Common use of Adjustment Amount Clause in Contracts

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within in any event within sixty (60) calendar days after the Distribution Datethereof, Mallinckrodt Buyer shall cause prepare and deliver to be prepared and delivered to Covidien Seller a statement (the “Closing Date Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation Net Working Capital as of the Target Adjustment Amount. The close of business on the day immediately preceding the Closing Statement shall be prepared Date, determined in accordance with the Transaction Accounting Principles, including Principles and without giving effect to the use consummation of the same line items Acquisition or any financing transactions in connection therewith (“Closing Date Net Working Capital”) and line item entriesof the Closing Cash, set forth on together with related supporting schedules, calculations and used in documentation. A sample Closing Date Statement is attached hereto as Exhibit D for illustrative purposes only. Following the Closing, Buyer shall provide Seller and its representatives access to the records, properties and personnel of the Company and its Subsidiaries relating to the preparation of the Sample Closing Statement; provided, however, that assets newly acquired Date Statement and liabilities newly incurred following shall cause the date personnel of the Sample Company and its Subsidiaries to reasonably cooperate with Seller in connection with its review of the Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting PrinciplesDate Statement. (cb) Within If Seller shall disagree with the calculation of Closing Date Net Working Capital and/or Closing Cash, it shall notify Buyer of such disagreement in writing (the “Seller’s Objection”), setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Date Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to . In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Date Statement will and the calculation of Closing Date Net Working Capital and Closing Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital and Closing Cash. If, at the end of such period, they are unable to resolve such disagreements, then Ernst & Young (or such independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall be instructed only to resolve all outstanding disagreements relating to the calculation of the Closing Date Net Working Capital and Closing Cash. The Auditor shall investigate only those items which are in dispute and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of Buyer or Seller or (B) lower than the lowest value for such item claimed by either of Buyer or Seller. The Auditor’s determination shall be based only upon written submissions by Buyer and Seller, and not upon an independent review by the Auditor. The Parties shall instruct the Auditor to render its determination within thirty (30) days of the referral of such matter thereto, and the determination of the Auditor shall be final, binding on and non-appealable upon all parties for all purposes of this Agreement. None of Seller, Buyer or the PartiesCompany shall have any ex parte communications or meetings with the Auditor without the prior consent of Buyer (in the case of Seller) or Seller (in the case of Buyer or the Company), other than pursuant to a request therefor from the Auditor. Any Dispute Notice If Seller delivers a Seller’s Objection, the fees, costs and expenses of the Auditor shall be paid (i) set forth by the Seller if the items covered thereby are resolved in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination favor of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and Buyer or (ii) include only disagreements based by Buyer if the items covered thereby are resolved in favor of the Seller’s Objection. If the items referred to therein are resolved in part in favor of the Seller’s Objection and in part in favor of Buyer, such fees, costs and expenses shall be allocated between Seller and Buyer in inverse proportion as Seller and Buyer may prevail on matters resolved by the Adjustment Amount and/or Auditor, which proportionate allocations shall be determined by the Target Adjustment Amount (as applicable) not being calculated properly Auditor; provided, however, that neither Seller nor Buyer shall be considered the prevailing party with respect to any matter resolved by the Auditor if Seller’s Objection giving rise thereto resulted from Buyer’s failure to provide Seller with the records, properties, personnel and auditors back-up or supporting data relating to the preparation of the Closing Date Statement reasonably requested by Seller in accordance with this Agreement or containing mathematical errorsSection 2.5. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt The date on which Closing Date Net Working Capital and Covidien shall negotiate Closing Cash are finally determined in good faith accordance with this Section 2.5(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution PeriodDetermination Date.”) (c) The “Adjustment Amount,” which may be positive or negative, then Mallinckrodt and Covidien jointly shall engagemean the Purchase Price minus the Closing Payment. (d) If the Adjustment Amount is a positive number, within ten (10) Business Days then, promptly following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicableDetermination Date, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the Determination Date, Buyer shall pay to Seller, by wire transfer of immediately available funds to the account designated pursuant to Section 2.3, an amount equal to such Adjustment Amount together with interest thereon at the Applicable Rate, accrued and calculated on the basis of the actual number of days elapsed over 360, from the Closing Date until the date on which of distribution. If the Adjustment Amount is a negative number, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Determination Date, the Escrow Agent shall pay to Buyer, by wire transfer of immediately available funds, out of the Escrow Funds an amount equal to the lesser of (i) the absolute value of such Adjustment Amount have been finally determined pursuant (the “Repayment Amount”) (together with any interest thereon at the Applicable Rate, accrued and calculated on the basis of the actual number of days elapsed over 360, from the Closing Date until the date of distribution) and (ii) $2,000,000. If the Repayment Amount exceeds $2,000,000, Seller shall pay the amount of the excess to Buyer, by wire transfer of immediately available funds. If the Adjustment Amount results in a Repayment Amount, each of Buyer and Seller shall promptly execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Escrow Funds in accordance with this Section 2.162.5(d).

Adjustment Amount. (a) Schedule 2.16 sets forth Not less than five (5) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller shall deliver to Buyer a sample calculation written statement setting forth, in reasonable detail, (i) its good faith estimate of (A) the Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”), (B) the aggregate amount of all Indebtedness of the Adjustment Amount and the Target Adjustment Amount Purchased Subsidiary Companies as of the Balance Sheet close of business on the day immediately preceding the Closing Date (the “Sample Estimated Closing StatementDate Indebtedness”), including and (C) the assetCash and Cash Equivalents of the Business (the “Estimated Closing Date Cash”), liability and other line items and accounting principles used in (ii) reasonable supporting documentation for such calculationestimates, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as (iii) Seller’s calculation of the DistributionEstimated Working Capital Adjustment Amount. Estimated Closing Date Net Working Capital shall be calculated in accordance with GAAP and in a manner consistent with Schedule 1.01(f), and each of Estimated Closing Date Indebtedness and Estimated Closing Date Cash shall be calculated in accordance with the definitions thereof. (b) Within sixty As soon as reasonably practicable following the Closing Date, and in any event within ninety (6090) days after thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Business as of the close of business on the day immediately preceding the Closing Date (the “Closing StatementBalance Sheet”), (ii) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount and Closing Date Net Working Capital, (iiiii) the Target Adjustment Amount and the a calculation of the Target Adjustment Amountaggregate amount of all Indebtedness of the Purchased Subsidiary Companies as set forth on the Closing Balance Sheet as of the close of business on the day immediately preceding the Closing Date (the “Closing Date Indebtedness”), and (iv) a calculation of the Cash and Cash Equivalents of the Business (the “Closing Date Cash”), in each case, determined without giving effect to (A) the consummation of the transactions contemplated by this Agreement (including any adjustments as a result of the application of purchase accounting) or (B) any financing transactions in connection therewith, by Buyer or its Subsidiaries (including the Purchased Subsidiaries) after the Closing. The Closing Statement Balance Sheet shall be prepared in accordance with GAAP. Following the Transaction Accounting PrinciplesClosing until the Determination Date (as defined below), including each Party shall provide the use other Party and its Representatives reasonable access during normal business hours and following reasonable written notice to the records, properties, personnel and (subject to the execution of the same line items and line item entries, set forth on and used in customary work paper access letters if requested) auditors of such Party reasonably relating to the preparation of the Sample Closing Statement; providedBalance Sheet and/or Dispute Notice (as defined below), howeveras applicable, that assets newly acquired and liabilities newly incurred following shall cause the date personnel of such Party and its Subsidiaries to reasonably cooperate with the other Party and its Representatives in connection with their review of the Sample Closing Statement which cannot be appropriately placed in line items previously used by MallinckrodtBalance Sheet and/or Dispute Notice, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principlesas applicable. (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with the calculation of the Closing StatementDate Net Working Capital, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement Date Indebtedness or the Closing Date Cash, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (the “Dispute Notice”); provided, however, within thirty (30) days after its receipt of the Closing Balance Sheet. In the event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness and the Closing Date Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and binding Seller shall negotiate in good faith for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness or the Closing Date Cash. If, at the end of such period, they are unable to resolve such disagreements, then Ernst & Young LLP (or such independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Auditor”), acting as an expert and not as an arbitrator, shall resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Parties. Any Dispute Notice shall (i) Auditor, whether the Closing Balance Sheet was prepared in accordance with the standards set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicableSection 2.09(b) and (iionly with respect to the remaining disagreements submitted to the Auditor) include only disagreements based on whether and to what extent (if any) the Adjustment Amount and/or Closing Date Net Working Capital, the Target Adjustment Amount (Closing Date Indebtedness or the Closing Date Cash require adjustment. The Auditor shall not be permitted to make a determination with respect to any item as applicable) not being calculated properly to which there is a disagreement that exceeds or is less than the greatest or lowest value, respectively, for such item as claimed by the Parties, shall limit its review to the disputed items, and shall limit its review to whether the Closing Balance Sheet and the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness and the Closing Date Cash were prepared in accordance with this Agreement or containing mathematical errorscontain mathematical/clerical error. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien The Auditor shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt base its determination solely on the written submissions of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt Parties and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principlesconduct an independent investigation. All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Seller and Mallinckrodt. All determinations Buyer in proportion to the allocation of the dollar value of the amounts in dispute as between Seller and Buyer (set forth in the written submissions to the Auditor) made by the Independent Accounting FirmAuditor such that the Party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if Seller challenges items underlying the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness and/or the Closing Date Cash in the net amount of $1,000,000, and the Closing StatementAuditor determines that Buyer has a valid claim for $400,000 of the $1,000,000, as modified by Buyer shall bear 60% of the Independent Accounting Firm, will fees and expenses of the Auditor and Seller shall bear the remaining 40% of the fees and expenses of the Auditor. The determination of the Auditor shall be final, conclusive and binding on the Partiesparties hereto. The date on which the Closing Date Net Working Capital, absent fraud or manifest errorthe Closing Date Indebtedness and the Closing Date Cash are finally determined in accordance with this Section 2.09(c) is hereinafter referred to as the “Determination Date.” (d) For purposes of complying with The “Adjustment Amount,” which may be positive or negative, shall mean (i) the terms set forth in this Section 2.16Closing Date Net Working Capital, Mallinckrodt and Covidien minus the Estimated Closing Date Net Working Capital, plus (ii) the Estimated Closing Date Indebtedness, minus the Closing Date Indebtedness, plus (iii) the Closing Date Cash, minus the Estimated Closing Date Cash. If the Adjustment Amount is a positive number, then the Purchase Price shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to be increased by such Adjustment Amount (the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business“Increase Amount”), and if the Adjustment Amount is a negative number, the Purchase Price shall permit access to its facilities and personnel, as may be reasonably required in connection with decreased by the preparation and analysis absolute value of the Closing Statement and Adjustment (the resolution of any disputes thereunder“Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.09(e). (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c)and in any event within five (5) Business Days of the Determination Date, by at least $20 million, then Mallinckrodt Buyer shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien Seller by wire transfer of immediately available funds to an account or accounts designated by Seller in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from Increase Amount. If there is a Deficit Amount, then, promptly following the first dollar Determination Date, and in any event within five (i.e.5) Business Days of the Determination Date, without regard Seller shall pay to the $20 million threshold) to Mallinckrodt Buyer by wire transfer of immediately available funds to an account or accounts designated by Buyer in writing by Mallinckrodt an amount in cash equal to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Deficit Amount.

Adjustment Amount. (a) Schedule 2.16 sets Not less than two (2) Business Days prior to the Initial Closing Date, Seller shall deliver to Buyer a written statement setting forth a sample calculation its good faith estimate of (A) the Adjustment Amount and the Target Adjustment Amount aggregate amount of all Indebtedness as of the Balance Sheet close of business on the day immediately preceding the Initial Closing Date (the “Sample Estimated Closing StatementDate Indebtedness”), including and (B) the assetCash on Hand, liability and other line items and accounting principles used which shall assume, for the purposes of this Section 3.09(a), that the amount of Xxxxx Cash included in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred Cash on Hand is equal to Mallinckrodt as of the DistributionMinimum Xxxxx Cash Requirement (the “Estimated Closing Date Cash”). (b) Within As soon as reasonably practicable following the Initial Closing Date, and in any event within sixty (60) days after thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Business as of the close of business on the day immediately preceding the Initial Closing Date (the “Closing StatementBalance Sheet”), (ii) a calculation of the aggregate amount of all Indebtedness as set forth on the Closing Balance Sheet as of the day immediately preceding the Initial Closing Date (the “Closing Date Indebtedness”) setting forth and (iiii) calculation of the Adjustment Amount and Cash on Hand (including the calculation of Xxxxx Cash) (the Adjustment Amount and “Closing Date Cash”), in each case, determined without giving effect to (iiA) the Target Adjustment Amount and the calculation consummation of the Target Adjustment Amounttransactions contemplated by this Agreement (including any adjustments as a result of the application of purchase accounting), (B) any financing transactions in connection therewith or, by Buyer or its Subsidiaries (including the Purchased Subsidiaries) after the Initial Closing, or (C) any action or omission by Buyer or any of its Subsidiaries (including the Purchased Subsidiaries) with respect to the Business or the Purchased Subsidiaries that is not in the ordinary course of business consistent with past practice. The Except as otherwise provided herein, the Closing Statement Balance Sheet shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing StatementGAAP; provided, however, that assets newly acquired the Closing Balance Sheet shall reflect no increases in reserves (regardless of whether any such reserve is recorded as an offset to a current asset’s carrying value or is included as an accrued liability in the Closing Balance Sheet) from amounts contained in the Balance Sheet, other than changes therein attributable to changes in facts and liabilities newly incurred following circumstances occurring after the date Financial Statement Date and prior to the Initial Closing. Following the Initial Closing, Buyer shall provide Seller and its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to the records, properties, management personnel and (subject to the execution of customary work paper access letters if requested) auditors of Buyer relating to the preparation of the Sample Closing Statement which canBalance Sheet and shall cause the management personnel of Buyer and its Subsidiaries to cooperate with Seller and its Representatives in connection with their review of the Closing Balance Sheet, provided, that such access does not be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent (i) unreasonably interfere with the Transaction Accounting Principlesnormal operations of Buyer or (ii) based on advice of counsel, (A) result in the waiver of attorney-client privilege, or (B) violate any applicable Law. (c) Within If Seller disagrees with the calculation of the Closing Date Indebtedness or the Closing Date Cash, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to Balance Sheet. In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of the Closing Date Indebtedness and the Closing Date Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Indebtedness or the Closing Date Cash. If, at the end of such period, they are unable to resolve such disagreements, then an independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall act as an expert, and not as an arbiter, and shall determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Auditor, whether the Closing Balance Sheet was prepared in accordance with the standards set forth in Section 3.09(b) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Indebtedness or the Closing Date Cash require adjustment. The fees and expenses of the Auditor shall be paid one-half by Buyer and one-half by Seller. The determination of the Auditor shall be final, conclusive and binding on the PartiesParties hereto. Any Dispute Notice The date on which the Closing Date Indebtedness and the Closing Date Cash are finally determined in accordance with this Section 3.09(c) is hereinafter referred to as the “Determination Date.” (d) The “Adjustment Amount,” which may be positive or negative, shall mean (i) set forth in reasonable detail the basis for any dispute included thereinEstimated Closing Date Indebtedness, minus the Closing Date Indebtedness, plus (ii) the Closing Date Cash, minus the Estimated Closing Date Cash. If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by such Adjustment Amount (the “Increase Amount”), and if the Adjustment Amount is a negative number, the amounts involved and Covidien’s determination Purchase Price shall be decreased by the absolute value of the Adjustment Amount and/or (the Target “Deficit Amount”). The Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly shall be paid in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”Section 3.09(e), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyer shall pay to Seller an amount in cash equal to the Adjustment Amount Increase Amount. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Amount have been finally determined pursuant Determination Date, Seller shall pay to this Section 2.16Buyer an amount in cash equal to the Deficit Amount.

Adjustment Amount. (a) Schedule 2.16 sets forth As soon as reasonably practicable following the Closing Date, and in any event within 90 calendar days thereof, Buyer shall prepare and deliver to Seller, Buyer’s calculation of (i) Closing Net Working Capital, (ii) Closing Indebtedness, (iii) Closing Transaction Expenses, (iv) Closing Cash, (v) Closing Net Working Capital Adjustment Amount, and (vi) on the basis of the foregoing, a sample calculation of the Adjustment Amount and Closing Purchase Price (together with the Target Adjustment Amount as of the Balance Sheet Date calculations referred to in clauses (i) through (v) above, the “Sample Final Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement Net Working Capital, Closing Indebtedness and Closing Cash shall be prepared in accordance with GAAP and the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and defined terms used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”this Section 2.06(a); provided, however, that if Covidien does the Final Closing Statement (and any amounts included therein) shall not deliver give effect to any Dispute Notice act or omission by Buyer or any of its Subsidiaries or the Company taken after the Reference Time or reflect any payments of cash in respect of the Purchase Price, or any financing transactions in connection therewith or reflect any expense or liability for which Buyer is responsible under this Agreement. For the avoidance of doubt, neither Section 2.04 nor this Section 2.06 is intended to Mallinckrodt within such thirty (30)-day period, be used to adjust the Closing Statement will Purchase Price for errors or omissions, under GAAP or otherwise, that may be final, conclusive and binding on found with respect to the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or Financial Statements or the Target Adjustment Amount (as applicable) Net Working Capital. No fact or event, including any market or business development, occurring after the Closing Date, and (ii) include only disagreements based on no change in GAAP or Applicable Law after the Adjustment Amount and/or Balance Sheet Date, shall be taken into consideration in the Target Adjustment Amount (as applicable) not being calculated properly in accordance with calculations to be made pursuant to Section 2.04 or this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth thereinSection 2.06. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail Buyer fails to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of timely deliver the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not Final Closing Statement in accordance with the position first sentence of either Covidien or Mallinckrodtthis Section 2.06(a) within such 90-day period, then the Preliminary Closing Statement delivered by Seller to Buyer pursuant to Section 2.04 shall not be in excess deemed to be Buyer’s proposed Final Closing Statement, for all purposes hereunder, and Seller shall retain all of its rights under this Section 2.06 with respect thereto, including the higher, nor less than right to dispute the lower, of the amounts calculations set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated therein in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes provisions of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder2.06. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereafter, Acquiror shall prepare and deliver to the Holder Representative an unaudited consolidated balance sheet of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date Company Group (the “Sample Closing StatementBalance Sheet”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt ) as of 11:59 P.M., Pacific Standard Time, on the Distribution. (b) Within sixty (60) days after day immediately preceding the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Closing Date (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and Closing Date Net Working Capital, (ii) the Target Adjustment Amount Closing Date Indebtedness, (iii) the Holder Expenses, (iv) the Adjusted Closing Date Cash, and (v) the calculation of Closing Consideration calculated based on the Target Adjustment Amountitems in the foregoing clauses (i) through (iv). The Closing Statement Balance Sheet, the Closing Statement, including the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses and the Adjusted Closing Date Cash shall be prepared in accordance with the Transaction Accounting Calculation Principles. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement, including the use Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses and the Adjusted Closing Date Cash and the related purchase price adjustment contemplated by this Section 2.8(a) is to measure the amount of the same line items Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses and line item entries, set forth on the Adjusted Closing Date Cash. Acquiror shall (i) permit the Holder Representative and its Representatives to have reasonable access to the books and records and working papers pertaining to or used in connection with the preparation of the Sample Closing Statement and Acquiror’s calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses and the Adjusted Closing Date Cash and (ii) provide the Holder Representative reasonable access to Acquiror’s and the Surviving Entity’s employees and accountants as reasonably requested by the Holder Representative in connection with its review of the Closing Statement (subject to customary access agreements as may be required by such auditors); provided, that, such access will be in a manner that does not interfere with the normal business operations of Acquiror or the Surviving Entity. (b) If the Holder Representative shall disagree with the calculation pursuant to Section 2.8(a) of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses or the Adjusted Closing Date Cash, it shall notify Acquiror of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (and providing all supporting documentation reasonably necessary for Acquiror to evaluate such disagreement), within thirty (30) days after its receipt of the Closing Statement. In the event that the Holder Representative does not provide such a notice of disagreement within such thirty (30) day period, the Holder Representative shall be deemed to have accepted the Closing Statement and the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Adjusted Closing Date Cash and the calculation of Closing Consideration based thereon delivered by Acquiror, which shall be final, binding and conclusive on all parties (and any other Person) for all purposes hereunder. In the event any such notice of disagreement is timely provided, Acquiror and the Holder Representative shall use commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses and the Adjusted Closing Date Cash; provided, however, that assets newly acquired any such calculation not specifically objected to by the Holder Representative in such notice of disagreement shall be deemed acceptable and liabilities newly incurred following shall be final and binding on the date parties (and any other Person) upon delivery of such notice of disagreement. If, at the end of such period, they are unable to resolve such disagreements, then BDO USA LLP (or such other independent accounting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative) (the “Auditor”) shall resolve any remaining disagreements, it being understood that the Auditor shall be functioning as an expert and not as an arbitrator and shall not have any authority to interpret any provision of this Agreement. The Auditor shall be directed to, within thirty (30) calendar days after such submission, determine and report to Acquiror and the Holder Representative upon the remaining disputed amounts with respect to the Closing Statement, and such report shall be final, binding and conclusive on the parties hereto (and any other Person) and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Auditor shall be authorized to resolve only those items remaining in dispute between Acquiror and the Holder Representative, and such resolution shall be based solely on the materials submitted by Acquiror and Holder Representative and not on independent review, and the Auditor (i) shall make no other determination and (ii) may not assign a value greater than the greatest positive or negative adjustment requested by a party. The fees and expenses of the Sample Closing Statement which cannot Auditor shall be appropriately placed paid by Acquiror and the Holder Representative (on behalf of the holders of Units) in line the same proportion that the aggregate amount of the items previously used unsuccessfully disputed or defended, as the case may be, by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included each (as finally determined by the Auditor) bears to the extent consistent with total amount of the Transaction Accounting Principlesdisputed items. (c) Within thirty (30) days following receipt by Covidien of the Closing StatementThe “Adjustment Amount,” which may be positive or negative, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall mean (i) set forth in reasonable detail the basis for any dispute included thereinClosing Date Net Working Capital minus the Estimated Closing Date Net Working Capital, plus (ii) the amounts involved and Covidien’s Estimated Closing Date Indebtedness minus the Closing Date Indebtedness, plus (iii) the Estimated Holder Expenses minus the Holder Expenses, plus (iv) the Adjusted Closing Date Cash minus the Adjusted Estimated Closing Date Cash. (d) Within three (3) Business Days following the final determination of the Adjustment Amount and/or in accordance with Section 2.8(b) hereof, Acquiror and the Target Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Working Capital Escrow Fund as follows: (i) if the Adjustment Amount is a positive number (A) the Escrow Agent shall pay to the Paying Agent, for the account of the former holders of Units (and, for the avoidance of doubt, other than any Units held by the Company or by Acquiror, directly or indirectly, as of the Effective Time) the Working Capital Escrow Fund in accordance with the Distribution Waterfall, and (B) Acquiror shall pay to the Paying Agent, for the accounts of the former holders of Units (and, for the avoidance of doubt, other than any Units held by the Company or by Acquiror, directly or indirectly, as of the Effective Time), cash in an amount equal to the Adjustment Amount (as applicable) and finally determined); and (ii) include only disagreements based on if the Adjustment Amount and/or is a negative number, (A) the Target Escrow Agent shall pay to Acquiror out of the Working Capital Escrow Fund an amount equal to the absolute value of the Adjustment Amount (as applicablenot to exceed the Working Capital Escrow Fund), and (B) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt if the absolute value of the Dispute Notice (Adjustment Amount is less than an amount equal to the “Dispute Resolution Period”)Working Capital Escrow Fund, then Mallinckrodt and Covidien jointly the Escrow Agent shall engage, within ten (10) Business Days following pay to the expiration Paying Agent for the accounts of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (former holders of Units the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement balance of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not Working Capital Escrow Fund in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorDistribution Waterfall. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth Not less than three (3) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller shall deliver to Buyer a sample calculation written statement setting forth, in reasonable detail, (i) its good faith estimate of (A) the aggregate amount of all Indebtedness related to the Business as of the close of business on the day immediately preceding the Closing Date (the “Estimated Closing Date Indebtedness”), and (B) the Closing Date Cash Adjustment Amount (the “Estimated Closing Date Cash Adjustment Amount”), (ii) reasonable supporting documentation for such estimates, (iii) Seller’s good faith estimate of the Non-Operating Restaurants Sale Proceeds Adjustment Amount (the “Estimated Non-Operating Restaurants Sale Proceeds Adjustment Amount”) and (v) a schedule reflecting all Permitted Non-Operating Restaurant Sales between (and inclusive of) November 15, 2016 and the day immediately preceding the Closing Date and the sales price of and net proceeds (determined on an after-Tax basis) received or receivable by Seller or its Subsidiaries with respect to each such sale. Estimated Closing Date Indebtedness shall be calculated in accordance with the definition thereof, and each of the Estimated Closing Date Cash Adjustment Amount and the Target Estimated Non-Operating Restaurants Sale Proceeds Adjustment Amount as of shall be calculated in accordance with the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distributiondefinitions thereof. (b) Within sixty As soon as reasonably practicable following the Closing Date, and in any event within ninety (6090) days after thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Business as of the close of business on the day immediately preceding the Closing Date (the “Closing StatementBalance Sheet”), (ii) setting forth (i) the Adjustment Amount and the a calculation of the aggregate amount of all Indebtedness related to the Business as set forth on the Closing Balance Sheet as of the close of business on the day immediately preceding the Closing Date (the “Closing Date Indebtedness”), (iii) a calculation of the Closing Date Cash Adjustment Amount and (iiiv) the Target Adjustment Amount and the a calculation of the Target Non-Operating Restaurants Sale Proceeds Adjustment AmountAmount (such calculation, the “Buyer Non-Operating Restaurants Sale Proceeds Calculation”), in each case, determined without giving effect to (A) the consummation of the transactions contemplated by this Agreement (including any adjustments as a result of the application of purchase accounting) or (B) any financing transactions in connection therewith, by Buyer or its Subsidiaries after the Closing. The Closing Statement Balance Sheet shall be prepared in accordance with GAAP and in a manner consistent with Schedule 1.01(e). Following the Transaction Accounting PrinciplesClosing until the Determination Date (as defined below), including each Party shall provide the use other Party and its Representatives reasonable access during normal business hours and following reasonable written notice to the records, properties, personnel and (subject to the execution of the same line items and line item entries, set forth on and used in customary work paper access letters if requested) auditors of such Party reasonably relating to the preparation of the Sample Closing Statement; providedBalance Sheet, howeverthe Buyer Non-Operating Restaurants Sale Proceeds Calculation and/or Dispute Notice (as defined below), that assets newly acquired as applicable, and liabilities newly incurred following shall cause the date personnel of such Party and its Subsidiaries to reasonably cooperate with the other Party and its Representatives in connection with their review of the Sample Closing Statement which cannot be appropriately placed in line items previously used by MallinckrodtBalance Sheet, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilitiesthe Buyer Non-Operating Restaurants Sale Proceeds Calculation and/or Dispute Notice, will also be included to the extent consistent with the Transaction Accounting Principlesas applicable. (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with the calculation of the Closing StatementDate Indebtedness, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement Date Cash Adjustment Amount or the Buyer Non-Operating Restaurants Sale Proceeds Calculation, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (the “Dispute Notice”); provided, however, within thirty (30) days after its receipt of the Closing Balance Sheet. In the event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculations of the Closing Date Indebtedness, the Closing Date Cash Adjustment Amount and the Buyer Non-Operating Restaurants Sale Proceeds Calculation delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and binding Seller shall negotiate in good faith for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Indebtedness, the Closing Date Cash Adjustment Amount or the Buyer Non-Operating Restaurants Sale Proceeds Calculation. If, at the end of such period, they are unable to resolve such disagreements, then Deloitte & Touche LLP (or such independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Auditor”), acting as an expert and not as an arbitrator, shall resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Parties. Any Dispute Notice shall (i) Auditor, whether the Closing Balance Sheet was prepared in accordance with the standards set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicableSection 2.09(b) and (iionly with respect to the remaining disagreements submitted to the Auditor) include only disagreements based on whether and to what extent (if any) the Closing Date Indebtedness, the Closing Date Cash Adjustment Amount and/or or the Target Buyer Non-Operating Restaurants Sale Proceeds Calculation require adjustment. The Auditor shall not be permitted to make a determination with respect to any item as to which there is a disagreement that exceeds or is less than the greatest or lowest value, respectively, for such item as claimed by the Parties, shall limit its review to the disputed items, and shall limit its review to whether the Closing Balance Sheet and the calculations of the Closing Date Indebtedness, the Closing Date Cash Adjustment Amount (as applicable) not being calculated properly and the Buyer Non-Operating Restaurants Sale Proceeds Calculation were prepared in accordance with this Agreement or containing mathematical errorscontain mathematical/clerical error. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien The Auditor shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt base its determination solely on the written submissions of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt Parties and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principlesconduct an independent investigation. All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne divided equally by Covidien between Buyer and MallinckrodtSeller. All determinations made by The determination of the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will Auditor shall be final, conclusive and binding on the Partiesparties hereto. The date on which the Closing Date Indebtedness, absent fraud or manifest errorthe Closing Date Cash Adjustment Amount and the Buyer Non-Operating Restaurants Sale Proceeds Calculation are finally determined in accordance with this Section 2.09(c) is hereinafter referred to as the “Determination Date.” (d) For purposes of complying with The “Adjustment Amount,” which may be positive or negative, shall mean (i) the terms set forth in this Section 2.16Estimated Closing Date Indebtedness, Mallinckrodt and Covidien minus the Closing Date Indebtedness, plus (ii) the Closing Date Cash Adjustment Amount, minus (iii) the Estimated Closing Date Cash Adjustment Amount plus (iv) the Estimated Non-Operating Restaurants Sale Proceeds Adjustment Amount minus the Buyer Non-Operating Restaurants Sale Proceeds Calculation. If the Adjustment Amount is a positive number, then the Purchase Price shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to be increased by such Adjustment Amount (the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business“Increase Amount”), and if the Adjustment Amount is a negative number, the Purchase Price shall permit access to its facilities and personnel, as may be reasonably required in connection with decreased by the preparation and analysis absolute value of the Closing Statement and Adjustment Amount (the resolution of any disputes thereunder“Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.09(e). (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c)and in any event within three (3) Business Days of the Determination Date, by at least $20 million, then Mallinckrodt Buyer shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien Seller by wire transfer of immediately available funds to an account or accounts designated by Seller in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from Increase Amount. If there is a Deficit Amount, then, promptly following the first dollar Determination Date, and in any event within three (i.e.3) Business Days of the Determination Date, without regard Seller shall pay to the $20 million threshold) to Mallinckrodt Buyer by wire transfer of immediately available funds to an account or accounts designated by Buyer in writing by Mallinckrodt an amount in cash equal to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Deficit Amount.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within in any event within sixty (60) days after the Distribution Datethereafter, Mallinckrodt Buyer shall cause to be prepared and delivered to Covidien the Stockholders’ Representative a statement (the “Closing Statement”) setting forth Buyer’s calculation of (i) Cash as of 12:01:01 a.m. (Eastern Time) on the Adjustment Amount and Closing Date (the calculation of the Adjustment Amount and “Closing Cash”), (ii) Net Working Capital as of 12:01:01 a.m. on the Target Adjustment Amount Closing Date (the “Closing Net Working Capital”), (iii) the Transaction Expenses (the “Closing Transaction Expenses”), (iv) the Closing Indebtedness, including the Defeasance Costs and the calculation Debt Repayment Expenses (the “Adjusted Closing Indebtedness”), and (v) the Severance Amount (the “Closing Severance Amount”) in each case along with supporting detail to evidence the calculations of the Target Adjustment Amountsuch amounts. The Closing Statement and the calculations set forth therein shall be prepared in accordance with the Transaction Company Accounting Principles, including Policies and the use definitions herein. The parties hereto acknowledge and agree that the sole purpose of the same line items and line item entries, set forth on and used in the preparation determination of the Sample Closing Statement; providedNet Working Capital, howeverthe Closing Cash, that assets newly acquired the Closing Transaction Expenses, the Closing Severance Amount and liabilities newly incurred following the date Adjusted Closing Indebtedness is to determine the amount, if any, of the Sample purchase price adjustment contemplated by this Section 3.3 so as to reflect, respectively, the differences, if any, between the Estimated Net Working Capital and the Closing Statement which cannot be appropriately placed in line items previously used by MallinckrodtNet Working Capital, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilitiesthe Estimated Cash and the Closing Cash, will also be included to the extent consistent with Estimated Transaction Expenses and the Closing Transaction Accounting PrinciplesExpenses, the Estimated Severance Amount and the Closing Severance Amount, and the Estimated Closing Indebtedness and the Adjusted Closing Indebtedness. (cb) Within thirty (30) days following receipt by Covidien After the delivery of the Closing Statement by Buyer, Buyer shall provide to the Stockholders’ Representative and its Representatives any information they may reasonably request and access at all reasonable times during normal business hours to the personnel, properties, working papers (subject to requirements of the applicable auditors), books and records of the Surviving Company and its Subsidiaries in order to review the Closing Statement. Following the Closing, Covidien neither Buyer nor the Surviving Company shall deliver written notice to Mallinckrodt of take any dispute Covidien has action with respect to the preparation accounting books, records, policies or content procedures of the Company and its Subsidiaries with the specific intent of affecting the components of the Closing Statement (or impeding or delaying the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described preparation thereof in the immediately preceding sentence manner and in any event not more than thirty (30) days following such presentations, make a final determination, binding on utilizing the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth methods required by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorthis Agreement. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth As soon as reasonably practicable following the Closing Date, and in any event within seventy-five (75) calendar days following the date thereof, Parent shall prepare and deliver to Seller Representative a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date schedule (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing StatementAdjustment Schedule”) setting forth a calculation of the final Aggregate Purchase Price and each of the components thereof (including the PlasChem Net Indebtedness) and attach reasonable documentation supporting Parent’s calculations. In the event Parent does not deliver the Adjustment Schedule within the seventy-five (75) day period specified in the immediately preceding sentence, at Seller Representative’s election, either (i) the Closing Aggregate Purchase Price shall become final and binding upon the parties hereto or (ii) Parent shall continue to be obligated to deliver the Adjustment Amount Schedule. Parent shall afford, and cause the Surviving Company and its Subsidiaries to afford, Seller Representative and its Representatives reasonable access to the work papers and other books and records (including Tax records) of Parent, the Surviving Blocker, the Surviving Company and their respective Subsidiaries for purposes of assisting Seller Representative and its Representatives in their review of the Adjustment Schedule. The Adjustment Schedule and the resulting calculation of the Adjustment Amount Aggregate Purchase Price shall become final and (ii) binding upon the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within parties hereto thirty (30) days following Seller Representative’s receipt by Covidien of the Closing Adjustment Schedule unless Seller Representative provides written notice of its objection (an “Objection Statement”) to Parent prior to the expiration of such thirty (30) day period. Any Objection Statement shall specify in reasonable detail the nature and amount of any disagreement so asserted, a reasonably detailed explanation of the basis thereof, and attach documentation supporting Seller Representative’s calculations. If Seller Representative shall have timely delivered an Objection Statement to Parent, Parent and Seller Representative may negotiate to resolve any objections set forth therein for a period of no more than thirty (30) days, and, if Parent and Seller Representative resolve each of Seller Representative’s objections as set forth on the Objection Statement, Covidien the Adjustment Schedule, as revised pursuant to such negotiations, shall deliver written notice become final and binding upon the parties hereto. If, following such thirty (30) day period, any of the objections set forth on the Objection Statement shall remain outstanding, Parent or Seller Representative may refer such disputed items for resolution by an internationally recognized independent accounting firm mutually agreeable to Mallinckrodt Parent and Seller Representative; provided that in the event that Parent and Seller Representative fail to agree thereon, the accounting firm shall be Ernst & Young LLP (such firm, the “Independent Accountant”); provided that if Ernst & Young LLP is unwilling or unable to serve as the Independent Accountant and Seller Representative and Parent are unable to select an alternative firm within thirty (30) days after delivery of any dispute Covidien has the Objection Statement, either Parent or Seller Representative may request the American Arbitration Association appoint, within twenty (20) days from the date of such request, an internationally recognized independent accounting firm. Each of Parent and Seller Representative shall promptly provide their assertions regarding the Aggregate Purchase Price in writing to the Independent Accountant and to each other. The Independent Accountant shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which shall be no later than forty-five (45) days following the preparation or content date on which the remaining objections are referred to the Independent Accountant). The Independent Accountant shall act as an expert and not an arbitrator and shall base its determination solely upon the written submissions of Parent and Seller Representative, any oral advocacy by each of Parent and Seller Representative in front of the Closing Statement Independent Accountant and the applicable provisions of this Agreement (and shall not conduct an independent investigation). Without limiting the “Dispute Notice”); providedforegoing, howeverthe Independent Accountant will resolve the dispute with respect to each disputed component of the Aggregate Purchase Price by assigning a value, as determined by the Independent Accountant, to each component thereof, that if Covidien does not deliver any Dispute Notice is no higher than the highest amount, or lowest than the lowest amount, claimed with respect to Mallinckrodt within such thirty item in Seller Representative’s final calculation thereof (30)-day periodas modified following discussions with Parent and as submitted to the Independent Accountant at the outset of the dispute resolution process with a copy to Parent) or Parent’s final calculation thereof (as modified following discussions with Seller Representative and as submitted to the Independent Accountant at the outset of the dispute resolution process with a copy to Seller Representative), as applicable. The determination of the Closing Statement will Independent Accountant shall be final, conclusive and binding on the Parties. Any Dispute Notice parties hereto, and no such Person shall (i) set forth in reasonable detail seek further recourse from any other Person or Governmental Entity other than to enforce the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting PrinciplesAccountant. All fees and expenses of the Independent Accountant relating to the work, if any, to be performed by the Independent Accounting Firm Accountant hereunder shall be borne equally by Covidien the Selling Equityholders on the one hand, and Mallinckrodt. All determinations made Parent on the other hand, based on the percentage that the portion of the contested amount not awarded to each party bears to the amount actually contested by such party and such allocation of fees and expenses shall be calculated by the Independent Accounting Firm, Accountant and the Closing Statement, as modified by the Independent Accounting Firm, will shall be final, conclusive final and binding on the Partiesparties. As used herein, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to “Final Aggregate Purchase Price” means the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis amount of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment AmountAggregate Purchase Price, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.162.6(a).

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation As soon as reasonably practicable following the Closing Date, and in any event within 75 days thereof, Parent shall prepare and deliver to the Holder Representative (i) an unaudited consolidated balance sheet of the Adjustment Amount Company and the Target Adjustment Amount its Subsidiaries as of the Balance Sheet close of business on the Closing Date (the “Sample Closing StatementBalance Sheet”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all (ii) a calculation of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt Net Working Capital as of the Distribution. close of business on the Closing Date (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing StatementDate Net Working Capital”), (iii) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount aggregate amount of all Indebtedness of the Company as of the close of business on the Closing Date (“Closing Date Indebtedness”) and (iiiv) the Target Adjustment Amount and the a calculation of Cash and Cash Equivalents of the Target Adjustment AmountCompany as of the close of business on the Closing Date (“Closing Date Cash”). The Closing Statement Balance Sheet and calculation of Closing Date Net Working Capital shall be prepared in accordance with the Transaction Accounting PrinciplesUnited States generally accepted accounting principles (“GAAP”), including the use of applied using the same line items accounting methods, practices, principles, policies and line item entriesprocedures, set forth on with consistent classifications, judgments and valuation and estimation methodologies that were used by the Company in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired 2014 Financial Statements and liabilities newly incurred following the date not taking into account any of the Sample transactions contemplated hereby. Notwithstanding the foregoing, for purposes of calculating Closing Statement which canDate Net Working Capital, current assets shall exclude any inventory SKU that has not be appropriately placed in line items previously used by Mallinckrodtbeen sold within the last 12 months and is not returnable, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilitiesnet of any inventory reserve. Following Parent’s delivery of the Closing Balance Sheet, will also be included Parent shall provide the Holder Representative and its representatives reasonable access to the extent consistent relevant records, personnel and (subject to the execution of customary work paper access letters if requested) accountants of the Surviving Corporation and its Subsidiaries relating to the preparation of the Closing Balance Sheet and shall cause the relevant knowledgeable personnel of the Surviving Corporation and its Subsidiaries to reasonably cooperate with the Transaction Accounting PrinciplesHolder Representative in connection with its review of the Closing Balance Sheet, it being understood that such access shall be provided and cooperation given only when the Holder Representative is reviewing the Closing Balance Sheet. The Auditor shall resolve any dispute between Parent and the Holder Representative as to whether appropriate access has been provided and cooperation given under this Section 3.5(a). (cb) Within thirty (30) If the Holder Representative shall disagree with the calculation of Closing Date Net Working Capital, Closing Date Indebtedness and/or Closing Date Cash, it shall notify Parent of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement and its calculation of Closing Date Net Working Capital, Closing Date Indebtedness and/or Closing Date Cash, within 30 days following after its receipt by Covidien of the Closing StatementBalance Sheet. In the event that the Holder Representative does not provide such a notice of disagreement within such 30-day period, Covidien the Holder Representative shall deliver written be deemed to have accepted the Closing Balance Sheet and the calculation of Closing Date Net Working Capital, Closing Date Indebtedness and Closing Date Cash delivered by Parent which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Parent and the Holder Representative shall use commercially reasonable efforts for a period of 30 days (or such longer period as they may mutually agree) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation calculations of Closing Date Net Working Capital, Closing Date Indebtedness and/or Closing Date Cash. If, at the end of such period, they are unable to resolve such disagreements, then Xxxxx Xxxxxxxx LLP (or, if Xxxxx Xxxxxxxx LLP declines or content is unable to serve such role, such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Parent and the Closing Statement Holder Representative) (the “Dispute NoticeAuditor”); provided) shall resolve any disagreements that were presented in the Holder Representative’s notice of disagreement and remain unresolved. Each of Parent and the Holder Representative shall promptly after engagement of the Auditor provide their assertions regarding the Closing Date Net Working Capital, howeverClosing Date Indebtedness, that if Covidien does not deliver any Dispute Notice and/or Closing Date Cash and, to Mallinckrodt within such thirty (30)-day periodthe extent relevant thereto, the Closing Statement will Balance Sheet in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the Parties agree shall not be later than the later of the date that is 45 days following the day on which the Auditor is retained or the date provided in the Auditor’s engagement letter). The Auditor shall base its determination solely on (i) the written submission of the Parties and shall not conduct an independent investigation and (ii) the extent (if any) to which the Closing Date Net Working Capital, Closing Date Indebtedness, and/or Closing Date Cash require adjustment (only with respect to the remaining disagreements that were included in the Holder Representative’s notice of disagreement and submitted to the Auditor) in order to be determined in accordance with Section 3.5(a) (including the definitions of the defined terms used in Section 3.5(a)). The determination of the Auditor for each item of disagreement submitted to it shall (x) be within the range of values assigned to such item by Parent and the Holder Representative in their respective written assertions to the Auditor and (y) be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved Closing Date Indebtedness, and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Date Cash are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.5(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien and Mallinckrodt. All determinations made by between Parent, on the Independent Accounting Firmone hand, and the Closing StatementHolder Representative, as modified a Holder Allocable Expense, on the other, based on the percentage which the portion of the total contested amounts not awarded to such Party as determined by the Independent Accounting Firm, will be final, conclusive and binding on Auditor bears to the total amounts contested by the Parties. (c) If the Adjustment Amount is a positive number, absent fraud or manifest errorthen the Aggregate Consideration shall be increased by the Adjustment Amount and the Adjustment Amount shall be paid in accordance with Section 3.5(d). If the Adjustment Amount is a negative number, then the Aggregate Consideration shall be decreased by the absolute value of the Adjustment Amount and the Adjustment Amount shall be paid in accordance with Section 3.5(e). (d) For purposes of complying with If the terms set forth in this Section 2.16Adjustment Amount is a positive number, Mallinckrodt and Covidien then (i) Parent shall cooperate with and make available deliver (or cause to be delivered) within three (3) Business Days following the Determination Date (x) to the Exchange Agent (for distribution to each other and their respective Representatives all information, records, data and working papers, Company Stockholder in each case, accordance with such Company Stockholder’s Common Pro Rata Percentage) a cash payment in an amount equal to the extent related product of (A) the Adjustment Amount, multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to the Mallinckrodt AssetsSurviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the Adjustment Amount, Mallinckrodt Liabilities or Mallinckrodt Businessmultiplied by (B) the Aggregate Option Pro Rata Percentage, and shall permit access to its facilities and personnel, as may be reasonably required in connection with (ii) the preparation and analysis Holder Representative (on behalf of the Closing Statement Company Equityholders) and Parent shall each, within three (3) Business Days after the resolution Determination Date, direct the Escrow Agent to release (x) to the Exchange Agent (for distribution to each Company Stockholder in accordance with such Company Stockholder’s Common Pro Rata Percentage) a cash payment in an amount equal to the product of any disputes thereunder(A) the total amount of the funds in the Adjustment Escrow Account, multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to the Surviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the total amount of the funds in the Adjustment Escrow Account, multiplied by (B) the Aggregate Option Pro Rata Percentage. (e) If the Adjustment AmountAmount is a negative number, as finally determined pursuant the Holder Representative (on behalf of the Company Equityholders) and Parent shall each, within three (3) Business Days after the Determination Date, direct the Escrow Agent to Section 2.16(c), is greater than (i) pay to Parent from the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid Escrow Account an aggregate amount in cash equal to the difference from absolute value of the first dollar Adjustment Amount and (i.e., without regard ii) release (x) to the $20 million thresholdExchange Agent (for distribution to each Company Stockholder in accordance with such Company Stockholder’s Common Pro Rata Percentage) to Covidien by wire transfer of immediately available funds to an account or accounts designated a cash payment in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from product of (A) the first dollar total amount of any remaining funds (i.e., without regard if any) in the Adjustment Escrow Account after giving effect to the $20 million thresholdpayments pursuant to the preceding clause (i), multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to Mallinckrodt the Surviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the total amount of any remaining funds (if any) in the Adjustment Escrow Account after giving effect to the payments pursuant to the preceding clause (i), multiplied by wire transfer of immediately available funds (B) the Aggregate Option Pro Rata Percentage. Notwithstanding anything to an account or accounts designated the contrary in writing by Mallinckrodt this Agreement, if the amount payable to Covidien. Any such payment Parent pursuant to this Section 2.16(e3.5(e) is to exceeds the Adjustment Escrow Amount, then such excess shall be made within five (5) Business Days paid out of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined Indemnification Escrow Amount. (f) Any amount that is paid pursuant to this Section 2.163.5 shall be treated by the Parties for Tax purposes as an adjustment of the Aggregate Consideration.

Adjustment Amount. (a) Schedule 2.16 sets Within ninety (90) calendar days after the Closing Date, Buyers shall prepare and deliver to Seller, Buyers’ good faith calculation of: (A) Closing Net Working Capital calculated in accordance with the illustrative calculation set forth in Section 1.01(a) of the Disclosure Letter and the Accounting Principles, (B) Closing Indebtedness, (C) Closing Cash, (D) the Closing Net Working Capital Adjustment Amount, (E) Transaction Expenses, (F) Affiliate Receivables, and (G) on the basis of the foregoing, a sample calculation of the Adjustment Amount and Closing Purchase Price (together with the Target Adjustment Amount as of the Balance Sheet Date calculations referred to in clauses (A) through (F) above, the “Sample Final Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement Net Working Capital, Closing Indebtedness, Closing Cash and Affiliate Receivables shall be prepared in accordance with the Transaction Accounting Principles, including Principles and the use defined terms used in this Section 2.06(a). (b) Seller shall have 30 days after its receipt of the same line items Final Closing Statement (the “Review Period”) to review the Final Closing Statement. During the Review Period, Buyers shall provide Seller and line item entriesits Representatives reasonable access to all relevant records, set forth on documentation, data and used in (subject to the preparation execution of customary work paper access letters if requested) auditors of each Company Entity relating to Seller’s review of the Sample Final Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with any of Buyers’ calculations contained in any of the Final Closing Statement, Covidien Seller shall deliver written notice to Mallinckrodt notify Buyers of any dispute Covidien has with respect to such disagreement in writing by no later than the preparation or content end of the Closing Statement Review Period (the a “Dispute Notice”); provided, howeversetting forth in reasonable detail the particulars of such disagreement (including for each component of the calculations, the amount of Seller’s calculation of such component and reasons for the difference). Any items not disagreed with in the Dispute Notice will be deemed to have been accepted by Seller. In the event that if Covidien Seller does not deliver any provide a Dispute Notice by the end of the Review Period, Seller shall be deemed to Mallinckrodt within have agreed to the Final Closing Statement (including the determinations included therein), which shall be final, binding and conclusive on Seller for all purposes hereunder. In the event a Dispute Notice is timely provided in accordance with this Section 2.06(c), Buyers and Seller shall work in good faith for a period of 30 days (or such thirty (30)-day longer period as they may mutually agree) to resolve any disagreements set forth in the Dispute Notice. If, at the end of such period, they are unable to resolve all disagreements set forth in the Dispute Notice, then any such remaining disagreements (such remaining disagreements, the “Disputed Items”) shall be resolved by the Accounting Expert. Buyers and Seller shall promptly provide their assertions regarding the Disputed Items in writing to the Accounting Expert and to each other. The Accounting Expert shall be instructed to render its determination with respect to the Disputed Items as soon as reasonably possible (which the Parties agree should not be later than 45 days following the date on which the disagreement is referred to the Accounting Expert), and to send copies of such written determination to Buyers and Seller. The Accounting Expert shall base its determination solely on the written submissions of the Parties and shall not conduct an independent investigation. The Accounting Expert shall not assign a value to any Disputed Item submitted to the Accounting Expert greater than the greatest value for such item claimed by a Party (in the Final Closing Statement will Statement, in the case of claims by Buyers, or in the Dispute Notice, in the case of claims by Seller) or less than the smallest value for such item claimed by a Party (in the Final Closing Statement, in the case of claims by Buyers, or in the Dispute Notice, in the case of claims by Seller). The Accounting Expert may not award the Parties in the aggregate more than the amount in dispute. The determination of the Accounting Expert shall be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail The date on which Closing Net Working Capital, Closing Indebtedness, Closing Cash, Closing Net Working Capital Adjustment Amount, Transaction Expenses, Affiliate Receivables and the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Purchase Price are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 2.06(c) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Accounting Expert relating to the work, if any, to be performed by the Independent Accounting Firm Expert hereunder relating to the Disputed Items shall be borne equally by Covidien between Buyers and MallinckrodtSeller, based upon a fraction, the numerator of which is the portion of the aggregate amount of the Disputed Items not awarded to the applicable Party and the denominator of which is the aggregate amount of the Disputed Items. All determinations made by (For example, if Seller challenges items underlying the Independent Accounting Firmcalculations of Closing Net Working Capital, Closing Indebtedness, Closing Cash, Transaction Expenses and/or Affiliate Receivables in the net amount of $1,000,000, and the Closing StatementAccounting Expert determines that Seller has a valid claim for $400,000 of the $1,000,000, as modified by Seller shall bear 60% of the Independent fees and expenses of the Accounting Firm, will be final, conclusive Expert and binding on Buyers shall bear 40% of the Parties, absent fraud or manifest errorfees and expenses of the Accounting Expert.) (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien The Adjustment Amount shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, be paid as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder.follows: (ei) If the Adjustment Amount is a positive number (such amount, the “Increase Amount, as finally determined pursuant to Section 2.16(c”), is greater than then, promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyers shall pay to Seller an amount, in immediately available funds by wire transfer to Seller’s Bank Account, equal to the Increase Amount. (ii) If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Amount have been finally determined Determination Date, Seller shall pay to Buyers an amount equal to the Deficit Amount, and if Seller fails to make such payment within such five (5) Business Day period then Buyers may deliver written instructions to the Escrow Agent in accordance with the Escrow Agreement to pay to Buyers, from the Escrow Amount, the Deficit Amount, in each case by wire transfer of immediately available funds to the account designated by Buyers. (iii) In the event that Buyers, pursuant to this Section 2.162.06(d)(ii), determine to have the Escrow Agent pay to Buyers, from the Escrow Amount, the Deficit Amount, Seller agrees to, promptly following the date of such payment, and in any event within five (5) Business Days of date of such payment, pay in to the Escrow Account an amount equal to the Deficit Amount.

Adjustment Amount. (a) Schedule 2.16 Within ninety (90) days after the Closing Date, Purchaser will deliver to Avado a report (the "Report") which (i) contains a balance sheet of the MS Division at the close of business on the Closing Date prepared in accordance with GAAP and in a manner consistent with the Financial Statements (the "Closing Balance Sheet"), and (ii) sets forth in a sample separate calculation (A) the Working Capital of the MS Division as of the close of business on the Closing Date (the "Closing Working Capital"), and (B) Purchaser's calculation of the Adjustment Amount. The Report shall include an audit opinion by PricewaterhouseCoopers LLP (or another accounting firm of national standing) stating that the Report presents fairly, in all material respects, the financial position, Closing Working Capital, and Adjustment Amount of the MS Division in accordance with the provisions of this Agreement. Purchaser shall use its commercially reasonable efforts to cause its accountants and shall cause those personnel employed by Purchaser and its affiliates after the Target Closing who have previously prepared internal financial statements of the MS Division to be reasonably available to Avado to discuss the Report. In connection with the preparation of the Report, Sellers shall provide Purchaser and its accountants with access to the accountants, accounting records and all audit work papers of the MS Division and other customary assistance and cooperation and shall provide such representations as are required under PricewaterhouseCoopers LLP's standard policies. Purchaser agrees that if PricewaterhouseCoopers LLP so requests, Purchaser shall provide the same representations. If, within thirty days following delivery of the Report (the "Review Period"), Avado has not given Purchaser notice of its objection to the Adjustment Amount, then the Adjustment Amount as of stated in the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement Report will be transferred to Mallinckrodt as of the Distributionfinal. (b) Within sixty If Avado gives such notice of objection (60) such notice must contain a statement in reasonable detail of the basis of Avado's objection and the total amount which Avado disputes), then Avado and Purchaser will attempt to resolve the issues in dispute. Any items not identified in such notice of objection will be deemed accepted by Avado. In the event that the issues are not resolved within 30 days after the Distribution Datedate of the notice, Mallinckrodt shall cause the issues in dispute will be submitted to be prepared and delivered to Covidien a statement Andersen, certified public xxxxxxxants, for resolution (the “Closing Statement”) setting forth "Accountants"). If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Adjustment Amount Accountants such workpapers and other documents and information relating to the calculation disputed issues as the Accountants may request and are available to that party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants one position paper relating to the determination within 15 days of the Adjustment Amount submission of the dispute to the Accountants and to respond to the Accountants' questions regarding the dispute; (ii) the Target Adjustment Amount determination by the Accountants, as set forth in a notice delivered to both parties by the Accountants, will be binding and conclusive on the parties; (iii) Sellers will pay an amount of the fees incurred by the Accountants for such determination equal to the amount of the fees multiplied by a fraction, the numerator of which is the amount of the dispute which is awarded in favor of Purchaser, and the calculation denominator of which is the Target Adjustment Amounttotal amount in dispute; and (iv) Purchaser shall pay the balance of such fees. The Closing Statement Purchaser and Avado shall be prepared in accordance with request that the Transaction Accounting Principles, including Accountants render a determination within 30 days after the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting PrinciplesAccountants are retained. (c) Within thirty (30) If the Adjustment Amount is a positive number, Purchaser shall pay Sellers such amount. If the Adjustment Amount is a negative number, Sellers shall pay Purchaser such amount. Such payments shall be made within ten days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s final determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errorsAmount. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Payments to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm Sellers shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c2.4(b)(i), is greater than the Target Adjustment Amount, as finally determined and payments to Purchaser shall be made pursuant to Section 2.16(c)2.10 or, by at least $20 millionPurchaser's option, then Mallinckrodt shall pay or cause to be paid an amount in cash equal from the Escrow Amount, subject to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16procedures contained herein.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within in any event within sixty (60) calendar days after thereof, Buyer shall prepare and deliver to the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien Holder Representative a written statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the a calculation of Net Working Capital (“Closing Date Net Working Capital”), (ii) a calculation of the Adjustment Amount aggregate amount of all Indebtedness of the Company (“Closing Date Indebtedness”), (iii) a calculation of Cash of the Company (“Closing Date Cash”) and (iiiv) the Target Adjustment Amount and the a calculation of Outstanding Company Expenses (“Closing Date Outstanding Company Expenses”), in each case, calculated as of 11:59 p.m. (Eastern Time) on the Target Adjustment Amountday immediately preceding the Closing Date. The items comprising the Closing Statement shall be prepared in accordance with GAAP, as adjusted by the Transaction Accounting Principlesaccounting practices, including the use of the same line items policies, judgments and line item entries, methodologies set forth on Schedule 1.1(c), without giving effect to the consummation of the Merger, including any payments or cash in respect of the Merger Consideration, Outstanding Company Expenses or any repayment of Indebtedness. Following the Closing, Buyer shall provide the Holder Representative and used in its representatives reasonable access (upon reasonable notice and during normal business hours) to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company and its Subsidiaries relating to the preparation of the Sample Closing Statement and shall cause the personnel of the Company and its Subsidiaries to reasonably cooperate with the Holder Representative in connection with its review of the Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (cb) Within If the Holder Representative shall disagree with the calculation of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Outstanding Company Expenses and/or Closing Date Cash, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to . In the preparation or content of event that the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien Holder Representative does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, the Holder Representative and Buyer shall be deemed to have accepted the Closing Statement and the calculation of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Outstanding Company Expenses and Closing Date Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and the Holder Representative shall use commercially reasonable efforts for a period of twenty (20) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Outstanding Company Expenses and/or Closing Date Cash. If, at the end of such period, Buyer and the Holder Representative are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by an independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and the Holder Representative (such firm, subject to the following proviso, the “Auditor”); provided, that if the Holder Representative and Buyer cannot agree on the Auditor, either Party may request that the American Arbitration Association (the “AAA”) choose the Auditor, in which case the AAA’s choice of the Auditor will be binding and the expenses of the AAA will be shared 50% by Buyer and 50% by the Holder Representative (on behalf of the Holders). Each of Buyer and the Holder Representative shall promptly provide their assertions regarding the disputed elements of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Outstanding Company Expenses and/or Closing Date Cash in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the Parties hereto agree should not be later than forty-five (45) days following the day on which the disagreement is referred to the Auditor). The Auditor shall base its determination solely on (i) the written submissions of the Parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Outstanding Company Expenses and/or Closing Date Cash require adjustment (only with respect to the remaining disagreements submitted to the Auditor) in order to be determined in accordance with Section 3.4(a) (including the definitions of the defined terms used in Section 3.4(a)) and must be based solely in accordance with the terms and provisions of this Agreement. The determination of the Auditor shall be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved and Covidien’s determination of the Adjustment Amount Closing Date Indebtedness, Closing Date Outstanding Company Expenses and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Date Cash are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.4(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally 50% by Covidien Buyer and Mallinckrodt. All determinations made 50% by the Independent Accounting FirmHolder Representative, as a Holder Allocable Expense. (c) The “Adjustment Amount,” which may be positive or negative, shall mean (i) Closing Date Net Working Capital (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Net Working Capital, plus (ii) Estimated Closing Date Indebtedness, minus Closing Date Indebtedness (as finally determined in accordance with Section 3.4(b)), plus (iii) Closing Date Cash (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Cash, plus (iv) Estimated Outstanding Company Expenses, minus Outstanding Company Expenses (as finally determined in accordance with Section 3.4(b)). If the Adjustment Amount is a positive number, then the Merger Consideration shall be increased by the Adjustment Amount, and if the Closing StatementAdjustment Amount is a negative number, as modified the Merger Consideration shall be decreased by the Independent Accounting Firm, will absolute value of the Adjustment Amount. The Adjustment Amount shall be final, conclusive and binding on the Parties, absent fraud or manifest errorpaid in accordance with Section 3.4(d). (d) For purposes of complying The Adjustment Escrow Amount shall be held and invested by the Escrow Agent in accordance with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) Escrow Agreement. If the Adjustment AmountAmount is a positive number, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c)and in any event within three (3) Business Days of the Determination Date, by at least $20 million, then Mallinckrodt Buyer shall pay or cause to be paid the Paying Agent an amount in cash equal to the difference from Adjustment Amount, and the first dollar (i.e., without regard Escrow Agent shall release the Adjustment Escrow funds to the $20 million threshold) Paying Agent, to Covidien be paid by wire transfer of immediately available funds the Paying Agent to an account or accounts designated in writing by Covidien Holders pursuant to Mallinckrodttheir respective Post-Closing Payment Allocation. If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount, as finally determined pursuant to Section 2.16(c”), is less than then, promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar any event within three (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (53) Business Days of the date on which Determination Date, the Escrow Agent shall pay to Buyer an amount out of Adjustment Escrow Funds equal to the Deficit Amount (and, to the extent the Deficit Amount is less than the Adjustment Escrow Funds, the Escrow Agent shall release the difference between the Deficit Amount and the Adjustment Escrow Funds to the Paying Agent, to be paid by the Paying Agent to Holders according to their respective Post-Closing Payment Allocation. If the Deficit Amount exceeds the Adjustment Escrow Funds, Buyer shall be entitled to be paid such difference from the Indemnity Escrow Funds. Upon determination of the Adjustment Amount pursuant to Section 3.4(a) and Section 3.4(b), each of Buyer and the Target Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse Adjustment Amount have been finally determined pursuant to Escrow Funds in accordance with this Section 2.163.4(c).

Adjustment Amount. (a) Schedule 2.16 sets Not less than five (5) business days prior to the Closing Date, the Company shall, in consultation with the HBC, prepare and deliver to HBC a consolidated balance sheet of the Company as of such date which shall represent the Company’s reasonable estimate of the Closing Balance Sheet; such balance sheet to be in form and detail and in its accounting principles and policies consistent in every material respect with, the Company Balance Sheet (as defined in Section 3.04) and accompanied by schedules setting forth in reasonable detail all assets and liabilities included therein. Such balance sheet or the accompanying schedules shall contain sufficient detail of the assets and liabilities. In the event HBC shall reasonably object to any of the information set forth on the consolidated balance sheet or accompanying schedules as presented by the Company within five (5) business days after delivery of the consolidated balance sheet by the Company, the parties shall negotiate in good faith and agree on appropriate adjustments to the end that such balance sheet and accompanying schedules reflect a sample reasonable estimate of the Closing Balance Sheet (the estimated balance sheet as finally determined by the parties pursuant to this Section 1.04(a) is herein referred to as the “Estimated Closing Balance Sheet”). In connection with the preparation of the Estimated Closing Balance Sheet, the Company shall provide to HBC such information and detail, as HBC shall reasonably request. For the avoidance of doubt, the Estimated Closing Balance Sheet shall include, and the calculation of the Estimated Balance Sheet Adjustment Amount shall reflect, the payment or accrual of Third Party Expenses and amounts owed to participants under the BVF/CSNK Acquisition Corp. Management Retention Plan as a result of the Contemplated Transactions (and the Target Adjustment Amount as of related effect on the Balance Sheet Date (the “Sample Closing Statement”Tax accrual), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution DateFor purposes of this Agreement, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Estimated Balance Sheet Adjustment Amount. The Closing Statement ” shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the workamount, if any, to be performed by that the Independent Accounting Firm shall be borne equally by Covidien and MallinckrodtTangible Stockholders’ Equity, as shown on the Estimated Closing Balance Sheet as of the Closing Date is less than $7,674,765 (the “Balance Sheet Target”). All determinations made by the Independent Accounting Firm, The Purchase Price and the Closing Statement, as modified Payment shall be reduced by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Estimated Balance Sheet Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of Not less than five (5) Business Days prior to the Adjustment Amount Closing Date and in no event more than ten (10) Business Days prior to the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt Seller shall cause deliver to be prepared and delivered to Covidien Buyer a written statement (the “Estimated Closing Statement”) setting forth (i) its good faith estimate of each Purchase Price Component of the Company and all Group Companies as at the Closing Date, including its good faith estimate of (A) the Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”), (B) the aggregate amount of all Indebtedness (the “Estimated Closing Date Indebtedness”), (C) the aggregate amount of all Cash and Cash Equivalents (the “Estimated Closing Date Cash”), and (D) the Transaction Expenses (the “Estimated Closing Date Transaction Expenses”), and (ii) its calculation of the Estimated Working Capital Adjustment Amount Amount, in each case, together with reasonable supporting information. Seller shall prepare the Estimated Closing Statement in good faith in accordance with the Accounting Principles and in a manner consistent with the calculation set forth in the Sample Closing Statement. Seller shall provide Buyer reasonable supporting documentation for the Estimated Closing Statement and the calculation thereof and any additional information related thereto reasonably requested by Buyer. Prior to the Closing, Seller and Buyer in good faith shall seek to resolve any differences that they may have with respect to the computation of any items in the Estimated Closing Statement and Seller shall consider in good faith any revisions proposed by Buyer to the calculations set forth in the Estimated Closing Statement, and to the extent Seller agrees with any such revisions, the Estimated Closing Statement shall be modified to reflect such revisions; provided, that if the Parties are unable to resolve such differences prior to the Closing Date, the amounts reflected in the Estimated Closing Statement shall be used for purposes of calculating the Purchase Price on the Closing Date (subject in any case to the adjustments set forth in this Section 2.04); provided, further, that Seller acknowledges and agrees that (x) Buyer shall not be deemed to have agreed to any of the amounts or calculations set forth in the Estimated Closing Statement or the calculation of each Purchase Price Component therein by virtue of having proposed any revisions (whether or not accepted) pursuant to this Section 2.04(a), (y) the use of such Estimated Closing Statement (whether it includes any revisions proposed by Buyer or not) shall not in any way prejudice Buyer’s right to disagree with, dispute or change any amount or Purchase Price Component in the Closing Statement delivered by Buyer pursuant to Section 2.04(b) and (z) any failure of Buyer to raise any objection or dispute with respect to the Estimated Closing Statement shall not in any way prejudice Buyer’s right to disagree with, dispute or change any amount or Purchase Price Component in the Closing Statement delivered by Buyer pursuant to Section 2.04(b). (b) As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereof, Seller shall prepare and deliver to Buyer the Closing Statement, together with reasonable supporting information, setting forth a calculation of each Purchase Price Component, including (i) the Closing Date Net Working Capital, (ii) the Closing Date Indebtedness, (iii) the Closing Date Cash, and (iv) the Closing Date Transaction Expenses. Following the delivery of the Closing Statement and taking into account any applicable Pandemic Measures, each Party shall provide the other Party and its Representatives reasonable access during business hours and upon reasonable prior notice to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested), auditors or accountants of such Party, and shall cause the personnel of such Party and its Affiliates (including, with respect to Buyer, the Group Companies) to reasonably cooperate with the other Party and its Representatives, in each case, in connection with the preparation and review of the Closing Statement. (c) If Buyer disagrees with the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash, or the Closing Date Transaction Expenses, it shall notify Seller of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement together with reasonable supporting information and calculations thereof, within sixty (60) days after its receipt of the Closing Statement. In the event that Buyer does not provide such a notice of disagreement within such sixty (60)-day period, Buyer shall be deemed to have accepted the Closing Statement and the calculation of the Adjustment Amount and (ii) Closing Date Net Working Capital, the Target Adjustment Amount Closing Date Indebtedness, the Closing Date Cash and the calculation of the Target Adjustment Amount. The Closing Statement Date Transaction Expenses delivered by Seller, which shall be prepared in accordance with final, binding, conclusive and non-appealable for all purposes hereunder. In the Transaction Accounting Principles, including the use event any such notice of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; disagreement is timely provided, however, that assets newly acquired Buyer and liabilities newly incurred following the date Seller shall use commercially reasonable efforts for a period of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of (or such longer period as the Closing Statement, Covidien shall deliver written notice Parties may mutually agree in writing) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation or content calculations of the Closing Statement Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses. If, at the end of such period, Buyer and Seller are unable to resolve such disagreements, then RSM US LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Dispute NoticeAuditor”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice ) shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth thereinremaining disagreements. If Mallinckrodt Buyer and Covidien, such good faith effort notwithstanding, fail Seller shall use commercially reasonable efforts to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of cause the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) Auditor to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve determine as the Independent Accounting Firm. As promptly as practicable, and but in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than within thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each date on which such dispute is referred to the Auditor, whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses require adjustment. The Auditor shall consider only those items and amounts in Buyer’s and Seller’s respective calculations of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line itemClosing Date Net Working Capital, such determinationClosing Date Indebtedness, if not in accordance with the position of either Covidien Closing Date Cash or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement Date Transaction Expenses that are identified by Buyer or by Covidien in the Dispute Notice, Seller as applicablebeing items and amounts to which Buyer and Seller have been unable to agree. Notwithstanding the foregoing, the The scope of the disputes to be resolved by the Independent Accounting Firm Auditor shall be limited to correcting mathematical errors and determining whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated items and amounts in dispute were determined in accordance with the Transaction Accounting Principles, Documents and the Independent Accounting Firm Auditor is not to make any other determination. In resolving any disputed item, including the Auditor may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either Party. The Auditor’s determination as to of the Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash or the Closing Date Transaction Expenses shall be based solely on written materials submitted by Buyer and Seller. Neither Buyer nor Seller nor any of their respective Affiliates or Representatives shall have any ex parte communications (whether GAAP was followed, written or oral) with the Auditor concerning the determinations required hereunder without the other Party’s prior written consent. All communications with the Auditor shall be conducted in writing with copies sent simultaneously to the extent GAAP is inconsistent with other party in the Transaction Accounting Principlessame manner. All The fees and expenses relating of the Auditor shall be allocated between Buyer or Seller, as applicable, in the same proportion as the aggregate amount of the disputed items so submitted to the work, if any, to be performed Auditor that are unsuccessfully disputed by each such Party (as finally determined by the Independent Accounting Firm Auditor) bears to the total disputed amount of such items so submitted. The determination of the Auditor shall be borne equally by Covidien final, binding, conclusive and Mallinckrodtnon-appealable absent manifest error. All determinations made by The date on which the Independent Accounting FirmClosing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash and the Closing StatementDate Transaction Expenses are finally determined in accordance with this Section 2.04(c) is hereinafter referred to as the “Determination Date.” For the avoidance of doubt and solely as an illustration of the methodology set forth in the immediately preceding sentence, as modified if Seller claims that the appropriate adjustments are $1,000 greater than the amount determined by Buyer and if the Independent Accounting FirmAuditor ultimately resolves the dispute by awarding to Seller $600 of the $1,000 contested, then the fees and expenses of the Auditor will be finalallocated sixty percent (60%) (i.e., conclusive 600 divided by 1,000) to Buyer and binding on the Partiesforty percent (40%) (i.e., absent fraud or manifest error400 divided by 1,000) to Seller. (d) For purposes of complying The “Adjustment Amount,” which may be positive or negative, shall mean (i) the Closing Date Net Working Capital (as finally determined in accordance with Section 2.04(c)) minus the terms set forth Estimated Closing Date Net Working Capital, plus (ii) the Estimated Closing Date Indebtedness minus the Closing Date Indebtedness (as finally determined in this accordance with Section 2.162.04(c)), Mallinckrodt and Covidien plus (iii) the Closing Date Cash (as finally determined in accordance with Section 2.04(c)) minus the Estimated Closing Date Cash, plus (iv) the Estimated Closing Date Transaction Expenses minus the Closing Date Transaction Expenses (as finally determined in accordance with Section 2.04(c)). If the Adjustment Amount is a positive number, then the Purchase Price shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to be increased by the extent related to Adjustment Amount (the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business“Increase Amount”), and if the Adjustment Amount is a negative number, then the Purchase Price shall permit access to its facilities and personnel, as may be reasonably required in connection with decreased by the preparation and analysis absolute value of the Closing Statement and Adjustment Amount (the resolution of any disputes thereunder“Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.04(e). (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyer shall pay to Seller an amount in cash equal to the Adjustment Increase Amount in immediately available funds by wire transfer to an account or accounts designated by Seller within two (2) Business Days of the Determination Date, by written notice to Buyer. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Determination Date, Seller shall pay, or shall cause to be paid, to Buyer an amount in cash equal to the Deficit Amount have been finally determined in immediately available funds by wire transfer to an account or accounts designated by Buyer within two (2) Business Days of the Determination Date by written notice to Seller. For U.S. federal income and other applicable Tax purposes, to the extent permitted by applicable Law, any Increase Amount or Deficit Amount pursuant to this Section 2.162.04 shall be treated as an adjustment to the Purchase Price.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset in any event within 90 calendar days thereof, Parent shall prepare and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred deliver to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien Equityholders’ Representative a written statement (the “Final Closing Statement”) setting forth (i) Parent’s calculations of (A) Net Working Capital, (B) Closing Date Indebtedness, (C) Closing Date Cash and (D) Transaction Expenses, (ii) Parent’s calculations of the Net Working Capital Adjustment Amount Amount, and (iii) on the basis of the foregoing, Parent’s calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the Equity Value. Parent’s calculation of the Target Adjustment Amount. The Net Working Capital, Closing Statement Date Indebtedness, Closing Date Cash and Transaction Expenses shall be prepared in accordance with the Transaction Accounting Principles, including Principles and the use definitions of the same line items and line item entries, applicable defined terms set forth on herein. If Parent fails to timely deliver the Final Closing Statement in accordance with the first sentence of this Section 2.08(a) within such 90-day period, then the Preliminary Closing Statement delivered by the Company to Parent pursuant to Section 2.07 shall be deemed to be the Final Closing Statement for all purposes hereunder. (b) Following the Closing, Parent shall provide the Equityholders’ Representative and used in its Representatives access to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company and its Subsidiaries relating to the preparation of the Sample Final Closing Statement and shall cause the personnel of the Company and its Subsidiaries to cooperate with the Equityholders’ Representative in connection with its review of the Final Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien If the Equityholders’ Representative shall disagree with any of Parent’s calculations contained in the Final Closing Statement, Covidien it shall deliver written notify Parent of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within 30 days after its receipt of the Final Closing Statement. In the event that the Equityholders’ Representative does not provide such a notice of disagreement within such 30-day period, the Equityholders’ Representative shall be deemed to Mallinckrodt have agreed to the Final Closing Statement (including the determinations included therein) delivered by Parent, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Parent and the Equityholders’ Representative shall use their respective reasonable best efforts for a period of 30 days (or such longer period as they may mutually agree) to resolve any dispute Covidien has disagreements with respect to any calculations contained in the Final Closing Statement. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements (such remaining disagreements, the “Disputed Items”) shall be resolved by an independent accounting firm of recognized national standing as may be mutually selected by Parent and the Equityholders’ Representative (such firm, the “Auditor”). Each of Parent and the Equityholders’ Representative shall promptly provide their assertions regarding the Disputed Items in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to the preparation or content Disputed Items as soon as reasonably possible (which the parties hereto agree should not be later than 60 days following the date on which the disagreement is referred to the Auditor). The Auditor shall act as an expert, and not as an arbitrator, and shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation or allow any ex parte conferences, oral examinations, testimony, depositions, discovery or other form of evidence gathering or hearings and (ii) the extent (if any) to which Net Working Capital, Closing Statement Date Indebtedness, Cash and/or Transaction Expenses require adjustment (only with respect to the “Dispute Notice”Disputed Items submitted to the Auditor) in order to be determined in accordance with Section 2.08(a) (including the definitions of the defined terms used therein); provided, however, that if Covidien does . The Auditor shall not deliver assign a value to any Dispute Notice Disputed Item submitted to Mallinckrodt within the Auditor greater than the greatest value for such thirty (30)-day period, item claimed by either party or less than the Closing Statement will smallest value for such item claimed by either party. The determination of the Auditor shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Net Working Capital, the amounts involved and Covidien’s determination of the Closing Date Indebtedness, Closing Date Cash, Transaction Expenses, Net Working Capital Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Equity Value are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 2.08(c) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Parent, on the one hand, and Mallinckrodt. All determinations the Equityholders’ Representative, on the other hand, in proportion to the allocation of the dollar value of the Disputed Items as between Parent and the Equityholders’ Representative (set forth in the written submissions to the Auditor) made by the Independent Accounting FirmAuditor such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if the Equityholders’ Representative challenges items underlying the calculations of Net Working Capital, Closing Date Indebtedness, Closing Date Cash and/or Transaction Expenses in the net amount of $1,000,000, and the Closing StatementAuditor determines that the Equityholders’ Representative has a valid claim for $400,000 of the $1,000,000, as modified by the Independent Accounting Firm, will be final, conclusive Equityholders’ Representative shall bear 60% of the fees and binding on expenses of the Parties, absent fraud or manifest errorAuditor and Parent shall bear 40% of the fees and expenses of the Auditor. (d) For purposes of complying The “Adjustment Amount,” which may be positive or negative, shall mean the Equity Value (as finally determined in accordance with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities 2.08(a) or Mallinckrodt Business, and shall permit access to its facilities and personnel2.08(c), as may applicable) minus the Estimated Equity Value. The Adjustment Amount shall be reasonably required paid in connection accordance with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunderSection 2.08(e). (e) Promptly following the Determination Date: (i) If the Adjustment Amount is a positive number or zero (such amount, the “Increase Amount, as finally determined pursuant to Section 2.16(c”), is greater than then (A) Parent shall cause an amount equal to the Target Adjustment portion of the Increase Amount payable to the Equityholders based on their Applicable Percentages (i.e., the Increase Amount less the Parent’s Applicable Percentage of the Increase Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause ) to be paid an amount in cash equal to the difference from Paying Agent for further distribution by the first dollar (i.e., without regard Paying Agent to the Equityholders in accordance with such Applicable Percentages and (B) Parent and the Equityholders’ Representative shall deliver a joint written instruction to the Escrow Agent to release to Parent and the Equityholders their respective Applicable Percentages of the Adjustment Escrow Amount. Notwithstanding anything to the contrary herein, in no event shall the Increase Amount exceed $20 million threshold5,000,000. (ii) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount, as finally determined pursuant to Section 2.16(c”), then (A) Parent and the Equityholders’ Representative shall deliver a joint written instruction to the Escrow Agent to release such amount to Parent from the Adjustment Escrow Account and (B) if the Deficit Amount is less than the Target Adjustment Escrow Amount, Parent and the Equityholders’ Representative shall also, as finally determined promptly as practicable, deliver a joint written instruction to the Escrow Agent to release an amount equal to the excess of the Adjustment Escrow Amount over the Deficit Amount to Parent and the Equityholders in accordance with their respective Applicable Percentages of such excess amount. Notwithstanding anything to the contrary herein, in no event shall the Deficit Amount exceed the Adjustment Escrow Amount. (f) As soon as practicable (but in any event within three Business Days) after the Determination Date, the Equityholders’ Representative shall deliver to Parent, the Paying Agent and the Escrow Agent, as applicable, a schedule which shall include a calculation of the portion of any Increase Amount and the portion of any Escrow Release Amount to which Parent and each Equityholder is entitled pursuant to Section 2.16(c2.08(e), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample As soon as reasonably practicable following the Closing Date, and in any event within 45 calendar days thereof, Seller shall prepare and deliver to Buyer (i) an unaudited combined balance sheet of the Companies (the “Closing Balance Sheet”) and (ii) Seller’s good faith calculation of (A) Net Working Capital (“Closing Net Working Capital”), (B) the aggregate amount of all Indebtedness (“Closing Indebtedness”), (C) the aggregate amount of Cash of the Companies (“Closing Cash”) and (D) Transaction Expenses (“Closing Transaction Expenses”), in each case, calculated as of immediately prior to the Closing; (iii) Seller’s calculation of the Closing Net Working Capital Adjustment Amount and (iv) on the Target Adjustment Amount as basis of the Balance Sheet Date foregoing, a calculation of the Closing Purchase Price (together with the items referred to in clauses (ii) and (iii) above, the “Sample Final Closing Statement”); provided, including that any liability for Taxes included in the assetFinal Closing Statement shall be calculated after taking into account any income Tax deductions for Transaction Expenses that are properly accrued on the Closing Date and are available to offset such Tax liability (or, liability and other line items and accounting principles to the extent such Tax deductions exceed such Tax liability, any such excess Tax deductions that the Buyer reasonably determines in good faith can be used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of offset its income Tax liability; Buyer shall provide the Distribution. (b) Within sixty (60) days after Seller with a certificate executed by the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) Buyer’s Chief Financial Officer setting forth (i) the Adjustment Amount and in reasonable detail the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amountsuch amounts together with supporting details). The Closing Statement Balance Sheet, Closing Net Working Capital, Closing Indebtedness and Closing Cash shall be prepared in accordance with the Transaction Accounting Principles, including Principles and the use definitions of the same line items and line item entries, set forth on and defined terms used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”this Section 2.06(a); provided, however, that if Covidien does not deliver (x) the Final Closing Statement (and any Dispute Notice to Mallinckrodt within amounts included therein) shall reflect no increase in any accrual, provision or reserve unless such thirty increase is consistent with the Accounting Principles, (30)-day periody) except as set forth in the following clause (z), the Final Closing Statement will (and any amounts included therein) shall not give effect to the consummation of the transactions contemplated by this Agreement, including any payments of cash in respect of the Purchase Price, or any financing transactions in connection therewith or, after the Closing, any other action or omission by Buyer or any of the Companies and (z) the Final Closing Statement shall not reflect (I) any expense or liability for which Buyer is expressly responsible under this Agreement, other than the Accrued Employee Amounts and any Transaction Expenses, or (II) any negative Bonus Bank Amounts. Notwithstanding anything to the contrary in this Agreement, the calculations to be finalmade pursuant to Section 2.05, conclusive and binding the purchase price adjustment to be made pursuant to this Section 2.06, shall be intended to give effect to the arithmetic difference between the items in the Preliminary Closing Statement and the Final Closing Statement, all of which shall be determined in accordance with the Accounting Principles without regard to any differences from GAAP. Neither Section 2.05 nor Section 2.06 is intended to be used to adjust for claims that may be made with respect to the Balance Sheet or any inconsistencies or questions of interpretation between the Balance Sheet or the Accounting Principles, on the Parties. Any Dispute Notice one hand, and GAAP, on the other. (b) Following the Closing, Buyer shall provide Seller and its representatives access to the records, properties, personnel and (isubject to the execution of customary work paper access letters if requested) set auditors of the Companies necessary for the preparation of the Final Closing Statement and shall cause the personnel of the Companies to cooperate with Seller in connection with its preparation of the Final Closing Statement. (c) If Buyer shall disagree with any of Seller’s calculations contained in the Final Closing Statement, it shall notify Seller of such disagreement in writing, setting forth in reasonable detail the basis particulars of such disagreement, including the specific items and amounts in dispute together with Buyer’s rationale for any dispute disputing such items and reasonable supporting details and calculations, within 45 days after its receipt of the Final Closing Statement. In the event that Buyer does not provide such a notice of disagreement within such 45-day period, Buyer shall be deemed to have agreed to the Final Closing Statement (including the determinations included therein) delivered by Seller, which shall be final, binding and conclusive for all purposes hereunder. In the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve event any such dispute within fifteen notice of disagreement is timely provided, Buyer and Seller shall use their respective reasonable best efforts for a period of 30 days (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”such longer period as they may mutually agree) to resolve any disagreements with respect to any calculations contained in the Final Closing Statement. If, at the end of such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt period, they are unable to agree on the Independent Accounting Firmresolve such disagreements, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two any such remaining disagreements (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoingremaining disagreements, the scope of the disputes to “Disputed Items”) shall be resolved by KPMG LLP or such other independent accounting firm of internationally recognized standing as may be mutually selected by Buyer and Seller (such firm, the Independent Accounting Firm “Auditor”). Each of Buyer and Seller shall be limited to whether any determination of promptly provide their assertions regarding the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followedDisputed Items and, to the extent GAAP is inconsistent with relevant thereto, the Transaction Accounting Principles. All fees and expenses relating Closing Balance Sheet in writing to the work, if any, Auditor and to be performed by the Independent Accounting Firm each other. The Auditor shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying instructed to render its determination in writing with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, respect to the extent related to Disputed Items as soon as reasonably possible (which the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may parties hereto agree should not be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater later than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of 60 days following the date on which the Adjustment Amount disagreement is referred to the Auditor). The Auditor shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the Target Adjustment Amount have been finally extent (if any) to which Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses require adjustment (only with respect to the Disputed Items submitted to the Auditor) in order to be determined pursuant to this Section 2.16.in accordance with Section

Adjustment Amount. (a) Schedule 2.16 sets Not less than three (3) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller Parent shall deliver to Buyer Parent a written statement setting forth a sample calculation (i) its good faith estimate of the (A) Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”), (B) Closing Date Indebtedness (the “Estimated Closing Date Indebtedness”), (C) Closing Date Cash (the “Estimated Closing Date Cash”) and (D) Closing Date Transaction Expenses (the “Estimated Closing Date Transaction Expenses”) and (ii) its calculations of the Estimated Working Capital Adjustment Amount and the Target Estimated Indebtedness Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the DistributionAmount. (b) Within sixty As soon as reasonably practicable following the Closing Date, and in any event within ninety (6090) days after thereof, Buyer Parent shall prepare and deliver to Seller Parent (i) a calculation of the Distribution DateClosing Date Net Working Capital, Mallinckrodt shall cause to be prepared and delivered to Covidien (ii) a statement calculation of the aggregate amount of all Indebtedness as of the Effective Time (the “Closing StatementDate Indebtedness”), (iii) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount Cash and Cash Equivalents of the Group Companies as of the Effective Time (the “Closing Date Cash”) and (iiiv) the Target Adjustment Amount and the a calculation of the Target Adjustment Amount. The Transaction Expenses as of the Effective Time (the “Closing Statement shall be Date Transaction Expenses,” and together with the Closing Date Net Working Capital, the Closing Date Indebtedness and the Closing Date Cash, the “Closing Date Calculations”), in each case (x) prepared in accordance with the Transaction Accounting Principles, including Principles and (y) other than with respect to the use calculation of the same line items Transaction Expenses, determined without giving effect to the consummation of the Closing (including any adjustments as a result of the application of purchase accounting). Following the Closing, Buyer Parent shall provide, or cause to be provided to, Seller Parent and line item entriesits Representatives reasonable access, set forth on during normal business hours and used in upon reasonable advance notice, to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested by) accountants of Buyer Parent relating to the preparation of the Sample Closing Statement; provided, however, that assets newly acquired Date Calculations and liabilities newly incurred following shall cause the date personnel of Buyer Parent and its Subsidiaries (including the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Group Companies) to reasonably cooperate with Seller Parent and its Representatives to the extent consistent necessary for Seller Parent to review the Closing Date Calculations and prepare a notice of disagreement, if any, in accordance with the Transaction Accounting PrinciplesSection 2.04(c). (c) Within If Seller Parent disagrees with the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses, it shall notify Buyer Parent of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement and the specific adjustments to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses which Seller Parent believes should be made, within forty-five (45) days after its receipt of the Closing Date Calculations. In the event that Seller Parent does not provide such a notice of disagreement within such forty-five (45)-day period, Seller Parent shall be deemed to have accepted the Closing Date Calculations delivered by Buyer Parent, which shall be final, binding and conclusive for all purposes hereunder. Any items not disputed in any notice of disagreement timely delivered by Seller Parent shall be deemed to have been accepted by Seller Parent for all purposes under this Agreement. In the event any such notice of disagreement is timely delivered, Buyer Parent and Seller Parent shall use commercially reasonable efforts for a period of thirty (30) days following receipt by Covidien the delivery of the Closing Statement, Covidien shall deliver written notice of disagreement by Seller Parent (or such longer period as they may mutually agree) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation or content calculations of the Closing Statement Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses. If, at the end of such period, they are unable to resolve all or some of such disagreements, then they shall as promptly as possible after the expiration of the thirty (30) day resolution period engage for purposes hereof and refer such disagreements to an independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer Parent and Seller Parent in good faith as promptly as practicable (the “Dispute NoticeAuditor”); provided) which shall, howeveracting as an expert and not an arbitrator, that resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within forty-five (45) days of the date on which such dispute is referred to the Auditor, only with respect to the remaining disagreements submitted to the Auditor, whether and to what extent (if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day periodany) the Closing Date Net Working Capital, the Closing Statement Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses require adjustment based on the written submissions of Seller Parent and Buyer Parent. A copy of all materials submitted to the Auditor shall be provided by Seller Parent or Buyer Parent as applicable, to the other Party concurrently with the submission thereof to the Auditor, and all such materials shall be submitted to the Auditor by Seller Parent and Buyer Parent no later than ten (10) days after the Auditor’s acceptance of appointment. In resolving the remaining disagreements, the Auditor (i) shall be bound by the provisions of this Agreement, (ii) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either Seller Parent or Buyer Parent and (iii) shall base its decision solely upon the written submissions of Seller Parent and Buyer Parent and the terms of this Agreement (and not upon an independent review) (provided that the Auditor may provide written requests for clarification regarding the written submissions of Seller Parent or Buyer Parent). If, before the Auditor renders its determination with respect to the disputed items, (x) Seller Parent notifies Buyer Parent in writing of its agreement with any of the disputed items or (y) Buyer Parent notifies Seller Parent in writing of its agreement with any of the disputed items, then in each case such items as so agreed will be final, conclusive and binding on the Parties immediately upon such notice. The fees and expenses of the Auditor shall be paid by Buyer Parent and Seller Parent so that Seller Parent’s share of such costs shall be in the in the same proportion that (x) the aggregate amount of the disputed items submitted by the Parties that are not awarded to Seller Parent bears to (y) the total amount of all disputed items submitted by the Parties to the Auditor. For example, if the Parties submit disputed items in the aggregate amount of $1,000 and Seller Parent is awarded $200, Seller Parent will be responsible for 80% of the fees and expenses of the Auditor and Buyer Parent will be responsible for 20% of the fees and expenses of the Auditor. The determination of the Auditor shall be final, binding and conclusive on the Parties. Any Dispute Notice shall The date on which the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash and the Closing Date Transaction Expenses are finally determined in accordance with this Section 2.04(c) is herein referred to as the “Determination Date.” (d) The “Adjustment Amount,” which may be positive or negative, means (i) set forth the Final Working Capital Adjustment Amount (as finally determined in reasonable detail accordance with Section 2.04(c)) minus the basis for any dispute included thereinEstimated Working Capital Adjustment Amount, plus (ii) the amounts involved Estimated Indebtedness Adjustment Amount minus the Final Indebtedness Adjustment Amount (as finally determined in accordance with Section 2.04(c)), plus (iii) the Closing Date Cash (as finally determined in accordance with Section 2.04(c)) minus the Estimated Closing Date Cash, plus (iv) the Closing Date Transaction Expenses (as finally determined in accordance with Section 2.04(c)) minus the Estimated Closing Date Transaction Expenses. If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount (the “Increase Amount”), and Covidien’s determination if the Adjustment Amount is a negative number, then the Purchase Price shall be decreased by the absolute value of the Adjustment Amount and/or (the Target “Deficit Amount”). The Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly shall be paid in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”Section 2.04(e), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyer Parent shall pay, or caused to be paid, to Seller Parent an amount in cash equal to the Adjustment Increase Amount in immediately available funds by wire transfer to the United States bank account or accounts designated by Seller Parent, by written notice to Buyer Parent. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Determination Date, Seller Parent shall pay, or shall cause to be paid, to Buyer Parent an amount in cash equal to the Deficit Amount have been finally determined in immediately available funds by wire transfer to a United States bank account designated by Buyer Parent, by written notice to Seller Parent. For U.S. federal income and other applicable Tax purposes, to the extent permitted by Law, any Increase Amount or Deficit Amount pursuant to this Section 2.162.04 shall be treated as an adjustment to the portion of the Purchase Price attributable to the relevant Purchased Interests.

Adjustment Amount. (a) Schedule 2.16 sets Not less than five (5) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller shall deliver to Buyer a written statement (the “Preliminary Closing Statement”) setting forth a sample (i) its good faith estimate of (A) the Net Working Capital as of the Effective Time (the “Estimated Closing Date Net Working Capital”), (B) the aggregate amount of all Funded Debt as of the Effective Time (the “Estimated Closing Date Funded Debt”), (C) the aggregate amount of all Cash as of the Effective Time (the “Estimated Closing Date Cash”) and (D) the Unpaid Company Transaction Expenses (the “Estimated Unpaid Company Transaction Expenses”) and (ii) its calculation of the Estimated Net Working Capital Adjustment Amount and Amount. The calculations included in the Target Adjustment Amount as Preliminary Closing Statement shall be prepared on a basis consistent with the Accounting Principles (it being acknowledged that certain amounts thereon shall be estimates). The Preliminary Closing Statement shall be accompanied by reasonable supporting detail (including reasonable supporting calculations). Following the delivery of the Balance Sheet Date (the “Sample Preliminary Closing Statement”), Seller shall, and shall cause its Subsidiaries (including the assetPrecoat Subsidiaries) to, liability provide Buyer and other line items its Representatives reasonable access (during normal business hours and accounting principles used in such calculation, at mutually agreeable dates) to the personnel and assuming that all (subject to the execution of such asset customary work paper access letters if requested by) auditors or accountants of Seller and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred its Subsidiaries (including the Precoat Subsidiaries) relating to Mallinckrodt as the preparation of the DistributionPreliminary Closing Statement and shall cause the personnel of Seller and its Subsidiaries (including the Precoat Subsidiaries) to reasonably cooperate with Buyer and its Representatives in connection with their review of the Preliminary Closing Statement and consider in good faith any changes Buyer recommends; provided, however, if the parties are unable to agree upon any matter set forth therein, the amount reflected in the Preliminary Closing Statement shall be used for calculation of the Consideration payable at Closing. (b) Within As soon as reasonably practicable following the Closing Date, and in any event within sixty (60) days after thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared Precoat Subsidiaries as of the Effective Time (the “Closing Balance Sheet”) and delivered to Covidien (ii) a written statement (together with the Closing Balance Sheet, the “Closing Statement”) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount and Net Working Capital as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Net Working Capital”), (ii) the Target Adjustment Amount and the a calculation of the Target Adjustment Amountaggregate amount of all Funded Debt as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Funded Debt”), (iii) a calculation of the aggregate amount of all Cash as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Cash”), and (iv) a calculation of the Unpaid Company Transaction Expenses (the “Closing Date Unpaid Company Transaction Expenses”). The Closing Balance Sheet and the calculations included in the Closing Statement shall be prepared in accordance with the Transaction Accounting Principles. The Closing Statement shall be accompanied by reasonable supporting detail (including reasonable supporting calculations). Following the delivery of the Closing Statement, Buyer shall, and shall cause its Subsidiaries (including the use Precoat Subsidiaries) to, provide Seller and its Representatives reasonable access (during normal business hours and at mutually agreeable dates) to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested by) auditors or accountants of Buyer and its Subsidiaries (including the same line items and line item entries, set forth on and used in Precoat Subsidiaries) relating to the preparation of the Sample Closing Statement and shall cause the personnel of Buyer and its Subsidiaries (including the Precoat Subsidiaries) to reasonably cooperate with Seller and its Representatives in connection with their review of the Closing Statement; provided. Without the prior written consent of Seller, however, that assets newly acquired and liabilities newly incurred following Buyer shall not have the date right (except to reflect the final resolution of any disputes in accordance with Section 2.05(c)) to modify the Sample Closing Balance Sheet or Buyer’s proposed calculations in the Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included after Buyer delivers such Closing Balance Sheet and Closing Statement pursuant to the extent consistent with the Transaction Accounting Principlesthis Section 2.05(b). (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with the calculation of the Closing StatementDate Net Working Capital, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement Date Funded Debt, the Closing Date Cash or the Closing Date Unpaid Company Transaction Expenses, it shall notify Buyer of such disagreement in writing (the “Dispute NoticeNotice of Disagreement”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set setting 20 forth in reasonable detail the basis for particulars of such disagreement (and, to the extent known or estimated, Seller’s proposed calculation of any dispute included thereinitem of the Closing Statement it is disputing), within forty-five (45) days after its receipt of the Closing Statement. In the event that Seller does not provide a Notice of Disagreement within such forty-five (45)-day period, Seller shall be deemed to have accepted the Closing Statement, including the calculation of the Closing Date Net Working Capital, the amounts involved Closing Date Funded Debt, the Closing Date Cash and Covidien’s determination of the Adjustment Amount and/or Closing Date Unpaid Company Transaction Expenses delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder; provided, however such forty-five (45)-day period shall be tolled to the Target Adjustment Amount extent that Buyer and its Subsidiaries (as applicableincluding, the Precoat Subsidiaries) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any provide such dispute access as is required by the penultimate sentence of Section 2.05(b) in a reasonably timely manner. In the event a Notice of Disagreement is provided within fifteen such forty-five (1545)-day period, Buyer and Seller shall use commercially reasonable efforts for a period of twenty (20) Business Days following receipt by Mallinckrodt of the Dispute Notice days (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash or the Closing Date Unpaid Company Transaction Expenses. If, at the end of such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt period, they are unable to agree on the Independent Accounting Firmresolve such disagreements, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two Duff & Xxxxxx (2) firms will mutually select a third nationally recognized major accounting firm or if Duff & Xxxxxx is unwilling or unable to serve as the Independent Accounting FirmAuditor, such other independent accounting or financial consulting firm of recognized national standing as may be mutually acceptable to each of Buyer and Seller acting in good faith) (the “Auditor”) shall resolve any remaining disagreements. As The Auditor shall determine as promptly as practicable, and but in any event not more than fifteen within forty-five (1545) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in date on which such dispute is referred to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause Auditor, whether the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not Closing Statement was prepared in accordance with the position standards set forth in Section 2.05(b) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash or the Closing Date Unpaid Company Transaction Expenses require adjustment. The Auditor shall base its determination solely on the written submissions of either Covidien or Mallinckrodtthe Parties and shall not conduct an independent investigation. In making such determinations, the Auditor must base its determinations solely on the definitions and other applicable provisions of this Agreement and using the Accounting Principles. Each Party shall be permitted to submit such data and information to the Auditor as such Party deems appropriate (with a copy to the other Party); provided, that there shall be no ex parte communications between any Party and the Auditor. The Auditor’s determination of each item in dispute shall not be in excess of greater than the higher, nor greater value for such item claimed by either Buyer or Seller or less than the lowerlower value for such item claimed by either Buyer or Seller, of the amounts set forth by Mallinckrodt in each case in the Closing Statement or by Covidien in the Dispute NoticeNotice of Disagreement, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principlesrespectively. All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Buyer, on the one hand, and Mallinckrodt. All determinations Seller, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Buyer and Seller made by the Independent Accounting FirmAuditor such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if Seller challenges items underlying the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Unpaid Company Transaction Expenses in the net amount of $1,000,000, and the Closing StatementAuditor determines that Buyer has a valid claim for $400,000 of the $1,000,000, as modified by Buyer shall bear sixty percent (60%) of the Independent Accounting Firm, will fees and expenses of the Auditor and Seller shall bear the remaining forty percent (40%) of the fees and expenses of the Auditor. The determination of the Auditor shall be final, binding and conclusive and binding on the Parties. The date on which the Closing Date Net Working Capital, absent fraud or manifest errorthe Closing Date Funded Debt, the Closing Date Cash and the Closing Date Unpaid Company Transaction Expenses are finally determined in accordance with this Section 2.05(c) is hereinafter referred to as the “Determination Date.” (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as The “Adjustment Amount,” which may be reasonably required positive or negative, shall mean (i) the Closing Date Net Working Capital (as finally determined in connection accordance with Section 2.05(c)), minus the preparation and analysis Estimated Closing Date Net Working Capital, plus (ii) the Estimated Closing Date Funded Debt, minus the Closing Date Funded Debt (as finally determined in accordance with Section 2.05(c)), plus (iii) the Closing Date Cash (as finally determined in accordance with Section 2.05(c)), minus the Estimated Closing Date Cash, plus (iv) the Estimated Unpaid Company Transaction Expenses, minus the Closing Date Unpaid Company Transaction Expenses (as finally determined in accordance with Section 2.05(c)). If the Adjustment Amount is a positive number, then the Consideration shall be increased by the Adjustment Amount (the “Increase Amount”). If the Adjustment Amount is a negative number, then the Consideration shall be decreased by the absolute value of the Closing Statement and Adjustment Amount (the resolution of any disputes thereunder“Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.05(e). (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, (x) Buyer shall pay the Increase Amount in cash to Seller by wire transfer of immediately available funds to such account as designated in writing by Seller, and (y) the Escrow Agent shall disburse the Escrow Funds to Seller. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Determination Date, (A) the Escrow Agent shall pay, from the Escrow Funds, to Buyer an amount in cash equal to the Deficit Amount and (B) if any of the Escrow Funds remain after such payment to Buyer, the Escrow Agent shall disburse the balance of the Escrow Funds to Seller. Notwithstanding anything to the contrary in this Agreement, if there is a Deficit Amount and the absolute value of the Deficit Amount is greater than the Escrow Funds, the Escrow Agent shall disburse the Escrow Funds to Buyer and thereafter, any additional amount of the Deficit Amount not covered by the Escrow Funds shall be paid by Seller to Buyer by wire transfer of immediately available funds to such account as designated in writing by Buyer. Upon determination of the Adjustment Amount pursuant to Section 2.05(d), each of Buyer and Seller shall execute joint written instructions to the Target Adjustment Escrow Agent instructing the Escrow Agent to disburse the Escrow Funds in accordance with this Section 2.05(e). For U.S. federal income and all other Tax purposes, to the extent permitted by applicable Law, any Increase Amount have been finally determined or Deficit Amount pursuant to this Section 2.162.05(e) shall be treated as an adjustment to the Consideration.

Adjustment Amount. (a) Schedule 2.16 sets Not less than three (3) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller shall deliver to Buyer a written statement setting forth a sample calculation (i) its good faith estimate, with reasonable supporting detail, of each of (A) the Adjustment Amount and Closing Date Net Working Capital (the Target Adjustment Amount “Estimated Closing Date Net Working Capital”), (B) the aggregate amount of all Indebtedness as of 11:59 p.m. on the Balance Sheet day immediately prior to the Closing Date (the “Sample Estimated Closing StatementDate Indebtedness”), including (C) the asset, liability Cash and other line items and accounting principles used in such calculation, and assuming that all Cash Equivalents of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt the Group Companies as of 11:59 p.m. on the Distributionday immediately prior to the Closing Date (the “Estimated Closing Date Cash”) and (D) the aggregate amount of all Transaction Expenses (the “Estimated Transaction Expenses”) and (ii) its calculation of the Estimated Working Capital Adjustment Amount. Seller shall review any comments proposed by Buyer with respect to such statement and will consider in good faith any appropriate changes. For the avoidance of doubt, no position taken or failed to be taken by any party with respect to the Purchase Price shall limit the positions that may be taken in connection with the adjustments pursuant to the following sections of this Section 2.04. (b) Within sixty As soon as reasonably practicable following the Closing Date, and in any event within seventy-five (6075) days after the Distribution Datethereof, Mallinckrodt Buyer shall cause prepare and deliver to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth Seller (i) a calculation of the Adjustment Amount and Closing Date Net Working Capital, (ii) a calculation of the aggregate amount of all Indebtedness as of 11:59 p.m. on the day immediately prior to the Closing Date (the 18 (c) If Seller disagrees with the calculation of the Adjustment Amount and (ii) Closing Date Net Working Capital, the Target Adjustment Amount and Closing Date Indebtedness, the calculation Closing Date Cash or Transaction Expenses, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principlesparticulars of such disagreement, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within within thirty (30) days following after its receipt by Covidien of the Post-Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to . In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Post-Closing Statement and the calculation of the Closing Statement will Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash and the Transaction Expenses set forth therein delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and binding on the Parties. Any Dispute Notice Seller shall use commercially reasonable efforts for a period of forty-five (i45) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount days (or such longer period as applicablethey may mutually agree) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth thereindisagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Transaction Expenses. If Mallinckrodt and CovidienIf, at the end of such good faith effort notwithstandingperiod, fail they are unable to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”)disagreements, then Mallinckrodt and Covidien jointly shall engageBDO USA, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young Buyer and Seller are unable to engage BDO USA, LLP is unavailable or conflictedfor any reason, another nationally independent accounting or financial consulting firm of recognized major accounting firm national standing to be mutually selected jointly by Covidien Buyer and Mallinckrodt Seller (the “Independent Accounting FirmAuditor”) to shall resolve any such disputeremaining disagreements. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt The Auditor shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve determine as the Independent Accounting Firm. As promptly as practicable, and but in any event not more than fifteen within forty-five (1545) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which such dispute is referred to the Adjustment Amount Auditor and only with respect to the remaining disagreements submitted to the Auditor, whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash or the Transaction Expenses require adjustment. In resolving any disputed items, the Auditor may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either Buyer or Seller. The fees and expenses of the Auditor shall be paid by Buyer (or its Subsidiaries) and by Seller (or the Retained Companies) in inverse proportion as they may prevail on matters resolved by the Auditor. The determination of the Auditor shall be final, binding and conclusive on the Parties. The date on which the Closing Date Net Working Capital, the Closing Date Indebtedness, the Closing Date Cash and the Target Adjustment Amount have been Transaction Expenses are finally determined pursuant to in accordance with this Section 2.162.04(c) is hereinafter referred to as the “Determination Date.” 19

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation Prior to the Closing, the Company shall engage KPMG LLP ("KPMG"), with the expense shared equally between the Sellers and the Buyer, to perform an audit of the Adjustment Amount Company's balance sheet prepared by the Company as of September 30, 2002. In order to complete such an audit, the Sellers, Buyer and the Target Adjustment Amount as Company shall cooperate with each other, including, without limitation, making available and providing reasonable access to the premises, books and records and employees of the Balance Sheet Date (Company. Following the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all completion of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred audit, which the parties thereto shall cause the Company to Mallinckrodt as of the Distribution. use its Best Efforts to complete within forty-five (b45) Within sixty (60) calendar days after the Distribution Closing Date, Mallinckrodt the Company shall cause deliver to be prepared the Sellers and delivered to Covidien a statement (the “Closing Statement”) setting forth Buyer (i) the Adjustment Amount a true and the calculation complete copy of the Adjustment Amount balance sheet as of September 30, 2002 and reflecting all audit adjustments which KPMG deems appropriate to present the financial condition of the Company in accordance with GAAP as of September 30, 2002 (the "Closing Balance Sheet"), and (ii) a schedule computing the Target Adjustment Amount (as defined in Section 2.5(b)) based upon the Closing Balance Sheet. The Company shall permit the Sellers and the calculation of Buyer to review all work papers and computations used by KPMG in auditing the Target Closing Balance Sheet and preparing the schedule computing the Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred Within fifteen (15) calendar days following the date of the Sample delivery of such Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Balance Sheet to the extent consistent with Sellers and the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of Buyer, the Sellers and the Buyer shall either accept the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive Balance Sheet and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or based thereon (which acceptance shall effect a "Final Determination", as hereinafter defined) or propose adjustments thereto. In the Target Adjustment Amount (as applicable) event the Buyer and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, Sellers fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt agree on all of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, adjustments proposed within ten (10) Business Days following thereafter, the expiration of the Dispute Resolution Period, parties shall request Ernst & Young LLP or, if Ernst & Young LLP in the event that such firm is unavailable or conflictedto accept this assignment, another nationally such other recognized major accounting firm selected jointly by Covidien and Mallinckrodt of auditors as the parties mutually agree (the “Independent Accounting Firm”"Final Auditor") to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted prepare and Covidien and Mallinckrodt are unable deliver to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, Buyer and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make Sellers a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or (the Target Adjustment Amount (as applicable"Final Determination") was properly calculated adjusting only items in accordance with dispute between the Transaction Accounting Principles, Buyer and the Independent Accounting Firm is not to make any other determinationSellers, including any determination as to whether GAAP was followedwhich Final Determination shall be binding upon the Buyer and the Sellers. The services of the Final Auditor shall be paid for equally by the Buyer and the Sellers unless the Final Auditor resolves all disputed items in favor of one party, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All in which case all fees and expenses relating to of the work, if any, to Final Auditor shall be performed paid by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorother party. (db) For purposes of complying with Upon a Final Determination, the terms set forth in this Section 2.16, Mallinckrodt and Covidien Preliminary Purchase Price shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, be reduced dollar for dollar by an amount equal to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If Adjustment Amount. To determine the Adjustment Amount, as finally determined pursuant the Closing Balance Sheet shall be adjusted to Section 2.16(c)give effect to the accounting methodologies, is greater than practices and adjustments set forth in Part 2.5(b) of the Target Disclosure Letter. The "Adjustment Amount, " means the amount by which $15,500,000 exceeds the net shareholders' equity reflected in the Closing Balance Sheet as finally determined pursuant adjusted to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal give effect to the difference from the first dollar (i.e.accounting methodologies, without regard to the $20 million thresholdpractices and adjustments set forth in Part 2.5(b) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Disclosure Letter, upon a Final Determination or zero, whichever is greater.

Adjustment Amount. (a) Schedule 2.16 sets forth The Purchase Price was determined based on the assumption that the Adjustment Amount at the Closing Date would be equal to $0.00 (the "Target Adjustment Amount"). Within 90 days after the Closing Date, Buyer will cause the Company to prepare and provide to Buyer and Seller a sample statement showing Current Assets, Liabilities and the Adjustment Amount as of the Closing Date (the "Closing Statement"). Seller shall be provided with reasonable access to the Company's workpapers and back-up materials relating to the preparation of the Closing Statement. (b) If Seller objects to the Company's calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used reflected in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien Seller shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content Buyer within 30 days after receipt of the Closing Statement (the “Dispute Notice”"Objection Period"); provided, however, that if Covidien does not a written statement describing his objections thereto. In the event Seller fails to deliver any Dispute Notice such written statement prior to Mallinckrodt within such thirty (30)-day periodthe expiration of the Objection Period, the Closing Statement will shall be final, conclusive and binding on upon Buyer and Seller. In the Partiesevent Seller delivers such written statement prior to the expiration of the Objection Period, Seller and Buyer will use all reasonable efforts to resolve any dispute. Any Dispute Notice If a final resolution is not obtained within 30 days after Seller has delivered such written notice, either Seller or Buyer may submit any remaining disputes for resolution to a nationally recognized accounting firm mutually agreeable to Seller and Buyer (such accounting firm shall (ibe referred to herein as the "Arbitrating Accountants") set forth in reasonable detail the basis for any which firm shall resolve such dispute included therein, the amounts involved and Covidien’s within 30 days following its selection. The Arbitrating Accountants' determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on upon Buyer and Seller. (c) Seller and Buyer shall cooperate with the PartiesArbitrating Accountants in all respects, absent fraud or manifest errorincluding providing the Arbitrating Accountants with all work papers and back-up materials used in preparation and review of their calculations of the Adjustment Amount. (d) For purposes The fees, expenses and costs of complying with the terms set forth in this Section 2.16Arbitrating Accountants shall be borne by the party (Seller or Buyer) whose estimation of the Adjustment Amount, Mallinckrodt and Covidien shall cooperate with and make available taking into account any changes made prior to each other and their respective Representatives all information, records, data and working papers, in each case, submission to the extent related to Arbitrating Accountants, is farthest from the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, Adjustment Amount as may be reasonably required in connection with finally determined by the preparation and analysis of the Closing Statement and the resolution of any disputes thereunderArbitrating Accountants. (e) If Within 10 days after the first to occur of (i) the expiration of the Objection Period, in the event no objection has been made, (ii) the mutual resolution of any dispute, in the event an objection has been made, or (iii) the delivery of the final calculation of the Adjustment Amount by the Arbitrating Accountants: (x) if the amount of the Adjustment Amount, as finally determined pursuant reflected on the Closing Statement, is less than the Target Adjustment Amount, Seller shall pay to Section 2.16(c)Buyer the amount by which the Adjustment Xxxxxx, as reflected on the Closing Statement, is less than the Target Adjustment Amount, with interest from the Closing Date until payment at a rate per annum equal to 8%, or (y) if the amount of the Adjustment Amount, as reflected on the Closing Statement, is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt Buyer shall pay or cause to be paid an Seller the amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If which the Adjustment Amount, as finally determined pursuant to Section 2.16(c)reflected on the Closing Statement, is less greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by with interest from the Closing Date until payment at least $20 million, then Covidien shall pay or cause to be paid an amount in cash a rate per annum equal to the difference from the first dollar (i.e., without regard 8%. The amount of such payment shall be treated as an adjustment to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Purchase Price.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample Within 90 days after the Closing Date, Buyer (in consultation with Sellers’ Representative) shall prepare and deliver to Sellers’ Representative (i) an unaudited consolidated balance sheet of the Company (the “Closing Balance Sheet”), (ii) Buyer’s good faith calculation of (A) Net Working Capital as of the Measurement Time (“Closing Net Working Capital”), (B) the aggregate amount of all Indebtedness (including all Payoff Amounts) owed by the Acquired Entities as of immediately prior to the Closing (“Closing Indebtedness”), (C) the aggregate amount of Cash of the Acquired Entities as of the Measurement Time (“Closing Cash”) and (D) Transaction Expenses (“Closing Transaction Expenses”), (iii) Buyer’s calculation of the Closing Net Working Capital Adjustment Amount and (iv) on the Target Adjustment Amount as basis of the Balance Sheet Date foregoing, a calculation of the Closing Purchase Price (together with the items referred to in clauses (i) through (iii) above, the “Sample Final Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement Balance Sheet, Closing Net Working Capital, Closing Indebtedness and Closing Cash shall be prepared in accordance with the Transaction Accounting Principles, including Principles and the use definitions of the same line items and line item entries, set forth on and defined terms used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”this Section 2.07(a); provided, however, that if Covidien (x) the Final Closing Statement (and any amounts included therein) shall reflect no increase or decrease in any accrual, provision or reserve unless such increase is consistent with the Accounting Principles, (y) except for Transaction Expenses or as set forth in the following clause (z), the Final Closing Statement (and any amounts included therein) shall not give effect to the consummation of the transactions contemplated by this Agreement, including any payments of cash in respect of the Purchase Price, or any financing transactions in connection therewith or, after the Closing, any other action or omission by Buyer or any of the Acquired Entities and (z) the Final Closing Statement shall not reflect any expense or liability for which Buyer is responsible under this Agreement (other than any Transaction Expenses payable under Section 2.04(d)). Notwithstanding anything to the contrary in this Agreement, the calculations to be made pursuant to Section 2.05, and the purchase price adjustment to be made pursuant to this Section 2.07, shall be intended to give effect to the arithmetic difference between the items in the Preliminary Closing Statement and the Final Closing Statement, all of which shall be determined in accordance with the Accounting Principles without regard to any differences from GAAP. Neither Section 2.05 nor Section 2.07 is intended to be used to adjust for claims that may be made with respect to the Balance Sheet or any inconsistencies or questions of interpretation between the Balance Sheet or the Accounting Principles, on the one hand, and GAAP, on the other. (b) If Sellers’ Representative shall disagree with any of Buyer’s calculations contained in the Final Closing Statement, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, including the specific items and amounts in dispute together with Sellers’ Representative’s rationale for disputing such items and reasonable supporting details and calculations, within 45 days after its receipt of the Final Closing Statement (such notice, the “Dispute Notice”). In the event that Sellers’ Representative does not deliver any provide the Dispute Notice to Mallinckrodt within such thirty 45-day period, Sellers’ Representative shall be deemed to have agreed to the Final Closing Statement (30)-day including the determinations included therein) delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event the Dispute Notice is timely provided, Buyer and Sellers’ Representative shall use their respective reasonable best efforts for a period of 30 days (or such longer period as they may mutually agree) to resolve any disagreements with respect to any calculations contained in the Final Closing Statement. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements (such remaining disagreements, the “Disputed Items”) shall be resolved by KPMG LLP, or if KPMG LLP is unwilling or unable to serve in such capacity, such other independent accounting firm of nationally recognized standing as may be mutually selected by Xxxxx and Sellers’ Representative (such firm, the “Auditor”). Each of Buyer and Sellers’ Representative shall, if requested by the Auditor, enter into a customary engagement letter with the Auditor with respect to the Auditor’s resolution of the Disputed Items pursuant to this Section 2.07. Each of Buyer and Sellers’ Representative shall promptly provide their assertions regarding the Disputed Items and, to the extent relevant thereto, the Closing Statement will Balance Sheet in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination in writing with respect to the Disputed Items as soon as reasonably possible (which the Parties agree should not be later than 60 days following the date on which the disagreement is referred to the Auditor or such longer period as mutually agreed by the Parties). The Auditor shall base its determination solely on (i) the written submissions of the Parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses require adjustment (only with respect to the Disputed Items submitted to the Auditor) in order to be determined in accordance with Section 2.07(a) (including the definitions of the defined terms used in Section 2.07(a)). The Auditor shall not assign a value to any Disputed Item submitted to the Auditor greater than the greatest value for such item claimed by either Party or less than the smallest value for such item claimed by either Party. The determination of the Auditor shall be final, conclusive and binding on the Parties, absent manifest error, mathematical miscalculation or fraud. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Net Working Capital, the amounts involved and Covidien’s determination of the Closing Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Net Working Capital Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Purchase Price are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 2.07(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Buyer, on the one hand, and Mallinckrodt. All determinations Sellers, on the other hand, in proportion to the allocation of the dollar value of the Disputed Items as between Buyer and Sellers (set forth in the written submissions to the Auditor) made by the Independent Accounting FirmAuditor such that the Party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses, and such allocation of fees and expenses shall be set forth in the Auditor’s written determination. For example, if Buyer challenges items underlying the calculations of Closing Net Working Capital in the net amount of $1,000,000, and the Auditor determines that Buyer has a valid claim for $400,000 of the $1,000,000, Buyer shall bear 60% of the fees and expenses of the Auditor and Sellers shall bear 40% of the fees and expenses of the Auditor. Each Seller shall be responsible for its Pro Rata Percentage of any amounts owed by Sellers pursuant to this Section 2.07(b). (c) The “Adjustment Amount,” which may be positive or negative, shall mean the Closing StatementPurchase Price (as finally determined in accordance with Section 2.07(a) or Section 2.07(b), as modified by applicable) minus the Independent Accounting FirmEstimated Closing Purchase Price. The Adjustment Amount shall be paid in accordance with Section 2.07(d) or Section 2.07(e), will be final, conclusive and binding on the Parties, absent fraud or manifest erroras applicable. (d) For purposes If the Adjustment Amount is a positive number (such amount, the “Increase Amount”), then, promptly following the Determination Date, and in any event within three Business Days of complying the Determination Date, (i) Buyer and Sellers’ Representative shall deliver a joint written instruction to the Escrow Agent to release from the Adjustment Escrow Account, in accordance with the terms set forth in this Section 2.16Escrow Agreement, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis Seller such Seller’s Pro Rata Percentage of the Closing Statement amount of the funds then in the Adjustment Escrow Account and (ii) Buyer shall pay to each Seller an amount in cash equal to such Seller’s Pro Rata Percentage of the resolution Increase Amount in immediately available funds by wire transfer to each Seller Bank Account or such other account of any disputes thereunderSeller designated by such Seller in writing. (e) If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount, as finally determined pursuant to Section 2.16(c”), is greater than then, promptly following the Target Determination Date, and in any event within three Business Days of the Determination Date, (i) Buyer and Sellers’ Representative shall deliver a joint written instruction to the Escrow Agent to release from the Adjustment AmountEscrow Account, as finally determined pursuant in accordance with the Escrow Agreement, (A) to Section 2.16(cBuyer, an amount equal to the lesser of the Deficit Amount and the amount of funds remaining in the Adjustment Escrow Account and (B) to each Seller, such Seller’s Pro Rata Percentage of the amount of the funds remaining in the Adjustment Escrow Account after giving effect to the foregoing clause (A), by at least $20 millionif any, then Mallinckrodt and (ii) if the Deficit Amount exceeds the amount of funds remaining in the Adjustment Escrow Account, each Seller shall pay or cause to be paid Buyer an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien such Seller’s Pro Rata Percentage of such excess in immediately available funds by wire transfer of immediately available funds to an account or accounts of Buyer designated by Buyer in writing by Covidien to Mallinckrodt. If writing; provided that, if such excess of the Deficit Amount over the amount of funds remaining in the Adjustment AmountEscrow Account is greater than $15,000,000, as finally determined then the excess above $15,000,000 will be paid pro rata only by Seller 1 and Seller 2. (f) Notwithstanding anything to the contrary herein, any payment pursuant to Section 2.16(c), is less than the Target Adjustment Amount, 2.07(d) or Section 2.07(e) shall be treated as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal adjustment to the difference from the first dollar (i.e., without regard Estimated Closing Purchase Price for all Income Tax purposes to the $20 million threshold) to Mallinckrodt maximum extent permitted by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Applicable Law.

Adjustment Amount. (a) Schedule 2.16 sets forth Pre-Closing Date Purchase Price Adjustment Estimate. (i) Not later than three (3) Business Days prior to the Closing Date, the Seller shall provide Buyer with a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date statement (the “Sample Estimated Closing Statement”) setting forth in reasonable detail a calculation of its good faith estimation of the Closing Working Capital (“Estimated Closing Working Capital”). The Estimated Closing Statement and Estimated Closing Working Capital shall be prepared by the Company in good faith in accordance with GAAP applied using the same accounting methods, including the assetpractices, liability principles, policies and other line items procedures, with consistent classifications, judgments and accounting principles valuation and estimation and accrual methodologies that were used in the preparation of the Company’s audited Financial Statements for the most recent fiscal year end as if such calculationEstimated Closing Statement and Estimated Closing Working Capital were being prepared and audited as of a fiscal year end. Notwithstanding the foregoing or any other provision of this Agreement, the Estimated Closing Statement, the Estimated Working Capital and assuming that all the Closing Working Capital Statement shall reflect the reserves set forth on Schedule 1.5 attached hereto (collectively, the “Supplemental Reserves”). The Supplemental Reserves shall be disregarded for the purposes of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities calculating any adjustment required to be made under this Agreement Section 1.5. (ii) If Estimated Closing Working Capital is less than Target Working Capital, then the Purchase Price payable at Closing will be transferred to Mallinckrodt as of decreased by the Distributionpositive difference between Estimated Closing Working Capital and Target Working Capital (the “Estimated Closing Working Capital Shortfall”). If Estimated Closing Working Capital is greater than Target Working Capital, then the Purchase Price payable at Closing will be increased by the positive difference between Estimated Closing Working Capital and Target Working Capital (the “Estimated Closing Working Capital Excess”). (b) Post-Closing Date Purchase Price Adjustment. (i) Following the Closing, the Purchase Price shall be adjusted as provided herein to reflect the difference between Closing Working Capital and Target Working Capital (the “Adjustment Amount”). (ii) Within sixty (60) days after following the Distribution Closing Date, Mallinckrodt Buyer shall cause deliver to be prepared and delivered to Covidien Seller a statement of Closing Working Capital (the “Closing Working Capital Statement”) setting forth in reasonable detail Buyer’s calculations of Closing Working Capital. The Closing Working Capital Statement shall be prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Company’s audited Financial Statements for the most recent fiscal year end as if such Closing Working Capital Statement was as of a fiscal year end. In order for the Seller and its Representatives to review such Closing Working Capital Statement, Buyer will promptly furnish to Seller and its Representatives such work papers, supporting schedules, analyses and other documents and information as Seller and its Representatives may reasonably request. Buyer shall reasonably cooperate with Seller to assist Seller’s and its Representatives’ review of any such Closing Working Capital Statement and if requested, Buyer’s accounting personnel will meet in person with Seller and its Representatives to discuss the Closing Working Capital Statement. (iiii) If, within forty-five (45) days following delivery of the Closing Working Capital Statement, Seller has not given Buyer written notice of its objection as to the Adjustment Amount (which notice shall state in reasonable detail the basis of Seller’s objection or identify additional information reasonably required by Seller and its Representatives to evaluate the determination made by Buyer), then the Adjustment Amount calculated by Buyer shall be binding and conclusive on the parties. (iv) If Seller gives Buyer such written notice of objection, and if Seller and Buyer fail to resolve the issues outstanding with respect to the Closing Working Capital Statement and the calculation of the Adjustment Amount within thirty (30) days of Buyer’s receipt of Seller’s objection notice, Seller and Buyer shall submit the issues remaining in dispute as identified in Seller’s notice of objection to Deloitte & Touche LLP or such other independent public accounting firm mutually selected by Buyer and Seller (the “Independent Accountants”) for resolution applying the principles, policies and practices referred to in Section 1.5(b)(ii). If issues are submitted to the Independent Accountants for resolution, (i) Seller and Buyer shall furnish or cause to be furnished to the Independent Accountants such work papers, supporting schedules, analyses and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; and (ii) the Target Adjustment Amount determination by the Independent Accountants, as set forth in a notice to be delivered to both Seller and Buyer within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute, shall be final, binding and conclusive on the parties and shall be used in the calculation of the Target Adjustment Amount. The Closing Statement Copies of all materials submitted or furnished by a Party to the Independent Accountants shall also be provided to the other Party and its Representatives and all meetings and communications with the Independent Accountants shall be prepared in accordance with the Transaction Accounting Principles, including the use held so that all Parties are given a reasonable opportunity to participate. The costs and expenses of the same line items and line item entries, set forth on and used Independent Accountants in a dispute regarding the preparation of Adjustment Amount shall be paid by Seller if (A) the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall positive difference between (i) the Adjustment Amount resulting from determination of the Independent Accountants, and (ii) the Adjustment Amount set forth in reasonable detail Seller’s notice of objection, is greater than (B) the basis for any dispute included thereinpositive difference between (i) the Adjustment Amount resulting from determination of the Independent Accountants, the amounts involved and Covidien(ii) Buyer’s determination calculation of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith delivered to resolve any dispute set forth therein. If Mallinckrodt and CovidienSeller; otherwise, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt costs and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement expenses of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute Accounts will be paid by Buyer. The Independent Accounts will be entitled to the Independent Accounting Firm. Mallinckrodt privileges and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission immunities of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorarbitrators. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (ev) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), Closing Working Capital is greater than the Target Adjustment AmountEstimated Closing Working Capital, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt the difference shall pay or cause to be paid an amount in cash equal by Buyer to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made Seller within five (5) Business Days days of either the delivery of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined Closing Working Capital Statement or, if Seller gives notice pursuant to Section 1.5(b)(iii) herein, the determination of the Independent Accountants. If Closing Working Capital is less than Estimated Closing Working Capital, the difference shall be paid by Seller to Buyer within five (5) days of either the delivery of the Closing Working Capital Statement or, if Seller gives notice pursuant to Section 1.5(b)(iii) herein, the determination of the Independent Accountants. (vi) The Independent Accountants shall have not been engaged by any Party or any Related Person of such Party within the prior five (5) year period ending on the date of this Section 2.16Agreement.

Adjustment Amount. (a) Schedule 2.16 2.15 sets forth a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.162.15, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c2.15(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) such excess to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c2.15(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) such shortfall to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e2.15(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been is finally determined pursuant to this Section 2.162.15.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within in any event within sixty (60) calendar days after the Distribution Datethereof, Mallinckrodt Buyer shall cause prepare and deliver to be prepared and delivered to Covidien Seller a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the a calculation of Net Working Capital (“Closing Date Net Working Capital”), (ii) a calculation of the Adjustment Amount aggregate amount of all Debt of the Company (“Closing Date Debt”) and (iiiii) the Target Adjustment Amount and the a calculation of Cash and Cash Equivalents (“Closing Date Cash” and together with the Target Adjustment AmountClosing Date Net Working Capital and Closing Date Debt, the “Closing Date Amounts”), in each case of clauses (i) through (iii), calculated as of the close of business on the Business Day immediately preceding the Closing Date. The Closing Statement Date Amounts shall be prepared in accordance with the Transaction Accounting Principles, including applicable definitions relating thereto. Following the use delivery of the same line items Closing Statement, Buyer shall provide Seller and line item entriesits representatives reasonable access upon reasonable advance notice to the records, set forth on properties and used in personnel of the Company and its Subsidiaries relating to the preparation of the Sample Closing Statement; providedDate Amounts (subject, howeverin the case of work papers of independent accountants, that assets newly acquired to Seller signing a customary confidentiality and liabilities newly incurred following hold harmless agreement relating to such access to work papers in form and substance reasonably acceptable to such independent accountants) and shall cause the date personnel of the Sample Company and its Subsidiaries to reasonably cooperate with Seller in connection with its review of the Closing Statement which canDate Amounts; provided that such access and cooperation does not be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent unreasonably interfere with the Transaction Accounting Principlesoperation of the Company or its Subsidiaries. (cb) Within If Seller shall disagree with the calculation of Closing Date Amounts, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing StatementDate Amounts. Any item or amount reflected on the Closing Statement that is not included in such notice of disagreement shall be deemed final, Covidien binding and conclusive for all purposes hereunder. In the event that Seller does not provide such a notice of disagreement within such 30-day period, Seller shall deliver written be deemed to have accepted the Closing Statement and the calculation of Closing Date Net Working Capital, Closing Date Debt and Closing Date Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use reasonable best efforts for a period of 30 days (or such longer period as they may mutually agree) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation calculations of Closing Date Net Working Capital, Closing Date Debt and/or Closing Date Cash, as applicable. If, at the end of such period, they are unable to resolve such disagreements, then KPMG US LLP (or content such other independent accounting or financial consulting firm of the Closing Statement recognized national standing as may be mutually selected by Buyer and Seller) (the “Dispute NoticeIndependent Accountant”); provided) shall resolve any remaining disagreements. Each of Buyer and Seller shall promptly provide their assertions regarding the remaining disputed aspects of Closing Date Net Working Capital, howeverClosing Date Debt and/or Closing Date Cash, as applicable, in writing to the Independent Accountant and to each other. No Party shall have any ex parte communications with the Independent Accountant. The Independent Accountant shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the parties hereto agree should not be later than forty-five (45) days following the day on which the disagreement is referred to the Independent Accountant (but if it is later, that if Covidien does fact shall not deliver be a basis for attempting to invalidate or overturn any Dispute Notice to Mallinckrodt within such thirty (30)-day period, determination made by the Closing Statement will be final, conclusive and binding Independent Accountant)). The Independent Accountant shall base its determination solely on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination written submissions of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) parties and shall not conduct an independent investigation and (ii) include the extent (if any) to which the Closing Date Net Working Capital, Closing Date Debt and/or Closing Date Cash require adjustment (only with respect to the remaining disagreements based on submitted to the Adjustment Amount and/or the Target Adjustment Amount (as applicableIndependent Accountant) not being calculated properly in order to be determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen Section 2.5(a) (15) Business Days following receipt by Mallinckrodt including the definitions of the Dispute Notice (the “Dispute Resolution Period”defined terms used in Section 2.5(a)) and, then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With with respect to each disputed line item, such the Independent Accountant’s determination, if not in accordance with the position of either Covidien Buyer or MallinckrodtSeller, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt presented in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination Buyer’s calculation of the Adjustment Amount and/or the Target Adjustment Amount (as applicablepursuant to Section 2.5(a) was properly calculated or in accordance with the Transaction Accounting Principles, and Seller’s written disagreement of such calculation pursuant to this Section 2.5(b). The determination of the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm Accountant shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, parties (absent fraud or manifest error). The date on which Closing Date Net Working Capital, Closing Date Debt and Closing Date Cash are finally determined in accordance with this Section 2.5(b) is hereinafter referred to as the “Determination Date.” The costs and expenses of the Independent Accountant shall be allocated between Buyer and Seller based upon a fraction, the numerator of which is the portion of the aggregate contested amount not awarded to the applicable Party and the denominator of which is the aggregate contested amount. (c) If the Adjustment Amount is a positive number, then the Closing Cash Consideration shall be increased by the Adjustment Amount, and if the Adjustment Amount is a negative number, the Closing Cash Consideration shall be decreased by the absolute value of the Adjustment Amount. The Adjustment Amount shall be paid in accordance with Section 2.5(d). (d) For purposes of complying with Promptly following the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt BusinessDetermination Date, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made event within five (5) Business Days of the date on which Determination Date: (i) if the Adjustment Amount and is a positive number or zero, Buyer shall pay (or cause to be paid) to Seller an amount equal to the Target Adjustment Amount have been finally determined (if greater than zero); and (ii) if the Adjustment Amount is a negative number, Seller shall pay (or cause to be paid) an amount to Buyer equal to the absolute value of the Adjustment Amount. Such amounts shall be paid, in immediately available funds pursuant to the instructions previously delivered by Buyer or Seller, as applicable. Any amounts payable to Seller pursuant to this Section 2.162.5 shall be paid net of any fees, costs or expenses that arise as a result of the payment of such amount and that would have been Outstanding Company Expenses if they were incurred and unpaid prior to the Closing. (e) Each of Buyer and Seller shall ensure that it reserves a reasonably sufficient amount of available funds in order to be able to discharge any potential payment obligations that it may incur pursuant to this Section 2.5.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming in any event on or before the date that all is the later of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. forty-five (b) Within sixty (6045) days after the Distribution DateClosing Date and January 31, Mallinckrodt 2019, Acquiror shall cause prepare and deliver to be prepared the Holder Representative an unaudited consolidated balance sheet of the Company Group (the “Closing Balance Sheet”) and delivered to Covidien a an unaudited consolidated statement of the Company Group as of the close of business on the Closing Date (the “Closing Statement”) setting forth (i) a calculation of the Closing Date Net Working Capital, (ii) a calculation of the Closing Date Indebtedness, (iii) a calculation of the Holder Expenses, (iv) a calculation of the Closing Date Cash, (v) a calculation of the Closing Date Other Adjustment Amount, (vi) the Closing Consideration calculated based on the items in the foregoing clauses (i) through (v), and (vii) the Current Blocker Tax Liabilities. The Closing Balance Sheet, the Closing Statement, including the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash and the Closing Date Other Adjustment Amount and the Current Blocker Tax Liabilities shall be determined on a consolidated basis using the Agreed Accounting Principles, and shall not include any changes in assets or liabilities as a result of purchase or other non-cash accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement, including the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash and the Closing Date Other Adjustment Amount and the related purchase price adjustment contemplated by this Section 2.7 is to measure the amount of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and the Current Blocker Tax Liabilities, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Statement or determining the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, and the Current Blocker Tax Liabilities unless such differences are required by GAAP. Following the Closing, Holder Representative and its representatives shall have the right to reasonable access following prior notice to the books, records, the chief financial officer and auditors of the Company Group to the extent relevant for its review of the Closing Statement and the Surviving Entity shall cause the employees and auditors of the Company Group to reasonably cooperate with the Holder Representative in connection with its review of the Closing Statement (subject to customary access agreements as may be required by such auditors). (b) If the Holder Representative shall disagree with the calculation pursuant to Section 2.7(a) of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities, it shall notify Acquiror of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (and providing all supporting documentation reasonably necessary for the Acquiror to evaluate such disagreement), within thirty (30) days after its receipt of the Closing Statement. In the event that the Holder Representative does not provide such a notice of disagreement within such thirty (30) day period, the Holder Representative shall be deemed to have accepted the Closing Statement and the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount and (ii) Amount, the Target Adjustment Amount calculation of Closing Consideration based thereon, and the calculation of the Target Current Blocker Tax Liabilities delivered by Acquiror, which shall be final, binding and conclusive on all parties (and any other Person) for all purposes hereunder. In the event any such notice of disagreement is timely provided, Acquiror and the Holder Representative shall use commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount. The , the Closing Statement shall be prepared in accordance with Consideration, and/or the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing StatementCurrent Blocker Tax Liabilities; provided, however, that assets newly acquired any such calculation not specifically objected to by the Holder Representative in such notice of disagreement shall be deemed acceptable and liabilities newly incurred following shall be final and binding on the parties (and any other Person) upon delivery of such notice of disagreement. If, at the end of such period, the Holder Representative and the Acquiror are unable to resolve such disagreements, then the New York office of the National Disputes Practice of BDO USA, LLP (or such other independent accounting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative, or if no such other accounting firm is willing to serve, then such other qualified Person upon whom the Holder Representative and the Acquiror shall mutually agree) (the “Auditor”) shall resolve any remaining disagreements, it being understood that the Auditor shall be functioning as an expert and not as an arbitrator and shall not have any authority to interpret any provision of this Agreement. The parties shall use their respective commercially reasonable efforts to cause the Auditor to determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Auditor, (i) whether the Closing Statement was prepared in accordance with the standards set forth in Section 2.7(a), (ii) if any mathematical errors were made in the Closing Statement in calculating the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities, and (iii) based solely on its determinations in clause (i) and (ii) of this sentence and only with respect to the remaining disagreements submitted to the Auditor, to what extent (if any) the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities require adjustment, and the Auditor (x) shall make no other determination and (y) may not assign a value greater than the greatest positive or negative adjustment requested by a party. The fees and expenses of the Sample Auditor shall be paid by Acquiror and the Holder Representative (on behalf of the Escrow Participants) in the same proportion that the aggregate amount of the items unsuccessfully disputed or defended, as the case may be, by each (as finally determined by the Auditor) bears to the total amount of the disputed items. Any fees and expenses payable by the Holder Representative under this Section 2.7(b) after the Closing Statement which canshall be paid first from the Holder Representative Expense Fund. The Auditor shall conduct its determination activities in a manner wherein all material submitted to it are held in confidence and shall not be appropriately placed disclosed to third parties. The parties hereto agree that judgment may be entered upon the determination of the Auditor in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also any court having jurisdiction over the party against which such determination is to be included to the extent consistent with the Transaction Accounting Principlesenforced. (c) Within thirty The “Adjustment Amount,” which may be positive or negative, shall mean (30i) days following receipt the Closing Date Net Working Capital minus the Estimated Closing Date Net Working Capital, plus or minus (as applicable) (ii) the Estimated Closing Date Indebtedness minus the Closing Date Indebtedness, plus or minus (as applicable) (iii) the Estimated Holder Expenses minus the Holder Expenses, plus or minus (as applicable) (iv) the Closing Date Cash minus the Estimated Closing Date Cash, plus or minus (as applicable) (v) the Closing Date Other Adjustment Amount minus the Estimated Closing Date Other Adjustment Amount. If the Adjustment Amount is a positive number and is in excess of $100,000, then the Closing Consideration shall be increased by Covidien the full amount of the Closing StatementAdjustment Amount, Covidien shall deliver written notice to Mallinckrodt and if the Adjustment Amount is a negative number, the absolute value of any dispute Covidien has with respect to the preparation or content which is in excess of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period$100,000, the Closing Statement will Consideration shall be final, conclusive and binding on decreased by the Partiesfull amount of the absolute value of the Adjustment Amount. Any Dispute Notice shall (i) set forth in reasonable detail If the basis for any dispute included thereinAdjustment Amount is a number, the amounts involved absolute value of which is $100,000 or less, the Adjustment Amount shall be deemed to be $0. Such adjustments to the Closing Consideration shall be paid in accordance with Section 2.7(d). The “Blocker Adjustment Amount,” which may be positive or negative, shall mean the Current Blocker Tax Liabilities minus the Estimated Current Blocker Tax Liabilities. If the Blocker Adjustment Amount is a negative number, then the Blocker Company Payment shall be increased by the full amount of the absolute value of the Blocker Adjustment Amount, and Covidien’s if the Blocker Adjustment Amount is a positive number, the Blocker Company Payment shall be decreased by the full amount of the absolute value of the Blocker Adjustment Amount. (d) Within three (3) Business Days following the final determination of the Adjustment Amount and/or in accordance with Sections 2.7(b) and 2.7(c) hereof: (i) if the Target Adjustment Amount is a positive number, (A) Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to pay (I) to the Payment Agent for disbursement to the Blocker Seller an amount equal to a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall, (II) to the Payment Agent for disbursement to the former holders of Units (and, for the avoidance of doubt, other than any Excluded Units and Unvested Units) a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for disbursement to the Bonus Payment Recipient a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall and (B) Acquiror shall pay or cause the Paying Agent to pay (I) to the Blocker Seller, an amount equal to a portion of the Adjustment Amount (as applicablefinally determined) in accordance with the Distribution Waterfall, (II) to the Paying Agent, for the accounts of the former holders of vested Units (and, for the avoidance of doubt, other than any Excluded Units), cash in an amount equal to a portion of the Adjustment Amount (as finally determined) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient, cash in an amount equal to a portion of the Adjustment Amount (as finally determined) in accordance with the Distribution Waterfall; and (ii) include only disagreements based on if the Adjustment Amount and/or is a negative number, (A) Acquiror and the Target Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to pay to Acquiror out of the Adjustment Escrow Fund an amount equal to the absolute value of the Adjustment Amount (as applicablefinally determined) (not being calculated properly to exceed the amount in the Adjustment Escrow Fund), together with the interest earned thereon earned and (B) if the absolute value of the Adjustment Amount is less than an amount equal to the amount in the Adjustment Escrow Fund on the date of payment, the Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing Escrow Agent to pay (I) to the Blocker Seller, an amount equal to the portion of the balance of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with any interest earned thereon) in accordance with this Agreement or containing mathematical errors. Upon receipt the Distribution Waterfall, (II) to the former holders of vested Units (other than Excluded Units) a portion of the balance of the Adjustment Escrow Amount (less any fees and expenses payable by Mallinckrodt the Holder Representative pursuant to Section 2.7(b), together with any interest earned thereon) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient a portion of a Dispute Noticethe balance of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), Mallinckrodt and Covidien shall negotiate together with any interest earned thereon) in good faith to resolve any dispute set forth thereinaccordance with the Distribution Waterfall. If Mallinckrodt and Covidienthe Adjustment Amount is zero, such good faith effort notwithstanding, fail (A) the Escrow Agent shall pay (I) to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt the Blocker Seller an amount equal to a portion of the Dispute Notice Adjustment Escrow Amount (less any fees and expenses payable by the “Dispute Resolution Period”Holder Representative pursuant to Section 2.7(b), then Mallinckrodt together with all interest earned thereon) in accordance with the Distribution Waterfall (II) to the former holders of vested Units (and, for the avoidance of doubt, other than any holder of Excluded Units) a portion of the Adjustment Escrow Amount (less any fees and Covidien jointly shall engageexpenses payable by the Holder Representative pursuant to Section 2.7(b), within ten together with all interest earned thereon) in accordance with the Distribution Waterfall and (10III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient a portion of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall. (e) Within three (3) Business Days following the expiration final determination of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not Blocker Adjustment Amount in accordance with Section 2.7(b) and 2.7(c) hereof: (i) if the position of either Covidien Blocker Adjustment Amount is a negative number, (A) Acquiror shall pay or Mallinckrodt, shall not be in excess cause the Paying Agent to pay to the Blocker Seller an amount equal to the absolute value of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Blocker Adjustment Amount (as applicablefinally determined); and (ii) was properly calculated in accordance with if the Transaction Accounting PrinciplesBlocker Adjustment Amount is a positive number, and (A) the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, Blocker Seller shall pay to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid Acquiror an amount in cash equal to the difference absolute value of the Blocker Adjustment Amount (as finally determined) and if such payment is not made, Acquiror may recover such amount owing from the first dollar (i.e.$[**]8 portion of the Special Escrow Fund for Unsatisfied Current Income Taxes and unsatisfied Current Blocker Tax Liabilities. 8Certain confidential information contained in this document, without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated marked with asterisks in writing by Covidien to Mallinckrodt. If the Adjustment Amountbrackets, as finally determined has been redacted pursuant to Section 2.16(c), is less than a request for confidential treatment and has been filed separately with the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount United States Securities and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Exchange Commission.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) calendar days thereof, Purchaser shall prepare and deliver to Seller (i) an unaudited carve-out balance sheet for the Business and consolidated Companies as of 11:59 p.m. on the day before the Closing Date (assuming the consummation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in Preliminary Transactions prior to such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (btime) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing StatementBalance Sheet”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the a calculation of Net Working Capital of the Target Adjustment AmountBusiness and consolidated Companies as set forth on the Closing Balance Sheet (“Closing Date Net Working Capital”), determined without giving effect to the consummation of the transactions contemplated by this Agreement (other than the consummation of the Preliminary Transactions prior to 11:59 p.m. on the day before the Closing Date) or the financing transactions in connection therewith. The Except as otherwise provided herein, the Closing Statement Balance Sheet shall be prepared in accordance with GAAP consistently applied in a manner consistent with the Transaction Accounting Principles, including principles and policies applied in connection with the use preparation of the Base Balance Sheet; provided, however, that the Closing Balance Sheet shall (x) except as otherwise provided herein, be prepared using the same line items accounting practices, policies, judgments and line item entries, set forth on and methodologies used in the preparation of the Sample Base Balance Sheet, (y) reflect no changes in reserves (regardless of whether any such reserve is recorded as an offset to a current asset’s carrying value or is included as an accrued liability in the Closing Statement; providedBalance Sheet) from amounts contained in the Base Balance Sheet, however, that assets newly acquired other than changes therein attributable to changes in facts and liabilities newly incurred following circumstances occurring after the date thereof and (z) not include any liability for income Taxes payable. Following the Closing, each of Purchaser and Seller shall provide the other and its respective representatives reasonable access to the records of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Business and the Companies to the extent consistent with reasonably relevant for the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien preparation and review of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt Balance Sheet. “Net Working Capital” as of any dispute Covidien has with respect to time shall mean, (1) the preparation or content consolidated current assets of the Closing Statement (the “Dispute Notice”); providedBusiness and consolidated Companies as of such time, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two minus (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement consolidated current liabilities of the Independent Accounting FirmBusiness and consolidated Companies as of such time (excluding the Inter-Company Obligation), Mallinckrodt and Covidien shall in each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, case as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent applied in a manner consistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required principles applied in connection with the preparation and analysis of the Closing Statement and Base Balance Sheet; provided, that the resolution of any disputes thereunder. (eitems set forth on Section 1.5(a) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which Seller Disclosure Letter shall be disregarded for the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16purposes of calculating Net Working Capital.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. in any event within ninety (b) Within sixty (6090) days after thereof, Acquiror shall prepare and deliver to the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien Holder Representative a statement (the “Closing Statement”) setting forth Acquiror’s good faith calculation of (i) the Adjustment Amount Net Working Capital (“Closing Date Net Working Capital”), (ii) Funded Debt (“Closing Date Funded Debt”), (iii) Cash (“Closing Date Cash”), and (iv) Outstanding Company Expenses (“Closing Date Outstanding Company Expenses”), in each case, as of Calculation Time, and the calculation of the Adjustment Amount and (ii) the Target Final Net Working Capital Adjustment Amount and the calculation Final Merger Consideration based on the foregoing and the 2023 EBITDA Adjustment Amount; provided, however, notwithstanding the foregoing, the amount of the Target Adjustment AmountEstimated Accrued Income Taxes shall be calculated as set forth in the definition thereof. The Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Outstanding Company Expenses shall be calculated, in accordance with this Agreement without giving effect to the transactions contemplated by this Agreement, and the determination of any items included in the Closing Statement shall be prepared based on facts, circumstances and information available to Acquiror as of the date on which the Closing Statement is delivered by Acquiror to the Holder Representative with regards to conditions that existed as of the Calculation Time in accordance with Financial Accounting Standards Board Accounting Standard Codifications Topic 855, Subsequent events; provided, however, that, for the avoidance of doubt, the calculation of the amount of the Estimated Accrued Income Taxes shall be calculated as set forth in the definition thereof. The parties hereto acknowledge and agree that the purpose of preparing and calculating the Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Outstanding Company Expenses hereunder is to measure changes from the Estimated Net Working Capital, Estimated Funded Debt, Estimated Cash and Estimated Outstanding Company Expenses without the introduction or application of new or different accounting methods, policies, practices, procedures, classifications, judgments or estimation methodologies. With respect to each item included in the Closing Statement, Acquiror shall provide all relevant supporting documentation, including underlying schedules, calculations and spreadsheets. Following the delivery of the Closing Statement (or if Acquiror does not deliver the Closing Statement, the last day on which the Closing Statement may be timely delivered pursuant to this Section 3.4(a)) and through the Determination Date, Acquiror shall provide the Holder Representative and its representatives reasonable access to all books and records, properties, personnel and (subject to the execution of customary work paper access letters, if requested) workpapers and auditors of the Company and its Subsidiaries relating to the preparation of the Closing Statement and shall direct the then-current and former personnel of the Company and its Subsidiaries to cooperate with the Holder Representative and its representatives in connection with its review of the Closing Statement and the resolution of any disputes contemplated by Section 3.4(b). If Acquiror fails for any reason to deliver the Closing Statement within the time period required by this Section 3.4(a), then the Estimated Closing Statement (and the calculations contained therein) shall be considered for all purposes of this Agreement to be the Closing Statement, with respect to which the Holder Representative shall have all of its rights under this Section 3.4, including the right to dispute the calculations set forth therein in accordance with the Transaction Accounting Principlesprovisions of Section 3.4(b). Without the prior written consent of the Holder Representative, Acquiror may not amend or modify the Closing Statement following its delivery to the Holder Representative. (b) If the Holder Representative disagrees with any aspect of the calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash or Closing Date Outstanding Company Expenses set forth in the Closing Statement, it shall notify Acquiror of such disagreement in writing (the “Notice of Disagreement”) within forty-five (45) days after the Holder Representative’s receipt of the Closing Statement. The Notice of Disagreement shall set forth in reasonable detail the reason and amount of each disagreement (the “Disputed Items”). In the event that the Holder Representative does not provide a Notice of Disagreement within such 45-day period (or prior to expiration of such 45-day period, provides written notice to Acquiror that it will not be submitting a Notice of Disagreement), the Holder Representative and Acquiror shall be deemed to have accepted the calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Outstanding Company Expenses set forth in the Closing Statement, which shall be final, binding and conclusive for all purposes hereunder. In the event any such Notice of Disagreement is timely provided, Acquiror and the Holder Representative shall work in good faith for a period of thirty (30) days (or such longer period as they may mutually agree in writing) to resolve any disagreements with respect to any Disputed Items. Any Disputed Items resolved by Xxxxxxxx and the Holder Representative in writing during such period shall be final, binding and conclusive for all purposes hereunder. If, at the end of such period, Acquiror and the Holder Representative are unable to resolve all of the Disputed Items, then Deloitte & Touche LLP or, if Deloitte & Touche LLP is unwilling or unable to serve in such role, such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative (the “Independent Accountant”) shall resolve any unresolved Disputed Items (the “Remaining Disputed Items”). Each of Acquiror and the Holder Representative shall promptly execute a customary engagement letter with the Independent Accountant and shall promptly provide their respective assertions regarding the Remaining Disputed Items in writing to the Independent Accountant and to each other; provided, that this process may be amended by the terms of the Independent Accountant’s engagement letter; provided, further, that any proposals exchanged between Acquiror and the Holder Representative relating to any Disputed Item shall be deemed to be intended solely for purposes of facilitating settlement discussions shall be kept confidential by or on behalf of Acquiror and the Holder Representative and shall not be disclosed in any court or arbitration hearing or proceeding, including with respect to the use Independent Accountant’s engagement in connection with any Remaining Disputed Items (and the Independent Accountant shall be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the same line items Remaining Disputed Items). Neither Acquiror nor the Holder Representative shall engage in any ex parte communication with the Independent Accountant. The Independent Accountant shall be instructed to render its determination with respect to the Remaining Disputed Items (and line item entriesprovide in reasonable detail the basis for each such determination, set forth on and used in as well as the preparation final calculation of the Sample Closing StatementIndependent Accountant’s fees and expenses and the allocation thereof between Acquiror and the Holder Representative in accordance with this Section 3.4(b)) as soon as reasonably practicable; provided, however, that assets newly acquired and liabilities newly incurred following the date failure of the Sample Closing Statement which canIndependent Accountant to strictly conform to any deadline or time period contained herein shall not render the determination of the Independent Accountant invalid and shall not be appropriately placed in line items previously used a basis for seeking to overturn any determination rendered by Mallinckrodtthe Independent Accountant. The Independent Accountant shall, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilitiesacting as an expert and not as an arbitrator, will also be included to base its determination solely on (i) the written submissions of Acquiror and the Holder Representative and shall not conduct an independent investigation and (ii) the extent consistent with (if any) to which the Transaction Accounting Principles. Remaining Disputed Items require adjustment (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has only with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice Remaining Disputed Items) in order to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicableAgreed Principles and, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With with respect to each disputed line itemRemaining Disputed Item, such the Independent Accountant’s determination, if not in accordance with the position of either Covidien Acquiror or Mallinckrodtthe Holder Representative, shall not be in excess of the higher, nor less greater than the lower, of the amounts set forth greatest value claimed for such Remaining Disputed Item by Mallinckrodt Acquiror in the Closing Statement or by Covidien the Holder Representative in the Dispute Notice, as applicableNotice of Disagreement or lesser than the lowest value claimed for such Remaining Disputed Item by Acquiror in the Closing Statement or the Holder Representative in the Notice of Disagreement. Notwithstanding the foregoingAbsent manifest error or fraud, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or Independent Accountant shall be final, conclusive and binding on the Target Adjustment Amount (as applicable) was properly calculated parties hereto and no party hereto shall seek further recourse to any Governmental Authority other than to enforce the determination of the Independent Accountant. The parties hereto acknowledge that the agreements contained in this Section 3.4 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties hereto would not enter into this Agreement. The date on which Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Outstanding Company Expenses are finally determined in accordance with this Section 3.4(b) is hereinafter referred to as the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. “Determination Date.” All fees and expenses of the Independent Accountant relating to the work, if any, to be performed by the Independent Accounting Firm Accountant hereunder shall initially be borne fifty percent (50%) by Acquiror and fifty percent (50%) by the Holder Representative and ultimately shall be borne equally by Covidien pro rata as between Acquiror, on the one hand, and Mallinckrodt. All determinations the Holder Representative, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Acquiror and the Holder Representative (set forth in the written submissions to the Independent Accountant) made by the Independent Accounting FirmAccountant such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses, with any amount allocated to the Holder Representative constituting a Holder Allocable Expense. For example, if the net amount of the Remaining Disputed Items equals $1,000,000, and the Closing StatementIndependent Accountant determines that Acquiror has a valid claim for $400,000 of the $1,000,000, as modified by Acquiror shall bear sixty percent (60%) of the fees and expenses of the Independent Accounting Firm, will be final, conclusive Accountant and binding on the Parties, absent fraud or manifest errorHolder Representative shall bear the remaining forty percent (40%) of the fees and expenses of the Independent Accountant. (dc) For purposes of complying The Adjustment Amount shall be paid in accordance with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) 3.4(c). If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), Amount is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 milliona positive number, then Mallinckrodt (i) Acquiror and the Holder Representative shall promptly (and in any event no later than five (5) Business Days following the Determination Date) deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to pay or cause to be paid each Holder an amount in cash equal to (A) the difference from the first dollar Escrow Funds, multiplied by (i.e.B) such Holder’s Pro Rata Share and (ii) Acquiror shall pay, without regard or cause to the $20 million threshold) be paid, to Covidien each Holder by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to (A) such Holder’s Pro Rata Share, multiplied by (B) the difference from the first dollar (i.e.Adjustment Amount, without regard to the $20 million threshold) to Mallinckrodt provided, that in no event shall such amount paid by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment Acquiror pursuant to this Section 2.16(eclause (ii) exceed an amount equal to the Escrow Amount. If the Adjustment Amount is to be made within a negative number (the absolute value of such amount, the “Deficit Amount”), but such calculation of the Adjustment Amount is less than the amount of the Escrow Funds, Acquiror and the Holder Representative shall promptly (and in any event no later than five (5) Business Days following the Determination Date) deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to (A) each Holder an amount in cash equal to (x) the excess of the date on which Escrow Funds over the Adjustment Amount (if any), multiplied by (y) such Holder’s Pro Rata Share and (B) to Acquiror, after giving effect to the disbursements contemplated in the foregoing clause (A), if any, the remainder of the Escrow Funds. If the Adjustment Amount is zero, then, promptly following the Determination Date, the Escrow Agent shall pay to each Holder an amount in cash equal to (1) the balance of the Escrow Funds, multiplied by (2) such Holder’s Pro Rata Share. Upon determination of the Adjustment Amount pursuant to Section 3.4(b), each of Acquiror and the Target Adjustment Amount have been finally determined Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Escrow Funds in accordance with this Section 3.4(c). Notwithstanding anything to the contrary in this Section 3.4(c), any amounts payable pursuant to this Section 2.163.4(c) with respect to any In-the-Money Options held by employees of the Company or its Affiliates shall be paid (I) to the Surviving Corporation or its applicable Subsidiary for payment to the applicable Holders through payroll (subject to withholding for Taxes, which amounts shall be paid by the Surviving Corporation to the applicable taxing authority) and Acquiror shall cause such payments to be made through the Surviving Corporation’s or its applicable Subsidiary’s payroll as soon as reasonably practicable following receipt of any such amounts; and (II) on the same schedule and under the same terms and conditions as apply to payments to Holders of Common Shares of the Company generally, in each case, in order to constitute transaction-based compensation for purposes of Treasury Regulation § 1.409A–3(i)(5)(iv). In no event shall the Holder Representative, any Holder or any other Person have any liability under this Section 3.4, or otherwise in respect of any Deficit Amount, in excess of the Escrow Funds or Acquiror be entitled to payment of any amount pursuant to this Section 3.4(c), or otherwise in respect of any Deficit Amount, in excess of the Escrow Funds. (d) Any adjustments made pursuant to this Section 3.4 shall be treated by the parties hereto as adjustments to the Estimated Merger Consideration for applicable Income Tax purposes, except as otherwise required by applicable Law.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset in any event within seventy-five (75) calendar days thereof, Buyer shall prepare and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred deliver to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth Stockholder Representative (i) the Adjustment Amount and the calculation of the Adjustment Amount Closing Balance Sheet and (ii) calculations of (w) Net Working Capital (“Closing Date Net Working Capital”) calculated as of immediately prior to the Target Adjustment Amount Effective Time consistent (except as provided in this Section 3.4(a)) with the Closing Balance Sheet, (x) the Closing Cash Amount, (y) the Closing Indebtedness Amount, and (z) the calculation of the Target Adjustment AmountExcess Transaction Expenses. The Closing Statement Balance Sheet shall be prepared in accordance with GAAP applied in a manner consistent with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used principles applied in connection with the preparation of the Sample most recent audited balance sheet included in the Financial Statements. Following the Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following until the date final determination of the Sample Closing Statement which canAdjustment Amount, Buyer shall, upon reasonable advanced written notice in a manner that does not be appropriately placed in line items previously used by Mallinckrodtunreasonably interfere with the business or operations of the Buyer, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included provide the Stockholder Representative and its representatives access during normal business hours to the extent consistent records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company solely relating to the preparation of the Closing Balance Sheet and shall cause the personnel of the Company to cooperate with the Transaction Accounting PrinciplesStockholder Representative in connection with its review of the Closing Balance Sheet. (cb) Within If the Stockholder Representative shall disagree with such calculation of Closing Date Net Working Capital, Closing Cash Amount, Closing Indebtedness Amount or Excess Transaction Expenses, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to Balance Sheet. In the preparation or content of event that the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien Stockholder Representative does not deliver any Dispute Notice to Mallinckrodt provide a notice of disagreement within such thirty (30)-day period, the Stockholder Representative and Buyer shall be deemed to have agreed to the Closing Statement will Balance Sheet and the calculations of Closing Date Net Working Capital, Closing Cash Amount, Closing Indebtedness Amount and Excess Transaction Expenses delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any notice of disagreement is timely provided, Buyer and the Stockholder Representative shall use commercially reasonable efforts for a period of fifteen (15) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Cash Amount, Closing Indebtedness Amount and Excess Transaction Expenses. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by KPMG LLP or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and the Stockholder Representative (such firm, the “Independent Auditor”). Each of Buyer and the Stockholder Representative shall promptly provide their respective assertions regarding Closing Date Net Working Capital, Closing Cash Amount, Closing Indebtedness Amount or Excess Transaction Expenses, as applicable, and, to the extent relevant thereto, the Closing Balance Sheet in writing to the Independent Auditor and to each other. The Independent Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably possible (which the parties hereto agree should not be later than sixty (60) days following the day on which the disagreement is referred to the Independent Auditor). The Independent Auditor shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Date Net Working Capital, Closing Cash Amount, Closing Indebtedness Amount or Excess Transaction Expenses requires adjustment (only with respect to the remaining disagreements submitted to the Independent Auditor) in order to be determined in accordance with Section 3.4(a) (including the definitions of the defined terms used in Section 3.4(a)). In resolving any disputed item, the Independent Auditor may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The determination of the Independent Auditor shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved Closing Cash Amount, Closing Indebtedness Amount and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Excess Transaction Expenses is finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.4(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Independent Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Buyer, on the one hand, and Mallinckrodt. All determinations the Stockholder Representative as a Stockholder Representative Expense, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Buyer and the Stockholder Representative (set forth in the written submissions to the Independent Auditor) made by the Independent Accounting FirmAuditor such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if the Stockholder Representative challenges items underlying the calculation of Closing Date Net Working Capital in the net amount of $1,000,000, and the Closing StatementIndependent Auditor determines that Buyer has a valid claim for $400,000 of the $1,000,000, as modified by Buyer shall bear 60% of the fees and expenses of the Independent Accounting Firm, will be final, conclusive Auditor and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with Stockholder Representative shall bear the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis remaining 40% of the Closing Statement fees and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days expenses of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Independent Auditor as a Stockholder Representative Expense.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within in any event within sixty (60) calendar days after thereof, Acquiror shall prepare and deliver to the Distribution Date, Mallinckrodt shall cause to be prepared Holder Representative (i) an unaudited consolidated balance sheet of the Company and delivered to Covidien a statement its Subsidiaries (the “Closing StatementBalance Sheet”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and ), (ii) the Target Adjustment Amount and the a calculation of the Target Adjustment Amount. The Net Working Capital (“Closing Statement shall be Date Net Working Capital”), prepared in accordance with the Transaction Accounting PrinciplesNWC Methodology, including the use (iii) a calculation of the same line items aggregate amount of all Indebtedness of the Company (“Closing Date Indebtedness”), (iv) a calculation of Cash and line item entriesCash Equivalents of the Company (“Closing Date Cash”), set forth and (v) a calculation of unpaid and accrued Transaction Expenses (“Closing Date Unpaid Transaction Expenses”), in each case, calculated as of the close of business on and used the Closing Date consistent (except as provided in this Section 3.4(a)) with the Closing Balance Sheet without giving effect to the consummation of the Merger or any financing transactions in connection therewith or, after the Effective Time, any other action or omission by Acquiror, the Surviving Corporation or any of its Subsidiaries that is not in the ordinary course of business consistent with past practice. The Closing Balance Sheet shall be prepared in a manner consistent with the principles applied in connection with the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following most recent audited balance sheet included in the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement Financial Statements (the “Dispute NoticeReference Balance Sheet”); provided, however, that (x) except as set forth in clause (y), the Closing Balance Sheet shall be prepared using the same accounting practices, policies, judgments and methodologies used in the preparation of the Reference Balance Sheet and (y) the Closing Balance Sheet shall reflect no changes in reserves (regardless of whether any such reserve is recorded as an offset to a current asset’s carrying value or is included as an accrued liability in the Closing Balance Sheet) from amounts contained in the Reference Balance Sheet, other than changes therein attributable to changes in facts and circumstances occurring after the date of the Reference Balance Sheet. Following the Closing, Acquiror shall provide the Holder Representative and its representatives access to the records, properties, personnel and (subject to the execution of customary work paper access letters if Covidien requested) auditors of the Company and its Subsidiaries relating to the preparation of the Closing Balance Sheet and shall cause the personnel of the Company and its Subsidiaries to cooperate with the Holder Representative in connection with its review of the Closing Balance Sheet. For the purpose of determining Closing Date Net Working Capital, the consolidated current assets and current liabilities of the Company and its Subsidiaries shall exclude the value of all Transaction Expenses. (b) If the Holder Representative shall disagree with the calculation of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and/or Closing Date Unpaid Transaction Expenses, it shall notify Acquiror of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within forty-five (45) days after its receipt of the Closing Balance Sheet. In the event that the Holder Representative does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty forty-five (30)-day 45)-day period, the Holder Representative shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Closing Date Unpaid Transaction Expenses delivered by Acquiror, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Acquiror and the Holder Representative shall use reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any such disagreements specified in such notice. If, at the end of such period, they are unable to resolve such disagreements, then KPMG LLP (or such independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative) (the “Auditor”) shall resolve any remaining disagreements. Each of Acquiror and the Holder Representative shall promptly provide their assertions regarding such disagreements in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably possible (which the parties hereto agree should not be later than ninety (90) days following the day on which any such disagreements are referred to the Auditor). The Auditor shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the extent (if any) to which the Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and/or Closing Date Unpaid Transaction Expenses require adjustment (only with respect to the remaining disagreements submitted to the Auditor) in order to be determined in accordance with Section 3.4(a) (including the definitions of the defined terms used in Section 3.4(a)). The determination of the Auditor shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved Closing Date Indebtedness, Closing Date Cash and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Date Unpaid Transaction Expenses are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.4(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Acquiror, on the one hand, and Mallinckrodt. All determinations the Holder Representative as a Holder Allocable Expense, on the other, in proportion to the allocation of the dollar value of the amounts in dispute between Acquiror and the Holder Representative made by the Independent Accounting FirmAuditor such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of such fees and expenses. (c) The “Adjustment Amount,” which may be positive or negative, shall mean (i) Closing Date Net Working Capital (as finally determined in accordance with Section 3.4(b)), minus Target Closing Date Net Working Capital, plus (ii) Estimated Closing Date Indebtedness, minus Closing Date Indebtedness (as finally determined in accordance with Section 3.4(b)), plus (iii) Closing Date Cash (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Cash, plus (iv) Estimated Closing Date Unpaid Transaction Expenses, minus Closing Date Unpaid Transaction Expenses (as finally determined in accordance with Section 3.4(b)). If the Adjustment Amount is a positive number, then the Aggregate Cash Consideration shall be increased by the Adjustment Amount, and if the Closing StatementAdjustment Amount is a negative number, as modified the Aggregate Cash Consideration shall be decreased by the Independent Accounting Firm, will absolute value of the Adjustment Amount. The Adjustment Amount shall be final, conclusive and binding on the Parties, absent fraud or manifest errorpaid in accordance with Section 3.4(d). (d) For purposes On the Closing Date, Acquiror shall pay pursuant to Section 3.2(a)(ii) a portion of complying the Aggregate Cash Consideration equal to the Adjustment Escrow Amount to Escrow Agent, to be held in escrow in accordance with the terms set forth of this Agreement and the Escrow Agreement. The Adjustment Escrow Amount shall be held and invested by the Escrow Agent in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection accordance with the preparation and analysis terms of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to MallinckrodtEscrow Agreement. If the Adjustment AmountAmount is a positive number, as finally determined pursuant to Section 2.16(c)then, is less than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, (x) Acquiror shall pay to each Pre-Closing Holder an amount in cash equal to (i) such holder’s Fully-Diluted Percentage, multiplied by (ii) the Adjustment Amount (provided that any incremental Transaction Expenses payable as a result of such payment to the holders shall first be deducted from the Adjustment Amount and promptly paid by Acquiror to the Target payee(s) of such Transaction Expenses), less any applicable withholding, and (y) the Escrow Agent shall pay to each Pre-Closing Holder an amount in cash equal to (i) the Adjustment Escrow Funds (provided that any incremental Transaction Expenses payable as a result of such payment to the holders shall first be deducted from the Adjustment Escrow Funds and paid by the Escrow Agent to Acquiror and promptly thereafter paid by Acquiror to the payee(s) of such Transaction Expenses), multiplied by (ii) such holder’s Applicable Percentage, less any applicable withholding. If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within five (5) Business Days of the Determination Date, (x) the Escrow Agent shall pay to Acquiror an amount equal to (A) the Deficit Amount, multiplied by (B) the sum of the Fully-Diluted Percentages of all Pre-Closing Holders, and (y) if any of the Adjustment Escrow Funds remain after such payment to Acquiror, the Escrow Agent shall pay to each Pre-Closing Holder an amount in cash equal to (i) the balance of the Adjustment Escrow Funds (provided that any incremental Transaction Expenses payable as a result of such payment to the holders shall first be deducted from such Adjustment Escrow Funds and paid by the Escrow Agent to Acquiror and promptly thereafter paid by Acquiror to the payee(s) of such Transaction Expenses), multiplied by (ii) such holder’s Applicable Percentage, less any applicable withholding. Upon determination of the Adjustment Amount pursuant to Section 3.4(b) and Section 3.4(c), each of Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Adjustment Escrow Funds in accordance with this Section 3.4(d). In no event shall the Holder Representative or any Pre-Closing Holder have been finally determined any liability under this Section 3.4 in excess of such holder’s allocable share of the Adjustment Escrow Funds. In the event that Acquiror is entitled to payment pursuant to this Section 2.163.4(d) in an amount in excess of the Adjustment Escrow Funds (such excess, the “Adjustment Overage Amount”), Acquiror shall be entitled to payment of, and the Escrow Agent shall pay (concurrent with the payment of the Adjustment Escrow Funds), the Adjustment Overage Amount, from and to the extent of the Indemnification Escrow Funds. In no event shall Acquiror be entitled to payment pursuant to this Section 3.4(d) of any amount in excess of the Adjustment Escrow Funds plus the Indemnification Escrow Funds.

Adjustment Amount. (a) Schedule 2.16 sets Not less than three (3) Business Days prior to the Closing Date and in no event more than ten (10) Business Days prior to the Closing Date, Seller shall deliver to Buyer a written statement (the “Estimated Closing Statement”) setting forth a sample (i) Seller’s good faith estimate of (A) the Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”), (B) Closing Date Indebtedness, including the Aggregate Reserved Amount (the “Estimated Closing Date Indebtedness”), (C) Closing Date Cash (the “Estimated Closing Date Cash”), and (D) Closing Date Transaction Expenses (the “Estimated Closing Date Transaction Expenses”) and (ii) its calculation of the Estimated Working Capital Adjustment Amount Amount. Seller shall provide Buyer a reasonable level of supporting documentation for the Estimated Closing Statement and the Target Adjustment Amount as calculation thereof and any additional information reasonably requested by Buyer and related thereto. If Buyer objects to the Estimated Closing Statement or the calculation thereof, Buyer shall deliver written notice of such objection to Seller no later than two (2) Business Days prior to the Balance Sheet Date (the “Sample Closing Statement”)Date, including the asset, liability and other line items Buyer and accounting principles used Seller consult with one another with respect to Buyer’s objections set forth in such calculationobjection notice, and assuming that all Seller shall revise the Estimated Closing Statement and the calculation thereof to reflect any revisions mutually agreed upon by Buyer and Seller prior to the Closing. If Buyer does not timely deliver such objection notice or, if Buyer timely delivers such objection notice, to the extent Buyer and Seller fail to resolve any of such asset Buyer’s objections, the Estimated Closing Statement and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under the calculation thereof as originally delivered by Seller pursuant to the first sentence of this Agreement will be transferred to Mallinckrodt as of the DistributionSection 2.05(a) shall control. (b) Within As soon as reasonably practicable following the Closing Date, and in any event within sixty (60) days after the Distribution Datethereof, Mallinckrodt Buyer shall cause prepare and deliver to be prepared and delivered to Covidien Seller a written statement (the “Closing Statement”) setting forth Buyer’s good faith calculation of (i) the Adjustment Amount Closing Date Net Working Capital, (ii) Closing Date Indebtedness, including the Aggregate Reserved Amount, (iii) Closing Date Cash, (iv) Closing Date Transaction Expenses, and the (v) its calculation of the Closing Date Working Capital Adjustment Amount and Amount, in each case, determined (iix) without giving effect to (A) the Target Adjustment Amount and the calculation consummation of the Target Adjustment Amounttransactions contemplated by this Agreement to occur at Closing (including any adjustments as a result of the application of purchase accounting); or (B) any financing transactions in connection therewith or by Buyer or its Subsidiaries (including the Group Companies) after the Closing. The Except as otherwise provided herein, the Closing Statement shall be prepared in accordance with the Transaction Accounting PrinciplesPrinciples and in a manner consistent with the Sample Closing Statement. Buyer shall provide Seller a reasonable level of supporting documentation for the Closing Statement and the calculation thereof and any additional information reasonably requested by Seller and related thereto. Nothing in this Section 2.05(b) is intended to be used to adjust for errors, omissions or inconsistencies that may be found with respect to the Financial Statements or the Balance Sheet, or any actual or alleged failure of the Financial Statements or the Balance Sheet to be prepared in accordance with GAAP or in good faith. Following the Closing, Buyer shall provide Seller and its Representatives reasonable access to the records, (to the extent involved in the preparation or components of the Closing Statement) personnel and (subject to the execution of customary work paper access letters if requested by) auditors of Buyer relating to the preparation of the Closing Statement and, upon reasonable advance written notice of Seller, shall cause the personnel of Buyer and its Subsidiaries (including the use of the same line items and line item entriesGroup Companies), set forth on and used who were involved in the preparation of the Sample Closing Statement (or the data reflected therein), to cooperate reasonably with Seller and its Representatives in connection with their review of the Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with the calculation of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day periodDate Net Working Capital, the Closing Statement will be finalDate Indebtedness, conclusive and binding on the Parties. Any Dispute Notice Closing Date Cash or Closing Date Transaction Expenses, it shall (i) set notify Buyer of such disagreement in writing, setting forth in reasonable detail the basis for any dispute included thereinparticulars of such disagreement, within sixty (60) days after its receipt of the Closing Statement. In the event that Seller does not provide such a notice of disagreement within such sixty (60)-day period, Seller shall be deemed to have accepted the Closing Statement and the calculation of the Closing Date Net Working Capital, the amounts involved Closing Date Indebtedness, the Closing Date Cash and Covidien’s determination the Closing Date Transaction Expenses delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use commercially reasonable efforts for a period of forty-five (45) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Adjustment Amount and/or Closing Date Net Working Capital, the Target Adjustment Amount Closing Date Indebtedness, the Closing Date Cash or Closing Date Transaction Expenses, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the Parties and the Closing Statement shall be adjusted in accordance with such resolution. All such discussions and communications related thereto shall (unless otherwise agreed by Buyer and Seller) be governed by Rule 408 of the Federal Rules of Evidence and any applicable similar state rule or evidence. If, at the end of such period, they are unable to resolve such disagreements, then Deloitte & Touche LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Auditor”) shall (as applicablean expert and not as an arbitrator) resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within forty-five (45) days of the date on which such dispute is referred to the Auditor, whether the Closing Statement was prepared in accordance with the standards set forth in Section 2.05(b) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Indebtedness, Closing Date Cash or the Closing Date Transaction Expenses require adjustment. Seller and Buyer shall instruct the Auditor to consider only those items and amounts which are identified in the notice of disagreement delivered by Seller and which have not already been resolved by Seller and Buyer. Further, the Auditor’s determination shall be based only on the relevant books and records and the other written information provided by Seller and Buyer (i.e., not on the basis of independent review), and the Auditor shall not conduct additional discovery in any form. The Auditor’s resolution of each disputed item shall be within the range of the respective positions taken by Buyer and Seller. (d) The fees and expenses of the Auditor shall be allocated between Seller and Buyer in proportion to the extent either Seller or Buyer did not prevail on the disputed items submitted for the Auditor’s review. For the avoidance of doubt and solely as an illustration of the methodology set forth in the immediately preceding sentence, if (i) the notice of disagreement delivered by Seller assigns values to the disputed items such that the Purchase Price would be increased by $1,000,000, (ii) include only disagreements based on Buyer maintains that the Adjustment Amount and/or Purchase Price as calculated pursuant to the Target Adjustment Amount Closing Statement is correct and (as applicableiii) not being calculated properly the Auditor’s final resolution of the disputed items in accordance with this Agreement or containing mathematical errors. Upon receipt Section 2.05(d) is that the Purchase Price as calculated by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt Buyer in the Closing Statement is increased by $600,000 (i.e., sixty percent (60%) of the amount in dispute is resolved in favor of Seller), then forty percent (40%) of such fees and expenses of the Auditor shall be paid by Seller and Buyer shall be responsible for sixty percent (60%) of such fees and expenses of the Auditor. All other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Auditor shall be borne by the Party incurring such cost and expense. (e) Except as may be required by applicable Law or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoingcourt order, the scope Parties agree to maintain confidentiality as to all aspects of any proceeding before the disputes Auditor, including its existence and results, except that nothing herein shall prevent any Party from disclosing information regarding such proceeding (i) to be resolved by a court of competent jurisdiction for purposes of enforcing this Section 2.05 or the Independent Accounting Firm Auditor’s final determination or (ii) in accordance with Section 5.14, applied to such proceeding and the aspects thereof, mutatis mutandis. The Auditor shall be limited bound by a mutually agreeable confidentiality agreement, which shall preserve the confidentiality of any proceeding before the Auditor. The decision rendered pursuant to whether this Section 2.05(e) may be entered as a judgment in any court of competent jurisdiction. The procedures of this Section 2.05 are exclusive, and the determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm Auditor shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, binding and conclusive and binding on the Parties, absent fraud or manifest error. The date on which the Closing Date Net Working Capital, the Closing Date Indebtedness, Closing Date Transaction Expenses and the Closing Date Cash are finally determined in accordance with this Section 2.05(e) is hereinafter referred to as the “Determination Date.” (df) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as The “Adjustment Amount,” which may be reasonably required in connection with the preparation and analysis of positive or negative, shall mean (i) the Closing Statement and Date Working Capital Adjustment Amount (as finally determined in accordance with Section 2.05), minus the resolution of any disputes thereunder. (e) If the Estimated Working Capital Adjustment Amount, plus (ii) the Estimated Closing Date Indebtedness, minus the Closing Date Indebtedness (as finally determined pursuant to in accordance with Section 2.16(c2.05), is greater than plus (iii) the Target Adjustment Amount, Closing Date Cash (as finally determined pursuant to in accordance with Section 2.16(c2.05), by at least $20 millionminus the Estimated Closing Date Cash, then Mallinckrodt shall pay or cause to be paid an amount plus (iv) the Estimated Closing Date Transaction Expenses, minus the Closing Date Transaction Expenses (as finally determined in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodtaccordance with Section 2.05). If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount (the “Increase Amount”), and if the Adjustment Amount is a negative number, then the Purchase Price shall be decreased by the absolute value of the Adjustment Amount (the “Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.05(g). (g) If there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is less than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyer shall pay to Seller (and/or one or more Retained Companies designated by Seller) an amount in cash equal to the Adjustment Increase Amount in immediately available funds by wire transfer to an account or accounts designated by Seller, by written notice to Buyer. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Determination Date, Seller shall pay, or shall cause to be paid, to Buyer an amount in cash equal to the Deficit Amount have been finally determined in immediately available funds by wire transfer to an account or accounts designated by Buyer, by written notice to Seller. For U.S. federal income and other applicable Tax purposes, to the extent permitted by applicable Law, any Increase Amount or Deficit Amount pursuant to this Section 2.162.05 shall be treated as an adjustment to the Purchase Price.

Adjustment Amount. 7.1 The parties shall procure that the Actual Completion Statement is prepared and agreed or determined (aas the case may be) Schedule 2.16 sets forth a sample calculation in accordance with the remainder of this clause 7. 7.2 The Buyer shall within 60 days of the Adjustment Amount Completion Date, prepare and submit to the Target Adjustment Amount as Sellers a draft of the Balance Sheet Date Actual Completion Statement (the “Sample Closing Draft Actual Completion Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Draft Actual Completion Statement shall be prepared in accordance with the Transaction Accounting Principlesremainder of this clause 7. 7.3 In the event of a failure by the Buyer to submit the Draft Actual Completion Statement to the Sellers within the period referred to in clause ‎7.2, including the use Estimated Adjustment Amount shall be deemed to be the Adjustment Amount for the purposes of this Agreement. 7.4 The draft Actual Completion Statement shall be prepared on the following basis, and in the order of priority shown below: 7.4.1 applying the following specific accounting principles, bases, conventions, rules and estimation techniques: a) Inventory shall be valued at Landed Cost, save that if any particular unit of Inventory is for any reason not immediately saleable at Completion, then any costs required to make such Inventory saleable shall be estimated in good faith and deducted from the Landed Cost of such Inventory; b) all non-saleable, defective and slow-moving Inventory shall be valued at £nil; c) any unit of Inventory comprising ASINs and SKUs no longer traded by the Business shall be valued at £nil; and d) all refunds made by the Buyer for products sold by the Company prior to Completion shall be deducted from the value of the same line items Inventory; and 7.4.2 to the extent not provided for by the matters referred to in clause 7.4.1, in accordance with GAAP. 7.5 The Sellers shall, within 10 days after receipt of the Draft Actual Completion Statement, give written notice to the Buyer stating whether they agree with the Draft Actual Completion Statement. The Buyer shall procure that the Sellers and line item entriesthe Sellers’ advisors are given all such assistance and access (during business hours) to all such information in the possession or control of the Buyer as they may reasonably require in order to enable the Sellers to reach their decision. 7.6 If the Sellers give notice that they have no proposed amendments to the Draft Actual Completion Statement, set forth on then the Draft Actual Completion Statement shall constitute the Actual Completion Statement for the purposes of this Agreement. If the Sellers give notice that they have proposed amendments to the Draft Actual Completion Statement, the Sellers shall within such notice inform the Buyer of their proposed amendments and used the Sellers and the Buyer shall, within the period of 20 days after receipt of such notice, seek to agree the proposed amendments. 7.7 In the event of a failure by the Sellers to give written notice to the Buyer within the period referred to in clause ‎7.2, stating whether they agree with the Draft Actual Completion Statement, the Draft Actual Completion Statement shall be deemed to be the Actual Completion Statement for the purposes of this Agreement. 7.8 In the event of any dispute between the Sellers and the Buyer as to any matter relevant to the Draft Actual Completion Statement remaining unresolved at the expiry of the period referred to in clause 7.6, such failure or dispute shall be referred to the Expert. The Expert’s determination shall be limited to: 7.8.1 whether any errors have been made in the preparation of the Sample Closing StatementDraft Actual Completion Statement or the documents, accounts or working papers used to determine the Adjustment Amount; providedand 7.8.2 any consequential adjustments, however, corrections or modifications that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included are required to the extent consistent with the Transaction Accounting PrinciplesDraft Actual Completion Statement. (c) Within thirty (30) days following receipt 7.9 Unless otherwise agreed by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day periodparties, the Closing Statement will Expert shall be final, conclusive and binding on required to make its determination in writing (including the Parties. Any Dispute Notice shall (i) set forth in reasonable detail reasons for the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicabledetermination) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (to provide a copy to each party as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve soon as the Independent Accounting Firm. As promptly as practicable, reasonably practicable and in any event not more than fifteen (15) within 30 days following of its appointment. The Expert’s fees shall be paid by the engagement Sellers and/or the Buyer in the proportions determined by the Expert and the Expert shall give due consideration to the conduct of the Independent Accounting Firm, Mallinckrodt parties when making such determination. The Sellers and Covidien the Buyer shall each prepare procure that the Expert is given all such assistance and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute access to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described all such information in the immediately preceding sentence Buyer’s or (as the case may be) the Sellers’ possession or control as such firm may reasonably require in order to determine the Actual Completion Statement. The Expert shall act as an expert and not as an arbitrator. Save in any the event not more than thirty (30) days following such presentations, make a final determination, of manifest error or fraud the Expert’s determination shall be binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm parties. 7.10 The following payments shall be limited to whether any determination of made on or before the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) fifth Business Days of Day following the date on which the Actual Completion Statement is agreed or determined in accordance with this clause 7: 7.10.1 if the Adjustment Amount as set out in the Actual Completion Statement exceeds the Estimated Adjustment Amount (the amount of such excess being the Excess), the Buyer shall pay the Reserved Estimated Adjustment Amount plus the amount of any Excess to the Sellers; or 7.10.2 if the Adjustment Amount as set out in the Actual Completion Statement is less than the Estimated Adjustment Amount (the amount of such shortfall being the Shortfall), then: a) if the Shortfall is less than the Reserved Estimated Amount, the Buyer shall retain an amount equal to the Shortfall and will pay to the Seller an amount equal to the difference between the Reserved Estimated Adjustment Amount and the Target Shortfall, and b) if the Shortfall is greater than the Reserved Estimated Amount, the Buyer shall retain the Reserved Estimated Adjustment Amount have been finally determined pursuant and the Sellers shall pay to this Section 2.16the Buyer an amount equal to the difference between the Reserved Estimated Adjustment Amount and the Shortfall.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing StatementState- ment”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Mallinck- rodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Tar- get Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Ac- counting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); providedpro- vided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve re- solve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstandingnotwith- standing, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Dis- pute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflictedconflict- ed, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally nation- ally recognized major accounting firm, and the two (2) firms will mutually select a third nationally nation- ally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly prompt- ly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Inde- pendent Accounting Firm to, as soon as practicable after the submission of the presentations described de- scribed in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate appropri- ate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position posi- tion of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated cal- culated in accordance with the Transaction Accounting Principles, and the Independent Accounting Account- ing Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting PrinciplesPrin- ciples. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective re- spective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant pursu- ant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million thresholdthresh- old) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth As soon as reasonably practicable following the Closing Date, and in any event within one hundred twenty (120) calendar days thereof, Purchaser shall prepare and deliver to the Holders’ Representative a sample calculation of (i) the Closing Date Net Working Capital, (ii) the Closing Date Funded Debt Amount, (iii) the Closing Date Cash Amount and (iv) the Closing Date Outstanding Company Expenses (the “Post-Closing Statement”). If Purchaser’s calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses results in a calculation of the Adjustment Amount that is a positive number, (i) Purchaser and the Target Holders’ Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to the Seller an amount in cash equal to the Adjustment Escrow Funds and (ii) Purchaser shall pay to the Seller an amount in cash equal to Purchaser’s calculation of the Adjustment Amount. If Purchaser’s calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses results in a calculation of the Adjustment Amount as that is a negative number and the absolute value of such calculation of the Balance Sheet Date (Adjustment Amount is less than the “Sample amount of the Adjustment Escrow Funds, Purchaser and the Holders’ Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to the Seller an amount in cash equal to the excess of the entire Adjustment Escrow Funds over the absolute value of Purchaser’s calculation of the Adjustment Amount. Following the delivery of the Post-Closing Statement”), including Purchaser shall provide the assetHolders’ Representative and his representatives access to the records, liability properties and other line items personnel of the Company and accounting principles used in such calculationthe Company Subsidiary relating to the preparation of the Post-Closing Statement and the calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as shall cause the personnel of the DistributionCompany to cooperate with the Holders’ Representative in connection with the Holders’ Representative’s review of the Post-Closing Statement and such calculations. (b) Within sixty If the Holders’ Representative shall disagree with the calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses, the Holders’ Representative shall notify Purchaser of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement including appropriate supporting calculations and schedules, within seventy-five (6075) calendar days after its receipt of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Post-Closing Statement”. In the event that the Holders’ Representative does not provide such a notice of disagreement within such seventy-five (75) setting forth (i) day period, the Adjustment Amount Holders’ Representative shall be deemed to have accepted the Post-Closing Statement and the calculation of the Adjustment Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses delivered by Purchaser, which shall be final, binding and (ii) conclusive for all purposes hereunder. In the Target Adjustment Amount event any such notice of disagreement is timely provided, Purchaser and the calculation Holders’ Representative shall use reasonable best efforts for a period of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice (or such longer period as they may mutually agree) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation or content calculations of the Closing Statement Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses. If, at the end of such period, they are unable to resolve such disagreements, then BDO USA, LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Purchaser and the Holders’ Representative) (the “Dispute NoticeIndependent Accountant”); provided, however, that if Covidien does not deliver ) shall resolve any Dispute Notice to Mallinckrodt within such thirty (30)-day periodremaining disagreements. Each of Purchaser and the Holders’ Representative shall promptly provide their assertions regarding the Closing Date Net Working Capital, the Closing Statement will Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses and, to the extent relevant thereto, the Post-Closing Statement, in writing to the Independent Accountant and to each other. The Independent Accountant shall be final, conclusive instructed to render its determination with respect to such disagreements (and binding on the Parties. Any Dispute Notice shall (i) set forth provide in reasonable detail the basis for any dispute included therein, each such determination) as soon as reasonably practicable (which the amounts involved and Covidien’s parties hereto agree should not be later than forty-five (45) days following the day on which the disagreement is referred to the Independent Accountant). The Independent Accountant shall base its determination solely on (i) the written submissions of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) parties and shall not conduct an independent investigation and (ii) include only disagreements based on the Adjustment extent (if any) to which the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Target Adjustment Amount Closing Date Outstanding Company Expenses require adjustment (as applicableonly with respect to the remaining disagreements submitted to the Independent Accountant) not being calculated properly in order to be determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen Section 3.3(a) (15) Business Days following receipt by Mallinckrodt including the definitions of the Dispute Notice (the “Dispute Resolution Period”defined terms used in Section 3.3(a)), then Mallinckrodt and Covidien jointly shall engageand, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With with respect to each disputed line item, such the Independent Accountant’s determination, if not in accordance with the position of either Covidien Purchaser or Mallinckrodtthe Holders’ Representative, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt presented in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination Purchaser’s calculation of the Adjustment Amount and/or pursuant to Section 3.3(a) or in the Target Holders’ Representative’s written notice of disagreement of such calculation pursuant to this Section 3.3(b). The determination of the Independent Accountant shall be final, conclusive and binding on the parties and no party shall seek further recourse to any Governmental Authority other than to enforce the determination of the Independent Accountant. The parties acknowledge that the agreements contained in this Section 3.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement. If Purchaser fails to promptly pay any Adjustment Amount (as applicable) was properly calculated that may be payable to the Seller in accordance with this Section 3.3, or if either party fails to give the Transaction Accounting Principlesjoint written instructions to the Escrow Agent in accordance with this Section 3.3 and, in order to obtain such payment or delivery of the joint written instructions to the Escrow Agent, a party commences an Action that results in a judgment against the other party for such Adjustment Amount or for the delivery of the joint written instructions to the Escrow Agent, the losing party shall pay to the prevailing party (or deliver the joint written instructions to the Escrow Agent directing it to pay), together with such Adjustment Amount, in accordance with Section 3.3(a) and Section 3.3(d), interest on such Adjustment Amount from the date Purchaser delivers to the Holders’ Representative its calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, Closing Date Outstanding Company Expenses at a rate per annum equal to the extent GAAP prime rate as published in the Wall Street Journal, Eastern Edition, in effect on the date hereof. In addition the prevailing party shall be entitled to any fees, costs and expenses (including legal fees) incurred by the prevailing party in connection with any such Action. The date on which the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses are finally determined in accordance with this Section 3.3(b) is inconsistent with hereinafter referred to as the Transaction Accounting Principles“Determination Date”. All fees and expenses of the Independent Accountant relating to the work, if any, to be performed by the Independent Accounting Firm Accountant hereunder shall be borne equally one-half (50%) by Covidien Purchaser, on the one hand, and Mallinckrodt. All determinations made one-half (50%) by the Independent Accounting FirmHolders’ Representative, on the other hand. (c) If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount, and if the Closing StatementAdjustment Amount is a negative number, as modified the Purchase Price shall be decreased by the Independent Accounting Firm, will absolute value of the Adjustment Amount. The Adjustment Amount shall be final, conclusive paid in accordance with Section 3.3(a) and binding on the Parties, absent fraud or manifest errorSection 3.3(d). (d) For purposes On the Closing Date, Purchaser shall pay a portion of complying the Purchase Price equal to the Escrow Amount to JPMorgan Chase Bank, NA, as escrow agent of the parties hereto (the “Escrow Agent”), to be held in escrow. The Escrow Amount shall be held and invested by the Escrow Agent in accordance with the terms set forth of an Escrow Agreement in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to form attached hereto as Exhibit 3.3(d) (the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c“Escrow Agreement”), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), Amount is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 milliona positive number, then Covidien (x) Purchaser shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which Determination Date pay to the Seller the Adjustment Amount, less any portion of the Adjustment Amount previously paid by Purchaser to the Seller pursuant to Section 3.3(a), and (y) promptly following the Determination Date, and in any event within five (5) Business Days of the Determination Date, Purchaser and the Target Holders’ Representative shall deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to the Seller an amount in cash equal to the Adjustment Escrow Funds less any portion of the Adjustment Escrow Funds previously paid by the Escrow Agent to the Seller pursuant to Section 3.3(a). If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within five (5) Business Days of the Determination Date, (x) Purchaser and the Holders’ Representative shall deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to Purchaser an amount of Adjustment Escrow Funds, and if such Adjustment Escrow Funds are insufficient to satisfy the Deficit Amount, from the Indemnification Escrow Funds, equal to the Deficit Amount (subject to the last sentence of this Section 3.3(d)), and (y) if any of the Adjustment Escrow Funds remain after such payment to Purchaser, the Escrow Agent shall pay to the Seller an amount in cash equal to the balance of the Adjustment Escrow Funds. Upon determination of the Adjustment Amount pursuant to Section 3.3(b) and Section 3.3(c), each of Purchaser and the Holders’ Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Adjustment Escrow Funds (and, if applicable pursuant to the preceding sentence, the Indemnification Escrow Funds) in accordance with this Section 3.3(d). In no event shall the Seller or Holders have been finally determined any liability under this Section 3.3 in excess of the Adjustment Escrow Funds and the Indemnification Escrow Funds. In no event shall Purchaser be entitled to payment pursuant to this Section 2.163.3(d) of any amount in excess of the sum of the Adjustment Escrow Funds and the Indemnification Escrow Funds. (e) Except as otherwise required by Law, the parties hereto agree to treat for all Tax purposes any adjustment made pursuant to this Section 3.3 as adjustments to the Purchase Price.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation The Adjustment Amount will be equal to the aggregate amount of Funded Indebtedness of the Adjustment Amount and the Target Adjustment Amount Acquired Companies as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the DistributionDate. (b) Within sixty For purposes of the Closing, Sellers shall notify Buyers of Sellers' estimate of the aggregate amount of Funded Indebtedness of the Acquired Companies that will be outstanding as of the Closing Date not less than two Business Days prior to the anticipated Closing Date (60) the "ESTIMATED CLOSING FUNDED INDEBTEDNESS"), which Estimated Closing Funded Indebtedness shall be used in determining the delivery of the cash portion of the Purchase Price to be delivered to Sellers at Closing pursuant to Section 2.4(b)(i). Sellers and Buyers shall use their Best Efforts to agree, within 45 days after the Distribution DateClosing, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (on the “Closing Statement”) setting forth (i) actual amount of the Adjustment Amount Amount. If Sellers and Buyers are able to reach agreement as to the calculation actual amount of the Adjustment Amount within such 45-day period, Sellers and (ii) Buyers shall execute a certificate evidencing their agreement as to the Target Adjustment Amount and the calculation actual amount of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items If Sellers and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Buyers are unable to agree as to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination actual amount of the Adjustment Amount and/or within such 45-day period, then such matter shall be resolved pursuant to the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly dispute resolution provisions in accordance with Section 11.6 of this Agreement or containing mathematical errorsAgreement. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Within three Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate actual amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or has been finally determined (whether by agreement of Sellers and Buyers or through the Target dispute resolution provisions in Section 11.6 of this Agreement), if the actual amount of the Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment AmountEstimated Closing Funded Indebtedness, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt Sellers shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e.Buyers, without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If Buyers, the amount by which the actual amount of the Adjustment AmountAmount exceeds the Estimated Closing Funded Indebtedness, as finally determined pursuant to Section 2.16(c), and if the actual amount of the Adjustment Amount is less than the Target Adjustment AmountEstimated Closing Funded Indebtedness, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien Buyers shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e.Sellers, without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days Sellers, the amount by which the Estimated Closing Funded Indebtedness exceeds the actual amount of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Amount.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth If (i) the Adjustment Amount is positive, then (A) Parent shall pay, or cause to be paid, to the Paying Agent the Adjustment Amount within three Business Days from the date on which the Adjustment Amount is finally determined pursuant to Section 2.2(f) by bank wire transfer of immediately available funds to the account or accounts designated in writing by the Paying Agent for payment to the Former Holders in accordance with this Agreement and the calculation Paying Agent Agreement and (B) the full Adjustment Escrow Amount shall be released and paid to the Paying Agent for payment to the Former Holders in accordance with this Agreement and the Paying Agent Agreement, or (ii) the Adjustment Amount is negative then, (A) Parent will be entitled to receive that portion of the Adjustment Escrow Amount equal to the absolute value of the Adjustment Amount and (iiB) the Target remaining Adjustment Amount and the calculation of the Target Adjustment Escrow Amount. The Closing Statement , if any, shall be prepared released and paid to the Paying Agent for payment to the Former Holders in accordance with this Agreement and the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”)Paying Agent Agreement; provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and to be paid pursuant to clause (ii) include only disagreements based on above exceeds the Adjustment Escrow Amount, then Parent may instruct the Escrow Agent to pay such excess from the Indemnification Escrow Funds. Parent and the Shareholders’ Representative will deliver joint written instructions instructing the Escrow Agent to release the Adjustment Escrow Amount and/or and, if applicable, the Target Adjustment Amount (as applicable) not being calculated properly Indemnification Escrow Funds, in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15Section 2.2(g) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less later than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) third Business Days of Day following the date on which the Adjustment Amount and the Target is finally determined in accordance with this Section 2.2. Unless otherwise required under applicable Law, for all Tax purposes, any Adjustment Amount have been finally determined pursuant attributable to this Section 2.16(x) Signode U.S. or any of its Subsidiaries shall be treated as an adjustment to the U.S. Share Consideration, and (y) the Company or any of its Subsidiaries (other than Signode U.S. or any of its Subsidiaries) shall be treated as an adjustment to the Aggregate Merger Consideration.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming in any event on or before the date that all is the later of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. forty-five (b) Within sixty (6045) days after the Distribution DateClosing Date and January 31, Mallinckrodt 2019, Acquiror shall cause prepare and deliver to be prepared the Holder Representative an unaudited consolidated balance sheet of the Company Group (the “Closing Balance Sheet”) and delivered to Covidien a an unaudited consolidated statement of the Company Group as of the close of business on the Closing Date (the “Closing Statement”) setting forth (i) a calculation of the Closing Date Net Working Capital, (ii) a calculation of the Closing Date Indebtedness, (iii) a calculation of the Holder Expenses, (iv) a calculation of the Closing Date Cash, (v) a calculation of the Closing Date Other Adjustment Amount, (vi) the Closing Consideration calculated based on the items in the foregoing clauses (i) through (v), and (vii) the Current Blocker Tax Liabilities. The Closing Balance Sheet, the Closing Statement, including the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash and the Closing Date Other Adjustment Amount and the Current Blocker Tax Liabilities shall be determined on a consolidated basis using the Agreed Accounting Principles, and shall not include any changes in assets or liabilities as a result of purchase or other non-cash accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement, including the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash and the Closing Date Other Adjustment Amount and the related purchase price adjustment contemplated by this Section 2.7 is to measure the amount of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and the Current Blocker Tax Liabilities, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Statement or determining the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, and the Current Blocker Tax Liabilities unless such differences are required by GAAP. Following the Closing, Holder Representative and its representatives shall have the right to reasonable access following prior notice to the books, records, the chief financial officer and auditors of the Company Group to the extent relevant for its review of the Closing Statement and the Surviving Entity shall cause the employees and auditors of the Company Group to reasonably cooperate with the Holder Representative in connection with its review of the Closing Statement (subject to customary access agreements as may be required by such auditors). (b) If the Holder Representative shall disagree with the calculation pursuant to Section 2.7(a) of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities, it shall notify Acquiror of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (and providing all supporting documentation reasonably necessary for the Acquiror to evaluate such disagreement), within thirty (30) days after its receipt of the Closing Statement. In the event that the Holder Representative does not provide such a notice of disagreement within such thirty (30) day period, the Holder Representative shall be deemed to have accepted the Closing Statement and the calculation of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount and (ii) Amount, the Target Adjustment Amount calculation of Closing Consideration based thereon, and the calculation of the Target Current Blocker Tax Liabilities delivered by Acquiror, which shall be final, binding and conclusive on all parties (and any other Person) for all purposes hereunder. In the event any such notice of disagreement is timely provided, Acquiror and the Holder Representative shall use commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount. The , the Closing Statement shall be prepared in accordance with Consideration, and/or the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing StatementCurrent Blocker Tax Liabilities; provided, however, that assets newly acquired any such calculation not specifically objected to by the Holder Representative in such notice of disagreement shall be deemed acceptable and liabilities newly incurred following shall be final and binding on the parties (and any other Person) upon delivery of such notice of disagreement. If, at the end of such period, the Holder Representative and the Acquiror are unable to resolve such disagreements, then the New York office of the National Disputes Practice of BDO USA, LLP (or such other independent accounting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative, or if no such other accounting firm is willing to serve, then such other qualified Person upon whom the Holder Representative and the Acquiror shall mutually agree) (the “Auditor”) shall resolve any remaining disagreements, it being understood that the Auditor shall be functioning as an expert and not as an arbitrator and shall not have any authority to interpret any provision of this Agreement. The parties shall use their respective commercially reasonable efforts to cause the Auditor to determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Auditor, (i) whether the Closing Statement was prepared in accordance with the standards set forth in Section 2.7(a), (ii) if any mathematical errors were made in the Closing Statement in calculating the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities, and (iii) based solely on its determinations in clause (i) and (ii) of this sentence and only with respect to the remaining disagreements submitted to the Auditor, to what extent (if any) the Closing Date Net Working Capital, the Closing Date Indebtedness, the Holder Expenses, the Closing Date Cash, the Closing Date Other Adjustment Amount, the Closing Consideration, and/or the Current Blocker Tax Liabilities require adjustment, and the Auditor (x) shall make no other determination and (y) may not assign a value greater than the greatest positive or negative adjustment requested by a party. The fees and expenses of the Sample Auditor shall be paid by Acquiror and the Holder Representative (on behalf of the Escrow Participants) in the same proportion that the aggregate amount of the items unsuccessfully disputed or defended, as the case may be, by each (as finally determined by the Auditor) bears to the total amount of the disputed items. Any fees and expenses payable by the Holder Representative under this Section 2.7(b) after the Closing Statement which canshall be paid first from the Holder Representative Expense Fund. The Auditor shall conduct its determination activities in a manner wherein all material submitted to it are held in confidence and shall not be appropriately placed disclosed to third parties. The parties hereto agree that judgment may be entered upon the determination of the Auditor in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also any court having jurisdiction over the party against which such determination is to be included to the extent consistent with the Transaction Accounting Principlesenforced. (c) Within thirty The “Adjustment Amount,” which may be positive or negative, shall mean (30i) days following receipt the Closing Date Net Working Capital minus the Estimated Closing Date Net Working Capital, plus or minus (as applicable) (ii) the Estimated Closing Date Indebtedness minus the Closing Date Indebtedness, plus or minus (as applicable) (iii) the Estimated Holder Expenses minus the Holder Expenses, plus or minus (as applicable) (iv) the Closing Date Cash minus the Estimated Closing Date Cash, plus or minus (as applicable) (v) the Closing Date Other Adjustment Amount minus the Estimated Closing Date Other Adjustment Amount. If the Adjustment Amount is a positive number and is in excess of $100,000, then the Closing Consideration shall be increased by Covidien the full amount of the Closing StatementAdjustment Amount, Covidien shall deliver written notice to Mallinckrodt and if the Adjustment Amount is a negative number, the absolute value of any dispute Covidien has with respect to the preparation or content which is in excess of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period$100,000, the Closing Statement will Consideration shall be final, conclusive and binding on decreased by the Partiesfull amount of the absolute value of the Adjustment Amount. Any Dispute Notice shall (i) set forth in reasonable detail If the basis for any dispute included thereinAdjustment Amount is a number, the amounts involved absolute value of which is $100,000 or less, the Adjustment Amount shall be deemed to be $0. Such adjustments to the Closing Consideration shall be paid in accordance with Section 2.7(d). The “Blocker Adjustment Amount,” which may be positive or negative, shall mean the Current Blocker Tax Liabilities minus the Estimated Current Blocker Tax Liabilities. If the Blocker Adjustment Amount is a negative number, then the Blocker Company Payment shall be increased by the full amount of the absolute value of the Blocker Adjustment Amount, and Covidien’s if the Blocker Adjustment Amount is a positive number, the Blocker Company Payment shall be decreased by the full amount of the absolute value of the Blocker Adjustment Amount. (d) Within three (3) Business Days following the final determination of the Adjustment Amount and/or in accordance with Sections 2.7(b) and 2.7(c) hereof: (i) if the Target Adjustment Amount is a positive number, (A) Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to pay (I) to the Payment Agent for disbursement to the Blocker Seller an amount equal to a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall, (II) to the Payment Agent for disbursement to the former holders of Units (and, for the avoidance of doubt, other than any Excluded Units and Unvested Units) a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for disbursement to the Bonus Payment Recipient a portion of the Adjustment Escrow Fund (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall and (B) Acquiror shall pay or cause the Paying Agent to pay (I) to the Blocker Seller, an amount equal to a portion of the Adjustment Amount (as applicablefinally determined) in accordance with the Distribution Waterfall, (II) to the Paying Agent, for the accounts of the former holders of vested Units (and, for the avoidance of doubt, other than any Excluded Units), cash in an amount equal to a portion of the Adjustment Amount (as finally determined) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient, cash in an amount equal to a portion of the Adjustment Amount (as finally determined) in accordance with the Distribution Waterfall; and (ii) include only disagreements based on if the Adjustment Amount and/or is a negative number, (A) Acquiror and the Target Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to pay to Acquiror out of the Adjustment Escrow Fund an amount equal to the absolute value of the Adjustment Amount (as applicablefinally determined) (not being calculated properly to exceed the amount in the Adjustment Escrow Fund), together with the interest earned thereon earned and (B) if the absolute value of the Adjustment Amount is less than an amount equal to the amount in the Adjustment Escrow Fund on the date of payment, the Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing Escrow Agent to pay (I) to the Blocker Seller, an amount equal to the portion of the balance of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with any interest earned thereon) in accordance with this Agreement or containing mathematical errors. Upon receipt the Distribution Waterfall, (II) to the former holders of vested Units (other than Excluded Units) a portion of the balance of the Adjustment Escrow Amount (less any fees and expenses payable by Mallinckrodt the Holder Representative pursuant to Section 2.7(b), together with any interest earned thereon) in accordance with the Distribution Waterfall and (III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient a portion of a Dispute Noticethe balance of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), Mallinckrodt and Covidien shall negotiate together with any interest earned thereon) in good faith to resolve any dispute set forth thereinaccordance with the Distribution Waterfall. If Mallinckrodt and Covidienthe Adjustment Amount is zero, such good faith effort notwithstanding, fail (A) the Escrow Agent shall pay (I) to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt the Blocker Seller an amount equal to a portion of the Dispute Notice Adjustment Escrow Amount (less any fees and expenses payable by the “Dispute Resolution Period”Holder Representative pursuant to Section 2.7(b), then Mallinckrodt together with all interest earned thereon) in accordance with the Distribution Waterfall (II) to the former holders of vested Units (and, for the avoidance of doubt, other than any holder of Excluded Units) a portion of the Adjustment Escrow Amount (less any fees and Covidien jointly shall engageexpenses payable by the Holder Representative pursuant to Section 2.7(b), within ten together with all interest earned thereon) in accordance with the Distribution Waterfall and (10III) to A-1 Manufacturing, Inc. for distribution to the Bonus Payment Recipient a portion of the Adjustment Escrow Amount (less any fees and expenses payable by the Holder Representative pursuant to Section 2.7(b), together with all interest earned thereon) in accordance with the Distribution Waterfall. (e) Within three (3) Business Days following the expiration final determination of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not Blocker Adjustment Amount in accordance with Section 2.7(b) and 2.7(c) hereof: (i) if the position of either Covidien Blocker Adjustment Amount is a negative number, (A) Acquiror shall pay or Mallinckrodt, shall not be in excess cause the Paying Agent to pay to the Blocker Seller an amount equal to the absolute value of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Blocker Adjustment Amount (as applicablefinally determined); and (ii) was properly calculated in accordance with if the Transaction Accounting PrinciplesBlocker Adjustment Amount is a positive number, and (A) the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, Blocker Seller shall pay to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid Acquiror an amount in cash equal to the difference absolute value of the Blocker Adjustment Amount (as finally determined) and if such payment is not made, Acquiror may recover such amount owing from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days [**]7 portion of the date on which the Adjustment Amount Special Escrow Fund for Unsatisfied Current Income Taxes and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16unsatisfied Current Blocker Tax Liabilities.

Adjustment Amount. (a) Schedule 2.16 sets At least three (3) days prior to the Closing, Sellers shall deliver to Buyer a statement setting forth a sample calculation in reasonable detail Sellers’ good faith estimate of the Adjustment Amount and (the Target “Estimated Adjustment Amount Amount”) as of the Balance Sheet Date (Closing Date, which statement shall be substantially in the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all form of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as Schedule 2.6(a) of the DistributionDisclosure Schedule attached hereto. (b) Within sixty (60) days after the Distribution Closing Date, Mallinckrodt Buyer shall cause deliver to be Sellers a balance sheet and income statement of the Business dated as of the Closing Date and prepared and delivered to Covidien a statement in accordance with GAAP (the “Closing StatementDate Financial Statements”) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount and each component thereof (iii.e., the Receivables Adjustment and the Prepaid Adjustment), together with reasonable supporting documentation. The Adjustment Amount so delivered by Buyer shall become final for all purposes of this Agreement unless, within fourteen (14) days after the Target receipt of such calculation by Sellers, Buyer receives written notice of the Sellers’ disapproval of such calculation along with Sellers’ determination of the final Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included a detailed explanation as to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within reasons for such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth thereindisapproval. If Mallinckrodt Buyer and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt Sellers are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than final Adjustment Amount within thirty (30) days following after such presentationsnotice is delivered, make they shall submit the issues remaining in dispute to a final determinationcertified public accounting firm of national standing in the industry in which Buyer and Sellers principally operate (the “Independent Accountants”) for resolution. If issues are submitted to the Independent Accountants for resolution, (a) Sellers and Buyer shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (b) the determination by the Independent Accountants, as set forth in a notice to be delivered to both Sellers and Buyer within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute, shall be final, binding and conclusive on the Parties, ; and (c) Buyer and Sellers will each bear fifty percent (50%) of the appropriate amount of each fees and costs of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, Independent Accountants for such determination, if not in accordance with . (c) No later than five (5) days following the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any final determination of the Adjustment Amount and/or (the Target “Final Adjustment Amount”), the following payments will be made: i. in the event that the Final Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Estimated Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid Buyer will retain from the Holdback Amount an amount in cash equal to the difference from between the first dollar (i.e., without regard to Final Adjustment Amount and the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Estimated Adjustment Amount, as finally determined pursuant to Section 2.16(c), ; and ii. in the event that the Final Adjustment Amount is less than the Target Estimated Adjustment Amount, as finally determined pursuant Buyer will pay to Section 2.16(c)Sellers, by at least $20 millionin cash, then Covidien shall pay or cause to be paid an the amount in cash equal to the difference from between the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Estimated Adjustment Amount and the Target Final Adjustment Amount have been finally determined pursuant to this Section 2.16Amount.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation Within one hundred eighty (180) days after the Closing Date, Purchaser shall prepare and deliver to Parent an unaudited combined balance sheet of the Adjustment Amount and the Target Adjustment Amount Company as of the Balance Sheet close of business on the Closing Date (the “Sample Closing StatementBalance Sheet”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a written statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the a calculation of Net Working Capital as set forth on the Adjustment Amount Closing Balance Sheet (the “Closing Date Net Working Capital”) and (ii) the Target Adjustment Amount and the a calculation of the Target Adjustment Amountaggregate amount of all Indebtedness of the Company as of the Closing Date (“Closing Date Indebtedness”), in each case, determined without giving effect to the consummation of the transactions contemplated hereby. The Closing Statement Balance Sheet shall be prepared in accordance with GAAP applied on a basis consistent with the Transaction Accounting PrinciplesInterim Financial Statements. Following the Closing, including Purchaser shall provide Parent and its representatives access to the use Books and Records, properties and personnel of the same line items and line item entries, set forth on and used in Company relating to the preparation of the Sample Closing Statement; provided, however, that assets newly acquired Balance Sheet and liabilities newly incurred following shall cause the date personnel of the Sample Company to cooperate with Parent in connection with its review of the Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting PrinciplesBalance Sheet. (cb) Within If Parent shall disagree with the calculation of Closing Date Net Working Capital and/or Closing Date Indebtedness, it shall notify Purchaser of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to Balance Sheet. In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Parent does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Parent shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of Closing Date Net Working Capital and Closing Date Indebtedness delivered by Purchaser, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Purchaser and Parent shall use commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital and/or Closing Date Indebtedness. If, at the end of such period, they are unable to resolve such disagreements, then an independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Purchaser and Parent (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Auditor, whether the Closing Balance Sheet was prepared in accordance with the standards set forth in Section 2.5(a) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) Closing Date Net Working Capital and/or Closing Date Indebtedness require adjustment. The fees and expenses of the Auditor shall be paid one-half by Purchaser and one-half by Parent. The determination of the Auditor shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved The date on which Closing Date Net Working Capital and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Date Indebtedness are finally determined in accordance with this Agreement Section 2.5(b) is hereinafter referred to as the “Determination Date.” (c) The “Adjustment Amount,” which may be positive or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Noticenegative, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth thereinmean (i) Closing Date Net Working Capital, minus Estimated Closing Date Net Working Capital, plus (ii) Estimated Closing Date Indebtedness, minus Closing Date Indebtedness. If Mallinckrodt the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount, and Covidienif the Adjustment Amount is a negative number, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt the Purchase Price shall be decreased by Mallinckrodt the absolute value of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly Adjustment Amount. The Adjustment Amount shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not be paid in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorSection 2.5(d). (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount is a positive number (such amount, the “Increase Amount, as finally determined pursuant to Section 2.16(c”), is greater than the Target Adjustment Amountthen, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the Determination Date, Purchaser shall pay to Seller an amount in cash equal to the Adjustment Amount, as finally determined, less any applicable withholding, plus interest thereon from the Closing Date to the date on which of payment. If the Adjustment Amount and is a negative number (the Target Adjustment Amount have been absolute value of such amount, the “Deficit Amount”), then, within five (5) Business Days of the Determination Date, Seller shall pay to Purchaser an amount in cash equal to the Deficit Amount, as finally determined determined, less any applicable withholding, plus interest thereon from the Closing Date to the date of payment at an annual rate equal to the Prime Rate. Any payment to be made pursuant to this Section 2.162.5(d) shall be made by wire transfer of immediately available funds to the account(s) designated by the recipient of such payment.

Adjustment Amount. No later than five (a5) Schedule 2.16 sets forth business days prior to the Closing, the Sellers’ Representative shall deliver to the Purchaser, a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date statement (such statement, the “Sample Closing Estimated Statement”), including together with supporting documentation therefor, setting forth (i) an estimate, prepared in good faith and consistent with GAAP and the assetexample based on the Financial Statements and set forth on Exhibit A, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the DistributionClosing Date Net Working Capital (the “Preliminary Working Capital Amount”), (ii) a good faith estimate of the Purchase Price Deductions (the “Estimated Purchase Price Deductions”) and (iii) a good faith estimate of the Inventory Amount (the “Estimated Inventory Amount”). For purposes of the Closing, the Purchase Price shall be increased or decreased, as the case may be, by the Preliminary Working Capital Amount, reduced by the Estimated Purchase Price Deductions and increased by the Estimated Inventory Amount and shall be subject to further adjustment after the Closing as specified in this Section 2.05: (a) No earlier than the first business day immediately following the day on which the Estimated Statement is delivered to Purchaser and no later than the day that is one business day prior to the Closing, Sellers’ Representative, Purchaser and Purchaser’s representatives shall conduct a mutual inspection and physical count of the Inventory. (b) Within sixty (60) Purchaser shall prepare and deliver to the Sellers’ Representative within 60 days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien Closing Date a statement (balance sheet as of the “Closing Statement”) Date together with a calculation setting forth the (i) the Adjustment Amount Closing Date Net Working Capital, calculated in accordance with GAAP and the calculation of example based on the Adjustment Amount Financial Statements and set forth on Exhibit A, (ii) the Target Purchase Price Deductions and (iii) the Inventory Amount (collectively, the “Closing Balance Sheet”). Following delivery of the Closing Balance Sheet, Purchaser and its representatives shall make available to the Sellers’ Representative and its advisors all work papers, accounting books and records and other pertinent information used in connection with the preparation thereof and shall reasonably consult with such persons from time to time. (c) Within 30 days after the Closing Balance Sheet is delivered to the Sellers’ Representative pursuant to subsection (b) above, the Sellers’ Representative shall complete its examination thereof and shall deliver to Purchaser either (i) a written acknowledgement accepting the Closing Balance Sheet or (ii) a written report setting forth in reasonable detail the specific items and matters in dispute (“Adjustment Amount Report”). A failure by the Sellers’ Representative to deliver the Adjustment Report within the required 30-day period shall constitute the Sellers’ and the calculation Sellers’ Representative’s acceptance of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with Balance Sheet. (d) During a period of 30 days following the Transaction Accounting Principles, including the use receipt by Purchaser of the same line items Adjustment Report, the Sellers’ Representative and line item entries, set forth on and used Purchaser shall attempt to resolve any difference they may have with respect to the matters raised in the preparation Adjustment Report. In the event the Purchaser and the Sellers’ Representative fail to agree on the Closing Balance Sheet within such 30 day period, then the Sellers’ Representative and Purchaser mutually agree that the Houston, Texas office of the Sample Closing Statementfirm of BDO LLP (or if such firm is unwilling or unable to serve, another nationally recognizable accounting firm mutually agreed upon by the Sellers’ Representative and Purchaser) (the “Independent Auditors”) shall make the final determination with respect to the specific disputed matters identified in the Adjustment Report; provided, however, that assets newly acquired and liabilities newly incurred following the date Independent Auditors’ determination as to any disputed matter shall not be more beneficial to the Purchaser than the determination of that item or amount by the Purchaser in the Closing Balance Sheet or more beneficial to Sellers than the determination of that item or amount in the Adjustment Report. The parties shall use their reasonable best efforts to cause the Independent Auditors to render their decision as soon as practicable (within 60 days after the submission to the Independent Auditors of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included proposed adjustments to the extent consistent Closing Balance Sheet), including by promptly complying with all reasonable requests by the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien Independent Auditors for information, books, records and similar items. The Independent Auditors shall make a determination as to each of the Closing Statementitems in dispute (and each item affected thereby), Covidien which determination shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect be in writing and furnished to the preparation or content Sellers’ Representative and Purchaser as promptly as practicable after the items in dispute have been referred to the Independent Auditors (within 60 days thereafter). The Independent Auditors shall follow the procedures specified in writing by the Independent Auditors, unless otherwise agreed in writing between Purchaser and the Sellers’ Representative. The decision of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will Independent Auditors shall be final, conclusive final and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved Sellers and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firmPurchaser, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required used in connection with a court of law by either Sellers or Purchaser for the preparation and analysis purpose of the Closing Statement and the resolution of any disputes thereunderenforcing such decision. (e) If After the earlier of (i) the acceptance of the Closing Balance Sheet or (ii) the failure of the Sellers’ Representative to deliver an Adjustment AmountReport within the 30-day period referenced in subsection (c) above or (iii) if the Sellers’ Representative delivers such an Adjustment Report, upon the resolution of the matters raised in such Adjustment Report, the Closing Date Net Working Capital, Purchase Price Deductions and Inventory Amount shall be recomputed based upon such Closing Balance Sheet or such resolution, as finally determined applicable. The Sellers shall promptly pay to Purchaser any decrease in the Purchase Price resulting from such recomputation (a “Shortfall Reduction”) by directing that such amount be paid from the Escrow Funds established pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt 2.06 below. The Purchaser shall promptly pay or cause to be paid an amount in cash equal to the difference Sellers any increase in the Purchase Price resulting from such recomputation. (f) The costs and expenses of the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment Independent Auditors pursuant to this Section 2.16(e) is 2.05 shall be borne by the Sellers and Purchaser pro rata in an amount inversely proportional to the dollar value of the disputed items determined in each party’s favor. By way of example, if Purchaser had taken the position that the Closing Date Net Working Capital was $100, the Sellers had taken the position that the Closing Date Net Working Capital was $200, and the Independent Auditors determine the Closing Date Net Working Capital to be made within five (5) Business Days $130, then Purchaser would pay 30% of the date on which the Adjustment Amount Independent Auditors’ fees and expenses and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Sellers would pay 70%.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation For purposes of calculating the Adjustment Amount and Stock Consideration on the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt the Company shall cause deliver to be prepared and delivered the Parent on or prior to Covidien the Closing Date a statement (the “Closing Statement”) certificate setting forth (i) the Adjustment Amount and the calculation of the estimated Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target “Estimated Adjustment Amount”). The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien after the Closing Date, the Parent shall prepare and deliver to Company Stockholder Representative a statement (the “Statement of Adjustment Amount”) setting forth a calculation the Adjustment Amount as of the Closing StatementEffective Time (the “Final Adjustment Amount”). The Estimated Adjustment Amount and the Final Adjustment Amount shall be calculated in accordance with U.S. GAAP consistently applied and be consistent with the books and records of the Company. (b) The Statement of Adjustment Amount and the Final Adjustment Amount shall become final and binding upon the parties on the tenth (10th) day following delivery thereof, Covidien shall deliver respectively, unless the Company Stockholder Representative gives written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content Parent of the Closing Holders’ disagreement with the Statement (of Adjustment Amount or the “Dispute Notice”); providedFinal Adjustment Amount prior to such date, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, at which time the Closing Statement of Adjustment Amount or the Final Adjustment Amount will only be final, conclusive final and binding upon the parties on the Partiesfinal resolution of such disagreement. Any Dispute Notice notice of disagreement given by the Company Stockholder Representative shall (i) set forth specify in reasonable detail the basis for nature of any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errordisagreement so asserted. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (ec) If the Final Adjustment Amount, as finally determined pursuant to Section 2.16(c), Amount is greater than the Target Estimated Adjustment Amount by 10% or more, then the Escrowed Series C Holder Stock Consideration, the Escrowed Special Cash Consideration, the Escrowed Employee Stock Consideration, and the Escrowed Employee Cash Consideration shall be reduced in aggregate by an amount in which the Stock Consideration calculated using the Estimated Adjustment Amount exceeds the Stock Consideration calculated using the Final Adjustment Amount, valuing such amount of Parent Shares at $5.00 per share (the “Total Reduction Amount”). The Total Reduction Amount shall be allocated as finally determined pursuant follows: (i) the Escrowed Series C Holder Stock Consideration shall be reduced by the number of Parent Shares valued at $5.00 per share equal to Section 2.16(c)the Total Reduction Amount multiplied by the fraction equal to (a) the Escrowed Series C Holder Stock Consideration, where Parent Shares are valued at $5.00 per share, over (b) the Escrowed Consideration, where Parent Shares included in such Escrowed Consideration are valued at $5.00 per share; (ii) the Escrowed Special Cash Consideration shall be reduced by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from Total Reduction Amount multiplied by the first dollar fraction equal to (i.e.a) the Escrowed Special Cash Consideration, without regard over (b) the Escrowed Consideration, where Parent Shares included in such Escrowed Consideration are valued at $5.00 per share; (iii) The Escrowed Employee Stock Consideration shall be reduced by the number of Parent Shares valued at $5.00 per share equal to the Total Reduction Amount multiplied by the fraction equal to (a) the Escrowed Employee Stock Consideration, where Parent Shares are valued at $20 million threshold5.00 per share, over (b) to Covidien the Escrowed Consideration, where Parent Shares included in such Escrowed Consideration are valued at $5.00 per share; and (iv) The Escrowed Employee Cash Consideration shall be reduced by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard equal to the Total Reduction Amount multiplied by the fraction equal to (a) the Escrowed Employee Cash Consideration, over (b) the Escrowed Consideration, where Parent Shares included in such Escrowed Consideration are valued at $20 million threshold5.00 per share. (d) If the Final Adjustment Amount is less than the Estimated Adjustment Amount by 10% or more, then: (i) the Parent shall issue to Mallinckrodt by wire transfer the former holders of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment Company Series C Preferred Stock who received Parent Shares pursuant to this Section 2.16(e) 2.1(d)(i)(A), their pro rata portion of 90% of the number of Parent Shares by which the Stock Consideration calculated using the Estimated Adjustment Amount is less than the Stock Consideration calculated using the Final Adjustment Amount, plus any cash in lieu of any fractional Parent Shares as set forth in Section 2.2(g), and shall deposit the remaining 10% of such number of Parent Shares into the Escrow to be made within five held thereafter as Escrowed Series C Holder Stock Consideration; and (5ii) Business Days the Parent shall pay Xxxx Xxxxx and Xxxxx Xxxxxxxx, collectively, 90% of an amount in cash equal $5.00 multiplied by the date on number of Parent Shares by which the Stock Consideration that Xxxx Xxxxx and Xxxxx Xxxxxxxx, collectively, would have been entitled to pursuant to Section 2.1(d)(i)(A) Consideration calculated using the Final Adjustment Amount exceeds the number of Parent Shares by which the Stock Consideration that Xxxx Xxxxx and the Target Adjustment Amount Xxxxx Xxxxxxxx, collectively, would have been finally determined entitled to pursuant to this Section 2.162.1(d)(i)(A) Consideration calculated using the Estimated Adjustment Amount, and shall deposit 10% of such amount into the Escrow to be held thereafter as Escrowed Special Cash Consideration.

Adjustment Amount. (a) Schedule 2.16 sets Not less than two (2) Business Days prior to the Initial Closing Date, Seller shall deliver to Buyer a written statement setting forth a sample calculation its good faith estimate of (A) the Adjustment Amount and the Target Adjustment Amount aggregate amount of all Indebtedness as of the Balance Sheet close of business on the day immediately preceding the Initial Closing Date (the “Sample Estimated Closing StatementDate Indebtedness”), including and (B) the assetCash on Hand, liability and other line items and accounting principles used which shall assume, for the purposes of this Section 3.09(a), that the amount of Xxxxx Cash included in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred Cash on Hand is equal to Mallinckrodt as of the DistributionMinimum Xxxxx Cash Requirement (the “Estimated Closing Date Cash”). (b) Within As soon as reasonably practicable following the Initial Closing Date, and in any event within sixty (60) days after thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Business as of the close of business on the day immediately preceding the Initial Closing Date (the “Closing StatementBalance Sheet”), (ii) a calculation of the aggregate amount of all Indebtedness as set forth on the Closing Balance Sheet as of the day immediately preceding the Initial Closing Date (the “Closing Date Indebtedness”) setting forth and (iiii) calculation of the Adjustment Amount and Cash on Hand (including the calculation of Xxxxx Cash) (the Adjustment Amount and “Closing Date Cash”), in each case, determined without giving effect to (iiA) the Target Adjustment Amount and the calculation consummation of the Target Adjustment Amounttransactions contemplated by this Agreement (including any adjustments as a result of the application of purchase accounting), (B) any financing transactions in connection therewith or, by Buyer or its Subsidiaries (including the Purchased Subsidiaries) after the Initial Closing, or (C) any action or omission by Buyer or any of its Subsidiaries (including the Purchased Subsidiaries) with respect to the Business or the Purchased Subsidiaries that is not in the ordinary course of business consistent with past practice. The Except as otherwise provided herein, the Closing Statement Balance Sheet shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing StatementGAAP; provided, however, that assets newly acquired the Closing Balance Sheet shall reflect no increases in reserves (regardless of whether any such reserve is recorded as an offset to a current asset’s carrying value or is included as an accrued liability in the Closing Balance Sheet) from amounts contained in the Balance Sheet, other than changes therein attributable to changes in facts and liabilities newly incurred following circumstances occurring after the date Financial Statement Date and prior to the Initial Closing. Following the Initial Closing, Buyer shall provide Seller and its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to 16 the records, properties, management personnel and (subject to the execution of customary work paper access letters if requested) auditors of Buyer relating to the preparation of the Sample Closing Statement which canBalance Sheet and shall cause the management personnel of Buyer and its Subsidiaries to cooperate with Seller and its Representatives in connection with their review of the Closing Balance Sheet, provided, that such access does not be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent (i) unreasonably interfere with the Transaction Accounting Principlesnormal operations of Buyer or (ii) based on advice of counsel, (A) result in the waiver of attorney-client privilege, or (B) violate any applicable Law. (c) Within If Seller disagrees with the calculation of the Closing Date Indebtedness or the Closing Date Cash, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to Balance Sheet. In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Seller does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of the Closing Date Indebtedness and the Closing Date Cash delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Indebtedness or the Closing Date Cash. If, at the end of such period, they are unable to resolve such disagreements, then an independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall act as an expert, and not as an arbiter, and shall determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Auditor, whether the Closing Balance Sheet was prepared in accordance with the standards set forth in Section 3.09(b) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Indebtedness or the Closing Date Cash require adjustment. The fees and expenses of the Auditor shall be paid one-half by Buyer and one-half by Seller. The determination of the Auditor shall be final, conclusive and binding on the PartiesParties hereto. Any Dispute Notice The date on which the Closing Date Indebtedness and the Closing Date Cash are finally determined in accordance with this Section 3.09(c) is hereinafter referred to as the “Determination Date.” (d) The “Adjustment Amount,” which may be positive or negative, shall mean (i) set forth in reasonable detail the basis for any dispute included thereinEstimated Closing Date Indebtedness, minus the Closing Date Indebtedness, plus (ii) the Closing Date Cash, minus the Estimated Closing Date Cash. If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by such Adjustment Amount (the “Increase Amount”), and if the Adjustment Amount is a negative number, the amounts involved and Covidien’s determination Purchase Price shall be decreased by the absolute value of the Adjustment Amount and/or (the Target “Deficit Amount”). The Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly shall be paid in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”Section 3.09(e), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation As soon as reasonably practicable following the Closing Date, and in any event within 90 calendar days thereof, Acquiror shall prepare and deliver to the Holder Representative (i) an unaudited consolidated balance sheet of the Adjustment Amount Company and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement its Subsidiaries (the “Closing StatementBalance Sheet”), (ii) setting forth a calculation of Net Working Capital (i“Closing Date Net Working Capital”), (iii) the Adjustment Amount and the a calculation of the Adjustment Amount aggregate amount of all Funded Debt of the Company (“Closing Date Funded Debt”), (iv) a calculation of Cash and Cash Equivalents of the Company (“Closing Date Cash”) and (iiv) the Target Adjustment Amount and the if applicable, a calculation of Outstanding Company Expenses not paid by Acquiror at Closing in accordance with Section 2.6 (“Additional Outstanding Company Expenses”), in each case, calculated as of the Target Adjustment Amountclose of business on the Business Day immediately preceding the Closing Date. The Closing Statement Date Net Working Capital shall be prepared in accordance with Annex B (and without any change in any reserves, or introduction of any new reserves, from the Transaction Accounting Principles, including reserves included in the use calculation of the same line items Estimated Closing Statement). If Acquiror’s calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and line item entriesAdditional Outstanding Company Expenses results in a calculation of the Adjustment Amount that is a positive number, set forth on Acquiror and used the Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to each Holder an amount in cash equal to (i) the Adjustment Escrow Funds, multiplied by (ii) such Holder’s Escrow Percentage. In addition, Acquiror shall pay to each Holder an amount in cash equal to (i) such Holder’s Escrow Percentage, multiplied by (ii) Acquiror’s calculation of the Adjustment Amount. If Acquiror’s calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Additional Outstanding Company Expenses results in a calculation of the Adjustment Amount that is a negative number and such calculation of the Adjustment Amount is less than the amount of the Adjustment Escrow Funds, Acquiror and the Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to each Holder an amount in cash equal to (i) the excess of the entire Adjustment Escrow Funds over Acquiror’s calculation of the Adjustment Amount, multiplied by (ii) such Holder’s Escrow Percentage (it being understood and agreed that such payment shall not limit the rights of the Holder Representative pursuant to this Section 2.4(a)). Following the Closing, Acquiror shall provide the Holder Representative and its representatives reasonable access to the records, properties and personnel of the Company and its Subsidiaries relating to the preparation of the Sample Closing Statement; provided, however, that assets newly acquired Balance Sheet and liabilities newly incurred following shall cause the date personnel of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Company and its Subsidiaries to the extent consistent reasonably cooperate with the Transaction Accounting PrinciplesHolder Representative in connection with its review of the Closing Balance Sheet. (cb) Within thirty (30) days following receipt by Covidien If the Holder Representative shall disagree with the calculation of the Closing StatementDate Net Working Capital, Covidien Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses it shall deliver written notice to Mallinckrodt notify Acquiror of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); providedsuch disagreement in writing, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set setting forth in reasonable detail the basis for any dispute included thereinparticulars of such disagreement, within 60 days after its receipt of the Closing Balance Sheet. In the event that the Holder Representative does not provide such a notice of disagreement within such 60-day period, the amounts involved Holder Representative shall be deemed to have accepted the Closing Balance Sheet and Covidien’s the calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses delivered by Acquiror, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Acquiror and the Holder Representative shall use reasonable best efforts for a period of 30 days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses. If, at the end of such period, they are unable to resolve such disagreements, then Deloitte & Touche LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative) (the “Independent Accountant”) shall resolve any remaining disagreements. Each of Acquiror and the Holder Representative shall promptly provide their assertions regarding any disputes relating to the Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses, and, to the extent relevant thereto, the Closing Balance Sheet in writing to the Independent Accountant and to each other. The Independent Accountant shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the parties hereto agree should not be later than 45 days following the day on which the disagreement is referred to the Independent Accountant). The Independent Accountant shall (i) base its determination solely on the written submissions of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) parties and shall not conduct an independent investigation and (ii) include consider only disagreements based on those items or amounts relating to the Adjustment Amount Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses, as to which the Target Adjustment Amount (as applicable) not being calculated properly Holder Representative timely disagreed, in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt Section 2.4(b) and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15iii) Business Days following receipt by Mallinckrodt use the definitions of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and defined terms used in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still this Section 2.4 provided in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Noticethis Agreement. With respect to each disputed line item, such the Independent Accountant’s determination, if not in accordance with the position of either Covidien Acquiror or Mallinckrodtthe Holder Representative, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt presented in Acquiror’s calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Additional Outstanding Company Expenses pursuant to Section 2.4(a) or in the Closing Statement or by Covidien in the Dispute Notice, as applicableHolder Representative’s written disagreement of any such calculation pursuant to this Section 2.4(b). Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any The determination of the Independent Accountant shall be final, conclusive and binding on the parties and no party shall seek further recourse to any Governmental Authority other than to enforce the determination of the Independent Accountant. The parties acknowledge that the agreements contained in this Section 2.4 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement. If Acquiror fails promptly to pay any Adjustment Amount and/or that may be payable to the Target Holders in accordance with this Section 2.4, and, in order to obtain such payment, the Holder Representative commences an Action that results in a judgment against Acquiror for such Adjustment Amount, Acquiror shall pay to the Holders, together with such Adjustment Amount, in accordance with Section 2.4(d), (a) interest on such Adjustment Amount (or portion thereof) which shall accrue from the date such amount should have been paid pursuant this Section 2.4 until the date such amount is paid to Holders at a rate per annum equal to the prime rate as applicablepublished in the Wall Street Journal, Eastern Edition, in effect on the date hereof and (b) was properly calculated any fees, costs and expenses (including legal fees) incurred by the Holder Representative in connection with any such Action. The date on which Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Additional Outstanding Company Expenses, are finally determined in accordance with this Section 2.4(b) is hereinafter referred to as the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. “Determination Date.” All fees and expenses of the Independent Accountant relating to the work, if any, to be performed by the Independent Accounting Firm Accountant hereunder shall be borne equally one-half by Covidien Acquiror and Mallinckrodt. All determinations made one-half by the Independent Accounting FirmHolder Representative, as a Holder Allocable Expense. (c) If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount, and if the Closing StatementAdjustment Amount is a negative number, as modified the Purchase Price shall be decreased by the Independent Accounting Firm, will absolute value of the Adjustment Amount. The Adjustment Amount shall be final, conclusive paid in accordance with Section 2.4(a) and binding on the Parties, absent fraud or manifest errorSection 2.4(d). (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment AmountAmount is a positive number, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, (x) Acquiror shall pay to the Holder Representative (for further distribution to the Holders) an amount in cash equal to the Adjustment Amount, less any portion of the Adjustment Amount previously paid by Acquiror to the Holders pursuant to Section 2.4(a), and (y) the Escrow Agent shall pay to each Holder an amount in cash equal to (i) the Adjustment Escrow Funds, multiplied by (ii) such Holder’s Escrow Percentage, less any portion of the Adjustment Escrow Funds previously paid by the Escrow Agent to such Holder pursuant to Section 2.4(a). If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within five Business Days of the Determination Date, (x) the Escrow Agent shall pay to Acquiror an amount of Adjustment Escrow Funds equal to the Deficit Amount and, if the Deficit Amount is in excess of the Adjustment Escrow Funds, then the Escrow Agent shall pay such excess amount from the Indemnification Escrow Funds (subject to the last sentence of this Section 2.4(d)), and (y) if any of the Adjustment Escrow Funds remain after such payment to Acquiror, the Escrow Agent shall pay to each Holder an amount in cash equal to (i) the balance of the Adjustment Escrow Funds, multiplied by (ii) such Holder’s Escrow Percentage, less any portion of the Adjustment Escrow Funds previously paid by the Escrow Agent to such Holder pursuant to Section 2.4(a). Upon determination of the Adjustment Amount pursuant to Section 2.4(b) and Section 2.4(c), each of Acquiror and the Target Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Adjustment Amount Escrow Funds in accordance with this Section 2.4(d). In no event shall the Holder Representative or any Holder have been finally determined any liability under this Section 2.4 in excess of such Holder’s Escrow Percentage of the Escrow Funds. In no event shall Acquiror be entitled to payment pursuant to this Section 2.162.4(d) of any amount in excess of the Escrow Funds.

Adjustment Amount. (a) Schedule 2.16 sets Promptly after the Closing Date, the Surviving Corporation shall preliminarily determine the Working Capital Adjustment (as defined below), if any, in accordance with GAAP, applying Exhibit 2.2.2 hereof. The Surviving Corporation shall set forth such preliminary determination on a sample calculation of the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date written statement (the “Sample Closing "WORKING CAPITAL STATEMENT") and promptly after making such preliminary determination shall retain Ernst & Young LLP to perform certain agreed upon procedures as determined by Surviving Corporation on the Working Capital Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all . After completion of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred engagement by Ernst & Young LLP, the Surviving Corporation shall deliver the Working Capital Statement to Mallinckrodt as of the Distribution. Newco within seventy-five (b) Within sixty (6075) days after the Distribution Closing Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within If within thirty (30) days following receipt by Covidien delivery of a copy of the Closing Working Capital Statement, Covidien shall deliver Newco does not give Parent written notice to Mallinckrodt of any dispute Covidien has with respect objecting to the preparation or content calculations set forth on the Working Capital Statement (such notice must contain a statement in reasonable detail of the Closing Statement (the “Dispute Notice”basis of Newco's objection); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Working Capital Adjustment reflected on the Working Capital Statement will shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice If Newco timely gives such notice of objection, then the issues in dispute shall (i) set forth in reasonable detail be promptly submitted to a nationally recognized firm of certified public accountants selected by the basis for any dispute included therein, the amounts involved and Covidien’s determination mutual agreement of the Adjustment Amount and/or the Target Adjustment Amount Surviving Corporation and Newco (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, other than Ernst & Young LLP oror Artxxx Xxdxxxxx XXP, if such other firm being referred to as the "ACCOUNTANTS") for resolution. If Surviving Corporation and Newco cannot promptly agree on the selection of the Accountants, then the Accountants will be selected by the agreement of Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such disputeArtxxx Xxdxxxxx XXP. If Ernst & Young LLP is unavailable issues in dispute are submitted to the Accountants for resolution, (i) each party shall promptly furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party (or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firmits independent public accountants), and shall be afforded the two (2) firms will mutually select a third nationally recognized major accounting firm opportunity to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute present to the Independent Accounting Firm. Mallinckrodt Accountants any material relating to the determination and Covidien shall cause to discuss the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance determination with the position of either Covidien or Mallinckrodt, shall not be in excess of Accountants; (ii) the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Working Capital Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing StatementAccountants, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16a written notice ("FINAL WORKING CAPITAL NOTICE") delivered to both parties by the Accountants, Mallinckrodt shall be binding and Covidien conclusive on the parties; and (iii) the Surviving Corporation and Newco shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis bear 50% of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days fees of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Accountants for such determination.

Adjustment Amount. (a) Schedule 2.16 sets forth As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) calendar days thereof, Acquiror shall prepare and deliver to Holdings (i) a sample calculation consolidated balance sheet of the Adjustment Amount Company and the Target Adjustment Amount its Subsidiaries as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing StatementBalance Sheet”) setting forth (i) the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the a calculation of (A) the Target Adjustment AmountNet Working Capital of the Company and its Subsidiaries as set forth on the Closing Balance Sheet (“Closing Date Net Working Capital”) and (B) the aggregate amount of the Funded Debt of the Company and its Subsidiaries, if any, that remains unpaid as of the Closing as reflected on the Closing Balance Sheet (the “Closing Date Funded Debt”) and (iii) the amount of cash and cash equivalents of the Company and its Subsidiaries as of the Closing as reflected on the Closing Balance Sheet (the “Closing Date Cash and Cash Equivalents”). The Closing Statement Balance Sheet shall be prepared in accordance with United States generally accepted accounting principles (“GAAP”) consistent with the Transaction Accounting Principles, including the use preparation of the Audited Financial Statements. The Closing Balance Sheet shall be prepared using the same line items accounting practices, policies and line item entries, set forth on and methodologies used in the preparation of the Sample Audited Financial Statements. For the purpose of determining the Closing Statement; providedDate Net Working Capital, however, that the consolidated current assets newly acquired and current liabilities newly incurred following the date of the Sample Closing Statement which canCompany and its Subsidiaries shall reflect the value of all tax deductions and other tax benefits resulting from the transactions contemplated hereby (including, without limitation, tax deductions and other tax benefits arising in connection with (A) the vesting, conversion, cancellation and/or exercise of all options to purchase Common Shares (whether or not be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included vested) pursuant to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation terms hereof or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation transactions contemplated hereby, (B) any bonuses paid or payable by the Company or its Subsidiaries as a result of the consummation of the transactions contemplated hereby or (C) any fees and analysis expenses that are deductible by the Company or any of its Subsidiaries for income tax purposes and that are payable by the Company or its Subsidiaries in connection with or related to the transactions contemplated hereby (for purposes of this Section 2.5, the parties agree that the fees payable to CIBC World Markets Corp. or its Affiliates and Carlyle or its Affiliates in connection with or related to the transactions contemplated hereby shall not be tax affected)), and the value of such deductions shall be deemed to equal (x) the aggregate amount of such deductions, multiplied by (y) 40%. “Net Working Capital” as of any date shall mean (1) the current assets (including any Relizon Trade Receivables outstanding as of the Closing Statement Date) of the Company and its Subsidiaries as of such date (excluding cash and cash equivalents and the resolution current assets included in the Excluded Assets), minus (2) the consolidated current liabilities (including any Relizon Trade Payables outstanding as of the Closing Date) of the Company and its Subsidiaries as of such date (excluding (x) the current portion of Funded Debt, (y) any disputes thereunder. obligations in respect of the capitalized lease listed on Schedule 1.1 and (ez) If the Adjustment Amountcurrent liabilities included in the Excluded Liabilities). For avoidance of doubt, as finally determined the Net Working Capital shall not include or reflect any Excluded Assets, any Excluded Liabilities or any liabilities or obligations assumed by Relizon pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.166.3.

Adjustment Amount. (a) Schedule 2.16 sets forth As soon as reasonably practicable following the Closing Date, and in any event within seventy-five (75) calendar days thereof, Acquiror shall prepare and deliver to the Holder Representative a sample calculation of (i) the Closing Date Net Working Capital, (ii) the Closing Date Funded Debt Amount, (iii) the Closing Date Cash Amount and (iv) the Closing Date Outstanding Company Expenses (the “Post-Closing Statement”). If Acquiror’s calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses results in a calculation of the Adjustment Amount that is a positive number, (i) Acquiror and the Target Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to each Holder an amount in cash equal to (A) the Adjustment Escrow Funds, multiplied by (B) such Holder’s Escrow Percentage, and (ii) Acquiror shall pay to each Holder an amount in cash equal to (x) such Holder’s Escrow Percentage, multiplied by (y) Acquiror’s calculation of the Adjustment Amount. If Acquiror’s calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses results in a calculation of the Adjustment Amount as that is a negative number and the absolute value of such calculation of the Balance Sheet Adjustment Amount is less than the amount of the Adjustment Escrow Funds, Acquiror and the Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to each Holder an amount in cash equal to (i) the excess of the entire Adjustment Escrow Funds over Acquiror’s calculation of the Adjustment Amount, multiplied by (ii) such Holder’s Escrow Percentage (it being understood and agreed that such payment shall not limit the rights of the Holder Representative pursuant to this Section 3.4). Following the Closing, Acquiror shall provide the Holder Representative and its representatives access to the records, properties and personnel of the Company and the Company Subsidiaries relating to the preparation of the Post-Closing Statement and the calculation of the Closing Date (Net Working Capital, the “Sample Closing Statement”)Date Funded Debt Amount, including the asset, liability Closing Date Cash Amount and other line items and accounting principles used in such calculationthe Closing Date Outstanding Company Expenses, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as shall cause the personnel of the DistributionCompany and the Company Subsidiaries to cooperate with the Holder Representative in connection with its review of the Post-Closing Statement and such calculations. (b) Within sixty If the Holder Representative shall disagree with the calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses, it shall notify Acquiror of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within seventy-five (6075) calendar days after its receipt of the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Post-Closing Statement”. In the event that the Holder Representative does not provide such a notice of disagreement within such seventy-five (75) setting forth (i) day period, the Adjustment Amount Holder Representative shall be deemed to have accepted the Post-Closing Statement and the calculation of the Adjustment Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses delivered by Acquiror, which shall be final, binding and (ii) conclusive for all purposes hereunder. In the Target Adjustment Amount event any such notice of disagreement is timely provided, Acquiror and the calculation Holder Representative shall use reasonable best efforts for a period of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice (or such longer period as they may mutually agree) to Mallinckrodt of resolve any dispute Covidien has disagreements with respect to the preparation or content calculations of the Closing Statement Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses. If, at the end of such period, they are unable to resolve such disagreements, then Xxxxx Xxxxxxxx LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Acquiror and the Holder Representative) (the “Dispute NoticeIndependent Accountant”); provided, however, that if Covidien does not deliver ) shall resolve any Dispute Notice to Mallinckrodt within such thirty (30)-day periodremaining disagreements. Each of Acquiror and the Holder Representative shall promptly provide their assertions regarding the Closing Date Net Working Capital, the Closing Statement will Date Funded Debt Amount, the Closing Date Cash Amount and/or the Closing Date Outstanding Company Expenses and, to the extent relevant thereto, the Post-Closing Statement, in writing to the Independent Accountant and to each other. The Independent Accountant shall be final, conclusive instructed to render its determination with respect to such disagreements (and binding on the Parties. Any Dispute Notice shall (i) set forth provide in reasonable detail the basis for any dispute included therein, each such determination) as soon as reasonably practicable (which the amounts involved and Covidien’s parties hereto agree should not be later than forty-five (45) days following the day on which the disagreement is referred to the Independent Accountant). The Independent Accountant shall base its determination solely on (i) the written submissions of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) parties and shall not conduct an independent investigation and (ii) include only disagreements based on the Adjustment extent (if any) to which the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and/or the Target Adjustment Amount Closing Date Outstanding Company Expenses require adjustment (as applicableonly with respect to the remaining disagreements submitted to the Independent Accountant) not being calculated properly in order to be determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen Section 3.4(a) (15) Business Days following receipt by Mallinckrodt including the definitions of the Dispute Notice (the “Dispute Resolution Period”defined terms used in Section 3.4(a)), then Mallinckrodt and Covidien jointly shall engageand, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With with respect to each disputed line item, such the Independent Accountant’s determination, if not in accordance with the position of either Covidien Acquiror or Mallinckrodtthe Holder Representative, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt presented in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination Acquiror’s calculation of the Adjustment Amount and/or pursuant to Section 3.4(a) or in the Target Holder Representative’s written notice of disagreement of such calculation pursuant to this Section 3.4(b). The determination of the Independent Accountant shall be final, conclusive and binding on the parties and no party shall seek further recourse to any Governmental Authority other than to enforce the determination of the Independent Accountant. The parties acknowledge that the agreements contained in this Section 3.4 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement. If Acquiror fails promptly to pay any Adjustment Amount (as applicable) was properly calculated that may be payable to the Holders in accordance with this Section 3.4, or if either party fails to give the Transaction Accounting Principlesjoint written instructions to the Escrow Agent in accordance with this Section 3.4 and, in order to obtain such payment or delivery of the joint written instructions to the Escrow Agent, a party commences an Action that results in a judgment against the other party for such Adjustment Amount or for the delivery of the joint written instructions to the Escrow Agent, the losing party shall pay to the prevailing party (or deliver the joint written instructions to the Escrow Agent directing it to pay), together with such Adjustment Amount, in accordance with Section 3.4(a) and Section 3.4(d), interest on such Adjustment Amount from the date Acquiror delivers to the Holder Representative its calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, Closing Date Outstanding Company Expenses at a rate per annum equal to the extent GAAP prime rate as published in the Wall Street Journal, Eastern Edition, in effect on the date hereof. In addition the prevailing party shall be entitled to any fees, costs and expenses (including legal fees) incurred by the prevailing party in connection with any such Action. The date on which the Closing Date Net Working Capital, the Closing Date Funded Debt Amount, the Closing Date Cash Amount and the Closing Date Outstanding Company Expenses are finally determined in accordance with this Section 3.4(b) is inconsistent with hereinafter referred to as the Transaction Accounting Principles. “Determination Date.” All fees and expenses of the Independent Accountant relating to the work, if any, to be performed by the Independent Accounting Firm Accountant hereunder shall be borne equally one-half (50%) by Covidien Acquiror, on the one hand, and Mallinckrodt. All determinations made one-half (50%) by the Independent Accounting FirmHolder Representative, first as a Holder Allocable Expense and then, to the extent in excess of the amount of Holder Allocable Expenses paid by Acquiror to the Holder Representative at Closing in accordance with Section 3.5, from the Adjustment Escrow Funds (and, if applicable pursuant to the third sentence of Section 3.4(d), the Indemnification Escrow Funds), on the other hand. (c) If the Adjustment Amount is a positive number, then the Merger Consideration shall be increased by the Adjustment Amount, and if the Closing StatementAdjustment Amount is a negative number, as modified the Merger Consideration shall be decreased by the Independent Accounting Firm, will absolute value of the Adjustment Amount. The Adjustment Amount shall be final, conclusive paid in accordance with Section 3.4(a) and binding on the Parties, absent fraud or manifest errorSection 3.4(d). (d) For purposes On the Closing Date, Acquiror shall pay a portion of complying the Merger Consideration equal to the Escrow Amount to Xxxxx Fargo Bank, National Association, as escrow agent of the parties hereto (the “Escrow Agent”), to be held in escrow; provided that Acquiror will promptly thereafter pay to the Escrow Agent any amounts by which the Escrow Amount increases due to any Dissenting Shares becoming Common Shares in accordance with Section 3.10. The Escrow Amount shall be held and invested by the Escrow Agent in accordance with the terms set forth of an Escrow Agreement in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to form attached hereto as Annex B (the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c“Escrow Agreement”), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment AmountAmount is a positive number, as finally determined pursuant to Section 2.16(c)then, is less than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien (x) Acquiror shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which Determination Date pay to each Holder an amount in cash equal to (i) such Holder’s Escrow Percentage, multiplied by (ii) the Adjustment Amount, less any portion of the Adjustment Amount previously paid by Acquiror to such Holder pursuant to Section 3.4(a), and (y) Acquiror and the Target Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to each Holder an amount in cash equal to (i) the Adjustment Escrow Funds, multiplied by (ii) such Holder’s Escrow Percentage, less any portion of the Adjustment Escrow Funds previously paid by the Escrow Agent to such Holder pursuant to Section 3.4(a). If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within five (5) Business Days of the Determination Date, (x) Acquiror and the Holder Representative shall immediately deliver joint written instruction to the Escrow Agent instructing the Escrow Agent to pay to Acquiror an amount of Adjustment Escrow Funds, and if such Adjustment Escrow Funds are insufficient to satisfy the Deficit Amount, from the Indemnification Escrow Funds, equal to the Deficit Amount (subject to the last sentence of this Section 3.4(d)), and (y) if any of the Adjustment Escrow Funds remain after such payment to Acquiror, the Escrow Agent shall pay to each Holder an amount in cash equal to (i) the balance of the Adjustment Escrow Funds, multiplied by (ii) such Holder’s Escrow Percentage. Upon determination of the Adjustment Amount pursuant to Section 3.4(b) and Section 3.4(c), each of Acquiror and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Adjustment Escrow Funds (and, if applicable pursuant to the preceding sentence, the Indemnification Escrow Funds) in accordance with this Section 3.4(d). In no event shall any Holder have been finally determined any liability under this Section 3.4 in excess of such Holder’s Escrow Percentage of the Adjustment Escrow Funds and the Indemnification Escrow Funds. In no event shall Acquiror be entitled to payment pursuant to this Section 2.163.4(d) of any amount in excess of the sum of the Adjustment Escrow Funds and the Indemnification Escrow Funds. (e) Except as otherwise required by Law, the parties hereto agree to treat for all Tax purposes any adjustment made pursuant to this Section 3.4 as adjustments to the Merger Consideration.

Adjustment Amount. (a) Schedule 2.16 Promptly, but in no event later than 5:00 p.m. Eastern Time, following the close of business on the Business Day prior to Closing, the Seller shall deliver to the Purchaser a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Seller, certifying with respect to the accuracy and completeness of a report attached to such certificate that sets forth (i) the monthly and aggregate unit and dollar sales (calculated at WAC) for each Product for the Pre-Closing Period, (ii) any Purchaser Cure Amounts paid by the Seller prior to Closing in the Seller’s sole discretion, together with reasonable evidence of such payments, and (iii) the Adjustment Amount (as so calculated by the Seller, the “Seller Adjustment Amount”), if any, which may be a sample negative or positive number. (b) To validly object to the Seller’s calculation of the Seller Adjustment Amount, the Purchaser must deliver to the Seller, on or prior to 12:00 a.m., Eastern Time, on the Closing Date, written notice (the “Purchaser Adjustment Amount Statement”) indicating that the Purchaser objects to the Seller Adjustment Amount, describing the basis for its objection, and providing its own calculation of the Adjustment Amount and (as so calculated by the Target Purchaser, the “Purchaser Adjustment Amount”). If the Purchaser fails to provide a Purchaser Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”Statement in accordance with this Section 1.9(b), including then the assetSeller Adjustment Amount shall become the final and binding Adjustment Amount. If the Seller receives a Purchaser Adjustment Amount Statement in accordance with this Section 1.9(b), liability and other line items and accounting principles used the Parties shall seek in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred good faith to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause reach an agreement with respect to be prepared and delivered to Covidien a statement (the “Closing Statement”) setting forth (i) the Adjustment Amount and by 11:00 a.m., Eastern Time, on the calculation Closing Date. If the Parties are unable to reach an agreement with respect to the Adjustment Amount by such time, then the Parties shall submit such dispute to the Bankruptcy Court for determination of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of If the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall Parties (i) set forth reach agreement on the Adjustment Amount prior to the Closing, any such Adjustment Amount shall be subtracted from the Closing Payment at the Closing (provided, that, for purposes of clarification, a negative Adjustment Amount would result in reasonable detail an increase in the basis for any dispute included thereinClosing Payment), or (ii) do not reach agreement on the amounts involved Adjustment Amount prior to the Closing and Covidien’s submit the determination of the Adjustment Amount and/or to the Target Bankruptcy Court, then, within three (3) Business Days after the Bankruptcy Court’s determination of any Adjustment Amount, either the Seller shall pay the Purchaser an amount equal to any net positive Adjustment Amount (as applicable) and or the Purchaser shall pay the Seller an amount equal to any net negative Adjustment Amount. At the Purchaser’s election, in its sole discretion, the Seller’s obligation to pay any Adjustment Amount pursuant to subsection (ii) include only disagreements based on of this Section 1.9(c) may be satisfied from the Escrow Funds, and if the Purchaser provides written notice to the Seller of such election, the Parties shall promptly execute and deliver to the Escrow Agent joint written instructions to disburse the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorPurchaser. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of Not less than three (3) Business Days prior to the Adjustment Amount Closing Date and in no event more than ten (10) Business Days prior to the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt Seller shall cause deliver to be prepared and delivered to Covidien Buyer a written statement (the “Estimated Closing Statement”) setting forth its good faith estimates of (i) the Adjustment Amount Closing Date Net Working Capital and the calculation of the Adjustment Amount and Closing Date Net Working Capital Adjustment, (ii) the Target Adjustment Amount Closing Date Indebtedness (the “Estimated Closing Date Indebtedness”), (iii) the Closing Date Cash and (iv) the amount of the Closing Date Transaction Expenses (the “Estimated Transaction Expenses”), in each case, calculated in accordance with the Accounting Principles. Together with the Estimated Closing Statement, Seller shall provide to Buyer such supporting documentation, information (including reasonable access to the records and personnel of the Group Companies and Seller) and calculations as are reasonably requested by Buyer to review the calculations set forth in the Estimated Closing Statement. In the event that Buyer notifies Seller that there are reasonably apparent errors in the Estimated Closing Statement, Buyer and Seller shall discuss such errors in good faith and Seller shall consider in good faith whether to revise any of its calculations prior to delivering a final version of the Estimated Closing Statement in accordance with this Section 2.05(a). (b) As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days thereof, Buyer shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Group Companies as of the Effective Time (the “Closing Balance Sheet”), (ii) a calculation of the Closing Date Net Working Capital and the Closing Date Net Working Capital Adjustment, (iii) a calculation of the Closing Date Indebtedness, (iv) a calculation of the Closing Date Cash and (v) a calculation of the Closing Date Transaction Expenses, (A) in the case of clauses (i), (ii), (iii) and (iv), determined without giving effect to the consummation of the transactions contemplated by this Agreement (including any adjustments as a result of the application of purchase accounting); provided that, the calculation of Closing Date Net Working Capital hereunder shall take into account any non-Income Tax deductions, credits or other Tax benefits accruing in a Pre-Closing Tax Period, including all such deductions, credits or benefits accruing from costs incurred in connection with the Target Adjustment Amounttransactions contemplated by this Agreement and borne by Seller, (B) in each case, determined without giving effect to any financing transactions in connection therewith or by Buyer or its Affiliates (including the Group Companies) at or after the Closing and (C) in each case, determined without giving effect to any action or omission by Buyer or any of its Affiliates (including the Group Companies) with respect to the Group Companies following the Closing that is not in the ordinary course of business consistent with past practices. The Closing Statement Balance Sheet and calculations contemplated by clauses (ii), (iii), (iv) and (v) shall be prepared in accordance with the Transaction Accounting Principles. Following the Closing, including Buyer shall provide Seller and its Representatives with reasonable access during normal business hours to the use records and personnel of the same line items Group Companies and line item entries, set forth on and used in (subject to the execution of customary work paper access letters if requested by) auditors of Buyer to the extent relevant to the preparation of the Sample Closing Statement; providedBalance Sheet and calculations contemplated by clauses (ii), however(iii), that assets newly acquired (iv) and liabilities newly incurred following (v) and shall cause the date personnel of Buyer and its Subsidiaries (including the Group Companies) to reasonably cooperate with Seller and its Representatives in connection with their review of the Sample Closing Statement which cannot be appropriately placed in line items previously used Balance Sheet and calculations contemplated by Mallinckrodtclauses (ii), but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities(iii), will also be included to the extent consistent with the Transaction Accounting Principles(iv) and (v). (c) Within thirty (30) days following receipt by Covidien If Seller disagrees with the calculation of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day periodDate Net Working Capital, the Closing Statement will be finalDate Net Working Capital Adjustment, conclusive and binding on the Parties. Any Dispute Notice Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses, it shall (i) set notify Buyer of such disagreement in writing, setting forth in reasonable detail the basis for any dispute included thereinparticulars of such disagreement, within sixty (60) days after its receipt of the Closing Balance Sheet. In the event that Seller does not provide such a notice of disagreement within such sixty (60)-day period, Seller shall be deemed to have accepted the Closing Balance Sheet and the calculation of the Closing Date Net Working Capital, the amounts involved Closing Date Net Working Capital Adjustment, the Closing Date Indebtedness, the Closing Date Cash, and Covidien’s the Closing Date Transaction Expenses delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and Seller shall use commercially reasonable efforts for a period of forty-five (45) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Net Working Capital Adjustment, the Closing Date Indebtedness, the Closing Date Cash and the Closing Date Transaction Expenses. If, at the end of such period, they are unable to resolve such disagreements, then Xxxxx LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and Seller) (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within forty-five (45) days of the date on which such dispute is referred to the Auditor, whether the Closing Balance Sheet was prepared in accordance with the Accounting Principles and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Net Working Capital Adjustment, the Closing Date Indebtedness, the Closing Date Cash or the Closing Date Transaction Expenses require adjustment based on the written submissions of Seller and Buyer. In resolving the remaining disagreements, the Auditor (i) shall be bound by the provisions of this Agreement, (ii) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either Seller or Buyer and (iii) shall base its decision solely upon the written submissions of Seller and Buyer and the terms of this Agreement (and not upon an independent review). The fees and expenses of the Auditor shall be paid in inverse proportion by Seller and Buyer as they may prevail on matters resolved by the Auditor, which proportionate allocations shall also be determined by the Auditor at the time the determination of the Auditor is rendered. The determination of the Auditor shall be final, binding and conclusive on the Parties. The date on which the Closing Date Net Working Capital, the Closing Date Net Working Capital Adjustment, the Closing Date Indebtedness, the Closing Date Cash and the Closing Date Transaction Expenses are finally determined in accordance with this Section 2.05(c) is hereinafter referred to as the “Determination Date.” (d) The “Adjustment Amount,” which may be positive or negative, means (i) the Closing Date Net Working Capital Adjustment (as finally determined in accordance with Section 2.05(c)), plus (ii) the Estimated Closing Date Indebtedness, minus the Closing Date Indebtedness (as finally determined in accordance with Section 2.05(c)), plus (iii) the Closing Date Cash (as finally determined in accordance with Section 2.05(c)), minus the Estimated Closing Date Cash, plus (iv) the Estimated Transaction Expenses, minus the Closing Date Transaction Expenses (as finally determined in accordance with Section 2.05(c)). If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the Adjustment Amount (the “Increase Amount”), and if the Adjustment Amount is a negative number, then the Purchase Price shall be decreased by the absolute value of the Adjustment Amount and/or (the Target “Deficit Amount”). The Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly shall be paid in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”Section 2.05(e), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the date on which Determination Date, Buyer shall pay to Seller (or one or more Retained Companies located in the Adjustment United States and designated by Seller) an amount in cash equal to the Increase Amount in immediately available funds by wire transfer to an account or accounts designated by Seller, by written notice to Buyer. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Determination Date, Seller shall pay, or shall cause to be paid, to Buyer an amount in cash equal to the Deficit Amount have been finally determined in immediately available funds by wire transfer to an account or accounts designated by Buyer, by written notice to Seller. For U.S. federal income and other applicable Tax purposes, to the extent permitted by Law, any Increase Amount or Deficit Amount pursuant to this Section 2.162.05 shall be treated as an adjustment to the portion of the Purchase Price attributable to the relevant Foreign Notes and Subsidiary Interests.

Adjustment Amount. (a) Schedule 2.16 sets Prior to the Closing Date, Seller shall have delivered to Purchaser a written statement (the “Preliminary Closing Statement”) setting forth a sample calculation its good faith estimate of (A) the Adjustment Amount and the Target Adjustment Amount Net Working Capital as of the Balance Sheet Date Effective Time (the “Sample Estimated Closing StatementDate Net Working Capital”) and the Net Working Capital Adjustment Amount, if any, resulting therefrom (the “Estimated Net Working Capital Adjustment Amount”), including (B) the asset, liability and other line items and accounting principles used in such calculation, and assuming that aggregate amount of all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt Funded Debt as of the DistributionEffective Time (the “Estimated Closing Date Funded Debt”), (C) the aggregate amount of all Cash as of the Effective Time (the “Estimated Closing Date Cash”), (D) the aggregate amount of all Foreign Cash as of the Effective Time (the “Estimated Closing Date Foreign Cash”) and the Foreign Cash Shortfall or Foreign Cash Excess, if any, resulting therefrom (the “Estimated Closing Date Foreign Cash Shortfall” or the “Estimated Closing Date Foreign Cash Excess”, as applicable), (E) the Company Transaction Expenses (the “Estimated Closing Date Company Transaction Expenses”), and (F) the Accrued Income Tax Amount (the “Estimated Closing Date Accrued Income Tax Amount”). The calculations included in the Preliminary Closing Statement shall be prepared on a basis consistent with the Accounting Principles (it being acknowledged that certain amounts thereon shall be estimates). The Preliminary Closing Statement shall be accompanied by reasonable supporting detail (including reasonable supporting calculations). (b) Within As soon as reasonably practicable following the Closing Date, and in any event within sixty (60) days after thereof, Purchaser shall prepare and deliver to Seller (i) an unaudited combined balance sheet of the Distribution Date, Mallinckrodt shall cause to be prepared Active Fluids Entities as of the Effective Time (the “Closing Balance Sheet”) and delivered to Covidien (ii) a written statement (together with the Closing Balance Sheet, the “Closing Statement”) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount and Net Working Capital as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Net Working Capital”), (ii) the Target Adjustment Amount and the a calculation of the Target Adjustment aggregate amount of all Funded Debt as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Funded Debt”), (iii) a calculation of the aggregate amount of all Cash as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Cash”), (iv) calculation of the aggregate amount of all Foreign Cash as of the Effective Time as set forth on the Closing Balance Sheet (the “Closing Date Foreign Cash”), including a listing of each account and the amount of Foreign Cash held in such account, and the Foreign Cash Shortfall or Foreign Cash Excess, if any, resulting therefrom (the “Closing Date Foreign Cash Shortfall” or the “Closing Date Foreign Cash Excess”, as applicable), (v) a calculation of the Company Transaction Expenses (the “Closing Date Company Transaction Expenses”), and (vi) a calculation of the Accrued Income Tax Amount (the “Closing Date Accrued Income Tax Amount”). The Closing Balance Sheet and the calculations included in the Closing Statement shall be prepared in accordance with the Transaction Accounting Principles. The Closing Statement shall be accompanied by reasonable supporting detail (including reasonable supporting calculations). Following the delivery of the Closing Statement, Purchaser shall, and shall cause its Subsidiaries (including the use Fluids Entities) to, provide Seller and its Representatives reasonable access (during normal business hours) to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested by) auditors or accountants of Purchaser and its Subsidiaries (including the same line items and line item entries, set forth on and used in Fluids Entities) relating to the preparation of the Sample Closing Statement and shall cause the personnel of Purchaser and its Subsidiaries (including the Fluids Entity) to reasonably cooperate with Seller and its Representatives in connection with their review of the Closing Statement; providedprovided that, howeversuch access and cooperation shall not unreasonably interfere with the normal business operations of Purchaser or any of its Subsidiaries (including the Fluids Entities). Without the prior written consent of Seller, that assets newly acquired and liabilities newly incurred following Purchaser shall not have the date right (except to reflect the final resolution of any disputes in accordance with Section 2.05(c)) to modify the Sample Closing Balance Sheet or Purchaser’s proposed calculations in the Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included after Purchaser delivers such Closing Balance Sheet and Closing Statement pursuant to the extent consistent with the Transaction Accounting Principlesthis Section 2.05(b). (c) Within If Seller disagrees with the calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash, the Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, or the Closing Date Company Transaction Expenses, or the Closing Date Accrued Income Tax Amount, it shall notify Purchaser of such disagreement in writing (the “Notice of Disagreement”), setting forth in reasonable detail the particulars of such disagreement (and, to the extent known or estimated, Seller’s proposed calculation of any item of the Closing Statement it is disputing), within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to . In the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, event that if Covidien Seller does not deliver any Dispute provide a Notice to Mallinckrodt of Disagreement within such thirty (30)-day period, Seller shall be deemed to have accepted the Closing Statement will Statement, including the calculation of the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash, the Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, the Closing Date Company Transaction Expenses and the Closing Date Accrued Income Tax Amount delivered by Purchaser, which shall be final, binding and conclusive for all purposes hereunder. In the event a Notice of Disagreement is timely provided, Purchaser and binding on the Parties. Any Dispute Notice Seller shall use commercially reasonable efforts for a period of twenty (i20) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount days (or such longer period as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”they may mutually agree) to resolve any disagreements with respect to the calculations of the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash, the Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, the Closing Date Company Transaction Expenses or the Closing Date Accrued Income Tax Amount. If, at the end of such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt period, they are unable to agree on the Independent Accounting Firmresolve such disagreements, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firmXxxxx Xxxxxxxx, and the two LLP (2) firms will mutually select a third nationally recognized major accounting firm or if Xxxxx Xxxxxxxx, LLP is unwilling or unable to serve as the Independent Accounting FirmAuditor, then such firm will be an internationally recognized accounting firm with experience in the Fluids Business combined with transaction arbitration experience related to purchase price adjustment disputes relating to transactions of a similar nature as may be reasonably acceptable to each of Purchaser and Seller) (the “Auditor”) (acting as an expert and not as an arbitrator) shall resolve any remaining disagreements. As The Auditor shall determine as promptly as practicable, and but in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than within thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of date on which such dispute is referred to the line items that remain in dispute as indicated in Auditor, whether the Dispute Notice. With respect to each disputed line item, such determination, if not Closing Statement was prepared in accordance with the standards set forth in Section 2.05(b) and (only with respect to the remaining disagreements submitted to the Auditor) whether and to what extent (if any) the Closing Date Net Working Capital, the Closing Date Funded Debt, the Closing Date Cash, the Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, the Closing Date Company Transaction Expenses or the Closing Date Accrued Income Tax Amount require adjustment. The Auditor shall base its determination solely on the written submissions of the Parties and shall not conduct an independent investigation. In resolving any disputed item, the Auditor shall select either the position of either Covidien the Purchaser or Mallinckrodt, shall the Seller as a resolution for each item or amount disputed and may not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement impose an alternative resolution with respect to any item or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principlesamount disputed. All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Purchaser, on the one hand, and Mallinckrodt. All determinations Seller, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Purchaser and Seller made by the Independent Accounting FirmAuditor such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if Seller challenges items underlying the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash, Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, Closing Date Company Transaction Expenses and the Closing Date Accrued Income Tax Amount in the net amount of $1,000,000, and the Closing StatementAuditor determines that Purchaser has a valid claim for $400,000 of the $1,000,000, as modified by Purchaser shall bear sixty percent (60%) of the Independent Accounting Firm, will fees and expenses of the Auditor and Seller shall bear the remaining forty percent (40%) of the fees and expenses of the Auditor. The determination of the Auditor shall be final, binding and conclusive and binding on the Parties. The date on which the Closing Date Net Working Capital, absent fraud or manifest errorthe Closing Date Funded Debt, the Closing Date Cash, the Closing Date Foreign Cash Shortfall, the Closing Date Foreign Cash Excess, the Closing Date Company Transaction Expenses and the Closing Date Accrued Income Tax Amount are finally determined in accordance with this Section 2.05(c) is hereinafter referred to as the “Determination Date.” (d) For purposes of complying The “Adjustment Amount,” which may be positive or negative, shall mean (i) the Closing Date Net Working Capital (as finally determined in accordance with Section 2.05(c)), minus the terms set forth Estimated Closing Date Net Working Capital, plus (ii) the Estimated Closing Date Funded Debt, minus the Closing Date Funded Debt (as finally determined in this accordance with Section 2.162.05(c)), Mallinckrodt and Covidien plus (iii) the Closing Date Cash (as finally determined in accordance with Section 2.05(c)), minus the Estimated Closing Date Cash, plus (iv) the Estimated Closing Date Foreign Cash Shortfall, minus the Closing Date Foreign Cash Shortfall (as finally determined in accordance with Section 2.05(c)), plus (v) the Estimated 24 Closing Date Company Transaction Expenses, minus the Closing Date Company Transaction Expenses (as finally determined in accordance with Section 2.05(c)), plus (vi) the Estimated Closing Date Accrued Income Tax Amount, minus the Closing Date Accrued Income Tax Amount (as finally determined in accordance with Section 2.05(c)). If the Adjustment Amount is a positive number, then the Cash Consideration shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to be increased by the extent related to Adjustment Amount (the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business“Increase Amount”), and if the Adjustment Amount is a negative number, then the Cash Consideration shall permit access to its facilities and personnel, as may be reasonably required in connection with decreased by the preparation and analysis absolute value of the Closing Statement and Adjustment Amount (the resolution of any disputes thereunder“Deficit Amount”). The Adjustment Amount shall be paid in accordance with Section 2.05(e). (e) If the Adjustment there is an Increase Amount, as finally determined pursuant to Section 2.16(c)then, is greater than promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount and in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made any event within five (5) Business Days of the later to occur of (i) of the Determination Date or (ii) the date on which of Hungary Audit Resolution, Purchaser shall pay an amount in cash equal to the Adjustment Increase Amount to Seller. If there is a Deficit Amount, then, promptly following the Determination Date, and in any event within five (5) Business Days of the Target Adjustment Determination Date, Seller shall pay an amount in cash equal to the Deficit Amount have been finally determined to Purchaser. For U.S. federal income and all other Tax purposes, to the extent permitted by applicable Law, any Increase Amount or Deficit Amount pursuant to this Section 2.162.05(e) shall be treated as an adjustment to the Cash Consideration.

Adjustment Amount. (a) Schedule 2.16 sets (i) No later than five Business Days prior to the Closing Date, the Company shall deliver to Buyer: a statement (“Estimated Closing Statement”) setting forth the Company’s good faith estimate of: (A) the Closing Working Capital (such estimate, “Estimated Closing Working Capital”); (B) the Closing Cash (such estimate, “Estimated Closing Cash”); (C) the Closing Indebtedness (such estimate, “Estimated Closing Indebtedness”); (D) the Closing Transaction Costs (such estimate, “Estimated Closing Transaction Costs”); (E) the Net Tax Adjustment (such estimate, “Estimated Net Tax Adjustment”); and (F) the Closing Merger Consideration. The Estimated Closing Statement shall also include instructions that identify the bank accounts designated to facilitate direct payment by Buyer of (x) the Debt Payoff Amount and (y) the Estimated Closing Transaction Costs (including any such amounts to be paid in accordance with Section 5.17), in each case, to the applicable payees on behalf of the Company Entities. The Estimated Closing Statement shall be prepared and calculated in a sample manner consistent with the applicable definitions contained in this Agreement, the Sample Calculation and in accordance with the Accounting Principles and shall include a reasonably detailed summary of the calculations made to arrive at such amounts. The Company shall provide to Buyer such supporting documentation in connection with the preparation and the calculation of the amounts set forth in the Estimated Closing Statement as Buyer may reasonably request, and shall cooperate with Buyer in its review and evaluation of the Estimated Closing Statement. The Company shall consider in good faith Buyer’s comments to the Estimated Closing Statement and shall revise the Estimated Closing Statement by no later than two Business Days prior to the Closing Date if, based on its good faith assessment of Buyer’s comments, the Company determines such changes are warranted, which revised statement and revised calculations shall become the applicable Estimated Closing Statement and the Estimated Closing Working Capital, Estimated Closing Cash, Estimated Closing Indebtedness, Estimated Closing Transaction Costs and Estimated Net Tax Adjustment reflected therein, as applicable. Estimated Closing Working Capital, Estimated Closing Cash, Estimated Closing Indebtedness, Estimated Closing Transaction Costs and Estimated Net Tax Adjustment (as set forth in the Estimated Closing Statement delivered by the Company to Buyer) shall be binding on the Parties for the purposes of determining the Closing Merger Consideration. (ii) No later than two business days prior to the Closing Date, the Company shall deliver to Buyer a schedule setting forth (A) the applicable portion of the Redemption Amount payable to each Company Preferred Stockholder, (B) the applicable portion of the Closing Merger Consideration payable to each Company Common Stockholder (including any applicable reduction to such amount in connection with the repayment of any applicable Co-Invest Promissory Note Balance in accordance with Section 2.5(d)), and (C) the applicable percentage of the Adjustment Amount payable to each Company Common Stockholder, in each case, calculated in accordance with the Company’s Organizational Documents and any other applicable Contract governing the Target Adjustment Amount Equity Securities of the Company as of immediately prior to the Balance Sheet Date Effective Time (the “Sample Closing StatementConsideration Allocation Schedule”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) As soon as reasonably practicable following the Closing, but in any event no later than 90 days after the Distribution DateClosing Date (the “Preparation Period”), Mallinckrodt shall Buyer will cause the Surviving Corporation to prepare, or cause to be prepared prepared, and delivered deliver to Covidien a the Stockholders’ Representative an unaudited statement (the “Closing Statement”) ), setting forth (i) the Surviving Corporation’s good faith calculation of each of the Closing Amounts, the Adjustment Amount and the calculation Merger Consideration, provided that the Stockholders’ Representative has delivered to the Surviving Corporation, by no later than the later of (i) 30 days following the Adjustment Amount Closing and (ii) 10 days following the Target Adjustment Amount Surviving Corporation’s request therefor, final trial balances, financial statements and such other information as the calculation Surviving Corporation may reasonably request in connection with the preparation of the Target Adjustment AmountClosing Statement (it being agreed that the Preparation Period shall be extended by one day for each day of delay by the Stockholders’ Representative in delivering the information requested by the Surviving Corporation). The Closing Statement shall be prepared and calculated in a manner consistent with the applicable definitions contained in this Agreement, the Sample Calculation and in accordance with the Transaction Accounting PrinciplesPrinciples and shall include a reasonably detailed summary of the calculations made to arrive at such amounts. In the event the Surviving Corporation does not deliver the Closing Statement to the Stockholders’ Representative within the Preparation Period, the Estimated Closing Statement shall be deemed to have been delivered by the Surviving Corporation to the Stockholders’ Representative as the Closing Statement upon the expiration of the Preparation Period. (c) Upon receipt from the Surviving Corporation, the Stockholders’ Representative shall have 30 days to review the Closing Statement (the “Review Period”). At the request of the Stockholders’ Representative, Buyer shall cause the Surviving Corporation to (i) reasonably cooperate with and assist, and shall cause its Subsidiaries, including the use Company Entities, and each of their respective Representatives to reasonably cooperate with and assist, the Stockholders’ Representative and its Representatives in the review of the same line Closing Statement (including by executing such documents and other instruments and taking further actions as may be reasonably required to cause the Company Entities and their respective accountants to deliver to the Stockholders’ Representative and its Representatives copies of their work papers relating to the Company Entities) and (ii) provide the Stockholders’ Representative and its Representatives with any information reasonably requested by the Stockholders’ Representative that is necessary for its review of the Closing Statement. If the Stockholders’ Representative disagrees with the Surviving Corporation’s computation of the Closing Amounts (each as set forth in the Closing Statement), the Stockholders’ Representative shall, on or prior to the last day of the Review Period, deliver a written notice to the Surviving Corporation (the “Notice of Objection”) that sets forth the Stockholders’ Representative’s objections to the Surviving Corporation’s calculation of the Closing Amounts, as applicable. Any Notice of Objection shall specify those items or amounts with which the Stockholders’ Representative disagrees and shall set forth the Stockholders’ Representative’s calculation of the Closing Amounts, the Adjustment Amount and the Merger Consideration based on such objections. (d) If the Stockholders’ Representative does not deliver a Notice of Objection to the Surviving Corporation with respect to any item contained in the Closing Statement within the Review Period, the Stockholders’ Representative shall be deemed to have accepted the Surviving Corporation’s calculation of all underlying items of the Closing Amounts, as applicable, and such calculations shall be final, conclusive and binding; provided, that nothing herein, including such final calculations, shall impair Buyer’s rights to indemnification for any amount pursuant to the Separation Agreement to the extent any such amount has not actually been compensated through payment of the Adjustment Amount, including for the avoidance of doubt, indemnification in respect of any Taxes otherwise indemnifiable pursuant to the Separation Agreement, whether or not of a type included in the definition of Net Tax Adjustment. If the Stockholders’ Representative delivers a Notice of Objection to the Surviving Corporation within the Review Period, the Surviving Corporation and the Stockholders’ Representative shall, during the 30 days following such delivery or any mutually agreed extension thereof, use their good faith efforts to reach agreement on the disputed items and line item entriesamounts in order to determine the amount of the disputed Closing Amounts, as applicable, the Adjustment Amount and the Merger Consideration. If, at the end of such 30-day period or any mutually agreed extension thereof, the Surviving Corporation and the Stockholders’ Representative are unable to resolve their disagreements, they shall jointly retain and refer their disagreements to KPMG LLP or such other nationally recognized independent accounting firm as may be mutually agreed by the Surviving Corporation and the Stockholders’ Representative (the “Independent Expert”). The Surviving Corporation and the Stockholders’ Representative shall instruct the Independent Expert promptly to review this Section 2.8, as well as the Closing Statement, Notice of Objection and any other materials reasonably requested by the Independent Expert, and to determine, solely with respect to the disputed items and amounts so submitted, whether and to what extent, if any, the Closing Amounts set forth on and used in the preparation Closing Statement require adjustment. The Independent Expert shall act as an expert, and not as an arbitrator, and shall base its determination solely on written submissions by the Surviving Corporation and the Stockholders’ Representative and the terms of this Agreement and not pursuant to an independent review. The Parties shall make available to the Independent Expert all relevant books and records and other items reasonably requested by the Independent Expert. As promptly as practicable, but in no event later than 45 days after its retention, the Independent Expert shall deliver to the Surviving Corporation and the Stockholders’ Representative a report that sets forth its resolution of the Sample disputed items and amounts and its calculation of the Closing StatementAmounts; provided, however, that assets newly acquired and liabilities newly incurred following the date of Independent Expert may not assign a value to any item greater than the Sample Closing Statement which cannot be appropriately placed in line items previously used greatest value for such item claimed by Mallinckrodtthe Surviving Corporation, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firmone hand, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicableStockholders’ Representative, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higherother hand, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved smallest value for such item claimed by the Independent Accounting Firm shall be limited to whether any determination of Surviving Corporation, on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principlesone hand, and the Independent Accounting Firm is not to make any Stockholders’ Representative, on the other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principleshand. All fees and expenses relating to the work, if any, to be performed by The decision of the Independent Accounting Firm Expert shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud and no determinations by the Independent Expert, including any work or manifest error. (d) For purposes analyses performed by the Independent Expert in connection with its resolution of complying with the terms set forth in any dispute under this Section 2.162.8(d) shall be admissible as evidence in any Legal Proceeding among the Parties, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, except to the extent related necessary to enforce payment obligations under this Section 2.8. The costs and expenses of the Independent Expert shall be allocated between the Surviving Corporation, on the one hand, and the Stockholders’ Representative (on behalf of the Company Common Stockholders in proportion to their respective shares of the Merger Consideration), on the other hand, based upon the percentage that the portion of the aggregate contested amount not awarded to such Party bears to the Mallinckrodt Assetsaggregate amount actually contested by such Party, Mallinckrodt Liabilities or Mallinckrodt Businessas determined by the Independent Expert. For example, if (i) the Stockholders’ Representative submits a Notice of Objection for $1,000, (ii) the Surviving Corporation contest only $500 of the amount claimed by the Stockholders’ Representative, and shall permit access to its facilities and personnel, as may be reasonably required in connection with (iii) the preparation and analysis Independent Expert ultimately resolves the dispute by awarding the Stockholders’ Representative $300 of the Closing Statement $500 contested, then the costs and expenses of the Independent Expert would be allocated 60% (i.e., 300/500) to the Surviving Corporation and 40% (i.e., 200/500) to the Stockholders’ Representative (on behalf of the Company Common Stockholders in proportion to their respective shares of the Merger Consideration). Buyer, the Surviving Corporation and the resolution Stockholders’ Representative agree to execute, if requested by the Independent Expert, a reasonable engagement letter, including customary indemnities in favor of any disputes thereunderthe Independent Expert. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer For purposes of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.Agreement:

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation As soon as reasonably practicable following the Closing Date, and in any event within 60 days thereof, Parent shall prepare and deliver to the Holder Representative (i) an unaudited consolidated balance sheet of the Adjustment Amount Company and the Target Adjustment Amount its Subsidiaries as of the Balance Sheet close of business on the Business Day immediately preceding the Closing Date (the “Sample Closing StatementBalance Sheet”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all (ii) a calculation of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt Net Working Capital as of the Distribution. close of business on the Business Day immediately preceding the Closing Date (b) Within sixty (60) days after the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement (the “Closing StatementDate Net Working Capital”), (iii) setting forth (i) the Adjustment Amount and the a calculation of the Adjustment Amount aggregate amount of all Indebtedness of the Company as of the Closing (“Closing Date Indebtedness”), and (iiiv) the Target Adjustment Amount and the a calculation of Cash and Cash Equivalents of the Target Adjustment AmountCompany as of the Closing (“Closing Date Cash”). The Closing Statement Balance Sheet shall be prepared in accordance with United States generally accepted accounting principles (“GAAP”), applied in a manner consistent with the Transaction Accounting Principles, including the use of the same line items accounting principles and line item entries, methodologies set forth on and used in the preparation Schedule 1.1(a), not taking into account any of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”)transactions contemplated hereby; provided, however, that if Covidien there is any inconsistency between GAAP and the principles and methodologies set forth on Schedule 1.1(a), the principles and methodologies set forth on Schedule 1.1(a) shall apply. Following the Closing, Parent shall provide the Holder Representative and its representatives access to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Surviving Corporation and its Subsidiaries relating to the preparation of the Closing Balance Sheet and shall cause the personnel of the Surviving Corporation and its Subsidiaries to cooperate with the Holder Representative in connection with its review of the Closing Balance Sheet. (b) If the Holder Representative shall disagree with the calculation of Closing Date Net Working Capital, Closing Date Indebtedness, and/or Closing Date Cash, it shall notify Parent of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within 30 days after its receipt of the Closing Balance Sheet. In the event that the Holder Representative does not deliver any Dispute Notice to Mallinckrodt provide such a notice of disagreement within such thirty (30)-day 30-day period, the Holder Representative shall be deemed to have accepted the Closing Statement will Balance Sheet and the calculation of Closing Date Net Working Capital, Closing Date Indebtedness and Closing Date Cash delivered by Parent, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Parent and the Holder Representative shall use reasonable best efforts for a period of 30 days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, and/or Closing Date Cash. If, at the end of such period, they are unable to resolve such disagreements, then Ernst & Young LLP (or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Parent and the Holder Representative) (the “Auditor”) shall resolve any remaining disagreements. Each of Parent and the Holder Representative shall promptly after engagement of the Auditor provide their assertions regarding the Closing Date Net Working Capital, Closing Date Indebtedness and/or Closing Date Cash and, to the extent relevant thereto, the Closing Balance Sheet in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the Parties agree should not be later than 45 days following the day on which the disagreement is referred to the Auditor). The Auditor shall base its determination solely on (i) the written submission of the Parties and shall not conduct an independent investigation and (ii) the extent (if any) to which the Closing Date Net Working Capital, Closing Date Indebtedness and/or Closing Date Cash require adjustment (only with respect to the remaining disagreements submitted to the Auditor) in order to be determined in accordance with Section 3.5(a) (including the definitions of the defined terms used in Section 3.5(a)). The determination of the Auditor shall be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved Closing Date Indebtedness, and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Date Cash are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.5(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien and Mallinckrodt. All determinations made by between Parent, on the Independent Accounting Firmone hand, and the Closing StatementHolder Representative (and deducted from the Holder Allocable Expense Amount), on the other, based on the percentage which the portion of the total contested amounts not awarded to such Party as modified determined by the Independent Accounting Firm, will be final, conclusive and binding on Auditor bears to the total amounts contested by the Parties. (c) If the Adjustment Amount is a positive number, absent fraud or manifest errorthen the Aggregate Consideration shall be increased by the Adjustment Amount and the Adjustment Amount shall be paid in accordance with Section 3.5(d). If the Adjustment Amount is a negative number, then the Aggregate Consideration shall be decreased by the absolute value of the Adjustment Amount and the Adjustment Amount shall be paid in accordance with Section 3.5(e). (d) For purposes of complying with If the terms set forth in this Section 2.16Adjustment Amount is a positive number, Mallinckrodt and Covidien then (i) Parent shall cooperate with and make available deliver (or cause to be delivered) within three Business Days following the Determination Date (x) to the Exchange Agent (for distribution to each other and their respective Representatives all information, records, data and working papers, Company Stockholder in each case, accordance with such Company Stockholder’s Common Pro Rata Percentage) a cash payment in an amount equal to the extent related product of (A) the Adjustment Amount, multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to the Mallinckrodt AssetsSurviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the Adjustment Amount, Mallinckrodt Liabilities or Mallinckrodt Businessmultiplied by (B) the Aggregate Option Pro Rata Percentage, and shall permit access to its facilities and personnel, as may be reasonably required in connection with (ii) the preparation and analysis Holder Representative (on behalf of the Closing Statement Company Equityholders) and Parent shall each, within three Business Days after the resolution Determination Date, direct the Escrow Agent to release (x) to the Exchange Agent (for distribution to each Company Stockholder in accordance with such Company Stockholder’s Common Pro Rata Percentage) a cash payment in an amount equal to the product of any disputes thereunder(A) the total amount of the funds in the Adjustment Escrow Account, multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to the Surviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the total amount of the funds in the Adjustment Escrow Account, multiplied by (B) the Aggregate Option Pro Rata Percentage. (e) If the Adjustment AmountAmount is a negative number, as finally determined pursuant the Holder Representative (on behalf of the Company Equityholders) and Parent shall each, within three Business Days after the Determination Date, direct the Escrow Agent to Section 2.16(c), is greater than (i) pay to Parent from the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid Escrow Account an aggregate amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer absolute value of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and (ii) release (x) to the Target Exchange Agent (for distribution to each Company Stockholder in accordance with such Company Stockholder’s Common Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the total amount of any remaining funds (if any) in the Adjustment Escrow Account after giving effect to the payments pursuant to the preceding clause (i), multiplied by (B) the Aggregate Common Pro Rata Percentage, and (y) to the Surviving Corporation (for payment to each Company Optionholder in accordance with such Company Optionholder’s Option Pro Rata Percentage) a cash payment in an amount equal to the product of (A) the total amount of any remaining funds (if any) in the Adjustment Escrow Account after giving effect to the payments pursuant to the preceding clause (i), multiplied by (B) the Aggregate Option Pro Rata Percentage. If the available funds in the Adjustment Escrow Account are insufficient to make the payment to Parent set forth in the preceding clause (i), the Holder Representative (on behalf of the Company Equityholders) and Parent shall each, within three Business Days after the Determination Date, direct the Escrow Agent to pay to Parent from the Indemnification Escrow Account an amount equal to the amount by which the absolute value of the Adjustment Amount have been finally determined pursuant to this Section 2.16exceeds the amount of funds available in the Adjustment Escrow Account.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of the The Adjustment Amount shall be calculated in accordance with Section 2.04(b) and shall be calculated at the time the Closing Balance Sheet and the Target Adjustment Amount as Closing ANWC Statement (and the computations of Closing Adjusted Net Working Capital reflected therein or calculated therefrom) becomes final and binding on the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred Parties pursuant to Mallinckrodt as of the DistributionSection 2.03. (b) Within sixty (60) days after The Final Purchase Price shall be determined by adjusting the Distribution Date, Mallinckrodt shall cause to be prepared and delivered to Covidien a statement Estimated Purchase Price by an amount (the “Closing StatementAdjustment Amount”) setting forth (i) equal to the Closing Adjusted Net Working Capital, minus the Estimated Adjusted Net Working Capital. If the Adjustment Amount and the calculation of the Adjustment Amount and (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principlesis a positive number, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of the Closing Statement (the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Statement will be final, conclusive and binding on the Parties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt Purchaser shall pay or cause to be paid to Sellers an amount in cash equal to such Adjustment Amount to such bank account(s) as Parent Seller designates. If the Adjustment Amount is a negative number, Sellers shall pay or cause to be paid to Purchaser an amount in cash equal to the difference absolute value of such Adjustment Amount. Any Adjustment Amount paid pursuant to this Section 2.04(b) shall be paid, plus interest from the first dollar Closing Date through the date of payment, within five (i.e.5) Business Days after the Closing Balance Sheet and the Closing ANWC Statement (and the related computation of the Closing Adjusted Net Working Capital) become final and binding pursuant to Section 2.03. The amount of interest to be paid in connection with the Adjustment Amount shall be calculated using the short-term applicable federal rate (as determined by the IRS) during the month in which the Closing Date occurs, without regard to calculated on the $20 million threshold) to Covidien basis of a three hundred sixty-five (365)-day year and the actual number of days elapsed. Any such payment shall be made by wire transfer of immediately available funds to an a bank account or accounts as shall be designated in writing by Covidien to Mallinckrodt. If the Adjustment AmountParent Seller or Purchaser, as finally determined pursuant to Section 2.16(c)the case may be, is less no later than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar three (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (53) Business Days prior to the payment date. (c) No matter that gives rise to adjustment under Sections 2.03 or 2.04 shall be the subject of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.or eligible for a claim by Purchaser for indemnification or other payment under Article IX or Article X.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. in any event (bi) Within within sixty (60) days after thereof if the Distribution DateClosing Date is on the last day of a month or (ii) within ninety (90) days thereof otherwise, Mallinckrodt Newco shall cause prepare and deliver to be prepared the Holder Representative (A) an unaudited consolidated balance sheet of the Company and delivered to Covidien its Subsidiaries (the “Final Closing Balance Sheet”), and (B) a reasonably detailed statement (the “Closing Statement”) setting forth Newco’s calculations of: (iw) Net Working Capital as of 11:59 p.m. (Eastern time) on the day immediately prior to the Closing Date (“Closing Date Net Working Capital”), (x) the Adjustment Amount and the calculation aggregate amount of all Funded Debt of the Adjustment Amount Company as of immediately prior to the Closing on the Closing Date (“Closing Date Funded Debt”), (y) the aggregate Cash of the Company as of immediately prior to the Closing on the Closing Date not to exceed $3,000,000 (“Closing Date Cash”), and (iiz) the Target Adjustment Amount and aggregate amount of Transaction Expenses as of immediately prior to the calculation of Closing on the Target Adjustment AmountClosing Date (the “Closing Transaction Expenses”), in each case, calculated consistent (except as provided in this Section 3.4(a)) with the Accounting Principles. The Final Closing Statement Balance Sheet shall be prepared in accordance with using the Transaction Accounting Principles; provided, however that (I) the Final Closing Balance Sheet shall not give effect to the consummation of the Mergers, including the use any payments of cash in respect of the same line items Merger Consideration or any Financing transactions in connection therewith or, after the Concrete Effective Time, any other action or omission by Newco, the Surviving Corporation or any of its Subsidiaries that is not in the ordinary course of business consistent with past practice, (II) the treatment of leases as capital leases or operating leases shall be identical to their treatment in the Interim Balance Sheet, and line item entries(III) the Final Closing Balance Sheet shall not reflect any expense or liability for which Newco is responsible under this Agreement. From the Closing Date through the final determination and payment of the Merger Consideration pursuant to Section 3.4, set forth on Newco shall provide the Holder Representative and used in its representatives reasonable access (during normal business hours and upon reasonable advance notice and at the sole cost and expense of the Holder Representative) to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company and its Subsidiaries relating to the preparation of the Sample Closing StatementBalance Sheet and shall cause the personnel of the Company and its Subsidiaries to cooperate as promptly as practicable with the Holder Representative in connection with its review of the Closing Balance Sheet; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which canNewco shall not be appropriately placed required to provide any information the disclosure of which would violate applicable Law (including competition or antitrust Law) (provided, that Newco shall use commercially reasonable efforts to make alternative arrangements to permit such disclosure in line items previously used by Mallinckrodta manner consistent with applicable Law) or which would, but based on the advice of counsel, result in the waiver of attorney client privilege (provided, that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included Newco and the Holder Representative shall cooperate to the extent permit such disclosure in a manner consistent with the Transaction Accounting Principlespreservation of such privilege). (cb) Within If the Holder Representative shall disagree with the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash or Closing Transaction Expenses set forth in the Closing Statement, it shall notify Newco of such disagreement in writing (a “Disagreement Notice”), setting forth in reasonable detail the particulars of such disagreement, within thirty (30) days following after its receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has with respect to the preparation or content of Balance Sheet and the Closing Statement (Statement. In the “Dispute Notice”); provided, however, event that if Covidien the Holder Representative does not deliver any Dispute Notice to Mallinckrodt provide a notice of disagreement within such thirty (30)-day period, the Holder Representative and Newco shall be deemed to have agreed to the Closing Statement will Balance Sheet and the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Transaction Expenses set forth in the Closing Statement, which shall be final, binding and conclusive for all purposes hereunder. In the event any Disagreement Notice is timely provided, Newco and the Holder Representative shall use reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash or Closing Transaction Expenses. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by Ernst & Young LLP or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Newco and the Holder Representative (such firm, subject to the following proviso, the “Accounting Referee”). Each of Newco and the Holder Representative shall promptly provide their respective assertions regarding Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Transaction Expenses and, to the extent relevant thereto, the Final Closing Balance Sheet in writing to the Accounting Referee and to each other; provided, that no party shall disclose to the Accounting Referee any settlement discussions (or the contents thereof) between the parties without the prior consent of the other party. The Accounting Referee shall be instructed to render its determination with respect to such disagreements as soon as reasonably possible (which the parties hereto agree should not be later than thirty (30) days following the day on which the disagreement is referred to the Accounting Referee). The Accounting Referee shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash or Closing Transaction Expenses require adjustment (only with respect to the remaining disagreements submitted to the Accounting Referee) in order to be determined in accordance with Section 3.4(a) (including the definitions of the defined terms used in Section 3.4(a)), and the parties shall instruct the Accounting Referee to make all determinations in accordance with the Accounting Principles, notwithstanding the availability of other accounting methods, policies, practices and/or procedures under GAAP or otherwise. The Accounting Referee may not assign a value greater than the greatest value for a disputed item claimed by either party or smaller than the smallest value for such item claimed by either party. The determination of the Accounting Referee shall be final, conclusive and binding on the Partiesparties. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included thereinThe date on which Closing Date Net Working Capital, the amounts involved Closing Date Funded Debt, Closing Date Cash and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly Closing Transaction Expenses are finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 3.4(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. Determination Date.” All fees and expenses of the Accounting Referee relating to the work, if any, to be performed by the Independent Accounting Firm Referee hereunder shall be borne equally by Covidien pro rata as between Newco, on the one hand, and Mallinckrodt. All determinations the Holder Representative from the Holder Representative Expense Amount, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Newco and the Holder Representative (as set forth in the written submissions to the Accounting Referee) made by the Independent Accounting FirmReferee such that the party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if the Holder Representative challenges items underlying the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Transaction Expenses in the net amount of $1,000,000, and the Accounting Referee determines that Newco has a valid claim for $400,000 of the $1,000,000, Newco shall bear sixty percent (60%) of the fees and expenses of the Accounting Referee and the Holder Representative shall bear the remaining forty percent (40%) of the fees and expenses of the Accounting Referee from the Holder Representative Expense Amount. (c) The “Adjustment Amount,” which may be positive or negative, shall mean (i) Closing StatementDate Net Working Capital (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Net Working Capital, plus (ii) Estimated Closing Date Funded Debt, minus Closing Date Funded Debt (as finally determined in accordance with Section 3.4(b)), plus (iii) Closing Date Cash (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Cash, plus (iv) Estimated Transaction Expenses, minus Closing Transaction Expenses (as finally determined in accordance with Section 3.4(b)). If the Adjustment Amount is a positive number, then the Merger Consideration shall be increased by the Adjustment Amount, and if the Adjustment Amount is a negative number, then the Merger Consideration shall be decreased by the absolute value of the Adjustment Amount. The Adjustment Amount shall be paid in accordance with Section 3.4(d) or Section 3.4(e), as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest errorapplicable. (d) For purposes If the Adjustment Amount is a positive number, then, promptly following the Determination Date, and in any event within three (3) Business Days of complying the Determination Date, (i) Newco shall pay by wire transfer of immediately available funds (x) to the Exchange Agent (for further delivery to each Pre-Closing Holder based on such Pre-Closing Holder’s Fully-Diluted Percentage in respect of its shares of Company Stock) an amount in cash equal to (A) the US Escrow Percentage of the Adjustment Amount, multiplied by (B) the sum of all Pre-Closing Holders’ Fully-Diluted Percentages in respect of the shares of Company Stock held by all Pre-Closing Holders, (y) to the Surviving Corporation (for further delivery to each Pre-Closing Holder based on such Pre-Closing Holder’s Option Pro-Rata Share) an amount in cash equal to (A) the US Escrow Percentage of the Adjustment Amount, multiplied by (B) the sum of all Pre-Closing Holders’ Option Pro-Rata Shares multiplied by (C) the US Escrow Percentage, and (z) to the UK Rollover Investors an amount in cash equal to the UK Escrow Percentage of the Adjustment Amount (to be allocated among the UK Rollover Investors in accordance with the terms set forth UK Share Purchase Agreement); and (ii) the parties shall jointly instruct the Escrow Agent in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available writing to pay (x) to the Exchange Agent (for further delivery to each other and their respective Representatives all information, records, data and working papers, Pre-Closing Holder based on such Pre-Closing Holder’s Escrow Percentage in each case, respect of the shares of Company Stock held by such Pre-Closing Holder immediately prior to the extent related Concrete Effective Time) an amount in cash equal to (A) the US Escrow Percentage of the Adjustment Escrow Amount, multiplied by (B) the Aggregate Stock Escrow Percentage, (y) to the Mallinckrodt AssetsSurviving Corporation (for further delivery to each Pre-Closing Holder based on such Pre-Closing Holder’s Escrow Percentage in respect of the Vested Options held by such Pre-Closing Holder immediately prior to the Concrete Effective Time) an amount in cash equal to (A) the US Escrow Percentage of the Adjustment Escrow Amount, Mallinckrodt Liabilities or Mallinckrodt Business, multiplied by (B) the Aggregate Option Escrow Percentage and shall permit access (z) to its facilities and personnel, as may the UK Rollover Investors an amount in cash equal to the UK Escrow Percentage of the Adjustment Escrow Amount (to be reasonably required allocated among the UK Rollover Investors in connection accordance with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunderUK Share Purchase Agreement). (e) If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within three (3) Business Days of the Determination Date, (i) the parties shall jointly instruct the Escrow Agent in writing to pay, from the Adjustment Escrow Amount to Newco an amount equal to the Deficit Amount, as finally determined pursuant and (y) if any of the Escrow Funds remain after such payment to Section 2.16(c)Newco, is greater than (I) to the Target Exchange Agent (for further delivery to each Pre-Closing Holder based on such Pre-Closing Holder’s Escrow Percentage in respect of the shares of Company Stock held by such Pre-Closing Holder immediately prior to the Concrete Effective Time) an amount in cash equal to (A) the US Escrow Percentage of the remaining Adjustment Escrow Amount, as finally determined pursuant multiplied by (B) the Aggregate Stock Escrow Percentage, and (II) to Section 2.16(c)the Surviving Corporation (for further delivery to each Pre-Closing Holder based on such Pre-Closing Holder’s Escrow Percentage in respect of the Vested Options held by such Pre-Closing Holder immediately prior to the Concrete Effective Time) an amount in cash equal to (A) the US Escrow Percentage of the remaining Adjustment Escrow Amount, multiplied by at least $20 million, then Mallinckrodt shall pay or cause (B) the Aggregate Option Escrow Percentage and (III) to be paid the UK Rollover Investors an amount in cash equal to the difference from UK Escrow Percentage of the first dollar remaining Adjustment Escrow Amount (i.e.to be allocated among the UK Rollover Investors in accordance with the UK Share Purchase Agreement). (f) Notwithstanding the foregoing, without regard any distributions by the Company or any of its Subsidiaries in respect of any Vested Options pursuant to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amountthis Agreement, as finally determined including pursuant to Section 2.16(c), is less than 3.4(d) or this Section 3.4(f) to Pre-Closing Holders who are current or former employees of the Target Adjustment Amount, as finally determined pursuant Company or its Subsidiaries shall be subject to Section 2.16(c), by at least $20 million, then Covidien 3.8 below. In no event shall pay the Holder Representative or cause any Pre-Closing Holder have any liability under this Section 3.4 in excess of such holder’s allocable share of the Escrow Funds. In no event shall Newco be entitled to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e3.4(f) is to be made within five (5) Business Days of any amount in excess of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16Escrow Funds.

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of Within 120 days following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculation, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. (b) Within sixty (60) days after the Distribution Date, Mallinckrodt Buyer shall cause to be prepared and delivered to Covidien a statement Stockholders’ Representative (i) an unaudited consolidated balance sheet of the Company and its Subsidiaries as at the Closing Date (the “Closing Balance Sheet”) and (ii) a statement prepared in accordance with this Section 2.3 (the “Closing Date Statement”) setting forth (i) the Adjustment Amount and the calculation of Net Working Capital as derived from the Adjustment Amount and Closing Balance Sheet (ii) the Target Adjustment Amount and the calculation of the Target Adjustment Amount“Closing Date Net Working Capital”). The Closing Statement Balance Sheet shall be prepared prepared, and the Closing Date Net Working Capital shall be determined in accordance with the Transaction Accounting PrinciplesGAAP and Annex 1, including the use of using the same line items accounting principles, practices, methodologies and line item entries, set forth on and policies as were used in the preparation of the Sample Company Financials (to the extent such accounting principles, practices, methodologies and policies are in conformity with GAAP) and shall not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby, except as set forth on Annex 1. (b) Except for the consummation of the Closing Statement; providedand the other transactions contemplated hereby, howeverBuyer and the Company agree that on the Closing Date the business and operations of the Company and its Subsidiaries shall be conducted in the ordinary course in a manner substantially consistent with past practice. Following the Closing, neither Buyer nor the Surviving Corporation shall take any action with respect to the accounting books, records, policies or procedures of the Company and its Subsidiaries on which the Closing Balance Sheet and the Closing Date Statement is to be based that assets newly acquired would affect the Closing Balance Sheet or the Closing Date Statement or would impede or delay the preparation of the Closing Balance Sheet or the determination of the Closing Date Net Working Capital in the manner and liabilities newly incurred following utilizing the methods required by this Agreement. Without limiting the generality of the foregoing, no changes shall be made in any reserve or other account existing as of the date of the Sample Closing Statement which cannot be appropriately placed Company Financials other than in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent accordance with GAAP applied in a manner consistent with the Transaction Accounting Principlespast practices of the Company and its Subsidiaries (whether as a result of events occurring after the date of the Company Financials, as a result of new information discovered after the date of the Company Financials, or otherwise). (c) Within thirty (30) Unless Stockholders’ Representative notifies Buyer in writing within 30 days following receipt by Covidien after Buyer’s delivery of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt Balance Sheet and the Closing Date Statement of any dispute Covidien has with respect objection to the preparation or content computation of the Closing Statement Date Net Working Capital set forth therein (the “Dispute NoticeNotice of Objection”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, the Closing Balance Sheet and the Closing Date Statement will shall be final, conclusive final and binding on for all purposes hereunder. During such 30-day period, Stockholders’ Representative and its directors, officers, employees, agents and representatives (including legal counsel and independent accountants) (collectively, “Representatives”) shall be permitted to have access to, to review and to make copies of all relevant working papers, schedules, memoranda and other documents prepared by Buyer and its Representatives relating to the PartiesClosing Balance Sheet and the Closing Date Statement. Any Dispute Notice of Objection shall (i) set forth specify in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith to resolve any dispute objections set forth therein. If Mallinckrodt and CovidienTo be effective, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt Notice of the Dispute Notice (the “Dispute Resolution Period”), then Mallinckrodt and Covidien jointly Objection shall engage, within ten (10) Business Days following the expiration of the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select include a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Closing Statement or by Covidien in the Dispute Notice, as applicable. Notwithstanding the foregoing, the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting Principles. All fees and expenses relating to the work, if any, to be performed by the Independent Accounting Firm shall be borne equally by Covidien and Mallinckrodt. All determinations made by the Independent Accounting Firm, and the Closing Statement, as modified by the Independent Accounting Firm, will be final, conclusive and binding on the Parties, absent fraud or manifest error. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis copy of the Closing Date Statement and the resolution of any disputes thereunder. (e) If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is greater than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Covidien by wire transfer of immediately available funds to an account or accounts designated in writing by Covidien to Mallinckrodt. If the Adjustment Amount, as finally determined pursuant to Section 2.16(c), is less than the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid an amount in cash equal to the difference from the first dollar (i.e., without regard to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and the Target Adjustment Amount have been finally determined pursuant to this Section 2.16.setting forth Buyer’s

Adjustment Amount. (a) Schedule 2.16 sets forth a sample calculation of As soon as reasonably practicable following the Adjustment Amount and the Target Adjustment Amount as of the Balance Sheet Date (the “Sample Closing Statement”), including the asset, liability and other line items and accounting principles used in such calculationDate, and assuming that all of such asset and liability line items that constitute Mallinckrodt Assets or Mallinckrodt Liabilities under this Agreement will be transferred to Mallinckrodt as of the Distribution. in any event within ninety (b) Within sixty (6090) days after the Distribution Datethereafter, Mallinckrodt Seller Parent shall cause prepare and deliver to be prepared and delivered to Covidien Buyer a statement (the “Final Closing Statement”) setting forth (i) Seller Parent’s calculation of the following as of the Calculation Time and presented in accordance with the format used in, and containing the line items set forth in, the Illustrative Closing Statement: (A) the Current Assets (“Closing Date Current Assets”), (B) the Unearned Revenue Amount (the “Closing Date Unearned Revenue Amount”), (C) the Accrued Vacation Liability (in the aggregate and for each Business Employee) (without duplication, the “Closing Date Accrued Vacation Liability”), (D) the Accrued Pre-Closing Bonus Liability (in the aggregate and for each Business Employee) (without duplication, the “Closing Date Accrued Pre-Closing Bonus Liability”), (E) the Indebtedness (the “Closing Date Indebtedness”), (F) the Seller Transaction Expenses (the “Closing Date Seller Transaction Expenses”), and (G) the CapEx Adjustment Amount (the “Closing Date CapEx Adjustment Amount”) and (ii) a calculation, whether positive or negative, of (x) the amount of the Closing Purchase Price calculated based on the Final Closing Statement (using, for the avoidance of doubt, the calculations described in the foregoing clauses (a)(i)(A) through (G) of this Section 1.05) minus (y) the amount of the Closing Purchase Price calculated based on the Estimated Closing Statement (the “Adjustment Amount”). Except as otherwise provided herein, the Closing Date Current Assets, the Closing Date Unearned Revenue Amount, the Closing Date Accrued Vacation Liability, the Closing Date Accrued Pre-Closing Bonus Liability, the Closing Date Indebtedness, the Closing Date Seller Transaction Expenses and the Closing Date CapEx Adjustment Amount shall (x) be calculated in accordance with IFRS and the definitions contained in this Agreement (and the determination of any items included in the Final Closing Statement shall be based on facts and circumstances as they exist as of the Calculation Time and shall exclude the effect of any act, decision change in circumstances or other event or development arising or occurring after the Calculation Time) and (y) presented in accordance with the format used in the Illustrative Closing Statement. Concurrently with its delivery of the Final Closing Statement, Seller Parent shall provide Buyer and its relevant Representatives at reasonable times and upon reasonable notice, such access to the books, records and other information regarding the Final Closing Statement, the Closing Date Current Assets, the Closing Date Current Liabilities, the Closing Date Unearned Revenue Amount, the Closing Date Accrued Vacation Liability, the Closing Date Accrued Pre-Closing Bonus Liability, the Closing Date Indebtedness, the Closing Date Seller Transaction Expenses and the Closing Date CapEx Adjustment Amount, and access to Seller Parent’s relevant Representatives, as Buyer reasonably requests, to aid in Buyer’s review of the Final Closing Statement and Seller Parent’s calculation of the Adjustment Amount set forth therein. Seller Parent shall cooperate in good faith to answer any questions raised by Buyer or its Representatives in connection with their review of the Final Closing Statement and Seller Parent’s calculation of the Adjustment Amount, shall review, in good faith, any comments proposed by Buyer or its Representatives with respect thereto, or any components thereof, and shall consider, in good faith, any appropriate changes to the Final Closing Statement and the Adjustment Amount based on Buyer’s calculations. (b) If Buyer disagrees with the Final Closing Statement and Seller Parent’s calculation of the Adjustment Amount, it shall notify Seller Parent of such disagreement in writing (the “Notice of Disagreement”), setting forth in reasonable detail the particulars of such disagreement (the “Disputed Items”), within ninety (90) days after its receipt of the Final Closing Statement. In the event that Buyer does not provide such a Notice of Disagreement within such ninety (90) day period, Seller Parent and Buyer shall be deemed to have agreed to the Final Closing Statement and the Adjustment Amount, which shall be final, binding and conclusive for all purposes hereunder. In the event any such Notice of Disagreement is timely provided, Buyer and Seller Parent shall use their respective reasonable best efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to any Disputed Items. If, at the end of such period, Buyer and Seller Parent are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by an independent accounting or financial consulting firm of recognized national standing as is mutually selected by Xxxxx and Seller Parent (such firm, subject to the following proviso, the “Accounting Auditor”); provided, that if Seller Parent and Buyer cannot agree on the Accounting Auditor, either Party may request that the American Arbitration Association (the “AAA”) choose the Accounting Auditor, in which case the AAA’s choice of the Accounting Auditor will be binding and the expenses of the AAA will be shared fifty percent (50%) by Xxxxx and fifty percent (50%) by Seller Parent. Each of Buyer and Seller Parent shall promptly provide its assertions regarding the Disputed Items in writing to the Accounting Auditor and, substantially concurrently with the provision thereof to the Accounting Auditor, to each other. No Party shall have any ex-parte communication with the Accounting Auditor relating to its services pursuant to this Section 1.05. The Accounting Auditor shall be instructed to act as an expert and not as an arbitrator (but its determination shall have the force and effect of an arbitral award) and to render its determination with respect to such disagreements as soon as reasonably possible (but in any event within thirty (30) days of its engagement). The Accounting Auditor shall base its determination solely on (i) the written submissions of the Parties (or oral hearings where both Parties participate) and shall not conduct an independent investigation, and (ii) the Target Adjustment Amount and extent (if any) to which the calculation of the Target Adjustment Amount. The Closing Statement shall be prepared in accordance with the Transaction Accounting Principles, including the use of the same line items and line item entries, set forth on and used in the preparation of the Sample Closing Statement; provided, however, that assets newly acquired and liabilities newly incurred following the date of the Sample Closing Statement which cannot be appropriately placed in line items previously used by Mallinckrodt, but that constitute Mallinckrodt Assets or Mallinckrodt Liabilities, will also be included to the extent consistent with the Transaction Accounting Principles. Disputed Items require adjustment (c) Within thirty (30) days following receipt by Covidien of the Closing Statement, Covidien shall deliver written notice to Mallinckrodt of any dispute Covidien has only with respect to the preparation or content remaining disagreements submitted to the Accounting Auditor) in order to be determined in accordance with this Agreement. The determination of the Closing Statement Accounting Auditor (which shall be in writing and include the “Dispute Notice”); provided, however, that if Covidien does not deliver any Dispute Notice to Mallinckrodt within such thirty (30)-day period, reasons for the Closing Statement will Accounting Auditor’s determination) shall be final, conclusive and binding on the PartiesParties absent manifest error. Any Dispute Notice shall (i) set forth in reasonable detail the basis for any dispute included therein, the amounts involved and Covidien’s determination of The date on which the Adjustment Amount and/or the Target Adjustment Amount (as applicable) and (ii) include only disagreements based on the Adjustment Amount and/or the Target Adjustment Amount (as applicable) not being calculated properly is finally determined in accordance with this Agreement or containing mathematical errors. Upon receipt by Mallinckrodt of a Dispute Notice, Mallinckrodt and Covidien shall negotiate in good faith Section 1.05(b) is hereinafter referred to resolve any dispute set forth therein. If Mallinckrodt and Covidien, such good faith effort notwithstanding, fail to resolve any such dispute within fifteen (15) Business Days following receipt by Mallinckrodt of the Dispute Notice (as the “Dispute Resolution PeriodDetermination Date”). In resolving any disagreement, then Mallinckrodt and Covidien jointly shall engage, within ten (10) Business Days following the expiration of Accounting Auditor may not assign any value to a Disputed Item greater than the Dispute Resolution Period, Ernst & Young LLP or, if Ernst & Young LLP is unavailable or conflicted, another nationally recognized major accounting firm selected jointly greatest value claimed for such Disputed Item by Covidien and Mallinckrodt (the “Independent Accounting Firm”) to resolve any such dispute. If Ernst & Young LLP is unavailable or conflicted and Covidien and Mallinckrodt are unable to agree on the Independent Accounting Firm, then each of Covidien and Mallinckrodt shall select a nationally recognized major accounting firm, and the two (2) firms will mutually select a third nationally recognized major accounting firm to serve as the Independent Accounting Firm. As promptly as practicable, and in any event not more than fifteen (15) days following the engagement of the Independent Accounting Firm, Mallinckrodt and Covidien shall each prepare and submit a presentation detailing each Party’s complete statement of proposed resolution of each issue still in dispute to the Independent Accounting Firm. Mallinckrodt and Covidien shall cause the Independent Accounting Firm to, as soon as practicable after the submission of the presentations described Seller Parent in the immediately preceding sentence and in any event not more than thirty (30) days following such presentations, make a final determination, binding on the Parties, of the appropriate amount of each of the line items that remain in dispute as indicated in the Dispute Notice. With respect to each disputed line item, such determination, if not in accordance with the position of either Covidien or Mallinckrodt, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by Mallinckrodt in the Final Closing Statement or by Covidien Buyer in the Dispute Notice, as applicable. Notwithstanding Notice of Disagreement or lesser than the foregoing, lowest value claimed for such Disputed Item by Seller Parent in the scope Final Closing Statement or by Buyer in the Notice of the disputes to be resolved by the Independent Accounting Firm shall be limited to whether any determination of the Adjustment Amount and/or the Target Adjustment Amount (as applicable) was properly calculated in accordance with the Transaction Accounting Principles, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed, to the extent GAAP is inconsistent with the Transaction Accounting PrinciplesDisagreement. All fees and expenses of the Accounting Auditor relating to the work, if any, to be performed by the Independent Accounting Firm Auditor hereunder shall be borne equally by Covidien pro rata as between Buyer, on the one hand, and Mallinckrodt. All determinations Seller Parent, on the other, in proportion to the allocation of the dollar value of the amounts in dispute as between Buyer and Seller Parent (set forth in the written submissions to the Accounting Auditor) made by the Independent Accounting FirmAuditor such that the Party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if Buyer challenges items in the gross amount of $1,000,000, and the Closing StatementAccounting Auditor determines that Buyer has a valid claim for $400,000 of the $1,000,000, as modified by Buyer shall bear sixty percent (60%) of the Independent fees and expenses of the Accounting Firm, will be final, conclusive Auditor and binding on Seller Parent shall bear forty percent (40%) of the Parties, absent fraud or manifest errorfees and expenses of the Accounting Auditor. (d) For purposes of complying with the terms set forth in this Section 2.16, Mallinckrodt and Covidien shall cooperate with and make available to each other and their respective Representatives all information, records, data and working papers, in each case, to the extent related to the Mallinckrodt Assets, Mallinckrodt Liabilities or Mallinckrodt Business, and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Closing Statement and the resolution of any disputes thereunder. (ec) If the Adjustment Amount, Amount (as finally determined pursuant to Section 2.16(c1.05(b)) is a positive number (such amount, the “Increase Amount”), is greater than then, promptly following the Target Adjustment AmountDetermination Date, as finally determined pursuant and in any event within ten (10) Business Days of the Determination Date, Buyer shall pay to Section 2.16(c)Seller Parent, by at least $20 millionwire transfer of immediately available funds, then Mallinckrodt shall pay or cause to be paid an amount in cash equal to the difference from Increase Amount. If the first dollar Adjustment Amount is a negative number (i.e.the absolute value of such amount, without regard the “Deficit Amount”), then, promptly following the Determination Date, and in any event within ten (10) Business Days of the Determination Date, Seller Parent shall pay to the $20 million threshold) to Covidien Buyer, by wire transfer of immediately available funds funds, an amount equal to the Deficit Amount. If Seller Parent does not make such payment within such ten (10) Business Day period, then Buyer shall be entitled (but shall not be required, in which case Seller Parent’s obligation hereunder shall continue) to cause Seller Parent to deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to release the Deficit Amount from the Indemnification Escrow Fund to an account or accounts designated by Buyer in writing by Covidien to Mallinckrodt. If and, within ten (10) Business Days after release of the Adjustment AmountDeficit Amount from the Indemnification Escrow Fund, as finally determined pursuant to Section 2.16(c), is less than Seller Parent shall deposit into the Target Adjustment Amount, as finally determined pursuant to Section 2.16(c), by at least $20 million, then Covidien shall pay or cause to be paid Indemnification Escrow Fund an amount in cash equal to the difference from the first dollar Deficit Amount. Buyer and Seller Parent shall (i.e., without regard and shall cause their respective Affiliates to) treat payments with respect to the $20 million threshold) to Mallinckrodt by wire transfer of immediately available funds to an account or accounts designated in writing by Mallinckrodt to Covidien. Any such payment pursuant to this Section 2.16(e) is to be made within five (5) Business Days of the date on which the Adjustment Amount and as adjustments to the Target Adjustment Amount have been finally determined pursuant consideration paid hereunder to this Section 2.16the fullest extent permitted by applicable Law.