Common use of Earn-Out Clause in Contracts

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

Earn-Out. (a) If prior At the earlier to the Closing Date, (i) the Company has elected to protest the March 2004 loss occur of the Defense Advanced Research Projects Agency (“DARPA”a) Contract – solicitation number N00174-03-R-0044 end of any consecutive twelve month period within the three year period after Closing that results in the payment of $6,800,000 (the “DARPA ContractMaximum Additional Payment”) through litigation or other administrative procedure to the Seller pursuant to the calculations of the Additional Payment set forth in this Section 5.4 and (the “Protest”), (iib) such Protest has not been finally and non-appealably resolved as of three years after the Closing Date and (iii) as a result of such Protest the Company, or any of its successors or Affiliates, is, on or before the final and non-appealable resolution of the Protest (“Earn-Out End Date”), awarded a contract by DARPA (the “Earn-Out ContractPeriod”), Purchaser shall provide a calculation to the Seller based on the consecutive twelve month period within the three year period (“Optimal Period”) for similar work as after Closing that results in the DARPA Contract and for largest payment possible to the same customer as the DARPA Contract, with such work being of at least the same value as the DARPA Contract, namely with an estimated total gross revenue during the term of the Earn-Out Contract of at least Thirty One Million Two Hundred Thirteen Thousand Eight Hundred Fifty Dollars ($31,213,850) Seller pursuant to this Section 5.4 (the “Target Earn-Out Contract RequirementsAdditional Payment”), then Purchaser shall have setting forth an obligation amount equal to the amount (such amount, the “Target Difference”) obtained by (a) the product obtained by multiplying (i) the quantity of Coal A sold, measured in tons, by Alden Resources during such Optimal Period by (ii) the amount, if any, by which the 2010 Cost of Production, calculated as $103.20 per ton (the “2010 Cost of Production”), exceeds the per ton Cost of Production of Coal A sold by Alden Resources during such Optimal Period less (b) $1,000,000 (the “Earn-Out ObligationCalculation Base Amount”) ). If the Target Difference is less than $3,000,000 (the “Earn-Out Threshold”), then the Additional Payment shall equal $0.00. If the Target Difference is greater than or equal to pay to the Sellers, within sixty (60) business days after the final and non-appealable award of the Earn-Out Contract to Threshold, then the Company, or any of its successors or AffiliatesAdditional Payment shall equal the product obtained by multiplying (a) the Maximum Additional Payment by (b) a fraction, (i) Five Hundred Thousand Dollars ($500,000) (the “Maximum Earn-Out Cash Payment”) and (ii) such number of shares of Purchaser Common Stock having a value of One Million Five Hundred Thousand Dollars ($1,500,000), with such value being determined in accordance with the Earn-Out Valuation (the “Maximum Earn-Out Purchaser Common Shares”) ((i) and (ii) together are referred to as the “Maximum Earn-Out Consideration”). In the event that the actual estimated total gross revenue during the term of the Earn-Out Contract (the “Actual Earn-Out Contract Requirements”) is for a greater amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have an Earn-Out Obligation to the Sellers equal to the Maximum Earn-Out Consideration. In the event that the Actual Earn-Out Contract Requirements are for a lower amount of estimated total gross revenue during the term of the Earn-Out Contract than the Target Earn-Out Contract Requirements, Purchaser shall have a reduced Earn-Out Obligation to the Sellers (the “Actual Earn-Out Consideration”) determined as follows: The Maximum Earn-Out Consideration shall be multiplied by a fraction, the numerator of which shall be equal to the Actual Target Difference less the Earn-Out Contract Requirements Threshold and (ii) the denominator of which shall be 8,000,000 (the Target “Earn-Out Contract RequirementsCalculation Denominator”); provided, but however, that in no event shall the Actual Earn-Out Consideration be greater than Additional Payment, together with any Partial Disposition Payment, exceed the Maximum Earn-Out Consideration. The Actual Earn-Out Consideration shall be paid (i) twenty five percent (25%) in cash (the “Actual Earn-Out Cash Additional Payment”) and (ii) seventy five percent (75%) in shares of Purchaser Common Stock, with such value being determined in accordance with the Earn-Out Valuation (the “Actual Earn-Out Purchaser Common Shares”). In no event shall Purchaser be obligated to issue or deliver any fractional shares of Purchaser Common Stock. All obligations on Purchaser to issue and deliver Purchaser Common Stock shall be rounded down to the nearest whole number and Purchaser shall pay cash for what would have been an obligation to deliver a fractional share. In the event that Purchaser or the Company or any of their successors or Affiliates are awarded any contract by DARPA unrelated to the Protest, Purchaser shall have no Earn-Out Obligation to the Sellers. Any dispute between Purchaser and the Sellers regarding whether Purchaser shall or shall not have an Earn-Out Obligation to the Sellers shall be resolved by the Independent Accounting Firm in a similar manner as set forth in Section 2.3(b) above.

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

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