Acquisition by Wright Medical Group, Inc. (continued)
In connection with the Merger Agreement, Wright and a trustee mutually agreeable to the Company and Wright will enter into an agreement governing the terms of the CVRs. A holder of a CVR will be entitled to receive the following cash payments, conditioned upon the achievement of certain milestones as follows:
• Approval Milestone: Wright would be obligated to pay $3.50 per CVR upon FDA approval of Augment on or before the sixth anniversary of the closing of the Merger.
• Product Sales Milestone #1: Wright would be obligated to pay $1.50 per CVR the first time sales of specified products exceed $40,000,000 during a consecutive 12-month period.
• Product Sales Milestone #2: Wright would be obligated to pay $1.50 per CVR the first time sales of specified products exceed $70,000,000 during a consecutive 12 month period.
The latter two sales milestone payments cannot be made sooner than 24 and 36 months post-closing of the transaction, respectively. The transaction closed on March 1, 2013. See Note 20.