Common use of Determination of Earnout Payments Clause in Contracts

Determination of Earnout Payments. Following the Earnout Statement Date and until resolution of the Earnout Amount under this Section 2.17(b), (i) Buyer and Sapphire shall reasonably cooperate with and assist each other in resolving any items questioned or disputed by Sapphire with respect thereto in good faith, including by Buyer making reasonably available and granting reasonable access (during normal business hours) to records and employees of Buyer and the other members of the Earnout Group involved in the calculation and preparation of such Earnout Statement, and (ii) Sapphire shall have a period of ninety (90) calendar days from the Earnout Statement Date ( the “Earnout Objection Period”) to deliver to Buyer a statement (the “Earnout Objection Statement”) setting forth any objections that Sapphire may have to such Earnout Statement, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sapphire does not deliver to Buyer an Earnout Objection Statement by the end of the Earnout Objection Period, or if during such Earnout Objection Period Sapphire delivers to Buyer written notice that Sapphire accepts such Earnout Statement, then such Earnout Statement and the amounts contained in such statement shall become final, conclusive, and binding on the Parties for purposes of this Section 2.17 and for all purposes under this Agreement. All discussions and negotiations pursuant to this Section 2.17(b) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable rules of evidence of any Governmental Authority. If Sapphire delivers an Earnout Objection Statement prior to the end of the Earnout Objection Period, then Sapphire and Buyer shall attempt in good faith to resolve any disputed items. If Sapphire and Buyer are unable to resolve all or any of the disputed items within sixty (60) calendar days after delivery of an Earnout Objection Statement (the “Earnout Resolution Period”), then the remaining disputed items that Sapphire objected to in the Earnout Objection Statement and that Buyer and Sapphire were unable to resolve during the Earnout Resolution Period (the “Earnout Disputed Items”) shall be jointly submitted to the Independent Firm (to act in its capacity as an independent expert and not as an arbitrator) to resolve such Earnout Disputed Items in accordance with the standards set forth in this Section 2.17(b). The Independent Firm’s determination shall be limited to the Earnout Disputed Items and based solely on the provisions of this Agreement and the written submissions and supporting materials provided by Buyer and Sapphire (i.e., not on the basis of independent review), and the Independent Firm may not assign a value to any Earnout Disputed Item greater than the greatest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement, or less than the smallest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement. Neither Buyer nor Sapphire may disclose to the Independent Firm, and the Independent Firm may not consider for any purpose, any settlement discussions or settlement offers made by or on behalf of either Buyer or Sapphire unless otherwise agreed by Buyer and Sapphire, and there shall be no ex parte communications with respect to the matters contemplated hereby between the Independent Firm and either Buyer or Sapphire. The Parties shall enter into a customary engagement letter with the Independent Firm at or prior to the time the Earnout Disputed Items are submitted to the Independent Firm. The Independent Firm shall be instructed to render its determination as promptly as practicable, but in no event later than thirty (30) calendar days after its engagement, and, contemporaneously with and based solely on its determination of the Earnout Disputed Items, to prepare and deliver to Sapphire and Buyer the Independent Firm’s determination of the Earnout Statement, Earnout Payment and other amounts required to be contained in such statement. Such Independent Firm’s determination of each of the disputed items shall be final, conclusive, and binding on the Parties, and such Independent Firm shall be instructed to such effect. The Independent Firm shall be bound by a mutually agreeable confidentiality agreement, and all negotiations and submissions to the Independent Firm shall be treated as confidential information. The fees and expenses of the Independent Firm pursuant to this Section 2.17(b) shall be borne by Buyer and Sapphire in proportion to the respective aggregate amounts as they do not prevail on Earnout Disputed Items resolved by the Independent Firm, which proportionate allocations shall also be determined by the Independent Firm at the time the determination of the Independent Firm is rendered on the merits of the matters submitted. Except as provided in the preceding sentence, the fees and disbursements of each party’s independent accountants, attorneys and advisors incurred in connection with their respective preparation or review of any Earnout Statement and any Earnout Objection Statement and presentations to the Independent Firm shall be borne by such party.

Determination of Earnout Payments. Following Within 45 calendar days of the end of each Earnout Statement Date and until resolution Year, Buyer shall deliver to the Stockholder Representative a written statement of Buyer’s calculations of the Earnout Amount under this Section 2.17(b), (i) Buyer and Sapphire shall reasonably cooperate with and assist each other in resolving any items questioned or disputed by Sapphire with respect thereto in good faith, including by Buyer making reasonably available and granting reasonable access (during normal business hours) to records and employees of Buyer and the other members of the Earnout Group involved Payment in the calculation and preparation of such Earnout Statement, and form agreed to by the parties prior to the Closing (ii) Sapphire shall have a period of ninety (90) calendar days from the Earnout Statement Date ( the “Earnout Objection PeriodPayment Calculation”) ). Buyer shall promptly provide to the Stockholder Representative any supplementary documentatio n related to the Earnout Payment reasonably requested by the Stockholder Representative. The Product Revenue upon which the Earnout Payment Calculation is determined shall be calculated in accordance with GAAP on a basis consistently applied from year-to-year. The Stockholder Representative shall have 45 calendar days to deliver to Buyer a statement written objections to the Earnout Payment Calculation (the “Earnout Objection Statement”) setting forth any objections that Sapphire may have to such Earnout Statement, including a reasonably detailed explanation of and the basis for each such objection along with reasonably detailed supporting calculations. If Sapphire does not deliver to Buyer an Earnout Objection Statement by the end Stockholder Representative’s revised calculation of the Earnout Objection PeriodPayment Calculation. The Stockholder Representative may, or if during such Earnout Objection Period Sapphire delivers to Buyer by written notice that Sapphire accepts to Buyer, waive or shorten such Earnout Statement, then such Earnout Statement and the amounts contained in such statement shall become final, conclusive, and binding on the Parties period for purposes of this Section 2.17 and for all purposes under this Agreementobjection. All discussions and negotiations pursuant to this Section 2.17(b) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable rules of evidence of any Governmental Authority. If Sapphire delivers an Earnout Objection Statement prior to the end of the Earnout Objection Period, then Sapphire and Buyer shall attempt in good faith to resolve any disputed items. If Sapphire and Buyer are unable to resolve all or any of the disputed items within sixty (60) calendar days after After delivery of an Earnout Objection Statement Statement, an authorized representative of Buyer and the Stockholder Representative shall promptly negotiate in good faith with respect to the Earnout Payment Calculation and the objections thereto, and if they are unable to reach an agreement within 45 calendar days after delivery to Buyer of such Earnout Objection Statement, the dispute shall be submitted to the Independent Accounting Firm. Each of the parties to this Agreement shall, and shall cause their respective officers, directors, employees, and representatives to, provide full cooperation to the Independent Accounting Firm. The Independent Accounting Firm shall (i) consider only those matters as to which there is a dispute between the parties, and (ii) be instructed to reach its conclusions regarding any such dispute within 30 calendar days after its appointment and provide a written explanation of its decision. In the event that Buyer and the Stockholder Representative shall submit any dispute to an Independent Accounting Firm, each such party may submit a “position paper” to the Independent Accounting Firm setting forth the position of such party with respect to such dispute, to be considered by such Independent Accounting Firm as it deems fit. All fees and expenses relating to the engagement of the Independent Accounting Firm shall be as follows: (i) if the accounting firm resolves all of the objections in favor of Buyer as set forth in the Proposed Earnout Payment Calculation (the Earnout Payment Calculation so determined is referred to herein as the “Earnout Resolution PeriodPayment Low Value”), then the Company Holders shall be responsible for all of the fees and expenses of the accounting firm; (ii) if the accounting firm resolves all of the remaining disputed items that Sapphire objected to objections in favor of the Stockholder Representative as set forth in the Earnout Objection Statement and that Buyer and Sapphire were unable (the final Earnout Payment Calculation so determined is referred to resolve during the Earnout Resolution Period (herein as the “Earnout Disputed ItemsPayment High Value”) ), Buyer shall be jointly submitted to the Independent Firm (to act in its capacity as an independent expert and not as an arbitrator) to resolve such Earnout Disputed Items in accordance with the standards set forth in this Section 2.17(b). The Independent Firm’s determination shall be limited to the Earnout Disputed Items and based solely on the provisions of this Agreement and the written submissions and supporting materials provided by Buyer and Sapphire (i.e., not on the basis of independent review), and the Independent Firm may not assign a value to any Earnout Disputed Item greater than the greatest value responsible for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement, or less than the smallest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement. Neither Buyer nor Sapphire may disclose to the Independent Firm, and the Independent Firm may not consider for any purpose, any settlement discussions or settlement offers made by or on behalf of either Buyer or Sapphire unless otherwise agreed by Buyer and Sapphire, and there shall be no ex parte communications with respect to the matters contemplated hereby between the Independent Firm and either Buyer or Sapphire. The Parties shall enter into a customary engagement letter with the Independent Firm at or prior to the time the Earnout Disputed Items are submitted to the Independent Firm. The Independent Firm shall be instructed to render its determination as promptly as practicable, but in no event later than thirty (30) calendar days after its engagement, and, contemporaneously with and based solely on its determination all of the Earnout Disputed Items, to prepare and deliver to Sapphire and Buyer the Independent Firm’s determination of the Earnout Statement, Earnout Payment and other amounts required to be contained in such statement. Such Independent Firm’s determination of each of the disputed items shall be final, conclusive, and binding on the Parties, and such Independent Firm shall be instructed to such effect. The Independent Firm shall be bound by a mutually agreeable confidentiality agreement, and all negotiations and submissions to the Independent Firm shall be treated as confidential information. The fees and expenses of the Independent Firm pursuant accounting firm; and (iii) if the accounting firm resolves some of the remaining objections in favor of Buyer and some objections in favor of the Stockholder Representative (the Earnout Payment Calculation so determined is referred to this Section 2.17(b) herein as the “Earnout Payment Actual Value”), the Company Holders shall be borne responsible for that fraction of the fees and expenses of the accounting firm equal to (x) the difference between the Earnout Payment High Value and the Earnout Payment Actual Value over (y) the difference between the Earnout Payment High Value and the Earnout Payment Low Value, and Buyer shall be responsible for the remainder of the fees and expenses. The Earnout Payment Calculation, as so adjusted by Buyer and Sapphire in proportion to the respective aggregate amounts as they do not prevail on Earnout Disputed Items resolved agreement or by the Independent FirmAudit Firm (if required), which proportionate allocations shall also be determined by the Independent Firm at the time the determination of the Independent Firm is rendered final and binding on the merits of the matters submitted. Except as provided in the preceding sentence, the fees and disbursements of each party’s independent accountants, attorneys and advisors incurred in connection with their respective preparation or review of any Earnout Statement and any Earnout Objection Statement and presentations to the Independent Firm shall be borne by such partyparties.

Determination of Earnout Payments. Following (a) On or prior to the date that each Earnout Payment is required to be made as specified in Section 1.7, ITEX shall provide the Stockholders’ Representative with a statement setting forth the revenue for the period in question and the aggregate Earnout Payment, if any, due to the BXI Stockholders (the “Determination”). ITEX’s computation of any Earnout Payment under this Section 1.8 shall be conclusive and binding upon the parties hereto, except that if any BXI Stockholder does not agree that such Determination correctly states the Earnout Statement Date and until resolution Payment for the relevant period (an “Objecting Stockholder”), such Objecting Stockholder shall have the right to give written notice to ITEX of any exceptions thereto within thirty (30) days following the later of (i) the Stockholders’ Representative’s receipt of the Earnout Amount under this Section 2.17(bPayment and Determination or (ii) the filing by ITEX of the quarterly or annual report which contains the financial statements to which such Earnout Payment relates (including the filing of any restated financial statements), (i) Buyer and Sapphire . Such written notice by an Objecting Stockholder shall reasonably cooperate with and assist each other in resolving any items questioned or disputed by Sapphire with respect thereto in good faith, including by Buyer making reasonably available and granting reasonable access (during normal business hours) to records and employees of Buyer and the other members include a schedule setting forth such Objecting Stockholder’s computation of the Earnout Group involved Payment, together with a copy of any financial information, other than that previously supplied by ITEX to the Stockholders’ Representative, used in making such Objecting Stockholder’s computation. If the calculation Objecting Stockholder and preparation ITEX are unable to reconcile their differences in writing within thirty (30) days after written notice of such Earnout Statementthe exceptions is delivered to ITEX, and (ii) Sapphire the items in dispute shall have be submitted to a period of ninety (90) calendar days from the Earnout Statement Date ( the “Earnout Objection Period”) to deliver to Buyer a statement mutually acceptable accounting firm for final determination (the “Earnout Objection StatementDetermining Accountants”) setting forth any objections that Sapphire may have to such Earnout Statement, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sapphire does not deliver to Buyer an Earnout Objection Statement by the end of and the Earnout Objection Period, or if during such Earnout Objection Period Sapphire delivers Payment allocable to Buyer written notice that Sapphire accepts such Earnout Statement, then such Earnout Statement and the amounts contained in such statement shall become final, conclusive, and binding on the Parties for purposes of this Section 2.17 and for all purposes under this Agreement. All discussions and negotiations pursuant to this Section 2.17(b) Objecting Stockholder shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable rules of evidence of any Governmental Authority. If Sapphire delivers an Earnout Objection Statement prior to the end of the Earnout Objection Period, then Sapphire and Buyer shall attempt in good faith to resolve any disputed items. If Sapphire and Buyer are unable to resolve all or any of the disputed items within sixty (60) calendar days after delivery of an Earnout Objection Statement (the “Earnout Resolution Period”), then the remaining disputed items that Sapphire objected to in the Earnout Objection Statement and that Buyer and Sapphire were unable to resolve during the Earnout Resolution Period (the “Earnout Disputed Items”) shall be jointly submitted to the Independent Firm (to act in its capacity as an independent expert and not as an arbitrator) to resolve such Earnout Disputed Items deemed adjusted in accordance with the standards set forth in this Section 2.17(bdetermination of the Determining Accountants and shall become final and conclusive as to ITEX and the Objecting Stockholder (but shall not adversely affect the Earnout Payments allocable to any non-Objecting Stockholders, which may not be reduced thereby). The Independent Firm’s determination Determining Accountants shall be limited to consider only the Earnout Disputed Items items in dispute and based solely on the provisions of this Agreement and the written submissions and supporting materials provided by Buyer and Sapphire (i.e., not on the basis of independent review), and the Independent Firm may not assign a value to any Earnout Disputed Item greater than the greatest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement, or less than the smallest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement. Neither Buyer nor Sapphire may disclose to the Independent Firm, and the Independent Firm may not consider for any purpose, any settlement discussions or settlement offers made by or on behalf of either Buyer or Sapphire unless otherwise agreed by Buyer and Sapphire, and there shall be no ex parte communications with respect to the matters contemplated hereby between the Independent Firm and either Buyer or Sapphire. The Parties shall enter into a customary engagement letter with the Independent Firm at or prior to the time the Earnout Disputed Items are submitted to the Independent Firm. The Independent Firm shall be instructed to render its determination as promptly as practicable, but in no event later than act within thirty (30) calendar days after its engagement, and, contemporaneously with (or such longer period as the Objecting Stockholder and based solely on its determination of the Earnout Disputed Items, ITEX may agree) to prepare resolve all claims and deliver to Sapphire and Buyer the Independent Firm’s determination of the Earnout Statement, Earnout Payment and other amounts required to be contained in such statement. Such Independent Firm’s determination of each of the disputed items shall be final, conclusive, and binding on the Parties, and such Independent Firm shall be instructed to such effect. The Independent Firm shall be bound by a mutually agreeable confidentiality agreement, and all negotiations and submissions to the Independent Firm shall be treated as confidential information. The fees and expenses of the Independent Firm pursuant to this Section 2.17(b) shall be borne by Buyer and Sapphire in proportion to the respective aggregate amounts as they do not prevail on Earnout Disputed Items resolved by the Independent Firm, which proportionate allocations shall also be determined by the Independent Firm at the time the determination of the Independent Firm is rendered on the merits of the matters submitted. Except as provided in the preceding sentence, the fees and disbursements of each party’s independent accountants, attorneys and advisors incurred in connection with their respective preparation or review of any Earnout Statement and any Earnout Objection Statement and presentations to the Independent Firm shall be borne by such partydispute.

Determination of Earnout Payments. Following Within 45 calendar days of the end of each Earnout Statement Date and until resolution Year, Buyer shall deliver to the Stockholder Representative a written statement of Buyer’s calculations of the Earnout Amount under this Section 2.17(b), (i) Buyer and Sapphire shall reasonably cooperate with and assist each other in resolving any items questioned or disputed by Sapphire with respect thereto in good faith, including by Buyer making reasonably available and granting reasonable access (during normal business hours) to records and employees of Buyer and the other members of the Earnout Group involved Payment in the calculation and preparation of such Earnout Statement, and form agreed to by the parties prior to the Closing (ii) Sapphire shall have a period of ninety (90) calendar days from the Earnout Statement Date ( the “Earnout Objection Period”) Payment Calculation” ). Buyer shall promptly provide to the Stockholder Representative any supplementary documentatio n related to the Earnout Payment reasonably requested by the Stockholder Representative. The Product Revenue upon which the Earnout Payment Calculation is determined shall be calculated in accordance with GAAP on a basis consistently applied from year-to-year. The Stockholder Representative shall have 45 calendar days to deliver to Buyer a statement written objections to the Earnout Payment Calculation (the “Earnout Objection Statement”” ) setting forth any objections that Sapphire may have to such Earnout Statement, including a reasonably detailed explanation of and the basis for each such objection along with reasonably detailed supporting calculations. If Sapphire does not deliver to Buyer an Earnout Objection Statement by the end Stockholder Representative’s revised calculation of the Earnout Objection PeriodPayment Calculation. The Stockholder Representative may, or if during such Earnout Objection Period Sapphire delivers to Buyer by written notice that Sapphire accepts to Buyer, waive or shorten such Earnout Statement, then such Earnout Statement and the amounts contained in such statement shall become final, conclusive, and binding on the Parties period for purposes of this Section 2.17 and for all purposes under this Agreementobjection. All discussions and negotiations pursuant to this Section 2.17(b) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable rules of evidence of any Governmental Authority. If Sapphire delivers an Earnout Objection Statement prior to the end of the Earnout Objection Period, then Sapphire and Buyer shall attempt in good faith to resolve any disputed items. If Sapphire and Buyer are unable to resolve all or any of the disputed items within sixty (60) calendar days after After delivery of an Earnout Objection Statement Statement, an authorized representative of Buyer and the Stockholder Representative shall promptly negotiate in good faith with respect to the Earnout Payment Calculation and the objections thereto, and if they are unable to reach an agreement within 45 calendar days after delivery to Buyer of such Earnout Objection Statement, the dispute shall be submitted to the Independent Accounting Firm. Each of the parties to this Agreement shall, and shall cause their respective officers, directors, employees, and representatives to, provide full cooperation to the Independent Accounting Firm. The Independent Accounting Firm shall (i) consider only those matters as to which there is a dispute between the parties, and (ii) be instructed to reach its conclusions regarding any such dispute within 30 calendar days after its appointment and provide a written explanation of its decision. In the event that Buyer and the Stockholder Representative shall submit any dispute to an Independent Accounting Firm, each such party may submit a “position paper” to the Independent Accounting Firm setting forth the position of such party with respect to such dispute, to be considered by such Independent Accounting Firm as it deems fit. All fees and expenses relating to the engagement of the Independent Accounting Firm shall be as follows: (i) if the accounting firm resolves all of the objections in favor of Buyer as set forth in the Proposed Earnout Payment Calculation (the Earnout Payment Calculation so determined is referred to herein as the “Earnout Resolution PeriodPayment Low Value”), then the Company Holders shall be responsible for all of the fees and expenses of the accounting firm; (ii) if the accounting firm resolves all of the remaining disputed items that Sapphire objected to objections in favor of the Stockholder Representative as set forth in the Earnout Objection Statement and that Buyer and Sapphire were unable (the final Earnout Payment Calculation so determined is referred to resolve during the Earnout Resolution Period (herein as the “Earnout Disputed ItemsPayment High Value”) ), Buyer shall be jointly submitted to the Independent Firm (to act in its capacity as an independent expert and not as an arbitrator) to resolve such Earnout Disputed Items in accordance with the standards set forth in this Section 2.17(b). The Independent Firm’s determination shall be limited to the Earnout Disputed Items and based solely on the provisions of this Agreement and the written submissions and supporting materials provided by Buyer and Sapphire (i.e., not on the basis of independent review), and the Independent Firm may not assign a value to any Earnout Disputed Item greater than the greatest value responsible for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement, or less than the smallest value for such Earnout Disputed Item claimed by either Party in the Earnout Statement or Earnout Objection Statement. Neither Buyer nor Sapphire may disclose to the Independent Firm, and the Independent Firm may not consider for any purpose, any settlement discussions or settlement offers made by or on behalf of either Buyer or Sapphire unless otherwise agreed by Buyer and Sapphire, and there shall be no ex parte communications with respect to the matters contemplated hereby between the Independent Firm and either Buyer or Sapphire. The Parties shall enter into a customary engagement letter with the Independent Firm at or prior to the time the Earnout Disputed Items are submitted to the Independent Firm. The Independent Firm shall be instructed to render its determination as promptly as practicable, but in no event later than thirty (30) calendar days after its engagement, and, contemporaneously with and based solely on its determination all of the Earnout Disputed Items, to prepare and deliver to Sapphire and Buyer the Independent Firm’s determination of the Earnout Statement, Earnout Payment and other amounts required to be contained in such statement. Such Independent Firm’s determination of each of the disputed items shall be final, conclusive, and binding on the Parties, and such Independent Firm shall be instructed to such effect. The Independent Firm shall be bound by a mutually agreeable confidentiality agreement, and all negotiations and submissions to the Independent Firm shall be treated as confidential information. The fees and expenses of the Independent Firm pursuant accounting firm; and (iii) if the accounting firm resolves some of the remaining objections in favor of Buyer and some objections in favor of the Stockholder Representative (the Earnout Payment Calculation so determined is referred to this Section 2.17(b) herein as the “Earnout Payment Actual Value”), the Company Holders shall be borne responsible for that fraction of the fees and expenses of the accounting firm equal to (x) the difference between the Earnout Payment High Value and the Earnout Payment Actual Value over (y) the difference between the Earnout Payment High Value and the Earnout Payment Low Value, and Buyer shall be responsible for the remainder of the fees and expenses. The Earnout Payment Calculation, as so adjusted by Buyer and Sapphire in proportion to the respective aggregate amounts as they do not prevail on Earnout Disputed Items resolved agreement or by the Independent FirmAudit Firm (if required), which proportionate allocations shall also be determined by the Independent Firm at the time the determination of the Independent Firm is rendered final and binding on the merits of the matters submitted. Except as provided in the preceding sentence, the fees and disbursements of each party’s independent accountants, attorneys and advisors incurred in connection with their respective preparation or review of any Earnout Statement and any Earnout Objection Statement and presentations to the Independent Firm shall be borne by such partyparties.