Options in accordance with each such Person’s Pro Rata Portion (the “Triggering Event III Earn Out Shares”);
(iv) upon the occurrence of Triggering Event IV, 1,000,000 of the Unvested Earn Out Shares shall vest to the Company Stockholders and the holders of the Exchanged Company Options in accordance with each such Person’s Pro Rata Portion (the “Triggering Event IV Earn Out Shares” and, together with the Triggering Event I Earn Out Shares, the Triggering Event II Earn Out Shares and the Triggering Event III Earn Out Shares, the “Earn Out Shares”).
(b) The Earn Out Shares shall be adjusted as appropriate to reflect any stock splits, reverse stock splits, stock dividends, extraordinary cash dividend, reorganization, recapitalization, reclassification, combination, amendment to organizational documentation, exchange of shares or other like change or transaction with respect to the initial fiscal year shares of Holdco Common Stock occurring on or after the Earn-Out Period during which the Trigger Date has occurred, the Earn-Out Consideration will be determined as being equal Closing. Stock dividends shall include any dividend or distribution of securities convertible into shares of Holdco Common Stock. Adjustments made pursuant to 15% of the Free Cash Flow of the Company from the Trigger Date this Section 3.06 on or prior to the last date Closing Date shall be subject to the reasonable mutual agreement of this initial fiscal year;Acquiror and the Company. The Triggering Events may be achieved at the same time or over the same overlapping trading days.
(c) If the Unvested Earn Out Shares do not vest in accordance with respect to this Section 3.06 during the final fiscal year of the Earn-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 obligations in this final fiscal year to the Earn-Out Period End Date;Section 3.06 shall terminate and no longer apply.
(d) no Earn-Any vesting of Earn Out Shares shall be treated as an adjustment to the Aggregate Merger Consideration will be payable with respect by the parties hereto for Tax purposes and not treated as “other property” within the meaning of any Free Cash Flow Section 356 of the Company after Code, unless otherwise required by a Tax Authority as a result of a “determination” that is final within the expiry meaning of Section 1313(a) of the Earn-Out Period;Code.
(e) Notwithstanding anything in this Agreement to the Company will calculate the Earn-Out Consideration within 90 days contrary, if a Holdco Change of the end of a relevant fiscal year of GPS Control occurs 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-Earn Out Period, provided that:
then, immediately prior to the consummation of such Holdco Change of Control, (i) the Purchaser must, in the manner contemplated by clause 3(c) of the Share Purchase Agreement, withhold amounts payable any Triggering Event that has not been previously satisfied shall be deemed to Nyrstar on account of Earn-Out Consideration, be satisfied 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 any Unvested Earn Out Shares shall be entitled to withhold payment of amounts on account of the Earn-Out Consideration in the manner contemplated by, fully vested and otherwise no longer subject to the provisions ofset forth in this Section 3.06. For the purposes of this Section 3.06, a “Holdco Change of Control” means (A) a sale, lease, license or other disposition, in a single transaction or a series of related transactions, of fifty percent (50%) or more of the Share Purchase Agreementassets of Holdco and its Subsidiaries, taken as a whole; (B) a merger, consolidation or other business combination of Holdco in any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) acquiring at least fifty percent (50%) of the combined voting power of the then outstanding securities of Holdco or the surviving person outstanding immediately after such merger, consolidation or other business combination; or (C) any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) obtaining beneficial ownership (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of the voting stock of Holdco representing more than fifty percent (50%) of the voting power of the capital stock of Holdco entitled to vote for the election of directors of Holdco.
Appears in 1 contract
Earn-Out Consideration. Subject (a) The holders of the Company Common Stock immediately prior to the terms and conditions of this AgreementEffective Time, the Purchaser will payVested Option Holders, or will cause and the holders of the Company Preferred Stock immediately prior to paythe Effective Time (other than the holders of Dissenting Shares) shall be entitled to receive in the aggregate, to Nyrstar the earnrespective amounts of the “Total Common Earn-out consideration in respect of Out Consideration” and “Total Preferred Earn-Out Consideration” (collectively, “Earn-Out Consideration”) on the Earn-Out Distribution Date as follows:
(i) If the Net Revenue during the Earn-Out Period is less than $*, the Total Common Earn-Out Consideration will be zero and the Total Preferred Earn-Out Consideration will be zero;
(ii) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $750,000 and the Total Preferred Earn-Out Consideration will be $2,250,000;
(iii) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $1,000,000 and the Total Preferred Earn-Out Consideration will be $4,000,000;
(iv) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $1,313,000 and the Total Preferred Earn-Out Consideration will be $6,188,000;
(v) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $2,000,000 and the Total Preferred Earn-Out Consideration will be $11,000,000;
(vi) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $2,313,000 and the Total Preferred Earn-Out Consideration will be $13,188,000;
(vii) If the Net Revenue during the Earn-Out Period is equal to or greater than $* but less than $*, the Total Common Earn-Out Consideration will be $2,625,000 and the Total Preferred Earn-Out Consideration will be $15,375,000; and
(viii) If the Net Revenue during the Earn-Out Period is equal to or greater than $*, the Total Common Earn-Out Consideration will be $2,875,000 and the Total Preferred Earn-Out Consideration will be $17,125,000; * Confidential treatment requested pursuant to Rule 24b-2. A complete copy of this exhibit including the omitted information has been filed separately with the Securities and Exchange Commission. provided, however, that with respect to * units *, if the total number of * units * during the four calendar quarters of 2008 (the “* Determination Period”) is *% or more of the combined number of * units sold * during the * Determination Period, then the Earn-Out Consideration shall be reduced (but in no event to less than zero) by (y) $2,000,000, in the case of Sections 2.6(a)(iii) and 2.6(a)(iv), and (z) $5,000,000, in the case of Sections 2.6(a)(v) through 2.6(a)(viii), respectively. Such reduction to the Earn-Out Consideration shall be proportionately made to each of the Total Common Earn-Out Consideration and the Total Preferred Earn-Out Consideration based on the percentages that the Total Common Earn-Out Consideration and Total Preferred Earn-Out Consideration would bear to the Earn-Out Consideration if the full Earn-Out Consideration were earned without any reductions. For the avoidance of doubt, under no circumstances shall the total amount of Earn-Out Consideration additionally payable by Parent pursuant to this Section 2.6 exceed $20,000,000.
(b) Within 30 days after receipt by Parent of all reports detailing the number of * and * products shipped by all * during the * Determination Period (the “Earn-Out Distribution Date”), Parent shall deposit with the “Paying Agent” (as defined in Section 2.8(a)) the total amount of Earn-Out Consideration”, if any, to which the former holders of Company Common Stock, and the former holders of Company Preferred Stock are entitled pursuant to Section 2.6(a) as additional consideration for shall be distributed. On such date, (i) the sale amount of Earn-Out Per Share Common Consideration shall be paid by the Paying Agent in cash to each former holder of Company Common Stock with respect to each share of Company Common Stock (other than Dissenting Shares) based on the percentages set forth in the Securityholder Schedule, provided, however, that the portion of the Company Earn-Out Per Share Common Consideration attributable to the then Unvested Common Shares shall not be so delivered until those shares vest pursuant to the Share applicable Restricted Stock Purchase Agreement, which obligations will be guaranteed by GPS Agreement in accordance with the Share Purchase Agreement. Subject to clause 2.5, schedule thereof incorporated in the disbursement agreement between Parent and the Paying Agent; and each former holder of Company Preferred Stock shall be paid the Earn-Out Per Share Preferred Consideration will be determined in cash with respect to each share of Company Preferred Stock on an as-converted to Company Common Stock basis (other than Dissenting Shares) based on the percentages set forth in the Securityholder Schedule and paid as follows:
(aii) the amount of Earn-Out Per Share Common Consideration will shall be determined as being equal paid by Parent in cash to 15% each former holder of each Vested Option with respect to each share of Company Common Stock subject to such Vested Option based on the percentages set forth in the Securityholder Schedule.
(c) Parent shall prepare (or cause to be prepared) and deliver to the Representative no later than 30 days after receipt by Parent of all reports detailing the number of * and * units shipped by all * during the entire * Determination Period, a calculation of the Free Cash Flow Net Revenue of the Company during Surviving Corporation for the Earn-Out Period, calculated and paid at the end number of each relevant fiscal year all * units (including details on the * and *) sold during the * Determination Period and a statement of GPS during the amount, if any, of Earn-Out Consideration to be delivered to the Company Securityholders for the applicable period.
(d) Parent shall cause the Surviving Corporation to (i) devote substantially similar resources to the development and sale of the Company Products as were normal and customary by the Company prior to the Effective Time, (ii) devote substantially similar resources to the marketing, distribution and sale of such Company Products as is normal and customary by Parent in connection with the marketing, distribution and sale of similar products and (iii) otherwise use commercially reasonable efforts to afford the Company Securityholders the reasonable opportunity to maximize the Earn-Out Period;out Consideration paid to such Company Securityholders hereunder. * Confidential treatment requested pursuant to Rule 24b-2. A complete copy of this exhibit including the omitted information has been filed separately with the Securities and Exchange Commission.
(be) with respect to The adoption of this Agreement and the initial fiscal year approval of the Merger by the Company Stockholders shall constitute approval of the Earn-Out Period during which terms and conditions specified in this Section 2.6, and the Trigger Date has occurredStockholders’ Written Consent, 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 Warrant Holder Consent Agreement, withhold amounts payable to Nyrstar on account of Earn-Out Consideration, and any amounts the Option Holder Consent shall 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 Agreementprovide.
Appears in 1 contract
Earn-Out Consideration. Subject (a) Following the Closing, Sellers shall be entitled to the terms and conditions of this Agreementadditional consideration (collectively, 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”) hereunder contingent upon the earliest of the following events to occur (the date on which any such event occurs sometimes referred to herein as additional consideration the “License Event”) or a portion thereof as provided herein:
(i) the extension, pursuant to a written instrument, on or before December 31, 2008, of the [***] Agreement for at least calendar years 2009 and 2010 (a “[***] Agreement Extension”) providing for guaranteed aggregate minimum royalties (the “AMR”) equal to or in excess of [***] Dollars ($[***]) in the aggregate; or
(ii) the date on which Buyer (or an Affiliate thereof) shall have earned and actually received royalties or other license fees (excluding advertising, design, marketing and other reimbursable expense payments deducted by the licensee before arriving at the royalty payable to the Buyer) which are generated from the Assets pursuant to a definitive license or similar agreement entered into after the Closing (“Royalties”), equal to or in excess of: (A) [***] Dollars ($[***]) in the aggregate for calendar years 2009 and 2010 or (B) [***] Dollars ($[***]) in the aggregate for calendar years 2009, 2010 and 2011. Notwithstanding anything to the contrary contained herein, for purposes of determining Royalties for calendar years 2009, 2010 and 2011, royalties from [***] shall be deemed to have been received when earned, except to the extent Buyer receives notice from [***] that such royalties will not be paid or would be deferred. Such Earn-Out Consideration shall, except as otherwise set forth herein, be evidenced through the issuance to Sellers of certificates representing shares of common stock, par value $.001 per share (“Common Stock”), of Buyer (the “Earn-Out Shares”), and shall be determined and payable as follows. Subject to the terms and conditions hereof, Buyer shall become obligated to issue a maximum number of Earn-Out Shares (the “Total Shares”) as determined by dividing Fifteen Million Dollars ($15,000,000) by the Closing Date Value of Buyer Common Stock (as defined herein). The “Closing Date Value of Buyer Common Stock” shall be equal to the average of the reported closing sale prices for such securities on the NASDAQ Global Market (or such other market as at the time constitutes the principal trading market for Buyer Common Stock) (the “Applicable Market”) for the sale period comprised of all the trading days commencing on the first trading day after the date hereof and ending on (and including) the last trading day immediately preceding the Closing Date. No Earn-Out Consideration shall be due and owing hereunder in the event a License Event shall not have occurred by December 31, 2011; provided, however, that the foregoing limitation shall not restrict the Sellers’ right to receive Earn-Out Shares in calendar year 2012 in respect of Royalties for calendar year 2011. Buyer shall provide the Sellers with a statement of the Company amount of Royalties received by the Buyer for each calendar year contemplated by this Section 3.3 within 45 days after the end of each such year. Such statement shall provide, in reasonable detail, (i) the name of each licensee or vendor, (ii) the category(s) of product covered by such license, (iii) the applicable royalty rate under such license, (iv) the total Royalty received by the Buyer during the applicable period from such licensee or vendor, and (v) the aggregate amount of Royalties received. Such statement shall be accompanied by a certification of Buyer’s chief financial officer to the effect that such officer has reviewed the report, as well as Buyer’s books of accounts and records, that such statement has been prepared in accordance with GAAP as applicable, which were applied on a consistent basis, and that, in such officer's opinion, such statement is complete and correct. If Sellers disagree with the Buyer’s determination of the amount of Royalties, then the amount of Royalties shall be determined by the independent registered public accounting firm then regularly engaged by Buyer (“Buyer’s Accountant”), and Buyer shall deliver the report of Buyer’s Accountant to Sellers within 90 days after the end of the year. Sellers shall have 15 days after receipt of such report to notify Buyer in writing of any objections thereto. If Sellers do not notify Buyer in writing of any objections within such period, then the amount determined by Buyer’s Accountant shall be final and binding upon all of the parties. If Sellers notify Buyer of any objections within such period, and Sellers and Buyer are unable to resolve such differences within 10 days thereafter, then the disputed items shall be resolved as soon as possible by a nationally recognized independent registered public accounting firm, selected by Buyer with Sellers’ consent, whose determination shall be final and binding upon all of the parties. The cost of such audit shall be borne by the Sellers unless such audit uncovers an error in Royalty computation such that Royalties reported by Buyer for any period being reviewed are to be adjusted upward by greater than two percent (2%), in which case the cost shall be borne by Buyer.
(b) Except as otherwise set forth herein, the Earn-Out Shares, if any, to be issued by Buyer to Sellers shall be issued within five business days after the amount thereof has been determined in accordance herewith (the date of such issuance, the “Earn-Out Shares Payment Date”). The Earn-Out Shares shall be subject to the terms and conditions of the registration rights agreement (the “Registration Rights Agreement”) in the form attached hereto as Exhibit “L”, which will be entered into by Sellers and Buyer on the Closing Date. Notwithstanding anything to the contrary contained herein, if (i) the License Event occurs prior to September 30, 2007, and (ii) the average of the reported closing sale prices of Buyer Common Stock on the Applicable Market during the 3 trading days immediately prior to October 1, 2007 is less than the Closing Date Value of Buyer Common Stock, Buyer may, at its sole option, elect, by written notice given to Sellers within such five business day period, to pay the Earn-Out Consideration in cash (in lieu of Buyer Common Stock) in an amount equal to Fifteen Million Dollars ($15,000,000).
(c) In the event (i) a License Event has occurred following October 1, 2007 and (ii) the average of the reported closing sale prices for Buyer Common Stock on the Applicable Market during the 3 trading days immediately prior to the occurrence of the License Event (the “License Event Value of Buyer Common Stock”) is less than the Closing Date Value of Buyer Common Stock, then Buyer may, at its sole option, elect to pay the Earn-Out Consideration in cash (in lieu of Buyer Common Stock) in an amount equal to Fifteen Million Dollars ($15,000,000).
(d) In the event (i) a License Event has occurred, (ii) the Earn-Out Shares have been issued under subparagraph (a) hereof and (iii) the average of the reported closing sale prices for Buyer Common Stock on the Applicable Market for the period comprised of all the trading days commencing on the first trading day after the Trading Date and ending on (and including) the last trading day immediately preceding the seventh trading day following the Trading Date (the “Trading Value of Buyer Common Stock”) is less than the Closing Date Value of Buyer Common Stock, then Buyer shall thereupon pay to Sellers, as part of the Earn-Out Consideration, an aggregate amount, in cash, equal to the difference between (A) Fifteen Million Dollars ($15,000,000) and (B) the product of (I) the number of Earn-Out Shares to be issued and (II) the Trading Value of Buyer Common Stock.
(e) The provisions of this subparagraph (e) shall apply in respect of the following instances where a License Event has not occurred, but a proportional amount of Earn-Out Consideration shall, subject to the terms and condition hereof, be paid.
(i) If aggregate Royalties for calendar year 2009 are equal to or in excess of [***] Dollars ($[***]), but less than [***] Dollars ($[***]), then the Sellers shall be entitled to receive, by no later than 50 days after the end of such calendar year, 50% of the number of Total Shares;
(ii) if aggregate Royalties for calendar year 2009 are in excess of [***] Dollars ($[***]), but less than [***] Dollars ($[***]), then the Sellers shall be entitled to receive, by no later than 50 days after the end of such calendar year, an amount of Earn-Out Shares equal to the product of (A) the number of Total Shares, multiplied by (B) a fraction, the numerator of which is the amount of Royalties for calendar year 2009 and the denominator of which is [***] Dollars ($[***]); and in either such case, if aggregate Royalties for calendar years 2009 and 2010 are equal to or in excess of: [***] Dollars ($[***]), then the Sellers shall be entitled to receive, by no later than 50 days after the end of calendar year 2010, the number of Earn-Out Shares determined by subtracting (C) the number of Earn-Out Shares issuable pursuant to clauses (i) or (ii), as the case may be, of this subparagraph (e) from (D) the number of Total Shares. Furthermore, if aggregate Royalties for calendar year 2010 are in excess of [***] Dollars ($[***]), but less than [***] Dollars ($[***]), then the Sellers shall be entitled to receive, by no later than 50 days after the end of such calendar year, an amount equal to the product of (A) the number of Total Shares, multiplied by (B) a fraction, the numerator of which is the amount of Royalties for calendar year 2010 and the denominator of which is [***] Dollars ($[***]). If (I) less than the number of Total Shares is issued in respect of calendar years 2009 and 2010, and (II) aggregate Royalties for calendar years 2009, 2010 and 2011 are equal to or in excess of [***] Dollars ($[***]), then the Sellers shall be entitled to receive, by no later than 50 days after the end of calendar year 2011, the number of Earn-Out Shares determined by subtracting (E) the number of Earn-Out Shares issued in respect of calendar years 2009 and 2010 from (F) the number of Total Shares. Sellers shall not be entitled to any proportionate (or other) issuance of Earn-Out Shares in respect of calendar year 2011 if aggregate Royalties for calendar years 2009, 2010 and 2011 are less than [***] Dollars ($[***]). Sellers shall not, under any circumstances, be entitled to receive an aggregate amount of Earn-Out Shares in excess of the number of Total Shares. If, under a [***] Agreement Extension, guaranteed AMR for 2009 and 2010 is at least [***] Dollars ($[***]) but less than [***] Dollars ($[***]) in the aggregate, then (in addition to any other Earn-Out Shares to which they may otherwise be entitled under this Section 3.3, subject in all instances to the maximum number of Total Shares issuable hereunder) the Sellers shall be entitled to receive within thirty (30) days of the execution of the execution and delivery of such [***] Agreement Extension, an amount of Earn-Out Shares equal to the product of (A) the number of Total Shares, multiplied by (B) a fraction, the numerator of which is the guaranteed AMR thereunder for calendar years 2009 and 2010 and the denominator of which is [***] Dollars ($[***]). In the event that (i) any Earn-Out Shares are issued and delivered to Sellers pursuant to this subparagraph (e) earlier than upon the occurrence of a License Event (“Pro-Rata Earn-Out Shares”), and (ii) if (and only if) the Pro-Rata Trading Value of Buyer Common Stock (as defined herein) thereof is less than the Closing Date Value of Buyer Common Stock, then Buyer shall thereupon pay to Sellers, as part of the Earn-Out Consideration, an aggregate amount, in cash, equal to the difference (the “Excess Value”) between (A) the product of (I) Fifteen Million Dollars ($15,000,000) and (II) a fraction, the numerator of which is the number of such Pro-Rata Earn-Out Shares to be issued and the denominator is the number of Total Shares, and (B) the product of (I) the number of such Pro-Rata Earn-Out Shares to be issued and (II) the Pro-Rata Trading Value of Buyer Common Stock. In the event that the applicable Pro-Rata Trading Value of Buyer Common Stock is greater than the Closing Date Value of Buyer Common Stock, then the aggregate Excess Value shall be deducted from any Earn-Out Consideration otherwise thereafter payable by Buyer to Sellers hereunder. For purposes hereof, the “Pro-Rata Trading Value of Buyer Common Stock” shall be determined in the same manner as set forth in subparagraph (d) above with respect to the determination of the Trading Value of Buyer Common Stock, except that if a registration statement, filed pursuant to the Share Purchase AgreementRegistration Rights Agreement and covering such Pro-Rata Earn-Out Shares, has theretofore been declared effective by the SEC, and is at such time effective, then clause (i) of the definition of “Trading Date” (as defined in Section 1.51 hereof) shall be deemed modified to refer instead to the date on which obligations will such Pro-Rata Earn-Out Shares are issued. For purposes of clarification, if any amounts are paid pursuant to this subparagraph (e) (including Earn-Out Shares) and then a License Event occurs, Buyer shall be guaranteed credited with any and all amounts theretofore paid under this subparagraph (e) in calculating any remaining Earn-Out Consideration to be paid.
(f) Notwithstanding anything to the contrary contained herein, in no event shall Buyer be required to issue shares of Buyer Common Stock having an aggregate License Event Value of Buyer Common Stock, or aggregate Pro-Rata Trading Value of Buyer Common Stock, in excess of Twenty Two Million Five Hundred Thousand Dollars ($22,500,000).
(g) In the event Sellers sell, transfer, or otherwise dispose of, including by GPS way of gift, any Earn-Out Shares in accordance any transactions (collectively, “Dispositions”) during the period commencing on the Trading Date and ending on the trading day immediately prior to the seventh trading day following the Trading Date, Sellers shall immediately advise Buyer of the same in writing, together with reasonable detail in respect of the Share Purchase AgreementDispositions, and the gross amount of proceeds that would have been realized by Sellers (based on then-prevailing Applicable Market prices) in respect thereof shall be deducted from the amount of the cash payment, if any, to be made to Sellers under this Section 3.3.
(h) Rights to the Earn-Out Consideration may not be pledged, hypothecated, sold or transferred in any manner whatsoever without the consent of Buyer. Subject to clause 2.5Any attempted transfer in violation of this subparagraph (h) shall be void and without force or effect. Notwithstanding the foregoing, the Earn-Out Consideration will may 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 Periodpledged, calculated and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;
(b) with respect hypothecated or transferred to the initial fiscal year Sellers’ secured lender and/or to its current shareholders (a “Proposed Transfer”) without the consent of Buyer; provided that, unless such Proposed Transfer is registered under the Earn-Out Period during which the Trigger Date has occurredAct, the Earn-Out Consideration will be determined as being equal not later than five (5) business days prior to 15% such Proposed Transfer, Sellers shall have delivered to Buyer an opinion of the Free Cash Flow of the Company from the Trigger Date counsel satisfactory to Buyer 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:effect that such Proposed Transfer is permitted under applicable federal and state securities laws.
(i) The number of shares of Buyer Common Stock (including the Purchaser mustmaximum number of Total Shares) issuable hereunder, if any, shall be adjusted appropriately to reflect any stock dividend, stock split, subdivision, combination, reclassification or similar transaction in respect of Buyer Common Stock as though the manner contemplated by clause 3(c) Earn Out Shares had been issued at the time of the Share Purchase Agreement, withhold amounts payable to Nyrstar on account such event. No fraction of Earn-Out Consideration, and any amounts so withheld a share of Buyer Common Stock will be treated as having been paid to Nyrstar on account of the Earn-Out Consideration; and
(ii) the Purchaser or the Company will issued hereunder, but in lieu thereof, if Sellers would otherwise be entitled to withhold a fraction of a share of Buyer Common Stock, Sellers shall receive an amount of cash (rounded to the nearest whole cent), without interest equal to the value of such fractional share. The parties acknowledge that payment of amounts on account the cash consideration in lieu of issuing fractional shares was not separately bargained for consideration, but merely represents a mechanical rounding off for purposes of simplifying the Earn-Out Consideration in corporate and accounting complexities that would otherwise be caused by the manner contemplated by, and otherwise subject issuance of fractional shares. Notwithstanding anything to the provisions of, the Share Purchase Agreement.contrary cont
Appears in 1 contract
Sources: Assets Purchase Agreement (Iconix Brand Group, Inc.)
Earn-Out Consideration. Subject (a) In addition to the terms and conditions of this AgreementBase Purchase Price, the Purchaser will pay, or will cause the Company Sellers shall be entitled to pay, to Nyrstar the additional earn-out consideration in respect of (the "Earn-Out Period (out Consideration") in the “Earn-Out Consideration”) as additional consideration for amount of up to $600,000 plus the sale of the Company pursuant to the Share Purchase AgreementActual Reduction Amount, which obligations will shall be guaranteed by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5, the Earn-Out Consideration will be determined earned and paid is payable as follows:
(ai) $50% in cash (the "Earn-Out Consideration will be determined out Cash Component"), subject to adjustment based on certain post-Closing revenue achievement as being equal to 15% of the Free Cash Flow of the Company during the Earn-Out Perioddescribed in Section 2.4(b), calculated and paid at the end of each relevant fiscal year of GPS during the Earn-Out Period;
payable within ten (b10) 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 completion of a relevant the audit of the financial statements of Buyer for the fiscal year of GPS during ending December 31, 2015 (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"2015 Financial Statements"); and
(ii) $50% in Common Stock (the Purchaser "Earn-out Stock Component"), subject to adjustment based on certain post-Closing revenue achievement as described in Section 2.4(b), the number of shares of Common Stock of which shall be determined by dividing the Earn-out Stock Component (as may be adjusted) by the average market closing price on NASDAQ of the ten (10) trading days immediately prior to the date of issuance, and issuable within ten (10) days of the completion of the audit of the 2015 Financial Statements; provided, however, that Buyer may elect to pay to Sellers the Earn-out Stock Component in the form of cash instead of Common Stock, and Buyer may elect to defer any necessary or the Company will be entitled to withhold payment of amounts on account required shareholder approval of the Earn-Out out Stock Component until after Closing.
(b) The adjustments to the Earn-out Cash Consideration shall be made based on Buyer's audit of its revenues for the fiscal year ending December 31, 2015, in accordance with GAAP from the manner contemplated bysum (such sum, the "Achieved Relevant 2015 Revenues") of (A) sales of the Company Group's GraphicMail or white label software and (B) 35% of the sales of Buyer's SMTP relay services to customers, resellers, distributors and partners (together, the "Customers") outside of the United States through Buyer's and the Company Group's sales channels (the "SMTP Service Revenue") as follows:
(i) The full value of the Earn-out Consideration shall be paid and issued if and only if the Achieved Relevant 2015 Revenues equal or exceed $6,563,000 (the "Earn-out Revenue Target");
(ii) If Achieved Relevant 2015 Revenues are less than the Earn-out Revenue Target and provided that Achieved Relevant 2015 Revenues are greater than $6,016,000, a portion of the Earn-out Consideration (the "Payout Percentage") shall be provided by Buyer to Sellers as follows: Payout Percentage = (Achieved Relevant 2015 Revenues - $6,016,000) / ($547,000) Provided, that the Payout Percentage may not be greater than 100% and the Payout Percentage will be rounded up or down to the closest 1%. The Earn-out Cash Component and Earn-out Stock Component will each be adjusted by multiplying them by the Payout Percentage;
(iii) Achieved Relevant 2015 Revenues shall include license fees, service revenues and recognized subscription revenues for the use of software, overage charges, set up fees, and otherwise subject service charges that Customers may incur in conjunction with the normal use of a subscription service and revenues from pay-as-you-go plans in which Customers are subscribed and recognized in accordance with GAAP, provided, the following shall not be included in calculating Achieved Relevant 2015 Revenues: (A) Booked revenues, gross bookings, or other credits not recognized as revenue under GAAP and (B) other unusual or one-off revenue items such as the sale or long term lease or license of assets.
(iv) Notwithstanding anything to the provisions ofcontrary herein, if the revenue growth of SMTP Service Revenues for the fiscal year ending December 31, 2015 over fiscal year ending December 31, 2014 is less than ten percent (10%), the Share Purchase AgreementSMTP Service Revenues shall be deemed to be $1,313,000 for purposes of determining Achieved Relevant 2015 Revenues.
Appears in 1 contract
Earn-Out Consideration. 5.1 Subject always to the terms and conditions of this Agreementclause 5.3, the Purchaser will pay, or will cause shall pay to the Company to pay, to Nyrstar the earn-out consideration in respect of the Earn-Out Period Sellers an additional payment (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 calculated in accordance with the Share Purchase Agreementprovisions of schedule 7; provided that the maximum Earn-Out Consideration shall not exceed €2,000,000.
5.2 The Earn Out Consideration shall be calculated at the end of each Earn Out Period (each an “Earn-Out Calculation Date”) and payable in respect of such Earn Out Period in accordance with the terms of schedule 7 and this clause 5.
5.3 If neither of the Executives is a Qualifying Employee on any Earn-Out Calculation Date, the Earn Out Consideration payable in respect of the relevant Earn-Out Period shall be adjusted downwards and shall be paid only pro- rata for the period during such Earn-Out Period in which both Executives remained as Qualifying Employees. Subject to clause 2.5If one Executive is, but the other Executive is not, a Qualifying Employee on any Earn-Out Calculation Date, 50% of the Earn-Out Consideration will be determined and paid as follows:
(a) the Earn-Out Consideration will be determined as being equal to 15% otherwise payable in respect 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 such Earn-Out Period shall be paid and the balance shall be adjusted downwards and shall be paid only pro- rata for the period during which the Trigger Date has occurred, the such Earn-Out Consideration will be determined Period in which the Executive remained as being equal to 15% a Qualifying Employee.
5.4 Within 60 days after the expiry 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 each Earn-Out Period, the Purchaser will prepare and deliver to the Seller Representative written notice (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 Notice”) containing (i) the Earn-Out Period End Date;
Revenues Statement and (dii) no Earn-Out Consideration will be payable with respect of any Free Cash Flow of the Company after the expiry Purchaser’s calculation of the Earn-Out Period;
(e) the Company will calculate Consideration based on the Earn-Out Revenues Statement and adjusted (x) as may be required under clause 5.3 and (y) in respect of Earn Out Consideration within 90 days paid in respect of the end prior Earn Out Period (if applicable).
5.5 Within 30 days after delivery of a relevant fiscal year of GPS during the each Earn-Out Period; and
(f) Notice, the Earn-Out Consideration Seller Representative will be paid deliver to Nyrstar within 105 days of the end of Purchaser a relevant fiscal year of GPS during written response in which the Earn-Out Period, provided thatSeller Representative will either:
(i) agree in writing with 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 Purchaser’s calculation of the Earn-Out Consideration, in which case such calculation will be final and binding on the parties for purposes of this clause 5; andor
(ii) dispute the Purchaser or the Company will be entitled to withhold payment of amounts on account Purchaser’s calculation of the Earn-Out Consideration by delivering to the Purchaser a written notice (an “Earn-Out Dispute Notice”) setting forth in reasonable detail the basis for each such disputed item and certifying that all such disputed items are being disputed in good faith. If the Seller Representative fails to take either of the foregoing actions within 30 days after delivery of an Earn-Out Notice, the Sellers will be deemed to have irrevocably accepted the Purchaser’s calculation of the Earn-Out Consideration payable in respect of the relevant Earn-Out Period, in which case such calculation will be final and binding on the parties for purposes of this clause 5.
5.6 If the Seller Representative timely delivers an Earn-Out Dispute Notice to the Purchaser, then the Purchaser and the Seller Representative will attempt in good faith, for a period of 30 days, to agree on the Earn-Out Consideration payable in respect of the relevant Earn-Out Period. Any resolution by the Purchaser and the Seller Representative during such 30-day period as to any disputed items will be final and binding on the parties for purposes of this clause 5. If the Purchaser and the Seller Representative do not resolve all disputed items by the end of 30 days after the date of delivery of such Earn-Out Dispute Notice, then the Purchaser and the Seller Representative will submit the remaining items in dispute to the Independent Accounting Firm for determination in accordance with clause 6.
5.7 The Purchaser shall pay any Earn-Out Consideration on or before the fifth Business Day after agreement or determination of the amount of such Earn-Out Consideration in accordance with this clause 5 (each, an “Earn-Out Payment Date”). Any such payment shall be made by CHAPS to the Sellers’ Solicitors Bank Account, details of which are set out in paragraph 1 of part 3 of schedule 4, and such payment shall constitute a valid discharge of the Purchaser’s obligation to make that payment to the Sellers.
5.8 If (i) the Purchaser gives notice to the Seller Representative of a Claim prior to an Earn-Out Payment Date and (ii) funds are not retained in the manner contemplated by, and otherwise subject Escrow Account in accordance with schedule 10 in an amount equal to the Purchaser’s estimate of the amount of such Claim (the difference between such estimate and the amount, if any, retained in the Escrow Account in respect of such Claim being the “Retention Deficit”), then the following provisions ofwill at the sole option of the Purchaser apply:
(a) to the extent that such Claim has been settled or otherwise determined in accordance with clause 5.9 but has not been paid by or on behalf of the Sellers prior to such Earn-Out Payment Date, the Share Purchase AgreementPurchaser will be entitled to set off the amount of the Retention Deficit (or such other amount so settled or determined to be payable to the Purchaser or the Company that is not otherwise retained in and able to be paid out of the Escrow Account) against the Earn-Out Consideration;
(b) to the extent that such Claim has not been settled or otherwise determined in accordance with clause 5.9 prior to such Earn-Out Payment Date the Purchaser shall be entitled to set off the amount of the Retention Deficit against the Earn-Out Consideration. Following settlement or other determination of the Claim, if the amount of the set off exceeds the sum of (i) the amount for which the Claim is settled or otherwise determined less (ii) the amount retained in the Escrow Account in accordance with schedule 10 in respect of such Claim (the “Net Settled or Determined Amount”), the excess shall be paid by the Purchaser to the Sellers in accordance with the provisions of clause 12 and if the amount of the set off is less than the Net Settled or Determined Amount the shortfall shall be paid by the Sellers to the Purchaser in accordance with the provisions of clause 12.
5.9 For the purposes of clause 5.8:
(a) a Claim shall be regarded as “settled” where it is the subject of an agreement in writing between the Seller Representative and the Purchaser (or their respective solicitors);
(b) a Claim will be regarded as “determined” if the Supreme Court in England and Wales or other court of competent jurisdiction has awarded judgment in respect of the Claim and no right of appeal lies in respect of such judgment.
5.10 Nothing contained in this clause 5 shall prejudice the right of the Purchaser to recover against the Sellers in respect of any Claim (whether such claim is made before or after the Earn-Out Payment Date) otherwise than in accordance with the provisions of this clause 5.
Appears in 1 contract
Sources: Share Purchase Agreement (Vasco Data Security International Inc)
Earn-Out Consideration. Subject (a) The Sellers shall be entitled 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 receive the Earn-Out Period Consideration in accordance with this Section 2.04 if on the 18 month anniversary of the Closing Date (the “Earn-Out ConsiderationDate”) as additional consideration for the sale of the Company pursuant to has reached the Share Purchase AgreementRevenue Target.
(b) For the purposes of this Section 2.04, which obligations will be guaranteed by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5, Revenue Target is met if the Company’s EBITDA between the Closing Date and the Earn-Out Consideration will be determined Date (the “Earn-Out Period”), as calculated and paid as followsaudited in accordance with US GAAP by the Purchaser’s appointed financial auditors, is equal to or greater than GBP£2,000,000 after the following accounting adjustments have been applied:
(ai) the Earn-Out Consideration will be determined as being equal to 15% of the Free Cash Flow of any revenues generated by the Company during the Earn-Out PeriodPeriod from any projects developed, calculated and paid at introduced or procured by the end Purchaser (“Purchaser Revenues”) have been removed from the EBITDA calculation;
(ii) any loans, investment or any other such injection of each relevant fiscal year of GPS capital by the Purchaser into the Company during the Earn-Out Period;Period has been deducted from the EBITA figure; and
(biii) with respect any increase in the cash equivalent value of the stock issued pursuant to the initial fiscal year of Share Consideration on the Earn-Out Period during which the Trigger Date has occurredbeen deducted from the EBITDA figure. The cash equivalent value of the stock issued pursuant to the Share Consideration shall be calculated on the Earn-Out Date on the basis of the amount of stock issued as Share Consideration at the Closing Date irrespective of whether or not the Sellers still own the Share Consideration (either in whole or in part) on the Earn-Out Date and shall be based on the unit price per Common Stock equal to the 30-day weighted average unit price per Common Stock on the Earn-Out Date.
(c) If the Company reaches the Revenue Target within the Earn Out Period as confirmed by the Purchaser’s appointed financial auditors in writing (the “Revenue Target Confirmation Letter”), the Purchaser shall deliver, or cause to be delivered, to the Sellers as soon as reasonably practicable, without delay or set-off, following receipt of the Revenue Target Confirmation Letter, the Earn-Out Consideration will be determined as being equal to 15% by wire transfer of the Free Cash Flow of the Company from the Trigger Date immediately available funds pro rata to the last date of this initial fiscal year;account designated by the Seller’s Solicitor.
(cd) 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 During the Earn-Out Period End Date;
(d) no Earn-Out Consideration the Purchaser undertakes to ensure and 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 procure that:
(i) the Purchaser mustCompany and the Acquired Company shall continue to carry its Business and activities diligently, efficiently and subject to Section 2.04(d)(ii) below, in substantially the same manner contemplated it has previously been carried out for the purpose of maximising business opportunities and profit, and shall not make or institute any unusual or novel methods of purchase, sale, lease, management, accounting or other operations that will vary materially from those methods used by clause 3(c) the Purchaser as of the Share Purchase Agreementdate of this Agreement and in compliance with its accounting principles, withhold amounts payable to Nyrstar on account including recording any revenue from customers won, obtained or generated by the Acquired Companies (“Ordinary Course 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; andBusiness”);
(ii) Notwithstanding Section 2.04(d)(i) above, the Sellers expressly acknowledge and agree that Purchaser Revenues shall be deemed to be included within the definition of the “Ordinary Course of Business” and nothing in Section 2.04(d)(i) should be read as either restricting or limiting (x) the Purchaser’s right or ability to bring in Purchaser Revenues or (y) the Acquired Companies’ obligation to provide such services as may be requested by the Purchaser or the Company will be entitled to withhold payment in furtherance of amounts on account of the Earn-Out Consideration in the manner contemplated bysuch Purchaser Revenues diligently, efficiently and otherwise subject to the provisions of, the Share Purchase Agreementbest of its ability.
Appears in 1 contract
Sources: Share Purchase Agreement (Esports Entertainment Group, Inc.)
Earn-Out Consideration. Subject (a) The Shareholders shall be entitled, subject to the terms and conditions of this Agreement, the Purchaser will pay, or will cause the Company to payhereof, to Nyrstar receive as additional cash consideration for the earn-out consideration in respect transfer of the Earn-Out Period Shares, additional cash payments (the “Earn-Out Consideration”) as additional consideration for based on: (i) the sale employment of ▇▇▇▇▇ ▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”) by the Company or the Buyer and (ii) the Actual Revenue Growth of the Company pursuant to during each of the Share Purchase Agreementthree consecutive twelve month periods following the Closing Date (each, which obligations will be guaranteed by GPS in accordance with an “Earn-Out Period” and the Share Purchase Agreement. Subject to clause 2.5, entire period from the first day of the Earn-Out Period to the end of the final Earn-Out Period, the “Earn-Out Term”), as described below.
(b) Earn-Out Consideration will may be determined and paid as follows:
(ai) Within sixty (60) calendar days following the last day of the relevant Earn-Out Consideration will be determined Period, the Company shall deliver the Minimum Payment to the Shareholders; provided, however, if either (A) the Company or Buyer terminates ▇▇▇▇▇▇▇’▇ employment for “Cause” (as being equal to 15% defined in ▇▇▇▇▇▇▇’▇ employment agreement with the Company) or (B) ▇▇▇▇▇▇▇ terminates his employment with the Company or Buyer without “Good Reason” (as defined in ▇▇▇▇▇▇▇’▇ employment agreement with the Company or Buyer) the Shareholders shall receive a pro-rated portion of the Free Cash Flow payment under this Section 1.7(b)(i) for the period in which termination occurs (based on number of the Company days ▇▇▇▇▇▇▇ was so employed during the Earn-Out Period), calculated and paid at but shall not be entitled to any payments for any subsequent Earn-Out Periods.
(ii) In addition to the end of each relevant fiscal year of GPS during foregoing, the Shareholders shall receive the Earn-Out Payment (as defined and calculated in accordance with Sections 1.7(c) and (d) below) for each Earn-Out Period;
. In the event that the Percentage Growth Achieved for the Third Earn-Out Period is less than one hundred percent (b) with respect 100%), then the Unearned Earn-Out for Third Earn-Out Period shall be forfeited, and Buyer shall have no further obligation to pay such amounts to the initial fiscal year Shareholders. Example calculations of the Earn-Out Period during which Payments for the Trigger Date has occurred, the three 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;Periods are set forth on Schedule 1.7(b)(ii).
(c) with respect to For purposes of calculating 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 ofterms of Section 1.7(d), the Share Purchase Agreement.following terms shall have the following meanings:
Appears in 1 contract
Sources: Stock Purchase Agreement (Sm&A)
Earn-Out Consideration. (a) 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 2.5Section 2.3(c), the Earn-Out Consideration will shall be determined equal to twenty per cent (20%) of the Operating Income in each of Period 1, Period 2, Period 3, Period 4, Period 5 and Period 6, subject to a total maximum Earn-Out Consideration of ¬2,000,000. The Earn-Out Consideration shall also be limited such that the sum of the consideration paid as follows:
(a) pursuant to Section 2.2 and the Earn-Out Consideration will be determined as being equal to 15% of shall not exceed 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;maximum price set out in Section 2.2(g).
(b) with respect The Earn-Out Consideration for each Earn-Out Period shall be due and payable by the Buyer to the initial fiscal year Sellers within thirty (30) days following the agreement or determination of the Operating Income for the relevant Earn-Out Period in accordance with this Section 2.3 and shall be paid by electronic bank transfer to such bank account as the Sellers shall have previously notified to the Buyer in writing. Each Seller shall be entitled to its Relevant Proportion of the Earn-Out Period during which the Trigger Date has occurred, Consideration.
(c) Each Seller shall only be entitled to its Relevant Proportion of the Earn-Out Consideration will be determined for so long as being equal to 15% of the Free Cash Flow such Seller remains an employee of the Company from or one of the Trigger Date Subsidiaries or provides services under the terms of a service agreement to the last date Company or one of this initial fiscal year;
(c) with respect the Subsidiaries. The entitlement of a Seller to the final fiscal year its Relevant Proportion of the Earn-Out Consideration shall not be re-allocated to any other Seller on such Seller ceasing to be an employee of the Company or one of the Subsidiaries or providing services under the terms of a service agreement to the Company or one of the Subsidiaries at the time of payment of the relevant Earn-Out Consideration pursuant to Section 2.3(b).
(d) Following the end of each Earn-Out Period (except for Period 6), Buyer shall instruct the Auditors, as part of their audit of the Buyer, to issue a draft statement setting out the Operating Income for the relevant Earn-Out Period and the amount of Earn-Out Consideration payable to each of the Sellers in respect of that year (the "Draft Earn-Out Statement"). The draft accounts and Draft Earn-Out Statement shall be approved by the audit committee of Buyer. Following the end of Period 6, Buyer shall, in conjunction with the Auditors cause to be prepared a Draft Earn-Out Statement on the basis of the unaudited accounts for Period 6.
(e) Buyer shall deliver the audited accounts (or, in the case of Period 6, unaudited accounts) and the Draft Earn-Out Statement to Sellers' Representative as soon as reasonably practicable and in any event within one hundred twenty (120) days following the end of the relevant Earn-Out Period.
(f) Sellers' Representative shall, within the period of thirty (30) days following delivery of the Draft Earn-Out Statement (the "Earn-Out Agreement Period") either:
(i) confirm his agreement with the Draft Earn-Out Statement; or
(ii) give notice in writing to Buyer that Sellers dispute the Draft Earn- Out Statement (a "Dispute Notice").
(g) Any Dispute Notice shall set out:
(i) the matters which are disputed (the "Disputed Matters");
(ii) the reasons why such matters are disputed; and
(iii) (so far as practicable) the monetary effect that Sellers believe each of the Disputed Matters has on the calculation of the Operating Income and the Earn-Out Consideration will be determined as being equal to 15% of for the Free Cash Flow of the Company from the first date of this final fiscal year to the relevant Earn-Out Period End Date;in question.
(dh) no Earn-Out Consideration will be payable with respect of any Free Cash Flow of the Company after If Sellers' Representative does not serve a Dispute Notice prior to the expiry of the Earn-Out Period;Agreement Period or during the Earn-Out Agreement Period confirm by notice in writing his agreement with the Draft Earn-Out Statement (either as delivered in accordance with Section 2.3(e) or as modified in such manner as shall be agreed between the Buyer and the Sellers' Representative), the Draft Earn-Out Statement shall constitute the Earn-Out Statement for the relevant Earn-Out Period and shall be final and binding on Buyer and Sellers.
(ei) If Sellers' Representative does serve a Dispute Notice, then Sellers' Representative and Buyer shall use their respective reasonable endeavors to resolve the Company will calculate Disputed Matters as soon as reasonably practicable and in any event within the period of fifteen (15) days following the date of service of the Dispute Notice (or such longer period as may be agreed in writing between Sellers' Representative and Buyer) (the "Dispute Resolution Period") and either:
(i) if Sellers' Representative and Buyer reach agreement on the Disputed Matters during the Dispute Resolution Period, the Draft Earn-Out Statement shall be modified to reflect such agreement and, as so modified, shall constitute the Earn-Out Statement and shall be final and binding on Sellers and Buyer; or
(ii) if Sellers' Representative and Buyer do not reach agreement on the Disputed Matters prior to the expiry of the Dispute Resolution Period, then either Buyer or Sellers' Representative may refer the dispute to such independent firm of accountants (the "Expert") as may be agreed between Buyer and Sellers' Representative (or if they cannot agree on such selection, each of Buyer and Sellers' Representative shall nominate an independent accounting firm, and each of those firms shall be instructed to nominate a third independent accounting firm to act as the Expert).
(j) Where a reference is made to an Expert, the Expert shall be instructed to make a determination only in relation to the Disputed Matters specified in the Dispute Notice within fifteen (15) days after the reference to him (or such longer period as the Expert may reasonably determine). In making his determination, the Expert shall act as an expert and not as an arbitrator and shall, in his reasonable discretion, determine the procedures which are to apply in connection with the conduct of the reference to him. The decision of the Expert shall, in the absence of fraud or manifest error, be final and binding on Buyer and Sellers. Following the notification of the Expert's determination to the Buyer and Sellers' Representative, the Draft Earn-Out Statement shall be amended as necessary to reflect the decision of the Expert in relation to the Disputed Matters and, as so amended, shall be signed by the Expert and, upon being signed by the Expert, shall constitute the Earn-Out Statement for the relevant Earn-Out Period and shall be final and binding on Sellers and Buyer. The costs of the Expert shall be borne by Sellers, unless the determination of the Expert is that the Earn-Out Consideration within 90 days for the relevant Earn-Out Period should be increased by at least twenty per cent (20%), in which case the costs of the end Expert shall be borne by Buyer.
(k) Buyer and Sellers shall provide or procure the provision to the Expert of a relevant fiscal year all such information and documentation as the Expert shall reasonably require (including access to the books and records and personnel of GPS during the Company).
(l) Buyer and Sellers shall bear their own respective costs incurred in connection with the preparation, review and finalization of the Draft Earn-Out Statement and the Earn-Out Period; and
(f) Statement and the agreement or determination of the Operating Income and the Earn-Out Consideration will be paid (other than any costs incurred in connection with any reference 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 Agreementan Expert).
Appears in 1 contract
Sources: Stock Purchase Agreement (Global Med Technologies Inc)
Earn-Out Consideration. Subject (a) As additional consideration for the Company Units, Buyer shall pay (or cause to be paid) to Seller, in accordance with this Section 2.6:
(i) an amount (the “First Earn-Out Payment”) equal to the terms sum of (A) the First Earn-Out Net Revenue Payment (if any) plus (B) the First Earn-Out Contribution Payment (if any); and
(ii) an amount (the “Second Earn-Out Payment”) equal to the sum of (A) the Second Earn-Out Net Revenue Payment (if any) plus (B) the Second Earn-Out Contribution Payment (if any).
(b) Buyer shall prepare (or cause to be prepared) and conditions of this Agreementdeliver to Seller, the Purchaser will pay, or will cause the Company to pay, to Nyrstar the earn-out consideration in respect no later than sixty (60) days after each of the First Earn-Out Period and the Second Earn-Out Period, a written statement setting forth in reasonable detail its calculation of the First Earn-Out Payment or the Second Earn-Out Payment, as applicable (the “Earn-Out ConsiderationStatement”). During the thirty (30) as additional consideration for days following delivery of the sale Earn-Out Statement, Seller and its Representatives shall have reasonable access during normal business hours to the facilities, books and records, personnel and accountants of the Company pursuant for the purpose of assessing the Earn-Out Statement. Within such thirty (30) days, Seller may object to all or any part of the Earn-Out Statement by delivering to Buyer a written notice setting forth support for their position in reasonable detail (an “Earn-Out Objection”). If Seller agrees in writing to the Share Purchase AgreementEarn-Out Statement or fails to timely deliver an Earn-Out Objection, which obligations will then the First Earn-Out Payment or the Second Earn-Out Payment, as applicable, shall be guaranteed as set forth in the Earn-Out Statement. If Seller timely delivers an Earn-Out Objection, then Buyer and Seller shall use their respective good faith efforts to resolve the disputed items set forth therein. If Seller and Buyer fail to resolve all disputes raised by GPS the Earn-Out Objection within thirty (30) days after delivery to Buyer thereof, then either Seller or Buyer may submit the unresolved matters in dispute to the Accountant, and Seller and Buyer shall execute any agreement reasonably required by the Accountant for its engagement hereunder. The Accountant shall make a final, binding and non-appealable determination of the First Earn-Out Payment or the Second Earn-Out Payment, as applicable (solely to the extent the components thereof set forth in the Earn-Out Objection remain in dispute), and deliver to Buyer and Seller a revised written reflecting such determination. The fees and expenses of the Accountant shall be allocated to Seller and based upon the percentage that the portion of the contested amount not awarded to such party bears to the amount contested (e.g., if Seller submits an Earn-Out Objection for $1,000, Buyer contests $500 of such amount, and the Accountant resolves the dispute by awarding Seller $300, then the costs and expenses of the Accountant shall be allocated 60% (i.e., 300/500) to Buyer and 40% (i.e., 200/500) to Seller).
(c) If the amount of First Earn-Out Payment or the Second Earn-Out Payment, as applicable (as finally determined in accordance with Section 2.6(b)), is a positive amount, then Buyer shall pay to Seller, promptly after determination thereof, by wire transfer in immediately available funds to an account designated by Seller, an amount equal to the Share Purchase Agreement. Subject to clause 2.5First Earn-Out Payment or the Second Earn-Out Payment, as applicable.
(d) From the Closing Date until the termination of the Second Earn-Out Period, the Business shall be operated exclusively by Buyer Parent and its Subsidiaries and Buyer Parent shall, and shall cause each of its Subsidiaries to, (i) maintain separate books and records with respect to the Business and (ii) cooperate with M▇. ▇▇▇▇▇▇▇▇▇ to develop reasonable and customary internal management reports with respect to the Business to facilitate assessment of Net Revenue and Direct Contribution for the Business on at least a quarterly basis (it being acknowledged and agreed that the formal determination of Net Revenue and Direct Contribution is only expected on an annual basis in accordance with Section 2.6(b). In the event Buyer Parent or any of its Subsidiaries takes any action (or fails to take any action required by this Agreement) other than in good faith and in the ordinary course, which action (or inaction) increases the expenses incurred by the Business or allocates additional expenses to the Business, in each case, not presently contemplated in the budget of the Business, then the impact of such expenses or allocations shall be disregarded for purposes of determining the Direct Contribution during all periods in which they are so incurred or allocated. Seller acknowledges and agrees that, subject to the foregoing and Section 2.6(e), there is no assurance that Seller will receive any Earn-Out Consideration and the Buyer has not promised that any Earn-Out Consideration will be determined and paid as follows:paid.
(ae) Until the earlier of the end of the Second Earn-Out Period and the termination of M▇. ▇▇▇▇▇▇▇▇▇'▇ employment with Buyer and its Subsidiaries, (i) M▇. ▇▇▇▇▇▇▇▇▇ shall be the Senior Vice President of the Business, (ii) the Continuing Employees and other employees hired to primarily support the operating activities of the Business (collectively, “Post-Closing Continuing Employees”) shall report directly or indirectly to M▇. ▇▇▇▇▇▇▇▇▇, (iii) M▇. ▇▇▇▇▇▇▇▇▇ shall be granted a budget for direct operating expenditures of $25,110,000 for the First Earn Out Period and $27,460,000 for the Second Earn Out Period, in each case, as specified in the Earn Out Calculation Principles and (iv) M▇. ▇▇▇▇▇▇▇▇▇ will have the authority consistent with prior practice to manage, conduct and operate the business affairs of the Business, subject to (A) the applicable operating expenditures budget (as established pursuant to this Section 2.6(e)), (B) M▇. ▇▇▇▇▇▇▇▇▇’▇ reporting relationship to the Executive Vice President, ACCO Brands North America and (C) the generally applicable policies of Buyer and Buyer Parent, including Buyer Parent’s code of conduct and policies with respect to Buyer Parent’s financial reporting and legal compliance. Except as otherwise approved by M▇. ▇▇▇▇▇▇▇▇▇ (such approval not to be unreasonably withheld, conditioned or delayed), Post-Closing Continuing Employees shall devote their full business time to the Business during the First Earn-Out Period and Second Earn-Out Period, it being acknowledged and agreed that such employees shall be required to comply with applicable Law and Buyer Parent’s internal financial controls and reporting, compliance and other general policies and practices in connection with the Business.
(f) Buyer, on its behalf and on behalf of its Affiliates, hereby waives any rights of set-off, netting, offset, recoupment or similar rights that Buyer or its Affiliates may have with respect to any Earn-Out Consideration.
(g) Notwithstanding anything to the contrary in this Agreement, if (i) Buyer Parent sells or otherwise transfers to any Person (other than any direct or indirect wholly owned Subsidiary of Buyer Parent), directly or indirectly, a material portion of the properties and assets of the Business, whether by way of merger, consolidation, business combination, asset sale or otherwise, including through a sale of equity interests in any entity that directly or indirectly holds any properties or assets of the Business, or a combination of any of the foregoing (such transactions, collectively, a “Sale of the Business”), then the Earn-Out Consideration will shall be determined as being equal immediately due and payable in full at or immediately prior to 15% the consummation of such transaction, or (ii) Buyer terminates the employment of M▇. ▇▇▇▇▇▇▇▇▇ without Cause or M▇. ▇▇▇▇▇▇▇▇▇’▇ employment is terminated for Good Reason on or prior to the end of the Free Cash Flow of the Company during the Second 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, then the Earn-Out Consideration will shall be determined as being equal to 15% immediately due and payable upon such termination. Notwithstanding the foregoing, none of following shall constitute a Sale of the Free Cash Flow Business for purposes of this Agreement: (A) the sale or other transfer of voting equity of Buyer Parent, directly or indirectly, by way of merger, consolidation, business combination or otherwise (including any such sale or other transfer that results in a sale of control of Buyer Parent), (B) the sale or other transfer, directly or indirectly, of all or substantially all of the Company from properties and assets of Buyer Parent and its Subsidiaries (including the Trigger Date to the last date of this initial fiscal year;
Company), taken as a whole, or (cC) internal reorganizations, restructuring or other transactions between or among Buyer Parent and its Subsidiaries with respect to the final fiscal year Business or the Company; provided that, in each case, the Business continues to be operated exclusively by Buyer Parent (or its successor) and its Subsidiaries.
(h) Each of Seller, the Earn-Out PeriodPrincipals and their respective Representatives shall be required, as a condition to access to and receipt of any information related to the Business pursuant to this Section 2.6, to execute and deliver to Buyer Parent a customary confidentiality agreement in form and substance reasonably satisfactory to Buyer Parent. The Parties hereby acknowledge and agree that the Earn-Out Consideration will shall be determined treated as being equal to 15% an installment obligation for purposes of Section 453 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) Code, and no party shall take any action or filing position inconsistent with such characterization unless otherwise required by applicable Law. Any 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 Seller pursuant to Nyrstar on account of Earn-Out Consideration, and any amounts so withheld will this Agreement shall be treated as having been paid an adjustment to Nyrstar on account the Final Purchase Price for U.S. federal and applicable state and local income Tax purposes (to the extent not treated as imputed interest pursuant to Section 483 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 byCode), and except as otherwise subject to the provisions of, the Share Purchase Agreementrequired by applicable Law.
Appears in 1 contract
Earn-Out Consideration. (a) Subject to the occurrence of the Closing and the terms and conditions of set forth in this AgreementSection 4.2 and Article IX, the Purchaser will pay, Parent shall pay or will cause the Company to pay, to Nyrstar the earn-out be paid additional consideration in respect of the Earn-Out Period (the “Earn-Out Consideration”) as additional consideration for of up to $165,000,000 (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 Cap”) to the Holders, pursuant to their respective allocations set forth on the Payment Schedule, to the extent achieved during the time period commencing on the first day of the Quarter beginning immediately following the Closing Date (the “Commencement Date”) and paid ending on the day before the fourth (4th) anniversary of the Commencement Date (the “Earn-Out Period”), as follows:
(ai) If the Earn-Out Consideration will be determined as being equal to 15% aggregate Applicable Revenue for any period of the Free Cash Flow of the Company four (4) full successive Quarters during the Earn-Out Period (each, an “Applicable L4Q Period”), calculated is greater than both (i) the prior four (4) Quarters’ aggregate Applicable Revenue and (ii) the greatest Applicable Revenue for any prior four-Quarter period commencing with the last completed period of four (4) full successive Quarters immediately preceding the Commencement Date (the greater of clause (i) or (ii) on any measurement date, the “Highwater ▇▇▇▇”), then Earn-Out Consideration for such Applicable L4Q Period shall be payable to the Holders, pursuant to their respective allocations set forth on the Payment Schedule, in an amount in the aggregate equal to (A) (1) the Applicable Revenue for such Applicable L4Q Period minus (2) the Highwater ▇▇▇▇, multiplied by (B) [***]. For the avoidance of doubt, commencing with the initial Earn-Out Consideration to be paid at with respect to, and following the end completion of, the first Applicable L4Q Period ending on or after the first anniversary of the Commencement Date (if and to the extent due), additional Earn-Out Consideration may be payable following each relevant fiscal year of GPS completed Quarter during the Earn-Out Period;
Period (b) with respect if and 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 mustextent due), 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 each case subject to the provisions of, the Share Purchase terms and conditions set forth in this Agreement.
Appears in 1 contract
Sources: Merger Agreement (CONMED Corp)
Earn-Out Consideration. Subject In addition to the terms and conditions of this AgreementFinal Base Purchase Price, the Purchaser will pay, or will cause the Company Sellers shall be entitled 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) If the EBIT of the Business Unit (as defined below) for any fiscal year ending December 31, 2006 to 2013 exceeds Combined Target EBIT for such fiscal year, then the Sellers shall be entitled to receive additional consideration equal to thirty seven and one-half percent (37.5%) of such excess, which amount shall in any such year constitute “Base 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;out Consideration.”
(b) In addition to Base Earn-out Consideration, the Sellers shall be entitled to receive additional consideration in an amount equal to one-fifth (20%) of the EBIT of the Business Unit for each of the fiscal years ending December 31, 2011, 2012, and 2013 (each, an “Additional Earn-Out Year”), which amount shall constitute “Additional Earn-out Consideration,” provided that (i) the maximum amount of Additional Earn-out Consideration payable with respect to the initial fiscal year of the any Additional Earn-Out Period during which Year shall not exceed $4 million for such fiscal year and (ii) the Trigger Date has occurred, the aggregate amount of Additional Earn-Out 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 payable under this initial fiscal year;subsection (b) shall not exceed $10 million.
(c) with With respect to the final each fiscal year ending December 31, 2006 to 2013, no later than 10 days after the filing of FTI’s annual report on Form 10-K with the SEC for such fiscal year or, if such report is not timely filed by FTI, no later than 90 days after the end of such fiscal year, FTI (on behalf of the Buyer) shall prepare (or cause to be prepared) and deliver to the Sellers’ Representative financial statements prepared in accordance with GAAP and consisting of a balance sheet and statements of income, changes in stockholders’ equity and cash flows of the Business as of the end of such fiscal year, together with a calculation of the EBIT of the Business Unit for such fiscal year then ended and a statement of the amount, if any, of Base Earn-Out Period, the out Consideration or Additional Earn-Out out Consideration will be determined as being equal to 15% (collectively, “Earn-out Consideration”). Unless the Sellers’ Representative disputes FTI’s determination of the Free Cash Flow EBIT of the Company from the first date of this final Business Unit and Earn-out Consideration for such fiscal year to in accordance with the Earn-Out Period End Date;provisions of subsection (d) below, FTI’s determination for such fiscal year shall be conclusive and binding upon the Sellers’ Representative and the Sellers.
(d) no In the event that the Sellers’ Representative disputes the calculation of the EBIT of the Business Unit and Earn-Out out Consideration will for any fiscal year, the Sellers’ Representative shall notify FTI and the Buyer in writing by delivery of a notice (an “Earn-out Dispute Notice”) within 30 days after delivery of FTI’s calculation of the EBIT of the Business Unit and Earn-out Consideration for such fiscal year, which Earn-out Dispute Notice shall set forth in reasonable detail the basis for such dispute. Any such dispute shall be payable with respect resolved under the procedures set forth in Section 1.7(f) of this Agreement. If the Sellers’ Representative does not deliver an Earn-out Dispute Notice within 30 days after delivery of FTI’s calculations, within 10 days after expiration of such 30 day period, or, if such a notice is timely delivered, within 10 days of the resolution of any Free Cash Flow such dispute, the Buyer shall pay each Seller his or her Asset Percentage of the Company after the expiry of the any Earn-Out Period;out Consideration. Subject to Sections 1.9(i) and 8.6, such Earn-out Consideration shall be delivered by the Buyer by wire transfers of immediately available funds to an account or accounts designated in writing by the Sellers’ Representative.
(e) For the Company will calculate the Earn-Out Consideration within 90 days purposes 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 this 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) following terms shall have 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.respective meanings set forth below:
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Sources: Stock and Asset Purchase Agreement (Fti Consulting Inc)
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 (a) Buyer shall make a cumulative earn-out consideration in respect payment of the Earn-Out Period up to $12,000,000 (the “Earn-Out Consideration”) to be paid in four equal installments, each payment of between zero and $3,000,000, as additional consideration earned pursuant to this Agreement. This Agreement contemplates four earn-out periods (each, an “Earn-Out Period”), with the corresponding Adjusted EBITDA target ranges (each, an “EBITDA Target”) indicated in the below table. The Earn-Out Consideration payable with respect to any Earn-Out Period in which the EBITDA Target is achieved shall be scaled ratably between zero and $3,000,000 for the sale each dollar of EBITDA achievement in excess of the Company pursuant minimum EBITDA Target, up to the Share Purchase Agreementmaximum EBITDA Target for such Earn-Out Period. Specifically, which obligations will if the Adjusted EBITDA with respect to any Earn-Out Period is greater than the minimum EBITDA Target for such Earn-Out Period, then the amount of Earn-Out Consideration payable with respect to such Earn-Out Period shall be guaranteed equal to $3,000,000 multiplied by GPS in accordance with the Share Purchase Agreement. Subject to clause 2.5quotient of (A) Adjusted EBITDA for such Earn-Out Period minus the minimum EBITDA Target for such Earn-Out Period, divided by (B) the difference between the maximum EBITDA Target for such Earn-Out Period, minus the minimum EBITDA Target for such Earn-Out Period; provided, that the Earn-Out Consideration will be determined and paid as follows:
(a) the payable with respect to any Earn-Out Consideration will Period shall not be determined as being equal less than zero or greater than $3,000,000. Earn-Out Period Minimum / Maximum EBITDA Target Earn-Out Period One 52 weeks beginning the first full fiscal week following the Closing Date *CONFIDENTIAL* Earn-Out Period Two 52 weeks beginning after Earn-Out Period One *CONFIDENTIAL* Earn-Out Period Three 52 weeks beginning after Earn-Out Period Two *CONFIDENTIAL* Earn-Out Period Four 52 weeks beginning after Earn-Out Period Three *CONFIDENTIAL*
(b) If the Business fails to 15% of fully achieve the Free Cash Flow of the Company during the EBITDA Target in any Earn-Out Period, calculated and paid at any excess achievement of Adjusted EBITDA in the end immediate following Earn-Out Period over such following Earn-Out Period’s EBITDA Target will be credited towards achievement of each relevant fiscal year of GPS during the prior Earn-Out Period shortfall (the “Earn-Out Catch-Up”). To qualify for the Earn-Out Period;
(b) Catch-Up for Earn-Out Period Four, the Business must maintain Adjusted EBITDA in the 52-week period commencing immediately following Earn-Out Period Four in excess of *CONFIDENTIAL*. Any payment with respect to the initial fiscal year of the Earn-Out Period during which the Trigger Date has occurred, the EarnCatch-Out Consideration Up will be made when determined as being equal pursuant to 15% of the Free Cash Flow of the Company from the Trigger Date to the last date of this initial fiscal year;Agreement.
(c) Buyer shall prepare statements of income for the Business in accordance with respect to GAAP and in a manner consistent with the final fiscal year past accounting practices, methodologies, and procedures used by Seller and as reflected in the definition of Adjusted EBITDA, except where such past practices, methodologies, or procedures of Seller are not in accordance with GAAP as applied by Buyer in preparation of its publicly reported financial statements. Within sixty (60) days following the last day of each Earn-Out Period, Buyer shall cause to be delivered to Seller Representative a copy of the statement of income for such Earn-Out Period together with Buyer’s calculation of Adjusted EBITDA, and a proposed final determination of whether any 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 is payable with respect of any Free Cash Flow of the Company after the expiry of the to such 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 . Seller Representative shall be entitled to withhold payment receive and review financial statements of amounts on account the Business, a detailed calculation of the Earn-Out Consideration in and such other documents, work papers and other records and materials as it may reasonably request. Within thirty (30) days after receipt of the manner contemplated bycalculation, Seller Representative shall advise Buyer if it disagrees with the calculation. Any disagreement or controversy between Buyer and otherwise subject Seller Representative as to the provisions ofcalculation of the Earn-Out Consideration for any Earn-Out Period shall be determined as follows: if Buyer and Seller Representative are unable to resolve any such dispute within the ninety (90) day period following delivery by Buyer of its initial proposed determination, Buyer and Seller Representative, unless otherwise mutually agreed to in writing, shall submit such dispute to the Share Purchase AgreementIndependent Accountant for resolution. Buyer and Seller Representative shall instruct the Independent Accountant to resolve such disputed matters within thirty (30) days of submission and not to assign a value to any item in dispute greater than the greatest value for such item assigned by either Buyer or Seller Representative, or lesser than the smallest value of such item assigned by either Buyer or Seller Representative. Buyer and Seller Representative shall pay the fees and expenses of its respective independent public accountant and shall each pay half of the fees and expenses of the independent accountant.
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