Common use of Earnout Payment Procedures Clause in Contracts

Earnout Payment Procedures. (i) Within 30 days following the end of the Earnout Period, Acquiror will deliver to the Stockholders’ Agent a statement that includes Acquiror’s calculation of Calendar-Year 2006 Revenues and each element of the calculation of the Earnout Payment and a statement of the amount, if any, of the Earnout Payment (“Earnout Statement”), together with the backup to support such calculations. The Stockholders’ Agent, and other representatives and advisors to Target, shall have access to the books and records of the Target Business and Target Business Unit and to the workpapers and other back-up materials of Acquiror or the Target Business Unit during regular business hours to track and verify each element of the calculation of the Earnout Payment at any time during the Earnout Period, and thereafter through the time of the resolution by the parties of any objections to the Earnout Statement. Acquiror shall instruct Acquiror’s accountants and members of its finance department to cooperate with representatives of Target in reviewing and analyzing the Earnout Statement. (ii) The amount of the Earnout Payment (or the calculation and statement that no Earnout Payment is due under this Section 2.8) set forth in the Earnout Statement shall be binding on the Stockholders, unless the Stockholders’ Agent presents to Acquiror within 30 days after the date the Stockholders’ Agent receives the applicable Earnout Statement (the “Earnout Objection Deadline”) written notice of disagreement specifying in reasonable detail (to the extent then known) the nature and extent of the disagreement and the Stockholders’ Agent’s calculation of the applicable Earnout Payment amount (including, if then known, a statement with each element of the Stockholders’ Agent’s calculation thereof) (the “Earnout Objection Statement”). Acquiror and the Stockholders’ Agent shall attempt in good faith during the ten days immediately following Acquiror’s timely receipt of the Earnout Objection Statement to resolve any disagreement with respect to such Earnout Payment (the “Earnout Dispute Resolution Period”). Acquiror shall be entitled to require that the Stockholders’ Agent sign a customary form of non-disclosure or confidentiality agreement (which may include an obligation extending the Stockholders’ Agent’s confidentiality obligation to its representatives and advisors) in order to protect the confidentiality of its books and records. (iii) If, at the end of the Earnout Dispute Resolution Period, Acquiror and the Stockholders’ Agent have not resolved all disagreements with respect to the calculation of the Earnout Payment, Acquiror and the Stockholders’ Agent will refer the items of disagreement for determination to the Independent Accounting Firm, and the parties will be reasonably available and work diligently to facilitate the Independent Accounting Firm rendering a determination within the 20-day period immediately following the referral to the Independent Accounting Firm. A determination by the Independent Accounting Firm with respect to any item of disagreement submitted to it will be binding on Acquiror and the Stockholders. The Independent Accounting Firm, Acquiror and Stockholders’ Agent will enter into such engagement letters as may be reasonably required by the Independent Accounting Firm to perform under this Section 2.8(d)(iii). The fees and disbursements of the Independent Accounting Firm under this Section 2.8(d)(iii) will be borne equally by the Acquiror and the Target Stockholders collectively and any such amounts payable by the Stockholders shall be deducted from the Escrow Account or Earnout Payment, if any; provided that if the Independent Accounting Firm determines one party has adopted a position or positions with respect to the Earnout Statement that is frivolous or clearly without merit, the Independent Accounting Firm may, in its discretion, assign a greater portion of any such fees and expenses to such party.

Earnout Payment Procedures. (i) Within 30 60 days following after the end of Initial Earnout Period and the Final Earnout Period, Acquiror will Buyer shall deliver to the Stockholders’ Agent a statement that includes Acquiror’s calculation of Calendar-Year 2006 Revenues and each element Sellers Representative unaudited combined financial statements of the calculation Purchased Companies and ETI Acquisition, with respect to the ETI Business, for the Initial Earnout Period and the Final Earnout Period, respectively, and calculations setting forth the Adjusted EBITDA, New Deal Activity and the Earnout Payments for the respective period (such unaudited combined financial statements and calculations, together, for the respective period, the “Earnout Payment Statement”). The Sellers Representative and Sellers’ Accountants will be entitled to full access during normal business hours to the relevant records and working papers of the Purchased Companies and ETI Acquisition, with respect to the ETI Business, to aid in their review and understanding of the Earnout Payment and a statement Statement. Sellers will be solely responsible for all costs of the amount, if any, of the Sellers’ Accountants. The Earnout Payment (“Earnout Statement”), together with the backup to support such calculations. The Stockholders’ Agent, and other representatives and advisors to Target, shall have access to the books and records of the Target Business and Target Business Unit and to the workpapers and other back-up materials of Acquiror or the Target Business Unit during regular business hours to track and verify each element of the calculation of the Earnout Payment at any time during the Earnout Period, and thereafter through the time of the resolution by the parties of any objections to the Earnout Statement. Acquiror shall instruct Acquiror’s accountants and members of its finance department to cooperate with representatives of Target in reviewing and analyzing the Earnout Statement. (ii) The amount of the Earnout Payment (or the calculation and statement that no Earnout Payment is due under this Section 2.8) set forth in the Earnout Statement shall be binding on deemed to be accepted by the StockholdersSellers Representative and shall be conclusive for the purposes of determining whether and what Earnout Payments are required pursuant to Section 3.5 and Section 3.6 for the applicable period, unless the Stockholders’ Agent presents to Acquiror Sellers Representative shall have delivered, within 30 days after the date on which any such Earnout Payment Statement is delivered to the Stockholders’ Agent receives the applicable Earnout Statement (the “Earnout Objection Deadline”) Sellers Representative, a written notice of disagreement from the Sellers Representative to Buyer stating each and every item to which the Sellers Representative takes exception as not being in accordance with GAAP or this Agreement or otherwise being incorrect, specifying in reasonable detail (to the extent then known) the nature and extent of any such exception. If a change proposed by the disagreement Sellers Representative is disputed by Buyer, then Buyer and the Stockholders’ Agent’s calculation of the applicable Earnout Payment amount (including, if then known, a statement with each element of the Stockholders’ Agent’s calculation thereof) (the “Earnout Objection Statement”). Acquiror and the Stockholders’ Agent Sellers Representative shall attempt negotiate in good faith during to resolve such dispute. If, after a period of 10 days following the ten days immediately following Acquiror’s timely receipt date on which the Sellers Representative gives Buyer notice of any such proposed change, any such proposed change still remains disputed, then the Accounting Firm shall resolve any remaining disputes. The Accounting Firm shall perform an independent review of the Earnout Objection Payment Statement to resolve any disagreement with respect to such Earnout Payment (and also take into account presentations by the “Earnout Dispute Resolution Period”). Acquiror shall be entitled to require that the StockholdersSellers Representative and Sellers’ Agent sign a customary form of non-disclosure or confidentiality agreement (which may include an obligation extending the Stockholders’ Agent’s confidentiality obligation to Accountant and Buyer and its representatives and advisors) accounting firm, in order to protect resolve those issues still in dispute. The Accounting Firm shall deliver to the confidentiality Sellers Representative and Buyer, within 30 days following the date on which the Sellers Representative gave Buyer notice of a proposed change (and which change was subsequently disputed by Buyer and submitted to the Accounting Firm pursuant to this Section 3.5(d)), a report setting forth its books and records. (iii) If, at the end findings. The decision of the Earnout Dispute Resolution Period, Acquiror Accounting Firm shall be final and binding and shall be in accordance with the Stockholders’ Agent have not resolved all disagreements with respect to the calculation provisions of this Section 3.5. All of the Earnout Payment, Acquiror and the Stockholders’ Agent will refer the items of disagreement for determination to the Independent Accounting Firm, and the parties will be reasonably available and work diligently to facilitate the Independent Accounting Firm rendering a determination within the 20-day period immediately following the referral to the Independent Accounting Firm. A determination by the Independent Accounting Firm with respect to any item of disagreement submitted to it will be binding on Acquiror and the Stockholders. The Independent Accounting Firm, Acquiror and Stockholders’ Agent will enter into such engagement letters as may be reasonably required by the Independent Accounting Firm to perform under this Section 2.8(d)(iii). The fees and disbursements of the Independent Accounting Firm under this Section 2.8(d)(iii) will be borne equally by the Acquiror and the Target Stockholders collectively and any such amounts payable by the Stockholders shall be deducted from the Escrow Account or Earnout Payment, if any; provided that if the Independent Accounting Firm determines one party has adopted a position or positions with respect to the Earnout Statement that is frivolous or clearly without merit, the Independent Accounting Firm may, in its discretion, assign a greater portion of any such fees and expenses of the Accounting Firm shall be allocated between Buyer, on the one hand, and Sellers, on the other hand, by the Accounting Firm based upon the percentage which the portion of the contested amount resolved in favor of Buyer or Sellers, as the case may be, bears to the amount actually disputed by such partyParties, using the same calculation methodology as described in Section 3.4(b)(i).

Earnout Payment Procedures. (i) Within 30 days following 5 Business Days after the end of Preliminary Operating Income Determination for any Year becomes the Final Operating Income Determination for that Year, Sellers shall notify the Surviving Corporation in writing as to how they desire to receive the Earnout PeriodPayment for that year, Acquiror will deliver to the Stockholders’ Agent a statement that includes Acquiror’s calculation of Calendar-Year 2006 Revenues and each element of the calculation if any is due, setting forth (A) how much of the Earnout Payment they desire to receive in Common Stock, and a statement in how many certificates, (B) how much they desire to receive in cash, (C) delivery instructions for certificates of Common Stock, and (D) the amountU.S. account or accounts, if anywith wiring instructions, to which they desire any cash portion to be paid (the "SELLERS NOTICE"). The cash portion of the any Earnout Payment (“Earnout Statement”), together with the backup to support such calculations. The Stockholders’ Agentshall be paid, and certificates representing the Common Stock portion of any Earnout Payment shall be delivered, by the Surviving Corporation within 5 Business Days of receipt of Sellers Notice. To the extent Sellers have not paid the Surviving Corporation any Shortfall pursuant to PARAGRAPH 3.2(F) or any Indemnified Losses pursuant to PARAGRAPH 11.1, the Surviving Corporation may deduct such unpaid amounts from any Earnout Payment without prejudice to any other representatives and advisors to Target, shall rights the Surviving Corporation may have access against the Sellers with respect to the books and records of the Target Business and Target Business Unit and to the workpapers and other back-up materials of Acquiror Shortfall or the Target Business Unit during regular business hours to track and verify each element of the calculation of the Earnout Payment at any time during the Earnout Period, and thereafter through the time of the resolution by the parties of any objections to the Earnout Statement. Acquiror shall instruct Acquiror’s accountants and members of its finance department to cooperate with representatives of Target in reviewing and analyzing the Earnout StatementIndemnified Losses. (ii) The amount If Sellers elect to receive any portion of the Year One Earnout Payment (or in Common Stock, the calculation and statement that no Earnout Payment is due under this Section 2.8) set forth in the Earnout Statement number of shares they shall receive shall be binding on equal to (A) the Stockholdersportion of the Year One Earnout so designated divided by (B) $9. If Sellers elect to receive any portion of the Year Two Earnout in Common Stock, unless the Stockholders’ Agent presents number of shares they shall receive shall be equal to Acquiror within 30 days after (A) the date portion of the Stockholders’ Agent receives Year Two Earnout so designated divided by (B) $12. If Sellers elect to receive any portion of the applicable Year Three Earnout Statement in Common Stock, the number of shares they shall receive shall be equal to (A) the “portion of the Year Three Earnout Objection Deadline”so designated divided by (B) written notice $15. The denominators used in each of disagreement specifying the preceding three sentences of this PARAGRAPH 3.3(H)(II) shall be adjusted for any stock splits or other reclassifications and any transaction in reasonable detail (which the Common Stock is replaced with or exchanged for the capital stock of a successor subsequent to the extent then known) the nature and extent execution of the disagreement and the Stockholders’ Agent’s calculation of the applicable Earnout Payment amount (including, if then known, a statement with each element of the Stockholders’ Agent’s calculation thereof) (the “Earnout Objection Statement”). Acquiror and the Stockholders’ Agent shall attempt in good faith during the ten days immediately following Acquiror’s timely receipt of the Earnout Objection Statement to resolve any disagreement with respect to such Earnout Payment (the “Earnout Dispute Resolution Period”). Acquiror shall be entitled to require that the Stockholders’ Agent sign a customary form of non-disclosure or confidentiality agreement (which may include an obligation extending the Stockholders’ Agent’s confidentiality obligation to its representatives and advisors) in order to protect the confidentiality of its books and recordsthis Agreement. (iii) If, at the end of the Earnout Dispute Resolution Period, Acquiror and the Stockholders’ Agent have not resolved all disagreements with respect to the calculation of the Earnout Payment, Acquiror and the Stockholders’ Agent will refer the items of disagreement for determination to the Independent Accounting Firm, and the parties will be reasonably available and work diligently to facilitate the Independent Accounting Firm rendering a determination within the 20-day period immediately following the referral to the Independent Accounting Firm. A determination by the Independent Accounting Firm with respect to any item of disagreement submitted to it will be binding on Acquiror and the Stockholders. The Independent Accounting Firm, Acquiror and Stockholders’ Agent will enter into such engagement letters as may be reasonably required by the Independent Accounting Firm to perform under this Section 2.8(d)(iii). The fees and disbursements of the Independent Accounting Firm under this Section 2.8(d)(iii) will be borne equally by the Acquiror and the Target Stockholders collectively and any such amounts payable by the Stockholders shall be deducted from the Escrow Account or Earnout Payment, if any; provided that if the Independent Accounting Firm determines one party has adopted a position or positions with respect to the Earnout Statement that is frivolous or clearly without merit, the Independent Accounting Firm may, in its discretion, assign a greater portion of any such fees and expenses to such party.

Earnout Payment Procedures. The procedures for the calculation and payment of the Earnout Payment Amount shall be as follows: (i) Within 30 90 days following the end of each of the Earnout Periodcalendar years of 2015 and 2016 (i.e., Acquiror will deliver to until March 31, 2016 and March 31, 2017, respectively), Buyer shall send the Stockholders’ Agent Representative a statement that includes Acquiror’s calculation of Calendar-Year 2006 Revenues (each, an “Earnout Statement”) specifying (a) with respect to the Earnout Statement sent on or before March 31, 2016 (the “2015 Earnout Statement”) - the 2015 Revenues, and each element of (b) with respect to the Earnout Statement sent on or before March 31, 2017 (the “2016 Earnout Statement”) - the 2016 Revenues, as applicable, as well as the calculation of the Earnout Payment and a statement of the amountAmount, if any, of the Earnout Payment (“Earnout Statement”), together with the backup to support such calculations. The Stockholders’ Agent, and other representatives and advisors to Target, shall have access to the books and records of the Target Business and Target Business Unit and to the workpapers and other back-up materials of Acquiror or the Target Business Unit during regular business hours to track and verify each element of the calculation of the Earnout Payment at any time during the Earnout Period, and thereafter through the time of the resolution by the parties of any objections to the Earnout Statement. Acquiror shall instruct Acquiror’s accountants and members of its finance department to cooperate with representatives of Target in reviewing and analyzing the Earnout Statementpayable hereunder. (ii) The amount of Stockholders’ Representative may object to the Earnout Payment Statement, no later than thirty (or 30) days following delivery thereof, by way of delivering a written notice, executed by the calculation and statement Stockholders’ Representative, to that no effect to Buyer, providing details for the grounds for such objection (the “Earnout Payment is due under this Section 2.8) set forth in Objection Notice”). If the Stockholders’ Representative does not timely deliver such Earnout Objection Notice, then the Earnout Statement shall be deemed final and binding on for all intents and purposes and Buyer shall transfer the StockholdersEarnout Payment Amount, unless the Stockholders’ Agent presents to Acquiror within 30 days after the date the Stockholders’ Agent receives the applicable if any, specified in such Earnout Statement within ten (the “Earnout Objection Deadline”10) written notice of disagreement specifying in reasonable detail (Business Days thereafter, to the extent then known) Company Equityholders (in accordance with the nature and extent provisions of the disagreement this Agreement and the Stockholders’ Agent’s calculation of allocation set forth in the applicable Earnout Final Payment amount (including, if then known, a statement with each element of the Stockholders’ Agent’s calculation thereof) (the “Earnout Objection Statement”Spreadsheet). Acquiror and the Stockholders’ Agent shall attempt in good faith during the ten days immediately following Acquiror’s timely receipt of the Earnout Objection Statement to resolve any disagreement with respect to such Earnout Payment (the “Earnout Dispute Resolution Period”). Acquiror shall be entitled to require that the Stockholders’ Agent sign a customary form of non-disclosure or confidentiality agreement (which may include an obligation extending the Stockholders’ Agent’s confidentiality obligation to its representatives and advisors) in order to protect the confidentiality of its books and records. (iii) IfHowever, if the Stockholders’ Representative timely delivers such Earnout Objection Notice, then, notwithstanding Section 9.12 hereof, the dispute regarding such amount shall be resolved in the manner set forth in Schedule A hereto. (iv) Buyer shall pay 40% (the “Share Percentage”) of (A) the 2015 Payment, if any (if such payment will be earned and payable based on the 2015 Earnout Statement) in Parent Ordinary Shares (the “2015 Earnout Shares”), the number of which shall equal to the product obtained by dividing (x) the portion payable in Parent Ordinary Shares by (y) the Average Price prior to March 31, 2016; and (B) the 2016 Payment, if any (if such payment will be earned and payable based on the 2016 Earnout Statement) in Parent Ordinary Shares (the “2016 Earnout Shares” and, together with the 2015 Earnout Shares, the “Earnout Shares”), the number of which shall equal to the product obtained by dividing (x) the portion payable in Parent Ordinary Shares by (y) the Average Price prior to March 31, 2017. The balance of the applicable 2015 Payment or 2016 Payment will be payable in cash. (v) Notwithstanding anything to the contrary hereunder, (A) Buyer shall not be required under clause (iv) above to issue Parent Ordinary Shares to any Company Cashholder, (B) the Share Percentage may be increased by Parent by up to an additional number of Parent Ordinary Shares that, in the absence of the foregoing clause (A), would be issuable to Company Cashholders, (C) the number of Earnout Shares together with the Closing Share Consideration and Holdback Share Consideration shall not exceed, in any event, 19.99% of the issued and outstanding Parent Ordinary Shares as of immediately prior to the Closing, and (D) if, at any time prior to the end issuance of any Earnout Shares, Parent is being acquired by a third party, whether by way of a merger, tender offer or otherwise, such that Parent Ordinary Shares will thereafter no longer be publicly traded, then the remaining Earnout Payment Amount, if any, shall be paid solely in cash. (vi) There can be no assurance that any Earnout Payment Amount will become payable hereunder. Without derogating from the generality of the foregoing, it is hereby clarified that, at and from the Closing, the Buyer will assume control of, and have absolute discretion to operate, the Company and its business as it sees fit; provided, however, that during the period following the Closing and December 31, 2016, the Buyer shall not willfully take any actions, nor omit to take any actions, with the exclusive intent of preventing the Earnout Dispute Resolution PeriodPayment Amount from becoming payable hereunder. The exercise of such control and discretion will not entitle the Company Equityholders or anyone on their behalf to assert any claims under this Agreement or otherwise for failure of the Buyer, Acquiror the Company or any of their Affiliates in satisfying any covenant (implied or express) relating to the operation of the Company and/or the Company’s business following the Closing. Parent, the Buyer, their Affiliates and their Representatives will have and reserve the exclusive authority, power and right at all times to control all aspects of the business and operations of the Company, the Parent, the Buyer or any Affiliate thereof, including the unrestricted discretion to determine to what extent, if any, will any resources be spent in order to develop, sell, market and support any Company Products, the manner in which development, sales and marketing will take place, if any, the budgets that will be dedicated and the acquisition, sale or incorporation of any products, technologies, divisions or operations. Nothing herein shall be deemed to create or imply any restriction or limitation on the ability of the Parent, the Buyer or any Affiliate thereof to pursue any activities or operations of any kind or nature, to enter into, terminate, modify, dispose of or otherwise make any change thereto, or sell any assets or properties. In addition, and without derogating from the generality of the foregoing, it is hereby clarified that the Earnout Payment Amounts, if any, shall not (i) be certificated, (ii) represent an equity ownership interest in the Company or Parent or any of their respective Affiliates, (iii) have any voting rights or dividend rights associated therewith, or (iv) bear any interest. (vii) Notwithstanding the foregoing clause (vi), if, following the Closing but prior to December 31, 2016, Buyer (or its Affiliates) implements a significant adverse change in the Business of the Company as specified in Schedule 1.8(c)(vii) hereto (each, an “Adverse Change”), then, unless (a) Buyer obtained the Stockholders’ Representative’s prior consent to such an Adverse Change (not to be unreasonably withheld, conditioned or delayed) or (b) such an Adverse Change is required under any applicable Legal Requirement, then an equitable downward adjustment shall be made to the 2015 Target and/or the 2016 Target, as applicable, so that the Earnout Payment Amount, in part or in whole (depending on the appropriate adjustment), may be deemed earned and payable as a result of such equitable adjustment. For the sake of clarity, nothing herein shall prevent Buyer, Parent and/or their Affiliates, including the Company, to take any action that would constitute an Adverse Change. In the event that an Adverse Change is required under clause (b) above, the Buyer and the Stockholders’ Agent have not resolved all disagreements Representative shall work together in good faith to provide the Company Stockholders, if reasonably practicable in light of such Legal Requirement, with respect a comparable opportunity to achieve 2015 Target and/or the 2016 Target, as applicable. (viii) Notwithstanding anything to the calculation of contrary hereunder, the Earnout Payment, Acquiror and the Stockholders’ Agent will refer the items of disagreement for determination to the Independent Accounting Firm, and the parties will be reasonably available and work diligently to facilitate the Independent Accounting Firm rendering a determination within the 20-day period immediately following the referral to the Independent Accounting Firm. A determination by the Independent Accounting Firm with respect to any item of disagreement submitted to it will be binding on Acquiror and the Stockholders. The Independent Accounting Firm, Acquiror and Stockholders’ Agent will enter into such engagement letters as may be reasonably required by the Independent Accounting Firm to perform under this Section 2.8(d)(iii). The fees and disbursements of the Independent Accounting Firm under this Section 2.8(d)(iii) will be borne equally by the Acquiror and the Target Stockholders collectively and any such amounts payable by the Stockholders shall be deducted from the Escrow Account or Earnout 2015 Payment, if any; provided that , and the 2016 Payment, if any, shall be reduced by the Independent Accounting Firm determines one party has adopted a position or positions with respect to amount of the Earnout Statement that is frivolous or clearly without merit, the Independent Accounting Firm may, in its discretion, assign a greater portion of any such fees and expenses to such partyContingent Transaction Expenses.