Payment Calculation District shall pay Contractor at a rate of $ per . District shall pay Contractor as described in attached Exhibit A
Earn-Out Payment (a) If, as of the close of business on September 30, 2019, the sum of (i) the total revenue (determined in accordance with GAAP) of Purchaser and its Affiliates (including the Company) resulting from sales of ECUs from the Closing up to and including September 30, 2019 (the “Product Revenue”) and (ii) the total dollar value of committed customer orders received by Purchaser and its Affiliates (including the Company) for ECUs that have been scheduled for delivery to such customer and represented by valid purchase orders as of the close of business on September 30, 2019 (the “Product Orders”) equals or exceeds $86,700,000 (the “Earn Out Benchmark”), Purchaser shall pay to Seller an amount of $30,000,000; provided, however, that if the aggregate amount of the Product Revenue and the Product Orders is less than the Earn Out Benchmark, then Purchaser shall pay to Seller an amount equal to (i) $30,000,000 multiplied by (ii) the percentage of the Earn Out Benchmark represented by the aggregate amount of the Product Revenue and the Product Orders, all as more particularly set forth in this Section 2.7. Any payment due under this Section 2.7 is referred to herein as the “Earn Out Payment” and is subject to Purchaser’s right of offset set forth in Section 10.3(i).
(b) Within 60 days of the expiration of the Earn Out Period, Purchaser shall deliver to Seller, with reasonable detail, its calculation of the Earn Out Payment, if any, and the components thereof. The Earn Out Payment shall be determined and calculated in accordance with GAAP. Following receipt of the calculation of the Earn Out Payment, if any, Seller shall be afforded a period of 30 days to review the same. To assist in any such review, Purchaser shall reasonably make available to Seller, upon request and during normal business hours, worksheets and other papers prepared in connection with the preparation of the calculation of the Earn Out Payment and the components thereof. At or before the end of the 30-day review period (the “Earn Out Review Period”), Seller shall either accept the calculation of the applicable Earn Out Payment or deliver to Purchaser a written notice disputing the same (a “Earn Out Dispute Notice”) setting forth a reasonable description of Seller’s objections and the amount of the adjustment to the Earn Out Payment which Seller believes should be made. Any items not identified within the Earn Out Dispute Notice shall be considered final and binding upon the Parties. If Purchaser’s calculation of the Earn Out Payment reflects that the Earn Out Payment is due to Seller and Seller objects in the Earn Out Dispute Notice that such calculated amount is too small, then, within five Business Days following Seller’s delivery of the Earn Out Dispute Notice, Purchaser shall pay to Seller Purchaser’s calculated amount of such Earn Out Payment by wire transfer of immediately available funds in accordance with instructions given by Seller to Purchaser, and the Parties shall proceed with the provisions of Section 2.7(c) as to the amount of the additional Earn Out Payment Seller believes is due to Seller. If no Earn Out Dispute Notice is delivered within the Earn Out Review Period, then the calculation of the Earn Out Payment shall be deemed to have been accepted by Seller.
(c) In the event that an Earn Out Dispute Notice is delivered in accordance with Section 2.7(b), Purchaser and Seller shall attempt in good faith to resolve the objections set forth therein within 30 days of Purchaser’s receipt of such Earn Out Dispute Notice. If Purchaser and Seller are unable to resolve all of the objections set forth in the Earn Out Dispute Notice within such 30-day period, any remaining objections related to the calculation of the Earn Out Payment shall be finally resolved by the Arbitrating Accountant who shall resolve any remaining disagreements in accordance with the provisions set forth in Sections 2.6(b), (c) and (d) mutatis mutandis. Purchaser and Seller shall fully cooperate with the Arbitrating Accountant. The decision of the Arbitrating Accountant shall be conclusive and binding upon the Parties, except in the case of manifest error.
(d) Upon final determination of the amount of the Earn Out Payment in accordance with Section 2.7(b) or Section 2.7(d) (the “Determination Date”), Purchaser shall pay to Seller the Earn Out Payment, as applicable, as finally determined within five Business Days of the Determination Date, by wire transfer of immediately available funds in accordance with instructions given by Seller to Purchaser.
(e) Notwithstanding anything herein to the contrary, if the Product Revenue following the Closing and prior to September 30, 2019 exceeds the Earn Out Benchmark, then Purchaser shall pay to Seller $30,000,000 within ten days after the end of the calendar month in which the Product Revenue first exceeds the Earn Out Benchmark, and thereafter no additional payments will be required pursuant to this Section 2.7. Any payment due under this Section 2.7(e) is subject to Purchaser’s right of offset set forth in Section 10.3(i).
(f) From the Closing Date until September 30, 2019 (the “Earn Out Period”), Purchaser covenants and agrees to the following: (i) Purchaser shall keep records sufficient to calculate the Earn Out Payment; (ii) upon Seller’s request during normal business hours, Purchaser shall reasonably make available to Seller and its advisors the records, worksheets and other supporting workpapers prepared in connection with the calculation of the Earn Out Payment for any period covered by this Agreement; (iii) neither Purchaser nor any of its Affiliates (including the Company) shall take any action that is primarily intended to impede Seller’s ability to earn the maximum Earn Out Payment; and (iv) Purchaser and its Affiliates (including the Company) shall operate the Business during the Earn Out Period in a commercially reasonable manner; provided, however, if the Earn Out Payment is paid to Seller prior to the expiration of the Earn Out Period as set forth in Section 2.7(e), Purchaser’s obligations set forth in this Section 2.7(f) shall terminate on the date the Earn Out Payment is paid to Seller. For purposes of this Section 2.7(f), “commercially reasonable manner” means, among other things, providing the Business with a level of administrative, development, maintenance, internal or outsourced manufacturing, quality, sales and marketing support that is consistent with the support currently being provided to the Business by Seller and providing the Business with working capital funding that is appropriate for a business of the Business’ size and industry.
Earn-Out In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers.
(a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015.
(i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.
(ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.
(iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers.
(b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00).
(c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers.
(d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.
Termination Date Determination Seller will not designate the Termination Date (as defined in the Receivables Sale Agreement), or send any written notice to Originator in respect thereof, without the prior written consent of the Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
Interest Calculation Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance.
Earnout (a) The Purchaser shall pay to the Shareholders earnout payments, each in an amount equal to seventy percent (70%) of Earnout Period Revenues generated in each Earnout Period, in accordance with this Section 3.6 (each such payment, an “Earnout Payment”). Notwithstanding the foregoing provisions of this Section 3.6(a), in no event shall the aggregate Earnout Payments payable hereunder be less than zero or greater than Nine Million Eight Hundred Thousand Dollars ($9,800,000).
(b) Within ninety (90) days following the end of the First Earnout Period and the Second Earnout Period, as the case may be, the Purchaser shall prepare and deliver to the Shareholders a report setting forth its calculation of the Earnout Payment for such applicable Earnout Period, including a statement of the Earnout Period Revenues for such applicable Earnout Period (the “Earnout Report”). The Purchaser shall provide a reasonable level of supporting documentation for the Earnout Payment and any additional information reasonably requested by the Shareholders related thereto together with the Earnout Report. The Earnout Payment for the applicable Earnout Period shall represent only a right to receive a cash payment from the Purchaser, subject to the terms set forth herein, and shall not be deemed an interest in any security or certificate or entitle the holders thereof to any rights of any kind other than as specifically set forth herein. No interest is payable with respect to any Earnout Payment to the extent timely paid when due.
(c) The Shareholders shall have thirty (30) days following receipt of the applicable Earnout Report delivered pursuant to Section 3.6(b) during which to notify the Purchaser of any dispute of any item contained therein or related thereto, which notice shall set forth in detail the basis for such dispute. The Purchaser and the Shareholders shall cooperate in good faith to resolve any such dispute as promptly as possible. Upon such resolution, a Final Earnout Report shall be prepared in accordance with the agreement of the Purchaser and the Shareholders and the calculation of the applicable Earnout Payment, if any, based thereon, shall constitute the applicable Final Earnout Payment and be final and binding upon the Parties. In the event the Shareholders do not notify the Purchaser of any such dispute within such thirty (30)-day period or notify the Purchaser within such period that they do not dispute any item contained therein, the applicable Earnout Report delivered pursuant to Section 3.6(b) shall constitute the Final Earnout Report with respect to such Earnout Period and the Purchaser’s calculation of the applicable Earnout Payment, if any, based thereon shall be final and binding upon the Parties.
(d) In the event the Purchaser and the Shareholders are unable to resolve any dispute regarding an Earnout Report delivered pursuant to Section 3.6(b) within thirty (30) days following the Purchaser’s receipt of notice of such dispute, such dispute shall be submitted to, and all issues having a bearing on such dispute shall be resolved by, an Accounting Referee. In resolving any such dispute, the Accounting Referee shall consider only those items or amounts in or related to the Earnout Report as to which the Shareholder has disagreed. The Accounting Referee’s determination of the Earnout Report and the Earnout Payment, if any, based thereon shall constitute the applicable Final Earnout Report and Final Earnout Payment and shall be final and binding on the Parties. The Parties shall direct the Accounting Referee to use commercially reasonable efforts to complete its work within thirty (30) days following its engagement. All fees and expenses of the Accounting Referee shall be shared equally by the Shareholders and the Purchaser.
(e) The Parties acknowledge that there is no assurance that the Shareholders will have the right to receive any Earnout Payment and Purchaser has not promised or projected any particular Earnout Payment. The earnout opportunity in this Section 3.6 is presented under the understanding that the Purchaser will have full control and direction over the Company and its business following the Closing, including decisions regarding strategic initiatives, management, legal structure, finance and accounting, marketing and branding and expenses. Notwithstanding the foregoing provisions of this Section 3.6(e), during the Earnout Period, the Purchaser shall not, nor shall it permit any of its Affiliates to, terminate the Earnout Contract and enter into a separate Contract with the Earnout Customer or any of its Affiliates for utilization management services for the purpose or effect of avoiding or reducing its obligations with respect to the Earnout Payments hereunder.
(f) All payments made pursuant to this Section 3.6 shall be treated by the Parties for tax purposes as adjustments to the Purchase Price, unless otherwise required by applicable Law.
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.
INDEPENDENT PRICE DETERMINATION 6.1 By signing and submitting this bid, the Bidder certifies that the prices in this bid have been arrived at independently, without consultation, communication or agreement, for the purpose of restricting competition, as to any matter relating to such prices with any other Bidder or with any competitor; unless otherwise required by law, the prices which have been quoted in this bid have not been knowingly disclosed by the Bidder prior to bid opening directly or indirectly to any other Bidder or to any competitor; no attempt has been made, or will be made, by the Bidder to induce any person or firm to submit, or not to submit, a bid for the purpose of restricting competition.
Earn-Out Payments (i) Pursuant to the Purchase Agreement, the WME Member or the Company, as applicable, are the obligors in respect of a portion of the Earn-Out Payment. Subject to Section 7.03(g)(ii), the Earn-Out Payments may be funded in any of the following manners (or any combination thereof) as determined by unanimous Board approval (provided that if unanimous Board approval is not obtained, the WME Member or the Company, as applicable, shall nevertheless be permitted to comply with their respective obligations to the Earn-Out Recipients under the Purchase Agreement): (A) for so long as the January Capital Member is a Member, a special cash distribution by the Company to the January Capital Member in consideration of that portion of the Earn-Out Payment due to the January Capital Member, (B) a cash distribution to all Common Members on a pro rata basis to enable the Common Members (other than the Class B Members) to make Earn-Out Payments to the Earn-Out Recipients (provided that all such Common Members shall be required to make such Earn-Out Payment following receipt of such distribution), (C) a special cash distribution by the Company to the WME Member to fund Earn-Out Payments by the WME Member to the Earn-Out Recipients (provided that the WME Member shall be required to make such Earn-Out Payment following receipt of such distribution), and (D) funding by the WME Member (and to the extent agreed to by the Sponsor Members, the Sponsor Members) for Earn-Out Payments to the Earn-Out Recipients.
(ii) The Earn-Out Payments shall be subject to the following rules: (A) Earn-Out Payments to the January Capital Member will, to the extent permitted under the terms of any indebtedness and Senior Equity of the Company and its Subsidiaries and Annex A, and to the extent the WME Directors reasonably determine (after meaningful consultation with the full Board) that doing so would not have an adverse impact on the Company or its Subsidiaries, for so long as the January Capital Member is a Member, be distributed by the Company to the January Capital Member (subject, in each case, to clause (B) below) (provided that, for purposes of clarification, the January Capital Member shall not lose or waive its right to receive unpaid Earn-Out Payments solely because it ceases to be a Member; provided further that, if the Company is prohibited under the terms of any indebtedness or Senior Equity of the Company or its Subsidiaries or Annex A, or the Board otherwise determines that doing so would have an adverse impact on the Company or its Subsidiaries, and accordingly does not distribute Earn-Out Payments to the January Capital Member in accordance with this clause (A), then the January Capital Member shall have the right, but not the obligation, to elect in writing to defer the payment of such Earn-Out Payment for a period of up to 24 months (the “Outside Earn-Out Payment Date”); provided further that the deferred Earn-Out Payment will be made to the January Capital Member on the earliest to occur of (A) the date on which the deferred Earn-Out Payment may be made by the Company in accordance with, and subject to the terms and conditions of, this clause (A), (2) the date specified in writing by the January Capital Member (provided the January Capital Member provides written notice to the WME Member at least 60 days prior to the date on which the January Capital Member would like to receive the deferred Earn-Out Payment if such date is prior to the Outside Earn-Out Payment Date) and (3) the Outside Earn-Out Payment Date, (B) the Class B Members shall be grossed up so that they do not bear the effect of any Dilutive Adjustment (as defined below) or the Economic Cost of any Earn-Out Payments that are funded by distributions by the Company, (C) the Class B Members shall not bear any dilution arising from (x) the issuance of any Units that are issued in connection with the Earn-Out Payments or (y) any adjustment to the exercise price (a “Dilutive Adjustment”) of any securities or other interests convertible into Equity Securities of the Company resulting from any gross-up or true-up payment made in connection with, or that constitutes, any Earn-Out Payment, and (D) if any portion of the Earn-Out Payments are paid pursuant to clause (D) of Section 7.03(g)(i) by the WME Member and, if applicable, any Sponsor Members, the WME Member and such Sponsor Members (if any), will be issued Class A Common Units in respect of the amounts so paid thereby pursuant to such clause (D) at a price to be unanimously determined by the Board, which shall in no event be greater than Fair Market Value; provided, that if the Board does not unanimously agree on the price per Class A Common Unit, such Class A Common Units will be issued at Fair Market Value, as unanimously determined by the Board; provided, further, that if the Board does not unanimously agree on Fair Market Value, such value shall be determined by an investment banking firm of national reputation selected by the WME Member and reasonably acceptable to the SL Member, the KKR Member and the Company, whose expenses shall be borne by the Company.
(iii) Solely for purposes of this Section 7.03(g), “Economic Cost”, means, with respect to a Class B Member, such Member’s direct or indirect Percentage Interest of any Company cash or other Company asset that is distributed in a non-pro rata distribution to fund all or any portion of any Earn-Out Payment; provided, that, “Economic Cost” shall not include any diminution in value, lost profits or similar cost not relating to the immediate economic effect of the applicable non-pro-rata distribution.
Settlement Statement A settlement statement setting forth the amounts paid by or on behalf of and/or credited to each of Purchaser and Seller pursuant to this Agreement;
