Common use of Earn-Out Payments Clause in Contracts

Earn-Out Payments. (a) Earn-Out Payments. For the twelve (12) month period ended December 31, 2022 (the “Earn-Out Period”), as additional consideration for the transactions contemplated hereby, Purchaser shall pay or cause to be paid to Seller, in cash, an amount as determined in accordance with this Section 1.7 (the “Earn-Out Amount”). Within thirty (30) days following delivery of the Company’s audited consolidated statement of financial position or balance sheet of the Company as at the end of the Earn-Out Period and the related audited consolidated income statement, audited consolidated statement of comprehensive income, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) for the Earn-Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered with the PCAOB (the “Purchaser Auditor”), Purchaser shall (i) prepare a good faith calculation (the “Proposed Earn-Out Calculation”) of Adjusted EBITDA for the Earn-Out Period and the applicable amount payable in connection with the Earn-Out Amount, if any, as determined in accordance with Section 1.7(b) (any such amount, as applicable, the “Proposed Earn-Out Amount”), and (ii) deliver to Seller a copy of the Proposed Earn-Out Calculation together with such Audited Financial Statements and other supporting documentation describing in reasonable detail how the Proposed Earn-Out Amount was calculated or otherwise determined (the “Earn-Out Statement”). Following the final and conclusive determination of the Earn-Out Amount in accordance with this Section 1.7 (the “Final Earn-Out Amount”), if the Final Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and in any event within ten (10) Business Days after such final determination, pay, or cause to be paid, the applicable Earn-Out Amount to Seller by wire transfer of immediately available funds to an account designated in writing by Seller.

Earn-Out Payments. (a) Following the Closing, Buyer shall pay to Sellers, in addition to the Base Purchase Price (as it may be adjusted), in each case in accordance with their respective Consideration Percentages, additional consideration for the acquisition of the Equity based on the performance of the Acquired Companies and the occurrence of certain other events described herein during each calendar year between January 1, 2022 and December 31, 2026 (such five-year period, the “Aggregate Earn-Out PaymentsPeriod” and each calendar year during such period, an “Annual Earn-Out Period”). For With respect to each Annual Earn-Out Period, if the twelve Aggregate IFO during such Annual Earn-Out Period exceeds the Aggregate IFO threshold for such Annual Earn-Out Period as set forth below (12the “IFO Threshold”), the Sellers shall be paid an amount equal to thirty percent (30%) month period ended December 31, 2022 of the amount by which the Aggregate IFO during such Annual Earn-Out Period exceeds such IFO Threshold (the “Earn-Out PeriodPayment”), as additional consideration for ; provided that in no event shall the transactions contemplated hereby, Purchaser shall pay or cause to be paid to Seller, in cash, an amount as determined in accordance with this Section 1.7 Earn- Out Payments exceed $20,000,000 (the “Earn-Out AmountCap”)) for the Aggregate Earn-Out Period. Within thirty The IFO Thresholds are $32.7 million, $36.0 million, $39.6 million, $43.5 million and $47.9 million for the Annual Earn-Out Periods ending on December 31, 2022, December 31, 2023, December 31, 2024, December 31, 2025 and December 31, 2026, respectively. Notwithstanding anything herein to the contrary, no Seller shall be entitled to receive any Earn-Out Payment (30other than Earn-Out Payments already received) days following delivery of if during the Company’s audited consolidated statement of financial position or balance sheet of the Company as at the end of the Aggregate Earn-Out Period and the related audited consolidated income statement, audited consolidated statement of comprehensive income, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) for the Earn-Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered with the PCAOB (the “Purchaser Auditor”), Purchaser shall (i) prepare a good faith calculation Xx. Xxxxxxx’x employment with Xxxxxxx LLC following the Closing is terminated for Cause (as defined in the “Proposed Earn-Out Calculation”Xxxxxxx Employment Agreement) of Adjusted EBITDA for or (ii) Xx. Xxxxxxx voluntarily resigns from his employment with Xxxxxxx LLC following the Earn-Out Period and the applicable amount payable in connection with the Earn-Out Amount, if any, as determined Closing in accordance with Section 1.7(b8.1 of the Xxxxxxx Employment Agreement. (b) Within five (any such amount5) Business Days following the filing of Buyer’s Form 10-K, as applicable, the “Proposed Earn-Out Amount”), and (ii) Buyer shall deliver to Seller Sellers Representative a copy of the Proposed Earn-Out Calculation together with such Audited Financial Statements and other supporting documentation describing in reasonable detail how the Proposed Earn-Out Amount was calculated or otherwise determined statement (the “Earn-Out Payment Statement”). Following ) that sets forth Buyer’s calculation of Aggregate IFO for the final and conclusive determination of the prior calendar year’s Annual Earn-Out Amount Period; provided that in accordance with this Section 1.7 (the “Final Earnevent the Buyer’s Form 10-Out Amount”), if the Final Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and in any event within ten (10) Business Days after such final determination, pay, or cause to be paid, the applicable Earn-Out Amount to Seller by wire transfer K is delayed past March 30 of immediately available funds to an account designated in writing by Seller.the

Earn-Out Payments. As part of the Purchase Price, the Buyer shall pay to the Shareholders, an amount equal to the fifty percent (a50%) Earnof the pre-Out Payments. For tax earnings of the L.R.S. cost center for the twelve (12) month period ended December beginning August 1, 1999 and ending July 31, 2022 2000 (the “"First Earn-Out Period”), as additional consideration for the transactions contemplated herebynot to exceed Three Million Dollars ($3,000,000), Purchaser shall pay or cause with payment to be paid made by the Buyer to Sellerthe Shareholders on or before October 31, in cash, an amount as determined in accordance with this Section 1.7 (the “2000. Additional Earn-Out Amount”). Within thirty Payments shall be paid by the Buyer to the Seller for each of the next succeeding three (303) days following delivery twelve month periods in an amount equal to 50% of the pre-tax earnings of the Company’s audited consolidated statement of financial position or balance sheet of the Company as at the end of the Earn-Out Period and the related audited consolidated income statement; provided, audited consolidated statement of comprehensive incomethat if such payments, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) for the Earn-Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered with the PCAOB (the “Purchaser Auditor”), Purchaser shall (i) prepare a good faith calculation (the “Proposed Earn-Out Calculation”) of Adjusted EBITDA for the Earn-Out Period and the applicable amount payable in connection when aggregated with the Earn-Out Amount, if any, as determined in accordance with Section 1.7(b) (any such amount, as applicable, Payment for the “Proposed First Earn-Out Amount”Period shall not exceed Three Million Two Hundred Thousand Dollars ($3,200,000), and (ii) deliver to Seller a copy . Payments for each of the Proposed succeeding Earn-Out Calculation together with Periods shall be made for such Audited Financial Statements and other supporting documentation describing in reasonable detail how period on or before September 30 of each such year. The pre-tax earnings used for the Proposed Earn-Out Amount was calculated or otherwise determined (the “Earn-Out Statement”). Following the final and conclusive determination purpose of calculating the Earn-Out Amount in accordance with this Section 1.7 Payments shall be based upon the earnings of the Company's business operated as a separate cost center (the “Final "LRS Cost Center") subsequent to the sale of Shares contemplated herein and shall include as income the loan fees, origination fees, gain on the sale of retail, wholesale and sub prime loans reduced by operating expenses for the cost center Income and Expense for the purpose of the foregoing, shall not include (a) any of the Buyer's corporate management or overhead charged to the cost center operation, but shall include compensation paid to the Shareholders pursuant to their Employment Agreements; (b) any interest income or interest expense related to the warehouse line and loans held for sale; (c) any income or expenses associated with the consolidation of the Buyer's San Xxxx office with the Company's office, including, but not limited to any wholesale volume related to the Buyer's San Xxxx account representatives and the Buyer's Tustin's account representatives; and (d) any additional cost centers or loan production business assigned to the Executive to manage from and after the Closing Date. During the Earn-Out Amount”)Period, if the Final Buyer covenants and agrees that it will not move or allow existing personnel from the LRS Cost Center to move to any other location or affiliate of Buyer, without the written consent of the Shareholders, which will not be unreasonably withheld. In addition, the Buyer covenants and agrees the during the Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and in any event within ten (10) Business Days after such final determination, pay, or cause to be paidPeriod, the applicable Buyer will not transfer any existing business operations or functions from the LRS Cost Center without the written consent of the Shareholders. During the Earn-Out Amount Period, the Shareholders shall have the right to Seller by wire transfer approve or reject any proposed increase in costs allocated to the LRS Cost Center, including, but not limited to increases in employee compensation (exclusive of immediately available funds pension or other employee benefits applicable to an account designated in writing by Selleremployees generally of Buyer), allocation of depreciation and amortization, except with respect to depreciation and amortization applicable to approved capital expenditures for the LRS Cost Center and other cost allocations which may impact the LRS Cost Center.

Earn-Out Payments. (ai) Earn-Out Payments. For If, during the twelve period beginning immediately after the Closing and ending on the six (126) month period ended December 31, 2022 anniversary of the Closing Date (the “Earn-Out Period”), as additional consideration Buyer enters into an Earn-Out Agreement, Buyer shall pay earn-out amounts to Seller equal to one times (1.00x) the recurring revenues billed and collected by Buyer (excluding any revenues associated with or collected by Buyer for or on behalf of a third party, including in connection with any partnership arrangement set forth in the Earn-Out Agreement), in respect of the Earn-Out Agreement for the transactions contemplated herebyinitial twelve (12) months following the first recurring revenue for such agreement being billed (such amount, Purchaser shall pay or cause to be paid to Seller, in cash, an amount as determined in accordance with this Section 1.7 (the “Earn-Out Amount,” and, such period, the “Determination Period”). Within thirty (30) days following delivery , provided however, that in no event will the Determination Period extend past 15 months of execution of the Company’s audited consolidated statement Earn-Out Agreement. Buyer shall use good faith commercially reasonable efforts to minimize the period of financial position or balance sheet time between the execution of the Company as at Earn-Out Agreement and the end date on which the first recurring revenue thereunder is billed. For the avoidance of doubt, if the first recurring revenue for the Earn-Out Agreement is billed six months after the execution of the Earn-Out Agreement, Buyer shall only be entitled to the Earn-Out Amounts for nine months after recurring revenue is first billed. Notwithstanding the foregoing, Earn-Out Amounts will include recurring revenues billed within the Determination Period and collected within the period after being invoiced set forth in the Earn-Out Agreement; and Buyer shall use good faith commercial efforts to collect such recurring revenues with such period. The Earn-Out Amount will not take into account any amendment to the Earn-Out Agreement that increases recurring revenues if such amendment is entered into after the Earn-Out Period and such amendment represents an increase in scope (in terms of number of buildings and/or additional services) from the related audited consolidated income statement, audited consolidated statement of comprehensive income, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) for the Earn-Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered with the PCAOB (the “Purchaser Auditor”), Purchaser shall (i) prepare a good faith calculation (the “Proposed Earn-Out Calculation”) of Adjusted EBITDA for the Earn-Out Period and the applicable amount payable in connection with the Earn-Out Amount, if any, as determined in accordance with Section 1.7(b) (any such amount, as applicable, the “Proposed Earn-Out Amount”), and (ii) deliver to Seller a copy of the Proposed Earn-Out Calculation together with such Audited Financial Statements and other supporting documentation describing in reasonable detail how the Proposed Earn-Out Amount was calculated or otherwise determined (the “Earn-Out Statement”). Following the final and conclusive determination of the Earn-Out Amount in accordance with this Section 1.7 (the “Final Earn-Out Amount”), if the Final Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and in any event within ten (10) Business Days after such final determination, pay, or cause to be paid, the applicable Earn-Out Amount to Seller by wire transfer of immediately available funds to an account designated in writing by SellerXxxxxx Xxx RFP.

Earn-Out Payments. (a) EarnPurchaser shall make additional payments to Seller and Option Holder, Pro-Rata (each an “Earn Out Payments. For Payment”), within thirty (30) calendar days following the twelve end of each month during the three (123) year period commencing on the first full month period ended December 31, 2022 following the Closing (the “Earn-Earn Out Period”); provided that in lieu of monthly Earn Out Payments during the final fiscal quarter of the Earn Out Period, as additional consideration for the transactions contemplated hereby, Purchaser such final Earn Out Payment shall pay or cause to be paid to Seller, in cash, an amount as determined in accordance with this Section 1.7 (the “Earn-Out Amount”). Within thirty (30) made once within 60 calendar days following delivery of the Company’s audited consolidated statement of financial position or balance sheet of the Company as at the end of such final fiscal quarter. Each Earn Out Payment shall be in an amount equal to 22.5% of Purchaser’s Adjusted Gross Profit (as defined in Section 2.2(c) below) derived from sales to non-affiliated third parties, plus 10% of amounts invoiced and delivered for Internally Delivered Services Revenue (“IDS Revenue,” as more fully defined in Section 2.2(d) below), in each case, for such month or quarter, as applicable. Within sixty (60) calendar days following the Earn-end of each fiscal quarter during the Earn Out Period and the related audited consolidated income statement, audited consolidated statement of comprehensive income, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) except for the Earn-final fiscal quarter within the Earn Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered with the PCAOB (the “Purchaser Auditor”Period), Purchaser shall reconcile all monthly Earn Out Payments made during such previous fiscal quarter, and (i) prepare a good faith calculation (if 22.5% of the “Proposed EarnAdjusted Gross Profit derived from sales to non-affiliated third parties during such fiscal quarter is determined to have been greater than the aggregate monthly Earn Out Calculation”) of Adjusted EBITDA for the EarnPayments paid during such fiscal quarter, Purchaser shall promptly pay such shortfall to Seller and Option Holder, Pro-Out Period and the applicable amount payable in connection with the Earn-Out Amount, if any, as determined in accordance with Section 1.7(b) (any such amount, as applicable, the “Proposed Earn-Out Amount”), and Rata; or (ii) deliver to Seller a copy if 22.5% of the Proposed EarnAdjusted Gross Profit derived from sales to non-affiliated third parties during such fiscal quarter is determined to have been less than the aggregate monthly Earn Out Calculation together with Payments paid during such Audited Financial Statements and other supporting documentation describing fiscal quarter, subsequent Earn Out Payments shall be correspondingly reduced in reasonable detail how the Proposed Earnamount of such over-Out Amount was calculated or otherwise determined (payment. On a quarterly basis, the “Earn-Out Statement”). Following CFO of Purchaser shall certify, in writing, the final and conclusive determination accuracy of the Earncalculations of the Earn Out Payments. The parties hereby agree that Purchaser’s sales to dinCloud, Inc., ADSL or collab9 are sales to non-affiliated third parties for purposes of the calculation of Earn Out Amount in accordance with this Section 1.7 (the “Final Earn-Out Amount”), if the Final Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and in any event within ten (10) Business Days after such final determination, pay, or cause to be paid, the applicable Earn-Out Amount to Seller by wire transfer of immediately available funds to an account designated in writing by SellerPayments.

Earn-Out Payments. (a) Earn-Out Payments. For the twelve (12) month period ended December 31, 2022 (the “Earn-Out Period”), as 3.3.1 As additional consideration for the transactions contemplated herebySpecified Assets, Purchaser Buyer shall pay to Seller with respect to each Calculation Period within the Earn Out Period an amount (each, an “Earn Out Payment”) equal to: three percent (3%) of all Revenue generated by Buyer from the amount, if any, of small diameter stainless steel pipe and tube (outside diameter of ten inches or cause less) sold in excess of 3.25 million pounds quarterly, excluding sales of Seller’s finished goods inventory post-Closing; provided that, the Parties shall review the Earn Out Payments annually (each fourth Calculation Period during the Earn Out Period), and if necessary, adjust up or down the final quarterly Earn Out Payment for each year during the Earn Out Period to be make certain the aggregate of the Earn Out Payments for each year during the Earn Out Period is equal to three percent (3%) of all Revenue generated by Buyer from the amount, if any, of small diameter stainless steel pipe and tube (outside diameter of ten inches or less) sold in excess of 13.0 million pounds annually. Notwithstanding the foregoing, if at the end of the Earn Out Period, Buyer has paid Seller Earn Out Payments totaling less than $3,000,000, in the aggregate, then Buyer shall pay Seller a “true-up” payment equal to the difference between $3,000,000 and the aggregate of the Earn Out Payments previously paid to Seller, in cash. 3.3.2 Procedures Applicable to Determination of the Earn Out Payments. 3.3.2.1 On or before the date which is twenty (20) days after the last day of each Calculation Period (each such date, an amount as determined “Earn Out Calculation Delivery Date”), Buyer shall prepare and deliver to Seller a written statement (in accordance with this Section 1.7 each case, an “Earn Out Calculation Statement”) setting forth in reasonable detail its determination of Revenue for the applicable Calculation Period and its calculation of the resulting Earn Out Payment (the in each case, an “Earn-Earn Out AmountCalculation”). Within 3.3.2.2 Seller shall have twenty (20) days after receipt of the Earn Out Calculation Statement for each Calculation Period (in each case, the “Review Period”) to review the Earn Out Calculation Statement and the Earn Out Calculation set forth therein. During the Review Period, Seller and its Representatives shall have the right to inspect the Company’s books and records during normal business hours at the Company’s offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of Revenue and the resulting Earn Out Payment. Prior to the expiration of the Review Period, Seller may object to the Earn Out Calculation set forth in the Earn Out Calculation Statement for the applicable Calculation Period by delivering a written notice of objection (an “Earn Out Calculation Objection Notice”) to Buyer. Any Earn Out Calculation Objection Notice shall specify the items in the applicable Earn Out Calculation disputed by Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If Seller fails to deliver an Earn Out Calculation Objection Notice to Buyer prior to the expiration of the Review Period, then the Earn Out Calculation set forth in the Earn Out Calculation Statement shall be final and binding on the parties hereto, and the Earn Out Payment shall be immediately due and payable. If Seller timely delivers an Earn Out Calculation Objection Notice, Buyer and Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Revenue and the Earn Out Payment for the applicable Calculation Period. If Buyer and Seller are unable to reach agreement within thirty (30) days following delivery of after such an Earn Out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to the Company’s audited consolidated statement of financial position or balance sheet of Independent Accountants. The Independent Accountants shall be directed to render a written report on the Company as at the end of the Earn-Out Period and the related audited consolidated income statement, audited consolidated statement of comprehensive income, audited consolidated statement of cash flows and audited consolidated statement of changes in equity (the “Audited Financial Statements”) for the Earn-Out Period by a “Big 4” or other nationally recognized independent certified public accountant registered unresolved disputed items with the PCAOB (the “Purchaser Auditor”), Purchaser shall (i) prepare a good faith calculation (the “Proposed Earn-Out Calculation”) of Adjusted EBITDA for the Earn-Out Period and respect to the applicable amount payable in connection with the Earn-Out Amount, if any, as determined in accordance with Section 1.7(b) (any such amount, as applicable, the “Proposed Earn-Out Amount”), and (ii) deliver to Seller a copy of the Proposed Earn-Earn Out Calculation together with such Audited Financial Statements and other supporting documentation describing in reasonable detail how the Proposed Earn-Out Amount was calculated or otherwise determined (the “Earn-Out Statement”). Following the final and conclusive determination of the Earn-Out Amount in accordance with this Section 1.7 (the “Final Earn-Out Amount”), if the Final Earn-Out Amount exceeds $0.00, Purchaser shall, as promptly as practicable and practicable, but in any no event within ten greater than thirty (1030) Business Days days after such final determinationsubmission to the Independent Accountants, payand to resolve only those unresolved disputed items set forth in the Earn Out Calculation Objection Notice. If unresolved disputed items are submitted to the Independent Accountants, or cause Buyer and Seller shall each furnish to be paidthe Independent Accountants such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountants may reasonably request. The Independent Accountants shall resolve the disputed items based solely on the applicable Earn-definitions and other terms in this Agreement and the presentations by Buyer and Seller, and not by independent review. The resolution of the dispute and the calculation of Revenue that is the subject of the applicable Earn Out Amount Calculation Objection Notice by the Independent Accountants shall be final and binding on the parties hereto. The fees and expenses 4 of the Independent Accountants shall be borne by Seller and Buyer in proportion to Seller the amounts by wire transfer which their respective calculations of immediately available funds to an account designated in writing Revenue differ from Revenue as finally determined by Seller.the Independent Accountants. 3.3.3