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EARNOUT CLAUSES


This Earnout Clauses (the 闁炽儲绌緂reement闁? is effective [DATE],


BETWEEN:	[YOUR COMPANY NAME] (the "Vendor"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

			[YOUR COMPLETE ADDRESS]

AND:	[COMPANY NAME] (the "Purchaser"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

			[COMPLETE ADDRESS]


1.	INTERPRETATION

1.1	闁炽儲绐奱rnout Amount闁?has the meaning ascribed to it in Section 2.2 hereof;

1.2	闁炽儲绐奱rnout Period闁?means the [NUMBER] year period commencing [DATE];

1.3	闁炽儲绐奱rnout Year闁?means the [NUMBER] month period commencing on the first day of the Earnout Period and each [NUMBER] month period thereafter during the Earnout Period.


2.	PURCHASE AND SALE OF SHARES

2.1	Purchaser agrees to purchase the Shares and Vendor agrees to sell and transfer the Shares to Purchaser as provided in this Agreement.

2.2	Purchase Price

As consideration for the Shares, Purchaser shall pay to Vendor (the 闁炽儲闃€urchase Price闁?:

(i)	[AMOUNT] plus

(ii)	an amount (the 闁炽儲绐奱rnout Amount闁? in respect of each Earnout Year equal to the amount by which [%] of the Company闁炽儲鐛?Revenues during such Earnout Year exceeds any Mutual Fund Fee Shortfall for such Earnout Year provided however that the Earnout Amount for each Earnout Year shall not be less than [AMOUNT].

2.3	Payment of Purchase Price

(a)	on Closing, Purchaser shall pay [AMOUNT] to Vendor;

no later than [NUMBER] days after the end of the first Earnout Year, Purchaser shall pay to Vendor the Earnout Amount estimated by the Company to be payable with respect to such first Earnout Year; and

(c)	commencing with the second Earnout Year, Purchaser shall pay to Vendor Earnout Amounts for the balance of the Earnout Period calculated quarterly based on quarterly results of the Company and paid in arrears not more than [NUMBER] days after the end of each quarter, subject to the yearly adjustments provided in Section 2.4.

2.4	Yearly Adjustments

Within [NUMBER] days following the end of each Earnout Year, the Company shall deliver to Vendor a statement, certified by the Company闁炽儲鐛?auditors as to its accuracy, setting forth, in such detail as Vendor may reasonably require, a computation of the Earnout Amount for such Earnout Year based on audited financial statements of the Company and appropriate adjustments shall be made for any overpayment or underpayment of the aggregate Earnout Amounts previously paid in respect of such Earnout Year at the time of the next quarterly payment under Section 2.3 (c) and in respect of the last Earnout Year, within [NUMBER] after delivery of the last annual certificate of the Company闁炽儲鐛?auditor delivered pursuant to this Section 2.4. The Company shall permit the Vendor to have reasonable access to its books and records for the purpose of permitting the Vendor闁炽儲鐛?independent verification of such statements, and the Parties shall act in good faith to resolve any discrepancy.

2.5	Closing Net Book Value

Vendor agrees that at the Closing Time, the Net Book Value of the Company shall be [AMOUNT]. Immediately prior to the Closing Date:

(i)	Vendor shall cause the Company to repay all indebtedness then owing (other than any notes issued in payment of the dividend or dividends referred to in Section 2.4(iii) below) and shall repay all indebtedness then owing to the Company;

(ii)	Vendor shall cause the Company to declare one or more dividends to Vendor in such aggregate amount as will result in the Net Book Value of the Company being [AMOUNT], immediately before the Closing Date; and

(iii)	the Company shall pay to Vendor that amount which Vendor, acting reasonably, then estimates to be the aggregate amount of such dividend or dividends.

2.6	Closing Financial Statements

Within [NUMBER] days following Closing, the Company and Vendor shall cause the Closing Financial Statements to be prepared in accordance with the provisions set forth below and audited by the Company闁炽儲鐛?current auditors. The Closing Financial Statements shall:

(a)	be prepared in accordance with Generally Accepted Accounting Principles and on a basis consistent with the Financial Statements (except as otherwise provided herein);

(b)	include appropriate accruals for all revenues and expenses of the Company for the period ended immediately before the Closing Date, including rent and utilities and all salaries, benefits, bonuses and other expenses relating to Company Employees which are attributable to activities undertaken prior to the Closing Date even though not payable until after Closing;

include appropriate provisions for all Taxes exigible in respect of the period ended immediately before the Closing Date;

(d)	include appropriate provisions or reserves, determined in a manner consistent with the Company闁炽儲鐛?past practice, for all other liabilities and obligations of the Company闁炽儲鐛?due or becoming due, contingent or otherwise, as at the time immediately before the Closing Date (including any liability to tax under Part VI.I of the Income Tax Act (Canada) resulting from any agreements authorized by resolutions of the directors of the Company dated [DATE] in respect of dividends paid by affiliates of 闁? and for all doubtful accounts of the Company;

(e)	reflect payment of, or liability for, the estimated amount of the dividend or dividends referred to in Section 2.5 (iii); and

(f)	include an unqualified favorable audit opinion of the Company闁炽儲鐛?auditors thereon.

The costs of preparation and audit of the Closing Financial Statements shall be borne by the Vendor.

The Net Book Value Adjustment Amount shall be the difference, if any, between the Net Book Value of the Company as determined from the Closing Financial Statements and [AMOUNT].

2.7	Payment of Net Book Value Adjustment Amount

If the Net Book Value Adjustment Amount is positive, the Company shall pay the amount thereof to Vendor on account of the dividend declared immediately prior to the Closing Date in accordance with Section 2.5 hereof. If the Net Book Value Adjustment Amount is negative, the Vendor shall refund the amount thereof to the Company as a refund of the dividend paid immediately prior to the Closing Date in accordance with Section 2.5 hereof. Any payment to be made in respect of the Net Book Value Adjustment shall be made within [NUMBER] days of delivery of the Closing Financial Statements.


IN WITNESS WHEREOF, each party to this agreement has caused it to be executed at [PLACE OF EXECUTION] on the date indicated above.


VENDOR 						PURCHASER



													
Authorized Signature					Authorized Signature


													
Print Name and Title					Print Name and Title

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