amounts as determined in
accordance with Section 5(e), which shall, if made, constitute additional
consideration for the Shares.
"EBITDA Earn-Out Period" shall mean the period beginning on October 1, 2006 and
ending September 30, 2008.
"First EBITDA Measurement Period" shall mean the period beginning on October 1,
2006 and ending September 30, 2007.
"Second EBITDA Measurement Period" shall mean the period beginning October 1,
2007 and ending September 30, 2008.
(b) Within ten (10) days following the close of the books of the Company or the
Purchaser after each of the First EBITDA Measurement Period and the Second
EBITDA Measurement Period, and in no event later than thirty (30) days following
each of the First EBITDA Measurement Period and the Second EBITDA Measurement
Period, Purchaser shall provide to the Sellers' Representative a statement of
the EBITDA for the First EBITDA Measurement Period or the Second EBITDA
Measurement Period, as applicable (the "EBITDA Statement"), detailing the
Purchaser's calculation of the EBITDA for such EBITDA Measurement Period. The
Purchaser shall provide to the Sellers' Representative and its representatives
copies of such records and work papers created in connection with preparation of
the EBITDA Statement which are reasonably required to support such EBITDA
Statement.
8
(c) Upon receipt of each such EBITDA Statement, the Sellers' Representative
shall be entitled to object to the calculation of EBITDA by using the procedures
set forth in Section 4(b) and 4(c) for objections to the Gross Profit Statement,
substituting references to "EBITDA" and the "EBITDA Statement" in each place
"Gross Profit" and "Gross Profit Statement" is referred. Each date on which the
EBITDA is finally determined shall be referred to herein as a "EBITDA Settlement
Date".
(d) On the date that an EBITDA Statement is delivered to the Sellers'
Representative reflecting that an EBITDA Earn-Out Payment (as determined in
accordance with Section 5(e) below) is due, Purchaser shall pay to the Sellers
the applicable EBITDA Earn-Out Payment (as determined in accordance with
Section 5(e) below). Notwithstanding the foregoing, if an EBITDA Earn-Out
Payment becomes due and payable to the Sellers after the resolution of a dispute
pursuant to Section 5(c) above, within three (3) business days of the EBITDA
Settlement Date, Purchaser shall pay to the Sellers the applicable EBITDA
Earn-Out Payment. All payments to the Sellers pursuant to this Section 5(d)
shall be made by wire transfer in accordance with wire transfer instructions
provided to Purchaser by the Sellers. Sellers confirm and agree that Purchaser
may conclusively rely on wire transfer instructions provided by the Sellers'
Representative.
(e) The applicable EBITDA Earn-Out Payments shall be determined as follows and
paid in accordance with the procedures and on the date set forth in
Section 5(d):
(i) If EBITDA for the First EBITDA Measurement Period equals or exceeds
$2,500,000 (two million five hundred thousand dollars), the Purchaser shall pay
the Sellers an EBITDA Earn-Out Payment in an amount equal to $500,000 (five
hundred thousand dollars);
(ii) If EBITDA for the First EBITDA Measurement Period does not equal