Earnout Clauses Agreement

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Earnout Clauses Agreement

This Earnout Clauses Agreement ("Agreement") is made effective as of {{effective_date}} by and between {{buyer_company_name}}, a company duly incorporated under the laws of {{buyer_jurisdiction}}, with its principal place of business at {{buyer_address}} (hereinafter referred to as "Buyer"), and {{seller_company_name}}, a company duly incorporated under the laws of {{seller_jurisdiction}}, with its principal place of business at {{seller_address}} (hereinafter referred to as "Seller").

Recitals

WHEREAS, Buyer and Seller have entered into a Share Purchase Agreement (or Asset Purchase Agreement) dated {{purchase_agreement_date}} (the “Purchase Agreement”) for the acquisition of {{target_company_name}} (the “Target Company”) by Buyer from Seller;

WHEREAS, as part of the consideration for the acquisition, the parties have agreed to include certain earnout payments contingent upon the future performance of the Target Company, as set forth herein.

Earnout Period

The earnout period ("Earnout Period") shall commence on {{earnout_start_date}} and shall end on {{earnout_end_date}}.

Earnout Metrics and Calculation

The earnout payments shall be calculated based on the achievement of the following financial metrics of the Target Company during the Earnout Period:

a) Net Revenue: {{net_revenue_percentage}}% of Net Revenue exceeding {{net_revenue_threshold}} (in {{currency}}) for each {{measurement_period}}.

b) EBITDA: {{ebitda_percentage}}% of EBITDA exceeding {{ebitda_threshold}} (in {{currency}}) for each {{measurement_period}}.

c) Other Specific Metrics: {{other_metrics_details}}.

The maximum aggregate earnout payment shall not exceed {{maximum_earnout_amount}} (in {{currency}}).

Reporting and Verification

Within {{number_of_days}} days after the end of each {{measurement_period}} within the Earnout Period, Buyer shall provide Seller with financial statements and a detailed calculation of the earnout metrics for the preceding period.

Seller shall have the right, at its own expense, to review and audit Buyer's books and records related to the earnout calculation, upon {{notice_period}} days' prior written notice.

Payment Terms

Earnout payments, if any, shall be made within {{payment_due_days}} days after the final determination of the earnout amount for each {{measurement_period}}.

Payments shall be made in {{currency}} by electronic bank transfer to an account designated by Seller.

Covenants and Undertakings

During the Earnout Period, Buyer shall operate the Target Company in good faith and shall not take any action with the primary intent of avoiding or reducing the earnout payments.

Buyer shall maintain separate books and records for the Target Company that clearly reflect its financial performance relevant to the earnout metrics.

Dispute Resolution

Any disputes arising under this Agreement concerning the calculation or payment of earnout amounts shall first be attempted to be resolved amicably between the parties.

If a resolution cannot be reached within {{negotiation_days}} days, the dispute shall be referred to an independent accounting firm mutually agreed upon by both parties, whose decision shall be final and binding.

Governing Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of {{governing_jurisdiction}} Applicable laws may include general contract law, corporate law, and potentially tax law relevant to earnout structures.

The parties agree to the exclusive jurisdiction of the courts of {{jurisdiction_for_disputes}} for the resolution of any disputes arising under this Agreement.

Miscellaneous

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, and agreements.

No amendment to this Agreement shall be effective unless it is in writing and signed by both Buyer and Seller.

Signature Block

IN WITNESS WHEREOF, the parties have executed this Earnout Clauses Agreement as of the Effective Date.

___________________________

{{buyer_company_name}}

By: _______________________

Name: {{buyer_signer_name}}

Title: {{buyer_signer_title}}

___________________________

{{seller_company_name}}

By: _______________________

Name: {{seller_signer_name}}

Title: {{seller_signer_title}}