Contingent Merger Consideration. As additional consideration for the Merger and subject to the conditions set forth in this Section 1.9, Section 1.13 (Dissenting Shares) and Section 8.6 (Right of Off-Set), Parent shall make additional payments as set forth in this Section 1.9 (the “Contingent Merger Consideration”) to the Payment Agent for distribution to those Stockholders who are not otherwise Dissenting Stockholders an amount equal to (A) the product of the Net Product Revenues for the period beginning on July 5, 2004 and ending on December 31, 2005 (the “Contingent Period”) multiplied by four (4), less (B) Forty Million Dollars ($40,000,000); provided however, that the aggregate Merger Consideration shall not exceed Two Hundred Fifty Million Dollars ($250,000,000). (a) Parent shall deliver quarterly to the Stockholders’ Representative, no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, a statement with reasonable detail reflecting Parent’s calculation of (i) Net Product Revenues for the preceding fiscal quarter, without adjustment for any Uncollected Invoices, (ii) the adjustment for Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period, and (iii) the Contingent Merger Consideration payable for such quarter, which shall be based on Net Product Revenues for the preceding fiscal quarter, less Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period; provided, however, that there shall be no deduction for Uncollected Invoices with respect to the first quarter of the Contingent Period. (the “Quarterly Contingent Calculation”). For the avoidance of doubt, any Uncollected Invoices for which a prior adjustment was made but subsequently collected will be added to Net Product Revenues for the quarter in which such previously Uncollected Invoices are collected. No later than July 15, 2006, Parent shall deliver to the Stockholders’ Representative a statement showing Parent’s final reconciliation of Net Product Revenues for the Contingent Period, including the adjustment for Uncollected Invoices that remain uncollected as of June 30, 2006 and that are related to sales of the Product made any time during the Contingent Period (the “Final Contingent Calculation”). All statements delivered by Parent pursuant to this Section 1.9(a) shall be certified by Parent’s Chief Financial Officer and shall be accompanied by schedules and work papers providing reasonable support for the calculations contained in such statements. The Stockholders’ Representative may distribute these statements to any Stockholder requesting these statements, any Person who is assisting the Stockholders’ Representative in connection with the calculation and verification of the Quarterly Contingent Calculation or the Final Contingent Calculation or any other Person if required by Applicable Law, provided that such Stockholder or other Person has agreed to be bound by the confidentiality obligations set forth in Section 4.4. (b) The Stockholders’ Representative may cause an audit to be made of those books and records of Parent and the Surviving Corporation that are necessary to review and audit the statements delivered pursuant to Section 1.9(a) and the Quarterly Contingent Calculation and the Final Contingent Calculation; provided, however, the Stockholders’ Representative shall have no right to audit the same quarterly period more than one time. Any such audit shall be conducted only by an independent certified accountant selected by the Stockholders’ Representative and reasonably acceptable to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent’s and the Surviving Corporation’s offices and in such a manner so as not to unreasonably interfere with Parent’s and the Surviving Corporation’s normal business activities. Parent agrees to permit, and to cause the Surviving Corporation to permit, such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of Parent and the Surviving Corporation that are necessary or advisable to review and audit the Quarterly Contingent Calculation, or the Final Contingent Calculation, as applicable. Neither the Stockholders’ Representative nor such auditors will have the right to review or audit any other books and records of Parent and the Surviving Corporation. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by less than $100,000 or that Parent overstated aggregate Net Product Revenues for the periods audited, the Stockholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by $100,000 or more, Parent shall pay for the reasonable third party costs and expenses of such audit. (c) Subject to Section 8.6 (Right of Off-Set), no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, beginning with the first quarter during the Contingent Period in which the cumulative Net Product Revenues since the beginning of the Contingent Period exceed an aggregate of Ten Million Dollars ($10,000,000), Parent shall pay the Contingent Merger Consideration, if any, for such fiscal quarter to the Payment Agent for distribution to the Stockholders; provided, however, that Parent may withhold from the Contingent Merger Consideration payment for the fiscal quarter ending December 31, 2005 an amount equal to the Contingent Merger Consideration that would otherwise by payable for such quarter multiplied by a fraction, the numerator of which will be 150% of the dollar amount of cumulative Uncollected Invoices related to sales of the Product through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period, and the denominator of which will be the cumulative Net Product Revenues through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period. Subject to Section 8.6 (Right of Off-Set), within fifteen (15) days following final determination of the Final Contingent Calculation pursuant to Section 1.9(a) or (b), Parent shall pay the balance of the Contingent Merger Consideration, if any, owed hereunder to the Payment Agent for distribution to the Stockholders.
Appears in 1 contract
Samples: Merger Agreement (American Medical Systems Holdings Inc)
Contingent Merger Consideration. As additional consideration for the Merger and subject to the conditions set forth in this Section 1.9, Section 1.13 (Dissenting Shares) and Section 8.6 (Right of Off-Set), Parent shall make additional payments as set forth in this Section 1.9 (the “"Contingent Merger Consideration”") to the Payment Agent for distribution to those Stockholders who are not otherwise Dissenting Stockholders an amount equal to (A) the product of the Net Product Revenues for the period beginning on July 5, 2004 and ending on December 31, 2005 (the “"Contingent Period”") multiplied by four (4), less (B) Forty Million Dollars ($40,000,000); provided however, that the aggregate Merger Consideration shall not exceed Two Hundred Fifty Million Dollars ($250,000,000).
(a) Parent shall deliver quarterly to the Stockholders’ ' Representative, no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, a statement with reasonable detail reflecting Parent’s 's calculation of (i) Net Product Revenues for the preceding fiscal quarter, without adjustment for any Uncollected Invoices, (ii) the adjustment for Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period, and (iii) the Contingent Merger Consideration payable for such quarter, which shall be based on Net Product Revenues for the preceding fiscal quarter, less Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period; provided, however, that there shall be no deduction for Uncollected Invoices with respect to the first quarter of the Contingent Period. (the “"Quarterly Contingent Calculation”"). For the avoidance of doubt, any Uncollected Invoices for which a prior adjustment was made but subsequently collected will be added to Net Product Revenues for the quarter in which such previously Uncollected Invoices are collected. No later than July 15, 2006, Parent shall deliver to the Stockholders’ ' Representative a statement showing Parent’s 's final reconciliation of Net Product Revenues for the Contingent Period, including the adjustment for Uncollected Invoices that remain uncollected as of June 30, 2006 and that are related to sales of the Product made any time during the Contingent Period (the “"Final Contingent Calculation”"). All statements delivered by Parent pursuant to this Section 1.9(a) shall be certified by Parent’s 's Chief Financial Officer and shall be accompanied by schedules and work papers providing reasonable support for the calculations contained in such statements. The Stockholders’ ' Representative may distribute these statements to any Stockholder requesting these statements, any Person who is assisting the Stockholders’ ' Representative in connection with the calculation and verification of the Quarterly Contingent Calculation or the Final Contingent Calculation or any other Person if required by Applicable Law, provided that such Stockholder or other Person has agreed to be bound by the confidentiality obligations set forth in Section 4.4.
(b) The Stockholders’ ' Representative may cause an audit to be made of those books and records of Parent and the Surviving Corporation that are necessary to review and audit the statements delivered pursuant to Section 1.9(a) and the Quarterly Contingent Calculation and the Final Contingent Calculation; provided, however, the Stockholders’ ' Representative shall have no right to audit the same quarterly period more than one time. Any such audit shall be conducted only by an independent certified accountant selected by the Stockholders’ ' Representative and reasonably acceptable to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent’s 's and the Surviving Corporation’s 's offices and in such a manner so as not to unreasonably interfere with Parent’s 's and the Surviving Corporation’s 's normal business activities. Parent agrees to permit, and to cause the Surviving Corporation to permit, such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of Parent and the Surviving Corporation that are necessary or advisable to review and audit the Quarterly Contingent Calculation, or the Final Contingent Calculation, as applicable. Neither the Stockholders’ ' Representative nor such auditors will have the right to review or audit any other books and records of Parent and the Surviving Corporation. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by less than $100,000 or that Parent overstated aggregate Net Product Revenues for the periods audited, the Stockholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by $100,000 or more, Parent shall pay for the reasonable third party costs and expenses of such audit.
(c) Subject to Section 8.6 (Right of Off-Set), no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, beginning with the first quarter during the Contingent Period in which the cumulative Net Product Revenues since the beginning of the Contingent Period exceed an aggregate of Ten Million Dollars ($10,000,000), Parent shall pay the Contingent Merger Consideration, if any, for such fiscal quarter to the Payment Agent for distribution to the Stockholders; provided, however, that Parent may withhold from the Contingent Merger Consideration payment for the fiscal quarter ending December 31, 2005 an amount equal to the Contingent Merger Consideration that would otherwise by payable for such quarter multiplied by a fraction, the numerator of which will be 150% of the dollar amount of cumulative Uncollected Invoices related to sales of the Product through the end of Parent’s 's fifth (5th) fiscal quarter during the Contingent Period, and the denominator of which will be the cumulative Net Product Revenues through the end of Parent’s 's fifth (5th) fiscal quarter during the Contingent Period. Subject to Section 8.6 (Right of Off-Set), within fifteen (15) days following final determination of the Final Contingent Calculation pursuant to Section 1.9(a) or (b), Parent shall pay the balance of the Contingent Merger Consideration, if any, owed hereunder to the Payment Agent for distribution to the Stockholders.
Appears in 1 contract
Samples: Merger Agreement (BSD Medical Corp)
Contingent Merger Consideration. As (a) Each holder of an Outstanding Share (other than any Company Shares to be cancelled pursuant to Section 4.1(c) and any Dissenting Shares), and each holder of a Vested Option, shall have the additional consideration for the Merger and right to receive, subject to the conditions set forth Article XV and in this accordance with Section 1.9, Section 1.13 (Dissenting Shares) and Section 8.6 (Right of Off-Set4.1(b), Parent the First Contingent Per Share Amount, the Second Contingent Per Share Amount, the Third Contingent Per Share Amount and the Fourth Contingent Per Share Amount as follows:
(i) If the Surviving Corporation achieves Milestone #1, the "First Contingent Per Share Amount" shall make additional payments as set forth be the amount in this Section 1.9 (the “Contingent Merger Consideration”) to the Payment Agent for distribution to those Stockholders who are not otherwise Dissenting Stockholders an amount cash equal to (Ax) $50,000,000 multiplied by the Payout Percentage less the Escrow Amount divided by (y) the product number of Fully Diluted Shares, without interest. The Surviving Corporation will deposit the Net Product Revenues for the period beginning on July 5, 2004 and ending on December 31, 2005 (the “Contingent Period”) sum of $50,000,000 multiplied by four (4), the Payout Percentage less (B) Forty Million Dollars ($40,000,000); provided however, that the aggregate Merger Consideration shall not exceed Two Hundred Fifty Million Dollars ($250,000,000).
(a) Parent shall deliver quarterly to the Stockholders’ Representative, no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, a statement with reasonable detail reflecting Parent’s calculation of (i) Net Product Revenues for the preceding fiscal quarter, without adjustment for any Uncollected Invoices, (ii) the adjustment for Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period, and (iii) the Contingent Merger Consideration payable for such quarter, which shall be based on Net Product Revenues for the preceding fiscal quarter, less Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period; provided, however, that there shall be no deduction for Uncollected Invoices with respect to the first quarter of the Contingent Period. (the “Quarterly Contingent Calculation”). For the avoidance of doubt, any Uncollected Invoices for which a prior adjustment was made but subsequently collected will be added to Net Product Revenues for the quarter in which such previously Uncollected Invoices are collected. No later than July 15, 2006, Parent shall deliver to the Stockholders’ Representative a statement showing Parent’s final reconciliation of Net Product Revenues for the Contingent Period, including the adjustment for Uncollected Invoices that remain uncollected as of June 30, 2006 and that are related to sales of the Product made any time during the Contingent Period (the “Final Contingent Calculation”). All statements delivered by Parent pursuant to this Section 1.9(a) shall be certified by Parent’s Chief Financial Officer and shall be accompanied by schedules and work papers providing reasonable support for the calculations contained in such statements. The Stockholders’ Representative may distribute these statements to any Stockholder requesting these statements, any Person who is assisting the Stockholders’ Representative in connection Escrow Amount with the calculation and verification of the Quarterly Contingent Calculation or the Final Contingent Calculation or any other Person if required by Applicable Law, provided that such Stockholder or other Person has agreed to be bound by the confidentiality obligations set forth in Section 4.4.
(b) The Stockholders’ Representative may cause an audit to be made of those books and records of Parent and the Surviving Corporation that are necessary to review and audit the statements delivered pursuant to Section 1.9(a) and the Quarterly Contingent Calculation and the Final Contingent Calculation; provided, however, the Stockholders’ Representative shall have no right to audit the same quarterly period more than one time. Any such audit shall be conducted only by an independent certified accountant selected by the Stockholders’ Representative and reasonably acceptable to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent’s and the Surviving Corporation’s offices and in such a manner so as not to unreasonably interfere with Parent’s and the Surviving Corporation’s normal business activities. Parent agrees to permit, and to cause the Surviving Corporation to permit, such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of Parent and the Surviving Corporation that are necessary or advisable to review and audit the Quarterly Contingent Calculation, or the Final Contingent Calculation, as applicable. Neither the Stockholders’ Representative nor such auditors will have the right to review or audit any other books and records of Parent and the Surviving Corporation. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by less than $100,000 or that Parent overstated aggregate Net Product Revenues for the periods audited, the Stockholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by $100,000 or more, Parent shall pay for the reasonable third party costs and expenses of such audit.
(c) Subject to Section 8.6 (Right of Off-Set), no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, beginning with the first quarter during the Contingent Period in which the cumulative Net Product Revenues since the beginning of the Contingent Period exceed an aggregate of Ten Million Dollars ($10,000,000), Parent shall pay the Contingent Merger Consideration, if any, for such fiscal quarter to the Payment Exchange Agent for distribution to the Stockholders; provided, however, that Parent may withhold from the Contingent Merger Consideration payment for the fiscal quarter ending December 31, 2005 an amount equal to the Contingent Merger Consideration that would otherwise by payable for such quarter multiplied by a fraction, the numerator of which will be 150% of the dollar amount of cumulative Uncollected Invoices related to sales of the Product through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period, and the denominator of which will be the cumulative Net Product Revenues through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period. Subject to Section 8.6 (Right of Off-Set), within fifteen (15) days following final determination Business Days of the Final receipt by the Surviving Corporation of the applicable Payment Schedule after Milestone #1 has been achieved that shows how the First Contingent Calculation pursuant Merger Consideration is to be allocated and the Exchange Agent shall disburse such funds as set forth in Section 1.9(a) 4.5. Notwithstanding the foregoing, if the Surviving Corporation does not achieve Milestone #1 on or prior to January 1, 2005 or if the Payout Percentage is equal to zero percent (b0%), Parent the First Contingent Per Share Amount and the First Contingent Merger Consideration shall pay be zero (0);
(ii) If the balance Surviving Corporation achieves Milestone #2, the "Second Contingent Per Share Amount" shall be the amount in cash equal to (x) $25,000,000 divided by (y) the number of Fully Diluted Shares, without interest. The Surviving Corporation will deposit the sum of $25,000,000 with the Exchange Agent within fifteen (15) Business Days of the receipt by the Surviving Corporation of the applicable Payment Schedule after Milestone #2 has been achieved that shows how the Second Contingent Merger ConsiderationConsideration is to be allocated and the Exchange Agent shall disburse such funds as set forth in Section 4.5. Notwithstanding the foregoing, if anythe Surviving Corporation does not achieve Milestone #2 on or prior to January 1, owed hereunder 2008, the Second Contingent Per Share Amount and the Second Contingent Merger Consideration shall be zero (0);
(iii) If the Surviving Corporation achieves Milestone #3, the "Third Contingent Per Share Amount" shall be the amount in cash equal to (x) $50,000,000 divided by (y) the number of Fully Diluted Shares, without interest. The Surviving Corporation will deposit the sum of $50,000,000 with the Exchange Agent within fifteen (15) Business Days of the receipt by the Surviving Corporation of the applicable Payment Schedule after Milestone #3 has been achieved that shows how the Third Contingent Merger Consideration is to be allocated and the Exchange Agent shall disburse such funds as set forth in Section 4.5. Notwithstanding the foregoing, if the Surviving Corporation does not achieve Milestone #3 on or prior to January 1, 2008, the Third Contingent Per Share Amount and the Third Contingent Merger Consideration shall be zero (0);
(iv) If the Surviving Corporation achieves Milestone #4, the "Fourth Contingent Per Share Amount" shall be the amount in cash equal to (x) $50,000,000 less the IP Indemnity Amount divided by (y) the number of Fully Diluted Shares, without interest. The Surviving Corporation will deposit the sum of $25,000,000 with the Exchange Agent within fifteen (15) Business Days of the receipt by the Surviving Corporation of the applicable Payment Schedule after Milestone #4 has been achieved that shows how such $25,000,000 payment is to be allocated and the Exchange Agent shall disburse such funds as set forth in Section 4.5. In addition, the Surviving Corporation will deposit the sum of $25,000,000 plus one year of interest at the Applicable Rate less the IP Indemnity Amount with the Exchange Agent within fifteen (15) Business Days of the receipt by the Surviving Corporation of the Payment Schedule after the IP Representation Expiry Date that shows how such amount is to be allocated (it being understood that the Shareholders' Agent will tender such Payment Schedule upon receipt of notification from the Surviving Corporation of such amount, which the Surviving Corporation will deliver to the Payment Shareholders' Agent for distribution as soon as practicable following the IP Representation Expiry Date) and the Exchange Agent shall disburse such funds as set forth in Section 4.5. Notwithstanding the foregoing, if the Surviving Corporation does not achieve Milestone #4 on or prior to January 1, 2009 the Stockholders.Fourth Contingent Per Share Amount and the Fourth Contingent Merger Consideration shall be zero (0);
Appears in 1 contract
Samples: Merger Agreement (Ev3 Inc.)
Contingent Merger Consideration. As additional consideration for Subject to the Merger terms and conditions of this Agreement, including the set-off rights contemplated by Article X, the Company Investors holding Company Shares (including Rollover Shares), Cash-Out Options, BSA Escrowed Options and/or Warrants at the Effective Time (subject to Section 3.02(h), the “Eligible Earnout Recipients”) (but not the holders of Options other than Cash-Out Options or BSA Escrowed Options) may become entitled to receive additional Merger Consideration if the Revenues of the Core Business during the four Fiscal Years of the Company ending on December 31, 2014 exceed certain specified targets, subject to potential acceleration upon certain events as provided below in this Section 3.02; provided, however, that, notwithstanding anything in this Agreement to the contrary, payments of Contingent Merger Consideration with respect to BSA Escrowed Options that have not satisfied the conditions set forth in this Section 1.9the BSA Unvested Option Escrow Agreement prior to December 31, Section 1.13 2011 shall be reallocated among the Eligible Earnout Recipients (Dissenting Sharesother than the holder(s) and Section 8.6 (Right of Off-Set), Parent shall make additional payments as set forth in this Section 1.9 (the “Contingent Merger Consideration”such BSA Escrowed Options) to the Payment Agent for distribution extent payable under this Section 3.02. Notwithstanding anything to those the contrary contained herein, it is acknowledged and agreed that the Rollover Stockholders who are not otherwise Dissenting Stockholders an amount equal to (A) the product Eligible Earnout Recipients by virtue of the Net Product Revenues for the period beginning on July 5, 2004 and ending on December 31, 2005 (the “Contingent Period”) multiplied by four (4), less (B) Forty Million Dollars ($40,000,000); provided however, that the aggregate Merger Consideration shall not exceed Two Hundred Fifty Million Dollars ($250,000,000).
(a) Parent shall deliver quarterly to the Stockholders’ Representative, no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, a statement with reasonable detail reflecting Parent’s calculation of (i) Net Product Revenues for the preceding fiscal quarter, without adjustment for any Uncollected Invoices, (ii) the adjustment for Uncollected Invoices related to sales provisions of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period, Contribution Agreement and (iii) the Contingent Merger Consideration payable for such quarter, which shall be based on Net Product Revenues treated as such for the preceding fiscal quarter, less Uncollected Invoices related to sales purposes of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period; provided, however, that there shall be no deduction for Uncollected Invoices with respect to the first quarter of the Contingent Period. (the “Quarterly Contingent Calculation”)calculations made hereunder. For the avoidance of doubt, any Uncollected Invoices for which a prior adjustment was made but subsequently collected it is hereby stated and acknowledged that the Earnout Payment Amounts that may become payable to Eligible Earnout Recipients under this Section 3.02 will be added to Net Product Revenues for less than the quarter in which such previously Uncollected Invoices are collected. No later than July 15, 2006, Parent shall deliver to corresponding Earnout Notional Payment Amounts because the Stockholders’ Representative a statement showing Parent’s final reconciliation of Net Product Revenues for the Contingent Period, including the adjustment for Uncollected Invoices that remain uncollected as of June 30, 2006 and Eligible Earnout Recipients do not include Company Investors holding Options that are related to sales of the Product made any time during the Contingent Period (the “Final Contingent Calculation”). All statements delivered be assumed by Parent pursuant to this in accordance with Section 1.9(a) shall be certified by Parent’s Chief Financial Officer 2.08(b)(i), but the definitions of Per Share Earnout Payment Amount, Per Share Earnout Acceleration Amount, Per Share Earnout Standard Payment Amount and shall be accompanied by schedules and work papers providing reasonable support for the calculations contained in such statements. The Stockholders’ Representative may distribute these statements to any Stockholder requesting these statements, any Person who is assisting the Stockholders’ Representative in connection with the calculation and verification of the Quarterly Contingent Calculation or the Final Contingent Calculation or any other Person if required by Applicable Law, provided Per Share Elective Termination Amount each includes all Options (including those that such Stockholder or other Person has agreed are to be bound assumed by the confidentiality obligations set forth Parent in accordance with Section 4.42.08(b)(i)) in its denominator.
(b) The Stockholders’ Representative may cause an audit to be made of those books and records of Parent and the Surviving Corporation that are necessary to review and audit the statements delivered pursuant to Section 1.9(a) and the Quarterly Contingent Calculation and the Final Contingent Calculation; provided, however, the Stockholders’ Representative shall have no right to audit the same quarterly period more than one time. Any such audit shall be conducted only by an independent certified accountant selected by the Stockholders’ Representative and reasonably acceptable to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent’s and the Surviving Corporation’s offices and in such a manner so as not to unreasonably interfere with Parent’s and the Surviving Corporation’s normal business activities. Parent agrees to permit, and to cause the Surviving Corporation to permit, such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of Parent and the Surviving Corporation that are necessary or advisable to review and audit the Quarterly Contingent Calculation, or the Final Contingent Calculation, as applicable. Neither the Stockholders’ Representative nor such auditors will have the right to review or audit any other books and records of Parent and the Surviving Corporation. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by less than $100,000 or that Parent overstated aggregate Net Product Revenues for the periods audited, the Stockholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by $100,000 or more, Parent shall pay for the reasonable third party costs and expenses of such audit.
(c) Subject to Section 8.6 (Right of Off-Set), no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, beginning with the first quarter during the Contingent Period in which the cumulative Net Product Revenues since the beginning of the Contingent Period exceed an aggregate of Ten Million Dollars ($10,000,000), Parent shall pay the Contingent Merger Consideration, if any, for such fiscal quarter to the Payment Agent for distribution to the Stockholders; provided, however, that Parent may withhold from the Contingent Merger Consideration payment for the fiscal quarter ending December 31, 2005 an amount equal to the Contingent Merger Consideration that would otherwise by payable for such quarter multiplied by a fraction, the numerator of which will be 150% of the dollar amount of cumulative Uncollected Invoices related to sales of the Product through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period, and the denominator of which will be the cumulative Net Product Revenues through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period. Subject to Section 8.6 (Right of Off-Set), within fifteen (15) days following final determination of the Final Contingent Calculation pursuant to Section 1.9(a) or (b), Parent shall pay the balance of the Contingent Merger Consideration, if any, owed hereunder to the Payment Agent for distribution to the Stockholders.
Appears in 1 contract
Contingent Merger Consideration. As additional consideration for the Merger and subject to the conditions set forth in this Section 1.9, Section 1.13 (Dissenting Shares) and Section 8.6 (Right of Off-Set), Parent shall make additional payments as set forth in this Section 1.9 (the “Contingent Merger Consideration”) to the Payment Agent for distribution to those Stockholders who are not otherwise Dissenting Stockholders an amount equal to (A) the product of the Net Product Revenues for the period beginning on July 5, 2004 and ending on December 31, 2005 (the “Contingent Period”) multiplied by four (4), less (B) Forty Million Dollars ($40,000,000); provided however, that the aggregate Merger Consideration shall not exceed Two Hundred Fifty Million Dollars ($250,000,000).
(a) Parent shall deliver quarterly to the Stockholders’ Representative, no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, a statement with reasonable detail reflecting Parent’s calculation of (i) Net Product Revenues for the preceding fiscal quarter, without adjustment for any Uncollected Invoices, (ii) the adjustment for Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period, and (iii) the Contingent Merger Consideration payable for such quarter, which shall be based on Net Product Revenues for the preceding fiscal quarter, less Uncollected Invoices related to sales of the Product during the fiscal quarter preceding the fiscal quarter for which Net Product Revenues are being calculated, if such quarter is within the Contingent Period; provided, however, that there shall be no deduction for Uncollected Invoices with respect to the first quarter of the Contingent Period. (the “Quarterly Contingent Calculation”). For the avoidance of doubt, any Uncollected Invoices for which a prior adjustment was made but subsequently collected will be added to Net Product Revenues for the quarter in which such previously Uncollected Invoices are collected. No later than July 15, 2006, 2.4.1 Parent shall deliver to the Stockholders’ Representative a statement showing promptly following the completion of the Parent’s final reconciliation of Net Product Revenues for the Contingent Period, including the adjustment for Uncollected Invoices that remain uncollected as of June 30, 2006 and that are related to sales of the Product made any time during the Contingent Period fiscal year 2012 audited financial reports (the “Final Contingent CalculationParent 2012 Audited Financials”) the Parent 2012 Audited Financials and Parent’s calculation in accordance with GAAP and without regard to deferrals or other adjustments required by purchase accounting of the Company’s revenue from its Guardian product/services in fiscal year 2012 (the “2012 Revenue Amount”). All statements delivered by Parent pursuant shall use commercially reasonable efforts to this Section 1.9(a) make such deliveries on or before March 10, 2013. The First Contingent Merger Consideration shall be certified by Parent’s Chief Financial Officer and earned if the 2012 Revenue Amount is at least $5,300,000 (the “First Contingent Merger Consideration Condition”).
2.4.2 Parent shall be accompanied by schedules and work papers providing reasonable support for the calculations contained in such statements. The Stockholders’ Representative may distribute these statements deliver to any Stockholder requesting these statements, any Person who is assisting the Stockholders’ Representative in connection with promptly following the calculation and verification completion of the Quarterly Contingent Calculation Parent’s fiscal year 2013 audited financial reports (the “Parent 2013 Audited Financials”) the Parent 2013 Audited Financials and Parent’s calculation in accordance with GAAP and without regard to deferrals or the Final Contingent Calculation or any other Person if adjustments required by Applicable Lawpurchase accounting of the Company’s revenue from its Guardian product/services in fiscal year 2013 (the “2013 Revenue Amount”). Parent shall use commercially reasonable efforts to make such deliveries on or before March 10, provided that such Stockholder or other Person has agreed to 2014. The Second Contingent Merger Consideration shall be bound by earned if the confidentiality obligations set forth in Section 4.42013 Revenue Amount is at least $8,400,000 (the “Second Contingent Merger Consideration Condition”).
(b) The 2.4.3 If the Stockholders’ Representative may cause an audit does not agree with Parent’s calculation of the 2012 Revenue Amount or the 2013 Revenue Amount then (i) the Stockholders’ Representative may, within thirty (30) days after receipt of the relevant Parent Audited Financials, deliver a notice to be made Parent (the “Dispute Notice”) setting forth the Stockholders’ Representative’s calculation of those books and records of Parent and the Surviving Corporation that are necessary to review and audit the statements delivered pursuant to Section 1.9(a) and the Quarterly Contingent Calculation and the Final Contingent Calculation; such Revenue Amount (provided, howeverthat, the Stockholders’ Representative shall have no right be entitled to audit deliver the same quarterly period more than one time. Any such audit shall be conducted Dispute Notice only by an independent certified accountant selected by if the Revenue Amount reflected therein, if correct, would result in the payment of the relevant Contingent Merger Consideration), and (ii) if the Stockholders’ Representative and reasonably acceptable delivers the Dispute Notice to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent’s and the Surviving Corporation’s offices and in such a manner so as not to unreasonably interfere with Parent’s and the Surviving Corporation’s normal business activities. Parent agrees to permit, and to cause the Surviving Corporation to permit, such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of then Parent and the Surviving Corporation that are necessary or advisable to review and audit the Quarterly Contingent Calculation, or the Final Contingent Calculation, as applicable. Neither the Stockholders’ Representative nor shall confer and cooperate in good faith to reach agreement on such auditors will have the right to review or audit any other books and records of Revenue Amount. If Parent and the Surviving Corporation. In the event any Stockholders’ Representative do not resolve such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by less than $100,000 or that Parent overstated aggregate Net Product Revenues for the periods audited, the Stockholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals that Parent understated aggregate Net Product Revenues for the periods audited by $100,000 or more, Parent shall pay for the reasonable third party costs and expenses of such audit.
(c) Subject to Section 8.6 (Right of Off-Set), no later than forty-five (45) days following the last day of each fiscal quarter of Parent during the Contingent Period, beginning with the first quarter during the Contingent Period in which the cumulative Net Product Revenues since the beginning of the Contingent Period exceed an aggregate of Ten Million Dollars ($10,000,000), Parent shall pay the Contingent Merger Consideration, if any, for such fiscal quarter to the Payment Agent for distribution to the Stockholders; provided, however, that Parent may withhold from the Contingent Merger Consideration payment for the fiscal quarter ending December 31, 2005 an amount equal to the Contingent Merger Consideration that would otherwise by payable for such quarter multiplied by a fraction, the numerator of which will be 150% of the dollar amount of cumulative Uncollected Invoices related to sales of the Product through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period, and the denominator of which will be the cumulative Net Product Revenues through the end of Parent’s fifth (5th) fiscal quarter during the Contingent Period. Subject to Section 8.6 (Right of Off-Set), disputed Revenue Amount within fifteen (15) days following final determination after Parent’s receipt of the Final Contingent Calculation pursuant Dispute Notice, then the remaining disputed items and amounts shall be submitted to Section 1.9(aa nationally-recognized independent accounting firm mutually agreed to by Parent and the Stockholders’ Representative for resolution (the “Accountant”). The revised Revenue Amount set forth in such Accountant’s written report (which report shall be delivered promptly, but in no event later than fifteen (15) or days, after the Accountant is engaged) shall be final, conclusive and binding on the parties. The fees, costs and expenses of the Accountant shall be borne by the Stockholders’ Representative (b)on behalf of the Company Holders) in the event that the Accountant concludes that the disputed Merger Consideration Condition has not been met, and by Parent if the Accountant concludes that the disputed Merger Consideration Condition has been met.
2.4.4 Parent shall pay the balance allocated portion of the First Contingent Merger Consideration, if anythe First Contingent Merger Consideration Condition has been met, owed hereunder and the Second Contingent Merger Consideration, if the Second Contingent Merger Consideration Condition has been met, to each Company Holder that has complied with the Payment Agent for distribution exchange procedures set forth in Section 2.11.1, promptly following the end of the Escrow Period, net of the amounts of (a) all paid indemnity claims and (b) all then-pending indemnity claims, until such claims are finally resolved.
2.4.5 From the Closing Date until such time as the satisfaction or achievement of the Second Contingent Merger Consideration Condition or the non-satisfaction or non-achievement of the Second Contingent Merger Consideration Condition, as applicable, Parent shall not interfere with the practices, policies or decisions of the Company where such interference is demonstrated by clear and convincing evidence to have materially impeded the StockholdersCompany’s achievement of target revenue that satisfy the First Contingent Merger Consideration Condition or Second Contingent Merger Consideration Condition.
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Samples: Merger Agreement (Digimarc CORP)
