Common use of Earn-Out Clause in Contracts

Earn-Out. (a) If prior to the Closing Date, (i) the Company has elected to protest the March 2004 loss of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174-03-R-0044 (the “DARPA Contract”) through litigation or other administrative procedure (the “Protest”), (ii) such Protest has not been finally and non-appealably resolved as of the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (“Earn-Out End Date”), awarded a contract by DARPA (the “Earn-Out Contract”) for similar work as the DARPA Contract and for the same customer as the DARPA Contract, with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term of the Earn-Out Contract of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) (the “Target Earn-Out Contract Requirements”), then Purchaser shall have an obligation (the “Earn-Out Obligation”) to pay to the Sellers, within sixty (60) business days after the final and non-appealable award of the Earn-Out Contract to the Company, or any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Earn-Out Cash Payment”) and (ii) such number of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the Earn-Out Valuation (the “Maximum Earn-Out Purchaser Common Shares”) ((i) and (ii) together are referred to as the “Maximum Earn-Out Consideration”). In the event that the actual estimated total gross revenue during the term of the Earn-Out Contract (the “Actual Earn-Out Contract Requirements”) is for a greater amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) above.

Earn-Out. (a) If prior to In the Closing Dateevent that an Earn-Out Milestone is achieved by the applicable Earn-Out Milestone Deadline, Parent shall (i) promptly, but in any event within ten (10) Business Days, notify the Company has elected to protest the March 2004 loss Stockholders’ Representative of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174achievement of such Earn-03-R-0044 (the “DARPA Contract”) through litigation or other administrative procedure (the “Protest”), Out Milestone and (ii) such Protest has not been finally subject to Section 8.10, make the applicable cash payment and non-appealably resolved as issue, in accordance with Section 2.14(e), the applicable aggregate amount of the Closing Date and shares of Parent Stock, in each case calculated in accordance with Exhibit B attached hereto, up to an aggregate amount of $355,000,000 (iii) as a result of such Protest the Companyeach, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (an “Earn-Out End DatePayment”), awarded a contract by DARPA (and collectively, the “Earn-Out ContractPayments”), to the applicable Sellers (with respect to the portion of any Earn-Out Payment payable in shares of Parent Stock), and to the Payment Agent (with respect to the portion of any Earn-Out Payment payable in cash), for further distribution to the Sellers, the Contingent Payment Parties and the Contingent Bonus Recipients (if applicable), in accordance with Section 2.13; provided, however, that no Earn-Out Payments shall be made (1) for similar work in the event that either of the Key Individuals has ceased to be employed by Parent or one of its Affiliates or (2) if Parent shall have consented to a Key Individual providing services to Parent or its Affiliates as an independent contractor rather than as an employee, in the DARPA Contract event that such Key Individual has ceased to be an independent contractor of Parent or its Affiliates (collectively, the “Service Condition”); provided, further, that the Service Condition shall not apply, and for Parent shall continue to have the same customer as the DARPA Contract, with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term of obligation to make the Earn-Out Contract Payments, if the failure of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars the Service Condition to be satisfied results from ($31,213,850y) the death or Permanent Disability of a Key Individual or (z) a Key Individual’s employment with Parent or its applicable Affiliate being terminated by Parent without “Cause” or by a Key Individual for “Good Reason” (as such terms are defined in the “Target Earn-Out Contract Requirements”Employment Agreements, which definitions may not be amended, modified, waived or terminated as such terms apply to this Agreement without the prior written consent of the Stockholders’ Representative). Notwithstanding anything to the contrary in this Section 2.12(a), then Purchaser in the event that a Key Individual (A) suffers a Permanent Disability (B) within two (2) years thereafter recovers from such Permanent Disability or is otherwise able to return to the workforce, such Key Individual shall promptly notify Parent of such recovery or ability to return to the workforce and, if Parent or its Affiliates offer such Key Individual a substantially comparable position as such Key Individual held prior to his Permanent Disability, such Key Individual must accept such position or the Service Condition shall not be satisfied and Parent shall have an no further obligation (the “Earn-Out Obligation”) to pay to the Sellers, within sixty (60) business days after the final and non-appealable award of make the Earn-Out Contract to the Company, or any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Earn-Out Cash Payment”) and (ii) such number of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the Earn-Out Valuation (the “Maximum Earn-Out Purchaser Common Shares”) ((i) and (ii) together are referred to as the “Maximum Earn-Out Consideration”). In the event that the actual estimated total gross revenue during the term of the Earn-Out Contract (the “Actual Earn-Out Contract Requirements”) is for a greater amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) abovePayments.

Earn-Out. (a) If prior to If, following the Closing DateClosing, (i) the Company has elected to protest the March 2004 loss a minimum average monthly gross revenue of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174-03-R-0044 $1.2 million (the “DARPA ContractRevenue Target”) through litigation or other administrative procedure (during the “Protest”), (ii) such Protest has not been finally and nonthree-appealably resolved as month period immediately preceding the 90-day anniversary of the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (“Earn-Out End Date”), awarded a contract by DARPA (the “Earn-Out ContractPeriod”) for similar work at a minimum 28% Gross Margin (as defined below)(the “Margin Target”) has been earned from the DARPA Contract operations of the Business, then Xxxxxxx Xxxx (being the Stockholder to whom the entire right to receive the Earn-Out Payment (as defined below) has been allocated pursuant to Section 2.7) shall be paid the Earn-Out Target Payment. If the Business during the Earn-Out Period fails to achieve the Revenue Target and for the Margin Target, Xxxxxxx Xxxx shall receive the same customer as the DARPA Contract, with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term percentage of the Earn-Out Contract of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) (Target Payment as the “Target Earn-Out Contract Requirements”), then Purchaser shall have an obligation (the “Earn-Out Obligation”) to pay actual revenues achieved therefrom bears to the SellersRevenue Target, within sixty (60) business days after provided that the final and non-appealable award of average monthly revenues for the Earn-Out Contract Period are not less than $750,000 and the Margin Target is achieved with respect to such revenues. Notwithstanding the Companyforegoing, or any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Earn-Out Cash Payment”) and (ii) such number of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the Earn-Out Valuation (the “Maximum Earn-Out Purchaser Common Shares”) ((i) and (ii) together are referred to as the “Maximum Earn-Out Consideration”). In the event that the actual estimated total gross revenue during the term of the Earn-Out Contract (the “Actual Earn-Out Contract Requirements”) is for a greater amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration Payment shall be paid (i) twenty five percent in the event that gross revenues from the Business in the month of August 2007 is at least $1.5 million and the Margin Target is met, (25%ii) in cash the event the gross revenues from the Business during any calendar month of the Earn-Out Period is at least $1.5 million (the “Actual Super Revenue Target”) and the Margin Target is met or (iii) upon termination of Xxxxxxx Xxxx without “cause” or resignation of Xxxxxxx Xxxx for “good reason” during the Earn-Out Cash Period (each as defined in the Xxxx Employment Agreement). The payment made to Xxxxxxx Xxxx under this Section 2.10 is sometimes hereinafter referred to as the “Earn-Out Payment”.” For the absence of doubt, only one Earn-Out Payment shall be payable. As used herein “Gross Margin” shall mean advertising revenues minus publisher payments; provided, however, as a condition to the payment of the Earn-Out Payment pursuant to clause (i) above only, write-offs for bad debts shall not exceed 5% of revenues during the Earn-Out Period. Xxxxxxx Xxxx shall have the full authority to conduct the Business, including the management of day-to-day affairs thereof, during the Earn-Out Period in a manner consistent with the conduct of the Business before the closing; provided such Business is conducted in accordance with applicable Laws. Within 15 days after the end of the Earn-Out Period, or, in the event that the Earn-Out Payment is earned in the month of August 2007 pursuant to clause (i) above, on or before September 17, 2007, the chief financial officer of Parent shall calculate and provide a written report to Xxxxxxx Xxxx disclosing the actual results and the amount of the Revenue Target or Super Revenue Target, as appropriate, and Margin Target achieved, and pay any amount that is due and owing to Xxxxxxx Xxxx hereunder no later than 60 days after the end of the Earn-Out Period or, in the event that the Earn-Out Payment is earned in the month of August 2007 pursuant to clause (iii) seventy five percent above, as follows: on October 1, 2007, an amount equal to $800,000 and the remainder of such Earn-Out Payment within 3 Business Days of the receipt by Parent or its Affiliates of each additional 5% (75%) in shares of Purchaser Common Stockor, with respect to the final payment, such value being lesser percentage) of the Super Revenue Target realized until the receipt by Parent or its Affiliates of 95% of the Super Revenue Target, at which time remainder of the full Earn-Out Payment shall be paid within 3 Business Days. Unless written objection is received by the Parent within 30 days the report of the CFO shall be final and binding on the parties, absent manifest error. All amounts and calculations required shall in each case be determined in accordance with GAAP. Notwithstanding the foregoing, the CEO or CFO may accelerate the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down Payment to the nearest whole number and Purchaser shall pay cash for what would have extent that the Revenue Target has been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) aboveachieved.

Earn-Out. (a) If prior In addition to the Closing Dateforegoing, Seller will receive from Buyer deferred payments, to the extent earned, in an amount equal to the sum of (i) the Company has elected to protest the March 2004 loss 10.8% of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174Pre-03-R-0044 (Tax Net Income of the “DARPA Contract”) through litigation or other administrative procedure (the “Protest”), Business plus (ii) such Protest has not been finally and non-appealably resolved as an additional 9.2% of the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and nonPre-appealable resolution Tax Net Income of the Protest (“Business in excess of $30,816,000, determined in accordance with GAAP subject to the mutually agreed pro forma adjustments described below, for each Earn-Out End Date”)Period as provided below and such payments will be a component of the Purchase Price (collectively, awarded a contract by DARPA (the “Earn-Out ContractPayments”). Notwithstanding the foregoing, (i) for similar work if at any time during any 12-month Earn-Out Period Xxxxxx X. Xxxxxx ceases to be employed by Buyer by virtue of his resignation without “Good Reason” (as the DARPA Contract and for the same customer such term is defined in his Employment Agreement with Buyer) or by a termination by Buyer with Cause (as the DARPA Contractdefined in Appendix I), with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term fifty percent (50%) of the Earn-Out Contract of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) (the “Target Payment for that Earn-Out Contract Requirements”), then Purchaser shall have an obligation Period and fifty percent (the “50%) of any Earn-Out Obligation”Payment for all remaining Earn-Out Periods will be forfeited, (ii) if at any time during any 12-month Earn-Out Period Xxxxxxx X. Xxxxxx ceases to pay to the Sellersbe employed by Buyer by virtue of his resignation without “Good Reason” (as such term is defined in his Employment Agreement with Buyer) or by a termination by Buyer with Cause (as defined in Appendix I), within sixty twenty percent (6020%) business days after the final and non-appealable award of the Earn-Out Contract to the Company, or any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Payment for that Earn-Out Cash Payment”Period and twenty percent (20%) and (ii) such number of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the any Earn-Out Valuation (the “Maximum Payment for all remaining Earn-Out Purchaser Common Shares”) ((i) Periods will be forfeited, and (iiiii) together are referred to as if at any time during the “Maximum 12-month Earn-Out Consideration”period Xxxxxxx X. Means ceases to be employed by Buyer by virtue of his resignation without “Good Reason” (as defined in the Means Agreement) or by a termination by Buyer with Cause (as defined in Appendix I). In the event that the actual estimated total gross revenue during the term , thirty percent (30%) of the Earn-Out Contract (the “Actual Payment for that Earn-Out Contract Requirements”Period and thirty percent (30%) is for a greater amount of estimated total gross revenue during the term of the any Earn-Out Contract than the Target Payment for all remaining Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall Periods will be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) aboveforfeited.

Earn-Out. (a) If prior to the Closing Date, (i) the Company has elected to protest the March 2004 loss of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174-03-R-0044 (the “DARPA Contract”) through litigation or other administrative procedure (the “Protest”), (ii) such Protest has not been finally and non-appealably resolved as of the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (“Earn-Out End Date”)Payment. In addition to the Initial Consideration, awarded a contract by DARPA Merger Sub and the Acquiror agree to pay, as set forth below, if and when earned, an earned payout amount (the “"Earn-Out Contract”Payment") for similar work as the DARPA Contract and for the same customer as the DARPA Contract, with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term of the Earn-Out Contract of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) (the “Target Earn-Out Contract Requirements”), then Purchaser shall have an obligation (the “Earn-Out Obligation”) equal to pay to the Sellers, within sixty (60) business days after the final and non-appealable award of the Earn-Out Contract to the Company, or any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Earn-Out Cash Payment”) and (ii) such number of shares of Purchaser Acquiror Common Stock having a value of One Million Five Hundred Thousand Dollars Fair Market Value equal to $3,500,000 ($1,500,000), with such value being determined in accordance with subject to adjustment as set forth below) (the "Earn-Out Valuation Shares") if the Net Product Revenues during the fifteen (15) month period commencing on April 1, 2006 and ending June 30, 2007 (the “Maximum "Earn-Out Purchaser Common Shares”Period") equals or exceeds $4,200,000 ((i) and (ii) together are referred to as the “Maximum Earn-Out Consideration”"Target Revenue"). In the event that the Target Revenue is less than $4,200,000, then the Earn-Out Payment shall be reduced by the same percentage that the actual estimated total gross revenue during Net Product Revenue (the term "Actual Revenue") is less than the Target Revenue; provided, however if the Actual Revenue is less than $1,200,000 then the Earn-Out Payment shall be reduced to zero (0). In addition, the Earn-Out Payment will be reduced dollar for dollar for expenses that exceed the expense budget for the Earn-Out Period as agreed upon by Acquiror and the Company. In no event shall the Earn-Out Payment exceed $3,500,000. The Earn-Out Shares shall be issued by the Acquiror within fifteen (15) days of the determination that the Target Revenue amount has been achieved, whether or not fifteen (15) months shall have passed from April 1, 2006. Subject to the condition that the Stockholders' Agent provides Acquiror with written evidence that within thirty (30) days of the Closing Date 100% of the unanimous written consent of the Company Stockholders authorized the following allocation of the Earn-Out Contract Payment, if any: (A) the “Actual first $875,000 of Earn-Out Contract Requirements”Shares, if any, shall be paid to the Company Stockholders, and (B) the remaining balance, if any, of the $3,500,000 of Earn-Out Shares or such lessor amount, if any, shall be paid to an escrow account to be established by the Company's current management. In the event written evidence of such authorization is for a greater amount of estimated total gross revenue during the term of not provided, the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration Payment shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) aboveCompany's Stockholders.

Earn-Out. (a) If prior Buyer shall pay to the Closing Date, (i) accounts designated in writing by the Company has elected to protest Seller Representative for the March 2004 loss benefit of the Defense Advanced Research Projects Agency (“DARPA”) Contract – solicitation number N00174-03-R-0044 (the “DARPA Contract”) through litigation or other administrative procedure (the “Protest”), (ii) such Protest has not been finally and non-appealably resolved Sellers additional consideration in cash as of the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (“Earn-Out End Date”), awarded a contract by DARPA described herein (the “Earn-Out,” with each payment made pursuant to the Earn-Out Contractbeing an “Earn-Out Payment”) in accordance with the following: The Sellers shall receive an Earn-Out Payment from Buyer in a percentage amount of the EBITDA of the Companies for similar work each of the six (6) consecutive years following the Closing (together, the “Earn-Out Period”), with the first year beginning on February 1, 2017 and ending on January 31, 2018, as follows: Year 1 Earn-Out: 40% of the DARPA Contract and EBITDA of the Companies Year 2 Earn-Out: 40% of the EBITDA of the Companies Year 3 Earn-Out: 40% of the EBITDA of the Companies Year 4 Earn-Out: 40% of the EBITDA of the Companies Year 5 Earn-Out: 75% of the EBITDA of the Companies Year 6 Earn-Out: 75% of the EBITDA of the Companies Notwithstanding anything in this Agreement to the contrary, (i) only to the extent the Companies (and/or their management team) run the Bxxxx Xxxxxx and/or B Bxxxx Xxxxxx women’s footwear line(s) (the “BA Lines”), for purposes of the Earn-Out, EBITDA shall include the combined EBITDA of the BA Lines, but only to the extent the combined EBITDA of the BA Lines is a positive number; provided that, for clarity, the combined EBITDA of the BA Lines shall be reduced by nine percent (9%) of the net sales of the BA Lines, (ii) subject to the following two (2) sentences, if, pursuant to the Kxxx Spade Agreement, an Additional Royalty (as defined in the Kxxx Spade Agreement) is required to be paid to Kxxx Spade LLC, the Earn-Out Payment payable for the same customer as year in which such Additional Royalty is actually paid shall be reduced by fifty percent (50%) of such Additional Royalty; provided, however, that the DARPA Contractmaximum amount in which the Earn-Out Payment for each of the Year 2 Earn-Out and the Year 3 Earn-Out may be reduced in connection with the Additional Royalty shall be seventy five thousand dollars ($75,000.00), and (iii) subject to the following two (2) sentences, any amounts paid pursuant to the Rent Stipulation shall be recouped against the Earn-Out Payment payable for the year in which such amount is actually paid. Notwithstanding anything to the contrary in the foregoing, with respect to each of Section 2.2(e)(ii) and Section 2.2(e)(iii) hereof, if the unadjusted Earn-Out Payment for any Earn-Out year in which the Earn-Out Payment is subject to reduction based on such work being Sections is insufficient to cover such reduction in full, the Sellers, jointly and severally, shall promptly pay to Buyer the amount of at least such deficiency. If Sellers do not pay the same value as the DARPA Contract, namely with an estimated total gross revenue during the term amount of such deficiency within twenty (20) days of Buyer’s delivery of the Earn-Out Contract calculation for the applicable year (pursuant to the following paragraph), Buyer may set-off or recoup the amount of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) (the “Target such deficiency against any Earn-Out Contract Requirements”Payment that is, or otherwise will be, due and payable to the Sellers pursuant to Section 2.2(e), then Purchaser . Buyer shall have an obligation (deliver the “calculation of any Earn-Out Obligation”) to pay Payment for each year during the Earn-Out Period to the Sellers, Seller Representative within sixty (60) business days after the final end of such year, and non-appealable award such calculation shall be deemed conclusive and binding on the Parties for purposes of the computing such Earn-Out Contract Payment, unless the Seller Representative notifies Buyer in writing within forty-five (45) days after receipt of any such calculation of the disagreement therewith by the Seller Representative. Any such notice of dispute shall state in reasonable detail the reasons for any such disagreement and identify the amounts and items in dispute. Buyer and the Seller Representative will use reasonable efforts to resolve any such disagreements themselves. If Buyer and the CompanySeller Representative are unable to resolve any such disagreement within thirty (30) days of receipt of notice of the Seller Representative’s disagreement, or then such dispute shall be resolved in a manner consistent with the procedures described in Section 2.4(f). If the Seller Representative fails to provide written notice of a disagreement with Buyer’s calculation of any of its successors or Affiliates, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum such Earn-Out Cash Payment”) and (ii) Payment to Buyer within such number 45-day period or if the Seller Representative indicates in writing that the Seller Representative has no dispute with respect to the calculation of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the Earn-Out Valuation (Payment prior to the “Maximum expiration of such 45-day period, then Buyer shall make such Earn-Out Purchaser Common Shares”Payment within fifteen (15) ((i) and (ii) together are referred days after the earlier of Buyer’s receipt of notice from the Seller Representative that the Seller Representative has no dispute with respect to as the “Maximum calculation of such Earn-Out Consideration”). In Payment or the event that the actual estimated total gross revenue during the term expiration of the Earnforty-Out Contract five (45) day period during which the “Actual Earn-Out Contract Requirements”) Seller Representative is for a greater amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation required to the Sellers equal provide such written notice pursuant to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be the Actual Earn-Out Contract Requirements and the denominator shall be the Target Earn-Out Contract Requirements, but in no event shall the Actual Earn-Out Consideration be greater than the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”this Section 2.2(e). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) above.