Common use of Earnout Clause in Contracts

Earnout. (a) As additional consideration for the Membership Interests, Buyer shall issue to Sellers additional Buyer Preferred Securities in accordance with their respective Pro Rata Shares equal to the following amounts upon the achievement by or on behalf of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”). (b) For the avoidance of doubt, (i) the number of shares of Buyer Preferred Securities to be issued to Sellers shall be determined based on a fixed value of $1.00 per share, consistent with the value used at the Closing, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and (ii) revenue shall be calculated in accordance with GAAP. (c) Within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.

Earnout. (a) As additional consideration In addition to the Merger Consideration provided to holders of HCI Common Stock, following the Effective Time, each former stockholder of HCI that had shares of HCI Common Stock exchanged for Merger Consideration (other than holders of Dissenting Shares) pursuant to Section 2.2 hereof (the Membership Interests"Former HCI Stockholders") shall also be entitled to certain Earnout Payments ----------------------- (as defined below), Buyer shall issue to Sellers additional Buyer Preferred Securities if any, in accordance with their respective Pro Rata Shares equal to the following amounts upon the achievement by or on behalf provisions of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”)this Section 2.3. (b) For Subject to paragraph (c) below, within 10 business days following the avoidance earlier of doubt, (i) the number last day of shares ALC's fiscal quarter during which either (x) a permanent certificate of Buyer Preferred Securities occupancy has been obtained, (y) a temporary certificate of occupancy and a license to be issued operate a facility have been obtained or (z) a sale/leaseback transaction has been closed with respect to Sellers shall be determined based on a fixed value of $1.00 per sharean Identified Site (as defined in Section 6.8 hereof), consistent with the value used at the Closing, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and (ii) revenue two years following the Effective Time with respect to any Identified Sites for which none of (x), (y) or (z) of the foregoing clause of this sentence have occurred, ALC shall provide an Earnout Payment, together with a notice setting forth the calculation of such Earnout Payment certified by the Chief Financial Officer or Controller of ALC (the "Earnout Payment Notice"), to each Former HCI Stockholder for each ---------------------- "unit" at an assisted living facility that (I) is located on (or within 15 miles of) such Identified Site referred to in clause (i) of this sentence or (II) ALC intends to develop on (or within 15 miles of) such Identified Site referred to in clause (ii) of this sentence; it being understood that if more than one assisted living facility is located on (or within 15 miles of) an Identified Site, then Earnout Payments shall be calculated provided by ALC with respect to all such assisted living facilities on (or within 15 miles of) such Identified Site. For purposes of this Agreement, an "Earnout Payment" shall be payable in accordance --------------- certified or ALC company check and shall equal (A) $7,500 multiplied by (B) the number of "units" located on or to be developed on (or within 15 miles of) such Identified Site divided by (B) 4,857,500, for each share of HCI Common Stock held by such Former HCI Stockholder immediately prior to the Effective Time. ALC shall mail the Earnout Payment, together with GAAPthe Earnout Payment Notice, to the address indicated by the respective Former HCI Stockholder on the Exchange Certificate submitted to the Exchange Agent in compliance with Section 2.2(a) hereof. (c) Within thirty ALC shall be obligated to provide Earnout Payments with respect to each and every assisted living facility that meets the criteria of paragraph (30b) days after of this Section 2.3, not to exceed 39 of such facilities in the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”)aggregate. (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing Any portion of the Earnout Payment that remains unclaimed by a Former HCI Stockholder for twelve months after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance mailing of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurredEarnout Payment Notice shall be deemed abandoned and shall revert to ALC. Thereafter, Buyer such Former HCI Stockholder shall (i) use commercially reasonable efforts to manage have no claim or interest in the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Paymentsabandoned Earnout Payment. Notwithstanding anything to the contrary contained herein, no action none of ALC, Newco, HCI, the Exchange Agent or any other person shall be intentionally takenliable to any Former HCI Stockholder for any property delivered to any public official pursuant to applicable abandoned property, nor shall any action be intentionally refrained from being taken, by Buyer escheat or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreementsimilar laws.

Earnout. (a) As additional consideration for Pursuant to the Membership InterestsMerger, Buyer there shall issue be issued to Sellers additional Buyer Preferred Securities each holder of a share of SpinCo Common Stock and each holder of a SpinCo Equity Award, their pro rata portion, as determined in accordance with their respective Pro Rata Shares equal the terms of Section 3.1(a) and the Employee Matters Agreement, as applicable, of an aggregate of 15,000,000 shares of Domesticated Parent Common Stock (without duplication), subject to the following amounts upon the achievement by or on behalf of Buyer (or the Companyforfeiture provisions set forth in Section 3.3(d) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA MilestoneEarnout Shares”). (b) The Earnout Shares shall be subject to the following vesting conditions: (i) If, at any time during the period commencing on the Closing Date and ending on the date that is five years after the Closing Date (the “Earnout Period”), the Parent Trading Price is greater than or equal to $12.50, 50% of the Earnout Shares held by each holder of Earnout Shares shall immediately vest and no longer be subject to the forfeiture conditions provided in Section 3.3(d). (ii) If, at any time during the Earnout Period, the Parent Trading Price is greater than or equal to $15.00, the remaining 50% of the Earnout Shares held by each holder of Earnout Shares shall immediately vest and no longer be subject to the forfeiture conditions provided in Section 3.3(d). (c) For the avoidance of doubt, (i) if the number of shares of Buyer Preferred Securities vesting conditions applicable to be issued to Sellers shall be determined based on a fixed value of $1.00 per share, consistent with the value used at the Closing, and not based on the value more than one of the Buyer Preferred Securities provisions of Section 3.3(b) have been satisfied at the time of issuance to Sellers; and (ii) revenue shall be calculated in accordance with GAAP. (c) Within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafterany one time, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA then all of the Company determined Earnout Shares subject to such satisfied vesting conditions shall immediately vest and no longer be subject to the forfeiture conditions provided in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”Section 3.3(d). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware If, upon the expiration of the Earnout Period, the vesting of any of the Earnout Shares has not occurred, then the applicable Earnout Shares that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”failed to vest pursuant to Section 3.3(b), as applicable, shall be automatically forfeited and the parties deemed transferred to Parent for cancellation for no consideration, and no Person (other than Parent) shall execute have any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafterright with respect thereto. (e) Until each Milestone Event has If, during the Earnout Period, the Domesticated Parent Common Stock outstanding as of immediately following the Merger Effective Time shall have been changed into a different number of shares or a different class, by reason of any Equity Adjustment, or any similar event shall have occurred, Buyer then the applicable Parent Trading Price specified in Section 3.3(b) shall be equitably adjusted to reflect such change. (f) If, during the applicable portion of the Earnout Period, there is a Change of Control that will result in the holders of Domesticated Parent Common Stock receiving a per share price equal to or in excess of the applicable Parent Trading Price required in connection with an applicable vesting event (an “Acceleration Event”), then immediately prior to the consummation of such Change of Control, any applicable Earnout Shares that have not previously been vested shall be deemed vested; provided, that such Earnout Shares shall be deemed vested (and such vesting event achieved) only (x) if such Change of Control has been approved by a majority of the independent directors on the Parent Board and (y) to the extent the price per share of Domesticated Parent Common Stock in the Change of Control equals or exceeds the applicable Parent Trading Price required in connection with such vesting event. For the avoidance of doubt, in the event of a Change of Control, including where the consideration payable is other than a specified price per share, for purposes of determining whether a Parent Trading Price required in connection with an applicable vesting event has been achieved, the price paid per share of Domesticated Parent Common Stock shall be calculated taking into account all of the Earnout Shares (whether or not then vested). (g) For so long as any Earnout Shares remains subject to the vesting and forfeiture conditions specified in Section 3.3(b) and Section 3.3(d), the holder thereof shall be entitled to (i) use commercially reasonable efforts to manage exercise the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice voting rights carried by such Earnout Shares and (ii) use commercially reasonable efforts receive any dividends or other distributions in respect of such Earnout Shares. For the avoidance of doubt, prior to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine vesting in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to accordance with the terms of this Section 2.03 are reliant upon 3.3, holders of the presumption that Buyer Earnout Shares shall not be entitled to transfer such shares, and its Affiliates, will, at all times after such shares shall bear a legend prohibiting transfer until such time as the Closing, act in good faith vesting conditions with respect to such share have been satisfied (the Milestone Payments“Transfer Restriction”). Notwithstanding anything to Any attempted transfer in violation of the contrary herein, no action Transfer Restriction shall be intentionally takenvoid ab initio. For the avoidance of doubt, nor the Company, Parent, SpinCo and any other applicable withholding agent shall each be entitled to deduct and withhold from any action be intentionally refrained from being taken, by Buyer amounts payable or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount distributions made in respect of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this AgreementEarnout Shares.

Earnout. In further consideration of the purchase of sixty-five percent (65%) of the Assets Related Business, Prime agrees to pay Moadel the amount (if any) specified below, in accordance with the provisions below. Any amounts payable pursuant to this Section are in addition to payment of the Purchase Price pursuant to Section 1.1, and no amount of the Purchase Price shall reduce amounts payable under this Section. (a) As additional consideration The net income for Newco shall be calculated for the Membership Intereststwelve consecutive calendar months ending on the one-year anniversary of the Closing Date, Buyer shall issue using the same methodology and principles reflected in the calculation of Base Net Income (as hereinafter defined) shown on Schedule 4.6 attached hereto (the "First Anniversary Net Income"). If the First Anniversary Net Income exceeds Base Net Income by at least twenty percent (20%), Prime agrees to Sellers additional Buyer Preferred Securities in accordance with their respective Pro Rata Shares pay Moadel an amount equal to the following amounts upon result obtained by (A) dividing the achievement Purchase Price by or on behalf of Buyer five (or the Company5) of the following events and (each, a “Milestone Event”B) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at multiplying such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing quotient by 9.75% (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”"First Anniversary Earnout"). (b) For The net income for Newco shall be calculated for the avoidance twelve consecutive calendar months ending on the two-year anniversary of doubtthe Closing Date, using the same methodology and principles reflected in the calculation of Base Net Income shown on Schedule 4.6 attached hereto (the "Second Anniversary Net Income"). To the extent that any one of the following requirements are met, Prime agrees to pay Moadel the respective amount determined as follows (the "Second Anniversary Earnout," and together with the First Anniversary Earnout, the "Earnout Payments"), with the understanding that a Second Anniversary Earnout, if any, will only be paid with respect to one of the following three alternatives, even if the requirements for more than one of the alternatives are satisfied: (i) If Second Anniversary Net Income exceeds First Anniversary Net Income by at least twenty percent (20%) and a First Anniversary Earnout was due and payable in accordance with Section 4.6(a), then Prime agrees to pay to Moadel an amount equal to the result obtained by (A) dividing the Purchase Price by five (5) and (B) multiplying such quotient by 22.75%. (ii) If (a) Second Anniversary Net Income exceeds First Anniversary Net Income by less than twenty percent (20%), (b) Second Anniversary Net Income exceeds Base Net Income (as hereinafter defined) by at least forty percent (40%), and (c) a First Anniversary Earnout was due and payable in accordance with Section 4.6(a), then Prime agrees to pay to Moadel an amount equal to the result obtained by (A) dividing the Purchase Price by five (5) and (B) multiplying such quotient by 22.75%. (iii) If Second Anniversary Net Income exceeds Base Net Income by at least forty percent (40%) and a First Anniversary Earnout was not due and payable in accordance with Section 4.6(a), then Prime agrees to pay to Moadel an amount equal to the result obtained by (A) dividing the Purchase Price by five (5) and (B) multiplying such quotient by 32.50%. (c) As used in this Agreement, Base Net Income shall mean the amount of $2,464,383, resulting from the calculations contained in Schedule 4.6 attached hereto and representing the estimated recurring net income from the Assets Related Business (on a stand alone basis) for the twelve (12) consecutive calendar months ending March 31, 2000, based on information available at the date of calculation and assuming all of the representations and warranties of PC and Moadel contained in this Agreement are true, complete and not misleading. The parties acknowledge and agree that the manner of calculation set forth on Schedule 4.6 attached hereto reflects the agreed upon means of calculating Base Net Income (subject to exclusions/additions described below in subsection (d)). (d) The parties agree that, notwithstanding any provision of this Agreement to the contrary, (i) the number revenues, income, costs, and expenses (including, without limitation, startup and transaction costs, legal and accounting costs and fees, and applicable financing costs) resulting from or attributable to the acquisition and/or operation of shares of Buyer Preferred Securities to be issued to Sellers any Existing Locations by Newco or Newco's subsidiaries shall be determined based on a fixed value of $1.00 per share, consistent with excluded from the value used at the Closing, and not based on the value calculation of the Buyer Preferred Securities at the time of issuance to Sellers; Earnout Payments and (ii) revenue the revenues, income, costs, and expenses (including, without limitation, startup and transaction costs, legal and accounting costs and fees, and applicable financing costs), resulting from or attributable to the development and/or operation of any New Locations by Newco or Newco's subsidiaries shall be calculated included in accordance the calculation of the Earnout Payments. To the extent possible, the operating results from New Locations shall be incorporated into the calculation of the Earnout Payments in a manner consistent with GAAPthe treatment on Schedule 4.6 of the operating results of PC existing immediately prior to the Effective Time, with appropriate departures to incorporate, among other items, non-recurring costs such as startup costs. The provisions of this subsection (d) shall not be construed to require any party, including Newco, to develop or acquire any Target Location. (ce) Prime shall calculate the First Anniversary Earnout within ninety (90) days of the end of the one-year anniversary of the Closing Date and shall calculate the Second Anniversary Earnout within ninety (90) days of the end of the two-year anniversary of the Closing Date. Within the applicable ninety (90) day period, Prime shall deliver to PC, via certified or registered U.S. Mail, a statement (the "Calculation Statement") showing calculation of the applicable Earnout Payment and the basis on which it was calculated in reasonable detail. If PC shall fail to receive a Calculation Statement within either ninety (90) day period, then PC shall promptly notify Prime in writing that the Calculation Statement has not been received, and Prime shall have an additional five (5) days following its receipt of such notice from PC, within which Prime may deliver the Calculation Statement without having been in default under this subsection (d). If Prime fails to deliver the Calculation Statement within such additional five (5) day period, and an Earnout Payment is required, Prime agrees to pay interest at PMSI's overnight funds investment rate on the amount of the Earnout Payment, charged from the first day following such addition five (5) day period until the day on which the Calculation Statement is delivered. PC shall have thirty (30) days following its receipt of a Calculation Statement during which Newco and Prime agree to provide to Moadel and PC reasonable access to Newco's books and records. If PC shall fail to deliver an Objection Notice (as hereinafter defined) within such thirty (30) day period, then such failure shall constitute PC's acceptance of the respective Calculation Statement, which shall thereupon become conclusive and binding on all parties hereto, and shall not be subject to further review, challenge, or adjustment. During such thirty (30) day period, PC may deliver to Prime, via certified or registered U.S. Mail, a written notice of objection to the respective Calculation Statement (an "Objection Notice"), which Objection Notice shall set forth in reasonable detail PC's calculation of the Earnout Payment calculated therein, and PC's basis for objection, in which case the parties shall meet and in good faith attempt to resolve any disagreement within thirty (30) days after Prime's receipt of the end Objection Notice. If the parties are unable to resolve such disagreement within such time period, the disagreement shall be referred to a "Big Five" accounting firm selected by mutual agreement of each fiscal quarter PC and Prime, or as soon as reasonably practicable thereafterif the parties cannot agree on such selection, ▇▇▇▇▇ then a "Big Five" accounting firm selected by lot, excluding those that have provided services to PC or Prime within the preceding twenty-four (24) months (the "Settlement Accountants"). The Settlement Accountants shall prepare and deliver be directed to Sellers use their best efforts to reach a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices correct Earnout Payment (the “Quarterly Statement”). "Audit Amount") within forty-five (d45) ▇▇▇▇▇ shall promptly notify Seller Representative in writing days after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”)referral, and the Audit Amount shall be final and binding on the parties hereto, and shall execute any such not be subject to further instruments to consummate the issuance review, challenge or adjustment. The costs and expenses of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. services of the Settlement Accountants (ethe "Audit Costs") Until shall be allocated to and borne by each Milestone Event has occurredof Prime and Moadel pursuant to the following calculation. First, Buyer the Settlement Accountants shall (i) use commercially reasonable efforts to manage calculate, for each of Prime and Moadel, the operations difference between such party's estimate of Buyer the Earnout Payment and the Company Audit Amount (for either party, expressed only as a positive number, the "Difference"). Next, each of Prime's and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA Moadel's share of the CompanyAudit Costs shall be determined by multiplying the Audit Costs by a fraction, the numerator of which shall be such party's Difference, and the denominator of which shall be the sum of the Differences of both parties. Subject to Notwithstanding the foregoing, Seller understands that Buyer if the Audit Amount exceeds Moadel's estimate, then Prime shall bear all Audit Costs, and its Affiliates will be free if the Audit Amount is lower than Prime's estimate, then Moadel shall bear all Audit Costs. Prime shall pay any applicable Earnout Payment in cash to operate PC within fifteen (15) days following the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition conclusive determination of the consent amount of Seller such Earnout Payment pursuant to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with paragraph. With respect to any Earnout Payment that is being contested by the Milestone Payments. Notwithstanding anything parties, Prime agrees to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount pay in cash to PC Prime's estimate of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties required Earnout Payment (as shown in the respective Calculation Statement) within fifteen (15) days following Prime's receipt of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreementrespective Objection Notice.

Earnout. (a) As During the six (6) month period following the Closing Date (the “Earnout Period”), Seller shall be eligible to receive up to six (6) additional consideration for the Membership Interestsmonthly payments (each, Buyer shall issue an “Earnout Payment”) in an aggregate amount of up to Sellers additional Buyer Preferred Securities One Million Dollars ($1,000,000) in accordance with their respective Pro Rata Shares equal this Section 2.04. (b) Within forty-eight (48) hours following the last day of each calendar month during the Earnout Period, Buyer will prepare and deliver to the following amounts upon the achievement by or on behalf of Buyer (or the Company) Seller a statement setting forth Buyer’s estimate of the following events aggregate amount of gross revenue received by the Company in respect of any Closing Receivable during such calendar month (each, a “Milestone Event”) (each payment, a “Milestone Payment,Monthly Earnout Statement” and collectivelysuch aggregate amount of gross revenue received for each such month as set forth in the Monthly Earnout Statement, the “Milestone PaymentsMonthly Collections”): ). Thereafter, upon forty-eight (i48) $10,000,000 at such time as hours’ prior written notice to Buyer, Buyer shall provide Seller and its advisors reasonable access to the books and records of the Company generates $5,000,000.00 that are relevant to the preparation of cumulative revenue such Monthly Earnout Statement during the normal business hours of the Company, solely for the Buyer following purpose of identifying the Closing (accuracy of Company’s calculation of the “Revenue Milestone”)Monthly Collections and the Earnout Payments as set forth therein; and (ii) $10,000,000 at provided that Seller and its advisors shall not have access to any such time as books or records if the Company achieves cumulative Adjusted EBITDA provision thereof would, in the good faith judgment of $6,000,000.00 (the “EBITDA Milestone”). (b) For the avoidance of doubt▇▇▇▇▇, (i) result in the number of shares of Buyer Preferred Securities to be issued to Sellers shall be determined based on a fixed value of $1.00 per shareloss of, consistent with or jeopardize, the value used at the Closingattorney-client, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and attorney work product or any other similar legal privilege, (ii) revenue result in a breach of the terms and conditions of any Contract to which Buyer or the Company is a party or otherwise bound, or (iii) violate applicable Law. Any such review by Seller and its advisors pursuant to this Section 2.04(b) shall be calculated in accordance with GAAPat Seller’s sole expense. (c) Within thirty If Seller has any objections to any Monthly Earnout Statement, Seller shall deliver to Buyer a written statement setting forth its objections thereto (30an “Earnout Objections Statement”) with reasonable supporting detail as to any such disputed items. If an Earnout Objections Statement is not delivered to Buyer within ten (10) days after delivery of the Monthly Earnout Statement to Seller, such Monthly Earnout Statement shall be final, binding and non-appealable on the Parties and all other Persons. If an Earnout Objections Statement is timely delivered, Seller and Buyer shall negotiate in good faith to resolve any such objections set forth therein, but if they do not reach a final resolution within ten (10) days after the end delivery of each fiscal quarter such Earnout Objections Statement, Seller and Buyer shall submit such dispute to an independent regionally recognized public accounting firm agreed upon by Seller and Buyer in writing (who shall not have any material relationship with Seller or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination Buyer or any of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices their respective Affiliates) (the “Quarterly Accounting Firm”), provided that if Seller and Buyer cannot agree upon the Accounting Firm promptly following the end of the ten (10) day period after the delivery of an Earnout Objections Statement, either one of them may request that the New York City office of the American Arbitration Association (the “AAA”) select the Accounting Firm (who shall not have any material relationship with Seller or Buyer or any of their respective Affiliates). The Accounting Firm shall make a determination of any matters submitted to it pursuant to the terms hereof, and any such determination made by the Accounting Firm shall be final, conclusive and binding on all Parties and all other Persons. The Parties will cooperate with the Accounting Firm during the term of its engagement, including by providing or causing to be provided to the Accounting Firm such information or documentation as the Accounting Firm may reasonably request. If the Accounting Firm is engaged pursuant to the terms hereof, the Parties shall enter into a customary engagement letter with such Accounting Firm, and Seller, on the one hand, and Buyer, on the other hand, shall each agree to pay one-half of the fees and expenses of such Accounting Firm (and, if applicable, the AAA). (d) ▇▇▇▇▇ No later than ten (10) days following the final and conclusive determination of the Monthly Collections for any calendar month during the Earnout Period, Buyer shall promptly notify pay, or cause the Company to pay, to Seller Representative by wire transfer of immediately available funds to an account designated by Seller an Earnout Payment in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date an amount equal to one hundred precent (100%) of such achievement Monthly Collections; provided, however, the aggregate amount of a Milestone Event all Earnout Payments payable by Buyer pursuant to this Section 2.04 shall not exceed One Million Dollars (such date being the “Milestone Achievement Date”$1,000,000), and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurredAfter the Closing Date, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and cause the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate for the Company as they in a manner intended to enable Buyer to accurately determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges Monthly Collections and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or corresponding Earnout Payments during the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this AgreementEarnout Period.

Earnout. (a) As additional consideration Subject to the terms and conditions of this Section 2.4, the Buyer may become obligated to pay an Earn-Out Payment to Sellers as provided in Schedule 2.4 of this Agreement (the “Earnout Principles”). The Earnout Principles are hereby incorporated by reference into this Agreement and shall be deemed to be included in and a part of this Agreement. (b) Not less than ninety (90) days following the Earnout Date (as defined in the Earnout Principles), the Buyer shall prepare and deliver to the Sellers’ Representative a statement (an “Earnout Statement”) that sets forth in reasonable detail its calculation of the Target Revenue Percentages (as defined in the Earnout Principles) for the Membership Interests, Buyer shall issue to Sellers additional Buyer Preferred Securities in accordance with their respective Pro Rata Shares equal to Earnout Period. In the following amounts upon the achievement by or on behalf of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): event S▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (i) $10,000,000 at dies during the Earnout Period, or (ii) is no longer employed by the Buyer during the Earnout Period then, in the case of clause (i), B▇▇▇▇ ▇▇▇▇▇▇▇▇, and, in the case of clause (ii), the Sellers’ Representative, shall, as applicable, be permitted reasonable access during normal business hours upon reasonable advance notice to review the Company’s books and records relating to the determination of the Earnout, subject to the proviso in the following sentence. Sellers’ Representative and its accountants shall be permitted reasonable access during normal business hours upon reasonable advance notice to review the Company’s books and records used in the preparation of the Earnout Statement, provided that the Sellers’ Representative and its accountants shall not have access to any such time as books or records if the provision thereof would, in the good faith judgment of the Buyer, (i) result in the loss of, or jeopardize, the attorney-client, attorney work product or any other similar legal privilege, (ii) result in a breach of the terms and conditions of any Contract to which the Company generates $5,000,000.00 of cumulative revenue for or any Affiliate thereof is a party or otherwise bound, or (iii) violate applicable Law. If the Sellers’ Representative has any objections to any Earnout Statement, the Sellers’ Representative shall deliver to the Buyer following a written statement setting forth its objections thereto (an “Earnout Objections Statement”) with reasonable supporting detail as to any such disputed items. If an Earnout Objections Statement is not delivered to the Closing Buyer within thirty (30) days after delivery of the Earnout Statement to the Sellers’ Representative, such Earnout Statement shall be final, binding and non-appealable on the parties hereto and all other Persons. If an Earnout Objections Statement is timely delivered, the Sellers’ Representative and the Buyer shall negotiate in good faith to resolve any such objections set forth therein, but if they do not reach a final resolution within thirty (30) days after the delivery of such Earnout Objections Statement, the Sellers’ Representative and the Buyer shall submit such dispute to an independent regionally recognized public accounting firm agreed upon by Buyer and Sellers’ Representative in writing (who shall not have any material relationship with the Sellers or Buyer or its Subsidiaries) (the “Revenue MilestoneAccounting Firm”); and , provided that if the Sellers’ Representative and the Buyer cannot agree upon the Accounting Firm promptly following the end of the thirty (ii30) $10,000,000 at such time as day period after the Company achieves cumulative Adjusted EBITDA delivery of $6,000,000.00 an Earnout Objections Statement, either one of them may request that the New York City office of the American Arbitration Association (the “EBITDA MilestoneAAA”) select the Accounting Firm (who shall not have any material relationship with the Sellers or the Buyer or its Subsidiaries). The Accounting Firm shall make a determination of any matters submitted to it pursuant to the terms hereof, and any such determination made by the Accounting Firm shall be final, conclusive and binding on all parties hereto and all other Persons. The parties will cooperate with the Accounting Firm during the term of its engagement, including by providing or causing to be provided to the Accounting Firm such information or documentation as the Accounting Firm may reasonably request If the Accounting Firm is engaged pursuant to the terms hereof, the parties shall enter into a customary engagement letter with such Accounting Firm, and the Sellers, on the one hand, and the Buyer, on the other hand, shall each agree to pay one-half of the fees and expenses of such Accounting Firm (and, if applicable, the AAA). (bc) No later than the date that is ten (10) Business Days following the final and conclusive determination of the Target Revenue Percentages for the Earnout Period pursuant to Section 2.4(b) hereof, if such Target Revenue Percentages shall exceed the thresholds for the making of any payment in respect of such Earnout Period pursuant to the Earnout Principles, and subject to the terms set forth in this Agreement (including the terms set forth in Article VI hereof), the Buyer shall pay, or cause to be paid, to the Sellers the amount required to be paid by the Buyer to the Sellers pursuant to Section 2.4(a) hereof, such payment to be made by wire transfer of immediately available funds to such account or accounts as the Sellers may designate to the Buyer in writing, such payments to be made to each Seller based on the Pro Rata Share thereof. The right of the Sellers to receive any payment pursuant to the Earnout Principles is solely a contractual right and is not a security for purposes of any federal or state securities laws (and shall confer upon the Sellers only the rights of a general unsecured creditor of the Buyer under applicable Law), (ii) will not be represented by any form of certificate or instrument, (iii) does not give the Sellers’ Representative, the Sellers or any other Person any dividend rights, voting rights, liquidation rights, preemptive rights or other rights common to holders of the Buyer’s equity securities, and (iv) is not redeemable. (d) After the Closing Date, the Buyer shall: (i) cause the Company to maintain books and records for the Company in a manner intended to enable the Buyer to accurately determine the amount of Target Revenue Percentages during the Earnout Period, and (ii) not, directly or indirectly, take any action in bad faith for the purpose of circumventing or reducing the Earn-Out Payment. (e) All amounts paid by the Buyer pursuant to Section 2.4(a) shall be treated by the parties as an adjustment to the purchase price paid by the Buyer hereunder in respect of the Interests acquired pursuant to the terms hereof. (f) For the avoidance of doubt, (i) the number of shares obligation of Buyer Preferred Securities to make any payments pursuant to Section 2.4 shall not be issued to Sellers shall be determined based on a fixed value contingent or conditioned upon the continuing employment or service of $1.00 per share, consistent with any Person (including the value used at the Closing, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and (ii) revenue shall be calculated in accordance with GAAP. (c) Within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.

Earnout. (a) As additional consideration Subject to the Borrower’s request, and the Administrative Agent’s confirmation of the Borrower’s satisfaction of the conditions below, Lenders shall disburse to or for the Membership Interestsbenefit of the Borrower, Buyer in up to two (2) disbursements, up to an additional $11,500,000 (the “Earnout”). Any undisbursed portion of the Earnout shall issue to Sellers additional Buyer Preferred Securities in accordance with their respective Pro Rata Shares equal to be cancelled on December 15, 2013. Disbursement of the following amounts Earnout shall be conditioned upon the achievement by or on behalf of Buyer (or the Company) satisfaction of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”):conditions: (i) The Borrower shall have delivered to the Administrative Agent a request for disbursement of all or a portion of the Earnout, which request shall have been received by the Administrative Agent by not later than November 15, 2013. The Borrower’s request shall specify the amount of the Earnout requested, which amount, when added to any portion of the Earnout previously disbursed, shall not exceed $10,000,000 at such time 11,500,000; (ii) Borrower shall not have previously received more than one (1) partial disbursement of the Earnout; (iii) As of the date of the Borrower’s request for disbursement, and as of the Company generates $5,000,000.00 date on which the Earnout is to be disbursed, (A) no Default or Event of cumulative revenue Default shall exist, (B) no material default (beyond the expiration of any applicable notice and cure periods), as determined by the Administrative Agent, shall exist under the Management Agreement or the Franchise Agreement and (C) there shall have been no change, circumstance or occurrence which could reasonably be expected to have a Material Adverse Effect, as determined by the Administrative Agent in its sole discretion; (iv) The Debt Service Coverage Ratio, calculated as of the last day of each of the two (2) most recent fiscal quarters preceding the date of the Borrower’s request, shall be not less than 1.35, and the Borrower shall provide evidence thereof acceptable to the Administrative Agent in its sole discretion; provided, for purposes of calculating Pro Forma Debt Service, the “outstanding principal balance of the Loans” shall be deemed to include the portion of the Earnout that the Borrower has requested be disbursed; (v) The Borrower shall have paid to the Administrative Agent, for the Buyer following ratable benefit of the Closing Lenders, a non-refundable fee in an amount equal to one-quarter of one percent (0.25%) of the “Revenue Milestone”)amount of the Earnout for which the Borrower has requested disbursement. Such fee shall be deemed earned when received; (vi) The Borrower shall have provided to the Administrative Agent, for its benefit and the benefit of the Lenders, any endorsements reasonably requested by the Administrative Agent to the Title Policy; and (iivii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”). (b) For the avoidance of doubt, (i) the number of shares of Buyer Preferred Securities to be issued to Sellers The Borrower shall be determined based on a fixed value of $1.00 per share, consistent with the value used at the Closing, and not based on the value have satisfied all of the Buyer Preferred Securities at the time of issuance conditions to Sellers; and (ii) revenue shall be calculated in accordance with GAAP. (c) Within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall disbursement set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafterin Section 6.2. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.

Earnout. 2.3.1.1 The Parties agree that an additional amount (the “Earnout”) shall be due by Buyer to Seller as a supplemental Purchase Price for the Transferred Shares if, during the Relevant EO Period, (a) As additional consideration for the Membership InterestsBuyer enters into Binding Agreements in respect of the Transfer of all or part of the Owned Real Property in one or several related transactions to one or more Unaffiliated Third Parties (the EO Tranche 1), Buyer shall issue it being further specified and agreed that any payment hereunder of the EO Tranche 1 shall, in any case, be subject to Sellers additional Buyer Preferred Securities actual completion of the Transfer contemplated under the related Binding Agreements in accordance with their respective Pro Rata Shares equal to the following amounts upon the achievement by or on behalf of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” terms and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”).conditions set forth therein; (b) the Buyer enters into Binding Agreements in respect of the Transfer of all or part of the Transferred Shares in one or several related transactions to one or more Unaffiliated Third Parties (the EO Tranche 2), it being further specified and agreed that any payment hereunder of the EO Tranche 2 shall, in any case, be subject to actual completion of the Transfer contemplated under the related Binding Agreements in accordance with the terms and conditions set forth therein; (c) the Company enters into Qualifying Leases with Unaffiliated Third Parties granting them occupancy rights on all or part of the Owned Real Property (the EO Tranche 3); (d) the Buyer enters into Binding Agreements with any Unaffiliated Third Parties in respect of the Sale and Leaseback of all or part of the Owned Property (the EO Tranche 4), it being further specified and agreed that (x) any payment hereunder of the EO Tranche 4 shall, in any case, be subject to actual completion of the Sale and Leaseback contemplated under the related Binding Agreements in accordance with the terms and conditions set forth therein and (y) should a Transfer fall under the scope of EO Tranche 4, it shall prevail EO Tranche 1; (the EO Tranche 1, the EO Tranche 2, the EO Tranche 3 and the EO Tranche 4 are hereinafter collectively referred to as the EO Tranches). 2.3.1.2 For the avoidance of doubt, the Parties further acknowledge and agree that: (a) no EO Tranche shall be due and payable in the event of (i) a merger between the number Company and Buyer or one of shares its Affiliates or (ii) a Transfer of Buyer Preferred Securities or all or part of the Transferred Shares or all or part of the Owned Real Property to be issued an Affiliate of Buyer, so long as the transferee remains an Affiliate of Buyer, provided that if the Affiliate ceases to Sellers remain so, the relevant EO Tranche shall be determined based due by Buyer and shall be computed on a fixed value the basis of $1.00 per share, consistent with the value used at the Closing, and not based on the value of the Company reflected in the price formula used by Buyer Preferred Securities at or its Affiliates in the time transaction whereby the relevant Affiliate ceased to remain an Affiliate of issuance Buyer and provided further that these transactions shall not affect the right of the Seller to Sellersreceive any EO Tranche 1, EO Tranche 3 or EO Tranche 4, as may be due and payable in accordance with the terms herein; if the Company is combined (including by way of merger, absorption or other form of combination) with Buyer or any of its Affiliates, all EO Tranches shall automatically be transferred to the resulting entity (the Resulting Entity) and will be binding toward it and the EO Tranche 2 Earnout shall apply to the Transfer of the Shares of the Resulting Entity, provided however that (i) any value attributable to businesses, assets, activities or liabilities of the Resulting Entity which are not related to the businesses, assets, activities or liabilities of the Company on the Closing Date shall not give rise to any Earnout and (ii) revenue the Parties shall jointly appoint (and will share the expense of) a mutually acceptable expert in order to assess the value of the former assets and liabilities of the Company that were in existence on the Closing Date and the share of the consideration received as a result thereof in the total consideration for the Transfer of the Resulting Entity. (b) no EO Tranche 1 shall be calculated in accordance with GAAP.due and payable by Buyer as a result of the completion of a Permitted Transfer (c) Within thirty (30) days after the end no EO Tranche 3 shall be due and payable by Buyer as a result of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”).Permitted Lease; (d) ▇▇▇▇▇ no EO Tranche shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved be due and such notice shall set forth payable by the effective date Buyer should the Earn Out, for any specific transaction (or any series of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”related transactions), and be lower than ten thousand euros (EUR 10,000) (the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafterDe Minimis). (e) Until each Milestone Event has occurredEO Tranche shall automatically, Buyer immediately and without any further formality, terminate upon expiry of the Relevant EO Period applicable thereto; (f) any EO Tranche 1, EO Tranche 2 and/or EO Tranche 4 (as applicable) shall, in any case, be subject to the actual completion of the transaction triggering payment of any such EO Tranche under the relevant Binding Agreements and, for the sake of clarity, no EO Tranche shall be due and payable for so long as the Binding Agreements entered into in connection therewith are not duly and satisfactorily completed in accordance with their relevant terms and conditions; (g) any EO Tranche 3 shall, in any case, be subject to the actual payment by the tenant under the relevant Qualifying Lease of the first rental for occupancy of the relevant premises under the terms of that relevant Qualifying Lease; (h) for the purposes of determining the EO Tranche 2, as may be applicable, if the Company were to acquire and/or hold after the Closing Date any asset (including real property asset) other than the Owned Real Property, the value allocable to any such other asset shall be deducted from the purchase price for the Transferred Shares deriving from the transaction triggering payment of the EO Tranche 2; (i) use commercially reasonable efforts to manage in case of series of transactions triggering payments of an EO Tranche, (x) if and where the operations determining of an EO Tranche results in a negative amount (and therefore, relieves Buyer from any payment obligation in connection therewith), any such negative amount shall be reported and offset against the Company amount of any other EO Tranche, as may be payable and their respective businesses on a basis consistent due by Buyer in accordance with past practice the terms herein and (iiy) use commercially reasonable efforts to maintain complete only one EO Tranche may be due and accurate books and records indicating the revenue and EBITDA payable for a same transaction, with no double counting or covenant of the CompanyBuyer to pay more than once an EO Tranche for a same transaction. Subject to The amount of each EO Tranche shall be as set forth in Schedule 2.3. If the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition Transfer of the consent of Seller Transferred Shares or the Owned Real Property to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliatesan Unaffiliated Third Party is made for a consideration which is not entirely in cash, will, at all times after the Closing, act then a cash equivalent to such consideration shall be determined in good faith by the Parties. Similarly, where adjustments are to be made to the determining of an EO Tranche due to the occurrence of events after the Closing Date (in particular, if value of other assets (including real property assets) acquired by the Company after the Closing Date are to be deducted to determine the amount of any EO Tranche 2 or in the circumstances described in paragraph (a) above), then the corresponding adjustments deriving therefrom to be taken into account in the determining of the relevant EO Tranche shall be determined in good faith by the Parties on the basis of an independent expert report, as provided in paragraph (a) above (mutatis mutandis). In the event of any dispute between the Parties as to the amount of any EO Tranche (including, as a result of the Parties failing to agree on the good faith determinations under the foregoing), such amount shall be conclusively determined by an Independent Accounting Firm in accordance with the provisions of Section 2.2.2, which are applicable mutatis mutandis for the purpose hereto. 2.3.1.3 Buyer undertakes to notify to Seller the occurrence of a transaction triggering payment of any EO Tranche in accordance with the terms herein, when applicable, the consideration to be received by Buyer in connection therewith (including payment mechanics) within seven (7) Business Days from the date of entry into the relevant binding agreement by Buyer, the Company or its Affiliate. An EO Tranche shall be due and payable by Buyer to Seller within thirty (30) calendar days following (the EO Payment Date): • with respect to EO Tranche 1, EO Tranche 2 or EO Tranche 4, the Milestone Payments. Notwithstanding anything date on which Buyer receives actual payment in furtherance of the relevant Binding Agreements under which any such EO Tranche is due and payable (Buyer undertaking to notify Seller of such receipt within seven (7) Business days of receipt thereof), or • with respect to EO Tranche 3, the date on which the Third Party makes the first payment to the contrary hereinCompany for the occupancy of the relevant premises (Buyer undertaking to notify Seller of such receipt within seven (7) Business days of receipt thereof), no action as appropriate, • and shall bear interest from the EO Payment Date through and including the date of actual payment of the relevant EO Tranche at a rate equal to EURIBOR 3 months plus 100 basis points. 2.3.1.4 An adjustment deed (acte d’ajustement), for tax registration purposes, shall be intentionally takensigned by the Parties and registered in due course by the Buyer, nor the related cost and expenses shall any action be intentionally refrained from being taken, borne by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this AgreementBuyer.

Earnout. (a) As additional consideration In addition to the Merger Consideration provided to holders of HCI Common Stock, following the Effective Time, each former stockholder of HCI that had shares of HCI Common Stock exchanged for Merger Consideration (other than holders of Dissenting Shares) pursuant to Section 2.2 hereof (the Membership Interests"Former HCI ---------- Stockholders") shall also be entitled to certain Earnout Payments (as defined ------------ below), Buyer shall issue to Sellers additional Buyer Preferred Securities if any, in accordance with their respective Pro Rata Shares equal to the following amounts upon the achievement by or on behalf provisions of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”)this Section 2.3. (b) For Subject to paragraph (c) below, within 10 business days following the avoidance earlier of doubt, (i) the number last day of shares ALC's fiscal quarter during which either (x) a permanent certificate of Buyer Preferred Securities occupancy has been obtained, (y) a temporary certificate of occupancy and a license to be issued operate a facility have been obtained or (z) a sale/leaseback transaction has been closed with respect to Sellers shall be determined based on a fixed value of $1.00 per sharean Identified Site (as defined in Section 6.8 hereof), consistent with the value used at the Closing, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and (ii) revenue two years following the Effective Time with respect to any Identified Sites for which none of (x), (y) or (z) of the foregoing clause of this sentence have occurred, ALC shall provide an Earnout Payment, together with a notice setting forth the calculation of such Earnout Payment certified by the Chief Financial Officer or Controller of ALC (the "Earnout Payment Notice"), to each Former HCI Stockholder for each ---------------------- "unit" at an assisted living facility that (I) is located on (or within 15 miles of) such Identified Site referred to in clause (i) of this sentence or (II) ALC intends to develop on (or within 15 miles of) such Identified Site referred to in clause (ii) of this sentence; it being understood that if more than one assisted living facility is located on (or within 15 miles of) an Identified Site, then Earnout Payments shall be calculated provided by ALC with respect to all such assisted living facilities on (or within 15 miles of) such Identified Site. For purposes of this Agreement, an "Earnout Payment" shall be payable in accordance --------------- certified or ALC company check and shall equal (A) $7,500 multiplied by (B) the number of "units" located on or to be developed on (or within 15 miles of) such Identified Site divided by (B) 4,857,500, for each share of HCI Common Stock held by such Former HCI Stockholder immediately prior to the Effective Time. ALC shall mail the Earnout Payment, together with GAAPthe Earnout Payment Notice, to the address indicated by the respective Former HCI Stockholder on the Exchange Certificate submitted to the Exchange Agent in compliance with Section 2.2(a) hereof. (c) Within thirty ALC shall be obligated to provide Earnout Payments with respect to each and every assisted living facility that meets the criteria of paragraph (30b) days after of this Section 2.3, not to exceed 39 of such facilities in the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”)aggregate. (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing Any portion of the Earnout Payment that remains unclaimed by a Former HCI Stockholder for twelve months after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance mailing of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurredEarnout Payment Notice shall be deemed abandoned and shall revert to ALC. Thereafter, Buyer such Former HCI Stockholder shall (i) use commercially reasonable efforts to manage have no claim or interest in the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Paymentsabandoned Earnout Payment. Notwithstanding anything to the contrary contained herein, no action none of ALC, Newco, HCI, the Exchange Agent or any other person shall be intentionally takenliable to any Former HCI Stockholder for any property delivered to any public official pursuant to applicable abandoned property, nor shall any action be intentionally refrained from being taken, by Buyer escheat or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreementsimilar laws.

Earnout. Upon satisfaction of all of the following items (ai) As additional consideration for – (vi) Lessor shall pay Lessee an earnout payment equal to the Membership Interests, Buyer shall issue to Sellers additional Buyer Preferred Securities total cost of construction of the Improvements (“Total Cost”): (i) completion of the Improvements in accordance with their respective Pro Rata Shares equal to the following amounts upon the achievement by or on behalf of Buyer (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectivelyall Applicable Laws, the “Milestone Payments”): (i) $10,000,000 at such time as approved plans and specifications, and the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and Approved Budget, (ii) $10,000,000 at such time as issuance by the Company achieves cumulative Adjusted EBITDA City of $6,000,000.00 (Stockton of an unconditional certificate of occupancy, together with evidence that the “EBITDA Milestone”). (b) For Lessee is in occupancy of the avoidance of doubtImprovements and is conducting its business therein, (iiii) issuance by the number Title Company of shares of Buyer Preferred Securities a date down title policy subject only to be issued to Sellers shall be determined based on a fixed value of $1.00 per share, consistent with Permitted Exceptions insuring the value used at Lessor’s interest in the Closing, Property lien free and not based on insuring the value of the Buyer Preferred Securities at Improvements, and including such endorsements as Lessor reasonably requests, (iv) issuance of an ALTA survey including all Table A Items 1, 2, 3, 4, 6, 7(a), (b)(i) (c), 8, 9, 10, 11(a), 12-16 and certified to Lessor and Lender, (v) issuance of a zoning letter from the time City of issuance to Sellers; Stockton confirming that the Improvements located on the Property are in compliance with all applicable zoning laws and constitute a conforming use, and (iivi) revenue shall be calculated in accordance with GAAP. a modification of this Lease to (ca) Within thirty extend Lessee’s right to early termination until, at least, ten (3010) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth years from the effective date of such achievement of a Milestone Event the modification, (such date being b) increase the “Milestone Achievement Date”), and Base Rent to an amount equal to the parties shall execute any such further instruments to consummate product obtained by multiplying the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage Total Cost times the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and Combined Interest Rate plus (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA Base Rent payable under this Lease as of the Company. Subject effective date of the modification of this Lease with five percent (5%) increases to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate Base Rent every five (5) years commencing on the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition first day of the consent initial Base Term and (c) extend Lessee’s right of Seller early termination until, at least, ten (10) years following the date of the modification, which shall be a period coterminous with the Building Lease. As an example, if construction of the Improvements was completed in December 2007 the expiration date of the Building Lease would continue as April 30, 2026, but, for purposes of early termination, Lessee’s tenth (10th) Lease Year shall commence in December, 2016, and end in December, 2017 with the first five percent (5%) increases to the terms Base Rent commencing on May 1, 2011 i.e. five (5) years following the commencement date of the initial Base Term. For purposes hereof Total Cost shall mean the actual hard cost of construction of the Improvements and the cost to prepare the plans and specifications, all fees and costs of regulating agencies and utility companies; all professional fees and costs; and all other costs that are customary in the development of this Section 2.03 are reliant upon type of building, but in no event including the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount cost of the Milestone Payment. Seller expressly acknowledges Property, the cost of the racking systems and agrees that ▇▇▇▇▇ makes no representations distribution systems which are to be installed as part of the Improvements, commissions, developer fees or warranties amounts in excess of any kind or naturethe Approved Budget, express or implied, at law or in equity, or otherwise, relating as such Approved Budget may be modified pursuant to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.Subsection 4.1

Earnout. (aIn addition to the consideration described in Section 1.2(a) As above, in the event that there is Qualifying Earnout Revenue, then the Purchasers shall pay to the Seller and the Affected Employees additional cash consideration for the Membership Interests, Buyer shall issue to Sellers additional Buyer Preferred Securities in accordance with their respective Pro Rata Shares an aggregate amount equal to the following amounts upon lesser of (1) US$10,000,000 or (2) the achievement product of US$0.667 multiplied by or on behalf of Buyer the Qualifying Earnout Revenue (or the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectivelyas adjusted pursuant to this Section 1.2(b), the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue MilestoneEarnout Payment”); and (ii) $10,000,000 at such time , less any applicable withholding taxes to the Seller, as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”). (b) For the avoidance of doubtset forth herein, (i) the number of shares of Buyer Preferred Securities to be issued to Sellers shall be determined based on a fixed value of $1.00 per share, consistent with the value used at the Closing, and not based on the value of the Buyer Preferred Securities at the time of issuance to Sellers; and (ii) revenue shall be calculated in accordance with GAAP. (c) Within within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company Determination Date (as defined below), with (A) an amount equal to thirty percent (30%) of the Earnout Payment to be paid by the Purchasers (or their Affiliates) to the Affected Employees as determined in accordance with GAAP on a basis consistent with its past practices the Affected Employee Earnout Allocation delivered by the Seller pursuant to Section 1.2(b)(v) (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement DateAffected Employee Earnout Payment”), less any applicable withholding taxes to the Affected Employees, and the parties shall execute any such further instruments (B) an amount equal to consummate the issuance seventy percent (70%) of the Earnout Payment, less any applicable Buyer Preferred Securities withholding taxes to the Seller; provided, that:” 1.6 A new Section 1.2(b)(vi) shall be added to the Asset Purchase Agreement and shall read in its entirety as soon as reasonably practicable thereafter. follows: “(eb)(vi) Until each Milestone Event has occurredIn the event that the IP Purchaser determines in its reasonable discretion that it is required to withhold any applicable withholding taxes with respect to the payment of the Earnout Payment to the Seller, Buyer shall then (i) use commercially reasonable efforts to manage IP Purchaser shall so notify the operations Seller at the time of Buyer and the Company and their respective businesses on a basis consistent with past practice delivery of the Earnout Statement, and (ii) use commercially reasonable efforts the Seller may, in its discretion, direct the IP Purchaser to maintain complete and accurate books and records indicating make such Earnout Payment directly to the revenue and EBITDA Seller’s shareholders on a pro-rata basis based on their equity interest in the Seller (less any applicable withholding taxes to the relevant shareholder of the CompanySeller). Subject The respective percentage allocations of the Earnout Payment as between the shareholders of the Seller shall be provided to the foregoing, IP Purchaser in writing by the Seller understands that Buyer and its Affiliates will shall be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that accompanied by a material condition certified copy of the consent Seller’s register of Seller to the terms of this members.” 1.7 Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action 1.5(b)(ii) shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or amended to read in its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.entirety as follows:

Earnout. (a) As additional consideration On the Closing Date, Parent shall deposit all of the Escrowed Earnout Shares with U.S. Bank, N.A. or another escrow agent mutually agreed to by Parent and the Company (the “Escrow Agent”), to be held in an escrow account for the Membership Interestspurpose of distributing such shares to the Company Stockholders upon the valuation of the ARS, Buyer as described in this Section 2.8. The Escrowed Earnout Shares shall issue to Sellers additional Buyer Preferred Securities be issued in the name of the Escrow Agent for the benefit of the Company Stockholders in accordance with their respective Pro Rata Shares equal the terms and conditions of this Section 2.8 and an agreement to be entered into at the following amounts upon the achievement by or on behalf of Buyer (or Closing between Parent, the Company) of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time Stockholders’ Representative and the Escrow Agent, in customary form and substance as reasonably agreed to by Parent and the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue MilestoneEscrow Agreement”); and (ii) $10,000,000 at such time . The Escrow Agreement shall provide that the Escrow Agent shall execute consents in lieu of a stockholders’ meeting with respect to, or vote, the Escrowed Earnout Shares on all matters in the same proportion as the Company achieves cumulative Adjusted EBITDA other Transaction Shares not held by the Escrow Agent are so voted or for which consents in lieu of $6,000,000.00 (the “EBITDA Milestone”)a stockholders’ meeting are so executed. (b) For Subject to Section 2.8 hereof, upon the avoidance last day of doubtthe forty-ninth (49th) month following the Closing Date (the “Earnout Distribution Date”), each Company Stockholder (other than Company Stockholders who properly exercised appraisal rights pursuant to Section 262 in connection with the Merger, which such Company Stockholders shall have the rights as provided in Section 2.7(g)) shall receive from Parent that number of shares of Parent Common Stock equal to the difference between: (i) the number product of shares multiplying (x) the Escrowed Earnout Shares by (y) such holder’s Pro Rata Percentage by (z) the applicable “Distribution Percentage of Buyer Preferred Securities to be issued to Sellers shall be determined based on a fixed value of $1.00 per share, consistent with Escrowed Earnout Shares” set forth in the value used at the Closing, and not based on the value far right column of the Buyer Preferred Securities at table set forth in Exhibit B attached hereto (the time of issuance to Sellers; and “Earnout Calculation Table”) less (ii) revenue the product of multiplying (y) the ARS Loss Share Equivalent by (z) such holder’s Pro Rata Percentage less (iii) the product of multiplying (y) the Municipal Derivative Litigation Liabilities Share Equivalent by (z) such holder’s Pro Rata Percentage less (iv) the product of multiplying (y) the Excess Dividend Share Equivalent by (z) such holder’s Pro Rata Percentage. The applicable Distribution Percentage of Escrowed Earnout Shares shall be calculated in accordance with GAAP. the percentage that the Aggregate ARS Market Value (c) Within thirty (30) days after the end of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forth, and specifying in reasonable detail, Buyer’s determination of revenue and Adjusted EBITDA of the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”). (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone Event has been achieved and such notice shall set forth the effective date of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”), and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreement.as

Earnout. (a) As Following the Closing, and as additional consideration for the Membership InterestsTransaction, Buyer within five (5) Business Days after the occurrence of the Trigger Event (subject to Section 2.17(d)), Acquiror shall issue or cause to Sellers additional Buyer Preferred Securities be issued to each Company Stockholder its pro rata portion of the Earnout Shares, in accordance with their respective Pro Rata the Allocation Schedule, which shall be registered pursuant to Securities Laws. In connection with a Trigger Event which is a Change in Control, such Earnout Shares equal shall be issued as of immediately prior to the following amounts upon the achievement by or on behalf of Buyer (or the Company) effectiveness of the following events (each, a “Milestone Event”) (each payment, a “Milestone Payment,” and collectively, the “Milestone Payments”): (i) $10,000,000 at such time as the Company generates $5,000,000.00 of cumulative revenue for the Buyer following the Closing (the “Revenue Milestone”); and (ii) $10,000,000 at such time as the Company achieves cumulative Adjusted EBITDA of $6,000,000.00 (the “EBITDA Milestone”)Change in Control. (b) For Unless otherwise required by a “determination” within the avoidance meaning of doubtSection 1313(a) of the Code, the Parties acknowledge and agree (i) that any Earnout Shares paid to the number of shares of Buyer Preferred Securities to be issued to Sellers Company Stockholders shall be determined based on a fixed value treated as additional consideration for the Surviving Company Stock for all income Tax purposes that can be received without imposition of $1.00 per share, consistent with tax (other than to the value used at the Closing, and not based on the value extent treated as interest under Section 483 of the Buyer Preferred Securities at Code or any similar provision of the time of issuance to Sellers; Code), and (ii) revenue shall to prepare and file all Tax Returns consistent with such Tax treatment. Notwithstanding anything in this Agreement to the contrary, the right to receive the Earnout Shares under this Agreement may not be calculated assigned or transferred, other than as may be permitted in accordance with GAAPRev. Proc. 84-42. (c) Within thirty (30) days after Notwithstanding anything to the end contrary contained herein, no fraction of each fiscal quarter or as soon as reasonably practicable thereafter, ▇▇▇▇▇ shall prepare and deliver to Sellers a statement setting forthan Earnout Share will be issued by virtue of the Trigger Event, and specifying each Person who would otherwise be entitled to a fraction of an Earnout Share (after aggregating all fractional Earnout Shares that otherwise would be received by such Person in reasonable detail, Buyer’s determination connection with the occurrence of revenue and Adjusted EBITDA a Trigger Event) shall instead have the number of Earnout Shares issued to such Person rounded down to the Company determined in accordance with GAAP on a basis consistent with its past practices (the “Quarterly Statement”)nearest whole number. (d) ▇▇▇▇▇ shall promptly notify Seller Representative in writing after it becomes aware that a Milestone If no Trigger Event has been achieved occurred prior to the eighth anniversary of the Closing Date, this Section 2.17 shall automatically terminate and such notice shall set forth the effective date be of such achievement of a Milestone Event (such date being the “Milestone Achievement Date”)no further force or effect, and the parties shall execute any such further instruments to consummate the issuance of the applicable Buyer Preferred Securities as soon as reasonably practicable thereafter. (e) Until each Milestone Event has occurred, Buyer shall (i) use commercially reasonable efforts to manage the operations of Buyer and the Company and their respective businesses on a basis consistent with past practice and (ii) use commercially reasonable efforts to maintain complete and accurate books and records indicating the revenue and EBITDA of the Company. Subject to the foregoing, Seller understands that Buyer and its Affiliates will be free to operate the Company as they determine in their reasonable discretion. In addition, Buyer, on behalf of itself and its Affiliates, further acknowledges that a material condition of the consent of Seller to the terms of this Section 2.03 are reliant upon the presumption that Buyer and its Affiliates, will, at all times after the Closing, act in good faith with respect to the Milestone Payments. Notwithstanding anything to the contrary herein, no action Earnout Shares shall be intentionally taken, nor shall any action be intentionally refrained from being taken, by Buyer or its Affiliates with the primary purpose of preventing any Milestone Payment from being earned or owed or otherwise reducing the likelihood or amount of the Milestone Payment. Seller expressly acknowledges and agrees that ▇▇▇▇▇ makes no representations or warranties of any kind or nature, express or implied, at law or in equity, or otherwise, relating to the future financial results of Buyer or the Company or the achievement of a Milestone Event, and Seller has not relied on any such representations or warranties in entering into this Agreementissuable hereunder.