Common use of Contingent Payments Clause in Contracts

Contingent Payments. (a) As additional consideration for ARCO Alaska and UTP Holdings, Purchaser shall pay to ARCO, on a monthly basis, Sliding Scale Payments (each, an "SSP") for production from the Producing Properties from the Effective Time through December 31, 2004; PROVIDED, HOWEVER, that Purchaser's total obligation to pay SSPs to Seller shall in no event exceed a total of $500,000,000.00. (b) Each SSP shall equal the product of (i) WTI Price minus $25.00 and (ii) Net Revenue Interest Barrels; provided, however, if the SSP for any given month is a negative number or is zero, no SSP shall be payable for that month. (c) For purposes of this Section 2.8: (i) "WTI PRICE" shall mean the average, rounded to four decimal places, of the mid-point Xxxxxxx second line as quoted in Xxxxx'x for WTI for each business day during the relevant month; IT BEING UNDERSTOOD that (A) the mid-point Xxxxxxx second line for any business day shall be equal to the average of the high and the low Xxxxxxx second line as quoted in Xxxxx'x for WTI for such business day and (B) for purposes of this definition only, the term "business day" shall mean any day on which a Xxxxxxx second line is quoted in Xxxxx'x for WTI, and (ii) "NET REVENUE INTEREST BARRELS" shall mean total barrels of hydrocarbon liquids produced from the Producing Properties delivered into TAPS Pump Station No. 1 during the relevant month, as reported in the relevant unit operator's off-take reports filed with the State of Alaska, but not including any barrels attributable to royalty obligations except for any royalty obligations which the owner of the Producing Properties may voluntarily incur subsequent to the First Closing. For the avoidance of doubt, any transfer of any Producing Property or part thereof by Purchaser to any Person after the First Closing shall not affect the calculations to be made under this Section 2.8.

Contingent Payments. (ai) As additional consideration If the EBITDA of the Company for ARCO Alaska the fiscal year ending February 3, 2001 or February 2, 2002, respectively, meets or exceeds $45.3 million and UTP Holdings$54.3 million, Purchaser respectively (the "Management EBITDA Targets"), then Buyer shall pay to ARCOthe Sellers, to the accounts set forth on the Payment Schedule (or to such other account as may be designated by any Seller at least two business days before the date on which such payment is due), $9,664,831 in immediately available funds within 120 days after the end of any such fiscal year in which the applicable Management EBITDA Target is met or exceeded (each such payment, a monthly basis"Contingent Payment," and the Contingent Payments plus the Purchase Price shall be the "Total Purchase Price"). Set forth in Section 1.2(d) of the Sellers' Disclosure Letter are the respective amounts to be paid to each Seller in connection with any Contingent Payment. It is understood and agreed that if the applicable Management EBITDA Target for any one fiscal year is not met, Sliding Scale Payments (each, an "SSP") for production from the Producing Properties from amount of the Effective Time through December 31, 2004; PROVIDED, HOWEVER, that Purchaser's total obligation Contingent Payment in respect of such fiscal year shall be forfeited in its entirety and shall not be carried forward to pay SSPs to Seller shall in no event exceed a total of $500,000,000.00the next succeeding fiscal year. (b) Each SSP shall equal the product of (i) WTI Price minus $25.00 Through the fiscal year ending February 2, 2002, the Company shall maintain its accounting books and records for purposes of tracking EBITDA for purposes of Section 1.2(d), in accordance with GAAP applied in a manner consistent with the Company's pre-Closing Date practices. Without limiting the generality of the foregoing, the Sellers and Buyer agree that, without the consent of the Sellers' Representative for purposes hereof, no changes shall be made in any reserve or other account, and no special charges shall be taken, except as a result of specific events or developments occurring after the Closing Date, and in such event, only in a manner consistent with GAAP and past practices. The Company shall deliver to the Sellers' Representative within 120 days after the end of each fiscal year to and including the year ending February 2, 2002, the Company's audited financial statements, together with a written audit report certified by the Company's independent certified public accountants (the "Company's Auditors"). The Company shall deliver to the Sellers' Representative together with the audited financial statements a certificate of the chief financial officer of the Company (or another officer of the Company not a Seller or an Affiliate of a Seller) stating that such statements have been prepared in accordance with GAAP applied on a basis consistent with the financial statements of the Company for the year ending January 30, 1999 (the "CFO's Certificate"). In addition, the Company shall use its reasonable best efforts to cause the Company's Auditors to make available to the Sellers' Representative the work papers used in preparation of the information set forth above in sufficient detail to enable the Sellers' Representative to verify the information set forth above subject to the Sellers' Representative's execution of customary access letters required by the Company's Auditors. The Company's calculation of EBITDA shall be subject to review by members of senior management of the Buyer who are neither Sellers nor Affiliates of Sellers. (ii) Net Revenue Interest Barrels; providedThe Company shall use its reasonable best efforts to cause the Company's Auditors to make all of its work papers and other relevant documents in connection with such audit and calculations available to the Sellers' Representative and any independent accounting firm chosen by the Sellers' Representative, howeverand shall make appropriate representatives of the Company's Auditors available for reasonable inquiry by the Sellers' Representative and such accounting firm, if subject to execution by the SSP Sellers' Representative of customary access letters required by the Company's Auditors. If the Sellers' Representative notifies the Company in writing that it does not agree with the manner of calculation of EBITDA for any given month is either the fiscal year ended February 3, 2001 or February 2, 2002, and identifies with reasonable specificity the reasons for such objection, within 30 business days after the delivery of such audit report, the Sellers' Representative and the Company shall promptly select a negative number or is zero, no SSP mutually acceptable accounting firm of nationally recognized reputation other than the Company's Auditors (the "Additional Auditor") to act as the arbitrator of such dispute. Any such arbitration shall be payable for that month. (c) For purposes conducted in New York, New York. If the parties are not able to agree to an Additional Auditor, then the office of the American Arbitration Association, located in New York City, shall select a firm of independent public accountants of nationally recognized reputation to serve as the Additional Auditor. The Additional Auditor shall be requested to act promptly to resolve any dispute in accordance with the terms of this Section 2.8: (i) "WTI PRICE" Agreement, it being understood that the sole issues for the Additional Auditor shall mean the average, rounded to four decimal places, of the mid-point Xxxxxxx second line as quoted in Xxxxx'x for WTI for each business day during the relevant month; IT BEING UNDERSTOOD that be whether EBITDA was (A) derived from financial statements which were prepared in accordance with GAAP, applied in a manner consistent with the midCompany's pre-point Xxxxxxx second line for any business day shall be equal to the average of the high and the low Xxxxxxx second line Closing Date practices, as quoted provided in Xxxxx'x for WTI for such business day Section 1.2(e)(i) and (B) for purposes consistent with the definition of EBITDA herein, and to issue its written decision within thirty days after the appointment of such Additional Auditor, which decision shall be final, binding and conclusive on both the Buyer and the Sellers. The Buyer and the Sellers' Representative shall cooperate with the Additional Auditor in connection with this definition onlySection 1.2. Without limiting the generality of the foregoing, the term "business day" Buyer and the Sellers' Representative shall mean any day on which a Xxxxxxx second line is quoted in Xxxxx'x for WTIeach provide, or cause to be provided to the Additional Auditor, all information and records, and (ii) "NET REVENUE INTEREST BARRELS" shall mean total barrels of hydrocarbon liquids produced from to make available at the Producing Properties delivered into TAPS Pump Station No. 1 during the relevant montharbitration proceeding all personnel, as reported in are reasonably necessary to permit the relevant unit operator's off-take reports filed with the State of Alaska, but not including Additional Auditor to resolve any barrels attributable disputes pursuant to royalty obligations except for any royalty obligations which the owner this Section 1.2. The expenses of the Producing Properties may voluntarily incur subsequent to the First Closing. For the avoidance of doubt, Additional Auditor in resolving any transfer of any Producing Property or part thereof by Purchaser to any Person after the First Closing shall not affect the calculations to be made disputes under this Section 2.81.2 shall be borne equally by the Buyer on the one hand and the Sellers on the other hand.

Contingent Payments. Subject to reduction by the amount of ------------------- any PAH Participation Adjustment or 3 Year Earndown as provided below, the Contingent Payment on each Pending Management Contract shall be calculated and paid at such time as the hotel which is the subject of such Pending Management Contract has been open for business for twenty-four (a24) As additional consideration for ARCO Alaska months, but not earlier than the Third Anniversary nor later than the Fifth Anniversary except as otherwise provided below, and UTP Holdings, Purchaser shall pay be equal to ARCO, on a monthly basis, Sliding Scale Payments (each, an "SSP") for production from the Producing Properties from the Effective Time through December 31, 2004; PROVIDED, HOWEVER, that Purchaser's total obligation to pay SSPs to Seller shall in no event exceed a total of $500,000,000.00. (b) Each SSP shall equal the product of (i) WTI Price minus $25.00 the percentage set forth in Schedule 1.05(b)(i) for such Pending Management Contract of the annualized hotel ------------------- management fees accrued and payable to OpCo or any affiliate of OpCo, as manager, under such Pending Management Contract for the second full year of operations thereof multiplied by (ii) Net Revenue Interest Barrelseither (A) 7.0, if the terms of the applicable Pending Management Contract provide that it cannot be terminated by any party other than the manager for a period of at least 10 but less than 15 years from the date when normal operations and payments to the manager begin to accrue thereunder, or (B) 9.0, if the terms of the applicable Pending Management Contract provide that it cannot be terminated by any party other than the manager for a period of at least 15 years from the date when normal operations and payments to the manager begin to accrue thereunder (for all purposes of this Section 1.05, "normal operation" will be deemed to begin when the applicable hotel opens for business if there is no so-called "soft opening" and otherwise upon conclusion of a reasonable soft opening period); provided, however, if that, -------- ------- notwithstanding the SSP foregoing, if, as of the Fifth Anniversary, a hotel which is the subject of a Pending Management Contract is open for any given business but has not been open for business for the twenty-four (24) month is a negative number or is zeroperiod immediately preceding the Fifth Anniversary, no SSP then the Contingent Payment shall be payable calculated as of the date on which such hotel has been open for that month.business for twenty-four (24) months and paid as provided below. A Pending Management Contract shall be deemed not to be subject to termination by any party other than the manager if it can only be terminated by such other party (cA) For purposes for default by the manager, (B) except as otherwise provided below with respect to a Pending Management Contract on the Grand Bay Philadelphia, as a result of the sale of the applicable hotel to a third party other than REIT or any affiliate of REIT as long as the manager receives a termination fee as a result of such sale in an amount at least equal to the Minimum Termination Fee Amount (as defined below), (C) as a result of the sale of the applicable hotel to a governmental authority pursuant to condemnation or as a result of the sale of the applicable hotel pursuant to foreclosure (or deed in lieu of foreclosure), (D) as a result of a casualty to the applicable hotel, or (E) as a result of the failure of the manager to meet reasonable performance criteria specified in such Pending Management Contract. Notwithstanding the foregoing, the Partnership agrees that a management contract on the hotel property to be known as the Grand Bay Philadelphia shall not be disqualified as a Pending Management Contract solely by reason of its failure to include a termination fee on sale at least equal to the Minimum Termination Fee Amount as long as (x) such termination fee on sale is at least equal to the termination fee set forth on Schedule 1.05(b)(ii) hereto and (y) it is agreed that the 7.0 multiple set forth -------------------- in clause (ii)(A) above applies notwithstanding the term of such management contract as long as such term is at least ten (10) years. If at any time the Management Contract for the Philadelphia Grand Bay is amended to provide for a termination fee on sale at least equal to the Minimum Termination Fee, then the 9.0 multiple set forth in clause (ii)(B) shall apply as long as the term of such management contract is at least fifteen (15) years from the date on which normal operations and payments to the manager begin (or began) to accrue thereunder, and an additional Contingent Payment (calculated as herein provided) in respect of the additional 2.0 multiple shall be due to the Stockholders within ten (10) business days after OpCo receives notice of such amendment to such management contract together with a copy of such amendment, consistent with the remaining provisions of this Section 2.8: 1.05. If a Contingent Payment, less the 3 Year Earndown (i) "WTI PRICE" shall mean or by the average, rounded to four decimal places, unapplied portion of the mid-point Xxxxxxx second line as quoted 3 Year Earndown if portions of the 3 Year Earndown have previously been applied against Contingent Payments) and any applicable PAH Participation Adjustment, is a positive number, the Surviving Corporation shall pay to the Stockholders in Xxxxx'x for WTI for each accordance with the penultimate paragraph of Section 1.03(a), their proportionate shares of the Contingent Payment within ten (10) business day during days after the relevant month; IT BEING UNDERSTOOD that (A) the mid-point Xxxxxxx second line for any business day shall be determination thereof in an aggregate number of shares of OpCo Preferred Stock equal to the average amount of the high and Contingent Payment divided by the low Xxxxxxx second line Current Market Price of a Paired Share as quoted in Xxxxx'x for WTI for such business day and (B) for purposes of this definition only, the term "business day" shall mean any day on which a Xxxxxxx second line is quoted in Xxxxx'x for WTI, and (ii) "NET REVENUE INTEREST BARRELS" shall mean total barrels of hydrocarbon liquids produced from the Producing Properties delivered into TAPS Pump Station No. 1 during the relevant month, as reported in the relevant unit operator's off-take reports filed with the State of Alaska, but not including any barrels attributable to royalty obligations except for any royalty obligations which the owner of the Producing Properties may voluntarily incur subsequent date of such determination. Notwithstanding anything to the First Closing. For contrary set forth herein, in no event shall the avoidance of doubt, any transfer of any Producing Property or part thereof by Purchaser to any Person after the First Closing shall not affect the calculations to be made under this Section 2.8aggregate Contingent Payments exceed $18,000,000.

Contingent Payments. Seller shall be entitled to additional ------------------- consideration hereunder (the "Contingent Payment"), which shall be payable as follows: (a) As additional consideration for ARCO Alaska and UTP Holdings, Purchaser shall pay to ARCO, on a monthly basis, Sliding Scale Payments (each, an "SSP") for production from the Producing Properties from the Effective Time through December 31, 2004; PROVIDED, HOWEVER, that Purchaser's total obligation to pay SSPs to Seller shall be entitled to an annual payment in no event an amount (not to exceed a total $500,000 per year) equal to 25% of $500,000,000.00. (b) Each SSP shall equal the product of difference between (i) WTI Price minus $25.00 the annual AmClyde EBITDA (as defined below) and (ii) Net Revenue Interest Barrels; provided, however$7,500,000 (but only to the extent such difference is a positive number) (the "EBITDA Contingent Payment"). Such EBITDA Contingent Payment, if the SSP for any given month is a negative number or is zeroany, no SSP shall be due and payable within ninety (90) days following the conclusion of Buyer's fiscal year-end and shall continue each year for that month. a period of six (c6) fiscal years, with the first payment, if any, based on Buyer's operations for the fiscal year ended March 31, 1999. For purposes of this Section 2.8: hereof, (i) "WTI PRICEEBITDA" shall mean net income before interest, taxes, depreciation and amortization (not taking into account, however, any amortization or depreciation which results from the average, rounded to four decimal places, transaction contemplated hereby or a write-up of the mid-point Xxxxxxx second line assets by Buyer as quoted in Xxxxx'x for WTI for each business day during the relevant month; IT BEING UNDERSTOOD that (Aa result thereof) the mid-point Xxxxxxx second line for any business day shall be equal to the average of the high and the low Xxxxxxx second line as quoted in Xxxxx'x for WTI for such business day and (B) for purposes of this definition only, the term "business day" shall mean any day on which a Xxxxxxx second line is quoted in Xxxxx'x for WTI, and (ii) "NET REVENUE INTEREST BARRELSAmClyde EBITDA" shall mean total barrels of hydrocarbon liquids produced Buyer's EBITDA that is generated from the Producing Properties delivered into TAPS Pump Station Noconsolidated operation of AmCane and the Business utilizing the Assets, but shall specifically exclude any proceeds from the sale of the AmCane. 1 during Buyer agrees that, for the relevant monthtime period beginning with the date of Closing and ending on March 31, 2004, Buyer (i) will operate the Business as reported a separate division or subsidiary of Parent, (ii) will not include in the relevant unit operator's off-take reports filed with Business any expenses (including general overhead expenses of Parent or Buyer or any affiliate of either such entity) not arising from the State of Alaska, but not including any barrels attributable to royalty obligations except for any royalty obligations which the owner operation of the Producing Properties may voluntarily incur subsequent Business, (iii) will provide Seller with separate financial statements of such division or subsidiary for the fiscal years 1999 through 2004 and, on the request of and at the sole expense of Seller, will submit any such financial statement to an audit by a recognized accounting firm engaged by Seller and reasonably acceptable to Buyer, and (iv) will include in the First Closing. For Business all revenues of the avoidance of doubt, any transfer of any Producing Property or part thereof type currently generated by Purchaser to any Person after the First Closing shall not affect the calculations to be made under this Section 2.8Business.