Company to comply with all of its
obligations and agreements under the Definitive Agreements.
5.2
Payment of Earnout to Hercules
. The Company shall, and SPG shall cause the Company to use commercially
reasonable efforts to pay to Hercules the sums set forth in Sections 5.2(a) and
(b) hereof upon the terms and conditions set forth herein; provided, that such
payments do not violate the terms of the Debt Financing.
(a)
Fiscal 2006 Earnout Payment. For fiscal 2006, the Company shall pay to
Hercules the amount (each of (i) and (ii) herein, the "Earnout Payment") of (i)
$5,000,000 if the Earnout EBITDA (as defined below) exceeds $22,000,000 and (ii)
to the extent that the Earnout EBITDA exceeds $25,000,000, for any excess, an
amount equal to the Earnout EBITDA in excess of $25,000,000 multiplied by five
(5), up to a maximum Earnout Payment of $20,000,000. The Earnout Payment for
fiscal 2006 shall be paid to Hercules within thirty (30) days after the amount
of the Earnout EBITDA has been determined in accordance with this Section 5.
(b)
Fiscal 2007 Earnout Payment.
(i)
For fiscal 2007, the Company shall pay to Hercules an Earnout Payment equal
to the product of the amount of any excess of the Earnout EBITDA in excess of
$27,000,000 multiplied by four (4) up to a maximum Earnout Payment of
$20,000,000. The amount of the Earnout Payment for fiscal 2007, which shall be
paid to Hercules on December 15, 2007, shall be based on an estimated Earnout
EBITDA ("Estimated Earnout EBITDA") calculated from the Projections of the
Company, subject to adjustment as set forth in Section 5.2(b)(iii) below. Copies
of the Projections prepared by the Company setting forth its computation of the
Estimated Earnout EBITDA for fiscal 2007 shall be submitted in writing to
Hercules by November 20, 2007, and unless Hercules notifies the Company within
ten (10) days after receipt of the Projections that it objects to the
computation of the Estimated Earnout EBITDA set forth therein, the Projections
and the
Estimated Earnout EBITDA shall be binding and conclusive for purposes of the
Earnout Payment for fiscal 2007, subject to adjustment as set forth in Section
5.2(b)(iii) below. Hercules shall have reasonable access to the books and
records of the Company and to its workpapers during regular business hours to
verify the computation of the Estimated Earnout EBITDA made by the Company.
(ii)
If Hercules notifies the Company as set forth in Section 5.2(b)(i) above,
that it objects to the computation of the Estimated Earnout EBITDA set forth in
the Projections, the amount of the Estimated Earnout EBITDA shall be determined
by negotiation between Hercules and SPG. If Hercules and SPG are unable to reach
agreement within ten (10) days after such notification, the amount of the
Estimated Earnout EBITDA to be paid to Hercules, subject to adjustment as set
forth in Section 5.2(b)(iii) below, shall be the amount of the Earnout EBITDA
for the ten-month period ended October 31, 2007 calculated from the unaudited
financial