Common use of Earn-Out Clause in Contracts

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Seller shall be entitled to receive the following payments (each, an aggregate “Earn Out Payment”) to the extent the Business achieves the applicable EBITDA (as defined below) targets: (i) An Earn Out Payment of One Million Three Two Hundred Thirty Three Thousand Dollars ($1,333,000) (200,000), if the “Annual Maximum”) can be earned based on the AEBITDA EBITDA of the Sellers’ Operations during each of Business for the trailing twelve (12) month periods period from the Closing Date (each a the “Measurement Initial Earn Out Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to $2,500,000 or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.greater; (ii) If An Earn Out Payment of Two Hundred Thousand Dollars ($200,000), if the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as EBITDA of the expiration Business for the trailing twelve (12) month period from the first anniversary of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(cClosing Date (the “Second Earn Out Period”) hereof.is $2,500,000 or greater; and (iii) Subject to Section 2.7(b) hereofAn Earn Out Payment of Two Hundred Thousand Dollars ($200,000), if the AEBITDA EBITDA of the Business for any applicable Measurement the trailing twelve (12) month period from the second anniversary of the Closing Date (the “Final Earn Out Period” and together with the Initial Earn Out Period and the Second Earn Out Period, the “Earn Out Periods” and each, an “Earn Out Period”) is zero $2,500,000 or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellersgreater. (b) If Within ninety (90) days following the Annual Maximum is not earned for any end of each Earn Out Period, Buyer shall prepare and deliver to Seller a statement of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) EBITDA of the amount not earned may be recaptured Business for such Earn Out Period (the “Recapture MaximumEarn Out Statement”). Seller shall have thirty (30) days after receipt of the Earn Out Statement (the “Earn Out Review Period”) to review the extent that calculation of EBITDA for such Earn Out Period. During the AEBITDA in Review Period, Seller shall have the immediately subsequent Measurement Period is greater than the Target AEBITDAright to inspect Buyer’s books and records during normal business hours at Buyer's offices, in which case, the amount of the recapture earn-out shall be equal upon reasonable prior notice and solely for purposes reasonably related to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any determinations of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period EBITDA and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Periodresulting Earn Out Payment. Each earn-out amount earned by Sellers for any Measurement Period pursuant Prior to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Review Period, or such earlier date as Purchaser and Sellers Seller may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer object to the accounts EBITDA calculation set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned Earn Out Statement by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative delivering a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections objection (an “Objection Notice”)) to Buyer, which shall specify the disputed items and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If Sellers’ Representative Seller fails to deliver an Objection Notice to Buyer prior to the expiration of the Review Period, then the EBITDA calculation set forth in the Earn Out Statement shall be final and binding on the parties hereto. If Seller timely delivers an Objection Notice, Purchaser and Sellers the parties shall attempt negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the EBITDA and the Earn Out Payment for the applicable earn-out amountEarn Out Period. If Purchaser and Sellers so agree in writing the parties are unable to reach agreement within thirty (30) days, then the Parties shall forthwith refer the dispute to a nationally recognized accounting firm mutually agreeable to the applicable earn-out amountSeller and the Buyer for resolution, Purchaser shallwith the understanding that such firm shall resolve all disputed items within 20 days after such disputed items are referred to it. If the Buyer and the Seller are unable to agree on the choice of an accounting firm, within five they shall select a nationally recognized accounting firm by lot (5) business days of reaching such agreement pay to Sellers any additional amounts agreed uponafter excluding their respective regular outside accounting firms). If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration Each of the dispute and Seller, on the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellershand, and the third (who must be independent Buyer, on the other hand, shall bear one-half of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members costs of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justificationsuch accounting firm. The decision of a majority the accounting firm shall be deemed final and conclusive and shall be binding upon the Seller and the Buyer. (c) To the extent the EBITDA of the three arbitrators Business, as finally determined pursuant to Section 1.6(b) for any applicable Earn Out Period is less than $2,500,000 but greater than $1,500,000, Buyer shall pay a partial Earn Out Payment to Seller in an amount equal to the earn-out product determined by multiplying (i) the EBITDA Achievement Percentage by (ii) the applicable Earn Out Payment for such Earn Out Period, where the “Achievement Percentage” is the percentage determined by dividing (A) the amount related of (i) the EBITDA of the Business for the applicable Earn Out Period less (ii) $1,500,000, by (B) $1,000,000. For avoidance of doubt, no partial Earn Out Payments shall be earned or paid to the extent the EBITDA of the Business for any applicable Earn Out Period is equal or less than $1,500,000. For illustration purposes only, if the EBITDA for the Initial Earn Out Period is $2,000,000, then the Earn Out Payment for the Initial Earn Out Period accrued to Seller under this Agreement shall be equal to $100,000 (i.e. 50% of $200,000), exclusive of interest. (d) To the extent Seller is entitled to all or a portion of an Earn Out Payment in accordance with this Section 1.6, the applicable Earn Out Payment(s) (or portion thereof) shall be paid on the date that is three (3) years from the Closing Date (the “Earn Out Payment Date”), and shall accrue interest from the date on which it is determined Seller is entitled to such Earn Out Payment (or portion thereof) at a rate equal to five percent (5%) per annum, computed on the basis of a 360 day year for the actual number of days elapsed. Any accrued interest on any Earn Out Payments(s) shall be accrued and paid on the Earn Out Payment Date. Notwithstanding anything to the contrary herein, Buyer shall only make payments to Seller under this Section 1.6(b) in accordance with and as permitted by the terms of the Subordination Agreement. (e) For purposes of this Agreement, “EBITDA” shall mean the earnings before interest, income taxes, depreciation and amortization of the Business, for the applicable fiscal period ended, determined in accordance with GAAP. For purposes of calculating the Earn-Out Notice Payment, the Management Fee described in Section 4.8 shall be binding added back to increase earnings and conclusive upon the parties. Such decision shall not be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order treated as an expense of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionBuyer.

Earn-Out. 4.1 In addition to the Closing Purchase Price, Price the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers Seller shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture an earn-out calculated as 23.2% of $100,000 the total revenue (i.e.including exported and cross border gross revenue) from client engagements that is (a) attributable to work originated by any employee employed by the Company at the Closing Date, a dollar for dollar recapture (up including but not limited to the maximum aggregate recapture Seller’s Indirect Shareholders and carryXxxxxxxx Xxxxxxx and (b) recognized during the Earn-forward earn-out amount for all Measurement Periods of $266,000Out Period in accordance with Danish GAAP, less (i) reimbursable expenses (e.g. travel expense) with respect to the engagements comprised by items (a) and (b) above to the extent actually paid by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement PeriodBuyer, the Annual Maximum earn-out, less $200,000 Company or their Affiliates on behalf of client and (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out ii) any amount of $166,000 (i.e., a dollar for dollar carry-forward (up receivable included in the Final Working Capital not paid to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) Company by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)debtor. (c) Except as expressly provided in Section 2.7(b) hereof, each earn4.2 The Buyer shall deliver the Earn-out amount (and/or recapture or carryOut Statement to the Seller no later than sixty Business Days after the end of the Earn-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Out Period. Each earnIf the Buyer fails to deliver the Earn-out amount earned by Sellers for any Measurement Period pursuant Out Statement to Section 2.7(a) hereofthe Seller within such time limit, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereofthe Buyer shall, shall be paid by Purchaser to Sellers within sixty (60) days from and including the 11th Business Day after the applicable Measurement Period ends (except that time limit and until delivery of the for Earn-Out Statement, pay to the last Measurement Period, such payment Seller an interest equal to the Interest accruing on the finally determined Earn-Out Amount. 4.3 The Seller shall be made within fifteen (15) days after Business Days from the expiration receipt of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer Statement notify the Buyer in writing whether it accepts or object to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating Statement. The Seller’s failure to notify the amount, if any, Buyer within the time limit will be regarded as the Seller’s acceptance of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for Statement. 4.4 If the applicable Measurement Period. In the event Sellers’ Representative objects Parties are unable to any earn-out amount set forth reach an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser agreement within fifteen (15) days Business Days of the date Buyer’s receipt of such the Seller’s notification pursuant to clause 4.3, either Party may demand that the calculation of the Earn-Out Notice a written notice setting forth Amount is referred to and determined by the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers Expert in accordance with Clause 10.5 to 10.7 which shall attempt in good faith to agree upon apply mutatis mutandis. 4.5 The Earn-Out Amount shall be paid by the applicable earn-out amount. If Purchaser and Sellers so agree in writing Buyer to the applicable earn-out amount, Purchaser shall, Seller’s Bank Account within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration Business Days from the Buyer’s receipt of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent Seller’s accept of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon Statement or the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order Expert’s determination of the arbitratorsEarn-Out Amount. Judgment upon The Earn-Out Amount shall accrue Interest from its due date to the date when it is paid together with any award, judgment, decree or order rendered by accrued Interest. 4.6 The Buyer is not entitled to terminate the arbitrators may be entered in employment of any court having competent jurisdiction. Any such arbitration shall be held of Seller’s Indirect Shareholder’s in the City and County Earn-Out Period unless the employee in question is in material breach of Orange, California under the CPR Rules for Non-Administered Arbitration then currently his/her contract resulting in effect. The non-prevailing party a dismissal without notice (as determined by the arbitratorsin Danish “Bortvisning”) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionemployee.

Earn-Out. In addition Buyer shall pay to the accounts designated in writing by the Seller Representative for the benefit of the Sellers additional consideration in cash as described herein (the “Earn-Out,” with each payment made pursuant to the Earn-Out being 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 each of the six (6) consecutive years following the Closing Purchase Price(together, the earn“Earn-out amounts set forth below can be earned Out Period”), with the first year beginning on February 1, 2017 and shall be paidending on January 31, if earned2018, as follows: Year 1 Earn-Out: 40% of the 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 Sellers. the contrary, (ai) Up only to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars the extent the Companies ($1,333,000and/or their management team) run the Bxxxx Xxxxxx and/or B Bxxxx Xxxxxx women’s footwear line(s) (the “Annual MaximumBA Lines”) can be earned based on the AEBITDA ), for purposes of the Sellers’ Operations during 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 year in which such Additional Royalty is actually paid shall be reduced by fifty percent (50%) of such Additional Royalty; provided, however, that the maximum amount in which the Earn-Out Payment for each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through Year 2 Earn-Out and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than Year 3 Earn-Out may be reduced in connection with the Target AEBITDA, then earn-out amount for such Measurement Period Additional Royalty shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. seventy five thousand dollars (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA$75,000.00), and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject 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 2.7(b2.2(e)(ii) and Section 2.2(e)(iii) hereof, if the AEBITDA unadjusted Earn-Out Payment for any applicable Measurement Period is zero or negative then no earnEarn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, Out year in which casethe Earn-Out Payment is subject to reduction based on such Sections is insufficient to cover such reduction in full, the Sellers, jointly and severally, shall promptly pay to Buyer the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Perioddeficiency. Similarly, if the Annual Maximum is If Sellers do not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, pay the amount of such deficiency within twenty (20) days of Buyer’s delivery of the carry forward earnEarn-out shall be equal Out calculation for the applicable year (pursuant to the following paragraph), Buyer may set-off or recoup the amount of such deficiency against any Earn-Out Payment that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basisis, up or otherwise will be, due and payable to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof 2.2(e). Buyer shall deliver the calculation of any Earn-Out Payment for such applicable Measurement each year during the Earn-Out Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers Seller Representative within sixty (60) days after the applicable Measurement Period ends end of such year, and such calculation shall be deemed conclusive and binding on the Parties for purposes of computing such Earn-Out Payment, unless the Seller Representative notifies Buyer in writing within forty-five (except 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 Seller Representative are unable to resolve any such disagreement within thirty (30) days of receipt of notice of the Seller Representative’s disagreement, 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 such Earn-Out Payment to Buyer within such 45-day period or if the Seller Representative indicates in writing that the for Seller Representative has no dispute with respect to the last Measurement Periodcalculation of such Earn-Out Payment prior to the expiration of such 45-day period, then Buyer shall make such payment shall be made Earn-Out Payment within fifteen (15) days after the expiration earlier of Buyer’s receipt of notice from the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree Seller Representative that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA Seller Representative has no dispute with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a Payment or the expiration of the forty-five (45) day period during which the Seller Representative is required to provide such written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith pursuant to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable2.2(e), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Buyer shall pay to Sellers an aggregate amount equal to fifty percent (50%) of the amount by which annual Gross Profit of the Company exceeds the amount set out in Schedule 2.2 (such amount being referred to herein as the “Earn-out Threshold”) during each Earn-out Year, to be calculated after the close of each Earn-out Year (with Gross Profit prorated for a 12 month period in the case of Earn-out Year One Million Three Hundred Thirty Three Thousand Dollars and the final period in Section 2.7 ($1,333,000c) (iv)) (the “Annual MaximumEarn-out Amount”) can be earned based on ). In the AEBITDA event that in any Earn-out Year the annual Gross Profit of the Sellers’ Operations during Company is less than the Earn-out Threshold (such deficiency being referred to herein as the “Earn-out Deficiency”), the Earn-out Threshold for the following Earn-out Year shall be deemed to be the amount equal to the Earn-out Threshold for that Earn-out Year plus the Earn-out Deficiency from the immediately preceding Earn-out Year, and so on for each successive Earn-out Year. For purposes of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If foregoing calculation, the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earnEarn-out Threshold for Earn-out Year One shall be pro rated to equal five-twelfths (5/12ths) of the amount set out in Schedule 2.2 and for such Measurement Period Earn-out Year Four shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as seven-twelfths (7/12ths) of the expiration said amount set out in Schedule 2.2. Notwithstanding any other provision of such Measurement Period and be payable by Purchaser this Agreement, the Earn-out Amount paid to Sellers as and when provided shall not exceed in Section 2.7(c) hereof. the aggregate the amount set out in Schedule 2.2 (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn“Earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement PeriodCap”), minus (B) the amount by upon payment of which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount Buyer shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero have no further obligation or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellersliability hereunder whatsoever. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earnThe Earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, Amount shall be paid by Purchaser wire transfer by Buyer to an account specified by Sellers within sixty on or before the later of the last day of the third calendar month following each Earn-out Year or three (603) business days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration calculation of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be Amount becomes binding and conclusive upon on the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) parties pursuant to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision2.10.

Earn-Out. In addition The Escrow Property shall be held in the Escrow Account and, subject to Article VIII and this Article II, will only be released to the Closing Purchase PriceSellers (along with the Accrued Dividends) in the event that the Purchaser, the earn-out amounts set forth below can be earned Company and shall be paidtheir respective Subsidiaries meet certain minimum performance requirements in accordance with this Article II. Subject to Article VIII and this Article II, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (in the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. event that (i) If the AEBITDA Adjusted Net Income for any applicable Measurement Period is equal to or greater than the Target AEBITDAcalendar year ended December 31, then earn2016 exceeds the 2016 Earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Out Target, (ii) If the AEBITDA Adjusted Net Income for any applicable Measurement Period is less than the calendar year ended December 31, 2017 exceeds the 2017 Earn-Out Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. or (iii) Subject to Section 2.7(b) hereofthe Adjusted Net Income for the calendar year ended December 31, if 2018 exceeds the AEBITDA for any applicable Measurement Period is zero or negative then no earn2018 Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which caseOut Target, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall collectively be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) receive (each, an “Earn-Out Payment DatePayment”) by wire transfer to from the accounts set forth on Schedule 2.7(c)Escrow Account, in each case, one-third (1/3rd) of the Escrow Shares, and from the allocation Purchaser the Accrued Dividends on such earnone-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless third (1/3rd) portion of the amount that each Seller’s former Operations contributed Escrow Shares, subject to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable maximum Earn-Out Payment DatePayments in the aggregate for all three calendar years 2016, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser 2017 and 2018 together (each such calendar year, an “Earn-Out NoticeYear”), together with a reasonably detailed calculation of AEBITDA for and such three-year calendar period, the applicable Measurement “Earn-Out Period”) equal to the Escrow Property plus the Accrued Dividends. In the event Sellers’ Representative objects that the above Adjusted Net Income targets are not met for any Earn-Out Year, the Sellers shall not be entitled to receive any earnEarn-out amount set forth Out Payment for such Earn-Out Year and shall forfeit any right to such Escrow Property and Accrued Dividends with respect to such Earn-Out Year; provided, however, that in the event that at the end of the Earn-Out Period the average Adjusted Net Income per Earn-Out Year for all three Earn-Out Years exceeds the Alternative Earn-Out Target (each of the 2016 Earn-Out Target, the 2017 Earn-Out Target, the 2018 Earn-Out Target and the Alternative Earn-Out Target, an “Earn-Out Target”), the Sellers shall collectively be entitled to receive all of the Escrow Property and Accrued Dividends that they previously did not receive (such payment the “Alternative Earn-Out Payment”, with such Alternative Earn-Out Payment considered an additional Earn-Out Payment). For the avoidance of doubt, failure to qualify for an Earn-Out Notice, Sellers’ Representative must deliver Payment in any Earn-Out Year during the Earn-Out Period shall not prevent the Sellers from being able to Purchaser within fifteen (15) days of collectively receive an Earn-Out Payment in a subsequent Earn-Out Year during the date of Earn-Out Period. If for any Earn-Out Year there is a final determination in accordance with Section 2.2 that the Sellers are entitled to receive an Earn-Out Payment for such Earn-Out Notice a written notice setting forth Year or the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection NoticeAlternative Earn-Out Payment, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, then within five (5) business days of reaching Business Days after such agreement pay to Sellers any additional amounts agreed upon. Iffinal determination, howeverthe Purchaser, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute DT Representative and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and Seller Representative will provide joint written instructions to the third (who must be independent of Escrow Agent to release to the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information Sellers Escrow Property from the opposing parties about Escrow Account (and Purchaser shall pay the subject matter Accrued Dividends) in an aggregate amount (of the dispute. The arbitrators shall rule upon motions Escrow Property and Accrued Dividends) equal to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable (i) such Earn-Out Notice shall be binding Payment less (ii) the aggregate amount of any indemnification claims by any Indemnified Parties under Article VIII that (A) are pending, (B) have been finally determined as due and conclusive upon owing but are unpaid from the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding Escrow Account in accordance with Article VIII or (C) have been paid from the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered Escrow Account in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) accordance with Article VIII but have not previously been used to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller reduce the amount of any additional earnprior Earn-out amount deemed earned Out Payment, with each Seller receiving its Pro Rata Share of such net Earn-Out Payment. At the end of the Earn-Out Period, if there is any Escrow Property and/or Accrued Dividends which the Sellers are not entitled to receive in accordance with this Article II, such Escrow Property and/or Accrued Dividends will be forfeited by the arbitrators Sellers and distributed to Purchaser from the Escrow Account in the case of Escrow Property, or retained by the Purchaser, in the case of Accrued Dividends, and within five (5) business days of notice Business Days after a final determination in accordance with Section 2.2 that at the end of the arbitrators decision. If Earn-Out Period there is such Escrow Property to which the Sellers are not entitled to receive, the determined Purchaser, the DT Representative and the Seller Representative will provide joint written instructions to be the non-prevailing partyEscrow Agent to release such Escrow Property to the Purchaser. The Purchaser will cancel any Escrow Shares distributed to the Purchaser from the Escrow Account promptly after its receipt thereof and cancel any Accrued Dividends payable in respect of such Escrow Shares. Each Seller acknowledges that such Seller’s right to receive the Escrow Shares, Purchaser may deduct other Escrow Property and Accrued Dividends is contingent based on the fees performance of the arbitratorsPurchaser, the administrative costs Company and their respective Subsidiaries for periods including those after the Closing as set forth in this ‎Article II, and that if the requirements for the payment of the arbitration Earn-Out Payments as set forth in this Article II are not met in accordance with the terms hereof, the Escrow Shares, the other Escrow Property and the expensesAccrued Dividends will not be paid or delivered to the Sellers, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expensesSellers shall have no right to receive such Escrow Shares, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionother Escrow Property or Accrued Dividends.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Following the Closing, subject to Section 10, the Sellers may be entitled to receive additional consideration (the "Earn-Out Consideration") in the form of shares of Chyron Common Stock (the "Earn-Out Shares") up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (amount such that the “Annual Maximum”) can be earned based on the AEBITDA sum of the Sellers’ Operations during each Closing Shares and the Earn-Out Shares (if earned) will represent up to fifty percent (50%) of the twelve sum of the Base Shares and the Earn-Out Shares (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through if earned), subject to and including 2015.contingent upon the following conditions: (i) If Subject to Section 2.3(a)(iv), if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Fifteen Million Five Hundred Thousand US Dollars ($15,500,000) for the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA2013 Earn-Out Period, then earn-out amount for such Measurement Period the Sellers shall be equal entitled to receive, and Chyron AB shall cause to be issued to them, as Earn-Out Consideration (the Annual Maximum for such Measurement Period and such amount shall be deemed earned as "2013 Earn-Out Consideration"), a number of additional shares of Chyron Common Stock (the "2013 Earn-Out Shares") which will cause the percentage of the expiration sum of such Measurement Period the Base Shares and be payable the 2013 Earn-Out Shares which is represented by Purchaser the sum of the Closing Shares and the 2013 Earn-Out Shares to increase by five percent (5%) over the percentage of the Base Shares which is represented by the Closing Shares (i.e., from forty percent (40%) to forty-five percent (45%)), allocated to and among the Sellers as and when provided set forth in Section 2.7(c) hereofthe Hego Payout Spreadsheet. (ii) If Subject to Section 2.3(a)(iv), if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Sixteen Million US Dollars ($16,000,000) for the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA2014 Earn-Out Period, then the earn-out amount for such Measurement Period Sellers shall be equal entitled to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDAreceive, and such amount Chyron AB shall cause to be deemed earned issued to them, as Earn-Out Consideration (the "2014 Earn-Out Consideration"), a number of additional shares of Chyron Common Stock (the "2014 Earn-Out Shares") which will cause the percentage of the expiration sum of such Measurement Period the Base Shares, the 2013 Earn-Out Shares (if earned) and be payable the 2014 Earn-Out Shares which is represented by Purchaser the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares to increase by two and one-half percent (2.5%) over the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares which is represented by the sum of the Closing Shares and the 2013 Earn-Out Shares (if earned) (i.e., from forty-five percent (45%) to forty-seven and one-half percent (47.5%) if the 2013 Earn-Out Consideration is earned and from forty percent (40%) to forty-two and one-half percent if the 2013 Earn-Out Consideration is not earned), allocated to and among the Sellers as and when provided set forth in Section 2.7(c) hereofthe Hego Payout Spreadsheet. (iii) Subject to Section 2.7(b) hereof2.3(a)(iv), if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers Hego Revenue (as recorded and translated to Sellers. (bUS dollars under U.S. GAAP) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two exceeds Sixteen Million Five Hundred Sixty Six Thousand US Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x16,500,000) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA2015 Earn-Out Period, then the Sellers shall be entitled to receive, and Chyron AB shall cause to be issued to them, as Earn-Out Consideration (the following: for "2015 Earn-Out Consideration"), a number of additional shares of Chyron Common Stock (the first Measurement Period"2015 Earn-Out Shares") which will cause the percentage of the sum of the Base Shares, the Annual Maximum earn2013 Earn-outOut Shares (if earned), less $100,000 the 2014 Earn-Out Shares (if earned) and the 2015 Earn-Out Shares which is represented by the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned), the 2014 Earn-Out Shares (if earned) and the 2015 Earn-Out Shares to increase by two and one-half percent (2.5%) over the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares (if earned) which is represented by the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares (i.e., a dollar for dollar reduction by from forty-seven and one-half percent (47.5%) to fifty percent (50%) if the amount that 2000 Xxxx-Xxx Consideration and the actual AEBITDA for 2014 Earn-Out Consideration are both earned, from forty-five percent (45%) to forty-seven and one-half percent (47.5%) if the first Measurement Period 2013 Earn-Out Consideration is less than earned but the Target AEBITDA); for second Measurement Period2014 Earn-Out Consideration is not earned, from forty-two and one-half percent to forty-five percent (45%) if the Annual Maximum earn2013 Earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was Out Consideration is not earned for but the first Measurement Period); 2014 Earn-Out Consideration is earned, and for from forty percent (40%) to forty-two and one-half percent (42.5%) if neither the third Measurement Period, 2000 Xxxx-Xxx Consideration nor the Annual Maximum earn2014 Earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDAOut Consideration is earned), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up allocated to and among the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by Sellers as set forth in the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)Hego Payout Spreadsheet. (civ) Except Notwithstanding the foregoing, if Hego Revenue (as expressly provided in Section 2.7(brecorded and translated to US dollars under U.S. GAAP) hereof, each earnexceeds Thirty-out amount Three Million US Dollars (and/or recapture or carry-forward earn-out amounts$33,000,000) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “2013/2014 Earn-Out Payment Date”) by wire transfer to Period, then the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed entitled to receive, and Chyron AB shall cause to be issued to them (to the AEBITDA. Sellers acknowledge and agree that extent not previously issued to them), the achievement maximum number of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment DateShares without regard to the provisions of Sections 2.3(a)(i), Purchaser (ii) and (iii), which provisions shall deliver Sellers’ Representative a written notice stating thereupon cease to be of any force or effect (i.e. such that the amount, if any, sum of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Closing Shares and Earn-Out Notice”), together with a reasonably detailed calculation Shares issued to them will represent fifty percent (50%) of AEBITDA for the applicable Measurement Period. In sum of the event Sellers’ Representative objects to any earn-out amount set forth an Base Shares and the Earn-Out Notice, Sellers’ Representative must deliver Shares issued to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”them). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.

Earn-Out. In addition The definitive asset purchase agreement relating to the Closing Purchase Price, the Acquisition will contain an earn-out amounts set forth below can agreement pursuant to which Seller will be earned and shall be paid, if earned, entitled to Sellers. payments (the “Earn-Out Payments”) based upon the following structure: (a) Up Seller shall be entitled to an aggregate amount equal to four percent (4%) of One Million Three Hundred Thirty Three Thousand Dollars the Buyer’s license fee revenue ($1,333,000as determined in accordance with GAAP) received from the combined Global Software, Inc./Timeline, Inc. analytics business (the “Annual MaximumCombined Analytics Business Revenue”) can for the period beginning on the date of Closing and ending on the first anniversary of the date of Closing (the “First Earn-Out Period”); (b) Seller shall be earned entitled to an amount equal to three percent (3%) of the Combined Analytics Business Revenue for the period beginning on the first anniversary of the date of Closing and ending on the second anniversary of the date of Closing (the “Second Earn-Out Period”); (c) Seller shall be entitled to an amount equal to two percent (2%) of the Combined Analytics Business Revenue for the period beginning on the second anniversary of the date of Closing and ending on the third anniversary of the date of Closing (the “Third Earn-Out Period”); and (d) Seller shall be entitled to an amount equal to one percent (1%) of the Combined Analytics Business Revenue for the period beginning on the third anniversary of the date of Closing and ending on the fourth anniversary of the date of Closing (the “Fourth Earn-Out Period”). The Buyer and the Seller agree that the estimate of the aggregate Earn-Out Payments is approximately $470,000, which estimate is based on the AEBITDA of following Combined Analytics Business Revenue targets: (w) $3,700,000 for the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement First Earn-Out Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA ; (x) $4,700,000 for the first Measurement Period is $100,000 less than the Target AEBITDA, Second Earn-Out Period; (y) $6,200,000 for the second Measurement Period exceeds the Target AEBITDA by $350,000, Third Earn-Out Period; and (z) $7,000,000 for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Fourth Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), Period. Any and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable all Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters Payments shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined payable in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionarrears at quarterly intervals.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Seller shall be entitled to receive four (4) annual earnout payments (each, an aggregate “Earn Out Payment”), each in an amount equal to forty percent (40%) of One Million Three annual Gross Profit (as defined below) of the Business in excess of Eight Hundred Thirty Three Thousand Dollars ($1,333,000800,000) (determined as of each anniversary of the “Annual Maximum”) can be earned Closing Date and based on the AEBITDA of the Sellers’ Operations during each of the immediately trailing twelve (12) month periods period (each a each, an “Measurement Earn Out Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period ). Each Earn Out Payment shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided paid in accordance with Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers1.6(b). (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within Within sixty (60) days after following the applicable Measurement Period ends (except that the for the last Measurement end of each Earn Out Period, Buyer shall prepare and deliver to Seller a statement of the Gross Profit of the Business for such payment Earn Out Period (the “Earn Out Statement”). Seller shall be made within fifteen have thirty (1530) days after receipt of the Earn Out Statement (the “Earn Out Review Period”) to review the calculation of Gross Profit for such Earn Out Period. During the Earn Out Review Period, Seller shall have the right to inspect Buyer’s books and records during normal business hours at Buyer’s offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of Gross Profit and the resulting Earn Out Payment. Prior to the expiration of the Medicare Cap Year immediately following such Measurement Earn Out Review Period, or such earlier date as Purchaser and Sellers Seller may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer object to the accounts Gross Profit calculation set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned Earn Out Statement by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative delivering a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections objection (an “Objection Notice”)) to Buyer, which shall specify the disputed items and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If Sellers’ Representative Seller fails to deliver an Objection Notice to Buyer prior to the expiration of the Earn Out Review Period, then the Gross Profit calculation set forth in the Earn Out Statement shall be final and binding on the parties hereto. If Seller timely delivers an Objection Notice, Purchaser and Sellers the parties shall attempt negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Gross Profit and the Earn Out Payment for the applicable earn-out amountEarn Out Period. If Purchaser and Sellers so agree in writing the parties are unable to reach agreement within thirty (30) days, then the Parties shall forthwith refer the dispute to a nationally recognized accounting firm mutually agreeable to the applicable earn-out amountSeller and the Buyer for resolution, Purchaser shallwith the understanding that such firm shall resolve all disputed items within twenty (20) days after such disputed items are referred to it. If the Buyer and the Seller are unable to agree on the choice of an accounting firm, within five they shall select a nationally recognized accounting firm by lot (5) business days of reaching such agreement pay to Sellers any additional amounts agreed uponafter excluding their respective regular outside accounting firms). If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration Each of the dispute and Seller, on the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellershand, and the third (who must be independent Buyer, on the other hand, shall bear one-half of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members costs of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justificationsuch accounting firm. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice accounting firm shall be deemed final and conclusive and shall be binding and conclusive upon the parties. Such decision Seller and the Buyer. (c) To the extent Seller is entitled to all or a portion of an Earn Out Payment in accordance with this Section 1.6, the applicable Earn Out Payment(s) shall be written and paid on the date that is ten (10) days from the date on which it is determined Seller is entitled to such Earn Out Payment. (d) For purposes of this Agreement, “Gross Profit” shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller mean the amount of revenues received from Qualifying Customers, less expenses charged by any additional earn-out amount deemed earned by the arbitrators within five 3rd party (5except Buyer and its affiliates) business days directly related to that job or account. Such expenses shall include but not be limited to cost of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing partygoods sold, Purchaser may deduct the fees of the arbitratorsdecoration, the administrative costs of the arbitration setup fees, 3rd party warehousing and the expensesfulfillment charges, including reasonable attorney’s inbound and outbound shipping, duties/taxes, credit card fees and customer specific trade show and event costs. In addition, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment in-house warehousing and fulfillment expenses will be included in the calculation of Gross Profit. “Qualifying Customers” for purposes of this Section 1.6 shall mean (i) those existing customers set forth on Schedule 2.1(t) and (ii) such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), additional customers as shall be paid mutually agreed upon by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionBuyer and Stockholder.

Earn-Out. In addition The following provisions shall apply with respect to the Closing Purchase Price, the earnEarn-out amounts set forth below can be earned and shall be paidOut Consideration, if earned, to Sellersany. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA The amount of the Sellers’ Operations during Earn-Out Consideration payable, if any, shall be calculated in accordance with and pursuant to Schedule 1.8. As soon as practical following the conclusion of each of the twelve 12-month, 18-month and 24-month anniversary of the first day of the calendar quarter immediately following the Closing Date (12each, an "Earn-Out Calculation Date", and collectively, the "Earn-Out Period"), and in any event not later than thirty (30) month periods days after each Earn-Out Calculation Date, Buyer shall prepare a calculation of the amount of the Earn-Out Consideration (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDAeach, then earnan "Earn-out amount for such Measurement Period shall be equal Out Calculation"), if any, payable with respect to the Annual Maximum for period ending on such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided Earn-Out Calculation Date in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDAaccordance with Schedule 1.8, and shall deliver a copy of each such amount shall be deemed earned as Earn-Out Calculation with reasonable back-up data and a statement showing the method of computing the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereofapplicable Earn-Out Consideration, if any, to Seller. Notwithstanding anything in this Agreement to the AEBITDA for any applicable Measurement Period is zero or negative then contrary, in no earnevent shall Seller be entitled to receive Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersOut Consideration which in the aggregate exceeds $18,000,000. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together Seller disagrees with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out NoticeCalculation, Sellers’ Representative must deliver to Purchaser Seller shall notify Buyer in writing in reasonable detail of the disagreement and the basis therefor within fifteen thirty (1530) days of the date after receipt of such Earn-Out Notice a written notice setting forth the basis for such objections Calculation (each, an “Objection Notice”"Earn-Out Objection"). If Sellers’ Representative delivers the Earn-Out Objection is not received by Buyer within such period or if Seller notifies Buyer that Seller agrees with Buyer's Earn-Out Calculation (each, an "Earn-Out Confirmation"), the applicable Earn-Out Calculation shall be deemed final and binding for all purposes of this Agreement and the amount of any Earn-Out Consideration shall be paid by Buyer within five (5) Business Days following the earlier of (i) the expiration of such thirty (30) day period and (ii) the delivery of an Earn-Out Confirmation. If Buyer does receive an Earn-Out Objection Noticewithin the applicable thirty (30)-day period, Purchaser Buyer and Sellers Seller shall attempt in good faith to agree upon the applicable earnpromptly resolve any differences within thirty (30) days after timely delivery of such Earn-out amountOut Objection. If Purchaser Xxxxx and Sellers so agree Seller resolve their disagreement, they shall set forth the agreement in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching a written document executed by Xxxxx and Seller and such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters written document shall be resolved by confidential deemed final and binding for all purposes of this Agreement. If Xxxxx and Seller are unable to resolve their disagreement within such period, any remaining differences will be submitted to binding arbitration conducted by in Boston, Massachusetts before a panel of three independent (3) arbitrators, who shall each have significant experience in software technology disputes. The panel shall comprise of one (1) arbitrator selected by PurchaserXxxxx, one (1) arbitrator selected by SellersXxxxxx, and the third one (who must be independent of the parties hereto1) arbitrator selected jointly by the two arbitrators previously so selectedselected by the foregoing. All arbitrators must The arbitration shall be members pursuant to the Commercial Arbitration Rules of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written American Arbitration Association then pertaining and shall be supported governed by written findings the United States Arbitration Act, 9 U.S.C. Sections 1-16. Any award(s) shall be subject to the confidentiality provisions of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitratorsthis Agreement. Judgment upon any award, judgment, decree or order rendered by on the arbitrators award may be entered in any court having competent jurisdiction. Any such The fees and expenses of the arbitration shall initially be held in borne fifty percent (50%) by Seller, and fifty percent (50%) by Xxxxx; provided that upon resolution of the City and County of Orangedispute, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (party, if any, as determined by the arbitrators) , shall be entitled to any arbitration under this Section 2.7 shall pay its own expenses, be reimbursed in proportion to the fees of each arbitrator, amount by which the administrative costs other party's determinations of the arbitration and items in dispute differed from the expenses, including reasonable attorneys’ amount determined by the arbitrators. Such amount shall be determined by the arbitrators. Any fees and costsexpenses of the arbitrators to be paid by Seller shall first be paid out of the Escrow Fund, incurred by the other party and Buyer and Seller shall execute and deliver to the arbitration. Purchaser shall pay to Seller Escrow Agent disbursement instructions for the amount of any additional earnsuch fees and expenses to be paid from the Escrow Fund pursuant to the Escrow Agreement. Any Earn-out amount deemed earned Out Consideration as finally determined by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice Buyer consistent with Section 1.8(c), promptly upon delivery of the arbitrators decisionarbitrators' written report, without interest, following such delivery. (c) Subject to Section 7.3(e), with respect to each period ending on an Earn-Out Calculation Date, Buyer shall pay the amount of Earn-Out Consideration, if any, earned in such period no later than ten (10) days following the final determination thereof in accordance with this Section 1.8 and Schedule 1.8 by wire transfer of immediately available funds to Seller. (d) The right to receive the Earn-Out Consideration, if any, payable pursuant to this Agreement is a contract right only and no certificate evidencing such right shall be issued. The right to receive the Earn-Out Consideration, if any, payable pursuant to this Agreement shall not be transferred or assigned and no beneficial interests therein may be pledged, sold, assigned or transferred by Seller, except that (i) Seller may assign or transfer its right to receive Earn-Out Consideration to the Seller Owner and (ii) heirs and beneficiaries of a Seller Owner upon death of such Seller Owner shall benefit from the right to receive the Earn-Out Consideration, subject to the conditions of receipt of such Earn-Out Consideration by such Seller Owner. (e) For U.S. federal income tax purposes, any payment of Earn-Out Consideration to Seller shall be (i) treated as additional purchase price (subject to imputation of interest under Section 483 or 1274 of the Code) or (ii) deemed to be paid to Seller and then paid by Seller to the SAR Holders in respect of Stock Appreciation Rights or to Phantom Unitholders in respect of Company Phantom Units, and Seller intends such amounts to be treated as compensation subject to applicable withholding tax for which the corresponding tax deduction inures to the benefit of Seller, although Buyer makes no covenant, representation or warranty as to such Tax treatment.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up At the First Effective Time, in accordance with the provisions of this ‎Article 2, Acquiror shall issue or cause to an aggregate be issued to each Pre-Closing Holder, such Pre-Closing Holder’s Pro Rata Allocation of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,0007,500,000 restricted Acquiror Common Shares which shall be subject to the vesting and forfeiture provisions provided for in this ‎Section 2.6 and, in the case of such restricted Acquiror Common Shares issued with respect to Company Options, the vesting and forfeiture conditions provided for in ‎Section 2.2(b) (collectively, the “Annual MaximumEarn Out Shares”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015.): (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as 3,750,000 of the expiration Earn Out Shares will vest upon the occurrence of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.Triggering Event I (the “$12 Earn Out Shares”); and (ii) If 3,750,000 of the AEBITDA for any applicable Measurement Period is less than Earn Out Shares will vest upon the Target AEBITDAoccurrence of Triggering Event II (the “$14 Earn Out Shares”). For illustrative purposes, then the earn-out amount for such Measurement Period shall be equal if, prior to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.the Earn Out Period: (iiii) Subject the Closing Price of the Acquiror Common Shares is greater than or equal to Section 2.7(b$12.00 over any 20 Trading Days within any 30 consecutive Trading Day period, all of the $12 Earn Out Shares shall vest; and (ii) hereofthe Closing Price of the Acquiror Common Shares is greater than or equal to $14.00 over any 20 Trading Days within any 30 consecutive Trading Day period, if all of the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period $14 Earn Out Shares shall be deemed earned or be payable by Purchasers to Sellersvest. (b) If Acquiror shall at any time prior to the Annual Maximum is not earned for any expiration of the first four Earn Out Period pay any cash or in-kind dividend (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA other than any dividend in the form of additional shares of Acquiror Common Shares, which dividend shall be governed by the immediately subsequent Measurement Period is greater than following sentence) on shares of Acquiror Common Shares then the applicable Target AEBITDA, in which case, Share Price shall be deemed to have been reduced for all purposes of this Agreement by the amount of such cash dividend or the recapture earnfair market value of the in-out kind dividend, as applicable, paid with respect to each Acquiror Common Share. If Acquiror shall at any time prior to the expiration of the Earn Out Period pay any dividend on shares of Acquiror Common Shares by the issuance of additional shares of Acquiror Common Shares, then in such case, (i) the number of Earn Out Shares shall be equal to adjusted by multiplying such number by a fraction, the amount numerator of which is the number of shares of Acquiror Common Shares (including any other shares so reclassified as Acquiror Common Shares) outstanding immediately after such event and the denominator of which is the number of shares of Acquiror Common Shares that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the were outstanding immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000event, and (zii) the applicable Target Share Price shall be appropriately adjusted to provide to each Pre-Closing Holder the same economic effect as contemplated by this Agreement prior to such event. Each Pre-Closing Holder shall not have the right to vote the Earn Out Shares held by such Pre-Closing Holder unless and until such Earn Out Shares vest in accordance with the terms set forth in ‎Section 2.6. Except for the third Measurement Period right to vote and the treatment with respect to dividends which is $200,000 less than addressed in this ‎Section 2.6(b), each Pre-Closing Holder shall have all of the Target AEBITDA, then Sellers shall be entitled rights of a stockholder with respect to the following: for the first Measurement PeriodEarn Out Shares, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up subject to the maximum aggregate recapture vesting and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)forfeiture conditions set forth herein. (c) Except as expressly provided in Section 2.7(b) hereofIf, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant time prior to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Earn Out Period, any Employee Earn Out Recipient ceases, for any reason or no reason, to remain in continuous employment with a Group Company (a “Former Employee Earn Out Recipient”), all unvested Earn Out Shares issued with respect to any Company Options and held by such earlier date as Purchaser Employee Earn Out Recipient shall be deemed to be automatically forfeited to Acquiror and Sellers may mutually agree) (each, an “Earn-Acquiror shall then distribute such Earn Out Payment Date”) by wire transfer Shares to the accounts set forth other Pre-Closing Holders on Schedule 2.7(c), and a pro rata basis based upon the allocation of Earn Out Shares as of the Closing Date (but disregarding any Earn Out Shares issued to a Former Employee Earn Out Recipient with respect to any Company Options held by such earn-out amounts among Sellers shall be Former Employee Earn Out Recipient). Any Earn Out Shares distributed to Employee Earn Out Recipients in accordance with Schedule 2.3 regardless the provisions of the amount that each Seller’s former Operations contributed this ‎Section 2.6(b) shall be granted to such individuals pursuant to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by SellersNew Incentive Plan. (d) On or before each If the applicable Earn-Triggering Event has not occurred prior to the expiration of the Earn Out Payment DatePeriod, Purchaser then all Earn Out Shares which would vest in connection with such Triggering Event shall be automatically forfeited and deemed transferred to Acquiror and shall be cancelled by Acquiror and cease to exist. (e) In the event of occurrence of any Triggering Event set forth in ‎Section 2.6(a), as soon as practicable (but in any event within five Business Days), the Acquiror will deliver Sellers’ to the Holder Representative a written notice stating statement that sets forth (i) the amountClosing Price over the applicable 20-Trading Day period and (ii) the calculation of the Earn Out Shares in connection therewith and the Allocation Schedule. (f) If, if anyprior to the expiration of the Earn Out Period, a Change of Control Transaction is consummated with a Change of Control Price equal to or in excess of the applicable earn-out amount deemed earned during price per share attributable to any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”)Triggering Event, together with a reasonably detailed calculation then, immediately prior to the consummation of AEBITDA for the Change of Control Transaction, the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount Triggering Event set forth an Earn-Out Notice, Sellers’ Representative must deliver in ‎Section 2.6(a) and the vesting conditions in ‎Section 2.6(f) shall be deemed to Purchaser within fifteen (15) days of have occurred and the date holders of such Earn-Earn Out Notice a written notice setting forth Shares shall be eligible to participate in such Change of Control Transaction. For avoidance of doubt, assuming no prior Triggering Events have occurred: (i) if the basis Change of Control Price for such objections acquisition of Acquiror Common Shares is greater than or equal to $12.00 per Acquiror Common Share, the $12 Earn Out Shares shall be deemed to have fully vested (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall $14 Earn Out Shares Shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written deemed forfeited and shall be supported cancelled by written findings Acquiror); (ii) if the Change of fact Control Price for acquisition of Acquiror Common Shares is greater than or equal to $14.00 per Acquiror Common Share, the $12 Earn Out Shares and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration $14 Earn Out Shares shall be held in deemed to have fully vested; provided that if the City and County Change of OrangeControl Price for acquisition of Acquiror Common Shares is less than $12.00 per Acquiror Common Share, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), no Earn Out Shares shall be paid deemed to have vested and all such Earn Out Shares shall be deemed forfeited and shall be cancelled by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionAcquiror.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (As additional Purchase Price consideration for the “Annual Maximum”) can be earned based on Purchased Interests, if the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through Earn-Out Target is attained, then Buyer shall, at its discretion and including 2015.at such time as provided in Section 1.5(e), pay: (i) If to the AEBITDA for any applicable Measurement Period is Members one million six hundred sixty thousand dollars ($1,660,000) in cash or an equivalent amount of shares of Buyer’s common stock equal to or greater than one million six hundred sixty thousand dollars ($1,660,000) divided by the Target AEBITDA, then earn-out amount for such Measurement Period price per share which shall be equal to determined by the Annual Maximum for such Measurement Period and such amount shall be deemed earned as volume-weighted average price per share of Buyer’s stock over the twenty (20)-day trading period ending at the end of the expiration of such Measurement Earn-Out Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.(the “Members’ Earn-Out Payment”); and (ii) If to the AEBITDA for any applicable Measurement Period is less than Company Employee Trust three hundred forty thousand dollars ($340,000) in cash or an equivalent amount of shares of Buyer’s common stock equal to three hundred forty thousand dollars ($340,000) divided by the Target AEBITDA, then the earn-out amount for such Measurement Period price per share which shall be equal to determined by the volume-weighted average price per share of Buyer’s stock over the twenty (A) 20)-day trading period ending at the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as end of the expiration of such Measurement Earn-Out Period (the “Company Employee Trust Earn-Out Payment” and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereoftogether with the Members’ Earn-Out Payment, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn“Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersOut Payment”). (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within Within sixty (60) days after the applicable Measurement Period ends (except that end of the Earn-Out Period, Buyer agrees to furnish a reasonably detailed written report to the Member Representative setting forth the amount of the Earn-Out Target for the last Measurement Earn-Out Period, such payment shall be made within fifteen together with copies of financial statements and any and all documents which evidence the amounts shown as being true, correct and complete (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment DateTarget Statement”). The Member Representative shall have a period (the “EO Review Period”) by wire transfer to of thirty (30) days respectively from the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless delivery of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment DateTarget Statement to review such statement. If as a result of such review, Purchaser the Member Representative disagrees with the Earn-Out Target Statement, the Member Representative shall deliver Sellers’ Representative to Buyer a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser Dispute Notice (each an “Earn-Out Dispute Notice”), together with a reasonably detailed calculation ) prior to the expiration of AEBITDA for the applicable Measurement Period. In EO Review Period setting forth in reasonable detail the event Sellers’ basis for such dispute, the specific items and amounts in dispute, and the Member Representative’s alternative calculation or determination of the applicable figures contained in the statement (including the alternative calculations of each disputed line item). (c) If the Member Representative objects either (i) fails to any deliver a Earn-Out Dispute Notice to Buyer prior to the expiration of the applicable EO Review Period or (ii) delivers a written notice to Buyer accepting the Earn-Out Target Statement, then, in either case, the calculations of the amounts reflected by or contained in the applicable earn-out amount set forth statement shall be final, binding and conclusive upon the Parties hereto. (d) If the Member Representative delivers an Earn-Out NoticeDispute Notice to Buyer in a timely manner, Sellers’ then the Member Representative must deliver and Buyer shall attempt in good faith to Purchaser resolve such dispute within fifteen thirty (1530) days of from the date of such Earn-Out Dispute Notice. If the Member Representative and Buyer cannot reach agreement within such thirty (30)-day period, then the dispute shall be promptly referred to the Neutral Accountant. The Neutral Accountant shall only resolve such contested items that were properly included by the Member Representative in a timely Earn-Out Dispute Notice and will resolve such items as promptly as may be reasonably practicable consistent with the terms of this Agreement, including making the calculations in accordance with the definitions of Earn-Out Period and Earn-Out Target. Following such review, the Neutral Accountant shall deliver a written notice opinion setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon its final determination of the applicable earn-out amountrevenue target, which shall be final, binding and conclusive on the Member Representative and Buyer and shall be used in computing the amount of any payment pursuant to this Section 1.5. If Purchaser All fees and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration expenses of the dispute and the matters Neutral Accountant shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third borne (who must be independent of the parties heretoA) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined Buyer in the sole judgment of proportion that the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent aggregate dollar amount of the disputed claimitems that are successfully disputed by the Member Representative (as finally determined by the Neutral Accountant) bears to the aggregate dollar amount of all disputed items and (B) by Member Representative in the proportion that the aggregate dollar amount of the disputed items that are unsuccessfully disputed by Member Representative (as finally determined by the Neutral Accountant) bears to the aggregate dollar amount of all disputed items. The arbitrators shall also have Except with respect to the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority expenses of the three arbitrators Neutral Accountant, the Parties shall bear their respective fees and expenses (including those of their respective advisors) in preparing, auditing or reviewing, as to the earn-out amount related to case may be, the applicable Earn-Out Notice Target Statement and Earn-Out Dispute Notice, as applicable. (e) In the event Buyer is required to pay the Earn-Out Payment pursuant to Section 1.5(a), the Earn-Out Payment shall be paid in full no later than the end of Buyer’s following fiscal quarter and upon determination by the Parties that the Earn-Out Target Statement is final, binding and conclusive upon the partiesParties pursuant to Section 1.5(c). (f) Prior to the end of the Earn-Out Period, Buyer shall ensure there is sufficient authorized and unissued Buyer Stock available to issue the maximum number of shares of Buyer Stock issuable hereunder and/or cash sufficient to fully satisfy the Earn-Out Payment. (g) After Closing Buyer shall have sole discretion with regard to all matters relating to the operation of the Company; provided, that Buyer shall not, directly or indirectly, take any actions in bad faith that would have the purpose of avoiding or reducing the Earn-out Payment. Such decision If Buyer takes any such actions, the Earn-Out Payment shall be written and deemed earned in full. (h) In the event of a Change of Control of Buyer during the Earn-Out Period, if the Earn-Out Target has not yet been attained, such Earn-Out Target shall be supported by written findings deemed attained upon the closing of fact such Change of Control and conclusions of law regarding Buyer shall immediately pay the dispute, which shall set forth the award, judgment, decree or order applicable portion of the arbitrators. Judgment Earn-Out Payment to the Members and the Company Employee Trust, respectively, upon any award, judgment, decree or order rendered the closing of such Change of Control. (i) Any payments made pursuant to this Section 1.5 shall be treated as an adjustment to the Purchase Price by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of OrangeParties for Tax purposes, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined unless otherwise required by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionLaw.

Earn-Out. In addition (i) As additional consideration for the Purchased Shares, the Purchaser will pay to the Closing Purchase PriceSeller, an earn out payment in the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate amount of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) US$2,250,000.00 (the “Annual MaximumEarn Out Payment”) can be earned based on that is calculated in accordance with Schedule 1.2(b)(i). During the AEBITDA Earn Out Period, the Purchaser agrees to conduct the business of the Sellers’ Operations during each Acquired Companies in good faith and will not take any actions to reduce the revenues of the twelve (12) month periods (each a “Measurement Period”) ending June 30 Acquired Companies or increase the expenses of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal Acquired Companies primarily in order to or greater than prevent the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal Earn Out Payment from being paid to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereofSeller. (ii) If the AEBITDA for any applicable Measurement Period Earn Out Payment is less than owed, the Target AEBITDA, then Purchaser will pay the earn-out amount for such Measurement Period shall be equal Earn Out Payment to the Seller within five (A5) Business Days after the Annual Maximum for such Measurement Period, minus (B) determination by the amount by which Purchaser that the actual AEBITDA for such Measurement Period Earn Out Payment is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided owed in accordance with this Section 2.7(c) hereof1.2(b). (iii) Subject After Closing, the Purchaser will prepare and deliver to Section 2.7(b) hereof, if the AEBITDA Seller monthly financial statements for any applicable Measurement Period is zero or negative then no earnthe Acquired Companies during the twenty-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (424) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole months after the Closing Date and neither Purchaser nor its Representatives (or until the Earn Out Payment is guaranteeing that any level of AEBITDA earned, if sooner). Such financial statements will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, delivered within five (5) business days Business Days after the preparation of reaching U.S. GAAP-based financial statements for the relevant month. (iv) Each of the following will constitute an “Acceleration Event”: (a) failure by the Purchaser to pay any amount when due under this Agreement unless the Purchaser is contesting the payment of such agreement pay to Sellers any additional amounts agreed upon. Ifamount in good faith, however, no agreement is reached after good-faith negotiations, either (b) the Purchaser or Sellers may demand arbitration any of the dispute and Acquired Companies suffers or incurs a Liquidation Event, (c) termination by the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent Purchaser of the parties heretoXxxxx Employment Agreement other than for “cause”, as such term may be defined in such agreement, or (d) selected jointly by the two arbitrators previously so selected. All arbitrators must be members a Change in Control of the CPR National Panel or CPR California Panel. Purchaser. (v) (x) The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined Parties acknowledge that certain accounts payable from ESPA in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-US$367,686.00, as disclosed on Schedule 3.6, will be reclassified as income. Any and all Taxes arising out amount deemed earned of such reclassification will be offset by the arbitrators within five Purchaser against the Earn Out Payment to the extent such Taxes are paid by the Purchaser (5) business days of notice or any of the arbitrators decisionAcquired Companies) after the Closing. If Sellers are Notwithstanding any other provisions of this Agreement to the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitratorscontrary, the administrative costs of Purchaser will not be entitled to assert a claim for Damages under Section 8 with respect to such Taxes to the arbitration and extent the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionEarn Out Payment is reduced.

Earn-Out. In addition (a) Buyer shall, subject to the Closing Purchase Price, conditions and at the earn-out amounts times set forth below can be earned in this Section 3.4, pay to Seller an additional and shall be paid, if earned, contingent amount not to Sellersexceed $50,000,000 annually and $175,000,000 in the aggregate (the "Earn Out Amount"). (ab) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can The Earn Out Amount shall be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015.payable as follows: (i) If Within 30 days following the AEBITDA for any applicable Measurement Period is equal end of each Earn Out Year, Buyer shall pay to or greater than Seller the Target AEBITDA, then earn-out amount Earn Out Payment for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereofEarn Out Year, if any. (ii) If No interest shall accrue on the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereofEarn Out Amount. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period The manner in which Earn Out Payments shall be deemed earned or calculated and hypothetical examples of when and how Earn Out Payments would be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA made are set forth in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)Exhibit 3.4. (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned All payments by Sellers for any Measurement Period pursuant Buyer to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts Seller pursuant to this Section 2.7 is contingent upon 3.4 shall be made by wire transfer of immediately available funds to the AEBITDA with respect account specified by Seller from time to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellerstime. (d) On If, at any time prior to or before each applicable Earn-during the Earn Out Payment DatePeriod, Purchaser Platts Oilgram Price Report or Petroleum Argus Global Markets shall deliver Sellers’ Representative a written notice stating the amount, if any, cease to be published or shall fail to publish any of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser prices used in calculating the Earn Out Payments, the parties (each acting in good faith) shall mutually agree on an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA alternate publication for the applicable Measurement Periodpurpose of establishing any such prices. In If the event Sellers’ Representative objects Maya Crude pricing formula ceases to any earn-out amount set forth represent the true market price for Maya Crude, or if Maya Crude is no longer the industry reference for heavy, sour Gulf Coast crudes, then the parties (acting in good faith) shall mutually agree on an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days alternative pricing formula consistent with the intent of the parties as of the date of this Agreement. (e) Buyer shall initially calculate the Earn Out Payment and shall deliver to Seller a statement setting forth the calculation of the Earn Out Payment, together with supporting information, at such Earn-time as the Earn Out Notice Payment is made. The acceptance by Seller of any Earn Out Payment shall not preclude Seller from taking exception to the correctness of the amount of any Earn Out Payment due hereunder; provided, however, that any such exception must be specified by Seller in a written notice setting forth to Buyer within 30 days after the date such payment is made, which notice shall describe the basis for such objections (an “Objection Notice”)Seller's dispute in reasonable detail. If Sellers’ Representative delivers an Objection NoticeSeller gives such notice, Purchaser Buyer shall pay to Seller any undisputed additional amount of the Earn Out Payment in accordance with this Section 3.4, and Sellers Seller and Buyer shall attempt consult in good faith and use all reasonable efforts to agree upon the applicable earn-out amountcalculation of the Earn Out Payment. If Purchaser on or before the 30th day after Seller's notice Seller and Sellers so agree in writing to Buyer have not agreed on the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiationsEarn Out Payment, either Purchaser Seller or Sellers may demand arbitration of the dispute and the matters Buyer shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority right to impose sanctionssubmit such matters as remain in dispute to Deloitte & Touche, including attorneys’ fees or such other accounting firm as Seller and other costs incurred by the partiesBuyer shall agree, to the same extent as a court of law or equityfor final resolution, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice which resolution shall be binding upon Seller and conclusive Buyer, and judgment upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdictionjurisdiction over the party against which such determination is sought to be enforced. Any such arbitration Buyer and Seller shall be held in the City and County of Orange, California under the CPR Rules for Noneach pay one-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, half the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment expenses of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any accounting firm for its services in resolving such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisiondispute.

Earn-Out. In addition to (a) As part of the Closing Purchase PriceAcquisition Consideration, Purchaser shall pay Earn-Out Payments, if any are earned, on the following terms and conditions: (i) for each of the 2017 calendar year (the “2017 Earn-Out Period”) and the 2018 calendar year (the “2018 Earn-Out Period”) (each such earn-out amounts set forth below can be earned period, an “Earn-Out Period” and collectively, the “Earn-Out Term”), Purchaser shall be paid, if earned, pay to Sellers. (a) Up to an aggregate those employees listed on Schedule 1.3 and remaining with the Company following Closing and at the time of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) the applicable Earn-Out Payment (the “Annual MaximumKey Employees”) can be earned based an amount of restricted shares of Purchaser common stock equal to such percentage (up to 120%) of the 2017 Revenue Target or 2018 Revenue Target achieved, respectively, multiplied by the quotient of (x) $600,000 divided by 80% of the OTCQB marketplace (or Nasdaq Stock Market or any national exchange or marketplace on which shares are traded) closing price per share of Purchaser’s common stock on the AEBITDA date of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through applicable Earn-Out Payment, and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If for each Earn-Out Period as applicable, Purchaser shall pay to the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out Key Employees an amount for such Measurement Period shall be of restricted shares of Purchaser common stock equal to such percentage (Aup to 120%) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration 2017 EBITDA Target or 2018 EBITDA Target achieved, respectively, multiplied by the quotient of (x) $600,000 divided by (y) 80% of the OTCQB marketplace (or Nasdaq Stock Market or any national exchange or marketplace on which shares are traded) closing price per share of Purchaser’s common stock on the date of the applicable Earn-Out Payment (each such Measurement Period and be payable payment by the Purchaser to Sellers as and when provided the Key Employees in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereofrespect of the achievement of the 2017 Revenue Target, if the AEBITDA for any applicable Measurement Period is zero 2018 Revenue Target, 2017 EBITDA Target or negative then no earn2018 EBITDA Target, an “Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersOut Payment”). (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earnNo Earn-out Out Payment shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount owed or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable paid by Purchaser to Sellers as and when provided the Key Employees in Section 2.7(c)If respect of any revenue or EBITDA achieved by the Annual Maximum is not earned Company for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Earn-Out Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out revenue and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period EBITDA is less than 70% of the Target AEBITDA); applicable revenue or EBITDA target for second Measurement the applicable Earn-Out Period. All Purchaser common stock paid to the Key Employees as Earn-Out Payments pursuant to this Agreement may not be sold or otherwise transferred for a period of one-year following the date of its issuance and shall not be resold, pledged, assigned or otherwise disposed of unless such shares are subsequently registered under the Securities Act and under the applicable securities laws of such states, or unless exemptions from such registration requirements are available. Following the applicable one-year holding period, the Annual Maximum earnKey Employees may elect for the re-outpurchase of such shares of Earn-Out Payment Purchaser common stock pursuant to the terms of Section 1.1(a)(ii). Solely for purposes of summarizing the Earn-Out Targets, plus and subject to the provisions above: Earn-Out Periods Earn-Out Targets 2017 Earn-Out Period 2018 Earn-Out Period Revenue Target $10,737,531 $17,358,111 EBITDA Target $832,404 $1,889,976 Stock payable to Key Employees for achieving each Earn-Out target (assumes a recapture earn-out $6.51 per share price (as 80% of $100,000 (i.e., a dollar for dollar recapture (up 8.41 closing price) used to the maximum aggregate recapture determine share amount and carryassumes 100% of applicable Earn-forward earn-out amount for all Measurement Periods of $266,000Out target met) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00).92,166 92,166 (c) Except as expressly provided in Section 2.7(b) hereof, each earnEach Earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and Out Payment shall be achieved, if at all, and be calculated separately based upon made to the AEBITDA for such Measurement applicable recipients no later than thirty (30) days following the end of the applicable Earn-Out Period. Each earnEarn-out amount earned Out Payment shall (i) be accompanied by Sellers for any Measurement Period pursuant to Section 2.7(aa statement (the “Earn-Out Statement”) hereofthat describes in reasonable detail how the Earn-Out Payment was calculated, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(band (ii) hereof, shall be paid by wire transfer of immediately available funds to such account as is directed by the applicable recipients. (d) The Earn-Out recipients may dispute Purchaser’s calculation of any Earn-Out Payment by notifying Purchaser to Sellers in writing, setting forth in reasonable detail the particulars of such disagreement (the “Notice of Objection”), within sixty fifteen (6015) days after receipt of the Earn-Out Statement by the applicable Measurement Period ends (except recipients. To the extent not set forth in the Notice of Objection, the applicable recipients shall be deemed to have agreed with all other calculations, items and amounts set forth in the Earn-Out Statement. In the event that the for the last Measurement Period, such payment shall be made applicable recipients do not deliver a Notice of Objection to Purchaser within fifteen (15) days after the expiration applicable recipients’ receipt of the Medicare Cap Year immediately following such Measurement PeriodEarn-Out Statement, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “the applicable recipients shall be deemed to have accepted Purchaser’s calculation of the Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and in the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement PeriodStatement. In the event Sellers’ Representative objects to that a Notice of Objection is timely delivered, Purchaser and the applicable recipients shall use their respective commercially reasonable efforts and exchange any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within information reasonably requested by the other Party for a period of fifteen (15) days after the receipt by Purchaser of the date Notice of such Objection (the “Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection NoticeResolution Period”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt or such longer period as they may agree in good faith writing, to agree upon resolve any disagreements set forth in the applicable earn-out amountNotice of Objection. If Purchaser and Sellers so agree the applicable recipients are unable to resolve such disagreements within the Earn-Out Resolution Period (the items that remain in writing dispute at the end of such period (the “Unresolved Items”)) then, at any time thereafter, either the applicable recipients or Purchaser may require that an Independent Accountant shall resolve the Unresolved Items. Upon selection of the Independent Accountant, each of Purchaser and the applicable recipients shall submit an analysis of the Unresolved Items. Purchaser and the applicable recipients shall instruct the Independent Accountant to determine as promptly as practicable, and in any event within thirty (30) days after the date on which such dispute is referred to the Independent Accountant, based solely on the provisions of this Agreement and the written presentations by the applicable recipients and Purchaser, the value of the Unresolved Items. The determination of the Independent Accountant shall be set forth in a written statement delivered to the applicable earn-out amount, recipients and Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitratorsfinal, one selected by Purchaser, one selected by Sellers, conclusive and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by binding on the parties, absent fraud or manifest error. The fees and disbursements of the Independent Accountant under this Section 1.3(d) shall be borne by the applicable recipients, jointly and severally, unless the adjustments to the same extent as a court of law or equity, if Unresolved Items resulting from the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority applicable recipients’ delivery of the three arbitrators as to the earn-out amount related to Notice of Objection caused change in the applicable Earn-Out Notice Payment, as amended by Purchaser prior to its submission to the Independent Accountant, in excess of $10,000 in favor of the applicable recipients, in which case such fees and disbursements shall be binding borne exclusively by Purchaser. (e) In the event an Independent Accountant is not selected or has not agreed to serve within the ten (10) Business Day period following the Earn-Out Resolution Period (or such longer period as agreed to in writing by the applicable recipients and conclusive upon Purchaser), then the parties. Such decision Parties agree that any dispute, controversy or claim arising out of or relating to calculations of or for the Earn-Out Payments shall be written promptly submitted to binding arbitration conducted by the American Arbitration Association under its rules, regulations and procedures, the cost of which shall be supported borne by written findings of fact and conclusions of law regarding the disputenon-prevailing party. Any arbitration hearing shall be held in New York, which shall set forth the award, judgment, decree or order of the arbitratorsNew York. Judgment upon any award, judgment, decree or order rendered under the award entered by the arbitrator or arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held jurisdiction thereof in accordance with the City and County terms of OrangeSection 9.9 hereof. (f) If, California under during the CPR Rules for NonEarn-Administered Arbitration Out Term, the Purchaser breaches the covenants in Section 6.5 or if Purchaser or the Company consummates a Change of Control, then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration all Earn Out Payments under this Section 2.7 1.3 shall pay its own expensesbe deemed due and owing to all Key Employees. As used herein, “Change of Control” means any transaction or series of related transactions pursuant to which the fees of each arbitrator, the administrative costs holders of the arbitration and Purchaser’s or Company’s equity securities, as the expensescase may be, including reasonable attorneys’ fees and costsimmediately prior to such transaction(s) hold, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice following such transaction(s), less than 50% of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees equity of the arbitratorsPurchaser or Company, as the administrative costs case may be, or other surviving entity, whether by merger, consolidation, business combination or similar transaction, or the sale or transfer of all or substantially all of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account assets of the fees of Purchaser or the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionCompany.

Earn-Out. (a) In addition to the Closing Preliminary Purchase Price, Seller will be entitled, pursuant to the earn-out amounts terms set forth below can be earned and shall be paidin this Section 2.07, to the Earn-Out Amount for each Earn-Out Year, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellersany. (b) No later than 30 days after the date on which Buyer receives the audited financial statements in respect of the DVU Transferred Entities for the applicable Earn-Out Year, Buyer will prepare and deliver, or cause to be prepared and delivered, to Seller a calculation, together with reasonable supporting documentation, of the (i) EBITDA, (ii) Earn-Out CapEx, (iii) Earn-Out EBITDA and, to the extent applicable, (iv) Earn-Out Amount, in each case for the immediately preceding Earn-Out Year, prepared in accordance with the terms of this Agreement (the “Earn-Out Calculation”) together with a statement of the capital invested by Buyer in the DVU Transferred Entities for such Earn-Out Year. (c) Seller may dispute the Earn-Out Calculation (or any element thereof) by notifying Buyer in writing, setting forth in reasonable detail the particulars of such disagreement, including the basis therefor (the “Earn-Out Objection”), within 45 days of Seller’s receipt of the Earn-Out Calculation. Any item or amount as to which no dispute is raised in the Earn-Out Objection will be final, conclusive and binding on the Parties for all purposes hereunder, unless such item or amount is by its nature adjusted in connection with the matters raised in the Earn-Out Objection. In the event that Seller does not deliver a Earn-Out Objection to Buyer within such 45 day period, Seller will be deemed to have accepted Buyer’s calculation of the EBITDA, Earn-Out CapEx and Earn-Out EBITDA for the applicable Earn-Out Year. In the event that an Earn-Out Objection is timely delivered, Buyer and Seller will use their respective commercially reasonable efforts for a period of 45 days after Buyer’s receipt of the Earn-Out Objection, or such longer period as the Parties may agree in writing, to resolve any disagreements set forth in the Earn-Out Objection. If Buyer and Seller are unable to resolve such disagreements within such 45 day period (or such longer period as the Parties will have agreed in writing), then the Parties will resolve all disputes in accordance with Section 2.06(d), Section 2.06(e) and Section 2.06(f). (d) If the Annual Maximum Earn-Out Calculation (as finally determined pursuant to Section 2.07(c)) reflects an Earn-Out Amount: (i) that is not earned for any of less than or equal to the first four (4) Measurement PeriodsEarn-Out Threshold, then up no payment to Two Hundred Sixty Six Thousand Dollars Seller will be required pursuant to this Section 2.07(d), or ($266,000ii) that is more than the Earn-Out Threshold, then Buyer will pay or will cause to be paid to Seller, 12.5% of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in by which case, the amount of the recapture earnEarn-out shall be equal to the amount that the applicable AEBITDA Out Amount exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “CarryEarn-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereofOut Threshold. Notwithstanding the foregoing, in no event shall will Buyer be obligated to pay any Earn-Out Amount over and above a maximum aggregate amount of $20,000,000 (the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000“Purchase Price Cap”). By way For purposes of illustration only, if AEBITDA (x) the Earn-Out Amount for the first Measurement Period is an Earn-Out Year equals $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA8,000,000, then Sellers shall Buyer would pay or cause to be entitled paid to the following: for the first Measurement Period, the Annual Maximum earn-out, less Seller an amount equal to $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)375,000. (ce) Except as expressly provided in Section 2.7(bFor any payments Buyer is obligated to pay (or cause to be paid) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to this Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty 2.07 (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment DatePayment”) by wire transfer ), Buyer will pay or cause to be paid the Earn-Out Payment, as an adjustment to the accounts set forth on Schedule 2.7(cPurchase Price, in cash to Seller within ten Business Days after the Earn-Out Amount for the Earn-Out Year is finally determined pursuant to Section 2.07(c), . The aggregate Earn-Out Payments paid by Buyer for the Earn-Out Period will not exceed the Purchase Price Cap. (f) During the Earn-Out Period: (i) all business of Buyer and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA DVU Transferred Entities with respect to Seller’s Operations the University as conducted at the Closing must be transacted through the DVU Transferred Entities, and cannot be transacted through any other Affiliate of Buyer or other Person (unless Buyer and the DVU Transferred Entities agree to consolidate the earnings of such entities or such joint ventures or similar arrangements, if applicable, for purposes of calculating the Earn-Out Payments); (ii) Buyer will not do or omit to do anything (and will cause the DVU Transferred Entities not to do or omit to do anything), the intention of which action or omission (but, for the avoidance of doubt, disregarding the effect of any such action or omission) is to hinder or prevent the DVU Transferred Entities from generating sufficient EBITDA in an effort to circumvent the payment of an Earn-Out Payment; and (iii) Buyer will not, and will cause the DVU Transferred Entities not to, with respect to the University, engage in related-party or Affiliate transactions on terms which are not generally consistent with, or which are materially less favorable to the DVU Transferred Entities in the aggregate compared to, terms that would reasonably be expected to be obtained by the DVU Transferred Entities in an “arms-length” transaction with an unaffiliated third party. (g) If, during the Earn-Out Period, (i) there is a whole Sale of the University and (ii) the aggregate Earn-Out Payments made to Seller are less than the Purchase Price Cap, Buyer will pay, or will cause to be paid, an accelerated Earn-Out Payment to Seller as follows: 12.5% of (A) any amount by which the proceeds received by Buyer in such Sale of the University exceed the capital invested by Buyer in the DVU Transferred Entities after the Closing Date (as reported to Seller in writing in each Earn-Out Calculation) and neither Purchaser nor (B) an amount equal to 15% compounded annual rate of return of Buyer and its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any Affiliates on the aggregate cost of the earn-out amounts will be earned DVU Equity Interests purchased by Sellers. (d) On Buyer on or before each applicable after the Closing Date, which accelerated Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating will not exceed the amount, if any, of the applicable earn-out amount deemed earned during Purchase Price Cap less any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”)Payments made to Seller prior to the Sale of the University. (h) Notwithstanding anything to the contrary contained in this Agreement, together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects any amounts owing or owed to Buyer or any earn-out amount set forth an Buyer Indemnitees by Seller pursuant to Article IX shall be offset against any Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved Payments payable by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay Buyer to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionunder Section 2.07.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Seller shall be entitled to receive the following payments (each, an aggregate “Earn Out Payment”) to the extent the Business achieves the applicable Gross Profit (as defined below) targets: (i) An Earn Out Payment equal to seventy percent (70%) of annual Gross Profit (as defined below) of the Business above One Million Three Five Hundred Thirty Three Thousand Dollars ($1,333,0001,500,000) (for the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the trailing twelve (12) month periods period from the first anniversary of the Closing Date (each a the “Measurement Initial Earn Out Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.); (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be An Earn Out Payment equal to seventy percent (A70%) of annual Gross Profit (as defined below) of the Annual Maximum Business above One Million Five Hundred Thousand Dollars ($1,500,000) for such Measurement the trailing twelve (12) month period from the second anniversary of Closing Date (the “Second Earn Out Period” and together with the Initial Earn Out Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA“Earn Out Periods” and each, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof.an “Earn Out Period”)); and (iii) Subject to Section 2.7(b) hereofIn the event that any Inventory included in the Purchased Assets is not purchased during the Initial Earn Out Period, if or any Accounts Receivables included in the AEBITDA for any applicable Measurement Purchased Assets are not paid during the Initial Earn Out Period is zero or negative (the “Unpurchased/Unpaid Amount”), then no earn-out amount for such Measurement Period Unpurchased/Unpaid Amount shall be deemed earned deducted from the Earn Out Payment due following the Initial Earn Out Period, or if such Unpurchased/Unpaid Amount exceeds the Earn Out Payment due following the Initial Earn Out Period, then such amounts shall be payable by Purchasers deducted from the Earn Out Payment due following the Second Earn Out Period. If any Unpurchased/Unpaid Amounts are subsequently sold or paid, the Seller shall be entitled to Sellers.receive such amounts in full.. (b) If Within ninety (90) days following the Annual Maximum is not earned for any end of each Earn Out Period, Buyer shall prepare and deliver to Seller a statement of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) Gross Profit of the amount not earned may be recaptured Business for such Earn Out Period (the “Recapture MaximumEarn Out Statement”). Seller shall have thirty (30) days after receipt of the Earn Out Statement (the “Earn Out Review Period”) to review the extent that calculation of Gross Profit for such Earn Out Period. During the AEBITDA in Review Period, Seller shall have the immediately subsequent Measurement Period is greater than the Target AEBITDAright to inspect Buyer’s books and records during normal business hours at Buyer’s offices, in which case, the amount of the recapture earn-out shall be equal upon reasonable prior notice and solely for purposes reasonably related to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any determinations of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period Gross Profit and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Periodresulting Earn Out Payment. Each earn-out amount earned by Sellers for any Measurement Period pursuant Prior to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Review Period, or such earlier date as Purchaser and Sellers Seller may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer object to the accounts Gross Profit calculation set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned Earn Out Statement by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative delivering a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections objection (an “Objection Notice”)) to Buyer, which shall specify the disputed items and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If Sellers’ Representative Seller fails to deliver an Objection Notice to Buyer prior to the expiration of the Review Period, then the Gross Profit calculation set forth in the Earn Out Statement shall be final and binding on the parties hereto. If Seller timely delivers an Objection Notice, Purchaser and Sellers the parties shall attempt negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Gross Profit and the Earn Out Payment for the applicable earn-out amountEarn Out Period. If Purchaser and Sellers so agree in writing the parties are unable to reach agreement within thirty (30) days, then the Parties shall forthwith refer the dispute to a nationally recognized accounting firm mutually agreeable to the applicable earn-out amountSeller and the Buyer for resolution, Purchaser shallwith the understanding that such firm shall resolve all disputed items within 20 days after such disputed items are referred to it. If the Buyer and the Seller are unable to agree on the choice of an accounting firm, within five they shall select a nationally recognized accounting firm by lot (5) business days of reaching such agreement pay to Sellers any additional amounts agreed uponafter excluding their respective regular outside accounting firms). If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration Each of the dispute and Seller, on the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellershand, and the third (who must be independent Buyer, on the other hand, shall bear one-half of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members costs of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justificationsuch accounting firm. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice accounting firm shall be deemed final and conclusive and shall be binding and conclusive upon the parties. Such decision shall be written Seller and shall be supported by written findings the Buyer. (c) To the extent Seller is entitled to all or a portion of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered an Earn Out Payment in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under accordance with this Section 2.7 shall pay its own expenses1.6, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5applicable Earn Out Payment(s) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid on the date that is thirty (30) days from the date on which it is determined Seller is entitled to such Earn Out Payment. (d) For purposes of this Agreement, “Gross Profit” shall mean (i) the amount invoiced to customers less (ii) expenses charged by Sellers any 3rd party (except Buyer and its affiliates) directly related to Purchaser within five (5) business days of notice of the arbitrators decisionthat job or account. Such expenses shall include but not be limited to COGS, decoration, setup fees, 3rd party warehousing and fulfillment charges, inbound and outbound shipping, duties/taxes and credit card fees.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up Independent of any amounts paid by Buyer to an aggregate Seller under Section 2.2 hereof, the Parties intend to provide for the possible payment by the Buyer of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) additional consideration to the Seller based on the financial performance of the GMC Program and the Healthy Families Program as operated by the Buyer during the 36 months following the Closing Date (the “Annual MaximumEarn-Out”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers). (b) If The Seller’s Earn-Out shall be based on the Annual Maximum is not earned for any of aggregate premium revenues under both the first four (4) Measurement PeriodsGMC Contract and the Healthy Families Contract, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of less aggregate medical expenses under the amount not earned may be recaptured GMC Contract and the Healthy Families Contract, each determined in a manner consistent with Buyer’s historical ordinary course practices (the “Recapture MaximumGross Margin Amount”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out ). The Gross Margin Amount shall be equal to measured over the amount that twelve-month period immediately following the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000Closing Date, and over the next two successive twelve-month periods (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled each such twelve-month measuring period being referred to the following: for the first Measurement herein as an “Earn-Out Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00”). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon If the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for Gross Margin Amount during any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”Period is less than $8,800,000, then the Buyer shall not pay the Seller any Earn-Out payment for that Earn-Out Period. If the Gross Margin Amount equals or exceeds $8,800,000 during the applicable Earn-Out Period, then the Buyer shall pay the Seller fifteen percent (15%) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earnGross Margin Amount for such Earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by SellersOut Period. (d) On In no event shall the aggregate Earn-Out payments paid by the Buyer to the Seller exceed $3,500,000. In the event the aggregate Earn-Out payments to the Seller have equaled $3,500,000, or before in the event that 36 months have elapsed since the Closing Date, no further Earn-Out payments shall be made by the Buyer to the Seller. (e) Within 90 days of the end of each applicable Earn-Out Payment DatePeriod, Purchaser the Buyer shall deliver Sellers’ Representative to the Seller a written notice stating calculation of the amountEarn-Out payment, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice Period, together with a check representing the amount of the Earn-Out payment, if any. The Buyer shall be binding also give reasonable access to the Seller and conclusive its accountants and financial consultants, upon reasonable notice, to review the partieswork papers and calculations used by the Buyer in its determination of the Earn-Out payment, including but not limited to review of historical and current incurred but not reported calculations. (f) If the Seller disputes the Buyer’s calculation of the Earn-Out payment, the Seller shall so notify the Buyer in writing within ten days after receipt of the written calculation referred to in this Section 2.3. Such decision The Parties shall be written and shall be supported by written findings of fact and conclusions of law then attempt to resolve such dispute regarding the Earn-Out payment within ten days. If the Parties are unable to resolve their dispute, which the Parties shall set forth then submit the awardmatter to a mutually agreed-upon accounting firm (“Accounting Firm”), judgment, decree or order who shall calculate the Earn-Out payment as described above. The Accounting Firm shall submit its written calculation of the arbitratorsEarn-Out to the Parties within 45 days. Judgment upon any award, judgment, decree If the Accounting Firm’s calculation shows the Earn-Out payment to be equal to or order rendered by less than the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as amount determined by the arbitrators) to any arbitration under this Section 2.7 Buyer, then the Seller shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorneyAccounting Firm’s fees and costsexpenses. If the Accounting Firm’s calculation shows the Earn-Out payment to be greater than the amount determined by the Buyer, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of Buyer shall pay the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorneyAccounting Firm’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionexpenses.

Earn-Out. (a) In addition to the Closing Purchase PricePrice Shares, the earn-out amounts set forth below can be earned and Members shall be paid, if earned, entitled to Sellers. (a) Up the issuance of up to an aggregate additional $600,000 in shares of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) common stock of the Purchaser (the “Annual MaximumEarn Out Shares”) can be earned during the 18 month period following the Closing Date (the “Earn Out Period”) based on the AEBITDA gross revenues of the Sellers’ Operations during each Company derived from the exploitation of the twelve content licensed pursuant to the Licensing Agreements (12defined below) month periods as well as the eBooks (each a collectively, the “Measurement PeriodEarn Out Revenues”) ending June 30 of 2011 through and including 2015.), as follows (each, an “Earn Out Date”): (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as $150,000 in Earn Out Shares if and when provided in Section 2.7(c) hereof.the monthly Earn Out Revenues for two consecutive calendar months during the Earn Out Period, equal or exceed $50,000, plus (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as $150,000 in Earn Out Shares if and when provided in Section 2.7(c) hereof.the monthly Earn Out Revenues for two consecutive calendar months during the Earn Out Period equal or exceed $100,000, plus (iii) Subject to Section 2.7(b$150,000 in Earn Out Shares if and when the monthly Earn Out Revenues for two consecutive calendar months during the Earn Out Period equal or exceed $200,000, and plus (iv) hereof, $150,000 in Earn Out Shares if and when the AEBITDA monthly Earn Out Revenues for any applicable Measurement two consecutive calendar months during the Earn Out Period is zero equal or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellersexceed $250,000. (b) If The Earn Out Shares, if any, shall be allocated among the Annual Maximum is not earned for any Members, and issued in the names of the first four Members, in accordance with the Pro Rata Distribution. (4c) Measurement Periods, then up The number of Earn Out Shares issued on a particular Earn Out Date shall be calculated by dividing $150,000 by the average closing trading price of a share of Purchaser’s common stock for the five trading days immediately prior to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured such Earn Out Date (the “Recapture MaximumEarn Out Per Share Denominator”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA); provided that, in which case, the amount each of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period Members acknowledges and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoingagrees, in no event shall the total aggregate recapture earnEarn Out Per Share Denominator be less than $.15 five-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way day average closing trading price of illustration only, if AEBITDA (x) a share of Purchaser’s common stock for the first Measurement Period is $100,000 less than five trading days immediately prior to such Earn Out Date. If the Target AEBITDA, (y) five-day average closing trading price of a share for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period any Earn Out Date is less than $.15, then the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and Purchase Price Per Share Denominator shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers$. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.

Earn-Out. In addition As additional consideration for the Purchased Assets, for a period of three years following the first day of the month immediately following the Closing (the "Earn Out Period"), Buyer shall pay to the Closing Purchase Price, the earn-out amounts Escrow Agent or Seller (as set forth below can be earned and below) an amount equal to 25% of the annual EBITDA generated by Buyer after the Closing (whether Buyer is operating out of the Leased Real Property or otherwise) from the Existing Suppliers up to a maximum of $300,000 per year (the "Earn Out Payments"). The amount of each Earn Out Payment shall be paiddetermined in accordance with GAAP and MTLM's reasonable standard accounting practices, consistently applied (it being understood that the calculation of EBIDTA for purposes of determining each Earn Out Payment shall include a reasonable allocation of certain general and administrative expenses incurred by Metal Management Northeast, Inc. but shall not include an allocation of any general and administrative expenses incurred by Metal Management, Inc.). The Earn Out Payments, if earnedany, for the first two years of the Earn Out Period shall be paid by Buyer to Sellers.the Escrow Agent no later than the 45th day after the end of the applicable one-year period. The Earn Out Payment for the third year of the Earn Out Period shall be paid as follows: (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (if at the “Annual Maximum”) can be earned based on the AEBITDA end of the Sellers’ Operations during each third year of the twelve Earn Out Period Buyer has asserted a claim for indemnification pursuant to Section 12.3 which has not been resolved (12) month periods (each a “Measurement Period”) ending June 30 and which claim is in excess of 2011 through and including 2015. the amount then held in Escrow), then Buyer shall pay to (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, Escrow Agent the amount of the recapture earn-out Earn Out Payment, if any, that is necessary to cause the aggregate amount of the Escrow to equal $600,000 (if the aggregate amount of the Escrow is at such time less than $600,000) and (ii) Seller the remainder of the Earn Out Payment and (b) if at the end of the third year of the Earn Out Period Buyer has not asserted a claim for indemnification pursuant to Section 12.3 which has not been resolved, then Buyer shall make the final Earn Out Payment directly to Seller. The Earn Out Payments that are paid to the Escrow Agent shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) released from Escrow as and to the extent that the AEBITDA provided in the immediately prior Measurement Period is greater than Escrow Agreement. Buyer shall provide Seller with reasonable access to those of its books and records which are relevant to the Target AEBITDA, in which case, the amount determination of the carry forward earn-out shall be equal Earn Out Payments for the purpose of allowing Seller to verify the accuracy of Buyer's determination thereof. It is expressly understood that, subsequent to the amount that Closing, Buyer shall in all respects have complete authority and control over the applicable AEBITDA exceeded Business and its manner of operation, including the Target AEBITDA in the prior period on a dollar for dollar basis, up ability to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount close or carry-forward earn-out amount for sell all or any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any portion of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of Business and operate the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA Business in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period Buyer's sole and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement absolute discretion without liability of any earn-out amounts kind to Seller. Seller's right to receive Earn Out Payments pursuant to this Section 2.7 is contingent upon 3.2 shall be subject to Buyer's authority, control, ability and discretion contemplated by the AEBITDA with respect previous sentence. Buyer and its Affiliates shall be under no obligation whatsoever to Seller’s Operations as a whole after operate the Business subsequent to the Closing Date and neither Purchaser nor its Representatives is guaranteeing in a manner that does not reduce or eliminate the possibility of Seller receiving all or any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount portion of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionEarn Out Payments.

Earn-Out. In addition to the Closing Purchase Priceforegoing, Seller will receive from Buyer deferred payments, to the earn-out amounts set forth below can be earned and shall be paid, if extent earned, in an amount equal to Sellers. (a) Up to an aggregate the sum of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as 10.8% of the expiration Pre-Tax Net Income of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. the Business plus (ii) If an additional 9.2% of the AEBITDA Pre-Tax Net Income of the Business in excess of $30,816,000, determined in accordance with GAAP subject to the mutually agreed pro forma adjustments described below, for any applicable Measurement each Earn-Out Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, as provided below and such amount shall payments will be deemed earned as a component of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Purchase Price (iii) Subject to Section 2.7(b) hereofcollectively, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture MaximumEarn-Out Payments”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof). Notwithstanding the foregoing, (i) 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 such term is defined in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars his Employment Agreement with Buyer) or by a termination by Buyer with Cause ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDAdefined in Appendix I), plus a carry-forward earn-out amount of $166,000 fifty percent (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,00050%) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”for that Earn-Out Period and fifty percent (50%) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “for all remaining Earn-Out Notice”)Periods will be forfeited, together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to (ii) if at any earntime during any 12-out amount set forth an month Earn-Out NoticePeriod Xxxxxxx X. Xxxxxx ceases to be 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), Sellers’ Representative must deliver to Purchaser within fifteen twenty percent (1520%) days of the date of such Earn-Out Notice a written notice setting forth the basis Payment for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall Period and twenty percent (20%) of any Earn-Out Payment for all remaining Earn-Out Periods will be binding forfeited, and conclusive upon (iii) if at any time during the parties. Such decision shall 12-month Earn-Out period Xxxxxxx X. Means ceases to be written and shall be supported employed by written findings Buyer by virtue of fact and conclusions of law regarding his resignation without “Good Reason” (as defined in the disputeMeans Agreement) or by a termination by Buyer with Cause (as defined in Appendix I), which shall set forth the award, judgment, decree or order thirty percent (30%) of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City Earn-Out Payment for that Earn-Out Period and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party thirty percent (as determined by the arbitrators30%) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earnEarn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to Out Payment for all remaining Earn-Out Periods will be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionforfeited.

Earn-Out. In addition 7.1 Subject to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDAsubclause 7.5, and such amount shall be deemed earned as paragraph 1 of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereofAppendix 5, if the AEBITDA Turnover for any applicable Measurement Period is zero or negative then no earnan Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Out Period exceeds the Target AEBITDA by $350,000amounts set out in Part 2 of Appendix 4 for that Earn-Out Period, and (z) as further consideration for the third Measurement Period is $200,000 less than sale of the Target AEBITDAShares, then the Sellers shall be entitled to receive a sum (the following: for Earn-Out Consideration) equal to the first Measurement Periodamount corresponding to the amount of Turnover achieved in that Earn-Out Period as set out in Part 2 of Appendix 4. The Earn-Out Consideration shall be satisfied in accordance with the provisions of this clause (and not otherwise), and each Seller shall be entitled to the Annual Maximum earnEarn-out, Out Relevant Percentage of the Earn-Out Consideration less $100,000 (i.e., a dollar for dollar reduction by the any amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up Sellers’ Representative requires to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up be deducted pursuant to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00subclause 8.11(c). (c) Except as expressly provided in Section 2.7(b) hereof, each earn-out amount (and/or recapture or carry-forward earn-out amounts) 7.2 The Turnover for each Measurement Earn-Out Period will stand alone and shall be achieved, if at all, and be calculated separately based upon ascertained as contemplated by Part 1 of Appendix 4. 7.3 The Purchaser shall satisfy the AEBITDA Earn-Out Consideration for such Measurement that Earn-Out Period by: (a) making a payment of the Earn-Out Relevant Percentage of the Earn-Out Consideration for that Earn-Out Period to the Cash Sellers; or (b) issuing to the Loan Note Sellers Earn-Out Notes with an aggregate nominal value equal to the Earn-Out Relevant Percentage of the Earn-Out Consideration for that Earn-Out Period. Each earn-out amount earned by . 7.4 Any payment to the Cash Sellers for any Measurement Period pursuant to Section 2.7(asubclause 7.3(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration 10 Business Days of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Turnover for the relevant Earn-Out Payment Date”) by wire transfer Period being ascertained. Any issue of Earn-Out Notes to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Loan Note Sellers pursuant to subclause 7.3(b) shall be in accordance with Schedule 2.3 regardless made within 15 Business Days of the Turnover for the relevant Earn-Out Period being ascertained. 7.5 The maximum Earn-Out Consideration payable by the Purchaser in respect of both Earn-Out Periods shall not exceed $100,000,000 in aggregate and there shall be disregarded for all purposes any Earn-Out Consideration in excess of that amount that each Sellerwhich would be payable but for this subclause. 7.6 Following Completion, any and all decisions regarding efforts which any member of the Purchaser’s former Operations contributed Group shall cause to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA be expended with respect to the design, development, production, marketing or sale of any Group Company’s products and services or any other aspect of the operation of the business of EA Inc. or its subsidiaries (including the Group Companies) shall be made by the Purchaser’s Group in its sole and absolute discretion without any express or implied obligation or liability to any party, including any Seller’s Operations as a whole after . Nothing in this subclause 7.6 shall operate to preclude the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level rights of AEBITDA will be achieved the Sellers (or that any of the earn-them) set out amounts will be earned by Sellersin subclauses 7.7 and 7.8 below. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision.

Earn-Out. In addition to the Aggregate Closing Purchase PriceDate Consideration, the earn-out amounts set forth below can be earned and Interest Holders shall be paid, if earned, entitled to Sellers.additional consideration from the Parent or the Company as follows in this Section 2.14 (the “Earn-Out Payment”): (a) Up For the period beginning on July 1, 2011, and ending on July 1, 2012, and each of the four (4) succeeding twelve-month periods beginning on July 1 thereafter (the “Earn-Out Term” and each year of the Earn-Out Term an “Earn-Out Year”), the Interest Holders shall be entitled to earn an aggregate amount equal to 25% of One Pre-Tax Profit that exceeds Seventeen Million Three Five Hundred Thirty Three Thousand Dollars ($1,333,00017,500,000.00) (the “Annual MaximumYearly Earn-Out Payment”); provided that any Yearly Earn-Out Payment shall not exceed Eight Million Dollars ($8,000,000.00) can be earned based on in the AEBITDA aggregate (the “Yearly Earn-Out Cap”). If it is finally determined that a Yearly Shortfall has occurred, Parent shall pay to the Interest Holders (simultaneously with the payment of the Sellers’ Operations during each Yearly Earn-Out Payment, if any) the Yearly Excess (if any) from any or all previous Earn-Out Years (to the extent not already paid to the Interest Holders) in an amount equal to such Yearly Shortfall. If it is finally determined that a Yearly Excess has occurred, Parent shall pay to the Interest Holders (simultaneously with the payment of the twelve (12Yearly Earn-Out Payment, if any) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out such Yearly Excess in an amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of aggregate Yearly Shortfall from any previous Earn-Out Year (to the expiration of such Measurement Period and be payable by Purchaser extent not already paid to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersInterest Holders). (b) If Within ninety (90) days after each twelve-month period in the Annual Maximum is not earned Earn-Out Term, Parent shall in good faith prepare (or cause to be prepared) and deliver to the Interest Holder Representative a report setting forth the Pre-Tax Profit for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured such period (the “Recapture MaximumPre-Tax Profit Report”), together with worksheets and data that support the determination of the Pre-Tax Profit for such period and any other information that the Interest Holder Representative may reasonably request in order to verify the Pre-Tax Profit. The Pre-Tax Profit Report and the Pre-Tax Profit for the twelve-month period reflected thereon, shall be binding upon the Interest Holder Representative, Stockholders and Parent upon the approval of such Pre-Tax Profit Report by the Interest Holder Representative or the failure of the Interest Holder Representative to object in writing within thirty (30) days after receipt thereof by the Interest Holder Representative. If the Interest Holder Representative does not agree with the Pre-Tax Profit Report and the calculation of the Pre-Tax Profit stated thereon, and Parent and the Interest Holder Representative cannot mutually agree on the same, then within forty-five (45) days following receipt by the Interest Holder Representative of the Pre-Tax Profit Report, Parent and the Interest Holder Representative shall engage the Neutral Accountant to resolve such dispute. The Neutral Accountant shall review the Pre-Tax Profit Report and, within ten (10) Business Days of its appointment, shall make any adjustments necessary thereto, and, upon completion of such review, such Pre-Tax Profit Report and the Pre-Tax Profit as determined by the Neutral Accountant shall be binding upon the Interest Holder Representative, the Stockholders and Parent. The fees and expenses of the Neutral Accountant shall be borne by the parties in proportion to the extent that amounts by which their proposals differed from the AEBITDA in Neutral Accountant’s final determination. In connection with the immediately subsequent Measurement Period is greater than the Target AEBITDAresolution of any dispute, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward each party (the “Carry-forward Maximum”Stockholders on one hand and Parent on the other) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDAshall pay its own fees and expenses, in which caseincluding legal, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period accounting and shall be payable by Purchaser to Sellers as consultant fees and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)expenses. (c) Except as expressly provided in Subject to Section 2.7(b) hereof2.14(g), each earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achievedEarn-Out Year, the Yearly Earn-Out Payment, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereofany, shall be paid by Purchaser to Sellers the Interest Holder Representative, on behalf of the Stockholders, and (at the direction within sixty five (605) days after Business Days of the final determination of the Pre-Tax Profit for the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be Year in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge Section 2.14(a) and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers2.14(b). (d) On None of Parent, the Surviving Company, nor any of their respective Affiliates shall take any action primarily intended to interfere with the ability of the Company and its Subsidiaries to maximize the Earn-Out Payments. Parent agrees that from the Effective Time through the end of the Earn-Out Term, Parent shall, and shall cause the Surviving Company, as applicable, to (i) cause the business activities and operations of the Surviving Company and its Subsidiaries to be accounted for separately from any other business activities and operations of Parent and to maintain such books and records with respect thereto as shall be necessary to carry out the provisions of this Agreement, (ii) not enter into any contract that specifically prohibits (except upon the occurrence of a default or before each applicable an event of default, and then only for so long as such default or event of default is continuing) Parent or the Surviving Company from paying a Yearly Earn-Out Payment Dateor any Yearly Excess, Purchaser and (iii) provide the business with adequate working capital; provided, however, that nothing in this Section 2.14(d)(iii) shall deliver Sellersbe interpreted as prohibiting the Surviving Company (or any of its Subsidiaries) from entering into loan or similar credit arrangements in the ordinary course of business. (e) None of Parent’s or its Affiliates’ Representative existing credit agreements, lines of credit, loans or similar arrangements contain a written notice stating specific prohibition (except upon the amountoccurrence of a default or an event of default, and then only for so long as such default or event of default is continuing) against payment of a Yearly Earn-Out Payment or any Yearly Excess. Parent represents and warrants that as of the date hereof no event of default has occurred and is continuing under any such credit arrangements that would restrict the payment of a Yearly Earn-Out Payment or any Yearly Excess. (f) In the event a Yearly Earn-Out Payment or Yearly Excess is due but not paid (for any reason other than the express right of offset set forth in Section 2.14(g)), the amount due shall accrue interest at a rate of four percent (4%) per annum. (g) Parent may elect to set off against (i) any Yearly Earn-Out Payment earned but not yet paid any payments, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information due from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compelInterest Holders in accordance with Sections 6.07, limit or allow discovery as they shall deem appropriate given the nature 6.08; and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitratorsii) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out Remaining Payment Obligations owed pursuant to Section 2.13(d)(iii); provided, however, that in the case of any offset pursuant to Section 2.14(g)(i), Parent shall (x) first have exhausted its right of offset against the full amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are Adjusted Indemnity Holdback Amount, (y) not be permitted to offset any amounts against the determined to be the nonYearly Earn-prevailing party, Purchaser may deduct the fees Out Payments in excess of the arbitrators, Earn-Out Indemnity Cap and (z) not be permitted to offset any amounts against the administrative costs Yearly Earn-Out Payments that relate to or are in connection with (A) projects of the arbitration general contracting division of the Company and its Subsidiaries and (B) Nagelbush Mechanical, Inc. (h) The Parties agree to treat the Earn-Out Payments as additional consideration paid for the purchase of Company Common Stock pursuant to this Agreement for all applicable Tax purposes, and no Party shall take a position on any Tax Return or other filings, or its books and records, that is inconsistent with this treatment, unless required by a change of Law effective after the date of this Agreement or a determination of a Governmental Authority that is final, provided that the Earn Out Payments shall be treated as interest as required by Code Section 1274 (and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account other applicable provisions of the fees of Code or applicable Tax Laws) using the arbitrators, discount rate to determine the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionimputed interest under Code Section 1274.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up The Sellers shall be entitled to an aggregate receive, as additional purchase price for the Shares (and irrespective of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) (the “Annual Maximum”) can be earned based on the AEBITDA whether a Seller remains employed with any of the Sellers’ Operations during Companies), a payment (each, an "Earn-Out Payment") with respect to each of the twelve four (124) month periods quarters (each, an "Earn-Out Quarter") in the six (6) full consecutive fiscal years of the Companies, beginning with the fiscal year ended on December 31, 1999 and ending with the fiscal year ended on December 31, 2004, determined as hereinafter provided (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is such fiscal year being referred to herein as an "Earn-Out Year"). With respect to each Earn-Out Quarter, an Earn-Out Payment shall be payable to each Seller in an amount equal to or greater than seven and one-half percent (7.5%) of the Target AEBITDAAdjusted Pre-Tax Earnings (as defined in Section 11 hereof) during each such Earn-Out Quarter. Each Earn-Out Payment, then earn-out amount for such Measurement Period if any, due to the Sellers shall be equal to paid by the Annual Maximum for such Measurement Period and such amount shall be deemed earned as Buyer within ninety (90) days after the end of the expiration applicable Earn-Out Quarter in respect of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellersit has been achieved. (b) If the Annual Maximum is not earned for any All determinations of the first four (4) Measurement PeriodsAdjusted Pre-Tax Earnings during each Earn-Out Quarter, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, and the amount of the recapture earnEarn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. SimilarlyOut Payout, if any, due to each Seller in respect thereof (each, a "Determination"), shall initially be made by the Annual Maximum is not earned Buyer in any of good faith from the final four (4) Measurement Periodscombined unaudited, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of internally prepared financial statements for the amount not earned may carried forward (the “CarryCompanies for each such Earn-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDAOut Quarter, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser made within twenty (20) days after the end of such Earn-Out Quarter. Upon each Determination, the Buyer shall immediately thereafter (but in any event within five (5) days) furnish to the Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any written notice of such Determination, together with a copy of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum financial statements for such Measurement Period. Any such recapture earnEarn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)Out Quarter. (c) Except Following the end of each Earn-Out Year, the Buyer shall instruct its then certified public accounting firm (the "Buyer's Accountants") to prepare, as expressly provided part of the Buyer's Accountant's audit of the Companies for such Earn-Out Year, a determination of the Adjusted Pre-Tax Earnings during each Earn-Out Quarter in Section 2.7(b) hereofsuch Earn-Out Year, each earnand a determination of the Earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achievedOut Payments, if at allany, due and owing to the Sellers in respect thereof. In connection with such process, the Buyer's Accountants shall determine whether the amount of the Earn-Out Payments, if any, paid by the Buyer to the Sellers in respect of each such Earn-Out Quarter, was correct, and be calculated separately based upon if not, shall calculate the AEBITDA for net amount that the Buyer or the Sellers, as the case may be, owe the other(s) on account thereof (any such Measurement Periodnet amount being referred to herein as an "Earn-Out Adjustment). Each earnAs soon as practicable after the Buyer's Accountants have determined the Earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereofOut Adjustment, if any, as aforesaid, they shall furnish a copy of their calculation, together with any recapture or carrysuch reasonably supporting information and worksheets, to the Buyer and the Sellers (herein, an "Earn-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty Out Adjustment Determination"). Within twenty (6020) days after the applicable Measurement Period ends Sellers' receipt of an Earn-Out Adjustment Determination (except that a "Determination Review Period"), each Seller shall notify the for Buyer in writing as to whether such Seller accepts the last Measurement Earn-Out Adjustment Determination. If any Seller does not object to the Earn-Out Adjustment Determination within the Determination Review Period, then the Earn-Out Adjustment Determination shall be final and binding upon the Buyer and such payment Seller. If, however, a Seller objects to the Earn-Out Adjustment Determination within the Determination Review Period, then the Buyer and such Seller shall promptly meet and use their best efforts in good faith to resolve the dispute. If, after ten (10) days, the parties are unable to resolve the dispute, then the matter shall be submitted to Tofias, Fleischman Shapiro & Co., P.C. of Boston, Massachusetts (who shall have xx xxxxx ox xxxxxing relationship with Chancellor or any of its Affiliates (as defined in Section 11 hereof), including the Buyer, or the Sellers) for resolution, whose determination shall be made within fifteen forty-five (1545) days after and shall be final and binding upon the expiration of the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c)parties, and the allocation such earn-out amounts among Sellers whose fees shall be in accordance with Schedule 2.3 regardless of borne by the amount that each Seller’s former Operations contributed to party against whom the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 matter is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellersresolved. (d) On All Earn-Out Payments, if any, shall be payable in cash; provided, --------- however, that after consummation of the Buyer IPO (as defined in Section 11 ------- hereof), at the election of the Buyer, the Buyer may offer both of the Sellers the option of receiving Earn-Out Payments in cash or before each applicable shares of the Buyer's common stock, $.01 par value per share (the "Buyer Common Stock"), or MRB common stock, $1.00 par value per share (the "MRB Common Stock"), as the case may be; provided, further, that if --------- the Buyer offers the Sellers such an option, the Sellers shall be entitled separately to elect to receive their Earn-Out Payments in cash or shares of Buyer Common Stock or MRB Common Stock, as the case may be. If a Seller so elects to receive an Earn-Out Payment Datein shares of Buyer Common Stock or MRB Common Stock, Purchaser as the case may be, such Seller shall deliver Sellers’ Representative be entitled to receive a written notice stating number of shares of Buyer Common Stock or MRB Common Stock, as the amountcase may, if any, of be equal to the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”)Payment divided by the average share price of the Buyer Common Stock or MRB Common Stock, together with a reasonably detailed calculation of AEBITDA as the case may be, for the applicable Measurement Period. In twenty (20) trading days immediately prior to the event Sellers’ Representative objects to any earn-out amount set forth an end of the particular Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days Quarter in respect of which the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement Payment is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisiondue.

Earn-Out. In addition Buyer shall pay to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid, if earned, to Sellers. (a) Up to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) Shareholders additional consideration in cash as described herein (the “Annual MaximumEarn-Out,” with the payment made pursuant to the Earn-Out being the “Earn-Out Payment”) can be earned based on ), in accordance with the AEBITDA of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015.following: (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earnThe Shareholders shall receive an Earn-out Out Payment from Buyer in an amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of fifty percent (50%) of the expiration EBITDA of such Measurement Period the Company during each of (1) the period commencing on October 1, 2014 and be payable by Purchaser to Sellers as ending on September 30, 2015 (the “First Earn-Out Year”) and when provided in Section 2.7(c(2) hereofthe period commencing on October 1, 2015 and ending on September 30, 2016 (the “Second Earn-Out Year” and together with the First Earn-Out Year, the “Earn-Out Period”). (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided Notwithstanding anything in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to Sellers. (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) this Agreement to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoingcontrary, in no event shall the total aggregate recapture earnEarn-out and/or carryOut Payment for the Earn-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Out Period be less than Five Million Dollars ($266,0005,000,000) (the “Minimum Earn-Out Amount”). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by If the amount that of the actual AEBITDA for the first Measurement Period Final First Earn-Out Year Payment (as defined below) is less than the Target AEBITDA); for second Measurement PeriodMinimum Earn-Out Amount, the Annual Maximum earn-outthen such difference, plus a recapture earn-out of $100,000 (i.e.less any amounts withheld in connection with any Unresolved Claims, a dollar for dollar recapture (up shall be paid to the maximum Shareholders by wire transfer of immediately available funds on October 1, 2016. If the aggregate recapture and carryamount of the Earn-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA Out Payment for the second Measurement Earn-Out Period exceeded as finally determined hereunder is greater than the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement PeriodMinimum Earn-Out Amount, the Annual Maximum earn-outthen such difference, less $200,000 (i.e.any amounts withheld in connection with any Unresolved Claims, a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up shall be paid to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount Shareholders in accordance with the terms of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00this Section 2.2(d). (ciii) Except For each of the First Earn-Out Year and the Second Earn-Out Year, Buyer shall prepare and complete a calculation of the Earn-Out Payment for the applicable Earn-Out Year based on the EBITDA for the Company during such Earn-Out Year calculated in accordance with GAAP, applied on a consistent basis with the Company’s past practices as expressly provided in Section 2.7(b) hereofof the Closing Date. Buyer shall deliver the calculation of the Earn-Out Payment for the applicable Earn-Out Year, each earnalong with reasonable supporting documentation, to the Shareholders within forty-out amount five (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (6045) days after the end of the applicable Measurement Period ends Earn-Out Year. During the period following delivery by the Buyer of the calculation of the Earn-Out Payment for the applicable Earn-Out Year until the final determination of the Earn-Out Payment for such Earn-Out Year in accordance with the terms of this Agreement, the Shareholders, after providing at least two (except 2) Business Days’ advanced notice to Buyer, shall have reasonable access to the books and records (including financial statements) of the Business, to the extent necessary, to the Facilities and employees of the Business and to Buyer’s accountant’s work papers during regular business hours to review the computation of EBITDA for the applicable Earn-Out Year. Buyer’s calculation of the Earn-Out Payment for each Earn-Out Year shall be deemed conclusive and binding on the Parties for purposes of computing the Earn-Out Payment, unless the Shareholders notify Buyer in writing within forty-five (45) days after receipt of any such calculation of the disagreement therewith by the Shareholders. 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 Shareholders will use reasonable efforts to resolve any such disagreements themselves. If Buyer and the Shareholders are unable to resolve any such disagreement within thirty (30) days of receipt of notice of the Shareholders’ disagreement, then such dispute shall be resolved in a manner consistent with the procedures set forth in Section 2.4(f). If the Shareholders fail to provide written notice of a disagreement with Buyer’s calculation of any such Earn-Out Payment to Buyer within such forty-five (45) day period or if the Shareholders indicate in writing that the for Shareholders have no dispute with respect to the last Measurement Periodcalculation of such Earn-Out Payment prior to the expiration of such forty-five (45) day period, then Buyer shall make such payment shall be made Earn-Out Payment, less any portion of the Earn-Out Payment previously paid and less any amounts withheld in connection with any Unresolved Claims, within fifteen (15) days after the expiration earlier of Buyer’s receipt of notice from the Medicare Cap Year immediately following such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree Shareholders that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA Shareholders have no dispute with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a Payment or the expiration of the forty-five (45) day period during which the Shareholders are required to provide such written notice setting forth the basis for such objections (an “Objection Notice”pursuant to this Section 2.2(d). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing Notwithstanding anything to the applicable earn-out amount, Purchaser shall, within five contrary contained in this Section 2.2(d): (51) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute if Buyer and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators Shareholders disagree as to the earn-out amount related to of the applicable portion of the Earn-Out Notice Payment payable with respect to the First Earn-Out Year (the “First Earn-Out Year Payment”), Buyer shall be binding and conclusive upon pay Shareholders the parties. Such decision shall be written uncontested portion of such First Earn-Out Year Payment as calculated by Buyer (the “First Year Uncontested Amount”), less any amounts withheld in connection with any Unresolved Claims, by wire transfer of immediately available funds within three (3) Business Days of receipt of a notice of disagreement by Buyer pursuant to this Section 2.2(d), and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order pay upon final determination of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for NonFirst Earn-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) Out Year Payment pursuant to any arbitration under this Section 2.7 2.2(d), an amount equal to such First Earn-Out Year Payment as finally determined hereunder (the “Final First Year Earn-Out Payment”), minus the First Year Uncontested Amount to the extent previously paid to the Shareholders, less any amounts withheld in connection with any Unresolved Claims, by wire transfer of immediately available funds within three (3) Business Days of final determination of the Final First Earn-Out Year Payment; and (2) if Buyer and Shareholders disagree as to the amount of the portion of the Earn-Out Payment payable with respect to the Second Earn-Out Year (the “Second Earn-Out Year Payment”), Buyer shall pay its own expensesShareholders an amount equal to the greater of: (i) the Minimum Earn-Out Amount minus the Final First Earn-Out Year Payment and (ii) the uncontested amount of the Second Earn-Out Year Payment as calculated by Buyer, (such greater amount of (i) or (ii) above, the fees “Second Year Uncontested Amount”), less any amounts paid pursuant to the second sentence of each arbitratorSection 2.2(d)(ii) and less any amounts withheld in connection with any Unresolved Claims, the administrative costs by wire transfer of immediately available funds within three (3) Business Days of receipt of a notice of disagreement by Buyer pursuant to this Section 2.2(d). Upon final determination of the arbitration and the expensesSecond Earn-Out Year Payment pursuant to this Section 2.2(d), including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser Buyer shall pay to Seller the Shareholders, an amount equal to such Earn-Out Payment as finally determined hereunder (the “Final Second Earn-Out Year Payment”) minus the Second Year Uncontested Amount (to the extent previously paid to the Shareholders), less any amounts withheld in connection with any Unresolved Claims, by wire transfer of any additional earn-out amount deemed earned by the arbitrators immediately available funds within five three (53) business days of notice Business Days of the arbitrators decision. If Sellers are the determined to be the nonFinal Second Earn-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionOut Year Payment.

Earn-Out. In addition to (a) As part of the Closing Purchase PriceAcquisition Consideration, Purchaser shall pay Earn-Out Payments, if any are earned, on the following terms and conditions: (i) for each of the 2017 calendar year (the “2017 Earn-Out Period”) and the 2018 calendar year (the “2018 Earn-Out Period”) (each such earn-out amounts set forth below can be earned period, an “Earn-Out Period” and collectively, the “Earn-Out Term”), Purchaser shall be paid, if earned, pay to Sellers. (a) Up to an aggregate those employees listed on Schedule 1.3 and remaining with the Company following Closing and at the time of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) the applicable Earn-Out Payment (the “Annual MaximumKey Employees”) can be earned based an amount of restricted shares of Purchaser common stock equal to such percentage (up to 120%) of the 2017 Revenue Target or 2018 Revenue Target achieved, respectively, multiplied by the quotient of (x) $600,000 divided by 80% of the OTCQB marketplace (or Nasdaq Stock Market or any national exchange or marketplace on which shares are traded) closing price per share of Purchaser’s common stock on the AEBITDA date of the Sellers’ Operations during each of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through applicable Earn-Out Payment, and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal to the Annual Maximum for such Measurement Period and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If for each Earn-Out Period as applicable, Purchaser shall pay to the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out Key Employees an amount for such Measurement Period shall be of restricted shares of Purchaser common stock equal to such percentage (Aup to 120%) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration 2017 EBITDA Target or 2018 EBITDA Target achieved, respectively, multiplied by the quotient of (x) $600,000 divided by (y) 80% of the OTCQB marketplace (or Nasdaq Stock Market or any national exchange or marketplace on which shares are traded) closing price per share of Purchaser’s common stock on the date of the applicable Earn-Out Payment (each such Measurement Period and be payable payment by the Purchaser to Sellers as and when provided the Key Employees in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereofrespect of the achievement of the 2017 Revenue Target, if the AEBITDA for any applicable Measurement Period is zero 2018 Revenue Target, 2017 EBITDA Target or negative then no earn2018 EBITDA Target, an “Earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersOut Payment”). (b) If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earnNo Earn-out Out Payment shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount owed or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable paid by Purchaser to Sellers as and when provided the Key Employees in Section 2.7(c)If respect of any revenue or EBITDA achieved by the Annual Maximum is not earned Company for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Earn-Out Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out revenue and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period EBITDA is less than 70% of the Target AEBITDA); applicable revenue or EBITDA target for second Measurement the applicable Earn-Out Period. All Purchaser common stock paid to the Key Employees as Earn-Out Payments pursuant to this Agreement may not be sold or otherwise transferred for a period of one-year following the date of its issuance and shall not be resold, pledged, assigned or otherwise disposed of unless such shares are subsequently registered under the Securities Act and under the applicable securities laws of such states, or unless exemptions from such registration requirements are available. Following the applicable one-year holding period, the Annual Maximum earnKey Employees may elect for the re-outpurchase of such shares of Earn-Out Payment Purchaser common stock pursuant to the terms of Section 1.1(a)(ii). Solely for purposes of summarizing the Earn-Out Targets, plus and subject to the provisions above: Revenue Target $10,737,531 $17,358,111 EBITDA Target $832,404 $1,889,976 Stock payable to Key Employees for achieving each Earn-Out target (assumes a recapture earn-out $6.51 per share price (as 80% of $100,000 (i.e., a dollar for dollar recapture (up 8.41 closing price) used to the maximum aggregate recapture determine share amount and carryassumes 100% of applicable Earn-forward earn-out amount for all Measurement Periods of $266,000Out target met) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00).92,166 92,166 (c) Except as expressly provided in Section 2.7(b) hereof, each earnEach Earn-out amount (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and Out Payment shall be achieved, if at all, and be calculated separately based upon made to the AEBITDA for such Measurement applicable recipients no later than thirty (30) days following the end of the applicable Earn-Out Period. Each earnEarn-out amount earned Out Payment shall (i) be accompanied by Sellers for any Measurement Period pursuant to Section 2.7(aa statement (the “Earn-Out Statement”) hereofthat describes in reasonable detail how the Earn-Out Payment was calculated, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(band (ii) hereof, shall be paid by wire transfer of immediately available funds to such account as is directed by the applicable recipients. (d) The Earn-Out recipients may dispute Purchaser’s calculation of any Earn-Out Payment by notifying Purchaser to Sellers in writing, setting forth in reasonable detail the particulars of such disagreement (the “Notice of Objection”), within sixty fifteen (6015) days after receipt of the Earn-Out Statement by the applicable Measurement Period ends (except recipients. To the extent not set forth in the Notice of Objection, the applicable recipients shall be deemed to have agreed with all other calculations, items and amounts set forth in the Earn-Out Statement. In the event that the for the last Measurement Period, such payment shall be made applicable recipients do not deliver a Notice of Objection to Purchaser within fifteen (15) days after the expiration applicable recipients’ receipt of the Medicare Cap Year immediately following such Measurement PeriodEarn-Out Statement, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “the applicable recipients shall be deemed to have accepted Purchaser’s calculation of the Earn-Out Payment Date”) by wire transfer to the accounts set forth on Schedule 2.7(c), and in the allocation such earn-out amounts among Sellers shall be in accordance with Schedule 2.3 regardless of the amount that each Seller’s former Operations contributed to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Date, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement PeriodStatement. In the event Sellers’ Representative objects to that a Notice of Objection is timely delivered, Purchaser and the applicable recipients shall use their respective commercially reasonable efforts and exchange any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within information reasonably requested by the other Party for a period of fifteen (15) days after the receipt by Purchaser of the date Notice of such Objection (the “Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection NoticeResolution Period”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt or such longer period as they may agree in good faith writing, to agree upon resolve any disagreements set forth in the applicable earn-out amountNotice of Objection. If Purchaser and Sellers so agree the applicable recipients are unable to resolve such disagreements within the Earn-Out Resolution Period (the items that remain in writing dispute at the end of such period (the “Unresolved Items”)) then, at any time thereafter, either the applicable recipients or Purchaser may require that an Independent Accountant shall resolve the Unresolved Items. Upon selection of the Independent Accountant, each of Purchaser and the applicable recipients shall submit an analysis of the Unresolved Items. Purchaser and the applicable recipients shall instruct the Independent Accountant to determine as promptly as practicable, and in any event within thirty (30) days after the date on which such dispute is referred to the Independent Accountant, based solely on the provisions of this Agreement and the written presentations by the applicable recipients and Purchaser, the value of the Unresolved Items. The determination of the Independent Accountant shall be set forth in a written statement delivered to the applicable earn-out amount, recipients and Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitratorsfinal, one selected by Purchaser, one selected by Sellers, conclusive and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by binding on the parties, absent fraud or manifest error. The fees and disbursements of the Independent Accountant under this Section 1.3(d) shall be borne by the applicable recipients, jointly and severally, unless the adjustments to the same extent as a court of law or equity, if Unresolved Items resulting from the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority applicable recipients’ delivery of the three arbitrators as to the earn-out amount related to Notice of Objection caused change in the applicable Earn-Out Notice Payment, as amended by Purchaser prior to its submission to the Independent Accountant, in excess of $10,000 in favor of the applicable recipients, in which case such fees and disbursements shall be binding borne exclusively by Purchaser. (e) In the event an Independent Accountant is not selected or has not agreed to serve within the ten (10) Business Day period following the Earn-Out Resolution Period (or such longer period as agreed to in writing by the applicable recipients and conclusive upon Purchaser), then the parties. Such decision Parties agree that any dispute, controversy or claim arising out of or relating to calculations of or for the Earn-Out Payments shall be written promptly submitted to binding arbitration conducted by the American Arbitration Association under its rules, regulations and procedures, the cost of which shall be supported borne by written findings of fact and conclusions of law regarding the disputenon-prevailing party. Any arbitration hearing shall be held in New York, which shall set forth the award, judgment, decree or order of the arbitratorsNew York. Judgment upon any award, judgment, decree or order rendered under the award entered by the arbitrator or arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held jurisdiction thereof in accordance with the City and County terms of OrangeSection 9.9 hereof. (f) If, California under during the CPR Rules for NonEarn-Administered Arbitration Out Term, the Purchaser breaches the covenants in Section 6.5 or if Purchaser or the Company consummates a Change of Control, then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration all Earn Out Payments under this Section 2.7 1.3 shall pay its own expensesbe deemed due and owing to all Key Employees. As used herein, “Change of Control” means any transaction or series of related transactions pursuant to which the fees of each arbitrator, the administrative costs holders of the arbitration and Purchaser’s or Company’s equity securities, as the expensescase may be, including reasonable attorneys’ fees and costsimmediately prior to such transaction(s) hold, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice following such transaction(s), less than 50% of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees equity of the arbitratorsPurchaser or Company, as the administrative costs case may be, or other surviving entity, whether by merger, consolidation, business combination or similar transaction, or the sale or transfer of all or substantially all of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account assets of the fees of Purchaser or the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisionCompany.

Earn-Out. In addition (a) As part of the Merger Consideration, Digirad shall pay Earn-Out Payments, if any, to the Closing Purchase PriceStockholders on the following terms and conditions: (i) for each of the 2015 Earn-Out Period, the 0000 Xxxx-Xxx Period, and the 2017 Earn-Out Period (each such earn-out amounts set forth below can period, an “Earn-Out Period” and collectively, the “Earn-Out Term”), to the extent the EBITDA earned by the Surviving Corporation exceeds the applicable Earn-Out Threshold for that Earn-Out Period, Digirad shall pay to each Stockholder his or her Pro Rata Share of fifty percent (50%) of EBITDA earned by the Surviving Corporation in excess of the applicable Earn-Out Threshold for the related Earn-Out Period (each an “Earn-Out Payment”), subject to clause 2.13(a)(ii) below; (ii) fifty percent (50%) of all Earn-Out Payments for the 2015 and 2016 Earn-Out Periods shall be earned retained by Digirad (and shall be paid, if earned, accrue interest at a rate of 90-day LIBOR plus 2% simple interest per annum) until the end of the Earn-Out Term in order to Sellers. (a) Up satisfy resolution of any Potential Claims and to an aggregate of One Million Three Hundred Thirty Three Thousand Dollars ($1,333,000) pay expenses related thereto (the “Annual MaximumEarn-Out Escrow”) can be earned based on the AEBITDA ), at which time any amount remaining of the Sellers’ Operations during each of the twelve Earn-Out Escrow (12plus accrued interest) month periods (each a “Measurement Period”) ending June 30 of 2011 through and including 2015. (i) If the AEBITDA for any applicable Measurement Period is equal to or greater than the Target AEBITDA, then earn-out amount for such Measurement Period shall be equal paid to the Annual Maximum Stockholders (with each Stockholder receiving his or her Pro Rata Share); and (iv) in the aggregate, the Earn-Out Payments shall not exceed $400,000 for such Measurement Period the entire Earn-Out Term. By way of illustration and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (ii) If the AEBITDA for any applicable Measurement Period is less than the Target AEBITDA, then the earn-out amount for such Measurement Period shall be equal to not limitation: (A) if during the Annual Maximum 2015 Earn-Out Period (that portion of the 2015 calendar year beginning on the Closing Date), the EBITDA achieved by the Surviving Corporation is $300,000 in excess of the Earn-Out Threshold for such Measurement Periodperiod, minus such excess EBITDA will be divided $75,000 to the Stockholders (with each Stockholder receiving his or her Pro Rata Share), $75,000 to Digirad for inclusion in the Earn-Out Escrow, and $150,000 to Digirad, (B) if during the amount 2016 Earn-Out Period (the 2016 calendar year), the EBITDA achieved by which the actual AEBITDA Surviving Corporation is $450,000 in excess of the Earn-Out Threshold for such Measurement Period is less than period, such excess EBITDA will be divided $112,500 to the Target AEBITDAStockholders (with each Stockholder receiving his or her Pro Rata Share), $112,500 to Digirad for inclusion in the Earn-Out Escrow, and such amount shall be deemed earned as $225,000 to Digirad, (C) if during the 2017 Earn-Out Period (the 2017 calendar year), the EBITDA achieved by the Surviving Corporation is $50,000 in excess of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earnEarn-out amount Out Threshold for such Measurement Period shall period, such excess EBITDA will be deemed earned divided $25,000 to the Stockholders (with each Stockholder receiving his or be payable by Purchasers her Pro Rata Share) and $25,000 to SellersDigirad and (D) if Digirad used $100,000 of the Earn-Out Escrow amount in connection with expenses related to Potential Claims, Digirad would release $87,500 to the Stockholders (with each Stockholder receiving his or her Pro Rata Share) at the conclusion of the Earn-Out Term. (b) If Each Earn-Out Payment shall be made to Stockholders on an annual basis, with each Stockholder receiving his or her Pro Rata Share no later than the earlier of: (a) ten (10) days after Digirad has filed its Annual Maximum is not earned for any Report on Form 10-K with the SEC covering the applicable Earn-Out Period, or (b) 105 days after the end of Digirad’s fiscal year covering the first four applicable Earn-Out Period. Each Earn-Out Payment shall (4i) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured accompanied by a statement (the “Recapture MaximumEarn-Out Statement”) that describes in reasonable detail how the Earn-Out Payment was calculated and (ii) be paid by wire transfer of immediately available funds to the extent that the AEBITDA in the immediately subsequent Measurement Period such account as is greater than the Target AEBITDA, in which case, the amount directed by each Stockholder. Digirad shall send a copy of the recapture earnEarn-out Out Statement to Stockholder Representative at the same time the Earn-Out Statement is sent to Stockholders. Digirad shall, and shall be equal direct its employees to, cooperate with Stockholder Representative and its professionals, and provide them with access to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar all books and records of MD Office necessary for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any their review of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “CarryEarn-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Period, the Annual Maximum earn-out, less $100,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the first Measurement Period is less than the Target AEBITDA); for second Measurement Period, the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00)Out Statement. (c) Except as expressly provided Stockholder Representative may dispute Digirad’s calculation of any Earn-Out Payment by notifying Digirad in Section 2.7(b) hereofwriting, each earn-out amount setting forth in reasonable detail the particulars of such disagreement (and/or recapture or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achievedthe “Notice of Objection”), if at all, and be calculated separately based upon the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty fifteen (6015) days after receipt of Earn-Out Statement by the applicable Measurement Period ends (except that Stockholder Representative. To the for extent not set forth in the last Measurement PeriodNotice of Objection, such payment the Stockholder Representative and the Stockholders shall be made deemed to have agreed with all other calculations, items and amounts set forth in the Earn-Out Statement. In the event that Stockholder Representative does not deliver an Notice of Objection to Digirad within fifteen (15) days after the expiration Stockholder Representative’s receipt of the Medicare Cap Year immediately following such Measurement PeriodEarn-Out Statement, or such earlier date as Purchaser the Stockholders shall be deemed to have accepted Digirad’s calculation of the Earn-Out Payment set forth in the Earn-Out Statement. In the event that an Notice of Objection is timely delivered, Digirad and Sellers may mutually agreeStockholder Representative shall use their respective commercially reasonable efforts and exchange any information reasonably requested by the other party for a period of fifteen (15) days after the receipt by Digirad of the Notice of Objection (each, an the “Earn-Out Payment DateResolution Period”), or such longer period as they may agree in writing, to resolve any disagreements set forth in the Notice of Objection. If Digirad and Stockholder Representative are unable to resolve such disagreements within the Earn-Out Resolution Period (the items that remain in dispute at the end of such period (the “Unresolved Items”)) by wire transfer then, at any time thereafter, either Stockholder Representative or Digirad may require that an Independent Accountants shall resolve the Unresolved Items. Upon selection of the Independent Accountants, each of Digirad and Stockholder Representative shall submit an analysis of the Unresolved Items. Digirad and Stockholder Representative shall instruct the Independent Accountants to determine as promptly as practicable, and in any event within thirty (30) days after the date, on which such dispute is referred to the accounts Independent Accountants, based solely on the provisions of this Agreement and the written presentations by Stockholder Representative and Digirad, the value of the Unresolved Items. The determination of the Independent Accountants shall be set forth on Schedule 2.7(c), in a written statement delivered to Stockholder Representative and the allocation such earn-out amounts among Sellers Digirad and shall be in accordance with Schedule 2.3 regardless final, conclusive and binding on the parties, absent fraud or manifest error. The fees and disbursements of the amount that each Seller’s former Operations contributed Independent Accountants under this Section 2.13 shall be borne jointly and severally by Stockholders unless the adjustments to the AEBITDA. Sellers acknowledge and agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA will be achieved or that any Unresolved Items resulting from Stockholder Representatives’ delivery of the earnNotice of Objection caused change in the applicable Earn-out amounts will Out Payment, as amended by Digirad prior to its submission to the Independent Accountants, in excess of Ten Thousand Dollars ($10,000) in favor of Stockholders, in which case such fees and disbursements shall be earned borne exclusively by SellersDigirad. (d) On In the event an Independent Accountants is not selected or before each applicable has not agreed to serve within the 10 Business Day period following the Working Capital Resolution Period or the Earn-Out Payment DateResolution Period (or such longer period as agreed to in writing by Stockholder Representative and Digirad), Purchaser shall deliver Sellers’ Representative a written notice stating then the amountparties agree that any dispute, if anycontroversy or claim arising out of or relating to calculations of or for the Closing Statement, of the applicable earnPost-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Closing Adjustment and the Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing to the applicable earn-out amount, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser or Sellers may demand arbitration of the dispute and the matters Payments shall be resolved settled promptly by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed pursuant to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decision8.07.

Earn-Out. In addition to the Closing Purchase Price, the earn-out amounts set forth below can be earned and shall be paid5.1 The Earn Out Amount, if earnedany, to Sellers.shall be: (a) Up calculated in accordance with this clause 5 and Schedule 5; and (b) paid in instalments by the Buyer annually (if earned) in such amounts as determined in accordance with this clause 5 and Schedule 5 within 90 days of the end of any Earn Out Period, subject to an aggregate the terms and conditions of One Million Three Hundred Thirty Three Thousand Dollars this clause 5, by electronic transfer for same day value within ten Business Days after the date on which the relevant Earn Out Amount has become final and binding in accordance with the procedure in this clause 5 and Schedule 5 ($1,333,000) (the “Annual MaximumEarn Out Payment”) can be earned based on the AEBITDA of to the Sellers’ Operations during each Solicitors’ Bank Account whose written confirmation of receipt shall be sufficient discharge of the twelve (12) month periods (each a “Measurement Period”) ending June 30 of 2011 through Buyer’s obligation to transfer such amount, and including 2015the Buyer shall have no duty in connection with the manner in which the Earn Out Amount is allocated among the Sellers or applied in any particular way. (i) If the AEBITDA 5.2 If, for any applicable Measurement Earn Out Period, the Actual Fee Revenue and Actual EBITDA Margin for that Earn Out Period is are equal to or greater than the Target AEBITDAFee Revenue and Target EBITDA Margin respectively for that Earn Out Period, then earn-out the Buyer will pay to the Sellers an amount for such Measurement Period shall be equal to the Annual Maximum Actual Fee Revenue for such Measurement that Earn Out Period and such amount shall be deemed earned multiplied by 8.75% as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereofEarn Out Payment for that Earn Out Period. 5.3 For the avoidance of doubt and by way of example, if the: (iia) If the AEBITDA for any applicable Measurement Period is Year 1 Actual Fee Revenue or EBITDA Margin are less than the Year 1 Target AEBITDAFee Revenue or Target EBITDA Margin, then the earn-out amount Buyer will not pay to the Sellers any Earn Out Amount for such Measurement the Year 1 Earn Out Period shall be equal to (A) the Annual Maximum for such Measurement Period, minus (B) the amount by which the actual AEBITDA for such Measurement Period is less than the Target AEBITDA, and such amount shall be deemed earned as of the expiration of such Measurement Period and be payable by Purchaser to Sellers as and when provided defined in Section 2.7(c) hereof. (iii) Subject to Section 2.7(b) hereof, if the AEBITDA for any applicable Measurement Period is zero or negative then no earn-out amount for such Measurement Period shall be deemed earned or be payable by Purchasers to SellersSchedule 5). (b) If Year 2 Actual Fee Revenue and EBITDA Margin are greater than the Annual Maximum is not earned for any of the first four (4) Measurement PeriodsYear 2 Target Fee Revenue and Target EBITDA Margin, then the Buyer will pay to the Sellers an amount equal to the Year 2 Actual Fee Revenue multiplied by 8.75% as the Earn Out Payment for the Year 2 Earn Out Period (as defined in Schedule 5) notwithstanding the Year 1 Earn Out Period results. 5.4 If at the date upon which any Earn Out Payment would otherwise be payable by the Buyer pursuant to this clause 5 any amount, which has been finally agreed or determined by a court of competent jurisdiction without a right of appeal to be payable to the Buyer pursuant to this Agreement or the Tax Deed, remains unpaid, then having first exhausted the Escrow Account the Buyer shall be entitled to withhold from the Earn Out Payment an amount up to Two Hundred Sixty Six Thousand Dollars such unpaid amount. Any amount so withheld shall be applied in settlement ($266,000in whole or in part) of the amount due to the Buyer, and shall be deemed to be deducted from the amount of the Earn Out Payment due to each Seller pro-rata to each Seller’s aggregate percentage entitlement as set out in column 4 of Schedule 1. 5.5 If at the date upon which an Earn Out Payment would otherwise be payable by the Buyer pursuant to this clause 5 there are unresolved or unpaid claims of the Buyer pursuant to this Agreement or the Tax Deed, including any Claim or Escrow Claim, the Buyer shall be entitled to withhold from the Earn Out Payment an amount (a “Retained Amount”) equal to the lesser of (i) the amount of the Earn Out Payment otherwise due and (ii) the amount of such unresolved or unpaid claim plus the Buyer’s reasonable estimate of the costs and expenses, including reasonable legal costs relating to such claim as determined under clause 5.6; provided that following final agreement or determination of such claim (whether by a binding settlement or a judgement or arbitration award to which there is no further appeal) then to the extent that the amount of the Earn Out Payment withheld by the Buyer exceeds the amount agreed or determined to be due to the Buyer in respect of the unresolved or unpaid claim, the Buyer shall promptly pay such excess to the Sellers. In the event that the Buyer agrees with the Sellers that it will not earned pursue any claim in respect of which any Retained Amount has been withheld, the Buyer shall pay to the Sellers (by payment to the Sellers’ Solicitors) the full amount of the Retained Amount in respect of such claim promptly following such agreement. Any Retained Amount shall be deemed to be deducted from the amount of the Earn Out Payment due to each Seller pro-rata to each Seller’s aggregate percentage entitlement as set out in column 3 of Schedule 1. 5.6 If on any day not more than 30 days before an Earn Out Payment is due to be paid and the Buyer and the Sellers shall not have reached agreement as to the amount which may be recaptured retained pursuant to clause 5.5 in respect of any Claim or Escrow Claim, then the question of the amount which may be retained may be referred by either the Buyer or the Sellers to an independent counsel of appropriate experience and standing to be appointed by the Buyer and the Sellers or (in default of agreement within five Business Days of any proposal for the appointment of such counsel) by the chairman for the time being of the Council of the Bar on the application of either the Buyer or the Sellers; and the decision of such counsel (who shall be deemed to be acting as an expert and not as an arbitrator) shall be final and binding on the parties and the cost of such reference shall be paid by the Buyer and the Sellers in equal shares or in such other proportions as such counsel shall determine. In relation to a determination to be made under this clause 5.6 the provisions of clause 7.6 shall mutatis mutandis apply. 5.7 The Buyer shall within 60 Business Days after the end of each Earn Out Period prepare and deliver to the Sellers a statement of the Actual Fee Revenue and EBITDA Margin for that Earn Out Period determined in accordance with paragraph 2(a) of Schedule 5 and based on that a provisional calculation of the Earn Out Amount for that Earn Out Period (“Recapture MaximumEarn Out Statement”). Each Earn Out Statement shall be prepared in accordance with Schedule 5. The Sellers shall by the fifth Business Day after receipt of the Earn Out Statement send the Buyer an acknowledgement of receipt. If the Sellers fail to issue an acknowledgement of receipt by such time then it shall, for the purposes of this clause 5.7 be deemed to have issued an acknowledgement of receipt on the fifth Business Day after it receives the Earn Out Statement. 5.8 If within 15 Business Days following the acknowledgement of receipt of an Earn Out Statement by the Sellers, the Sellers have not given the Buyer written notice of his objection to the Earn Out Statement (which notice shall state in detail the basis of the Sellers’ objection) then the Earn Out Statement shall be binding and conclusive on the parties subject to final adjustment in accordance with paragraph 2(b) of Schedule 5. 5.9 If the Sellers give the Buyer written notice of their objection to an Earn Out Statement within 15 Business Days following the acknowledgement of receipt of an Earn Out Statement by the Sellers and if the Sellers and the Buyer fail to resolve the issues outstanding with respect to the determination of the Earn Out Statement within 15 Business Days after the Buyer’s receipt of the Sellers’ notice of objection either the Sellers or the Buyer may at any time after that date refer the matter or matters in dispute to such independent firm of certified public accountants as they shall agree or, in default of agreement within 10 days of any proposal for the appointment of such accountants, as shall be appointed by the AICPA on the application of either these or the Buyer. 5.10 The independent firm of certified public accountants referred to in clause 5.9 shall be an internationally recognised accounting firm in both the UK and USA and shall determine the matter or matters in dispute acting as experts not as arbitrators and their decision shall be final and binding and accordingly the Accountant Determined Earn Out Amount shall be the amount of the Earn Out Payment for that Earn Out Period. Such independent firm of certified public accountants shall be instructed to deliver their determination as soon as practicable to the Sellers and the Buyer. 5.11 The Sellers and the Buyer agree that they shall instruct any accountants appointed under clause 5.9 to determine only the particular aspect of the preparation of the Earn Out Statement in dispute and, accordingly, such accountants shall not determine or adjust any other matter or have regard to any fact not directly relating to the matter in dispute. 5.12 The fees of the accountant appointed pursuant to this clause 5 shall be paid by the Buyer on the one hand and the Sellers on the other hand in equal shares or as the accountant may determine. 5.13 If either the Sellers or the Buyer fails to pay such fees of the accountants appointed under clause 5.9 in accordance with the provisions of clause 5.12, the other party may in its absolute discretion pay such fees on the non-paying party’s behalf and the non-paying party shall reimburse the other on demand all costs and expenses incurred by the other in so doing. 5.14 The Earn Out Payments are contingent on the performance of the business of the Company and accordingly the Sellers accept that there may be no Earn Out Payments. No Member of the Buyer Group makes any representation or warranty of any kind nor expresses any opinion as to the likelihood or the amount of any Earn Out Payment. So long as each of them is subject to their Service Agreement, the Sellers shall continue to be entitled to manage the day-to-day business of the Company, provided that they acknowledge, understand and agree that, after Completion the Buyer shall subject to clause 5.15 exercise ultimate operational control over the business and assets of the Company, provided that Xxxxx Xxxxx will have authority to hire staff consistent with the business plan (as approved by the Buyer) provided that the cost of such hires is funded out of the Company’s cash flow. 5.15 The Sellers acknowledge, understand and agree that no Member of the Buyer Group has a duty to the Sellers to use any level of efforts to do any action or thing which would or might increase the Actual EBITDA or Actual Fee Revenue of the Company for any part of the Relevant Period. However: (a) no Member of the Buyer Group will knowingly interfere with or do anything the sole or main purpose of which is to materially impair or adversely diminish the Actual EBITDA or Actual Fee Revenue of the Company for any part of the Relevant Period; and (b) to the extent that the AEBITDA in the immediately subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount any Member of the recapture earn-out shall be equal to Group does any action or thing which could materially impair or adversely diminish the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar Actual EBITDA or Actual Fee Revenue for dollar basis, up to the Recapture Maximum for such immediately subsequent Measurement Period. Similarly, if the Annual Maximum is not earned in any part of the final four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may carried forward (the “Carry-forward Maximum”) to the extent that the AEBITDA in the immediately prior Measurement Period is greater than the Target AEBITDA, in which case, the amount of the carry forward earn-out shall be equal to the amount that the applicable AEBITDA exceeded the Target AEBITDA in the prior period on a dollar for dollar basis, up to the Carry-forward Maximum for such immediately prior Measurement Period. Any such recapture earn-out amount or carry-forward earn-out amount for any applicable Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such applicable Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c)If the Annual Maximum is not earned for any of the first four (4) Measurement Periods, then up to Two Hundred Sixty Six Thousand Dollars ($266,000) of the amount not earned may be recaptured (the “Recapture Maximum”) to the extent that the AEBITDA in the subsequent Measurement Period is greater than the Target AEBITDA, in which case, the amount of the recapture earn-out shall be equal to the amount that the applicable AEBITDA exceeds the Target AEBITDA on a dollar for dollar basis, up to the Recapture Maximum for such Measurement Period. Any such recapture earn-out amount for any Measurement Period shall be in addition to any earn-out amount earned by Sellers pursuant to Section 2.7(a)(i) hereof for such Measurement Period and shall be payable by Purchaser to Sellers as and when provided in Section 2.7(c) hereof. Notwithstanding the foregoing, in no event shall the total aggregate recapture earn-out and/or carry-forward earn-out for all measurement periods exceed Two Hundred Sixty Six Thousand Dollars ($266,000). By way of illustration only, if AEBITDA (x) for the first Measurement Period is $100,000 less than the Target AEBITDA, (y) for the second Measurement Period exceeds the Target AEBITDA by $350,000, and (z) for the third Measurement Period is $200,000 less than the Target AEBITDA, then Sellers shall be entitled to the following: for the first Measurement Relevant Period, the Annual Maximum earnBuyer (via Holdco’s CEO) shall consult with Sellers’ Representative in good faith in order to agree upon such reasonable adjustments or add-outbacks to the Earn-Out Amount so as to take into account the impact of such action or thing on the Actual EBITDA or Actual Fee Revenue of the Company for such period. 5.16 As soon as reasonably practicable after and in any event within six months of Completion (or such other date as the parties may agree in writing) the Sellers’ Representative, less $100,000 with assistance from the Buyer as is reasonably necessary (i.e.including full access to Consulting Business Partners and Consulting Business Principals, a dollar for dollar reduction by their associated financial performance and client records), shall prepare and deliver an Integration Plan to Holdco’s CEO which shall include, inter alia, the amount that following items: (a) details of those Consulting Business Partners and Consulting Business Principals who the actual AEBITDA Seller Representative believes should be transferred from the Consulting Business to the Company; (b) proposals for the first Measurement Period is less than implementation of the Target AEBITDA); for second Measurement PeriodIntegration Plan, including proposed members of the Annual Maximum earn-out, plus a recapture earn-out of $100,000 (i.e., a dollar for dollar recapture (up to the maximum aggregate recapture and carry-forward earn-out amount for all Measurement Periods of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a recapture for the first Measurement Period by the amount that the Annual Maximum was not earned for the first Measurement Period); and for the third Measurement Period, the Annual Maximum earn-out, less $200,000 (i.e., a dollar for dollar reduction by the amount that the actual AEBITDA for the third Measurement Period was less than the Target AEBITDA), plus a carry-forward earn-out amount of $166,000 (i.e., a dollar for dollar carry-forward (up to the maximum aggregate recapture and carry-forward earn-out for all Measurement Periods amount of $266,000) by the amount that the AEBITDA for the second Measurement Period exceeded the Target AEBITDA as a carry-forward for the third Measurement Period by the amount that the Annual Maximum was not earned for the third Measurement Period, but limited so that the total aggregate recapture earn-out paid for the first Measurement Period and the carry-forward earn-out for the third Measurement Period does not exceed $266,000.00).commercial Integration team; (c) Except details of all out-of-pocket costs that are to be incurred in the process of preparing the Integration Plan, such expenses to be approved in accordance with the agreed procedure so as expressly provided not to impact on the Target EBITDA Margin; and (d) proposals for funding the Company’s bonus pool on the Integration Date for both (i) the current employees of the Company and (ii) the newly transferred employees from the Consulting Business and related business plan, on the assumption that variable compensation for all employees employed by the Company after the Integration Date will be based on the Company’s current plan (subject to amendment from time to time). 5.17 As soon as reasonably practicable and in Section 2.7(bany event within 30 days of the delivery of such Integration Plan, Holdco’s CEO and the Sellers’ Representative shall meet to discuss and agree such plan, subject to such amendments as the Buyer (via Holdco’s CEO) hereofand the Sellers’ Representative shall mutually agree, each earnincluding with regard to timing and process for implementing the Integration Plan in accordance with clause 5.16(b). 5.18 Upon mutual approval of any Integration Plan by the parties, the Buyer and the Sellers shall co-operate in good faith to implement such Integration Plan according to the timeline set out amount (and/or recapture in such Integration Plan. If the parties agree that such Integration Plan is deemed to materially adversely affect Actual EBITDA Margin or carry-forward earn-out amounts) for each Measurement Period will stand alone and shall be achieved, if at all, and be calculated separately based upon Actual Fee Revenue of the AEBITDA for such Measurement Period. Each earn-out amount earned by Sellers Company for any Measurement Period pursuant to Section 2.7(a) hereof, together with any recapture or carry-forward earn-out amounts earned by Sellers for such Measurement Period pursuant to Section 2.7(b) hereof, shall be paid by Purchaser to Sellers within sixty (60) days after the applicable Measurement Period ends (except that the for the last Measurement Period, such payment shall be made within fifteen (15) days after the expiration part of the Medicare Cap Year immediately following Earn Out Periods, the Buyer will work with the Sellers, acting in good faith, to make such Measurement Period, or such earlier date as Purchaser and Sellers may mutually agree) (each, an “reasonable adjustments to the Earn-Out Payment Date”) Amount so as to take into account the impact of the Integration Plan on the Earn Out Amount for any part of the Earn Out Periods. 5.19 Upon mutual agreement that the Integration Plan has been implemented in accordance with its terms, the Sellers and the Buyer shall either adopt the Revised Earn Out by wire transfer the Revised Earn Out Date or the Final Earn Out Date or, if the parties do not agree to the accounts set forth on Schedule 2.7(c), and the allocation such earn-out amounts among Sellers shall be Revised Earn Out in accordance with Schedule 2.3 regardless of 5, the amount that each Seller’s former Operations contributed Buyer has the option to exercise the Earn Out Buyout (subject to the AEBITDA. Sellers acknowledge and further provisions set out in Schedule 5). 5.20 The parties agree that the achievement of any earn-out amounts pursuant to this Section 2.7 is contingent upon Company’s bonus scheme in the AEBITDA with respect to Seller’s Operations as a whole after the Closing Date and neither Purchaser nor its Representatives is guaranteeing that any level of AEBITDA agreed form will be achieved or that any of the earn-out amounts will be earned by Sellers. (d) On or before each applicable Earn-Out Payment Dateapply from Completion, Purchaser shall deliver Sellers’ Representative a written notice stating the amount, if any, of the applicable earn-out amount deemed earned during any applicable Measurement Period as determined by Purchaser (each an “Earn-Out Notice”), together with a reasonably detailed calculation of AEBITDA for the applicable Measurement Period. In the event Sellers’ Representative objects to any earn-out amount set forth an Earn-Out Notice, Sellers’ Representative must deliver to Purchaser within fifteen (15) days of the date of such Earn-Out Notice a written notice setting forth the basis for such objections (an “Objection Notice”). If Sellers’ Representative delivers an Objection Notice, Purchaser and Sellers shall attempt in good faith to agree upon the applicable earn-out amount. If Purchaser and Sellers so agree in writing subject to the applicable earn-out amountexpress provision therein permitting the Buyer to amend, Purchaser shall, within five (5) business days of reaching such agreement pay to Sellers any additional amounts agreed upon. If, however, no agreement is reached after good-faith negotiations, either Purchaser substitute or Sellers may demand arbitration of terminate the dispute and the matters shall be resolved by confidential arbitration conducted by three independent arbitrators, one selected by Purchaser, one selected by Sellers, and the third (who must be independent of the parties hereto) selected jointly by the two arbitrators previously so selected. All arbitrators must be members of the CPR National Panel or CPR California Panel. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery of information relating to any dispute while allowing the parties an opportunity, adequate as determined in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel, limit or allow discovery as they shall deem appropriate given the nature and extent of the disputed claim. The arbitrators shall also have the authority to impose sanctions, including attorneys’ fees and other costs incurred by the parties, to the same extent as a court of law or equity, if the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to by a party without substantial justification. The decision of a majority of the three arbitrators as to the earn-out amount related to the applicable Earn-Out Notice shall be binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions of law regarding the dispute, which shall set forth the award, judgment, decree or order of the arbitrators. Judgment upon any award, judgment, decree or order rendered by the arbitrators may be entered in any court having competent jurisdiction. Any such arbitration shall be held in the City and County of Orange, California under the CPR Rules for Non-Administered Arbitration then currently in effect. The non-prevailing party (as determined by the arbitrators) to any arbitration under this Section 2.7 shall pay bonus scheme at its own expenses, the fees of each arbitrator, the administrative costs of the arbitration and the expenses, including reasonable attorneys’ fees and costs, incurred by the other party to the arbitration. Purchaser shall pay to Seller the amount of any additional earn-out amount deemed earned by the arbitrators within five (5) business days of notice of the arbitrators decision. If Sellers are the determined to be the non-prevailing party, Purchaser may deduct the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser out any amounts then owing to Sellers hereunder prior to payment of such amounts to Sellers. Any remaining amounts owing by Sellers to Purchaser on account of the fees of the arbitrators, the administrative costs of the arbitration and the expenses, including reasonable attorney’s fees and costs, incurred by Purchaser, after any such deduction of amounts then owing by Purchaser to Sellers hereunder (if applicable), shall be paid by Sellers to Purchaser within five (5) business days of notice of the arbitrators decisiondiscretion.