Earn-Out. (a) In addition to the Purchase Price, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount. (b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement. (c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement. (d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions: (i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party. (ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction. (iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party. (e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.
Appears in 2 contracts
Samples: Share Purchase Agreement, Share Purchase Agreement (Silicon Motion Technology CORP)
Earn-Out. (a) In addition Subject to the terms and conditions of this Section 1.5, Purchaser will pay to the Individuals, as additional Purchase PricePrice for the Acquired Shares, an amount equal to three times the amount, if any, by which the Company meets or exceeds (i) total EBITDA for the Revenue Target and (ii) 2016 fiscal year for the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio Companies (the “Earn-Out2016 EBITDA”) exclusive of any Tax, fees or other expenses of any kind; provided that exceeds $15,655,477 (the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-“Earn Out Amount”).
(b) Within ten (10) business days To determine the 2016 EBITDA amount, Purchaser’s independent public accountants will calculate, in accordance with GAAP and consistent with the same manner in which the Companies’ 2015 Audited Financial Statements were prepared, the EBITDA of each of the Companies for its 2016 fiscal year and the sum of the total EBITDA of the Companies for their 2016 fiscal year. Such calculations will be undertaken promptly after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be preparedClosing, and deliver a copy of such final calculations will be provided to the SellersPurchaser and Equityholders’ Representative by such accountants (such final calculations being referred to as, the “Auditor’s Report”). The parties agree that the costs incurred by the Companies in 2016 that are solely related to: (i) a statement setting forth the Product Revenues for Companies’ responses to the calendar year 2007, each component used in due diligence requests of Purchaser; (ii) the calculation thereof, the ADS Appreciation Ratio and the amount restatement of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, Companies’ financials at Purchaser’s cost and expense, request; and (iiiii) such documentationpreparing to consummate the transactions contemplated by this Agreement, if anyincluding the Pre-Closing Reorganization, as may which costs will be reasonably necessary to enable set forth on Schedule 1.5 and attached hereto at the SellersClosing, shall not be deducted from the Companies’ Representative to determine such amount. Concurrently with earnings for purposes of calculating the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement2016 EBITDA.
(c) After Following the receipt from Purchaser by Equityholders’ Representative of the Earn-Out Statement andAuditor’s Report, if applicable, the Earn-Out, Sellers Purchaser shall have the right, at its cost and expense, and upon not less than seven (7) dayspermit Equityholders’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have Representative reasonable access during normal business hours to inspect the books and records pertaining to the preparation of the Company Auditor’s Report and working papers provide Equityholders’ Representative with copies thereof (including those prepared as reasonably requested by advisors Equityholders’ Representative) and other third parties, such additional information as Equityholders’ Representative may reasonably request to confirm the Earn Out Amount. The Equityholders agree that the scope of such audit shall be reasonable and as is customary in transactions of this kind. All costs and fees incurred by the parties related to the extent permitted thereby) relating to such calculationexercise of the audit right shall be borne by each of the respective parties. If the Sellers’ Representative fails parties fail to challenge Purchaser’s determination mutually agree on the Earn Out Amount after 30 days following the receipt of the Product RevenuesAuditor’s Report by Equityholders’ Representative, then the ADS Appreciation Ratio and parties shall submit the amount of issues then-remaining in dispute to the Earn-Out by the delivery of a written notice Independent Accountants to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreementdecided in accordance with Section 1.3(b).
(d) In The Earn Out Amount, if any, will be allocated among the event Acquired Shares, in the same ratio that Sellers disputes Purchaser’s determination each of the amount following bear to the combined EBITDA of all of the Product Revenues, Companies as shown in the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
Auditor’s Report: (i) Purchaser the combined EBITDA of Xxxxxx and Alpha as shown in the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice Auditor’s Report; and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) the EBITDA of Alpha Company as shown in the Auditor’s Report. The CPA Firm shall prepare Earn Out Amount as so allocated in the immediately preceding sentence, will be allocated among the Acquired Shares and distribute the Individuals in the same percentages as the Closing Payment is allocated among the Acquired Shares and the Individuals, and be paid by wire transfer of immediately available funds to the Parties a writing setting forth Individuals’ Accounts (per Section 1.2(e)) within three days of the CPA Firm’s final determination of such amount. Notwithstanding the Unresolved Objectionsforegoing, the CPA Firm’s reasons therefor and parties agree that, for Tax purposes, the amount of the Earn-Earn Out calculated pursuant thereto; providedAmount, howeverif any, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports deemed paid directly to the Company in connection with Sellers as consideration for the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product MarginAcquired Shares.
Appears in 2 contracts
Samples: Share Purchase Agreement, Share Purchase Agreement (Installed Building Products, Inc.)
Earn-Out. The record holders of Company Common Stock, determined on an As-Converted Basis, and the Bonus Grantees shall be entitled to share in an earn-out payment from Parent as follows:
(a) In addition to the Purchase Price, if the Company meets or exceeds Within fifteen (i15) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007Parent announces its 2015 annual earnings in accordance with Applicable Canadian Securities Laws, Purchaser Parent shall prepare, or cause to be prepared, and deliver to the SellersStockholders’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”)) containing a reasonably detailed calculation of the Total Revenue and gross margin for the Business for the 2015 calendar year, which shall be prepared in each case calculated in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out StatementSpecified Accounting Principles.
(cb) After The Stockholders’ Representative shall have thirty (30) days from the date of its receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaserreview Parent’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as determinations set forth in the Earn-Out Statement Statement. Parent shall provide the Stockholders’ Representative and (ii) have its Representatives reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating relevant to such calculation. If verifying the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative contents of the Earn-Out Statement. Upon completion of its review (and in any event within the required thirty (30)-day period), the Stockholders’ Representative shall deliver to Parent written notice of the Stockholders’ Representative’s acceptance or rejection of Parent’s determination of each of the Total Revenue and gross margin for the Business for the 2015 calendar year. If the Stockholders’ Representative fails to deliver any such written notice to Parent within such thirty (30)-day period, the Stockholders’ Representative shall be irrevocably deemed to have accepted Parent’s determination by Purchaser of the Total Revenue and gross margin for the Business for the 2015 calendar year, in which event Parent’s determination of the Total Revenue and gross margin for the Business for the 2015 calendar year shall be final, binding and conclusive on the Stockholders, the Stockholders’ Representative, Parent and binding for all purposes of this Agreementthe Surviving Corporation.
(dc) In If the event that Sellers disputes PurchaserStockholders’ Representative delivers written notice to Parent under Section 3.3(b) of rejection of Parent’s determination of Total Revenue or gross margin for the Business for the 2015 calendar year, which notice must contain reasonable details of the basis for such rejection, including (if reasonably practicable) the Stockholders’ Representative’s proposed recalculation of the amount of the Product RevenuesTotal Revenue or gross margin in dispute, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the SellersStockholders’ Representative and Parent shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth promptly (and in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of delivery of such notice) confer, or cause their respective Representatives to confer, with each other with a view to resolving such dispute. If the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the SellersStockholders’ Representative shall submit and Parent or their respective Representatives are unable to the CPA Firm (with a copy delivered to the other Party on the same day), resolve such dispute within thirty (30) days after the date of the engagement delivery of the CPA FirmStockholders’ Representative’s notice of rejection to Parent, a memorandum either the Stockholders’ Representative or Parent may refer such matter to the Independent Accountants for review and final determination of (which and only of) the Total Revenue and/or gross margin to the extent they remain in dispute. The Independent Accountants may include supporting exhibits) setting forth their respective positions request of the Stockholders’ Representative and Parent such documents and information as may be necessary or appropriate for proper determination of such dispute, and such parties shall cooperate reasonably to promptly satisfy any such request. The determination by the Independent Accountants of the disputed Total Revenue and/or gross margin shall be final, binding and conclusive on the Unresolved Objections. Each of Purchaser Stockholders, the Stockholders’ Representative, Parent and the SellersSurviving Corporation, absent manifest error. The costs of the Independent Accountants in undertaking such review and determination shall be shared equally by the Stockholders (administered through the Stockholders’ Representative may Representative) and Parent.
(but d) In the event that (i) Total Revenue for the Business for the 2015 calendar equals or exceeds U.S.$8,500,000 and (ii) gross margin for the Business for the 2015 calendar year exceeds seventy percent (70%) of the Total Revenue for the Business for the 2015 calendar year, the record holders of Company Common Stock immediately before the Effective Time, as determined on an As-Converted Basis, and the Bonus Grantees shall not be required toentitled to receive an aggregate cash payment (the “Earn-Out Payment”) submit equal to fifty percent (50%) of the CPA Firm amount by which the Total Revenue for the Business for the 2015 calendar year exceeds U.S.$6,982,596. Within five (with a copy delivered to the other Party on the same day), within sixty (605) days Business Days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and on which the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes Payment is finally determined pursuant to this paragraph Section 3.3, Parent shall make a cash payment to the record holders of Company Common Stock immediately before the Effective Time, as determined on an As-Converted Basis, and the Bonus Grantees (dthe aggregate share allocated to the Bonus Grantees not to exceed fifteen percent (15%) shall be shared equally of the aggregate Earn-Out Payment, as contemplated by Purchaser and Sellers; providedSection 6.13), however, that if pro rata in accordance with their respective pro rata shares of the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without meritTranche One Payment Amount, the CPA Firm mayTranche Two Payment Amount, in its discretion, assign a greater portion of such fees the Tranche Three Payment Amount and expenses to such Partythe Tranche Four Payment Amount.
(e) From Notwithstanding the Closing Date through provisions of Section 3.3(d), if Parent causes or permits to be sold substantially all of the assets of the Company and its Subsidiaries prior to December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct2015, the Business in Earn-Out Payment shall be calculated based on the Ordinary Course of Business Total Revenue and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out gross margin of the Business any Customer Offerings (or any derivative product therefromfor the fully completed calendar months in 2015 immediately preceding the date of completion of such sale, and the U.S.$6,982,596 annual Revenue target amount referred to in Section 3.3(d) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation reduced pro rata to reflect such number of the Product Profits, the Product Revenues and the Product Marginfully completed calendar months.
Appears in 1 contract
Earn-Out. (a) In addition to the Purchase Price, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in to Seller additional cash consideration (the "Contingent Consideration") equal to Sellersthe sum of the following:
(1) $500,000, if revenues to Purchaser from the sale of Seller's Products or Purchaser's products by Purchaser to Seller's Customers (as defined below) and revenues from sales of the Products to Purchaser's customers (the "Earn-Out Revenues") exceed $12,000,000 for the 12-month period commencing on a prothe date of this Agreement (the "Earn-rata basisOut Period"); and
(2) $500,000, if the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate Revenues exceed $13,000,000 for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.Period; and
(b3) Within ten (10) business days after an amount equal to 0.20 multiplied by the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount excess of the Earn-Out determined in accordance with Section 2.4(a) (Revenues over $14,000,000 for the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and Period.
(ii) such documentation, if any, as may Seller's Customers" shall be reasonably necessary to enable the Sellers’ Representative to determine such amountthose customers listed on Schedule 2.4(b). Concurrently with the delivery Calculation of the Earn-Out StatementRevenues shall be subject to the following qualifications:
(1) Revenues from Seller's Customers who are also customers of Purchaser ("Mutual Customers") shall be excluded for purposes of calculating Earn-Out Revenues, provided however, that revenues from Mutual Customers who are resellers or distributors shall be included for purposes of calculating Earn-Out Revenues for that portion of revenues that relates to the shipment of a Seller's Product.
(2) Revenues from Seller's end user customers whose names are set forth on the attached list who are not Mutual Customers shall apply whether Purchaser sells a Seller's Product or transitions the Seller's end user customer to a Purchaser's product.
(3) No revenues shall deposit into a nominated account as established by be included to the Sellers’ Representative for payment extent that they are related to Sellers, on a per share basis, Purchaser's products sold to Purchasers customers.
(4) Earn-Out Revenues shall include revenues from the sale of any Seller Product to any of Purchaser's existing customers.
(iii) The amount of the EarnContingent Consideration payable to Seller under this Section 2.4(b) shall be subject to adjustment for credits related to product returns, price adjustments and non-Outpayment of invoices.
(iv) Subject to adjustment under Section 2.4(b)(ii), Contingent Consideration, if any, specified in payable under Section 2.4(b)(i) shall be payable to Seller within 45 days after the Earn-Out Statement.
(c) After receipt from Purchaser end of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers Period. Seller shall have the right, at its cost and sole expense, to audit Purchaser's records related and upon not less than seven (7) days’ prior written notice limited to Purchaser, 's performance under Section 2.4(b)(i) as is necessary to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of verify the amount of the Product RevenuesContingent Consideration payable, the ADS Appreciation Ratio and the Earn-Out as set forth upon at least three days prior notice, in the Earn-Out Statement and (ii) have reasonable access a manner not disruptive of Purchaser's business during Purchaser's normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreementhours.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.
Appears in 1 contract
Earn-Out. (a) In addition On or before March 18, 2014, Parent shall deliver to the Purchase Price, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on Representative a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio statement (the “Earn-OutPreliminary Revenue Statement”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and showing the amount of Company 2013 Revenue, and the Earnexcess, if any, of Company 2013 Revenue over $23,100,000. If Company 2013 Revenue exceeds $23,100,000, the Preliminary Revenue Statement shall also show the excess, if any, of non-Out determined in accordance with Section 2.4(a) (VASERshape Revenue over $19,900,000 and the “Earn-Out Statement”), which excess of VASERshape Revenue over $3,200,000. The Preliminary Revenue Statement shall be prepared 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 accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes provisions of this Agreement.
(b) Following the delivery of the Preliminary Revenue Statement to the Representative, Parent and the Surviving Company shall afford the Representative and its representatives the opportunity to examine the Preliminary Revenue Statement, and such supporting schedules, analyses, workpapers and other underlying records or documentation as are reasonably necessary and appropriate, including a list of Parent consolidated sales by customer, sales representative, distributor and product. Parent and the Surviving Company shall cooperate promptly, as reasonably requested, with the Representative and its representatives in such examination.
(c) If within 10 days following delivery of the Preliminary Revenue Statement to the Representative, the Representative has not delivered to Parent written notice (the “Earn Out Objection Notice”) of its objections to the Preliminary Revenue Statement, then the Preliminary Revenue Statement shall be deemed final and conclusive. If the Representative delivers the Earn Out Objection Notice within such 10-day period, then Parent and the Representative shall endeavor in good faith to resolve the objections, for a period not to exceed 15 days from the date of delivery of the Earn Out Objection Notice. If at the end of the 15-day period there are any objections that remain in dispute, then the remaining objections in dispute shall be submitted for resolution to the Neutral Firm. The Neutral Firm shall determine any unresolved items of Company 2013 Revenue within 30 days after the objections that remain in dispute are submitted to it. If any remaining objections are submitted to the Neutral Firm for resolution, (i) each party shall furnish to the Neutral Firm such workpapers and other documents and information relating to such objections as the Neutral Firm may request and are available to that party, and shall be afforded the opportunity to present to the Neutral Firm any material relating to the determination of the matters in dispute and to discuss such determination with the Neutral Firm, (ii) to the extent that a value has been assigned to any objection that remains in dispute, the Neutral Firm shall not assign a value to such objection that is greater than the greatest value for such objection claimed by either party or less than the smallest value for such objection claimed by either party, (iii) the determination by the Neutral Firm of such unresolved items of 2013 Company Revenue, as set forth in a written notice delivered to Parent and the Representative by the Neutral Firm, shall be made in accordance with this Agreement and shall be binding and conclusive on the parties and shall constitute an arbitral award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction thereof, and (iv) the fees and expenses of the Neutral Firm shall be paid by the party whose calculation of 2013 Company Revenue deviated the most from the 2013 Company Revenue as determined by the Neutral Firm.
(d) In Provided that the event Company 2013 Revenue (as shown on the Final Revenue Statement) exceeds $23,100,000, then Parent shall, as soon as reasonably practicable, deliver to the Exchange Agent (i) a number of shares of Parent Common Stock that Sellers disputes Purchaser’s determination is equal to the sum of the non-VASERshape Revenue Shares and the VASERshape Revenue Shares, less that number of shares equal to the amount of the Product RevenuesWB Fee due with respect thereto divided by the Parent Volume Weighted Average Price, and such number of shares shall be the ADS Appreciation Ratio and/or the amount of the “Earn-Out, out Consideration”; and (ii) cash equal to the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice WB Fee due with respect to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writingConsideration; provided, however, that each party in no event shall have the right maximum number of shares of Parent Common Stock so delivered and constituting Earn-out Consideration exceed 3,625,954, less that number of shares equal to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the WB Fee divided by the Parent Volume Weighted Average Price ; and provided further, that in no event shall the number of shares constituting Total Merger Consideration exceed 13,600,000 shares of Parent Common Stock in the aggregate less that number of shares equal to the amount of the WB Fee divided by the Parent Volume Weighted Average Price. Furthermore, any Earn-Out Consideration payable to Unaccredited Investors shall be paid in cash and not shares of Parent Common Stock, with such cash payable calculated pursuant thereto; providedbased on the number of shares of Parent Common Stock otherwise deliverable divided by the Parent Volume Weighted Average Price. The “non-VASERshape Revenue Shares” shall be that number of shares of Parent Common Stock that is the quotient of (A) the excess, howeverif any, of non-VASERshape Revenue over $19,900,000, multiplied by 1.25, divided by (B) the Parent Volume Weighted Average Price, provided in any event that the CPA Firm number of non-VASERshape Revenue Shares shall not change nor deviate from exceed 3,053,435. The “VASERshape Revenue Shares” shall be that number of shares of Parent Common Stock that is the calculation quotient of (A) the excess, if any, of VASERshape Revenue over $3,200,000, multiplied by 1.25, divided by (B) the Parent Volume Weighted Average Price, provided in any item event that the number of VASERshape Revenue Shares shall not specifically challenged exceed 3,053,435. The obligation to deliver Earn-out Shares is subject to the final sentence of Section 1.6(b) and Parent’s right to withhold such delivery in respect of its indemnification claims in accordance with Article 7. The cash delivered to the Exchange Agent on account of the WB Fee shall be paid to Xxxxxxx Xxxxx & Company, L.L.C. as provided in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdictionExchange Agent Agreement.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.
Appears in 1 contract
Samples: Merger Agreement (Solta Medical Inc)
Earn-Out. (a) In addition to the Purchase PriceBy November 28, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target2005, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, prepare and deliver to the Sellers’ Representative ' Representatives (i) a statement of income (the "Income Statement") of the Company and its Subsidiaries for the period from July 11, 2005 through October 2, 2005 (such period, the "Earn Out Test Period") and (ii) a certificate setting forth the Product Revenues total EBITDA for the calendar year 2007Earn Out Test Period, each component used as adjusted to exclude, in a manner consistent with Schedule 2.07(a) attached hereto, the calculation impact of any non-recurring income and expenses, including, but not limited to, any costs and expenses related to the Sale/Leaseback Transaction including the incremental GAAP rent payable as a result thereof, the ADS Appreciation Ratio ownership, operation and the amount disposal of the Earn-Out determined Company's corporate aircraft and Xxxxxx X. Xxxxx'x salary and other employment benefits paid or expensed by the Company, which shall include, but not be limited to, the costs and expenses for his office located in accordance with Section 2.4(a) (Barrington, Illinois and reimbursement of his legal fees which shall include the “Earn-Out Statement”amounts paid by the Company for matters described in 9.01(a)(vi), which any Transaction Expenses paid relating to the transaction (including any extraordinary bonuses paid or any transaction expenses of Buyer paid by the Company post-closing including closing fees, debt issuance costs and professional fees), (such amount, as adjusted, the "Earn Out EBITDA"). The Income Statement shall be prepared in accordance with the Adjusted Korean GAAPsame accounting policies, at Purchaser’s cost practices and expense, judgments as those used to prepare the Financial Statements. The Sellers' Representatives and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers their representatives shall have the rightright to review all work papers and procedures of Purchaser and any representatives of Purchaser used to prepare the Income Statement and to arrive at the Earn Out EBITDA and shall have the right to perform any other reasonable procedures necessary to verify the accuracy of the Income Statement and the Earn Out EBITDA. Unless the Sellers' Representatives, at its cost within 30 Business Days after delivery to the Sellers' Representatives of the Income Statement and expensethe certificate setting forth the Earn Out EBITDA, notify Purchaser in writing that the Sellers' Representatives object to the Income Statement or the Earn Out EBITDA and specify the basis for such objection (as well as the Sellers' Representatives calculation of the disputed line items), such Income Statement and Earn Out EBITDA shall become final and binding upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with the parties for the purposes of this Section 2.07. If Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they ' Representatives are unable to resolve the dispute within thirty (30) days after the delivery all of the Earn-Out Dispute NoticeSellers' Representatives' objections within 20 Business Days after any such notification has been given by the Sellers' Representatives, then the all remaining matters in dispute shall be submitted to the CPA Firm for Independent Accountants. The Independent Accountants shall make a final determination as to all remaining matters in dispute that shall be conclusive and binding on Purchaser and the Sellers. Purchaser and the Sellers agree to cooperate with each other and with each other's authorized representatives in order to resolve any and all matters in dispute as soon as practicable.
(b) Within 10 Business Days after the Income Statement and the Earn Out EBITDA have been finally determined, the Sellers shall be entitled to receive, from the Earn Out Escrow Amount, the amount determined in accordance with the following provisionsfollowing:
(i) Purchaser and if the Sellers’ Representative Earn Out EBITDA equals or exceeds the Target Earn Out EBITDA, the Sellers shall submit be entitled to receive $5,000,000; or
(ii) if the CPA FirmEarn Out EBITDA is less than the Target Earn Out EBITDA (such difference, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter"Earn Out EBITDA Difference"), copies of the Sellers shall be entitled to receive an amount, if positive, equal to (A) the Earn-Out Statement, $5,000,000 minus (B) the Earn-product of the Earn Out Dispute Notice EBITDA Difference multiplied by 6.38. For the avoidance of doubt, if the product of the Earn Out EBITDA Difference multiplied by 6.38 is greater than $5,000,000, the Sellers shall not be entitled to any payment under this Section 2.07(b).
(c) Payment pursuant to the foregoing shall include interest on such amount earned pursuant to the terms of the Earn Out Escrow Agreement. Upon determination of the amount to be paid to the Sellers (if any) and/or the Purchaser (if any) from the Earn Out Escrow Amount, the Sellers' Representatives and Purchaser shall deliver joint written instructions to the Escrow Agent to distribute the Earn Out Escrow Amount as follows:
(i) if the Sellers are entitled to receive all of the Earn Out Escrow Amount, the Escrow Agent shall distribute (A) $4,040,000 to the Sellers in accordance with their respective Proportionate Shares and (CB) a list of all unresolved objections raised by Sellers with respect $960,000 to the calculation Company to be used to satisfy obligations of the Company to participants under the SERP;
(ii) if the Sellers are not entitled to receive all of the Earn Out Escrow Amount, the Escrow Agent shall distribute (A) to the Purchaser the amount equal to the difference between (1) $5,000,000 and (2) the amount of the Earn-Earn Out Escrow Amount to which the Sellers are entitled, and (B) to the “Unresolved Objections”). Each of Purchaser and Sellers in accordance with written instructions provided by the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections' Representatives, the CPA Firm’s reasons therefor and the aggregate amount of the Earn-Earn Out calculated pursuant theretoEscrow Amount to which the Sellers are entitled; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.and
(iii) The fees and expenses if the Sellers are not entitled to any of the CPA Firm in connection Earn Out Escrow Amount, the Escrow Agent shall distribute the Earn Out Escrow Amount to the Purchaser. Purchaser hereby covenants and agrees that it shall cause the Company, as sponsor of the SERP, or the "Plan Administrator" of the SERP to promptly credit to the "Corporation Discretionary Contribution Accounts" of the individuals set forth on Schedule 2.07(c) hereto with the resolution of disputes percentage set forth opposite each such individual's name on Schedule 2.07(c). Amounts credited pursuant to this paragraph (d) the foregoing sentence shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out treated for purposes of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company SERP as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin"Annual Corporation Discretionary Contributions."
Appears in 1 contract
Samples: Stock Purchase Agreement (Restaurant Co of Minnesota)
Earn-Out. (a) In addition On or before the 75th day following the expiration of the calendar years 2005, 2006 and 2007, the Surviving Corporation shall deliver to each Shareholder copies of the Purchase Price, if Surviving Corporation's year-end financial statements for the Company meets or exceeds immediately preceding calendar year and a calculation (iin reasonable detail) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, of the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio for such immediately preceding calendar year (the “Earn"Post-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out AmountClosing Delivery").
(b) Within ten The Shareholders' Representative (10for and on behalf of the Shareholders) shall have thirty (30) days from the date the Surviving Corporation makes the Post-Closing Delivery (such period, the "Dispute Period") to notify the Surviving Corporation, in writing, as to whether the Shareholders' Representative agrees or disagrees with the Post-Closing Delivery (such written notice, the "Dispute Notice"). During the Dispute Period, the Shareholders' Representative and its accountants shall be permitted to review (during regular business days after hours and upon reasonable prior notice) the announcement date working papers of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, the Surviving Corporation and deliver (where applicable) the Surviving Corporation's accountants relating to the Sellers’ Representative (i) a statement setting matters set forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the EarnPost-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out StatementClosing Delivery.
(c) After receipt from Purchaser If the Shareholders' Representative fails to deliver a Dispute Notice to the Surviving Corporation during a Dispute Period, the Surviving Corporation's calculation of the applicable Earn-Out Statement and, if applicable, the Earn-Out, Sellers Amount shall have the right, at its cost be deemed to be final and expense, correct and shall be binding upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation each of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreementparties hereto.
(d) In If the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Shareholders' Representative shall so notify Purchaser by delivering delivers a Earn-Out Dispute Notice to Purchaser within the Surviving Corporation during a Dispute Period, the Shareholders' Representative and the Surviving Corporation shall, for a period set forth in Section 2.4(cof forty-five (45) days from the date the Dispute Notice is delivered to the Surviving Corporation (such period, the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”"Resolution Period"). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith their respective best efforts to amicably resolve such dispute between themthe items in dispute. Any items so resolved by the parties shall be deemed to be final and correct as so resolved and shall be binding upon each of the parties hereto.
(e) If they the Shareholders' Representative and the Surviving Corporation are unable to resolve the dispute within thirty (30) days after the delivery all of the Earnitems in dispute during the Resolution Period, then either the Shareholders' Representative or the Surviving Corporation may refer the items remaining in dispute to the Independent Accountants. Such referral shall be made in writing to the Independent Accountants, copies of which shall concurrently be delivered to the non-Out referring party hereto. The referring party shall furnish the Independent Accountants, at the time of such referral, with the Post-Closing Delivery and the Dispute Notice, then . The parties shall also furnish the dispute Independent Accountants with such other information and documents as the Independent Accountants may reasonably request in order for them to resolve the items in dispute. The parties hereto shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firmalso, within ten (10) days after of the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect items in dispute are referred to the calculation of Independent Accountants, provide the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (Independent Accountants with a copy delivered to the other Party on the same day), within thirty written notice (30a "Position Statement") days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth describing in reasonable detail their respective positions on the Unresolved Objections. Each items in dispute (copies of Purchaser and the Sellers’ Representative may (but shall not which will concurrently be required to) submit to the CPA Firm (with a copy delivered to the other Party on party hereto). If any party fails to timely deliver its Position Statement to the same day)Independent Accountants, the Independent Accountants shall resolve the items in dispute solely upon the basis of the information otherwise provided to them. The Independent Accountants shall resolve all disputed items in a written determination to be delivered to each of the parties hereto within sixty forty-five (6045) days after the date of the engagement of the CPA Firm, a memorandum responding such matter is referred to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writingthem; provided, however, that each party any delay in delivering such determination shall have not invalidate such determination or deprive the right Independent Accountants of jurisdiction to respond resolve the items in dispute. The decision of the Independent Accountants as to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged items in the Unresolved Objections. Any decision rendered by the CPA Firm dispute shall be final, conclusive final and binding upon the Parties, parties hereto and judgment thereon may shall not be entered and enforced in any court of competent jurisdiction.
(iii) subject to judicial review. The fees and expenses of the CPA Firm Independent Accountants incurred in connection with the resolution of disputes pursuant to this paragraph (d) any items in dispute shall be shared equally determined by Purchaser the Independent Accounts and Sellers; providedset forth in their report and shall be allocated and paid by the Shareholders, howeveron one hand, that if and the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without meritSurviving Corporation, on the CPA Firm mayother hand, in its discretion, assign a greater portion of such fees and expenses inverse proportion to such Partythe extent they prevailed on the items in dispute.
(ef) From Once there is a final determination of the Earn-Out Amount for any calendar year (whether through failure of Seller to timely deliver a Dispute Notice, agreement of the parties, or determination of the Independent Accountants), the Surviving Corporation shall increase each Shareholder's Note by an amount equal to the Per Share Earn-Out Amount for the immediately preceding calendar year multiplied by the total number of common shares of the Company owned beneficially and of record by such Shareholder on the Closing Date through December 31(the "Annual Increase"). Interest shall accrue for each Annual Increase beginning on the first day of the calendar year following the Earn-Out Year. During the first three years after an Annual Increase, 2007accrued interest with respect to such Annual Increase shall be paid in quarterly installments on the last day of March, except as otherwise contemplated by this Agreement or as June, September and December. The outstanding principal balance under the Sellers’ Representative otherwise agrees in writing in advanceNote attributable to an Annual Increase, Purchaser and Parent shall conduct, and shall cause its affiliates be paid on the last day of the calendar year that is three years after the Earn-Out Year relating to conductsuch Annual Increase.
(g) Notwithstanding the foregoing, the Business in Surviving Corporation shall not be obligated to make a Post-Closing Delivery or pay the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the Earn-Out for any calendar year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection if John Tac Hung Tran's employment with the Business and shall not transfer out Surviving Corporation terminaxxx beforx xx xxxxxx such calendar year for any of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as reasons described in Section 7.1 of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Marginhis Employment Agreement.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Standard Management Corp)
Earn-Out. (a) In addition to the Purchase PriceClosing Payment, if the Company meets or exceeds Preferred Stockholders shall be entitled to receive, in the aggregate, an amount of Buyer Stock (such amount, the “Earn-Out Payment”) with a value equal to (i) the lesser of (x) $12,000,000 and (y) the product of (A) two and (B) the excess, if any, of (1) Revenue Target and for the Elected Year over (2) $4,000,000 (such excess, “Excess Revenue”) minus (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive amount of any Taxoffset pursuant to Section 4.4, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amountin accordance with this Section 4.3.
(b) Within ten the 90-day period following the end of each of the fiscal years ending December 31, 2005, 2006 and 2007 (10) business days after each, a “Fiscal Year”), the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and Buyer will deliver to the SellersStockholders’ Representative Representatives an unaudited income statement of the Surviving Corporation for such Fiscal Year prepared in accordance with GAAP (each, an “Income Statement”); provided that the Buyer will no longer be required to deliver any such Income Statement to the Stockholders’ Representatives following the designation of an Elected Year by delivery of an Election Notice or as otherwise provided in accordance with the second sentence of this clause (b). The Stockholders’ Representatives may, by written notice (the “Election Notice”) to the Buyer not later than the 45th day after delivery to the Stockholders’ Representatives of any such Income Statement that reflects Excess Revenue for the Fiscal Year that is the subject of such Income Statement, elect to calculate the Earn-Out Payment with reference to such Fiscal Year (such designated Fiscal Year, the “Elected Year”); provided that if at any time during a Fiscal Year, and prior to the designation of an Elected Year in accordance with this clause (b), Revenue for such Fiscal Year equals or exceeds $10,000,000, then such Fiscal Year shall be deemed to be designated the Elected Year by the Stockholders’ Representatives on the 90th day after the end of such Fiscal Year. Buyer agrees to use commercially reasonable efforts to inform the Stockholders’ Representatives promptly after the date, if any, upon which the Buyer becomes aware that Revenue in any Fiscal Year exceeds $10,000,000.
(c) Within the 120-day period following the date on which the Elected Year is designated by the Stockholders’ Representatives by delivery to Buyer of an Election Notice or as otherwise provided in accordance with clause (b) above, the Buyer will deliver to the Preferred Stockholders the Earn-Out Payment as follows:
(i) a statement setting forth Each Series B-2 Preferred Stockholder shall be entitled to receive, provided that such Series B-2 Preferred Stockholder shall have previously surrendered of all Company Certificates held by such Series B-2 Preferred Stockholder as provided in Section 4.6, such number, rounded to the Product Revenues nearest whole number, of shares of Buyer Stock, issued to such Series B-2 Preferred Stockholder, equal to (A) the product of (1) the amount that is equal to (w) in the event the Aggregate Net Series B-2 Payment (as defined below) is less than $5,000,000: the difference between (I) 5% of the total Aggregate Net Series B-2 Payment minus (II) the sum of the Initial Series B-2 Payment plus $83,333; (x) in the event the Aggregate Net Series B-2 Payment is more than $5,000,000 but less than $10,000,000: the sum of the amount described in clause (w) above plus 3% of the Aggregate Net Series B-2 Payment that exceeds $5,000,000; (y) in the event the Aggregate Net Series B-2 Payment is more than $10,000,000 but less than $15,000,000: the sum of the amount described in clause (x) above plus 2% of the Aggregate Net Series B-2 Payment that exceeds $10,000,000; and (z) in the event the Aggregate Net Series B-2 Payment is more than $15,000,000: the sum of the amount described in clause (y) above plus 1% of the Aggregate Net Series B-2 Payment that exceeds $15,000,000, and (2) the Earn-Out Payment divided by (B) the average closing price per share, rounded to the fourth decimal place, of Buyer Stock as reported on NASDAQ for the calendar year 2007, each component used ten Trading Days ending on the third Trading Day prior to the date on which the Earn-Out Payment is made (the “Average Price”). The “Aggregate Net Series B-2 Payment” shall be the result of (aa) the Merger Consideration less (bb) the value of the consideration assigned for the benefit of participants in the calculation thereofCompany’s Management Incentive Plan dated on or about the date of this Agreement as determined in good faith and in the sole discretion of the Stockholders’ Representatives by written notice to the Buyer not later than ten Business Days prior to the date on which the Earn-Out Payment is made.
(ii) Each Series AA Preferred Stockholder shall be entitled to receive, provided that such Series AA Preferred Stockholder shall have previously surrendered of all Company Certificates held by such Series AA Preferred Stockholder as provided in Section 4.6, such number, rounded to the ADS Appreciation Ratio nearest whole number, of shares of Buyer Stock, issued to such Series AA Preferred Stockholder, equal to (A) the product of (x) such Series AA Preferred Stockholder’s Pro Rata Multiplier and (y) the amount excess of the Earn-Out determined in accordance with Section 2.4(a) (Payment over the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to aggregate payments payable under clause (i) meet with Purchaser and above divided by (B) the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this AgreementAverage Price.
(d) In no event shall the event that Sellers disputes Purchaser’s determination number of the amount shares of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Buyer Stock be calculated under this Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers 4.3 until an effective Resale Registration Statement is available with respect to the calculation of the amount of the Earn-Out such Buyer Stock.
(the “Unresolved Objections”). Each of Purchaser and the Sellerse) The Stockholders’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party Representatives shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination audit any Income Statement of the Unresolved ObjectionsSurviving Corporation delivered under this Section 4.3 for completeness, accuracy and compliance with GAAP, provided that any such audit shall be conducted in a commercially reasonable manner at reasonable times during the CPA FirmSurviving Corporation’s reasons therefor normal business hours and no more than one such audit may be conducted for any Income Statement. Such audit shall be at the amount expense of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation Stockholders’ Representatives unless such audit reveals an understatement in Revenue of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm maymore than 5%, in its discretion, assign a greater portion which case Buyer shall pay the reasonable cost of such fees and expenses to such Partyaudit.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.
Appears in 1 contract
Earn-Out. (a) In addition On or before the 75th day following the expiration of the calendar year 2005 (the "Earn-Out Post-Closing Delivery Period"), the Surviving Corporation shall deliver to each Shareholder copies of the Purchase PriceSurviving Corporation's year-end financial statements for calendar year 2005 and a calculation of EBITDA for calendar year 2005 (the "Earn-Out Post-Closing Delivery"). If the Surviving Corporation's EBITDA for calendar year 2005 is $600,000 or more (the "EBITDA Target"), if the Company meets or exceeds Shareholders shall be entitled to receive their respective Pro-Rata portions of $500,000 (i) the Revenue Target and (ii) "Earn-Out Amount"), as more fully set forth in this Section 2.3. If the Product Margin TargetSurviving Corporation's EBITDA for calendar year 2005 is less than $600,000, Purchaser the Shareholders shall pay in cash not be entitled to Sellers, on a pro-rata basis, the Earn-Out Amount less (or any portion thereof). If the product of Surviving Corporation fails to deliver to each Shareholder the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”Out Post-Closing Delivery on or before the tenth (10th) exclusive of any Tax, fees or other expenses of any kind; provided that business day after the exchange rate shall be fixed at the Exchange Rate for the calculation expiration of the Earn-Out. The EarnOut Post-Out Closing Delivery Period, the EBITDA Target shall not exceed be deemed to have been met and the Shareholders shall entitled to receive their Pro-Rata portions of the Earn-Out AmountAmount in accordance with Section 2.3(f) hereof. In no event shall any Shareholder be required to make a payment to the Surviving Corporation or any other party in the event that, and solely as a result of the fact that, the EBITDA Target has not been met.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ The Shareholders' Representative (ifor and on behalf of the Shareholders) a statement setting forth shall have thirty (30) days from the Product Revenues for date the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of Surviving Corporation makes the Earn-Out determined in accordance with Section 2.4(a) Post- Closing Delivery (such period, the “"Earn-Out Statement”)Dispute Period") to notify the Surviving Corporation, which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if anywriting, as may be reasonably necessary to enable whether the Sellers’ Shareholders' Representative to determine such amount. Concurrently agrees or disagrees with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basisPost-Closing Delivery (such written notice, the amount of the "Earn-Out, if any, specified in Out Dispute Notice"). During the Earn-Out Statement.
Dispute Period, the Shareholders' Representative and her accountants shall be permitted to review (cduring regular business hours and upon reasonable prior notice) After receipt from Purchaser the working papers of the Earn-Out Statement and, if Surviving Corporation and (where applicable, ) the Earn-Out, Sellers shall have Surviving Corporation's accountants relating to the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as matters set forth in the Earn-Out Statement and Post-Closing Delivery.
(iic) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Shareholders' Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a deliver an Earn-Out Dispute Notice to Purchaser within the Surviving Corporation during the Earn-Out Dispute Period, the Earn-Out Post-Closing Delivery as delivered by the Surviving Corporation shall be deemed to be final and correct and shall be binding upon each of the parties hereto.
(d) If the Shareholders' Representative delivers an Earn-Out Dispute Notice to the Surviving Corporation during an Earn-Out Dispute Period, the Shareholders' Representative and the Surviving Corporation shall, for a period set forth in Section 2.4(cof forty-five (45) days from the date the Earn-Out Dispute Notice is delivered to the Surviving Corporation (such period, the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”"Earn-Out Resolution Period"). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith their respective best efforts to amicably resolve such dispute between themthe items in dispute. Any items so resolved by the parties shall be deemed to be final and correct as so resolved and shall be binding upon each of the parties hereto.
(e) If they the Shareholders' Representative and the Surviving Corporation are unable to resolve all of the items in dispute within thirty during the Earn-Out Resolution Period, then Shareholders' Representative or the Surviving Corporation may refer the items remaining in dispute to Deloitte & Touche (30) days after the delivery "Independent Accountants"), which the Company and the Parent both represent is independent of their interests. Such referral shall be made in writing to the Independent Accountants, copies of which shall concurrently be delivered to the non-referring party hereto. The referring party shall furnish the Independent Accountants, at the time of such referral, with the Earn-Out Post-Closing Delivery and the Earn-Out Dispute Notice, then . The parties shall also furnish the dispute Independent Accountants with such other information and documents as the Independent Accountants may reasonably request in order for them to resolve the items in dispute. The parties hereto shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firmalso, within ten (10) days after of the date the items in dispute are referred to the Independent Accountants, provide the Independent Accountants with a written notice (a "Earn-Out Position Statement") describing in reasonable detail their respective positions on the items in dispute (copies of which will concurrently be delivered to the other party hereto). If any party fails to timely deliver its Earn-Out Position Statement to the Independent Accountants, the Independent Accountants shall resolve the items in dispute solely upon the basis of the engagement information otherwise provided to them. The Independent Accountants shall resolve all disputed items in a written determination to be delivered to each of the CPA Firm parties hereto within forty-five (45) days after such matter is referred to them; provided, however, that any delay in delivering such determination shall not invalidate such determination or deprive the Independent Accountants of jurisdiction to resolve the items in dispute. The decision of the Independent Accountants as evidenced to the items in dispute shall be final and binding upon the parties hereto and shall not be subject to judicial review or arbitration. The fees and expenses of the Independent Accountants incurred in the resolution of any items in dispute shall be determined by the date of Independent Accountants and set forth in their report and shall be allocated and paid by the engagement letter)Shareholders, copies of on one hand, and the Surviving Corporation, on the other hand, in inverse proportion to the extent they prevailed on the items in dispute.
(Af) Once there is a final determination with respect to the Earn-Out StatementPost-Closing Delivery, (B) if such final determination results in the Surviving Corporation owing the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect Amount to the calculation Shareholders (whether through failure of the amount of Surviving Corporation to timely deliver the Earn-Out (Post-Closing Delivery, failure of the “Unresolved Objections”). Each Shareholders' Representative to timely deliver an Earn-Out Dispute Notice, agreement of Purchaser and the Sellers’ Representative shall submit to parties, or determination of the CPA Firm (with a copy delivered to the other Party on the same dayIndependent Accountants), the Surviving Corporation shall pay each Shareholder within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth such final determination their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount Pro-Rata portion of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged Amount in immediately available funds and Standard Management Shares in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive same proportion of cash and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of stock as such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of Shareholder received at the Closing; provided that Voting Trustee's Pro-Rata portion of the Earn-Out Amount (including both cash and stock) shall be paid to the Escrow Agent to be held in escrow pursuant to the terms of the Escrow Agreement.
(g) During the period from the Closing through December 31, 2005, Parent shall cause the Surviving Corporation to operate its business in the event ordinary course and usual course consistent with past practices and will not cause EBITDA to be artificially reduced by virtue of any Customer Offering is bundled expenses that were not consistent with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Marginpast practices or accelerated expenses or delayed income.
Appears in 1 contract
Earn-Out. (a1) In addition On the same date the Purchaser makes a payment (an “Earn Out Payment”) to the Purchase PriceVendors of the respective Earn Out Amount, or within 45 Business Days after the last day of the applicable Earn Out Period if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basisamount of such Earn Out Payment is nil, the Earn-Out Amount less the product Purchaser will deliver to SSI a copy of the Stock Consideration documentation on which the Purchaser relied for purposes of calculating the amount of such Earn Out Payment (each, an “Earn Out Statement”), including any calculations decreasing the amounts payable given the minimum earn-out payments previously paid under Section 2.02(b) and the ADS Appreciation Ratio (Purchaser will permit the “Earn-Out”) exclusive Vendors and their advisors to examine backup material and ledgers used in preparing the Earn Out Statements as may be reasonably requested by the Vendors. The Purchaser will, upon written request of any TaxSSI, fees or other expenses of any kind; make such backup material and ledgers available for audit to a national accounting firm chosen and compensated by SSI provided that the exchange rate shall Purchaser is only required to submit to one such audit per applicable Earn Out Period.
(2) If SSI gives written notice to the Purchaser that it disputes an Earn Out Statement within 30 Business Days after the Earn Out Statement is delivered to SSI and SSI and the Purchaser cannot reach agreement on the Earn Out Statement within 30 Business Days after such notice of dispute is given, the dispute will be fixed referred for determination by arbitration to a senior audit partner at the Exchange Rate for Vancouver office of Deloitte & Touche LLP chosen by the calculation managing partner of such office. The determination by such arbitrator will be made within 60 Business Days of such referral and will be final and binding on both SSI and the Purchaser. The costs of the Earn-Out. The Earn-Out shall not exceed arbitrator will be borne by the Earn-Parties in such proportion as decided by the arbitrator, with SSI’s portion, if any, being deducted and paid out of the Earn Out Amount.
(b3) Within ten (10) business days after If the announcement date of Parent’s fourth quarter fiscal year 2007Earn Out Payment as determined by SSI and the Purchaser or the arbitrator, Purchaser shall prepareas the case may be, or cause to be prepared, and deliver exceeds the Earn Out Payment as determined pursuant to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereofEarn Out Statement, the ADS Appreciation Ratio and Purchaser will pay the amount of the Earn-difference to SSI within two Business Days after the determination and the Purchase Price will be adjusted accordingly. If the Earn Out Payment as so determined in accordance with Section 2.4(a) (is less than the “Earn-Earn Out Statement”), which shall be prepared in accordance with Payment as determined pursuant to the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Earn Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, SSI will pay the amount of the Earndifference to the Purchaser within two Business Days after the determination and the Purchase Price will be adjusted accordingly.
(4) The Purchaser shall be entitled to set-Outoff against all or a portion of any amounts payable to the Vendors under Sections 2.02(b)(ii) and 2.02(c) any amounts payable by such Vendors to the Purchaser hereunder or any liability of any Vendor to the Purchaser pursuant to this Agreement, if anyprovided that the Purchaser shall not be entitled to set-off an amount equal to the Net Book Value Difference against the amounts payable to the Vendors under Section 2.02(b).
(5) For greater certainty and notwithstanding any of the other provisions of this Agreement, specified provided the Purchaser (either directly or through its Affiliates) makes commercially reasonable efforts to sell the TPM Products that are used in the Earn-Commercial Vehicle market during the Earn Out Statement.Period, the Purchaser may in its sole discretion deal with the TPM Products and the Intellectual Property Rights therein without any duty or obligation to account to the Vendors in respect thereof except as otherwise provided in this Agreement, including
(a) incorporating all or a portion of the TPM Products in a product or system manufactured or sold by the Purchaser or an Affiliate of the Purchaser;
(b) decreasing or discontinuing sales of the TPM Products to new or existing customers;
(c) After receipt from Purchaser of discontinuing the Earn-Out Statement andTPM Products, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.related product lines or support therefor; or
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted granting exclusive licenses to the CPA Firm for determination TPM Products or otherwise transferring or disposing the Intellectual Property Rights in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit or to the CPA FirmTPM Products, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, provided that the CPA Firm shall not change nor deviate fees generated from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position such licenses or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings transfers shall be included in Net TPM Product Sales, and that the calculation Purchaser shall not transfer title to Intellectual Property Rights without either (i) prior approval of YA Global, or (ii) obtaining the Product Profits, agreement of such transferee that it will comply with the Product Revenues and the Product Marginterms of this Agreement with respect to Earn Out Payments.
Appears in 1 contract
Earn-Out. (a) In addition to the Purchase Price, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, The calculation of Adjusted EBITDA for the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall Period will be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding based upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during Company's audited financial statements for the year ending December 31, 20072000. Adjusted EBITDA, with respect to the period for which it is to be computed, shall provide adequate financial mean earnings before interest, taxes, depreciation and other supports amortization (prepared in accordance with generally accepted accounting principles ("GAAP")) ("EBITDA"), plus adjustments and add backs as follows: the exclusion of expenses related to or associated with (a) any management fees paid to the Purchaser or its Affiliates, (b) all depreciation and amortization associated with, or as a result of, the acquisition of the Company contemplated herein, (c) the acquisition of the Company contemplated herein and new ventures, (d) the Purchaser's additional general corporate overhead and administrative expenses, (e) the Company's general corporate overhead and administrative expenses that are in excess of the Company's historical expense levels for the corresponding period, (f) extraordinary gain or loss on the sale or disposition of assets, and (g) any profit sharing, incentive compensation or retirement plans implemented after the Closing Date.
(b) During the Earn-Out Period, the Purchaser shall operate the Company in connection with a manner necessary to maximize Adjusted EBITDA for the Business Earn-Out Period and shall not transfer out operate the Company in a manner that promotes the long term growth of the Business business of the Company at the expense of the Company's EBITDA for the Earn-Out Period. During the Earn-Out Period, the Purchaser agrees that they will not, without the consent of the Stockholder, unreasonably require that the business of the Company be operated substantially differently than it was operated in the past, unreasonably change the prices charged, the level of compensation of full-time employees and the level of general and administrative expenses. During the Earn-Out Period, the Purchaser shall not take any Customer Offerings of the following actions with respect to the Company, without first obtaining the consent of the Stockholder or appropriately segregating the accounting for the business of the Company as then in existence: (i) sell any significant portion of the Company's assets (other than sales of assets in the ordinary course of business consistent with past practice); (ii) merge, consolidate, or reorganize the Company with another party; (iii) cause the Company to acquire all or substantially all, or any derivative product therefromsignificant portion of, the assets of a third party; (iv) offered or planned to be offered by cause the Company to enter into a material joint venture, partnership, strategic alliance, or other similar business arrangement with one or more third parties; or (v) cause the Company to enter into any material transaction, however designated, not in the ordinary course of business consistent with past practice, in each case the consummation of which has or can reasonably be expected to have, a material impact upon the Company's EBITDA earned during the Earn-Out Period. During the Earn-Out Period, the Purchaser shall, through the use of credit facilities in existence as of the Closing; provided that in the event , make reasonable levels of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable working capital available to the Customer Offerings shall be included Company, in amounts and at times, sufficient to maximize the calculation of Company's EBITDA during the Product Profits, the Product Revenues and the Product MarginEarn-Out Period.
Appears in 1 contract
Earn-Out. (a) In addition to the Purchase Price, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.
(b) Within ten (10) business 90 days after the announcement date end of Parent’s fourth quarter fiscal year 20072014 of Xxxx Food Company, Purchaser Inc., the Acquiror shall prepare, or cause to be prepared, prepared and deliver delivered to the Sellers’ Stockholder Representative (ion behalf of the Stockholders) a written statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”)” ) that shall include and set forth unaudited financial statements for fiscal years 2012, which 2013 and 2014 for Blueberry Farms of Mexico and Blueberry Farms of Georgia, based on the operations of such businesses as they exist on the Closing Date, and, based on such financial statements, and the provisions of this Section 2.12, a detailed calculation of the Earn-Out Amount. The Earn-Out Statement shall be accompanied by a certificate of the President and the Chief Financial Officer of the Acquiror, stating that the Earn-Out Statement and amounts calculated therefrom have been prepared in accordance with this Section 2.12 (including the Adjusted Korean GAAP, at Purchaserdefinitions of any capitalized terms used in this Section 2.12) and that the Earn-Out Statement and amounts calculated therefrom have been reviewed by Acquiror’s cost auditors and expense, and that such auditors did not propose any material adjustments or modifications thereto.
(iib) such documentation, if any, as may be reasonably necessary to enable During the Sellers’ Representative to determine such amount. Concurrently with 30 day period following the delivery Stockholder Representative’s receipt of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Acquiror will cause the Surviving Corporation (i) to provide the Stockholder Representative for payment and his Representatives with access to Sellers, on a per share basis, the amount books and records of the Earn-Out, if any, specified Acquiror and its Subsidiaries relevant to the calculations set forth in the Earn-Out Statement.
(c) After receipt from Purchaser , and to any other documents or information relating to the preparation of the Earn-Out Statement andor calculation of amounts reflected thereon reasonably requested by the Stockholder Representative or his Representatives, and to the employees of the Acquiror and its Subsidiaries responsible for and knowledgeable about the information used therein, and the preparation or calculation thereof, and (ii) to use commercially reasonable efforts to obtain access to the work papers, if applicableany, the Earn-Out, Sellers shall have the right, at of its cost and expense, and upon not less than seven (7) days’ prior written notice auditors relating to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out Statement, subject to the execution of a customary access letter. The Earn-Out Statement shall become final and binding on the 30th day following delivery thereof, unless prior to the end of such period, the Stockholder Representative delivers to the Acquiror written notice of his disagreement (a “Notice of Earn-Out Disagreement”) specifying in detail the nature and amount of any dispute as to the calculation of the Earn-Out Amount, as set forth in the Earn-Out Statement Statement, and (ii) have reasonable access during normal business hours to inspect the books and records accompanied by a certificate of the Company Stockholder Representative’s auditors stating that they concur with each of the positions taken by the Stockholder Representative in the Notice of Earn-Out Disagreement. The Stockholder Representative shall be deemed to have agreed with the items and working papers amounts set forth in the Earn-Out Statement not specifically referenced in the Notice of Earn-Out Disagreement, and such items and amounts shall not be subject to review in accordance with Section 2.12(c). Any Notice of Earn-Out Disagreement may reference only disagreements based on mathematical errors or based on the calculation of amounts set forth in the Earn-Out Statement not being calculated in accordance with this Section 2.12.
(including those prepared c) During the 15 day period following delivery of a Notice of Earn-Out Disagreement by advisors and other third parties, the Stockholder Representative to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product RevenuesAcquiror, the ADS Appreciation Ratio parties in good faith shall seek to resolve and incorporate into a writing any differences that they may have with respect to the amount computation of the Earn-Out by Amount as specified therein. During such 15 day period, the delivery Stockholder Representative shall (i) provide the Acquiror and its Representatives with access to its books and records and any other documents or information relating to the preparation of a written notice to Purchaser (the “Notice of Earn-Out Dispute Notice”) within sixty (60) days after receipt Disagreement or calculation of amounts thereon reasonably requested by the Sellers’ Acquiror or its Representatives, and to the relevant employees responsible for and knowledgeable about the information used therein, and the preparation or calculation thereof, and (ii) shall use commercially reasonable efforts to obtain access to the work papers of its auditors relating to the Notice of Earn-Out Disagreement, subject to the execution of a customary access letter. Any disputed items resolved in writing between the Stockholder Representative and the Acquiror within such 15 day period shall be final and binding with respect to such items, and if the Stockholder Representative and the Acquiror agree in writing on the resolution of each disputed item specified by the Stockholder Representative in the Notice of Earn-Out Disagreement, the amounts so determined shall be final and binding on the parties for all purposes hereunder. If the Stockholder Representative and the Acquiror have not resolved all such differences by the end of such 15 day period, the Stockholder Representative and the Acquiror shall submit, in writing, not later than the 30th day after the end of such 15 day period, to the Independent Accounting Firm, their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the Earn-Out Amount, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the Earn-Out Amount, which determination shall be final and binding on the parties for all purposes hereunder. The Independent Accounting Firm shall consider only those items and amounts in the Stockholder Representative’s and the Acquiror’s respective calculations of the Earn-Out StatementAmount that are identified as being items and amounts to which the Stockholder Representative and the Acquiror have been unable to agree. In resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The determination of the Independent Accounting Firm shall be accompanied by a certificate of the Independent Accounting Firm that it reached such determination in accordance with the provisions of this Section 2.12. The Independent Accounting Firm shall be PriceWaterhouseCoopers or, if such firm is unable or unwilling to act, such determination by Purchaser other independent public accounting firm as shall be finalagreed in writing by the Stockholder Representative and the Acquiror. The Stockholder Representative and the Acquiror shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within 30 days following the submission thereof. Judgment may be entered upon the written determination of the Independent Accounting Firm in any court referred to in Section 8.10. The costs of any dispute resolution pursuant to this Section 2.11(c), conclusive including the fees and expenses of the Independent Accounting Firm and of any enforcement of the determination thereof, shall be borne by the Stockholder Representative and the Acquiror in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting Firm at the time the determination of such firm is rendered on the merits of the matters submitted. The fees and disbursements of the Representatives of each party incurred in connection with the preparation or review of the Final Closing Statement and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such party. Notwithstanding the foregoing, if there are unresolved disagreements between the Stockholder Representative and the Acquiror concerning either the application of the employment contingencies set forth in Section 2.12(d) or the performance of the Acquiror of its covenant set forth in Section 5.2, the Independent Accounting Firm shall not deal with such dispute but shall calculate the Earn-Out Amount under the assumptions that the disputed employment contingencies had not been satisfied and that the Acquiror had performed its covenant set forth in Section 5.2, but the calculation of the Earn-Out Amount by the Independent Accounting Firm under such assumptions shall only be binding upon the parties in the senses that: (i) such determined Earn-Out Amount shall be paid forthwith by the Acquiror to the Stockholders Representative; and (ii) any amounts calculated by the Independent Accounting Firm that are not affected by such assumptions shall be final and binding for all purposes of this Agreementupon the parties.
(d) In For all purposes of this Agreement and subject to the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenuesadjustments set forth in this Section 2.12(d), the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a “Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (Amount” means the amount equal the lesser of any disputed Contingent Payment being referred to herein (i) $15,000,000 and (ii) the difference (but not less than zero Dollars ($0.00)) between: (x) six (6) times the average annual combined EBITDA of the Farm Operations, as such operations exist on the “Disputed Contingent Payment”Closing Date, calculated for two (2) of the three (3) full fiscal years (i.e., fiscal years 2012, 2013 and 2014) following the Closing having the highest combined EBITDA of the Farm Operations (consistently applied), less (y) the $3,000,000 no-risk, non-refundable payment for such businesses included in the Closing Cash Amount, and less (z) Adjusted Capital Expenditures. In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery The payment of the Earn-Out Dispute Notice, then the dispute shall be submitted Amount is subject to the CPA Firm for determination in accordance with three Individual Sellers’ satisfying the following provisions:
employment contingencies: (i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced Xxxxx Xxxxx must be employed by the date Acquiror and/or its Subsidiaries for a period of thirty six (36) consecutive calendar months commencing on the engagement letter), copies of (A) the Earn-Out StatementClosing Date, (Bii) Xxxxxxx Xxxxx must be employed by the Earn-Out Dispute Notice Acquiror and/or its Subsidiaries for a period of twenty four (24) consecutive calendar months commencing on the Closing Date, and (Ciii) Xxxxxx Xxxxx, Xx. must be employed by the Acquiror and/or its Subsidiaries for a list period of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out twelve (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party 12) consecutive calendar months commencing on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writingClosing Date; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event any such Individual Seller fails to be employed by the Acquiror and/or its Subsidiaries for the requisite number of months, such Individual Seller’s corresponding employment contingency shall nevertheless be deemed satisfied by such Individual Seller to the extent the reason for such failure is because (A) such Individual Seller has died, (B) such Individual Seller’s employment by the Acquiror and/or its Subsidiaries is Terminated by the Acquiror as a result of such Individual Seller becoming Disabled at any Customer Offering time during his respective term of employment, (C) such Individual Seller’s employment by the Acquiror and/or its Subsidiaries is bundled with another product which Terminated other than for Cause or (D) such Individual Seller’s employment by the Acquiror and/or its Subsidiaries is not a product Terminated for Good Reason. In the event the foregoing employment contingencies are only partially satisfied (i.e., one or more Sellers fails to continue his employment as prescribed for the entire specified duration and none of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.four specified exceptions
Appears in 1 contract
Samples: Merger Agreement (Dole Food Co Inc)
Earn-Out. (a) In addition Notwithstanding anything to the Purchase Pricecontrary herein, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser in no event shall pay in cash to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio (the exceed $10,000,000. The “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate Out Consideration” shall be fixed at the Exchange Rate $1 for the calculation each $1 of the Earn-OutTarget Revenues in excess of $16,000,000. The Earn-Out shall not exceed Consideration, as finally determined pursuant to this Section 2.9, plus the Tool Vendor Reimbursement, if any, is referred to as the “Aggregate Earn-Out AmountConsideration”.
(b) Within ten (All determinations of Target Revenues shall be determined by Acquiror using its books and records in accordance with GAAP applied in the same manner, and using the same accounting policies and methodologies, as such principles are applied in the preparation of the consolidated financial statements of Acquiror in its quarterly and annual reports on Form 10) business days after -Q and 10-K, as filed by Acquiror with the announcement SEC with respect to the Earn-Out Period. Notwithstanding the foregoing, in the event of adjustments to financial statements included in any periodic or current report filed by Acquiror pursuant to the Exchange Act, from the date hereof through the filing of ParentAcquiror’s fourth quarter Annual Report on Form 10-K for the fiscal year 2007in which the Earn-Out Period ends, Purchaser shall preparewhether such adjustments are due to restatement, changes in accounting principles required under GAAP or pursuant to SEC comment or disclosure or accounting requirement or regulation, or cause to be prepared, and deliver otherwise that result in adjustments to the Sellers’ Representative (i) a statement setting forth the Product Target Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount any period ending on or prior to end of the Earn-Out determined Period, the Target Revenues derived from such revised and adjusted financial statements shall control in accordance with Section 2.4(adetermining the Target Revenues. Subject to the foregoing, the Target Revenues shall reflect and be net of (without duplication) all (the “i) returns of Target Earn-Out Statement”), which shall be prepared in accordance with Products and authorizations of returns of the Adjusted Korean GAAP, at Purchaser’s cost and expense, and Target Earn-Out Products whether or not physically received back from customer; (ii) such documentationwarranty claims; (iii) product liability claims; (iv) uncollectible accounts and (v) other adjustments that are required under GAAP, if anyincluding adjustments prescribed or advisable under Financial Accounting Standards Board Accounting Standards Codification No. 605, “Revenue Recognition” and SEC Staff Accounting Bulletin #No. 101, “Revenue Recognition in Financial Statements”, as may amended by SEC Staff Accounting Bulletin No. 104, “Revenue Recognition” or pursuant to SEC comment, disclosure or accounting requirement or regulation. The Target Revenues shall eliminate inter-company transactions among Acquiror and its subsidiaries such that the Target Revenues shall be reasonably necessary to enable the Sellers’ Representative to determine such amountbased only on transactions between Acquiror (as a consolidated entity) and any third party. Concurrently with the delivery of the Whenever Target Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basisProducts are sold in combination with other products of Acquiror, the amount attributable to the Target Revenues shall be allocated by Acquiror in its reasonable discretion in a fair and equitable manner taking into consideration the historical costs (including any increases or decreases in such costs) of the Earn-Out, if any, specified in the Target Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement andProducts in comparable volumes, if applicable, the Earn-Out, Sellers shall have the right, at its cost as well as production costs and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom competitive analyses attributable to the Customer Offerings shall be included in the calculation various components of the Product Profits, the Product Revenues and the Product Margincombined product(s).
Appears in 1 contract
Earn-Out. (a) In addition Following the Closing, at such time as provided in this Section 2.12, the Pioneer Parties shall pay to the Purchase PriceRepresentative, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Targetin accordance with Section 2.12(c), Purchaser shall pay in cash with respect to Sellers, on a pro-rata basis, the Earn-Out Amount less the product of the Stock Consideration and the ADS Appreciation Ratio out Period, an amount, if any, calculated as follows (the “Earn-Out”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the an illustrative calculation of the Earn-Out. The Earn-Out shall not exceed out Amount is set forth on Schedule C): if the Actual Gross Profit Amount during the Earn-Out out Period is greater than the Earn-out Threshold, the Pioneer Parties shall pay or cause to be paid to the Representative on behalf of the Company Members and the UAR Holders, in the aggregate, in accordance with this Section 2.12, an amount equal to (such amount, the “Earn-out Amount”) the product of (A) the Maximum Earn-out Amount multiplied by (B) the lesser of (1) one or (2) the Percentage of Target Gross Profit Amount Achieved.
(b) Within ten For purposes of determining whether any Earn-out Amount is due to the Company Members and the UAR Holders, no later than thirty (1030) business days after the announcement date issuance and release of Parent’s fourth quarter the audited consolidated financial statements for the Company for the fiscal year 2007ending December 31, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”)2018, which audited consolidated financial statements shall be prepared in accordance with the Adjusted Korean GAAPAccounting Principles, at Purchaser’s cost Pioneer Investment shall deliver to the Representative a written statement (the “Earn-out Statement”) setting forth in reasonable detail the calculation of the Actual Gross Profit Amount, together with reasonable supporting documentation thereof. The Pioneer Parties shall take all commercially reasonable steps to cause the above-referenced audited consolidated financial statements of the Company to be completed and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amountdelivered on a timely basis. Concurrently with Following the delivery of the Earn-Out Statementout Statement to the Representative, Purchaser Pioneer Investment and the Surviving Entity shall deposit into a nominated account afford the Representative and its representatives the opportunity to examine the Earn-out Statement and such supporting schedules, analyses, workpapers and other underlying records or documentation as established are reasonably requested and necessary and appropriate. Pioneer Investment, the Surviving Entity and their respective representatives shall cooperate with the Representative in such examination, including providing answers to reasonable questions asked by the Sellers’ Representative for payment and its representatives and promptly making available to Sellersthe Representative and its representatives any copies of records reasonably requested and necessary and appropriate. If, on a per share basis, the amount within thirty (30) days following delivery of the Earn-Outout Statement to the Representative, if any, specified in the Representative has not delivered to Pioneer Investment written notice (the “Earn-Out Statement.
(cout Objection Notice”) After receipt from Purchaser of setting forth in reasonable detail the Earn-Out Statement and, if applicable, reasons for which the Earn-Out, Sellers shall have Representative does not agree with the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as Actual Gross Profit Amount set forth in the Earn-Out out Statement, then the Earn-out Statement and (ii) have reasonable access during normal business hours to inspect the books determination of whether payment of an Earn-out Amount is due based on such Earn-out Statement shall be binding and records final for all purposes of this Agreement. If, based on the Company Actual Gross Profit Amount, an Earn-out Amount is due, such Earn-out Amount shall be due and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculationpayable as provided in Section 2.12(c). If the Sellers’ 30 Representative fails delivers an Earn-out Objection Notice within such thirty day (30) period, then the Representative and Pioneer Investment shall try to challenge Purchaserresolve any differences in their respective positions with respect to Pioneer Investment’s determination calculation of the Product Revenues, Actual Gross Profit Amount. If the ADS Appreciation Ratio Representative and Pioneer Investment are unable to agree upon the amount calculation of the Actual Gross Profit Amount within thirty (30) days after the Representative’s delivery of the Earn-Out by out Objection Notice to Pioneer Investment, then the delivery of a written notice matter to Purchaser be resolved (the “Earn-Out Dispute Noticeout Dispute”) shall be submitted for resolution to the Referee within sixty the following five (605) Business Days (it being understood that such Referee shall be selected in the same manner as provided in Section 2.11(b)). Pioneer Investment and the Representative shall each provide to the Referee and the other Party a statement of its position as to calculation of the Actual Gross Profit Amount and whether an Earn-out Amount is due within fifteen (15) days from the date of the referral to the Referee. The Referee shall make a written determination as promptly as practicable, but in any event within thirty (30) days after receipt the date on which the dispute is referred to the Referee, by determining the Actual Gross Profit Amount; provided, that the Actual Gross Profit Amount as determined by the Sellers’ Referee may not be greater than the greatest value for Actual Gross Profit Amount claimed by any Party or less than the smallest value for Actual Gross Profit Amount claimed by any Party. If any objections are submitted to the Referee for resolution, each Party shall furnish to the Referee such workpapers and other documents and information relating to such objections as the Referee may request and are available to that Party or its subsidiaries (or its independent public accountants) and will be afforded the opportunity to present to the Referee any material relating to the determination of the matters in dispute and to discuss such determination with the Referee. In the event a dispute is submitted to the Referee in connection with the determination of the Actual Gross Profit Amount, the costs and expenses of the Referee will be borne by the Parties in such proportion as is appropriate to reflect the relative benefits received by the Pioneer Parties and the Representative on behalf of the Company Members and the UAR Holders from the resolution of the Earn-Out Statementout Dispute. The decision of the Referee shall be final and binding for all purposes of this Agreement and the Earn-out Statement shall be revised, if necessary, to reflect such decision and the Earn-out Statement and thereupon the calculation of the Actual Gross Profit Amount and whether any such Earn-out Amount is due shall be final and binding for all purposes of this Agreement. Such determination by Purchaser the Referee shall be finalconclusive and binding upon the Parties, conclusive absent fraud or manifest error. With respect to any Earn-out Dispute referred to the Referee, the Referee shall not be authorized or permitted to (A) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the Earn-out Dispute in accordance with this Section 2.12(b) or (B) apply any accounting methods, treatments, principles or procedures other than the Accounting Principles. If at any time Pioneer Investment and the Representative resolve their dispute, then, notwithstanding the preceding provisions of this Section 2.12(b), the Referee’s involvement promptly shall be discontinued and the Earn-out Statement shall be revised, if necessary, to reflect such resolution and the Earn-out Statement and thereupon the calculation of the Actual Gross Profit Amount and whether any Earn-out Amount is due shall be final and binding for all purposes of this Agreement.
(dc) In When the event that Sellers disputes Purchaser’s determination of Earn-out Statement becomes final and binding in accordance with Section 2.12(b), if there is any Earn-out Amount owed to the amount of Company Members and the Product RevenuesUAR Holders, then the ADS Appreciation Ratio and/or Pioneer Parties shall first pay the amount portion of the Earn-Out, out Amount owed to Xxxxxxx pursuant to the Sellers’ Representative shall so notify Purchaser by delivering a Xxxxxxx Engagement Letter set forth on Company Disclosure Schedule 3.13 (the “Xxxxxxx Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a disputeout Amount Fee” and, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then out Amount less the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Xxxxxxx Earn-Out Statementout Amount Fee, (B) the “UAR/Company Member Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objectionsout Amount”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(ii) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.fifteen
Appears in 1 contract
Earn-Out. (a) In addition Sellers may be entitled to the Purchase Price, if the Company meets or exceeds earn-out payments (i) the Revenue Target and (ii) the Product Margin Target, Purchaser shall pay in cash to Sellers, on a pro-rata basis, the each an “Earn-Out Amount less the product of the Stock Consideration out Payment” and the ADS Appreciation Ratio (collectively, the “Earn-OutOut Payments”) exclusive of any Tax, fees or other expenses of any kind; provided that the exchange rate shall be fixed at the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amount.from Buyer as set forth on Schedule C.
(b) Within ten EBITDA shall be calculated based upon principles, policies and practices that are in accordance with GAAP; provided, however, that any Parent corporate expense shall not be allocation to the Company. On or before March 30, 2014 (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007for 2013 EBITDA), Purchaser shall prepareMarch 30, or cause to be prepared2015 (for 2014 EBITDA), and March 30, 2016 (for 2015 EBITDA), Buyer shall deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”)applicable year’s EBITDA, which calculation shall be prepared conducted in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expenseprevious sentence, and (ii) such documentation, if any, as may be reasonably necessary Buyer shall pay to enable Sellers the applicable Earn-out Payment actually earned by wire transfer by Buyer to the account specified by Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser (which shall deposit into a nominated account as established be distributed by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount and allocated amongst Sellers in accordance with each Seller’s respective ownership of the Earn-Out, if any, specified Shares as set forth on Schedule B) in the Earn-Out Closing Statement.
(c) After receipt Buyer acknowledges and agrees that, from Purchaser of the Earn-Out Statement andClosing Date through the 2015 fiscal year, if applicable, it shall endeavor in good faith to maintain the Earn-Out, Sellers shall have the right, at its same general cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and structure for the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth reflected in the Earn-Out Statement and (ii) have reasonable access during normal business hours Company’s historical Financial Statements delivered pursuant to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing3.07; provided, however, that each party Buyer and its Affiliates shall have the right be permitted to respond make changes to the CPA FirmCompany’s requests directed cost structure or operation of its business following the Closing without consent of any Seller to the other Partyextent Buyer in good faith believes that that such changes are in the best interests of Buyer and the Company.
(iid) The CPA Firm shall prepare For purposes of calculating EBITDA for the Company under Section 2.08, any administrative services and distribute similar “corporate” services provided by Buyer and its Affiliates to the Parties a writing setting forth Company shall be priced at the CPA Firm’s determination average cost to Sellers of the Unresolved Objections, same services during the CPA Firm’s reasons therefor and three fiscal years immediately preceding the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered Closing (increased annually by the CPA Firm shall be final, conclusive and binding upon percentage increase computed by the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
All Items Consumer Price Index (iiiCPI-U) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally or at such other amount as is mutually agreed by Purchaser Buyer and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31Sellers acknowledge and agree that although Earn-out Payments may become payable by Buyer to Sellers under this Section 2.08, 2007, except as otherwise contemplated by this Agreement neither Buyer nor any of its Affiliates make any guarantees or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates representations or warranties to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which Sellers that the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company will achieve its EBITDA targets or that any Earn-out Payments will in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to fact be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Marginowed.
Appears in 1 contract
Earn-Out. (a) In addition Unless at such time the Buyer shall have paid to the Purchase PriceSeller the aggregate PDR Release Amounts equal to the PDR Release Target in accordance with the procedures set forth in this Section 2.5, within five (5) Business Days following CLIC’s filing with the TDI of CLIC’s annual audited statutory financial statements for the calendar years ending each of December 31, 2016 and December 31, 2017, the Buyer shall notify the Seller Parties of the APLIC PDR reported therein. At least ten (10) Business Days prior to CLIC’s filing with the TDI of CLIC’s annual unaudited statutory financial statutory statements for the calendar years ending each of December 31, 2016 and December 31, 2017, the Buyer shall provide or cause CLIC to provide to the Seller each such annual unaudited statutory financial in order for the Seller to review and comment on such annual unaudited statutory financial statutory statement, including, if requested by the Company meets or exceeds Seller, all reasonable supporting information in the possession of the Buyer and its Affiliates, including internal work papers, and the Buyer shall request its independent actuaries and auditors to provide their work papers to the Seller Parties, subject to the Seller Parties executing a customary agreement relating to such access to work papers in form and substance reasonably acceptable to such independent actuaries and auditors, as applicable The “PDR Release Amount” for either such year will equal the positive amount, if any, equal to (i) the Revenue Target net increase, if any, in the Statutory Capital of CLIC (after taking into account any related decrease in Admitted DTA), solely attributable to the difference between (x) the APLIC PDR as of the Closing Date and (y) the APLIC PDR as of December 31 of such subsequent year, minus (ii) the Product Margin sum of all prior PDR Release Amounts paid by the Buyer to the Seller hereunder. For the avoidance of doubt, no PDR Release Amount will be negative, nor will the sum of all PDR Release Amounts exceed the PDR Release Target. Consequently, if the sum of all PDR Release Amounts exceeds the PDR Release Target, Purchaser the current year PDR Release Amount shall pay in cash be reduced by the amount of such excess. So long as the sum of all PDR Release Amounts paid pursuant to Sellers, on a pro-rata basisSection 2.5(c) by the Buyer to the Seller prior to such date is less than the PDR Release Target, the Earn-Out Amount less amount due to the product Seller from the Buyer (such amount, the “Total Payment Amount”) for either such year will be equal to the positive amount, if any, of such then current year PDR Release Amount, together with interest thereon accrued at a rate of 3% per annum, calculated from the Closing Date through and including the date of the Stock Consideration and payment by the ADS Appreciation Ratio (Buyer to the “Earn-Out”) exclusive Seller of any Taxsuch current year PDR Release Amount pursuant to Section 2.5(c); provided, fees or other expenses of any kind; provided that the exchange rate Total Payment Amount shall be fixed at reduced to the Exchange Rate for the calculation of the Earn-Out. The Earn-Out shall not exceed the Earn-Out Amountextent, if any, required pursuant to Section 2.5(e).
(b) Within ten (10) business days after Until such time as no payments are due from the announcement date of Parent’s fourth quarter fiscal year 2007, Purchaser shall prepare, or cause to be prepared, and deliver Buyer to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Seller pursuant to this Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day)2.5, within thirty (30) days after of the date of filing of each of CLIC’s annual audited statutory financial statements, the engagement Buyer shall cause CLIC to pay dividends in respect of its common stock in an amount not less than the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.lesser of
(iiA) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount of the Earn-Out calculated pursuant thereto; provided, however, that the CPA Firm shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered by the CPA Firm shall be final, conclusive and binding upon the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction.
(iii) The fees and expenses of the CPA Firm in connection with the resolution of disputes pursuant to this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without merit, the CPA Firm may, in its discretion, assign a greater portion of such fees and expenses to such Party.
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company cumulative Total Payment Amounts as of the Closing; provided that in end of each such year less (B) the event aggregate of any Customer Offering is bundled with another product which is not a product of all prior Total Payment Amounts paid by the Business, such portion of gross revenues therefrom attributable Buyer to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.Seller pursuant to Section 2.5(c); and
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Samples: Stock Purchase and Sale Agreement (Universal American Corp.)
Earn-Out. (a) In addition to the Cash Portion of the Purchase PricePrice and the Closing Shares payable and issuable at the Closing pursuant to this Section 2.1, if the Company meets or exceeds (i) the Revenue Target and (ii) the Product Margin Target, Purchaser Shareholders shall pay in cash be entitled to Sellers, on a pro-rata basis, receive the Earn-Out Amount less determined and payable as provided in this Section 2.1(n).
(i) PentaStar agrees that, during the product Earn-Out Period, it will conduct the Retained Operations in the Phoenix and Tucson, Arizona metropolitan area as a separate division of PentaStar with no other operations (the "Partel Division"). The operations of the Stock Consideration and Partel Division will be conducted in accordance with the ADS Appreciation Ratio cost structure set forth in Exhibit 2.1(n) to this Agreement.
(ii) As soon as reasonably practicable after the “end of the Earn-Out”) exclusive of Out Period, and in any Taxevent by April 30, fees or other expenses of any kind; provided that 2001, PentaStar will cause the exchange rate shall be fixed at the Exchange Rate independent auditors who audit its financial statements for the year 2000 to prepare a separate income statement of the Partel Division for the Earn-Out Period (which need not be audited) in accordance with GAAP on a basis consistent with the historical accounting practices of PentaStar, and a written calculation of the Earn-OutOut Amount (collectively, the "Earn-Out Financial Statements"). PentaStar will promptly provide a copy of the Earn-Out Financial Statements to the Shareholders. Within 20 days after receipt of the Earn-Out Financial Statements, each of PentaStar and the Shareholders will, in a written notice to the other, either accept the Earn-Out Financial Statements or object to them by describing in reasonably specific detail any proposed adjustments to the Earn-Out Financial Statements and the estimated amounts of and reasons for such proposed adjustments. PentaStar shall make the books of the Partel Division (and, to the extent relevant, the books of PentaStar) available to the Shareholders' Agent for purposes of reviewing and verifying the Earn-Out Financial Statements. The failure by PentaStar or the Shareholders to object to the Earn-Out Financial Statements within such 20-day period will be deemed to be an acceptance by such Person of the Earn-Out Financial Statements. If any adjustments to the Earn-Out Financial Statements are proposed by PentaStar or the Shareholders within such 20-day period, the dispute shall be resolved as provided in Section 2.1(p). The fees and expenses of the independent auditors for the preparation of the Earn-Out Financial Statements will be paid 50% by PentaStar and 50% by the Shareholders. Such fees and expenses shall not include any portion of the work done by PentaStar's auditors in connection with its annual audit.
(iii) Within 10 Business Days after the later of the acceptance of the Earn-Out Financial Statements by PentaStar and the Shareholders or the resolution of any disputes under Section 2.1(p), as the case may be, PentaStar will pay the Earn-Out Amount, if any, to the Shareholders. The Earn-Out Amount shall not exceed the Earn-Out Amount.
(b) Within ten (10) business days after the announcement date of Parent’s fourth quarter fiscal year 2007be payable in PentaStar's sole discretion, Purchaser shall preparein cash or PentaStar Common Stock, or cause to be prepared, and deliver to the Sellers’ Representative (i) a statement setting forth the Product Revenues for the calendar year 2007, each component used in the calculation any combination thereof, the ADS Appreciation Ratio and the amount of the Earn-Out determined in accordance with Section 2.4(a) (the “Earn-Out Statement”), which shall be prepared in accordance with the Adjusted Korean GAAP, at Purchaser’s cost and expense, and (ii) such documentation, if any, as may be reasonably necessary to enable the Sellers’ Representative to determine such amount. Concurrently with the delivery of the Earn-Out Statement, Purchaser shall deposit into a nominated account as established by the Sellers’ Representative for payment to Sellers, on a per share basis, the amount of the Earn-Out, if any, specified in the Earn-Out Statement.
(c) After receipt from Purchaser of the Earn-Out Statement and, if applicable, the Earn-Out, Sellers shall have the right, at its cost and expense, and upon not less than seven (7) days’ prior written notice to Purchaser, to (i) meet with Purchaser and the Company Accounting Firm to discuss Purchaser’s calculation of the amount of the Product Revenues, the ADS Appreciation Ratio and the Earn-Out as set forth in the Earn-Out Statement and (ii) have reasonable access during normal business hours to inspect the books and records of the Company and working papers (including those prepared by advisors and other third parties, to the extent permitted thereby) relating to such calculation. If the Sellers’ Representative fails to challenge Purchaser’s determination of the Product Revenues, the ADS Appreciation Ratio and the amount of the Earn-Out by the delivery of a written notice to Purchaser (the “Earn-Out Dispute Notice”) within sixty (60) days after receipt by the Sellers’ Representative of the Earn-Out Statement, such determination by Purchaser shall be final, conclusive and binding for all purposes of this Agreement.
(d) In the event that Sellers disputes Purchaser’s determination of the amount of the Product Revenues, the ADS Appreciation Ratio and/or the amount of the Earn-Out, the Sellers’ Representative shall so notify Purchaser by delivering a Earn-Out Dispute Notice to Purchaser within the period set forth in Section 2.4(c) (the amount of any disputed Contingent Payment being referred to herein as the “Disputed Contingent Payment”). In the event of such a dispute, Sellers and Purchaser shall first use diligent, good faith efforts to resolve such dispute between them. If they are unable to resolve the dispute within thirty (30) days after the delivery of the Earn-Out Dispute Notice, then the dispute shall be submitted to the CPA Firm for determination in accordance with the following provisions:
(i) Purchaser and the Sellers’ Representative shall submit to the CPA Firm, within ten (10) days after the date of the engagement of the CPA Firm (as evidenced by the date of the engagement letter), copies of (A) the Earn-Out Statement, (B) the Earn-Out Dispute Notice and (C) a list of all unresolved objections raised by Sellers with respect to the calculation of the amount of the Earn-Out (the “Unresolved Objections”). Each of Purchaser and the Sellers’ Representative shall submit to the CPA Firm (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the CPA Firm, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Purchaser and the Sellers’ Representative may (but shall not be required to) submit to the CPA Firm (with a copy delivered to the other Party on the same day), within sixty (60) days after the date of the engagement of the CPA Firm, a memorandum responding to the initial memorandum submitted to the CPA Firm by the other Party. Unless requested by the CPA Firm in writing, neither Purchaser nor the Sellers’ Representative may present any additional information or arguments to the CPA Firm, either orally or in writing; provided, however, that each party shall have the right to respond to the CPA Firm’s requests directed to the other Party.
(iiA) The CPA Firm shall prepare and distribute to the Parties a writing setting forth the CPA Firm’s determination at least 50% of the Unresolved Objections, the CPA Firm’s reasons therefor and the amount first $1,000,000 of the Earn-Out calculated pursuant thereto; providedAmount shall be paid in cash and (B) the total amount of cash included in the payment of the Earn-Out Amount shall not be such as to cause the Purchase Price, howevertaken as a whole, not to comply with the continuity of interest test for a tax-free reorganization under Section 368 of the Code, as determined in good faith by PentaStar based on the advice of counsel. The per share value of the PentaStar Common Stock for that purpose shall be the remainder of (A) the Fair Market Value of the PentaStar Common Stock as of the date that the CPA Firm Earn-Out Amount is paid minus (B) the Company Increase. The cash portion of the Earn-Out Amount shall not change nor deviate from the calculation of any item not specifically challenged in the Unresolved Objections. Any decision rendered be paid by wire transfer to an account or accounts designated by the CPA Firm shall Shareholders. The certificates representing the shares of PentaStar Common Stock issued in payment of the Earn-Out Amount will be final, conclusive and binding upon mailed to the Parties, and judgment thereon may be entered and enforced in any court of competent jurisdictionShareholders at their addresses for notice purposes under this Agreement.
(iiiiv) The fees and expenses In the event that PentaStar sells the operations conducted by the Partel Division (whether separately or as part of the CPA Firm sale of all of the assets or operations of PentaStar, and whether in connection with a sale of assets, by merger or otherwise) prior to the resolution end of disputes pursuant the Earn-Out Period, PentaStar shall require the purchaser to continue to account for such operations separately and agree to assume the obligations of PentaStar to pay the Earn-Out Amount as provided in this paragraph (d) shall be shared equally by Purchaser and Sellers; provided, however, Section 2.1(n). In that if the CPA Firm determines that one Party has adopted a position or positions that is or are frivolous or clearly without meritevent, the CPA Firm may, purchaser may pay the Earn-Out Amount in its discretion, assign a greater portion combination of cash and such purchaser's common equity securities based on the fair market value of such fees and expenses to such Partysecurities on the relevant date as provided in this Section 2.1(n).
(e) From the Closing Date through December 31, 2007, except as otherwise contemplated by this Agreement or as the Sellers’ Representative otherwise agrees in writing in advance, Purchaser and Parent shall conduct, and shall cause its affiliates to conduct, the Business in the Ordinary Course of Business and use all commercially reasonable efforts to preserve intact the Business and its relationship with its customers, sales representatives, suppliers, Distributors, creditors, employees and other third parties with which the Company transacts business, shall use commercially reasonable efforts to maximize the Product Profits, the Product Revenues and the Product Margin during the year ending December 31, 2007, shall provide adequate financial and other supports to the Company in connection with the Business and shall not transfer out of the Business any Customer Offerings (or any derivative product therefrom) offered or planned to be offered by the Company as of the Closing; provided that in the event of any Customer Offering is bundled with another product which is not a product of the Business, such portion of gross revenues therefrom attributable to the Customer Offerings shall be included in the calculation of the Product Profits, the Product Revenues and the Product Margin.
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