Common use of Adjustment to Acquisition Consideration Clause in Contracts

Adjustment to Acquisition Consideration. 2.11.1 Buyer will calculate its cumulative earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first four and one-half (4.5) years after Closing (the “Applicable Cumulative EBITDA”). EBITDA will be calculated by Buyer on an accrual basis and shall be equal to the amount of net patient revenues for all AGA affiliated endoscopy centers (which shall equal gross revenues minus contractual adjustments, write-offs, refunds and uncollectible amounts) (“Net Revenues”) and less the aggregate of the following: (i) the cost of CRNAs and physician labor under staffing ratios based on AGA’s requirements for their endoscopy centers (provided, however, the cost of employing any physicians in addition to the number of physicians engaged by GAA as of the date hereof shall not be included in such calculation); (ii) anesthesia drugs and supplies (including carts) and personnel scrubs; (iii) a billing and collection expense equal to six percent (6%) of Buyer’s Net Revenues; (iv) insurance costs for professional liability insurance for Buyer and general commercial insurance for Buyer (and not including the cost of professional liability insurance for any CRNAs and/or physicians employed or contracted with Buyer in addition to the number of physicians employed by GAA as of the date hereof); (v) bank fees charged to Buyer for operating bank accounts and merchant services (and not including any bank fees charged to Buyer in connection with any financing or otherwise); (vi) business license fees: (vii) printing expenses; (viii) payroll expenses; and (ix) legal and professional fees directly related to the business of Buyer; and (x) other similar or related expenses required by Buyer to provide anesthesia services pursuant to the PSA Contracts (as defined in the Other Acquisition Agreement), as mutually agreed upon by Buyer and Seller. For purposes of determining the amount of payments to be made pursuant to this Section 2.11, EBITDA will not include any allocated overhead from CRH. To the extent that Buyer receives an indemnification payment under Section 6 hereof with respect to an expense that would otherwise be deducted from EBITDA for purposes of determining the payments to be made to the Seller pursuant to this Section 2.11, such amount shall not be taken into account in performing such EBTIDA calculation. Such calculation will be made within forty-five (45) days after the expiration of such first four and one-half (4.5) year period after the Closing; provided, however, Buyer shall provide the Seller with monthly calculations of EBITDA following the Closing with reasonable detail and with specificity regarding the basis for such calculation and, in the event the Applicable Cumulative EBITDA equals or exceeds Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000) prior to the end of the first four and one-half (4.5) years after Closing, the provisions of Sections 2.11.2 through 2.11.10 shall immediately apply. Buyer shall grant the Seller, the Owner, the Owner Member and their Representatives reasonable access to Buyer’s books and records for purposes reasonably related to the determination of the Applicable Cumulative EBITDA and the resulting payments, if any, due to the Seller hereunder. 2.11.2 Buyer shall provide the Seller with a copy of such calculation (the “EBITDA Adjustment Calculation”) within such forty-five (45) day period setting forth in reasonable detail regarding the basis for such calculation. Following the Seller’s receipt of such EBITDA Adjustment Calculation, if the Seller disputes the EBITDA Adjustment Calculation, Seller shall, within thirty (30) days after its receipt of the EBITDA Adjustment Calculation (any dispute not so timely noticed shall be deemed waived), notify Buyer, in writing in reasonable detail and with specificity (the “EBITDA Dispute Notice”) of such dispute(s). Seller and Buyer shall attempt to negotiate in good faith to resolve such dispute. In the event that Seller and Buyer fail to agree on any of the Seller’s proposed adjustments set forth in the EBITDA Dispute Notice within twenty (20) days after Buyer receives the EBITDA Dispute Notice, Seller and Buyer agree that Xxxxx & Xxxxxx, P.C. in Atlanta, Georgia (the “Accountants”) shall, within the 40-day period immediately following such failure to agree, make the final determination of the Applicable Cumulative EBITDA in accordance with the terms of this Agreement. Buyer and Seller each shall provide the Accountants with their respective determinations of the Applicable Cumulative EBITDA. Such determination shall be made in writing, shall set forth the Applicable Cumulative EBITDA as determined by the Accountants and shall be final and binding on Seller and Buyer. The fees, costs and expenses of the Accountants shall be paid by the party whose Applicable Cumulative EBITDA calculation was different by the greater amount from that of the Accountants. 2.11.3 If Buyer’s Applicable Cumulative EBITDA (as finally determined) for such period equals or exceeds Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000), then the entire EBITDA Payment Amount will be paid to Seller within ten (10) days after the final Applicable Cumulative EBITDA is determined. 2.11.4 Subject to Section 2.11.5, if Buyer’s Applicable Cumulative EBITDA for such period is less than Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000), then the positive difference between (a) Fourteen Million Six Hundred Fifty Five Thousand Six Hundred Dollars ($14,655,600) minus (b) the difference between Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000) minus the Applicable Cumulative EBITDA for such period, will be paid to the Seller within ten (10) days after the final Applicable Cumulative EBITDA is determined (and the EBITDA Payment Amount will thereafter be such positive difference between (a) and (b) and Buyer shall not owe any additional portion (above such amount) of the EBITDA Payment Amount to Seller). 2.11.5 If Buyer’s Applicable Cumulative EBITDA for such period is less than or equal to Fifty-Eight Million Six Hundred Twenty-Two Thousand Four Hundred Dollars ($58,622,400), then Buyer shall owe no portion of the EBITDA Payment Amount to Seller. 2.11.6 Any payments to the Seller made under this Section 2.11 shall be treated for Tax purposes as an adjustment to the total consideration paid for the Purchased Assets under this Agreement to the extent such characterization is proper or permissible according to relevant Tax Authorities. 2.11.7 The Seller may direct Buyer, in writing, to make any payments due pursuant to this Section 2.11 to the Owner, the Owner Member or any other Person in accordance with instructions provided to Buyer. 2.11.8 Except as provided in Section 6.6, Buyer’s obligation to pay the EBITDA Payment Amount to the Seller in accordance with this Section 2.11 is an independent obligation of Buyer and is not otherwise conditioned or contingent upon the satisfaction of any conditions other those set forth in this Section 2.11. 2.11.9 CRH hereby agrees that it shall be jointly and severally liable for Buyer’s obligations pursuant to this Section 2.11.

Adjustment to Acquisition Consideration. 2.11.1 Buyer will calculate its cumulative earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first four and one-half (4.5) years after Closing (the “Applicable Cumulative EBITDA”). EBITDA will be calculated by Buyer on an accrual basis and shall be equal to the amount of net patient revenues for all AGA affiliated endoscopy centers (which shall equal gross revenues minus contractual adjustments, write-offs, refunds and uncollectible amounts) (“Net Revenues”) and less the aggregate of the following: (i) the cost of CRNAs and physician labor under staffing ratios based on AGA’s requirements for their endoscopy centers (provided, however, the cost of employing any physicians in addition to the number of physicians engaged by GAA as of the date hereof shall not be included in such calculation); (ii) anesthesia drugs and supplies (including carts) and personnel scrubs; (iii) a billing and collection expense equal to six percent (6%) of Buyer’s Net Revenues; (iv) insurance costs for professional liability insurance for Buyer and general commercial insurance for Buyer (and not including the cost of professional liability insurance for any CRNAs and/or physicians employed or contracted with Buyer in addition to the number of physicians employed by GAA as of the date hereof); (v) bank fees charged to Buyer for operating bank accounts and merchant services (and not including any bank fees charged to Buyer in connection with any financing or otherwise); (vi) business license fees: (vii) printing expenses; (viii) payroll expenses; and (ix) legal and professional fees directly related to the business of Buyer; and (x) other similar or related expenses required by Buyer to provide anesthesia services pursuant to the PSA Contracts (as defined in the Other Acquisition Agreement), as mutually agreed upon by Buyer and Seller. For purposes of determining the amount of payments to be made pursuant to this Section 2.11, EBITDA will not include any allocated overhead from CRH. To the extent that Buyer receives an indemnification payment under Section 6 hereof with respect to an expense that would otherwise be deducted from EBITDA for purposes of determining the payments to be made to the Seller pursuant to this Section 2.11, such amount shall not be taken into account in performing such EBTIDA calculation. Such calculation will be made within forty-five (45) days after the expiration of such first four and one-half (4.5) year period after the Closing; provided, however, Buyer shall provide the Seller with monthly calculations of EBITDA following the Closing with reasonable detail and with specificity regarding the basis for such calculation and, in the event the Applicable Cumulative EBITDA equals or exceeds Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000) [REDACTED] prior to the end of the first four and one-half (4.5) years after Closing, the provisions of Sections 2.11.2 through 2.11.10 shall immediately apply. Buyer shall grant the Seller, the Owner, the Owner Member and their Representatives reasonable access to Buyer’s books and records for purposes reasonably related to the determination of the Applicable Cumulative EBITDA and the resulting payments, if any, due to the Seller hereunder. 2.11.2 Buyer shall provide the Seller with a copy of such calculation (the “EBITDA Adjustment Calculation”) within such forty-five (45) day period setting forth in reasonable detail regarding the basis for such calculation. Following the Seller’s receipt of such EBITDA Adjustment Calculation, if the Seller disputes the EBITDA Adjustment Calculation, Seller shall, within thirty (30) days after its receipt of the EBITDA Adjustment Calculation (any dispute not so timely noticed shall be deemed waived), notify Buyer, in writing in reasonable detail and with specificity (the “EBITDA Dispute Notice”) of such dispute(s). Seller and Buyer shall attempt to negotiate in good faith to resolve such dispute. In the event that Seller and Buyer fail to agree on any of the Seller’s proposed adjustments set forth in the EBITDA Dispute Notice within twenty (20) days after Buyer receives the EBITDA Dispute Notice, Seller and Buyer agree that Xxxxx & Xxxxxx, P.C. in Atlanta, Georgia (the “Accountants”) shall, within the 40-day period immediately following such failure to agree, make the final determination of the Applicable Cumulative EBITDA in accordance with the terms of this Agreement. Buyer and Seller each shall provide the Accountants with their respective determinations of the Applicable Cumulative EBITDA. Such determination shall be made in writing, shall set forth the Applicable Cumulative EBITDA as determined by the Accountants and shall be final and binding on Seller and Buyer. The fees, costs and expenses of the Accountants shall be paid by the party whose Applicable Cumulative EBITDA calculation was different by the greater amount from that of the Accountants. 2.11.3 If Buyer’s Applicable Cumulative EBITDA (as finally determined) for such period equals or exceeds Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000)[REDACTED], then the entire EBITDA Payment Amount will be paid to Seller within ten (10) days after the final Applicable Cumulative EBITDA is determined. 2.11.4 Subject to Section 2.11.5, if Buyer’s Applicable Cumulative EBITDA for such period is less than Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000)[REDACTED], then the positive difference between (a) Fourteen Million Six Hundred Fifty Five Thousand Six Hundred Dollars ($14,655,600) [REDACTED] minus (b) the difference between Seventy-Three Million Two Hundred Seventy-Eight Thousand Dollars ($73,278,000) [REDACTED] minus the Applicable Cumulative EBITDA for such period, will be paid to the Seller within ten (10) days after the final Applicable Cumulative EBITDA is determined (and the EBITDA Payment Amount will thereafter be such positive difference between (a) and (b) and Buyer shall not owe any additional portion (above such amount) of the EBITDA Payment Amount to Seller). 2.11.5 If Buyer’s Applicable Cumulative EBITDA for such period is less than or equal to Fifty-Eight Million Six Hundred Twenty-Two Thousand Four Hundred Dollars ($58,622,400)[REDACTED], then Buyer shall owe no portion of the EBITDA Payment Amount to Seller. 2.11.6 Any payments to the Seller made under this Section 2.11 shall be treated for Tax purposes as an adjustment to the total consideration paid for the Purchased Assets under this Agreement to the extent such characterization is proper or permissible according to relevant Tax Authorities. 2.11.7 The Seller may direct Buyer, in writing, to make any payments due pursuant to this Section 2.11 to the Owner, the Owner Member or any other Person in accordance with instructions provided to Buyer. 2.11.8 Except as provided in Section 6.6, Buyer’s obligation to pay the EBITDA Payment Amount to the Seller in accordance with this Section 2.11 is an independent obligation of Buyer and is not otherwise conditioned or contingent upon the satisfaction of any conditions other those set forth in this Section 2.11. 2.11.9 CRH hereby agrees that it shall be jointly and severally liable for Buyer’s obligations pursuant to this Section 2.11.