Common use of Contingent Merger Consideration Clause in Contracts

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,600. (i) $1,641,600 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

AutoNDA by SimpleDocs

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6009,300,000. (i) $1,641,600 9,300,000 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, Closing or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. XxxxLove, Xx. Jr. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6003,900,000. (i) $1,641,600 3,900,000 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal ------------------------------------------------------------------- to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, Closing or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6001,958,400. (i) $1,641,600 1,958,400 (the "Maximum Earn Out Amount") will be paid, subject ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at -------------------------- least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's -------------------------- independent accountant ("CCC's Accountant"), will determine the Group Actual ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The Shareholders -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the ----------------------------------------- Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with ------------------------- GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, Closing or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6007,002,000. (i) $1,641,600 7,002,000 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, ----- of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders Stockholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders Stockholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- ShareholdersStockholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

AutoNDA by SimpleDocs

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6007,500,000. (i) $1,641,600 7,500,000 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, acquisitions (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,6005,700,000. (i) $1,641,600 5,700,00 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders Stockholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders Stockholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- ShareholdersStockholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. For purposes of this Agreement, the "Specified Percentage" shall mean a fraction, the -------------------- numerator of which is the amount by which the Group Actual Earn Out EBIT exceeds the Earn Out Threshold and the denominator of which is the Earn Out Range.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Contingent Merger Consideration. (a) For purposes of this Agreement, but subject to the provisions of subsections (i), (ii), and (iii) below, the "Contingent Merger Consideration" ------------------------------- shall mean an amount up to $1,641,600. (i) $1,641,600 (the "Maximum Earn Out Amount") will be paid, ----------------------- subject to the provisions of subsection (ii) and (iii) below, if the Earnings before Interest and Taxes of the Surviving Group Companies (as defined below), for the one year period after February 28, 1998 (the "Group Actual Earn Out --------------------- EBIT") is at least equal to the sum of $25,020,000 and the amount, if any, of ---- the EBIT Increase (the "Maximum Earn Out Threshold"). Price Waterhouse LLP, -------------------------- CCC's independent accountant ("CCC's Accountant"), will determine the Group ---------------- Actual Earn Out EBIT and deliver prompt notice of such amount to the Shareholders (the "Earn Out EBIT Notice") with supporting documentation. The -------------------- Shareholders (through the Group Representative as defined in Section 13.14(a)) shall have the right to inspect, audit and make extracts from all of the records, files and books of account of CCC relating to the Group Actual Earn Out EBIT for purposes of verifying the amount of the consideration payable pursuant to Section 2.3, at reasonable times during business hours, upon advance notice to CCC. For purposes of this Section 2.3, "Earnings before Interest and Taxes of ------------------------------------- the Surviving Group Companies" is equal to net income computed in accordance ----------------------------- with GAAP consistently applied of the Group Companies reflected on the books and records of the Surviving Group Companies and the Holding Company (as defined in Section 7.21 below), which net income (A) shall not reflect (1) the amortization of goodwill and other intangibles recognized by CCC in connection with the acquisition of the Group Companies or any future acquisitions, (2) expenses (including corporate overhead) of CCC other than those expenses incurred for the benefit of the Surviving Group Companies that do not duplicate expenses incurred by the Surviving Group Companies nor exceed the amounts of similar expenses incurred in the most recently ended fiscal year by the Group Companies prior to the Closing, or (3) the tax that arises under Section 4978 of the Code, (B) shall reflect (1) depreciation and amortization of assets of the Surviving Group Companies except to the extent such amounts result from an increase in the book value of the assets resulting from the Group Merger Transaction and (2) the expenses under the employment agreement of Xxxxxxx X. Xxxx, Xx. with the Holding Company and other expenses reasonably necessary for the operation of the Holding Company in connection with its actions as parent of the Surviving Group Companies and (C) shall be adjusted by (1) adding the amounts of any interest expense, income taxes, extraordinary items, cumulative effect of accounting changes and discontinued operations of the Surviving Group Companies and (2) subtracting the amount of any interest income of the Surviving Group Companies. CCC's Accountant will calculate the Contingent Merger Consideration for each Surviving Group Company and the Group Actual Earn Out EBIT applying the same accounting principles applied by such Group Company (on a company by company basis), with all such computations made (and definitions used) in the same way the computations were made (and definitions were used) by such Group Company prior to the Closing and will conform to the methods of accounting utilized consistently during the calendar years 1996, 1997 and 1998 for each such Group Company, provided in each case that such computations were in accordance with GAAP. If, after the Closing, CCC's Accountant makes conforming adjustments to unify the accounting principles utilized by each of the Group Companies, such adjustments shall have no effect on the calculations made by CCC's Accountant for purposes of this Section 2.3. CCC will provide the Surviving Corporation with a schedule on a quarterly basis detailing expenses incurred for the benefit of the Surviving Group Companies, such schedule to be prepared on a comparative basis to expenses incurred in the prior year by the Group Companies for the same items. (ii) If the Group Actual Earn Out EBIT is equal to or less than the sum of $22,043,000 and the amount, if any, of the EBIT Increase (the "Earn ---- Out Threshold"), then no Contingent Merger Consideration will be paid to the ------------- Shareholders. (iii) If the Group Actual Earn Out EBIT is greater than the Earn Out Threshold but less than the Maximum Earn Out Threshold (the difference between the Maximum Earn Out Threshold and the Earn Out Threshold being hereinafter referred to as the "Earn Out Range"), then the Contingent Merger -------------- Consideration will equal the product determined by multiplying (A) the Specified Percentage (as defined below) by (B) the Maximum Earn Out Amount. i. For purposes of this Agreement, the "Specified PercentageContingent Merger ----------------- Consideration" shall mean up to $13,000,000 representing up to ------------- $6,000,000 payable upon the achievement of certain earnings targets by the Company identified in Sections 2.3(a)(i) and (ii) below (in the aggregate referred to herein as the "Actual EBIT ----------- Earn Out") and up to $7,000,000 payable upon the achievement of -------- certain revenue targets by the Company identified in Section 2.3(a)(iii) (in the aggregate referred to herein as the "Revenue ------- Earn Out"). The Contingent Merger Consideration shall be payable -------- in accordance with the provisions of this Section 2.3. (1) $3,000,000 of the Actual EBIT Earn Out will be paid in a lump sum if Price Waterhouse LLP ("'CCC's Accountant") ----------------- determines that both (A) the Company's unadjusted earnings before interest and taxes, computed in accordance GAAP consistently applied throughout the period involved, and including for this purpose as expenses of the Company all amounts accrued under the employment agreement between CCC and the Stockholder ("Actual EBIT") for the 120 day period ----------- after the Closing (such 120 day period of time being referred to as the "Initial Earn Out Period") is at least $ ----------------------- 1,000,000, and (B) the Company's sales for the Initial Earn Out Period are at least equal to the Company's sales for the first 120 day period of 1997. For purposes of determining Actual EBIT for the Initial Earn Out Period only, such term shall mean the unadjusted earnings before interest and taxes, computed in accordance GAAP consistently applied of the Company and any company which was acquired directly by the Company or becomes a direct or indirect wholly-owned subsidiary during such Initial Earn Out Period. (2) The entire unpaid amount of the Actual EBIT Earn Out will be paid in a lump sum if CCC's Accountant determines that both (A) the Company's Actual EBIT for the 12 month period after the Closing (such 12 month period of time being referred to as the "Subsequent Earn Out Period") is at least $3,000,000 -------------------------- and (B) the Company's sales for the Subsequent Earn Out Period are at least equal to the Company's sales for 1997. If the condition set forth in Clause (B) above is satisfied but CCC's Accountant determines that the Company's Actual EBIT for the Subsequent Earn Out Period is greater than $2,700,000 but less than $3,000,000, then the entire unpaid amount of the Actual EBIT Earn Out will be paid in a lump sum less an amount equal to (X) the total amount of the Actual EBIT Earn Out multiplied by (Y) a fraction, the -------------------- numerator of which is shall be equal to the amount by which difference between $3,000,000 and the Group Company's Actual EBIT for the Subsequent Earn Out EBIT exceeds the Earn Out Threshold Period and the denominator of which is the shall be $3,000,000. (3) The Revenue Earn Out Rangewill be paid in $1,000,000 increments for each $25 million by which the revenue of the Company during the twenty four month period following the closing (such period of time being referred to as the "Extended Earn ------------- Out Period") exceeds the aggregate revenue levels of the ---------- Company during the 12 month period ended December 31, 1997, provided however, that the total amount of the Contingent Merger Consideration payable under this clause (iii) shall not exceed $7,000,000. For purposes of calculating the revenue of the Company during the Extended Earn out Period under this clause (iii), the revenue of the Company during the Extended Earn Out Period shall include (A) the revenues of any of companies which are acquired by the Company and which are recognized by such acquired company in accordance with GAAP consistently applied during the Extended Earn Out Period but after the date of acquisition of the company by the Company, (B) the revenues of any of the companies listed on SCHEDULE 2.3 (A) (III) hereto (the "Identified ---------- Acquisition Candidates") which are acquired by CCC or any ---------------------- direct or indirect wholly-owned subsidiary of CCC and which are recognized by such acquired Identified Acquisition Candidate during the Extended Earn Out Period but after the date of acquisition of the Identified Acquisition Candidate by CCC or any direct or indirect wholly-owned subsidiary of CCC, and (C) the revenues of any Other Acquisition Candidate (hereinafter defined) which are recognized by such Other Acquisition Candidate in accordance with GAAP consistently applied during the Extended Earn Out Period but after the date of acquisition of the Other Acquisition Candidate. An "Other Acquisition Candidate" shall mean a company which (x) --------------------------- was acquired by CCC or any direct or indirect wholly-owned subsidiary of CCC due to contacts initially directed to, or made by, CCC or any direct or indirect wholly-owned subsidiary of CCC, (y) was ultimately acquired in part due to the efforts of the Stockholder, and (z) had revenues of less than $50 million during the 12 calendar months immediately preceding the acquisition of such company by CCC or any direct or indirect wholly-owned subsidiary of CCC. In no event shall the revenues of a company acquired by CCC or any direct or indirect wholly-owned subsidiary of CCC (other than the Company) be included in the revenues of the Company for purposes of this clause (iii) unless such acquired company was either an Identified Acquisition Candidate or an Other Acquisition Candidate.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)

Draft better contracts in just 5 minutes Get the weekly Law Insider newsletter packed with expert videos, webinars, ebooks, and more!