Common use of Earnout Payment Clause in Contracts

Earnout Payment. In addition to the Closing Payment Shares, if Madhouse meets certain performance requirements during a three-year performance period ending December 31, 2022 as set forth on Schedule II (the “Earnout Provisions”), then the Purchaser shall make the one-time payment (the “Earnout Payment”) determined in accordance with the Earnout Provisions, payable to the Seller and the long-term incentive plan (described below). As set forth in more detail in, and subject to, the Earnout Provisions, the Earnout Payment will be made in the form of (a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination of the foregoing payment methods. The Earnout Payment shall be made by the Purchaser within five (5) Business Days after a final determination of payment due to the Seller pursuant to this Section 3.1. The Purchaser hereby covenants and agrees to perform its obligations set forth in the Earnout Provisions and to maintain the highest number of Purchaser Common Shares potentially issuable under the terms of the Earnout Provisions (which number shall not be less than 22,200,000) available for issuance with respect to Earnout Payment Shares without any restriction or limitation thereof, at all times after the Closing until all of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The amount of the Earnout Payment (i) is subject to reduction as set forth in the Earnout Provisions and Article VIII and, (ii) as set forth in the Earnout Provisions, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established for the benefit of designated individuals employed by or associated with the Group Company business, in a manner that shall be determined in Seller’s discretion, provided that Seller shall not receive any portion of such assigned Earnout Payment.

Earnout Payment. In addition to Promptly following the Closing Payment Sharesdetermination of the amount of the Earnout Payment, if Madhouse meets certain performance requirements during a three-year performance period ending December 31any, 2022 as set forth on Schedule II (the “Earnout Provisions”), then the Purchaser shall make the one-time payment (the “Earnout Payment”) determined in accordance with the Earnout Provisions, payable to the Seller and the long-term incentive plan (described below). As set forth in more detail inthis Section 1.7, and subject toin any event within thirty (30) days after such determination, the Earnout Provisions, Buyer shall pay to Parent the Earnout Payment will be made in cash (or wire transfer of immediately available funds) to an account designated in writing by Parent. In the form of (a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination event payment of the foregoing payment methods. The Earnout Payment shall be made prohibited by the Purchaser within five terms of the Debt Financing or any Alternative Financing (5as any of them may be amended, waived, modified, refinanced, replaced or superseded) Business Days after a final determination (the “Loan Agreements”), Buyer shall pay the maximum amount of payment due the Earnout Payment that may be paid by Buyer pursuant to the Seller pursuant Loan Agreements, and Buyer shall not be obligated to this Section 3.1. The Purchaser hereby covenants and agrees pay any remainder amount subject to perform its obligations set forth in the following: (i) any amount of the Earnout Provisions Payment not paid shall accrue interest for the period of any deferral at an annual rate equal to the interest rate applicable to the Senior Debt Financing (or any replacement or refinanced facility), (ii) any amount of the Earnout Payment not paid and to maintain the highest number of Purchaser Common Shares potentially issuable any interest thereon shall be paid as soon as allowable under the terms of the Earnout Provisions Loan Agreements, (which number shall iii) Buyer and its subsidiaries may not be less than 22,200,000) available for issuance with make any payments in respect to Earnout Payment Shares without any restriction of management fees or limitation thereof, at all times after similar fees until the Closing until all of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The full amount of the Earnout Payment and any accrued and unpaid interest thereon has been paid to Parent, (iiv) is subject to reduction as set forth any increase in the Earnout Provisions and Article VIII and, Availability (ii) as set forth defined in the Loan Agreements) required in order for Buyer to make the Earnout ProvisionsPayment shall not be effective for purposes of determining whether Buyer is obligated to pay the Earnout Payment hereunder, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established for (v) any unpaid amount of the benefit of designated individuals employed by or associated with the Group Company business, in a manner that Earnout Payment and any accrued and unpaid interest thereon shall be determined in Seller’s discretiondue and payable (but shall continue to accrue interest if still unpaid) upon the first to occur of (A) October 1, provided that Seller shall not receive any portion 2013 and (B) the acceleration of such assigned Earnout Paymentindebtedness under the Loan Agreements.

Earnout Payment. In addition Due to the Closing Payment Sharesdifficulty in determining the value of the assets involved in the Transaction, if Madhouse meets certain performance requirements during a threepart of the Purchase Price is being paid via the issuance of contingent stock upon terms that comply with Rev. Proc. 84-year performance period ending December 31, 2022 as set forth on Schedule II 42 (the “Earnout ProvisionsRev Proc. 84-42”). On the terms and subject to the conditions of the Agreement and this Exhibit D, then Future Health will deliver (or cause to be delivered) to Seller or, in connection with Seller’s liquidation following the Purchaser shall make Closing or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the one-time payment shareholders of the Seller, the Earnout Shares (the “Earnout Payment”) determined in accordance with the Earnout Provisions, payable to the Seller and the long-term incentive plan (described below). As set forth in more detail in, and subject to, the Earnout Provisions, the Earnout Payment will be made in the form of (a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination of the foregoing payment methods. The Earnout Payment shall be made by the Purchaser within five (5) Business Days after a final determination the filing (but in no event later than the fifth anniversary of payment due the Closing Date) of the first Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K (each prepared in accordance with GAAP) in which Consolidated Revenues (determined in accordance with GAAP) of Future Health in the most recent fiscal quarter included therein shall have exceeded One Hundred Fifty Million U.S. Dollars ($150,000,000), provided that such Earnout Shares shall only be payable if the filing of such Form 10-Q or Form 10-K occurs prior to the Seller pursuant to this Section 3.1fifth anniversary of the Closing Date (the “Earnout Period”). The Purchaser hereby covenants parties will endeavor in good faith to establish a mutually acceptable dispute resolution mechanism in connection with the calculations of Consolidated Revenues pursuant hereto. Notwithstanding anything to the contrary herein, all Earnout Shares required to be paid will be paid within 5 years of the Closing In the event, and agrees to perform its obligations set forth only in the Earnout Provisions and event, of a Going Private Transaction prior to maintain the highest number of Purchaser Common Shares potentially issuable under the terms end of the Earnout Provisions Period, Future Health will deliver (which number shall not or cause to be less than 22,200,000delivered) available for issuance to Seller or, in connection with respect to Earnout Payment Shares without any restriction or limitation thereof, at all times after Seller’s liquidation following the Closing until all or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The amount Seller, a pro rata portion of the Earnout Payment Shares (ithe “Going Private Earnout”), within five (5) is subject Business Days after the closing of the Going Private Transaction, based on the most recently filed Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, with such Going Private Earnout being the number of shares of Future Health Common Stock equal to reduction as set forth the product of (a) 20,000,000 multiplied by (b) the difference of (A) the Consolidated Revenues (determined in accordance with GAAP) of Future Health in the Earnout Provisions and Article VIII andmost recent fiscal quarter included in such Form 10-Q or Form 10-K less (B) $88,000,000, (ii) as set forth in being the Earnout Provisions, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established agreed quarterly revenue for the benefit first quarter of designated individuals employed 2022, divided by or associated with the Group Company business, in a manner that shall be determined in Seller’s discretion, provided that Seller shall not receive any portion of such assigned Earnout Payment(c) $62,000,000.

Earnout Payment. In addition Subject to Section 2(e)(iii)(C) above, for a period of [ * * * ] following the Closing Date, Buyer shall pay to the Closing Payment SharesAccount as part of the Merger Consideration an amount [ * * * ] from sales of the Products in Canada by Buyer, if Madhouse meets certain performance requirements during a three-year performance period ending December 31its affiliates, 2022 as set forth on Schedule II successors, licensees or assigns (the “"Earnout Provisions”Payment"). Within ninety (90) days after the end of each fiscal year of Buyer and the end of each second quarter of the fiscal year of Buyer during such [ * * * ] period (the "Earnout Payment Date"), then the Purchaser Buyer shall make the one-time payment (the “Earnout Payment”) determined in accordance with the Earnout Provisions, payable pay to the Seller and Stockholder Representative the long-term incentive plan (described below). As set forth in more detail in, and subject to, the Earnout Provisions, the Earnout Payment will be made in the form of (a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination of the foregoing payment methods. The Earnout Payment shall be made by the Purchaser within five (5) Business Days after a final determination of payment due to the Seller pursuant to this Section 3.1. The Purchaser hereby covenants and agrees to perform its obligations set forth in the Earnout Provisions and to maintain the highest number of Purchaser Common Shares potentially issuable under the terms of the Earnout Provisions (which number shall not be less than 22,200,000) available for issuance with respect to Earnout Payment Shares without any restriction or limitation thereof, at all times after the Closing until all of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The amount of the Earnout Payment earned during such half fiscal year (ia "Semi-Annual Earnout Payment"). Past due amounts shall bear interest at the default rate of one percent (1.0%) is per month from the Earnout Payment Date until paid. Concurrently with the payment of a Semi-Annual Earnout Payment, Buyer shall deliver to the Stockholder Representative a statement with reasonable supporting detail reflecting Buyer's calculation of the Net Profits from sales of the Products in Canada and the amount of the Semi-Annual Earnout Payment payable by Buyer in respect of such fiscal period (the "Earnout Calculations"). At any time, upon fifteen (15) days prior written notice to Buyer, the Stockholder Representative may appoint, subject to reduction Buyer's reasonable approval, a nationally recognized independent auditor (the "Independent Auditor"), to audit and examine, at Buyer's offices during normal business hours, solely for the purpose of confirming the accuracy of payments hereunder, the Earnout Calculations against all business records of Buyer on which the Earnout Calculations rely, as set forth reasonably requested by the Independent Auditor. Such audit may be made no more often than once in every twelve (12) calendar month period. In the event that an audit reveals an overpayment by Buyer, the Stockholder Representative agrees to promptly refund or credit Buyer for such overpaid amount. In the event that such audit reveals an underpayment by Buyer, Buyer agrees to promptly pay to the Stockholder Representative the amount of such underpayment with interest accumulated thereon at the rate of one percent (1.0%) per month from the applicable Earnout Payment Date until such payment. The fees, costs and expenses of the Independent Auditor shall be advanced by the Stockholder Representative and borne by Buyer and the Stockholder Representative in the Earnout Provisions and Article VIII and, (ii) as set forth in same proportion that their respective positions are confirmed or rejected by the Earnout Provisions, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established for the benefit of designated individuals employed by or associated with the Group Company business, in a manner that shall be determined in Seller’s discretion, provided that Seller shall not receive any portion of such assigned Earnout PaymentIndependent Auditor.

Earnout Payment. In addition ITEX shall make earnout payments (“Earnout Payments”) to the Closing Payment SharesBXI Stockholders with respect to each of the first 12 full fiscal quarters following the Signing Date, if Madhouse meets certain performance requirements during a three-year performance period beginning with the fiscal quarter ending December October 31, 2022 as set forth on Schedule II 2005 (the “Earnout ProvisionsPeriod”), then in an aggregate amount equal to 5% of the Purchaser shall make amount by which the one-time payment revenue recognized by ITEX and its Subsidiaries (the “Earnout Payment”including BXI) determined on a consolidated basis (calculated in accordance with GAAP, but excluding “Trade Unit Revenue” as defined below) during each such quarter exceeds $3,000,000. Notwithstanding the foregoing, in no event shall the aggregate Earnout Provisions, payable Payment with respect to any quarter exceed $37,500. Failure to recognize at least $3,000,000 in revenue in any quarter will result in no Earnout Payment being made for that quarter. No liability with respect to any quarter for an Earnout Payment in excess of $37,500 shall be accrued or carried forward to a subsequent quarterly period. Each Earnout Payment shall be paid by ITEX to the Seller Stockholders’ Representative within 55 days of the end of the quarter for which such Earnout Payment relates, provided that if the quarter is the last quarter of ITEX’s fiscal year, such payment may be made within 100 days of the end of such quarter, and provided further that if ITEX is subject to the long-term incentive plan periodic reporting requirements of the Securities Exchange Act of 1934 but a quarterly or annual report, as the case may be, is filed late, ITEX shall be granted a grace period for such payment until such filing is actually made (described belowexcept that no such grace period shall extend for more than 60 days). As set forth The Earnout Payments shall be subject to reduction as specified in more detail in, and subject to, the Earnout Provisions, the Earnout Payment will Section 1.9 hereof. Any such reduction shall be made pro rata amongst the BXI Stockholders in the form accordance with their respective ownership of (a) the Purchaser issuing to the Seller additional Purchaser shares of BXI Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination Stock as of the foregoing payment methodsEffective Time. The Earnout Payment shall be made by the Purchaser within five (5) Business Days after a final determination of payment due ITEX to the Seller pursuant Stockholders’ Representative acting on behalf of each BXI Stockholder, other than Dissenting Stockholders, who are entitled to this Section 3.1receive Merger Consideration at the Closing, based upon each BXI Stockholder’s ownership of shares of BXI Common Stock as of the Effective Time. The Purchaser hereby covenants and agrees to perform its obligations set forth in For purposes of calculating the Earnout Provisions and to maintain Payment, Trade Unit Revenue shall mean any non-cash revenue recognized based on an exchange of assets for trade or barter credits, based on the highest number fair value of Purchaser Common Shares potentially issuable under the terms of the Earnout Provisions (which number shall not be less than 22,200,000) available for issuance with respect to Earnout Payment Shares without any restriction goods or limitation thereof, at all times after the Closing until all of the payment obligations set forth services received in the Earnout Provisions have been satisfied or have expired. The amount of the Earnout Payment (i) is subject to reduction as set forth in the Earnout Provisions and Article VIII and, (ii) as set forth in the Earnout Provisions, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established for the benefit of designated individuals employed by or associated accordance with the Group Company businessguidance of APB 29, in a manner EITF 93-11 and EITF 93-17 and any non-cash revenue or ITEX Trade Dollar revenue that shall may be determined in Seller’s discretion, provided that Seller shall not receive any portion of such assigned Earnout Paymentearned for transaction or association fees.

Earnout Payment. In addition (a) As additional, partial consideration for the Merger, and subject to the Closing Payment Sharesprovisions set forth in this Section 2.15, Parent shall issue to the holders of Outstanding Common Shares an additional earnout amount (the “Earnout”), if Madhouse meets certain performance requirements during a three-year performance any, of up to an aggregate of the Earnout Shares based upon the Net Revenue (as hereinafter defined) of the Surviving Corporation for the period ending December 31, 2022 as set forth on Schedule II in this Section 2.15, subject to the provisions of this section below. If Net Revenue totals $[***] (the “Earnout ProvisionsThreshold”)) or more for the period beginning on January 1, then the Purchaser shall make the one-time payment 2020 and ending June 30, 2020 (the “Earnout PaymentPeriod”), then, subject to reduction under Section 2.15(d) and subject to the last two sentences of this Section 2.15(a), Parent will issue, and Parent will cause the Exchange Agent to subscribe and deliver, to the holders of Outstanding Common Shares on the date that is fifteen (15) Business Days after it is finally determined pursuant to this Section 2.15 whether the Earnout has been achieved (the “Earnout Release Date”) determined and the Earnout Shares become issuable, each such holder’s Earnout Pro Rata Share of the Earnout Shares (such additional amount, before reduction under Section 2.15(d), the “Earnout Amount”). If issuable pursuant to this Section 2.15, the Earnout Shares shall be paid up by set-off of the Earnout claim by the holders of Outstanding Common Shares against Parent. If Net Revenue is less than the Earnout Threshold for the Earnout Period, then Parent will not issue any Earnout Shares to any holder of Outstanding Common Shares at any time pursuant to this Agreement. Notwithstanding the foregoing or anything else in this Section 2.15 to the contrary, if the Earnout Shares become issuable by Parent to the holders of Outstanding Common Shares pursuant to this Section 2.15 and such Earnout Shares become issuable prior to the Escrow Release Date, then [***] of the Earnout Shares shall be held back by Parent as security for the indemnification obligations of the Seller Indemnitors pursuant to Article IX (the “Holdback Shares”) and shall only be issued (if ever) by Parent to the holders of Outstanding Common Shares in accordance with the Earnout Provisionsterms of Article IX. Notwithstanding the foregoing, payable to the Seller and the long-term incentive plan (described below). As set forth in more detail in, and subject to, if the Earnout Provisions, the Earnout Payment will be made in the form of (a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d) a combination of the foregoing payment methods. The Earnout Payment shall be made by the Purchaser within five (5) Business Days after a final determination of payment due to the Seller is achieved pursuant to this Section 3.1. The Purchaser hereby covenants 2.15 and agrees (i) Parent’s shareholders fail to perform its obligations set forth in approve, as applicable, by the Earnout Provisions and Release Date a shares proposal amending Parent’s articles of incorporation to maintain permit the highest issuance of a sufficient number of Purchaser shares of Parent Common Shares potentially issuable under Stock to cover the terms issuance of all of the Earnout Provisions Shares (which number shall not be less than 22,200,000including Holdback Shares) available for issuance with respect issuable or deliverable to Earnout Payment holders of Outstanding Common Shares without any restriction or limitation thereof, at all times after the Closing until all of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The amount of the Earnout Payment (i) is subject pursuant to reduction as set forth in the Earnout Provisions and Article VIII andthis Section 2.15, (ii) as set forth of the Earnout Release Date there are an insufficient number of authorized but unissued shares of Parent Common Stock (excluding treasury shares) under article 27 of Parent’s articles of incorporation to permit the issuance of all of the Earnout Shares (including the Holdback Shares) or (iii) Parent is prevented from registering any otherwise issuable Earnout Shares with the Swiss Commercial Registry of the Canton of Vaud for a period of more than twenty (20) Business Days past the otherwise applicable Earnout Release Date (provided, that Parent shall in any event use commercially reasonable efforts to remove any such impediments as promptly as reasonably practicable during such period), then, in each case, Parent, Parent or a designee of Parent shall (x) in the case of clauses (i) and (ii), on the Earnout ProvisionsRelease Date or (y) in the case of clause (iii), has been partially within two (2) Business Days of the expiry of such twenty (20) Business Day period, in each case of clauses (x) and irrevocably assigned by Seller to fund a long-term incentive plan (y), pay (or cause to be established for paid) to (A) each such holder of Outstanding Common Shares, based on each holder’s Earnout Pro Rata Share thereof, an amount of cash equal to (1)(I) the benefit number of designated individuals employed Earnout Shares that would otherwise be issued or delivered to such holder pursuant to this Section 2.15 less (II) the Holdback Shares multiplied by or associated with (2) the Group Company businessParent Market Price (the “Cash Earnout Payment”) and (B) the Escrow Agent an amount of cash equal to (1) the Holdback Shares multiplied by (2) the Parent Market Price, in which amount contemplated by this clause (B) shall constitute a manner that shall be determined in Seller’s discretion, provided that Seller shall not receive any segregated portion of such assigned Earnout Paymentthe Escrow Amount and be treated in the same manner as the Holdback Shares hereunder, mutatis mutandis.