Common use of Procedure for Earn-Out Clause in Contracts

Procedure for Earn-Out. Within ninety (90) days of the end of each Royalty Target Year, the Buyer shall deliver to the Seller Parties: (i) a statement (the “Earn-Out Statement”) prepared by the Buyer of the calculation of the Earn-Out Value, the Buyer’s election to pay the Earn-Out Consideration in Earn-Out Cash, Earn-Out Shares or a combination of Earn-Out Cash and Earn-Out Shares, and, if the Buyer elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Shares, the number of Earn-Out Shares to be issued to the Seller pursuant to this Section 3.4; and (ii) if reasonably requested by the Seller Parties, supporting documentation of the determination of Net Royalties during each Royalty Target Year within the Earn-Out Period (collectively, (i) and (ii), the “Earn-Out Reconciliation”). If the Seller Parties disagree with the Earn-Out Reconciliation, the Seller Parties shall deliver a written objection to the Buyer within thirty (30) days after the Buyer’s delivery of the Earn-Out Reconciliation, which written objection shall specify in detail the rationale for the objection and the amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered by the Buyer, shall be final and binding on the Parties. Any dispute regarding any Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon by the Seller Parties and the Buyer (an “Accounting Referee”), with such decision being final and binding on the Parties. The Seller Parties shall bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal to the percentage that the amount contested by but not awarded to the Seller Parties bears to the aggregate amount contested by the Seller Parties, with the Buyer bearing the remainder of such fees, costs and expenses. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer shall deliver the applicable Earn-Out Consideration to the Seller. In the event that all or any portion of the Earn-Out Consideration is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date of the Earn-Out Statement, subject to a minimum share price of Three Dollars and Sixty Cents ($3.60) per share.

Procedure for Earn-Out. Within ninety (90) days of As soon as practicable after the end of each Royalty Target YearPeriod, but in no event later than 30 days following the Buyer end of each Royalty Target Period, Buyers shall deliver to Sellers’ Representative on behalf of the Seller PartiesSellers: (i) a statement (the “Earn-Out Statement”) prepared by the Buyer XCel of the calculation of the Earn-Out Value, Value for the Buyer’s election to pay the Earn-Out Consideration in Earn-Out Cash, Earn-Out Shares or a combination of Earn-Out Cash and Earn-Out Shares, previous Royalty Target Period and, if the Buyer elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Sharesapplicable, the number of Earn-Out XCel Shares to be issued to the Seller Sellers pursuant to this Section 3.4; and (ii) if reasonably requested by the Seller Parties, supporting documentation of the determination of Net Royalties during each Royalty Income for the previous Royalty Target Year within the Earn-Out Period (collectively, (i) and (ii), the “Earn-Out ReconciliationStatement”). If the Seller Parties disagree with the The Earn-Out Reconciliation, the Seller Parties shall deliver a written objection to the Buyer within thirty (30) days after the Buyer’s delivery of the Earn-Out Reconciliation, which written objection shall specify in detail the rationale for the objection and the amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered by the Buyer, Statement shall be final prepared in accordance with sound business practices and binding on the Parties. Any dispute regarding any Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon by the Seller Parties and the Buyer (an “Accounting Referee”), with such decision being final and binding on the Parties. The Seller Parties shall bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal to the percentage that the amount contested by but not awarded to the Seller Parties bears to the aggregate amount contested by the Seller Parties, in accordance with the Buyer bearing books and records of Buyers used to prepare the remainder financial statements of such fees, costs and expensesXCel. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer shall deliver the applicable Earn-Out Consideration to the Seller. In the event that all or any portion of the Earn-Out Consideration is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date Upon delivery of the Earn-Out Statement, subject XCel shall (A) pay to JR on behalf of Sellers, in cash, an amount equal to the Earn-Out Value set forth in such Earn-Out Statement, or (B) issue to JR on behalf of Sellers, free and clear of all Liens, options, warrants, calls, proxies, rights, commitments, restrictions or agreements of any kind, other than those created or existing pursuant to applicable securities laws or pursuant to this Agreement or any Related Agreement, a minimum share price number of Three Dollars Earn-Out Shares equal to the quotient obtained by dividing (x) the Earn-Out Value earned by the Sellers for the then applicable Royalty Target Period, by (y) the greater of (A) the VWAP for the last twenty (20) Business Days of the then previous Royalty Target Period or (B) $7.00. The Sellers acknowledge and Sixty Cents agree that ($3.60i) per sharethere is no guarantee that the Buyers shall achieve Net Royalty Income at sufficient levels for the Sellers to receive Earn-Out Shares, (ii) the Sellers shall not hold the Buyers responsible for failing to achieve the Net Royalty Income targets required to receive Earn-Out Shares and (iii) the Sellers are not relying on any information from the Buyers in determining the requirements to achieve the Earn-Out Shares. The Sellers hereby waive and indemnify the Buyers from any claims as a result of the failure of the Buyers to achieve Net Royalty Income at sufficient levels for the Sellers to receive Earn-Out Shares.

Procedure for Earn-Out. Within ninety (90) days of the end of each Royalty Target Year, the Buyer shall deliver to the Seller Parties: (i) a statement (During the “15 day period following the Purchasers’ receipt of an Earn-Out Dispute Notice, the Purchasers and the Group’s Representative shall attempt in good faith to resolve the disagreement with respect to the Earn-Out Statement and during the period from the date on which Purchasers deliver the Earn-Out Statement through such 15 day period the Purchasers will cause the Group’s Representative to be provided with access at reasonable times, following reasonable notice, to books and records relevant to sales and expenses of the Business for the purposes of verifying the Earn-Out Statement. If the Group’s Representative and the Purchasers are unable to resolve any such disagreement within such 15 day period, the matter shall be submitted to an independent accounting firm of national reputation reasonably acceptable to the Purchasers and the Group’s Representative (an “Independent Firm”) prepared ). In connection with such engagement, the parties will each execute, if requested by the Buyer Independent Firm, a reasonable engagement letter including customary indemnities. Promptly after such engagement of the calculation Independent Firm, the parties will provide the Independent Firm with a copy of this Agreement, the Earn-Out ValueStatement, the Buyer’s election to pay and the Earn-Out Consideration in Earn-Out Cash, Earn-Out Shares or a combination of Earn-Out Cash Dispute Notice. The Purchasers and Earn-Out Shares, and, if the Buyer elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Shares, the number of Earn-Out Shares to be issued Group’s Representative may each submit one position statement accompanied by supporting documentation to the Seller Independent Firm. The Independent Firm will have the authority to request in writing such additional written submissions from the parties as it deems appropriate, provided that a copy of any such submission will be provided to the other party at the same time as it is provided to the Independent Firm. The parties will not make any additional submission to the Independent Firm except pursuant to this Section 3.4; and (ii) if reasonably requested such a written request by the Seller PartiesIndependent Firm. The parties will not communicate orally or in written form (or permit any of their Affiliates to communicate) with the Independent Firm without providing the other party a reasonable opportunity to participate in such communication with the Independent Firm (other than with respect to written submissions to the Independent Firm, supporting documentation a copy of which shall also be provided to the determination of Net Royalties during each Royalty Target Year within the Earn-Out Period (collectively, (i) and (ii), the “Earn-Out Reconciliation”other party). If The parties shall use commercially reasonable efforts to cause the Seller Parties disagree with Independent Firm to render its determination on the Earn-Out Reconciliation, the Seller Parties shall deliver a written objection to the Buyer matter within thirty (30) days after the Buyer’s delivery of the its submission. Such determination shall be, for all purposes, conclusive, non-appealable, final and binding upon all parties to this Agreement. Once such determination is made, any resolved Earn-Out ReconciliationAmount shall become immediately payable by the Purchasers pursuant to Section 2.4(c)(ii). The fees and expenses of the Independent Firm will be borne by the Group, which written objection shall specify in detail on the rationale for the objection one hand, and the Purchasers, on the other hand, in the same proportion that the dollar amount of disputed items lost by the Group, on the one hand, or the Purchasers, on the other hand, bears to the total dollar amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered dispute resolved by the Buyer, shall be final and binding on the PartiesIndependent Firm. Any dispute regarding any Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon by the Seller Parties and the Buyer (an “Accounting Referee”), with such decision being final and binding on the Parties. The Seller Parties shall Each party will bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal to the percentage that the amount contested its own accountants and all of its other expenses in connection with matters contemplated by but not awarded to the Seller Parties bears to the aggregate amount contested by the Seller Parties, with the Buyer bearing the remainder of such fees, costs and expenses. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer shall deliver the applicable Earn-Out Consideration to the Seller. In the event that all or any portion of the Earn-Out Consideration is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date of the Earn-Out Statement, subject to a minimum share price of Three Dollars and Sixty Cents ($3.60) per sharethis Section 2.4(d).

Procedure for Earn-Out. Within (a) During the 20 business day period following the Buyer's receipt of a Base Earn-Out Audit Notice or [* * *] Earn-Out Audit Notice, as the case may be, the Buyer and the Parent shall attempt in good faith to resolve the disagreement with respect to the Base Earn-Out Statement or the [* * *] Earn-Out Statement, as applicable, and during the period from the date on which Buyer delivers the Base Earn-Out Statement or an [* * *] Earn-Out Statement through such 20 business day period the Buyer will cause the Parent to be provided with access at reasonable times, following reasonable notice, to books and records relevant to sales of the Business for the purposes of verifying and/or auditing the Base Earn-Out Statement or the [* * *] Earn-Out Statement, as applicable. If the Parent and the Buyer are unable to resolve any such disagreement within such 20 business day period, the matter shall be submitted to an independent auditing firm of national reputation reasonably acceptable to the Buyer and the Parent (an “Independent Firm”). In connection with such engagement, the Buyer and the Parent will each execute, if requested by the Independent Firm, a reasonable engagement letter including customary indemnities. Promptly after such engagement of the Independent Firm, the Parent or the Buyer will provide the Independent Firm with a copy of this Agreement, the Base Earn-Out Statement or the [* * *] Earn-Out Statement, as applicable, and the Base Earn-Out Audit Notice or the [* * *] Earn-Out Audit Notice, as applicable. Each of the Buyer and the Parent may submit one position statement accompanied by supporting documentation to the Independent Firm. The Independent Firm will have the authority to request in writing such additional written submissions from the Parent or the Buyer as it deems appropriate, provided that a copy of any such submission will be provided to the other party at the same time as it is provided to the Independent Firm. The Parent and the Buyer will not make (or permit any of their Affiliates to make) any additional submission to the Independent Firm except pursuant to such a written request by the Independent Firm. The Parent and the Buyer will not communicate orally or in written form (or permit any of their Affiliates to communicate) with the Independent Firm without providing the other party a reasonable opportunity to participate in such communication with the Independent Firm (other than with respect to written submissions to the Independent Firm, a copy of which shall also be provided to the other party). The Parent and the Buyer shall use commercially reasonable efforts to cause the Independent Firm to render its determination on the matter within ninety (90) days of its submission by the end of each Royalty Target YearParent and the Buyer. Such determination shall be, for all purposes, conclusive, non appealable, final and binding upon the Buyer shall deliver to Parent and the Seller Parties: (i) a statement (the “Buyer. Once such determination is made, any resolved Base Earn-Out Statement”) prepared Amount or [* * *] Earn-Out Amount, as the case may be, shall become immediately payable by the Buyer pursuant to Section 1.4(b) or Section 1.5(b), respectively. The fees and expenses of the calculation of the Earn-Out Value, the Buyer’s election to pay the Earn-Out Consideration in Earn-Out Cash, Earn-Out Shares or a combination of Earn-Out Cash and Earn-Out Shares, and, if the Buyer elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Shares, the number of Earn-Out Shares to Independent Firm will be issued to the Seller pursuant to this Section 3.4; and (ii) if reasonably requested borne by the Seller PartiesParent, supporting documentation of on the determination of Net Royalties during each Royalty Target Year within the Earn-Out Period (collectivelyone hand, (i) and (ii), the “Earn-Out Reconciliation”). If the Seller Parties disagree with the Earn-Out Reconciliation, the Seller Parties shall deliver a written objection to the Buyer within thirty (30) days after the Buyer’s delivery of the Earn-Out Reconciliation, which written objection shall specify in detail the rationale for the objection and the amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered by the Buyer, shall be final and binding on the Parties. Any dispute regarding any Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon other hand, in the same proportion that the dollar amount of disputed items lost by the Seller Parties and the Buyer (an “Accounting Referee”)Parent, with such decision being final and binding on the Partiesone hand, or the Buyer, on the other hand, bears to the total dollar amount in dispute resolved by the Independent Firm. The Seller Parties shall Each party will bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal to the percentage that the amount contested its own accountants and all of its other expenses in connection with matters contemplated by but not awarded to the Seller Parties bears to the aggregate amount contested by the Seller Parties, with the Buyer bearing the remainder of such fees, costs and expenses. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer shall deliver the applicable Earn-Out Consideration to the Seller. In the event that all or any portion of the Earn-Out Consideration is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date of the Earn-Out Statement, subject to a minimum share price of Three Dollars and Sixty Cents ($3.60) per sharethis Section 1.6.

Procedure for Earn-Out. Within ninety (90) days of the end of each Royalty Target YearJune 30, the Buyer 2019, Buyers shall deliver to the Seller PartiesSeller: (i) a statement (the “Earn-Out Statement”) prepared by the Buyer Xcel of the calculation of the Earn-Out Value, the BuyerXcel’s election to pay the Earn-Out Consideration Value in Earn-Out Cash, cash or Earn-Out Shares or a combination of Earn-Out Cash and Earn-Out SharesBranded Product Royalties, and, if the Buyer Xcel elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Shares, the number of Earn-Out Shares to be issued to the Seller pursuant to this Section 3.4; and (ii) if reasonably requested by the Seller PartiesSeller, supporting documentation of the determination of Net Royalties and Branded Product Royalties during each Royalty Target Year within the Earn-Out Target Royalty Period (collectively, (i) and (ii), the “Earn-Out Reconciliation”). If the Seller Parties disagree with Within thirty (30) days after receiving the Earn-Out Reconciliation, Seller shall notify Buyers that they agree with the Seller Parties shall deliver Earn-Out Reconciliation or have a written objection to the Buyer within thirty (30) days after the Buyer’s delivery of dispute regarding the Earn-Out Reconciliation, which written objection shall specify in detail the rationale for the objection and the amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered by the Buyer, shall be final and binding on the Parties. Any dispute regarding any the Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon by the Seller Parties and the Buyer Buyers (an “Accounting Referee”), with such decision being final and binding on the Parties. The Seller Parties shall bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal shall be borne by Seller and Buyers (or its successor), as the case may be, in inverse proportion relative to how they prevail in such dispute. Following either the percentage that the amount contested by but not awarded to the Seller Parties bears to the aggregate amount contested notification by the Seller Parties, of its agreement with the Buyer bearing Earn-Out Reconciliation or the remainder resolution of such feesany dispute regarding the Earn-Out Reconciliation by the Accounting Referee, costs the Earn-Out Reconciliation shall be binding and expensesconclusive on all of the Parties. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer Buyers shall deliver the applicable Earn-Out Consideration Value, either in cash or in Earn-Out Shares, to the Seller. In the event that all or any portion of the Earn-Out Consideration Value is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date end of the Earn-Out StatementPayment Period, subject to a minimum share price of Three Dollars and Sixty Cents ($3.60) 9.00 per share, which shall be equitably adjusted to reflect the effect of any stock split, stock dividend (including any dividend or distribution of securities made to holders of Xcel Shares which are convertible into shares of Xcel Shares), reorganization, recapitalization, reclassification, combination or other like change with respect to Xcel Shares occurring on or after the Closing Date.

Procedure for Earn-Out. Within (a) During the 20 business day period following the Buyer’s receipt of a Base Earn-Out Audit Notice or [***] Earn-Out Audit Notice, as the case may be, the Buyer and the Parent shall attempt in good faith to resolve the disagreement with respect to the Base Earn-Out Statement or the [***] Earn-Out Statement, as applicable, and during the period from the date on which Buyer delivers the Base Earn-Out Statement or an [***] Earn-Out Statement through such 20 business day period the Buyer will cause the Parent to be provided with access at reasonable times, following reasonable notice, to books and records relevant to sales of the Business for the purposes of verifying and/or auditing the Base Earn-Out Statement or the [***] Earn-Out Statement, as applicable. If the Parent and the Buyer are unable to resolve any such disagreement within such 20 business day period, the matter shall be submitted to an independent auditing firm of national reputation reasonably acceptable to the Buyer and the Parent (an “Independent Firm”). In connection with such engagement, the Buyer and the Parent will each execute, if requested by the Independent Firm, a reasonable engagement letter including customary indemnities. Promptly after such engagement of the Independent Firm, the Parent or the Buyer will provide the Independent Firm with a copy of this Agreement, the Base Earn-Out Statement or the [***] Earn-Out Statement, as applicable, and the Base Earn-Out Audit Notice or the [***] Earn-Out Audit Notice, as applicable. Each of the Buyer and the Parent may submit one position statement accompanied by supporting documentation to the Independent Firm. The Independent Firm will have the authority to request in writing such additional written submissions from the Parent or the Buyer as it deems appropriate, provided that a copy of any such submission will be provided to the other party at the same time as it is provided to the Independent Firm. The Parent and the Buyer will not make (or permit any of their Affiliates to make) any additional submission to the Independent Firm except pursuant to such a written request by the Independent Firm. The Parent and the Buyer will not communicate orally or in written form (or permit any of their Affiliates to communicate) with the Independent Firm without providing the other party a reasonable opportunity to participate in such communication with the Independent Firm (other than with respect to written submissions to the Independent Firm, a copy of which shall also be provided to the other party). The Parent and the Buyer shall use commercially reasonable efforts to cause the Independent Firm to render its determination on the matter within ninety (90) days of its submission by the end of each Royalty Target YearParent and the Buyer. Such determination shall be, for all purposes, conclusive, non appealable, final and binding upon the Buyer shall deliver to Parent and the Seller Parties: (i) a statement (the “Buyer. Once such determination is made, any resolved Base Earn-Out Statement”) prepared Amount or [***] Earn-Out Amount, as the case may be, shall become immediately payable by the Buyer pursuant to Section 1.4(b) or Section 1.5(b), respectively. The fees and expenses of the calculation of the Earn-Out Value, the Buyer’s election to pay the Earn-Out Consideration in Earn-Out Cash, Earn-Out Shares or a combination of Earn-Out Cash and Earn-Out Shares, and, if the Buyer elects to pay all or any portion of the Earn-Out Consideration in Earn-Out Shares, the number of Earn-Out Shares to Independent Firm will be issued to the Seller pursuant to this Section 3.4; and (ii) if reasonably requested borne by the Seller PartiesParent, supporting documentation of on the determination of Net Royalties during each Royalty Target Year within the Earn-Out Period (collectivelyone hand, (i) and (ii), the “Earn-Out Reconciliation”). If the Seller Parties disagree with the Earn-Out Reconciliation, the Seller Parties shall deliver a written objection to the Buyer within thirty (30) days after the Buyer’s delivery of the Earn-Out Reconciliation, which written objection shall specify in detail the rationale for the objection and the amount in dispute. If the Seller Parties do not deliver a written objection to the Buyer within such thirty (30) day period, then the Earn-Out Reconciliation, as delivered by the Buyer, shall be final and binding on the Parties. Any dispute regarding any Earn-Out Reconciliation shall be decided by an independent certified public accountant mutually agreed upon other hand, in the same proportion that the dollar amount of disputed items lost by the Seller Parties and the Buyer (an “Accounting Referee”)Parent, with such decision being final and binding on the Partiesone hand, or the Buyer, on the other hand, bears to the total dollar amount in dispute resolved by the Independent Firm. The Seller Parties shall Each party will bear a percentage of the fees, costs and expenses of the Accounting Referee that is equal to the percentage that the amount contested its own accountants and all of its other expenses in connection with matters contemplated by but not awarded to the Seller Parties bears to the aggregate amount contested by the Seller Parties, with the Buyer bearing the remainder of such fees, costs and expenses. Within five (5) days of the Earn-Out Reconciliation becoming final, the Buyer shall deliver the applicable Earn-Out Consideration to the Seller. In the event that all or any portion of the Earn-Out Consideration is paid in Earn-Out Shares, the price per Earn-Out Share shall be based on the market value of the Earn-Out Shares as determined at the average closing price on the Trading Market for each of the ten (10) Trading Days ending two (2) Business Days ending on the Trading Day immediately preceding the date of the Earn-Out Statement, subject to a minimum share price of Three Dollars and Sixty Cents ($3.60) per sharethis Section 1.6.