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.
Earnout Payment (i) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.
Interim payment At the end of each of the periods indicated in Annex I the Contractor shall submit to the Agency a formal request for payment accompanied by those of the following documents which are provided for in the Special Conditions: ➢ an interim technical report in accordance with the instructions laid down in Xxxxx X; ➢ the relevant invoices indicating the reference number of the Contract and of the order or specific contract to which they refer;
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.
Deferred Payment “Deferred Payment” means any severance pay or benefits to be paid or provided to Executive (or Executive’s estate or beneficiaries) pursuant to this Agreement and any other severance payments or separation benefits, that in each case, when considered together, are considered deferred compensation under Section 409A.
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.
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.
Premium Payment The Bank shall pay any premiums due on the Policy.
Estimated Payments Commencing on the first day of the Term on which Additional Rent is due, and on the first day of each calendar month thereafter during the Term of this Lease, Tenant shall pay Landlord all Additional Rent for: a) Real estate taxes pursuant to Section 2 above, b) Insurance premiums pursuant to Section 3 above, c) HVAC maintenance pursuant to Section 5 above, d) Common Area Charges pursuant to Section 4 above and e) Water and common utility use pursuant to Section 14 below. On an annual basis, Landlord shall provide Tenant with (a) a statement of all actual Common Area Charges and insurance premiums incurred in the preceding calendar year and (b) a statement of all charges of real estate taxes assessed against the Property in the preceding fiscal year. If Tenant has made estimated payments of Additional Rent during such calendar/fiscal year in excess of the actual amount due, Landlord shall credit Tenant with any overpayment against the next Rent otherwise due. If the actual Additional Rent due exceeds the estimated payments made by Tenant during the preceding year, Tenant shall pay such amount due as Additional Rent within 15 business days after notice from Landlord. Any failure by Landlord to deliver such statements shall not constitute a default by Landlord or operate as a waiver of Landlord’s right to collect all or any portion of Additional Rent due pursuant to the terms of this Lease. If Additional Rent for any calendar year increases by more than five percent (5%) over Additional Rent for the immediately preceding calendar year, Tenant, within ninety (90) days after receiving Landlord’s statement of actual Additional Rent (inclusive of those which vary with occupancy) for a particular calendar year, shall have the right to provide Landlord with written notice (the “Review Notice”) of its intent to review Landlord’s books and records relating to the Additional Rent for such calendar year. Within a reasonable time after receipt of a timely Review Notice, Landlord shall make such books and records available to Tenant or Tenant’s agent for its review at either Landlord’s home office or at the office of the Building, provided that if Tenant retains an agent to review Landlord’s books and records for any calendar year, such agent must (i) be a CPA firm or an in-house accountant or finance department employee of Tenant, (ii) not be compensated on a contingency basis and (iii) execute a copy of a confidentiality agreement with respect to such review. Tenant shall be solely responsible for any and all costs, expenses and fees incurred by Tenant or Xxxxxx’s agent in connection with such review. If Tenant elects to review Xxxxxxxx’s books and records, within thirty (30) days after such books and records are made available to Tenant, Tenant shall have the right to give Landlord written notice stating in reasonable detail any objection to Xxxxxxxx’s statement of actual Additional Rent for such calendar year. If Tenant fails to give Landlord written notice of objection within such thirty (30) day period or fails to provide Landlord with a Review Notice within the ninety (90) day period provided above, Tenant shall be deemed to have approved Xxxxxxxx’s statement of Additional Rent in all respects and shall thereafter be barred from raising any claims with respect thereto. Upon Xxxxxxxx’s receipt of a timely objection notice from Xxxxxx, Landlord and Tenant shall work together in good faith to resolve the discrepancy between Xxxxxxxx’s statement and Xxxxxx’s review. If Landlord and Tenant determine that Additional Rent for the calendar year in question are less than reported, Landlord shall provide Tenant with a credit against future Rent in the amount of any overpayment by Tenant. Likewise, if Landlord and Tenant determine that Additional Rent for the calendar year in question are greater than reported, Tenant shall forthwith pay to Landlord the amount of underpayment by Tenant with the understanding that there shall be no interest or late charge added thereto at the time same is billed to Tenant by reason of the failure of Tenant to previously have paid same when the excess was billed for such reviewed period. Any information obtained by Tenant pursuant to the provisions of this Section shall be treated as confidential. Notwithstanding anything herein to the contrary, Xxxxxx shall not be permitted to examine Xxxxxxxx’s books and records or to dispute any statement of Additional Rent unless Xxxxxx has paid to Landlord the amount due as shown on Landlord’s statement of actual Additional Rent, said payment being a condition precedent to Xxxxxx’s right to examine Xxxxxxxx’s books and records.
Due Diligence Period (a) During the period (the “Due Diligence Period”) beginning on the Effective Date and ending at 5:00 p.m. Eastern time on November 19, 2014 (the “Expiration of the Due Diligence Period”), Purchaser shall have the right, upon a minimum of one Business Day’s prior telephonic or written notice to Seller, to make a physical inspection of the Property, including (i) a non-invasive inspection of the environmental condition thereof and such non-invasive physical engineering and other studies and tests on the Property as Purchaser deems appropriate in its sole discretion and (ii) with Seller’s consent, which Seller may withhold in its sole discretion, further inspections of the environmental condition of the Property and further physical engineering and other studies and tests on the Property that are invasive or could alter the physical condition of the Property (including examination of materials, soil samples, and groundwater). Prior to performing any inspection or test (whether non-invasive or otherwise), Purchaser must deliver a certificate of insurance to the applicable Seller evidencing that Purchaser and its contractors, agents and representatives have in place comprehensive general liability insurance (with policy limits of at least $1,000,000 per occurrence and $2,000,000 aggregate) and for workers’ compensation insurance (with policy limits not less than statutory requirements) for its activities on the Property on terms reasonably satisfactory to Seller covering any accident arising in connection with the presence of Purchaser, its contractors, agents and representatives on the Property, which insurance shall name Seller and the Company as additional insureds thereunder and Purchaser shall bear the cost of all such inspections or tests. All third-party professional inspection companies or individuals shall be duly licensed. Notwithstanding the foregoing, Purchaser shall give no fewer than two Business Days’ notice to Seller prior to inspecting any Tenant occupied portions of the Property. Subject to the provisions of this Section 2.3, Purchaser upon prior notice to Seller may meet with the current property manager at the Property. At Purchaser’s request, and to the extent in Seller’s or the Company’s possession, Seller shall make available to Purchaser copies of the maintenance records and reports for the Property. Purchaser shall (i) exercise reasonable care at all times that Purchaser shall be present upon the Property, (ii) at Purchaser’s expense, observe and comply with all applicable laws and any conditions imposed by any insurance policy then in effect with respect to the Property and made known to Purchaser, (iii) not engage in any activities which would violate the provisions of any permit or license pertaining to the Property and made known to Purchaser, (iv) not unreasonably disturb the Tenants or unreasonably interfere with their use of the Property pursuant to their respective Leases, (v) not unreasonably interfere with the operation and maintenance of the Property, (vi) repair any damage to the Property resulting directly or indirectly from Purchaser’s activities at the Property and (vii) not disclose any confidential information except as permitted under this Agreement or required by applicable law. Purchaser’s obligation pursuant to clauses (vi) and (vii) above shall survive any termination of this Agreement. (b) Purchaser understands and agrees that any on-site inspections of the Property shall occur during normal business hours after the requisite prior notice to Seller and shall be conducted in accordance with the terms hereof. Seller reserves the right to have a representative present during any such inspections and property manager interviews. If the Closing does not occur, then on request by Seller and payment by Seller to Purchaser 50% of Purchaser’s out-of-pocket costs for any requested inspection reports, Purchaser will furnish to Seller any draft of final reports received by Purchaser and requested by Seller relating to any inspections of the Property. (c) Purchaser agrees to protect, indemnify, defend and hold Seller and the Company harmless from and against any claim for liabilities, losses, costs, expenses (including reasonable attorneys’ fees), damages or injuries arising out of or resulting from the inspection of the Property by Purchaser or its agents or consultants, excluding any liabilities, losses, costs and expenses, damages or injuries arising out of, and then only to the extent of, (i) Seller’s or the Company’s negligence or willful misconduct or (ii) any pre-existing condition discovered or revealed in the inspection of the Property by Purchaser or its agents or consultants. Purchaser’s obligation to indemnify and hold harmless Seller and the Company pursuant to this Section 2.3(c) shall survive the Closing or any termination of this Agreement.
