Earn-Out Consideration Clause Samples
The Earn-Out Consideration clause defines the terms under which additional payments may be made to the seller after the closing of a transaction, based on the future performance of the acquired business. Typically, this clause outlines specific financial targets or milestones—such as revenue or EBITDA—that must be met within a set period for the seller to receive these contingent payments. By linking part of the purchase price to post-closing results, the clause helps bridge valuation gaps between buyer and seller and incentivizes continued strong performance of the business.
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Earn-Out Consideration. Subject to the terms and conditions set forth in this Section 3.4(d), if the Parent Trading Price on the Closing Date is less than $10.90 per share, the Stockholder shall be entitled to receive from Parent additional consideration based on the performance of the Company following the Closing in an aggregate amount up to $14,025,000 (the “Maximum Earn-Out Payment”), paid, calculated and determined in the manner set forth in this Section 3.4(d).
(i) If the Company’s EBITDA for the twelve (12)-month period ending December 31, 2024 (the “2024 EBITDA”) exceeds the 2024 EBITDA Target, Parent will pay the Stockholder an amount (the “Earn-Out Payment”) equal to the product of (A) the 2024 EBITDA minus the 2024 EBITDA Target, multiplied by (B) 0.75; provided, however, that in no event shall the aggregate Earn-Out Payment exceed the Maximum Earn-Out Payment. For the avoidance of doubt, if the 2024 EBITDA is less than the 2024 EBITDA Target or the Parent Trading Price on the Closing Date equals or exceeds $10.90 per share of Parent Common Stock, then no Earn-Out Payment will be made. The Earn-Out Payment, if payable, will be paid by Parent to the Stockholder by wire transfer of immediately available funds to an account designated by Stockholder, within five Business Days after the final determination of the 2024 EBITDA as set forth in Section 3.4(d)(ii).
(ii) By the earlier of (A) the date which is fifteen (15) days after the completion of the audit of Parent’s 2024 fiscal year and (B) April 30, 2025, Parent shall (1) prepare or cause to be prepared in good faith (a) the Company’s consolidated statements of income for the year ended December 31, 2024 (the “Earn-Out Financial Statements”), and (b) a statement setting forth in reasonable detail the 2024 EBITDA (as derived from the Earn-Out Financial Statements) and the resulting Earn-Out Payment, if any (collectively, the “Earn-Out Deliveries”), and (2) deliver the Earn-Out Deliveries to the Stockholder.
(A) At any time during the thirty (30)-day period beginning on the date of the delivery of the Earn-Out Deliveries to Stockholder (the “Review Period”), Stockholder may deliver to Parent in writing its objections, if any, to the determinations set forth in the Earn-Out Deliveries (the “Notice of Objection”); provided, such Notice of Objection shall specify the items in the Earn-Out Deliveries disputed by the Stockholder and shall describe in reasonable detail the nature and dollar amount of any disagreement so asserted...
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.
Earn-Out Consideration. (a) The Shareholders shall be entitled to earn additional consideration (the “Earn-Out”) during the Complete Earn-Out Period (as defined below), in an amount, up to $1,200,000 in the aggregate, payable in cash in accordance with the terms of this Section 1.3 (the “Earn-Out Consideration”).
(b) The followings terms shall have the following meanings for purposes of this Agreement:
Earn-Out Consideration. (i) Within sixty (60) days of the end of each of the fiscal years ending December 31, 2015 (the “2015 Fiscal Year”) and the 2016 Fiscal Year (the 2015 Fiscal Year and the 2016 Fiscal Year, the “Earn-Out Fiscal Years”), Parent shall deliver to the Stockholder Representative a statement (the “Preliminary Revenue Statement”) showing the amount of Company Revenue for such Earn-Out Fiscal Year, and the excess, if any, over the Revenue Target. For the purposes of this Agreement, the “Revenue Target” shall be: (a) with respect to the 2015 Fiscal Year, an amount equal to Company Revenues as set forth in the Company’s 2014 Audited Financial Statements; and (b) with respect to the 2016 Fiscal Year, the greater of (x) the Revenue Target for the 2015 Fiscal Year and (y) Company Revenues for the 2015 Fiscal Year. The Preliminary Revenue Statement shall be certified by the chief financial officer of Parent or another senior executive officer of Parent, in such officer’s capacity as an officer and not is his capacity as an individual, to have been calculated in a manner consistent with GAAP and the Company’s practices for determining revenue prior to the Closing.
(ii) Following the delivery of the Preliminary Revenue Statement to the Stockholder Representative, Parent and the Surviving Corporation shall afford the Stockholder Representative the opportunity to examine the Preliminary Revenue Statement, and such supporting schedules, analyses, work papers and other underlying records or documentation as are reasonably necessary and appropriate.
(iii) If within ten (10) days following delivery of the Preliminary Revenue Statement or the MIST Payments to the Stockholder Representative, the Stockholder Representative has not delivered to Parent written notice (the “Earn Out Objection Notice”) of its objections to the Preliminary Revenue Statement or MIST Payments specifying (i) those items as to which there is disagreement and (ii) a reasonably detailed description of the basis, nature, dollar amount and extent of the dispute or disagreement, then the Preliminary Revenue Statement and MIST Payments shall be deemed final and conclusive (the “Final Revenue Statement”). If the Stockholder Representative delivers the Earn Out Objection Notice within such 10-day period, then Parent and the Stockholder Representative shall endeavor in good faith to resolve the objections, for a period not to exceed fifteen (15) days from the date of delivery of the Earn Out Objection Notice. If at ...
Earn-Out Consideration. (a) For each of the years ending December 31, 2010, 2011 and 2012 (collectively, the “Earn-Out Period”), the Target Stockholders (in the aggregate) shall be entitled to receive (if and to the extent, with respect to any particular Target Stockholder, that such Target Stockholder is entitled to receive Merger Consideration in accordance with Section 1.6), and the Acquiror shall pay, an aggregate amount equal to twenty percent (20%) of revenues (as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), consistently applied during the applicable periods) in excess of $3,600,000 (the “Revenue Minimum”) received by Acquiror (on a consolidated basis together with all of its subsidiaries and affiliates, including the Surviving Corporation) for each such year from the sale of those Target products that were being sold as of the Closing (including any enhancements, modifications or improvements of such products) to (i) customers of Target identified on Exhibit B attached hereto, (ii) each of the Top 25 Lenders as identified in Exhibit B attached hereto, and
(iii) customers who purchase products or services under Target’s Loan Mod Forensics brand (including license revenue therefrom), reduced by (Y) the amount of any FTV Contingent Payment made with respect to such year as provided in Section 1.14 and (Z) any Reimbursable Indemnification Payments made by the Principal Stockholders pursuant to Section 9.2(c) (collectively, the “Earn-Out Consideration”). The aggregate Earn-Out Consideration payable pursuant to this Section 1.9 with respect to the Earn-Out Period is referred to herein as the “Merger Consideration.” The Earn-Out Consideration payable for any particular fiscal year during the Earn-Out Period shall be determined by the Acquiror in good faith as soon as practicable (and in any event within forty-five (45) days) after the end of such fiscal year, and a reasonably detailed calculation and itemization thereof shall be promptly delivered to the Exchange Agent and the Principal Stockholders. The Earn-Out Consideration payable for any particular fiscal year during the Earn-Out Period as determined by the Acquiror and set forth in the calculation and itemization thereof shall be deemed to be final and conclusive unless the Principal Stockholders object thereto by written notice to Acquiror within twenty (20) business days after their receipt of the same. If the Principal Stockholders shall so object, the parties shall cooperate in g...
Earn-Out Consideration. (a) The Shareholder shall be entitled to earn additional cash consideration (collectively, the "EARN-OUT") in an amount, up to $300,000 in the aggregate (the "MAXIMUM EARN-OUT"), equal to 33% of the positive Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") beginning on the Closing Date (as defined below) and continuing for the twelve (12) calendar quarters immediately following the Closing (the "EARN-OUT PERIODS" and each individually, an "EARN-OUT PERIOD"), with the first Earn-Out Period to include the first full calendar quarter following the Closing Date plus the period between the Closing Date and the first day of such first calendar quarter, all in accordance with the terms and conditions of this Section.
(b) Within thirty (30) calendar days after the end of each calendar quarter (i.e., the three (3) months ended March 31, June 30, September 30 and December 31 of each relevant calendar year) or portion thereof that is included within the Earn-Out Periods, Bridgeline shall prepare an income statement reflecting solely the business and operations associated exclusively with the operations of Company following the completion of the Acquisition independent of the remaining business and operations of Bridgeline (the "IAPPS BUSINESS") calculated in accordance with generally accepted accounting principles consistently applied ("GAAP") for such Earn-Out Period, and a related calculation of EBITDA of the Iapps Business for such Earn-Out Period, such calculation of EBITDA to be completed in accordance with GAAP and to reflect as closely as reasonably possible the EBITDA that would have been achieved by the Company during such Earn-Out Period if the Acquisition had not occurred (each such income statement and EBITDA calculation are collectively referred to herein as the "INCOME STATEMENT"). The maximum allocation of corporate overhead ("G&A ALLOCATION") that will be charged by Bridgeline to the Iapps Business (operating as a division of Bridgeline) on a monthly basis shall not exceed $12,000.00 per month. This G&A Allocation assumes that the Iapps business unit or division will provide all research and development and sales and marketing activity and related expenses within its own internal expense budgets, operating as a division of Bridgeline. Other than the aforesaid G&A Allocation, for purposes of computing the EBITDA of the Iapps Business, the following rules shall apply: (i) there shall be no (A) allocations of any other Bridgeline...
Earn-Out Consideration. (a) The Sponsor, the Company and NAC hereby agree that following the Closing, in addition to the consideration to be received pursuant to the BCA, ParentCo shall be required to issue to the Sponsor an additional One Million Two Hundred Fifty Thousand (1,250,000) ParentCo Common Shares, in the aggregate (the “Earn-Out Consideration”), if any time prior to or as of the second anniversary of the Closing, the VWAP is greater than or equal to Thirteen Dollars ($13.00) over any twenty (20) trading days within any thirty (30) trading day period (the “Earn-Out Target”).
(b) If the Earn-Out Target set forth in Section 5(a) shall have been achieved, within five (5) Business Days following the achievement of the Earn-Out Target, ParentCo shall issue the Earn-Out Consideration to the Sponsor.
(c) If a Change of Control of ParentCo occurs prior to the second anniversary of the Closing and the Earn-Out Consideration that is issuable pursuant to Section 5(a) remains unissued as of immediately prior to the consummation of such Change of Control, the Earn-Out Consideration shall immediately vest and the Sponsor shall be entitled to receive the Earn-Out Consideration prior to the consummation of such Change of Control.
(d) The Earn-Out Consideration and the Earn-Out Target shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into ParentCo Common Shares), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to ParentCo Common Shares, occurring on or after the date hereof and prior to the time the Earn-Out Consideration is delivered to Sponsor, if any.”
Earn-Out Consideration. Following the Closing, Purchasers shall pay or cause Newco to pay to APIL the Earn-Out Consideration, in accordance with the terms of Exhibit E.
Earn-Out Consideration. (a) If the consolidated earnings before taxes (the "EBT") of the Company for the year ending December 31, 1998, increased by amounts in respect of items of the kind set forth on Schedule 2.5 that affected net income during such year (but only to the extent of such effect and, in the case of amounts representing compensation and expenses for present and former employees in excess of the amounts (if any) attributable to such employees under post-Closing arrangements, only to the extent of any such actual pre-Closing excess), and decreased by the amount of UniCapital corporate overhead allocated to the Company for the period from the Closing Date through December 31, 1998 (the "Adjusted 1998 EBT"), exceeds the consolidated EBT of the Company for the year ending December 31, 1997, inclusive of the add-backs set forth on Schedule 2.5 (the "Adjusted 1997 EBT"), then the Stockholders shall be entitled to receive one-half of the difference between the Adjusted 1998 EBT and the Adjusted 1997 EBT.
(b) If the consolidated EBT of the Company for the year ending December 31, 1999, increased by amounts in respect of items of the kind set forth on Schedule 2.5 that affected net income during such year and decreased by the amount of UniCapital corporate overhead allocated to the Company for such year (the " Adjusted 1999 EBT", and together with the Adjusted 1997 EBT and the Adjusted 1998 EBT, the "Company EBT"), exceeds the greater of the Adjusted 1998 EBT and the Adjusted 1997 EBT, then the Stockholders shall be entitled to receive one-half of the difference between (i) the Adjusted 1999 EBT and (ii) the greater of the Adjusted 1998 EBT and the Adjusted 1997 EBT.
(c) The EBT of the Company for the years ending December 31, 1998 and December 31, 1999 shall be computed using generally accepted accounting principles and practices as applied in the audited financial statements of the Company included in the Registration Statement. The allocation of UniCapital overhead shall be made on a pro rata basis applied consistently among UniCapital subsidiaries. To the extent gain-on-sale treatment was accorded any Lease, whether in the add-backs set forth on Schedule 2.5 or in any year, income from the payment stream on such Lease shall not be included in the EBT of the Company for any subsequent year.
(d) The amounts (if any) that the Stockholders become entitled to receive pursuant to Sections 2.5(a) and/or 2.5(b) are referred to herein as the "Earn-Out Consideration." The Earn-Out...
Earn-Out Consideration. (a) During the period beginning on the Closing Date and ending on the seven-year anniversary of the Closing Date,
(i) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $14.00, Buyer shall cause the Partnership to issue 10,714,285 Common Units to the Contributor;
(ii) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $16.00, Buyer shall cause the Partnership to issue 9,375,000 Common Units to the Contributor;
(iii) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $18.00, Buyer shall cause the Partnership to issue 13,888,889 Common Units to the Contributor; and
(iv) promptly and in any event within 5 Business Days after the first date that the 20-Day VWAP equals or exceeds $20.00, Buyer shall cause the Partnership to issue 12,500,000 Common Units to the Contributor (each issuance of Common Units pursuant to clauses (i), (ii), (iii) or (iv) above, an “Earn-Out Payment” and all Earn-Out Payments, collectively, the “Earn-Out Consideration”).
(b) In the event that the Partnership shall issue any Common Units in satisfaction of an Earn-Out Payment, Buyer shall issue to the Contributor, a number of shares of Buyer Class C Common Stock equal to the number of Common Units so issued and the Contributor shall separately pay Buyer an amount of cash equal to the number of shares of Buyer Class C Common Stock received multiplied by the par value of such shares. The right to receive the Earn-Out Consideration shall be transferrable on a share-by-share basis by the Contributor to the same extent that the Common Units and shares of Buyer Class C Common Stock received by the Contributor pursuant to this Agreement are transferrable by them; provided that the Contributor and such transferees shall deliver notice to Buyer indicating the Common Units and shares of Buyer Class C Common Stock such transferee may be entitled to receive and an undertaking to indemnify Buyer and its Affiliates in the event of any dispute among any Contributor or any such transferee or other Affiliate of the Contributor or transferee with respect to any such transfer or the Common Units and/or shares of Buyer Class C Common Stock to be delivered in accordance therewith.
(c) Notwithstanding anything to the contrary herein, (i) the Contributor shall not be entitled to receive a particular Earn-Out Payment on more than one occasi...