Earnout Generally Clause Samples
The "Earnout Generally" clause defines the framework for contingent payments to a seller based on the future performance of the acquired business after a transaction closes. Typically, it outlines the metrics—such as revenue or EBITDA—that will be measured, the time period over which performance is assessed, and the calculation method for any additional payments owed. This clause serves to bridge valuation gaps between buyer and seller by tying part of the purchase price to actual post-closing results, thereby aligning incentives and managing risk for both parties.
Earnout Generally. At the Closing or as soon as reasonably practicable thereafter, and, in any case, by no later than seven (7) Business Days after the Closing and after receipt of all required approvals from any applicable Governmental Authority for the Israeli Prospectus (as defined in Section 5.15(a)), subject to the terms and conditions set forth herein, the Company shall issue to the Company Shareholders who were Company Shareholders as of immediately prior to the Closing at a record date to be determined by the Company in coordination with the TASE (the “Pre-Closing Company Shareholders”) an aggregate of Four Million (4,000,000) non-tradeable, non-assignable rights (the “Earnout Rights”), to be allocated among the Pre-Closing Company Shareholders according to their respective Pro Rata Shares. The Earnout Rights shall be automatically converted (subject to Section 1.2(i) below) into Company Ordinary Shares (by the Company issuing one Company Ordinary Share in lieu of each converted Earnout Right which shall be automatically cancelled and extinguished upon such conversion), in an amount not to exceed Four Million (4,000,000) Company Ordinary Shares in the aggregate (subject to adjustment after the Closing for share splits, combinations or exchange or readjustment of shares, reorganizations, recapitalizations, share sub-divisions (including share consolidations), split-up and the like, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”), upon and subject to the occurrence of Earnout Milestone(s) (as defined below) during a five-year period (which shall commence as of the first day of the full fiscal quarter immediately following the Closing) (the “Earnout Period”), subject to the other terms set forth below, in accordance with the terms set forth in Section 1.2(h) below, and without the payment of any consideration by the Pre-Closing Company Shareholders (other than, to the extent applicable, the transfer of the applicable Withholding Amount (as defined below) by each respective Pre-Closing Company Shareholder in accordance with the terms set forth in Section 1.2(h) below). The Earnout Rights shall be issued through the “Nesher system” of the TASE. The Earnout Rights shall convert automatically (subject to Section 1.2(i) below) into Earnout Shares in accordance with the terms set forth in Section 1.2 below. All conversions of Earnout Rights by Pre-Closing Company Shareholders shall be in accordance with...
Earnout Generally. The parties acknowledge and agree that the Company’s annual recurring revenue is a material factor in determining the valuation of the Company by Parent. Therefore, notwithstanding any provision of this Agreement to the contrary, Parent shall pay to the Stockholders their portion of the Earnout Consideration, if any, in accordance with this Article III.
Earnout Generally. The parties acknowledge and agree that in addition to the Component One Consideration and the Component Two Consideration, Parent shall deposit with the Exchange Agent for payment to the Shareholders an amount equal to the Earnout Amounts set forth herein, in cash, as earned, and shall treat such Earnout Amount in accordance with this ARTICLE IX.
Earnout Generally. The parties acknowledge and agree that the Company’s projected revenue targets (as described below) are material factors in determining the valuation of the Company by Parent. Therefore, notwithstanding any provision of this Agreement to the contrary, Parent shall retain a portion of the Merger Consideration equal to the Earnout Consideration otherwise payable at the Effective Time to the Stockholders and shall treat such Earnout Consideration in accordance with this Article VIII.
Earnout Generally. All of the Exchange Shares (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted, and together with the Earnings thereof, the “Escrow Earnout Shares”) shall be placed in escrow pursuant to Section 1.3(c) hereof and each Seller shall have the contingent right to receive its Pro Rata Share of such Escrow Earnout Shares based on the Contributed Profits of Dirong and Melody (together, the “Operating Companies”) during the fiscal years ending each of December 31, 2025, December 31, 2026 and December 31, 2027 (each such fiscal year, an “Earnout Year”).
Earnout Generally. The parties acknowledge and agree that the Company's projected revenue and deployment development targets (as described below) are material factors in determining the valuation of the Company by Parent. Therefore, notwithstanding any provision of this Agreement to the contrary, Parent shall retain such an amount equal to Two Million U.S. dollars ($2,000,000) (the "EARNOUT AMOUNT") of the Merger Consideration otherwise payable at the Effective Time to the Stockholders, and the obligation of the Company to pay such Earnout Amount shall be contingent upon the achievement of the milestones specified in this ARTICLE IX.
Earnout Generally. The parties acknowledge and agree that projected financial goals of the Investment Banking Business after the Closing are material factors in determining the valuation of Seller by Parent and Purchaser. Therefore, notwithstanding any provision of this Agreement to the contrary, any payment of Earnout Payments shall be made only in accordance with this Article 11.
Earnout Generally. The parties acknowledge and agree that the Company’s projected ▇▇▇▇▇▇▇▇ (as such term is defined in Annex A attached hereto) (as described below) are material factors in determining the valuation of the Company by Parent. Therefore, notwithstanding any provision of this Agreement to the contrary, Parent shall retain a portion of the Merger Consideration equal to the Earnout Consideration otherwise payable at the Effective Time to the Stockholders and shall treat such Earnout Consideration in accordance with this ARTICLE VIII.
Earnout Generally
Earnout Generally