Common use of Third Payment Clause in Contracts

Third Payment. (i) During Buyer's fiscal year 2005 fourth quarter Buyer and Muscats will meet to develop the projected business plan for the Business for the 2006 fiscal year (October 1, 2005 through September 30, 2006), including projected Net Sales for the 2006 fiscal year (the "2006 Net Sales Projection"). In the event Buyer and Muscats cannot agree by November 1, 2005 on the 2006 projected Net Sales, the 2006 Net Sales Projection will be deemed for purposes of this Agreement to be equal to the actual Net Sales of the Business for the period October 1, 2004 through September 30, 2005. (ii) If the Business achieved a Net Profit of at least $1,000,000 for the period October 1, 2004 through September 30, 2005 (the "2005 Target Net Profits"), on December 15, 2005, Buyer will wire transfer to Seller an amount equal to ten percent (10%) of the 2006 Net Sales Projection (the "2005 Payment"). If the Business achieves a Net Profit of more than $500,000 but less than $1,000,000 for the period October 1, 2004 through September 30, 2005, the 2005 Payment shall be reduced by a percentage equal to the difference between the 2005 Target Net Profits and the actual Net Profits for the period October 1, 2004 through September 30, 2005 divided by the 2005 Target Net Profits, and if the Business does not achieve a Net Profit for the period October 1, 2004 through September 30, 2005 of more than $500,000, then no payment shall be made to Seller pursuant to this Section 3.2(c)(ii).