Common use of Earn-Out Clause in Contracts

Earn-Out. (a) Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable to the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the "Earn-Out Period"), as follows: (b) Within ninety (90) days of the end of the Earn-Out Period, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation of the "net sales" attributable to the Business for such period, as well as a calculation of the "operating margin" for the Business for such period. (c) For purposes of this Agreement, the "operating margin" for the Business with respect to the Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable to Within 30 days following the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of date that is 12 months following the Closing Date (the "“Earn-Out Period"out Determination Date”), as follows:subject to Section 13.2 of this Agreement, Parent shall pay the Company Shareholders, in accordance with the Closing Allocation Schedule, an amount of cash, if any, equal to the portion of the Earn-out Amount earned during the period between the Closing Date and the Earn-out Determination Date (the “Earn-out Period”), determined in accordance with this Section 2.4. In the event the Earn-out Amount is not paid by Parent when due, the unpaid portion thereof shall bear interest at the rate of 10% per annum from the due date until the date of payment, except to the extent that the failure to pay any portion of the Earn-out Amount is the result of a good faith dispute concerning the achievement of such portion of the Earn-out Amount under this Section 2.4(a) or an unresolved Parent Claim asserted under Section 13 of this Agreement; provided that Parent agrees to pay any undisputed portions of the Earn-out Amount when due. (b) Within ninety (90) days of the end The portion of the Earn-Out Period, Buyer out Amount earned by the Surviving Corporation during the Earn-out Period shall provide Seller (with appropriate supporting documentation) with its calculation be determined as of the "net sales" attributable to Earn-out Determination Date by Parent in good faith in accordance with the Business for such period, as well as a calculation terms of Schedule 2.4(b). In the event Parent determines that any portion of the "operating margin" Earn-out Amount is not payable, Parent shall notify the Representative in writing of such determination within ten (10) Business Days of the corresponding Target Date set forth on Schedule 2.4(b) (an “Adverse Earn-out Determination Notice”). The Adverse Earn-out Determination Notice shall set forth in reasonable detail the basis and reasons for the Business for such periodadverse Earn-out determination. (c) For purposes Parent shall, and shall cause the Surviving Corporation to, use commercially reasonable efforts to provide any and all resources necessary or appropriate to allow achievement of this Agreement, the "operating margin" for the Business with respect to milestones by the Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal yearout Determination Date. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer Subject to and in accordance with the remaining provisions of this Section 2.4 and the terms and conditions of Schedule 2.4, Purchaser shall pay Seller an "make earn-out" out payments to Sellers in an aggregate amount based upon operating margins attributable (such amounts paid to or earned by Purchaser, the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the "“Earn-Out Period"), Consideration”) as follows:set forth on Schedule 2.4. (b) Within ninety (90) days of the end of the If and when any Earn-Out PeriodConsideration becomes owing pursuant to Schedule 2.4, Buyer Purchaser shall provide Seller (with appropriate supporting documentation) with its calculation of pay, or shall cause the "net sales" attributable Company to the Business for pay, such period, as well as a calculation of the "operating margin" for the Business for such periodEarn-Out Consideration to Sellers according to their Percentage Interest. (c) For purposes of this AgreementSection 2.4, Sellers acknowledge and agree that, from and after the Closing, Purchaser shall have the complete right, power and authority to operate and control the Company and the operations of the Company in any manner as it shall determine in its sole and absolute discretion, subject to the provisions in this Section 2.4(c), Purchaser owes no fiduciary duty to Sellers with respect to the operation of the Company, Purchaser or otherwise. Notwithstanding the foregoing, following the Closing and through December 31, 2024, Purchaser shall, and shall cause its Affiliates to (i) maintain the Company and Excel Leasing as a separate legal entities, (ii) keep the Company’s and Excel Leasing’s books and records in a manner that will facilitate the recording, compiling and analysis of all information relevant to the determination and calculation of the Earn-Out Consideration, (iii) not take any action with the purpose of reducing the Earn-Out Consideration, (iv) not allocate any corporate or other charges from the Company or its Affiliates to the Company or Excel Leasing that would negatively impact the Earn-Out Consideration in an amount in excess of the corresponding corporate or other charge incurred by the Company or Excel Leasing prior to Closing consistent with past practice (provided that if any such charges are allocated and are greater than the charges incurred by the Company or Excel Leasing prior to Closing, such charges shall be excluded from the calculations of the Earn-Out Consideration) other than allocations for applicable corporate overhead costs (e.g., human resources, legal, compliance, sales, business development and any other functional areas), and (v) operate the Company and Excel Leasing in good faith and in the Ordinary Course of Business of the Company and Excel Leasing (to the extent permitted by applicable Law), except to the extent reasonably necessary for integration planning or with the prior consent of Sellers. (d) The Parties understand and agree that (i) the contingent right to receive the Earn-out Consideration shall not be represented by any form of certificate or other instrument, is not transferable, except by operation of law relating to descent and distribution, divorce and community property, and does not constitute an equity or ownership interest in Purchaser, the "operating margin" for Company, or Excel Leasing, (ii) Sellers shall not have any rights as a securityholder of Parent, Purchaser, the Business Company or Excel Leasing as a result of Sellers’ contingent right to receive the Earn-Out Consideration, (iii) no interest is payable with respect to the Earn-Out Period shall be calculated by dividing the earnings of the Business Consideration or any other payment due to Sellers pursuant to this Agreement, and (calculated in accordance with GAAPiv) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller Consideration shall be calculated by multiplying reflected as an adjustment to the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" Consideration for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------all Tax purposes.

Earn-Out. (a) Buyer If the aggregate EBITDA, as defined below, of Holdings for the five fiscal years ending December 31, 2006 equals or exceeds two billion nine hundred eight million dollars ($2,908,000,000), then C&A Products and/or any of its Subsidiaries shall pay Seller an "Parent and/or designated Subsidiaries of Parent the earn-out" out amount based upon operating margins attributable to the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date specified in Schedule G hereto (the "Earn-Out PeriodAmount"), as follows: (b) Within ninety (90) days of the end of the . Earn-Out PeriodAmounts between the fixed points including and in excess of three billion two hundred ninety seven million dollars ($3,297,000,000) in the column on Schedule G entitled "5-Year Cumulative EBITDA" shall be determined by interpolation. The term "EBITDA" shall mean (i) the Consolidated Cash Flow, Buyer minus Projected Time Adjusted Acquisition Cash Flow (excluding any Consolidated Cash Flow attributable to any Receivables Financing Subsidiary), provided that (A) the term "EBITDA" shall provide Seller be substituted for the term "Adjusted Consolidated Pro Forma Coverage Ratio" in the applicable definitions, (with appropriate supporting documentationB) with its the term "consolidated Subsidiary" shall be substituted for the term "Restricted Subsidiary" in the applicable definitions, (C) any net income or loss described in section (vi) of the definition of Consolidated Net Income shall be included in the calculation of Consolidated Net Income and (D) lease payments, or the "net sales" attributable functional equivalent thereof (including payments of principal and interest in connection with any synthetic lease arrangement or similar financing arrangement), relating to the Business for equipment initially subject to the transaction described in Section 5.21 shall be added to Consolidated Cash Flow to the extent such periodpayments were deducted in computing Consolidated Net Income, as well as a plus (ii) to the extent that it is not included in the calculation of Consolidated Cash Flow pursuant to (i), (x) the Consolidated Cash Flow minus Projected Time Adjusted Acquisition Cash Flow, but substituting the term "operating marginTextron Automotive Holdings Italy S.r.l." for the Business for such periodterm "Company" and deleting the term "Restricted Subsidiary" in all applicable definitions, and (y) discounts and interest relating to factoring. (Capitalized terms in the immediately preceding sentence shall have the meaning ascribed to them in the Certificate of Designation. (c) For purposes of this Agreement, the "operating margin" for the Business with respect All claims to the Earn-Out Period shall be calculated by dividing Amounts are subordinate to any amounts due under the earnings of financings described in the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal yearDebt Commitment Letter. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable keep separate accounting books and records for the Company for all periods applicable to the operation calculation of the Business Earn-Out Amount, which accounting books and records shall be in accordance with GAAP, consistently applied in accordance with applicable requirements of law applicable to Buyer. Sellers’ Representative shall be entitled, upon reasonable prior notice and at reasonable times and in accordance with reasonable confidentiality requirements specified by Buyer, to review such accounting books and records and to make and retain copies thereof and extracts therefrom solely for the period commencing on purpose of the Closing Date and ending on calculation of the last Earn-Out Amount, all in a manner consistent with applicable requirements of law applicable to Buyer. (b) Buyer shall deliver to Sellers’ Representative within sixty (60) days after the first day of the first calendar month closest to after the first sixth anniversary of the Closing Date a notice (a “Buyer’s Earn-Out Notice”) containing the calculation of the Company’s Earn-Out Amount. Unless Sellers’ Representative, within forty-five (45) days after the delivery to him of such Buyer’s Earn-Out Notice, delivers a notice to Buyer stating that Sellers’ Representative objects to any item or computation in connection with the calculation therein, and specifying in reasonable detail the basis for such objection, such calculation as set forth in such Buyer’s Earn-Out Notice shall be binding upon the parties. If Sellers’ Representative and Buyer are unable to agree upon such calculation within thirty (30) days after any timely notice of objection has been given by Sellers’ Representative to Buyer, the Settlement Accountants shall resolve the disputed items or computations and determine the Earn-Out Amount, if any, based on its resolution of the disputed items or computations within thirty (30) days after its acceptance of its appointment. Any determination by the Settlement Accountants shall be binding upon the parties. The fees, costs and expenses of the Settlement Accountants selected in the event of a dispute shall be borne in a manner consistent with that set forth in Section 2.03(d)(ii). (c) Subject to any amounts to be deducted or withheld pursuant to Section 10.07, Buyer shall pay such Earn-Out Amount, if any, within ten business days after Sellers’ Representative’s acceptance of, or the final resolution by the Settlement Accountants of, such amount by wire transfer of immediately available funds to a bank account in the United States designated by Sellers’ Representative in writing. (d) If prior to the sixth anniversary of the Closing (the "“Earn-Out Period"”) Buyer shall sell the business of the Company to an unaffiliated third party such that after giving effect to such sale, (x) neither Buyer nor an Affiliate of Buyer shall own at least a majority of the capital or voting stock of the Company or (y) all or substantially all of the assets of the Company shall have been transferred to one or more Persons who are neither Buyer nor an Affiliate of Buyer (such event, an “Early Trigger Earn-Out Transaction”), as followsthen the following provisions shall apply: (bi) Within ninety (90) days In the case of the end of an Early Trigger Earn-Out Transaction which occurs during the Earn-Out Period, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation pay to Sellers the Gain on Sale; provided, however, that the portion of the "net sales" attributable Gain on Sale payable to Sellers shall in no event exceed Twenty Million Dollars ($20,000,000). “Gain on Sale” shall mean the Business for such period, as well as a calculation portion of the "operating margin" for the Business for such period. (c) For purposes of this Agreement, the "operating margin" for the Business with respect to the Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying Enterprise Value which exceeds the sum of five hundred thousand and No/100 Dollars (x) $500,000.00316,500,000, plus (y) all capital invested in the Company following the Closing by the Percentage Buyer and/or any Affiliate of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------Buyer.

Earn-Out. (a) Buyer Earn-Out Shares. In the event Pacific Magtron, Inc. ("PMI"), Pacific Magtron (GA), Inc. ("PMI-GA"), and LiveWarehouse, Inc. ("LW") achieve the Milestones (as defined in Section 4.3 below) for any year during the two (2) year period commencing January 1, 2005 and expiring December 31, 2006, Executive shall pay Seller an "earn-out" amount based upon operating margins attributable have the right to the operation receive on March 31 of the Business immediately following calendar year, the applicable ratable portion of 33,333,333 shares of restricted common stock of ACT (priced at $.01 per share, or $333,333 in the aggregate), to be earned at the end of each such year at the rate of 50% for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date each year (the "Earn-Out PeriodShares"); provided, that in the event the Milestones are not achieved in any year, except as follows: provided below, such ratable portion of Shares shall be forfeited entirely, without any ability to re-earn such Shares in a future year; provided further, that in the event Executive's employment with PMIC is terminated for "cause" by PMIC (as contemplated by Section 6.1 of this Agreement) prior to the expiration of the initial Employment Period, all of the Shares earned or to be earned by Executive shall be forfeited. In the event that Executive's employment with PMIC is terminated prior to the expiration of the initial Employment Period for any reason other than "cause," Executive shall be permitted to receive the Shares earned by her prior to such termination, but shall in no event be entitled to receive Shares to be earned after the Termination Date (as defined in Section 6.1 below). Notwithstanding the foregoing, the number of Shares and the price per Share shall be adjusted accordingly for stock splits, reverse stock splits and other recapitalizations effected by ACT, so that Executive retains the right to receive, after accounting for such adjustment, the same percentage of ACT's outstanding shares of Common Stock as Executive would have had the right to receive had such adjustment not been so effected. Upon earning the Shares at the end of each year, if applicable, the Shares will be placed in escrow with a mutually agreeable escrow agent to be held and released in accordance with the terms of an escrow agreement in substantially the form of Exhibit "A" hereto; provided, however, that in the event that the employment of Executive is terminated by PMIC prior to the expiration of the initial Employment Period without cause (as contemplated by Section 6.2 of this Agreement), Executive terminates this Agreement for Good Reason (as contemplated by Section 6.3 of this Agreement), or this Agreement is terminated due to Executive's death or Disability (as defined below), Executive shall receive any Shares earned by her no later than the later of (a) the immediately following March 31 or (b) Within ninety thirty (9030) days after the Termination Date. Upon release from escrow, the Shares will include piggyback registration rights, subject to customary underwriters' cutbacks. Upon receipt of the end Shares, Executive will acquire the Shares for her own account and not with a view to their distribution within the meaning of Section 2(11) of the Earn-Out PeriodSecurities Act of 1933, Buyer shall provide Seller (with appropriate supporting documentationas amended. Executive is an "accredited investor," as such term is defined in Rule 501(a) with its calculation promulgated pursuant to the Securities Act of 1933, as amended. Executive acknowledges that Executive has had the opportunity to ask questions of and receive answers from, or obtain additional information from, the executive officers of the "net sales" attributable Company concerning the financial and other affairs of the Company, and to the Business for extent deemed necessary in light of such period, as well as a calculation personal knowledge of the "operating margin" for Company's affairs, Executive has asked such questions and received answers to the Business for full satisfaction of Executive. Executive understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness of suitability of the investment in the Shares nor have such period. (c) For purposes authorities passed upon or endorsed the merits of this Agreementthe offering of the Shares. Notwithstanding the foregoing, in the event that the Milestones are not achieved in a given year, the "operating margin" for Board of Directors of ACT shall have the Business with respect right, in its sole and absolute discretion, to the Earn-Out Period shall be calculated by dividing the earnings grant to Executive all or a portion of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for Shares that could have been earned by Executive during such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer As additional consideration for the Purchased Membership Interests, at such times as provided in Section 2.5(e), Purchaser shall pay to Sellers with respect to each of the two Calculation Periods within the Earn-Out Period an amount (each, an “Earn-Out Payment”), if any, equal to the product of (i) an amount equal to (A) the EBITDA for such Calculation Period, minus (B) the EBITDA Threshold for such Calculation Period; multiplied by (ii) the Earn-Out Multiple. If the EBITDA for a particular Calculation Period does not exceed the applicable EBITDA Threshold, no Earn-out Payment shall be due for such Calculation Period. (b) Upon any acquisition of an asset or business by the Acquired Companies or a restructuring of the Acquired Companies as permitted by Section 2.5(f), the Parties shall negotiate in good faith to determine whether the results of operations of such asset or business (or any change resulting from such restructuring) shall be included in the computation of EBITDA for any Calculation Period and, if so, the appropriate change to the EBITDA, if any. Without prior agreement of the Parties, there shall be no change to the EBITDA Threshold for such Calculation Period. Notwithstanding any decision made by the Parties with respect to the preceding sentence, any Seller employed or engaged as a consultant by Purchaser and its Affiliates shall manage, operate or otherwise provide services to any asset or business acquired that is within the operational knowledge and experience of any Seller so employed or engaged after the Closing Date, as requested by Purchaser. The EBITDA for any Calculation Period shall not be increased or diminished by revenues earned or costs or expenses incurred on direction of Purchaser and its Affiliates in the acquisition or operation of any asset or business acquired without the agreement of Sellers. (c) On or before the date that is sixty (60) days after the last day of each of the two Calculation Periods (each such date, an "earn“Earn-out" Out Calculation Delivery Date”), Purchaser shall prepare and deliver to Sellers a written statement (in each case, an “Earn-Out Calculation Statement”) setting forth in reasonable detail its determination of EBITDA for the applicable Calculation Period and its calculation of the resulting Earn-Out Payment (in each case, an “Earn-Out Calculation”). Purchaser shall provide Sellers and their Representatives copies of such records and work papers used or created in connection with preparation of each Earn-Out Calculation Statement that are reasonably required to support such Earn-Out Calculation Statement. Such records and work papers shall be held in confidence by Sellers and their Representatives and not used for any purpose except in connection with the calculation of EBITDA and the related Earn-Out Payment and the resolution of any dispute arising with respect thereto. (d) Sellers shall have thirty (30) days after receipt of the Earn-Out Calculation Statement for each Calculation Period (in each case, the “Review Period”) to review the Earn-Out Calculation Statement and the Earn-Out Calculation set forth therein. During the Review Period, Sellers and their Representatives shall have the right to inspect the Purchaser’s Books and Records related to the Business during normal business hours at Purchaser’s offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of EBITDA and the resulting Earn-Out Payment. Prior to the expiration of the Review Period, Seller may object to the Earn-Out Calculation set forth in the Earn-Out Calculation Statement for the applicable Calculation Period by delivering a written notice of objection (an “Earn-Out Calculation Objection Notice”) to Purchaser. Any Earn-Out Calculation Objection Notice shall specify the items in the applicable Earn-Out Calculation disputed by Sellers and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute and Sellers’ calculation of each item in dispute. If Sellers fail to deliver an Earn-Out Calculation Objection Notice to Purchaser prior to the expiration of the Review Period, then the Earn-Out Calculation set forth in the Earn-Out Calculation Statement shall be final and binding on the parties hereto. If Sellers timely deliver an Earn-Out Calculation Objection Notice, Purchaser and Sellers shall 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 Calculation Period. If Purchaser and Sellers are unable to reach agreement within thirty (30) days after such an Earn-Out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to the Accounting Firm. The Accounting Firm shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-Out Calculation as promptly as practicable, but in no event greater than sixty (60) days after such submission to the Accounting Firm, and to resolve only those unresolved disputed items set forth in the Earn-Out Calculation Objection Notice. If unresolved disputed items are submitted to the Accounting Firm, Purchaser and Sellers shall each furnish to the Accounting Firm such work papers, schedules and other documents and information relating to the unresolved disputed items as the Accounting Firm may reasonably request. The Accounting Firm shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Sellers, and not by independent review. In resolving the dispute, the Accounting Firm, acting in the capacity of an expert and not as an arbitrator, shall (i) limit its review to matters specifically set forth in the Earn-Out Calculation Objection notice (other than matters thereafter resolved by mutual written agreement of Purchaser and Sellers), and (ii) not assign a value to any item greater than the greatest value for such item or less than the smallest value for such item, in each case, claimed by Purchaser in the Earn-Out Calculation or Sellers in the Earn-Out Calculation Objection, as applicable. The resolution of the dispute and the calculation of EBITDA that is the subject of the applicable Earn-Out Calculation Objection Notice by the Accounting Firm shall be final and binding on the parties hereto. The fees and expenses of the Accounting Firm shall be borne by Sellers and Purchaser in proportion to the amounts by which their respective calculations of EBITDA differ from EBITDA as finally determined by the Accounting Firm. (e) Subject to Section 2.5(g), any Earn-Out Payment that Purchaser is required to pay pursuant to Section 2.5(a) hereof shall be paid in full no later than thirty (30) Business Days following the date upon operating margins attributable which the determination of EBITDA for the applicable Calculation Period becomes final and binding upon the parties as provided in Section 2.01(c) (including any final resolution of any dispute raised by Sellers in an Earn-Out Calculation Objection Notice). Purchaser shall pay to Sellers the applicable Earn-Out Payment in cash by wire transfer of immediately available funds to the bank account(s) for Sellers designated by the Sellers. (f) Subject to the terms of this Agreement, subsequent to the Closing, Purchaser shall have sole discretion with regard to all matters relating to the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to Acquired Companies, including, but not limited to, restructuring the first anniversary Acquired Companies; provided, that Purchaser shall not, directly or indirectly, take any actions in bad faith that would have the purpose of the Closing Date (the "Earn-Out Period"), as follows: (b) Within ninety (90) days of the end avoiding or reducing any of the Earn-Out PeriodPayments hereunder. Notwithstanding the foregoing, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation Purchaser has no obligation to operate the Business of the "net sales" attributable Acquired Companies in order to achieve any Earn-Out Payment or to maximize the Business for such periodamount of any Earn-Out Payment. Sellers acknowledge that (i) there is no assurance that Sellers will receive any Earn-Out Payment and Purchaser has not promised or projected any Earn-Out Payment, as well as a calculation and (ii) the parties solely intend the express provisions of the "operating margin" for the Business for such periodthis Agreement to govern their contractual relationship. (cg) For purposes Purchaser shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to this Section 2.5 the amount of this Agreement(i) any Damages, as finally determined in accordance with the "operating margin" for provisions of Article 8, to which any Purchaser Indemnified Party may be entitled and (ii) any other amounts due Purchaser from Sellers. (h) The Parties understand and agree that (i) the Business contingent rights to receive any Earn-Out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in Purchaser or the Acquired Companies, (ii) Sellers shall not have any rights as a securityholder of Purchaser or the Acquired Companies as a result of Sellers’ contingent right to receive any Earn-Out Payment hereunder, and (iii) no interest is payable with respect to the any Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal yearPayment. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) As additional consideration for the Contemplated Transactions, the Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable to the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date contingent price payments set forth in this Section 1.5 (the "“Earn-Out Period"Out”), as follows: (b) Within ninety (90) days of the end . The amount of the Earn-Out Period, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation will equal 5% of the "net sales" attributable to the Business for such period, as well as a calculation of the "operating margin" EBIT for the Business solely with respect to the Existing DMAs for such period. (c) the years ending December 31, 2006, 2007, 2008, 2009 and 2010; provided that the Earn-Out for 2006 shall begin to accrue on the day after the Closing Date. Buyer shall pay Seller the Earn-Out payments annually within 10 days of MasTec filing its 10-K for the respective fiscal year by wire transfer of next day funds to an account or accounts designated by Seller. For purposes of this Agreement, “EBIT” means the "operating margin" Net Income of the Business solely with respect to the Existing DMAs for the respective twelve-month period in the applicable fiscal year, plus (a) income Taxes deducted in determining Net Income, and (b) any interest on indebtedness incurred to finance the acquisition of the Assets contemplated hereby (including, without limitation, any original issue discount). For purposes of this Agreement, “Net Income” means, for any of the foregoing periods, the net income (or loss) of the Business solely with respect to the Existing DMAs, determined in accordance with GAAP consistent with MasTec’s other Advanced Tech Service Group divisions and as set forth in Schedule 1.5; provided however, that Net Income shall not be adjusted for any intra-company transfers to or from the Business with respect to MasTec or its Affiliates unless those transfers relate to a business transaction between the Earn-Out Period Business and MasTec or its Affiliates that would have occurred in the ordinary course of conducting business had Buyer not acquired the Assets. For purposes of clarification, Net Income shall only be calculated by dividing derived from the earnings operation of the Business in the Existing DMAs and only to the extent the Business is being conducted in such Existing DMAs during the applicable period, from the services the Business is offering in the Existing DMAs, and from customers (calculated in accordance with GAAPi.e., DirecTV) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with that the consummation Business is generating orders from as of the transactions contemplated hereby for such period by date of this Agreement. Any revenue and expenses resulting from new customers, new DMAs or new services shall not be included in the "net sales" attributable definition of Net Income; however, MasTec shall pay Mx. Xxxxxxxx a bonus if earned pursuant to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation terms of the Seller's "net sales" Executive Employment Agreement from the successful oversight of such new customers, DMAs or services as reflected on the Seller's audited financial statements at June 25, 2002any such incremental oversight responsibilities may be assigned by MasTec in its reasonable discretion. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer shall pay Seller an "earn-out" amount based upon operating margins attributable to the operation of the Business for During the period commencing beginning on the Closing Date and ending on the last day earlier of (i) April 9, 2024, and (ii) the date on which all of the month closest to Company’s obligations under the first anniversary of Zoetis License have been completed and discharged in full (such period, the Closing Date (the "“Earn-Out Period"”), Parent will, upon receipt by the Surviving Corporation of any payment pursuant to the Zoetis License from time to time, promptly pay to the Paying Agent, for distribution to the Holders (such amounts to be allocated among the Holders in accordance with each Holder’s Pro Rata Share of such amount), an amount equal to (x) 85% of such payment, less (y) the amount, if any, of all direct expenses in excess of the Budgeted Zoetis Expenses incurred by the Surviving Corporation or Parent in connection with the performance of the Company’s obligations under the Zoetis License since the Closing Date or the calculation of the last such payment, as follows:applicable (such net amount with respect to each such payment, if a positive amount, an “Earn Out Payment”, and collectively with all payments under this Section 3.07(a), the “Earn-Out Payments”). (b) Within ninety Parent shall use commercially reasonable efforts (90) days after giving effect, to among other things, the business of the Surviving Corporation) to cause the Surviving Corporation to perform all of the Company’s obligations under the Zoetis License in such a manner as to maximize the revenues of the Surviving Corporation under the Zoetis License, provided that nothing in this Section 3.07 shall require Parent or the Surviving Corporation to make any expenditure or incur any expense in excess of the Budgeted Zoetis Expenses unless Parent determines, in good faith, that the payments reasonably expected to be received under the Zoetis License will exceed such amount of expense in excess of the Budgeted Zoetis Expenses; and provided, further, that Parent shall not be required to cause the Surviving Corporation to take any action, or omit to take any action, that would reasonably be expected to be adverse to the business of the Surviving Corporation, which, for the avoidance of doubt, would not include any expense contemplated in the Zoetis Budget and any action expressly related thereto. Promptly following the Closing, Parent shall appoint a representative of Parent or Surviving Corporation (who shall initially be Xxxx Xxxxxx), who shall liaise with Xxxxxxxx Xxxx regarding the same. (c) From and after the completion of the first full calendar month following the Closing Date, and subject to compliance with all confidentiality requirements of the Company pursuant to the Zoetis License and any related confidentiality agreements, Parent shall, or shall cause the Surviving Corporation to, deliver to the Holder Representative a monthly report within 15 Business Days of the last day of such calendar month setting out the expenses incurred by the Surviving Corporation and Parent in connection with the performance of the obligations of the Company pursuant to the Zoetis License for the period since the Closing Date or the date of the last such report, as applicable. (d) If at any time, and from time to time, during the Earn-Out Period, Parent or the Surviving Corporation determines not to make an expenditure or incur an expense in excess of, or expected to be in excess of, the Budgeted Zoetis Expenses (an “Unbudgeted Zoetis Expense”) in accordance with Section 3.07(b), it shall promptly notify the Holder Representative in writing of such determination and provide a reasonable, good-faith estimate of the total amount of such Unbudgeted Zoetis Expense. Neither Parent nor the Surviving Corporation shall have any liability to the Holder Representative or any Holder for any inaccuracy or misstatement pertaining to such estimate or if the actual expenses necessary to complete the performance of the Zoetis License differ from Parent’s or the Surviving Corporation’s good-faith estimate provided to the Holder Representative pursuant to this Section 3.07(d). If, within 10 Business Days following delivery by Parent or the Surviving Corporation of a notice of an Unbudgeted Zoetis Expense as set out in this Section 3.07(d), the Holders deliver the full amount of the Unbudgeted Zoetis Expense to the Surviving Corporation, Parent will cause the Surviving Corporation to apply such amount against the Unbudgeted Zoetis Expense and shall make the corresponding expenditure or incur the corresponding expense, as applicable. (e) Within 15 Business Days of Surviving Corporation’s receipt of any and all payments under the Zoetis License, Parent will pay or cause Surviving Corporation to pay to the Paying Agent, for distribution to the Holders, by wire transfer of immediately available funds, the respective Earn-Out Payment payable under Section 3.07(a). Within 15 Business Days following the end date of the Earn-Out Period, Buyer shall provide Seller Surviving Corporation will pay to the Paying Agent, for distribution to the Holders (such amounts to be allocated among the Holders in accordance with appropriate supporting documentation) with its calculation each Holder’s Pro Rata Share of such amount), the amount, if any, equal to the sum of the "net sales" attributable following: (i) any Earn-Out Payment not previously paid out under the prior sentence, if any, payable pursuant to Section 3.07(a); (ii) the amount, if any, by which the Budgeted Zoetis Expenses exceeded the aggregate amount actually incurred by the Surviving Corporation and Parent in the discharge of the Company’s obligations under the Zoetis License; and (iii) the amount, if any, by which any amount paid by the Holders to the Business for such period, as well as a calculation Surviving Corporation or Parent in respect of any Unbudgeted Zoetis Expenses exceeded the aggregate amount of the "operating margin" for expenses actually incurred by the Business for Surviving Corporation and Parent in respect of such periodUnbudgeted Zoetis Expenses. (cf) For purposes Each of this Agreement, the "operating margin" for the Business with respect to Parties agrees that (A) the Earn-Out Period Payment and the payment of the amounts considered under Section 3.07(e)(i) and (ii) shall be calculated by dividing treated as adjustments to the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period Purchase Price by the "net sales" attributable Parties for Tax purposes, except to the Business for such fiscal year. extent otherwise required by Law, and (dB) The Buyer shall cause its auditors it will take commercially reasonable steps to calculate the "net sales" attributable to the Business for structure the Earn-Out Period in accordance with GAAP Payment, if any, and the payment of the amounts under Section 3.07(e)(i) and (ii), if any, in a manner consistent with tax-efficient manner, provided that any such structure shall be subject to the calculation approval of each of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002Parties. (eg) The If (i) any Parent Indemnitee has any claim for indemnifiable Losses pursuant to this Agreement or any Ancillary Document of which any amount remains unpaid after the 15 Business Day period set out in Section 9.06(a), or (ii) Parent or any Affiliate thereof is entitled to payment from Holders in respect of any amount payable under Section 3.06(b)(ii)(B) and 11.02 of this Agreement that remains unpaid within 10 Business Days of written request therefor, then Parent shall have the "earn-out" payable by Buyer right to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of withhold, or to cause Surviving Corporation to withhold from any Earn-Out Payment or other payment otherwise payable by Parent or Surviving Corporation pursuant to this Section 3.07, and set out below opposite off against the "Operating Margin" for same, the Business for amount of such unsatisfied claims in satisfaction of such portion of such claim as is represented by the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------amount so withheld.

Earn-Out. (a) As promptly as practicable after the one year anniversary of the Closing Date, but in no event later than ninety (90) days thereafter, Buyer shall pay deliver to Seller an "earn-out" amount based upon operating margins attributable to the operation a statement of income (loss) of the Business as operated by Seller, Buyer or its successors or assigns (the “Earn-Out Income Statement”) for the period commencing starting on (x) if the Closing Date and ending occurs on or before the last fifteenth fiscal day of the month closest to in which the Closing occurs, the first anniversary fiscal day of such month or (y) if the Closing Date occurs after the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of the month immediately following the Closing Date (the "date referred to in (x) or (y), the “Earn Out Start Date”) until the last fiscal day of the month that is twelve months after the Earn Out Start Date (the “Earn-Out Period"”), including, without limitation, a calculation of EBITDA (as follows: (bdefined below) Within ninety (90) days for the Earn-Out Period. The Earn-Out Income Statement shall be prepared in accordance with the Accounting Standards applied in a manner consistent with the preparation of the end Interim Statements. The portion of such statement covering the year ended December 31, 2006 shall be included in the consolidated financial statements audited by Buyer’s accounting firm. During the Earn-Out Period, Buyer shall provide Seller use commercially reasonable efforts to operate the Business in the Ordinary Course of Business in a commercially reasonable fashion (with appropriate supporting documentationincluding by not taking any action or making any operational changes having the principal purpose of reducing EBITDA) with its calculation and shall maintain books and records adequate to permit an audit of the "net sales" attributable to the Business for such period, as well as a calculation stand-alone division. Without limiting the generality of the "operating margin" for the Business for such period. (c) For purposes of this Agreementforegoing, the "operating margin" for the Business with respect to Buyer agrees and covenants that, during the Earn-Out Period Period, (i) Buyer will not divert any business opportunity relating to the Products, customers or sales of Products from Buyer to any of Buyer’s Affiliates or other business divisions; (ii) Buyer will continue to manufacture Products so long as, in Buyer’s good faith judgment, sufficient demand exists for such Products (and if Buyer determines that sufficient demand does not exist, Buyer will provide supporting documentation, such as written communication from customers, to that effect), in order to meet such demand; and (iii) all sales of Products, whether effected by Buyer or an Affiliate of Buyer, will be included in the calculation of EBITDA; provided, however¸ that none of the obligations in clauses (i) through (iii) above shall be calculated apply to any products of a type that Buyer can demonstrate was manufactured by dividing Buyer or an Affiliate of Buyer prior to Closing. (b) Following the earnings one year anniversary of the Closing Date, each of Buyer and Seller shall give the other party reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Earn-Out Income Statement. Seller shall have 30 days following the delivery to Seller of the Earn-Out Income Statement during which to provide written notice to Buyer of any dispute of any item contained in the Earn-Out Income Statement (calculated the “Earn-Out Objection Notice”), which notice shall set forth in reasonable detail the basis for such dispute and Seller’s calculation of EBITDA for the Earn-Out Period. If Seller fails to provide an Earn-Out Objection Notice to Buyer within such 30-day period, the Earn-Out Income Statement shall be conclusive and binding on the Parties. In the event that Seller shall provide an Earn-Out Objection Notice to Buyer within such 30-day period, Buyer and Seller shall cooperate in good faith to resolve the dispute as promptly as possible and agree upon a mutually satisfactory income statement which reflects EBITDA for the Earn-Out Period. If Seller timely provides an Earn-Out Objection Notice to Buyer, and if Buyer and Seller are unable to resolve such objections within 30 days of Buyer’s receipt of the Earn-Out Objection Notice, Buyer and Seller shall submit the items remaining in dispute to the Independent Accountant; provided, however, that the Independent Accountants shall be limited to selecting either the EBITDA amount reflected on Buyer’s Earn-Out Income Statement or the EBITDA amount reflected on the Earn-Out Objection Notice submitted by Seller. If issues are submitted to the Independent Accountants for resolution, (A) Buyer and Seller shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (B) Buyer and Seller shall instruct the Independent Accountants to make their determination based solely on such materials presented by Buyer and Seller (i.e., not on the basis of an independent review) and to resolve the dispute with respect to each such specified item and amount in accordance with GAAP) before interestthe Accounting Standards, taxes, extraordinary items and any depreciation and/or amortization associated applied in a manner consistent with the consummation preparation of the transactions contemplated hereby for such period by Interim Statements, and in accordance with the "net sales" attributable to definition of EBITDA set forth in this Agreement; (C) the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business determination of EBITDA for the Earn-Out Period by the Independent Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon thereafter as practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of the Independent Accountants shall be borne (x) by Seller if the Independent Accountants select Buyer’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Income Statement, or (y) by Buyer, if the Independent Accountants select Seller’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Objection Notice. The Earn-Out Income Statement, either as agreed to by Buyer and Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding and shall be referred to as the “Final Earn-Out Income Statement” for the respective Earn-Out Period. Any amounts to be paid pursuant to §2.7(d) below shall be paid within fifteen (15) days of the determination of the Final Earn-Out Income Statement for such Earn-Out Period. (c) No objection may be raised and no adjustment may be proposed to any entry or item contained in the Earn-Out Income Statement or the calculation of EBITDA (as defined below), except on the grounds that such item or entry is not in accordance with GAAP the provisions of this Agreement or the Accounting Standards, applied in a manner consistent with the calculation preparation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25Interim Statements, 2002or that such item or entry contains a mathematical error. (ed) The amount of For the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite Period, Buyer shall pay to Seller, as an adjustment to the "Operating Margin" for Purchase Price, in immediately available funds to a United States bank account designated to Buyer by Seller in writing at least two (2) Business Days prior to the Business date of such payment, the product (the “Earn-Out Amount”) of (i) the excess, if a positive number, of (A) EBITDA for the Earn-Out Period: Operating Margin Percentage of Period over (B) the Earn-Out ---------------- ----------------------Threshold (as hereinafter defined), multiplied by (ii) 5; provided, however, that in no event shall the Earn-Out Amount exceed $10,000,000. The “Earn-Out Threshold” shall initially mean $5,000,000, subject to adjustment as provided below.

Earn-Out. (a) Buyer 2.9.1 If the Surviving Corporation’s 2020 GAAP Revenue exceeds $36,000,000, Sellers shall pay Seller be entitled to an "earn-out" amount based upon operating margins attributable out payment of up to the operation a maximum of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date $3,000,000 (the "“Earn-Out Period")Out”) paid in accordance with this Section 2.9. If the Surviving Corporation’s 2020 GAAP Revenue exceeds $36,000,000, as follows: (b) Within ninety (90) days of the end of the Earn-Out Periodshall equal the lesser of the amount of such excess and $3,000,000. 2.9.2 As used herein, Buyer shall provide Seller (2020 GAAP Revenue means the Company’s revenue generated by the business of the Company on a stand-alone basis in ordinary course from January 1, 2020 through December 31, 2020, all as calculated by the Surviving Corporation in accordance with appropriate supporting documentation) with GAAP. 2.9.3 The Surviving Corporation shall, prior to March 31, 2021, prepare and deliver to the Sellers a statement setting forth its calculation of 2020 GAAP Revenue. If the "net sales" attributable Sellers do not object to such calculations in writing within ten days of delivery, the Business for Sellers shall be deemed to have accepted such period, as well as a calculation of calculations. Any dispute shall be resolved in accordance with the "operating margin" for the Business for such perioddispute resolution provisions contained in this Agreement. (c) For purposes 2.9.4 The Earn-Out will be paid within the earlier of this Agreement, 20 days after the "operating margin" for the Business with respect date on which Sellers have accepted or are deemed to have accepted the Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated calculations in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal yearSection 2.9.3 above. (d) The Buyer shall cause its auditors 2.9.5 During the period under which Sellers are entitled to calculate the "net sales" attributable to the Business for receive the Earn-Out Period in accordance with GAAP in a manner consistent payment pursuant to this Agreement, neither Purchaser nor the Surviving Corporation shall (i) take any action with the calculation specific intent and purpose of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for reducing the Earn-Out Period: Operating Margin Percentage payment or the ability of the Surviving Corporation to achieve the revenue metrics set forth in Section 2.9.1, or (ii) take any action that Purchaser or the Surviving Corporation then knows would, or would reasonably be expected to, materially and adversely affect the ability of the Sellers to receive the Earn-Out ---------------- ----------------------payment or the Surviving Corporation to achieve the revenue metrics set forth in Section 2.9.1. 2.9.6 For accounting purposes, the Earn-Out shall be accounted for as additional Merger Consideration.

Earn-Out. (a) As promptly as practicable after the one year anniversary of the Closing Date, but in no event later than ninety (90) days thereafter, Buyer shall pay deliver to Seller an "earn-out" amount based upon operating margins attributable to the operation a statement of income (loss) of the Business as operated by Seller, Buyer or its successors or assigns (the “Earn-Out Income Statement”) for the period commencing starting on (x) if the Closing Date and ending occurs on or before the last fifteenth fiscal day of the month closest to in which the Closing occurs, the first anniversary fiscal day of such month or (y) if the Closing Date occurs after the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of the month immediately following the Closing Date (the "date referred to in (x) or (y), the “Earn Out Start Date”) until the last fiscal day of the month that is twelve months after the Earn Out Start Date (the “Earn-Out Period"”), including, without limitation, a calculation of EBITDA (as follows: (bdefined below) Within ninety (90) days for the Earn-Out Period. The Earn-Out Income Statement shall be prepared in accordance with the Accounting Standards applied in a manner consistent with the preparation of the end Interim Statements. The portion of such statement covering the year ended December 31, 2006 shall be included in the consolidated financial statements audited by Buyer’s accounting firm. During the Earn-Out Period, Buyer shall provide Seller use commercially reasonable efforts to operate the Business in the Ordinary Course of Business in a commercially reasonable fashion (with appropriate supporting documentationincluding by not taking any action or making any operational changes having the principal purpose of reducing EBITDA) with its calculation and shall maintain books and records adequate to permit an audit of the "net sales" attributable to the Business for such period, as well as a calculation stand-alone division. Without limiting the generality of the "operating margin" for the Business for such period. (c) For purposes of this Agreementforegoing, the "operating margin" for the Business with respect to Buyer agrees and covenants that, during the Earn-Out Period Period, (i) Buyer will not divert any business opportunity relating to the Products, customers or sales of Products from Buyer to any of Buyer’s Affiliates or other business divisions; (ii) Buyer will continue to manufacture Products so long as, in Buyer’s good faith judgment, sufficient demand exists for such Products (and if Buyer determines that sufficient demand does not exist, Buyer will provide supporting documentation, such as written communication from customers, to that effect), in order to meet such demand; and (iii) all sales of Products, whether effected by Buyer or an Affiliate of Buyer, will be included in the calculation of EBITDA; provided, however ¸ that none of the obligations in clauses (i) through (iii) above shall be calculated apply to any products of a type that Buyer can demonstrate was manufactured by dividing Buyer or an Affiliate of Buyer prior to Closing. (b) Following the earnings one year anniversary of the Closing Date, each of Buyer and Seller shall give the other party reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Earn-Out Income Statement. Seller shall have 30 days following the delivery to Seller of the Earn-Out Income Statement during which to provide written notice to Buyer of any dispute of any item contained in the Earn-Out Income Statement (calculated the “Earn-Out Objection Notice”), which notice shall set forth in reasonable detail the basis for such dispute and Seller’s calculation of EBITDA for the Earn-Out Period. If Seller fails to provide an Earn-Out Objection Notice to Buyer within such 30-day period, the Earn-Out Income Statement shall be conclusive and binding on the Parties. In the event that Seller shall provide an Earn-Out Objection Notice to Buyer within such 30-day period, Buyer and Seller shall cooperate in good faith to resolve the dispute as promptly as possible and agree upon a mutually satisfactory income statement which reflects EBITDA for the Earn-Out Period. If Seller timely provides an Earn-Out Objection Notice to Buyer, and if Buyer and Seller are unable to resolve such objections within 30 days of Buyer’s receipt of the Earn-Out Objection Notice, Buyer and Seller shall submit the items remaining in dispute to the Independent Accountant; provided, however, that the Independent Accountants shall be limited to selecting either the EBITDA amount reflected on Buyer’s Earn-Out Income Statement or the EBITDA amount reflected on the Earn-Out Objection Notice submitted by Seller. If issues are submitted to the Independent Accountants for resolution, (A) Buyer and Seller shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (B) Buyer and Seller shall instruct the Independent Accountants to make their determination based solely on such materials presented by Buyer and Seller (i.e., not on the basis of an independent review) and to resolve the dispute with respect to each such specified item and amount in accordance with GAAP) before interestthe Accounting Standards, taxes, extraordinary items and any depreciation and/or amortization associated applied in a manner consistent with the consummation preparation of the transactions contemplated hereby for such period by Interim Statements, and in accordance with the "net sales" attributable to definition of EBITDA set forth in this Agreement; (C) the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business determination of EBITDA for the Earn-Out Period by the Independent Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon thereafter as practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of the Independent Accountants shall be borne (x) by Seller if the Independent Accountants select Buyer’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Income Statement, or (y) by Buyer, if the Independent Accountants select Seller’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Objection Notice. The Earn-Out Income Statement, either as agreed to by Buyer and Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding and shall be referred to as the “Final Earn-Out Income Statement” for the respective Earn-Out Period. Any amounts to be paid pursuant to §2.7(d) below shall be paid within fifteen (15) days of the determination of the Final Earn-Out Income Statement for such Earn-Out Period. (c) No objection may be raised and no adjustment may be proposed to any entry or item contained in the Earn-Out Income Statement or the calculation of EBITDA (as defined below), except on the grounds that such item or entry is not in accordance with GAAP the provisions of this Agreement or the Accounting Standards, applied in a manner consistent with the calculation preparation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25Interim Statements, 2002or that such item or entry contains a mathematical error. (ed) The amount of For the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite Period, Buyer shall pay to Seller, as an adjustment to the "Operating Margin" for Purchase Price, in immediately available funds to a United States bank account designated to Buyer by Seller in writing at least two (2) Business Days prior to the Business date of such payment, the product (the “Earn-Out Amount”) of (i) the excess, if a positive number, of (A) EBITDA for the Earn-Out Period: Operating Margin Percentage of Period over (B) the Earn-Out ---------------- ----------------------Threshold (as hereinafter defined), multiplied by (ii) 5; provided, however, that in no event shall the Earn-Out Amount exceed $10,000,000. The “Earn-Out Threshold” shall initially mean $5,000,000, subject to adjustment as provided below.

Earn-Out. (a) Buyer shall pay Seller an "The payment by Purchase to Sellers of the $2 million balance of the Purchase Price comprising the Earn-out will be subject to Purchaser achieving the earn-out" amount based upon operating margins attributable to out payment thresholds set forth in Schedule 2.04, and will be payable at the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the "Earn-Out Period"), as follows:times set out in this Section 2.04. (b) Within ninety (90) 30 days after the completion of Purchaser’s financial statements in respect of the end first twelve months of the Business following the Closing, Purchaser will provide to Seller a statement (“First Earn-Out Period, Buyer shall provide Seller (with appropriate supporting documentationout Statement”) with its calculation of setting out the "net sales" attributable to extent that Purchaser achieved the Business for earn-out payment thresholds set forth in Schedule 2.04 during such period, as well as a calculation of and the "operating margin" for the Business for such periodcorresponding Earn-out payment that is due to Seller based thereon. (c) For purposes Within 30 days after the completion of this Agreement, Purchaser’s financial statements in respect of the "operating margin" for the Business with respect to the Earn-Out Period shall be calculated by dividing the earnings second twelve months of the Business following the Closing, Purchaser will provide to Seller a statement (calculated “Second Earn-out Statement”) setting out the extent that Purchaser achieved the earn-out payment thresholds set forth in accordance with GAAP) before interestSchedule 2.04 during such period, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable corresponding Earn-out payment that is due to the Business for such fiscal yearSeller based thereon. (d) The Buyer shall cause its auditors to calculate During the "net sales" attributable to period from the Business for date of delivery of each of the Earn-Out Period out Statements referred to in accordance with GAAP in a manner consistent with Section 2.04(b) or (c), until the calculation date no later than 30 days after delivery of the Seller's "net sales" applicable Earn-out Statement, Purchaser shall give Seller such assistance and access to the books and records of the Business as reflected on Seller may reasonably request in order to enable them to reasonably assess the Seller's audited financial statements at June 25, 2002Earn-out Statement and the calculations and determinations set out therein. (e) The amount If Seller does not give a notice of the "earnobjection within 30 days from delivery of any Earn-out" payable by Buyer to out Statement, Seller shall be calculated deemed to have accepted such Earn-out Statement, which shall be final and binding on the Parties. (f) If Seller objects to any matter in an Earn-out Statement prepared pursuant to Section 2.04(b) or (c), Seller shall give notice to Purchaser no later than 30 days after delivery of the applicable Earn-out Statement. Any notice given by multiplying Seller shall set forth in detail the sum particulars of five hundred thousand and No/100 Dollars ($500,000.00) such objection. The Parties shall then use reasonable efforts to resolve such objection for a period of 30 days following the giving of such notice. If the matter is not resolved by the Percentage end of such 30 day period, then the dispute with respect to such objection shall be submitted by the Parties to a chartered accountant associated with an accounting firm of recognized national standing in the United States who is independent of the Parties (the “Earn-Out set out below opposite Accountant”). If the "Operating Margin" for the Business for Parties are unable to agree on the Earn-Out Period: Operating Margin Percentage out Accountant within a further 10 day period, either Party may apply under the rules of the American Arbitration Association to have a court appoint the Earn-Out ---------------- ----------------------out Accountant. The Earn-out Accountant shall, as promptly as practicable (but in any event within 45 days following its appointment), make a determination of the Earn-out amount payable in respect of such Earn-out Statement, based on Schedule 2.04, based solely on written submissions of the Parties given by them to the Earn-out Accountant. The submissions of each Party shall be disclosed to the other Party and each other Party shall be afforded a reasonable opportunity to respond thereto. The decision of the Independent Accountant as to the Earn-out Statement shall be final and binding upon the Parties and shall constitute the applicable Earn-out in respect of such Earn-out Statement for purposes of this Agreement. Purchaser and Seller shall each pay one-half of the fees and expenses of the Earn-out Accountant with respect to the resolution of the dispute. (g) Within 30 days of settling any Earn-out Statement, Purchaser shall pay to Seller the Earn-out amount, if any, which will constitute part of the Purchase Price.

Earn-Out. (a) Buyer Earn-Out Shares. In the event Pacific Magtron, Inc. ("PMI"), Pacific Magtron (GA), Inc. ("PMI-GA"), and LiveWarehouse, Inc. ("LW") achieve the Milestones (as defined in Section 4.3(b) below) for any year during the three (3) year period commencing January 1, 2005 and expiring December 31, 2007, Executive shall pay Seller an "earn-out" amount based upon operating margins attributable have the right to the operation receive on March 31 of the Business immediately following calendar year, the applicable ratable portion of 66,666,666 shares of restricted common stock of ACT (priced at $.01 per share, or $666,666 in the aggregate), to be earned at the end of each such year at the rate of 25% for each of the first and second years and 50% for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date third year (the "Earn-Out PeriodShares"); provided, that in the event the Milestones are not achieved in any year, except as follows: provided below, such ratable portion of Shares shall be forfeited entirely, without any ability to re-earn such Shares in a future year; provided further, that in the event Executive's employment with the Company is terminated for "cause" by the Company (as contemplated by Section 6.1 of this Agreement) prior to the expiration of the initial Employment Period, all of the Shares earned or to be earned by Executive shall be forfeited. In the event that Executive's employment with the Company is terminated prior to the expiration of the initial Employment Period for any reason other than "cause," Executive shall be permitted to receive the Shares earned by him prior to such termination, but shall in no event be entitled to receive Shares to be earned after the Termination Date (as defined in Section 6.1 below). Notwithstanding the foregoing, the number of Shares and the price per Share shall be adjusted accordingly for stock splits, reverse stock splits and other recapitalizations effected by ACT, so that Executive retains the right, after accounting for such adjustment, to receive the same percentage of ACT's outstanding shares of Common Stock as Executive would have had the right to receive had such adjustment not been so effected. Upon earning the Shares at the end of each year, if applicable, the Shares will be placed in escrow with a mutually agreeable escrow agent to be held and released in accordance with the terms of an escrow agreement in substantially the form of Exhibit "A" hereto; provided, however, that in the event that the employment of Executive is terminated by the Company prior to the expiration of the initial Employment Period without cause (as contemplated by Section 6.2 of this Agreement), Executive terminates this Agreement for Good Reason (as contemplated by Section 6.3 of this Agreement), or this Agreement is terminated due to Executive's death or Disability (as defined below), Executive shall receive any Shares earned by him no later than the later of (a) the immediately following March 31 or (b) Within ninety thirty (9030) days after the Termination Date. Upon release from escrow, the Shares will include piggyback registration rights, subject to customary underwriters' cutbacks. Upon receipt of the end Shares, Executive will acquire the Shares for his own account and not with a view to their distribution within the meaning of Section 2(11) of the Earn-Out PeriodSecurities Act of 1933, Buyer shall provide Seller (with appropriate supporting documentationas amended. Executive is an "accredited investor," as such term is defined in Rule 501(a) with its calculation promulgated pursuant to the Securities Act of 1933, as amended. Executive acknowledges that Executive has had the opportunity to ask questions of and receive answers from, or obtain additional information from, the executive officers of the "net sales" attributable Company concerning the financial and other affairs of the Company, and to the Business for extent deemed necessary in light of such period, as well as a calculation personal knowledge of the "operating margin" for Company's affairs, Executive has asked such questions and received answers to the Business for full satisfaction of Executive. Executive understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness of suitability of the investment in the Shares nor have such period. (c) For purposes authorities passed upon or endorsed the merits of this Agreementthe offering of the Shares. Notwithstanding the foregoing, in the event that the Milestones are not achieved in a given year, the "operating margin" for Board of Directors of ACT shall have the Business with respect right, in its sole and absolute discretion, to the Earn-Out Period shall be calculated by dividing the earnings grant to Executive all or a portion of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for Shares that could have been earned by Executive during such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer shall cause the Company to pay Seller an 50% of the net profit (the "earn-out" Net Profit"), if any, generated by the Company's Ready Mix Business (as defined below) for a period of 24 months commencing with the month immediately following the month in which the Closing occurs (unless the Closing occurs on the first day of a month, in which event the 24 month period will commence with the month in which the Closing occurs). In the event the Company generates a negative Net Profit (i.e., a net loss), Seller shall pay 50% of the amount based upon operating margins attributable of such negative Net Profit to the Company. The Net Profit shall be calculated as set forth in Schedule 2.2, consistent with the Company's historical accounting practices, to the extent such practices are not inconsistent with United States generally accepted accounting principles consistently applied ("GAAP"). The Net Profit shall be calculated before taxes only if the payment of the Net Profit to Seller by the Company would be tax deductible to the Company, Buyer or any of Buyer's Affiliates (as described in Section 3.28); otherwise, Net Profit shall be calculated after taxes. For purposes of calculating the Net Profit, the parties shall allocate the costs of the Company's activities relating to the ready mix operations (the "Ready Mix Business") and the Company's activities relating to the operation of the Business for the period commencing on the Closing Date a bulk cement terminal and ending on the last day bagging of the month closest to the first anniversary of the Closing Date cement (the "EarnCement Business") as set forth on Schedule 2.2; provided, however, for the purposes of calculating Net Profit, the transfer price of bulk cement from the Cement Business to the Ready Mix Business shall be calculated as established in the Supply Agreement between UMAR, certain of UMAR's affiliates, the Company, Seller and certain of Seller's subsidiaries dated December 29, 1999. Net Profit shall be estimated by the Company and presented to Buyer and Seller within ten days after the end of each week, and quarterly financial statements shall be prepared by the Company within 30 days after the end of each calendar quarter. Within ten days after the quarterly financial statements of the Company have been presented to Buyer by the Company, Buyer shall make the Net Profit payment to Seller if the Net Profit for the quarter has been positive. Within ten days after the quarterly financial statements of the Company have been presented to Buyer, Buyer shall advise Seller to make the Net Profit payment to Buyer if the Net Profit for the quarter has been negative. After the Company's annual audited financial statements for any period scheduled in the 24 month period become available, the parties shall adjust the earn-Out Period")out payments previously made pursuant to this Section to take into account any audit or year-end or other adjustments not reflected on the monthly or quarterly financial statements. Such adjustment may result in a payment from Buyer to Seller or a payment from Seller to Buyer, as follows: applicable. Notwithstanding the foregoing, at any time during such 24 month period, in lieu of making or receiving the payment described in the first sentence of this Section, Buyer shall have the option of paying the higher of: (i) US$700,000 or (ii) the sum of any accrued but unpaid earn-out payments for completed months plus the product of (a) 50% of the average historical monthly Net Profit for all of the then completed months of such 24 month period multiplied by (b) Within ninety the number of months remaining until the conclusion of such 24 month period (90) days including the month in which such election is made), and, in such event, the obligation of Seller to pay 50% of the amount of any negative Net Profit to the Company shall cease commencing with the month in which such election is made. In the event Buyer elects to terminate the Management Agreement in the form of Exhibit 9.2.7 prior to the end of the Earn-Out Periodsuch 24 month period, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation of be deemed to have made the "net sales" attributable to election set forth in the Business for such period, as well as a calculation of the "operating margin" for the Business for such periodimmediately preceding sentence. (c) For purposes of this Agreement, the "operating margin" for the Business with respect to the Earn-Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------

Earn-Out. (a) Buyer Subject to, and in accordance with, the other provisions of this Section 2.12, if during the first 12 full calendar months following the Closing Date (the “Review Period”), the product obtained by multiplying the Operating Income of Purchaser’s Non-Telecommunications Business during such period times ten exceeds the Base Valuation, Purchaser (or one or more Purchasing Subsidiaries) shall pay Seller an "earnamount (the “Earn-out" amount based upon operating margins attributable out Payment”) equal to such difference (the “Valuation Gap”) in cash or in AsiaInfo Shares having an aggregate Market Value as of the last Business Day of the Review Period equal to such difference. The use of cash or AsiaInfo Shares to satisfy the Earn-out Payment shall be at the sole and absolute discretion of Purchaser. For the avoidance of doubt, no businesses, assets or companies acquired by Purchaser after the date hereof, other than as contemplated in this Agreement, shall be included in Operating Income for purposes of the Earn-out Payment. (b) During the Review Period, Purchaser shall operate the Business only in the ordinary course and any transaction relating to the operation Business between Purchaser and its Affiliates shall be an arm’s-length, negotiated transaction on terms that shall not be less or more favorable than terms that would have been received from an unrelated party. During the Review Period, Purchaser will afford Seller and its Representatives (i) access to the financial records of the Non-Telecommunications Business as Seller may reasonably request and (ii) the right to make copies and extracts therefrom. The Earn-out Payment shall be made within ninety (90) days after the end of the Review Period (A) in the event of payment in cash, by wire transfer to an account designated by Seller, or (B) in the event of payment in AsiaInfo Shares, by delivering a certificate reflecting the number of AsiaInfo Shares to be issued or delivered by Purchaser under this Section 2.12. In the event that the Earn-out Payment is made in AsiaInfo Shares, such shares shall not be subject to the lock-up provisions in Section 5.17(a) and Seller shall be entitled to one demand registration on Form S-3 in respect of such shares pursuant to the Registration Rights Agreement. (c) Within sixty days following the end of the Review Period, Purchaser shall (A) prepare or cause to be prepared a statement setting forth the Operating Income of the Business, which shall be calculated in accordance with U.S. GAAP, for the Review Period (the “Post-Closing Statement”) and (B) deliver or cause to be delivered to Seller the Post-Closing Statement. (d) During the twenty business days immediately following the receipt by Seller of the Post-Closing Statement (the “Seller’s Review Period”), Seller and its accountants and attorneys shall be entitled to review such items and any working papers, trial balance and similar materials relating thereto prepared by Purchaser, its accountants or other personnel. If Seller in good faith disagrees with the Post-Closing Statement, Seller may deliver to Purchaser, within Seller’s Review Period, a notice (the “Earn-out Objection Notice”) setting forth in reasonable detail (A) the amounts with which Seller disagrees and the basis for such disagreement and (B) Seller’s proposed corrections to the Post-Closing Statement. Seller shall be deemed to have agreed with all amounts contained in the Post-Closing Statement to which no specific objection has been made. If Seller does not deliver an Earn-out Objection Notice prior to the expiration of Seller’s Review Period, Seller shall be deemed to agree in all respects with Purchaser’s calculation of the Operating Income of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the "Earn-Out Period"), as follows: (b) Within ninety (90) days of the end of the Earn-Out Review Period, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation of and the "net sales" attributable to amounts set forth in the Business for such period, as well as a calculation of the "operating margin" for the Business for such period. (c) For purposes of this Agreement, the "operating margin" for the Business with respect to the EarnPost-Out Period Closing Statement shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items final and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002binding upon Seller and Purchaser. (e) The amount If an Earn-out Objection Notice is properly and timely delivered, Seller and Purchaser shall negotiate in good faith with each other to resolve the disputed amounts set forth in the Earn-out Objection Notice. If the parties are unable to resolve the disputed amounts set forth in the Earn-out Objection Notice within five calendar days after Seller’s delivery of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite Objection Notice to Purchaser, the "parties shall cause the Reviewing Accountant to promptly review this Agreement and the disputed amounts in the Post-Closing Statement for the purpose of calculating the Operating Margin" for Income of the Business for the Review Period. In making any such calculations, the Reviewing Accountant shall consider only those amounts in the Post-Closing Statement as to which Seller has, in the Earn-Out Period: Operating Margin Percentage out Objection Notice, disagreed. (f) The Reviewing Accountant shall deliver to Seller and Purchaser, as promptly as practicable, but no later than ten (10) calendar days after the Reviewing Accountant are engaged, a written report setting forth its calculation of Earn-Out ---------------- ----------------------the disputed amounts. Upon such delivery, such report and the calculations set forth therein shall be final and binding upon Seller and Purchaser. The cost of such review and report shall be borne equally by Seller and Purchaser.

Earn-Out. (a) Buyer 5.1 As full compensation for the sale and assignment of the Assigned Intellectual Property, K2 shall pay Seller an "to the Assignors, in accordance with the next sentence, annually a cash earn-out" amount based upon operating margins attributable out (the “Earn-Out”) with respect to each Product equal to the operation product of (x) the Business for the period commencing on the Closing Date and ending on the last day of the month closest to the first anniversary of the Closing Date (the "Earn-Out Period")Percentage for such Product and (y) the Net Revenues of K2 attributable to sales of such Product during the applicable year. The Earn-Out in respect of a Product shall be paid directly to the Assignor who contributed the Assigned Intellectual Property upon which such product is based; provided, that, if a Product is based upon Assigned Intellectual Property assigned by more than one Assignor, then such Earn-Out shall be apportioned among the Assignors who assigned such intellectual property in such proportion as follows: (b) Within ninety (90) they shall agree or, absent such an agreement, in such proportions as K2 shall reasonably determine taking into account the items assigned and the extent to which they were incorporated into the applicable Product. The Earn-Out shall be paid quarterly within thirty days of the end of the applicable quarter. Each year following the completion of the Company’s independent audit of its books and records, the Company shall reconcile the actual Earn-Out Periodpayments made in respect of such year and any deficiency shall be promptly paid by K2 to the applicable Assignor(s) or, Buyer in the case of an overpayment by K2, such amount shall provide Seller (with appropriate supporting documentation) with its calculation be credited toward future Earn-Out payments due hereunder. All Earn-Out payments to be made hereunder shall be made in U.S. Dollars. Earn-Out payments for foreign sales of Products shall be separately and distinctly accounted and determined based on the applicable currency conversion rate as of the "net sales" attributable to the Business for such period, as well as a calculation 1st calendar day of the "operating margin" for the Business for such periodquarter when payment is due. (c) 5.2 For purposes of this Agreement, the "operating margin" for the Business term “Earn-Out Percentage” with respect to any Product shall mean: (a) For each Product, the Earn-Out Period Percentage from and after the date hereof, shall be calculated by dividing six percent (6%) until the earnings later of (i) expiration of the Business last to expire of any issued patents having one or more claims covering such Product, or (calculated in accordance with GAAPii) before interestthe date of abandonment of any patent application describing such Product, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal year. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for at which time the Earn-Out Period Percentage for such Product shall be reduced to three percent (3%) where one or more claims of an issued patent covered the Product, or two percent (2%) where no claims of an issued patent covered the Product; and (b) For each Product that is not described in accordance with GAAP clause (a) above and is based in a manner consistent with the calculation whole or in part on any item of Assigned Intellectual Property that as of the Seller's "net sales" as reflected on date hereof was not the Seller's audited financial statements at June 25subject of an issued patent or patent application (“Unfiled Assigned IP”), 2002. (e) The amount of from and after the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for date hereof the Earn-Out Period: Operating Margin Percentage for such Product shall be four percent (4%); provided that, (i) if any such item of Unfiled Assigned IP results in an issued patent, then the Earn-Out ---------------- ----------------------Percentage for such Product shall remain at four percent (4%) until the last to expire of any issued patents relating to Unfiled Assigned IP upon which such Product is based, at which time the Earn-Out Percentage for such Product shall be reduced to three percent (3%), and (ii) if all of the Unfiled Assigned IP upon which such Product is based does not result in an issued patent (i.e., all the patent applications go abandoned), then from and after the date of abandonment of the last patent application with respect to Unfiled Assigned IP upon which such Product is based, the Earn-Out Percentage for such Product shall be reduced to two percent (2%). (c) Notwithstanding the foregoing, in the event that a Product based in whole or in part on the Assigned Intellectual Property is covered by the claims of one or more patents issued to a 3rd party not affiliated with K2 (the “Other Patents”) and K2 is obligated to make royalty or similar payments to such 3rd party in respect of such Products, then the Earn-Out Percentage for such Product shall be reduced, as reasonably determined by the Board of K2 (which determination shall include the affirmative consent of at least one member of the Board designated by the Xxxxxx Group (as such term is defined in the K2 Operating Agreement), based on the claims of the Other Patents which cover such Product as such claims relate to the total claims of the Product.

Earn-Out. (a) Buyer As additional consideration for the Purchased Membership Interests, at such times as provided in Section 2.5(e), Purchaser shall pay to Sellers with respect to each of the two Calculation Periods within the Earn-Out Period an amount (each, an “Earn-Out Payment”), if any, equal to the product of (i) an amount equal to (A) the EBITDA for such Calculation Period, minus (B) the EBITDA Threshold for such Calculation Period; multiplied by (ii) the Earn-Out Multiple. If the EBITDA for a particular Calculation Period does not exceed the applicable EBITDA Threshold, no Earn-out Payment shall be due for such Calculation Period. (b) Upon any acquisition of an asset or business by the Acquired Companies or a restructuring of the Acquired Companies as permitted by Section 2.5(f), the Parties shall negotiate in good faith to determine whether the results of operations of such asset or business (or any change resulting from such restructuring) shall be included in the computation of EBITDA for any Calculation Period and, if so, the appropriate change to the EBITDA, if any. Without prior agreement of the Parties, there shall be no change to the EBITDA Threshold for such Calculation Period. Notwithstanding any decision made by the Parties with respect to the preceding sentence, any Seller employed or engaged as a consultant by Purchaser and its Affiliates shall manage, operate or otherwise provide services to any asset or business acquired that is within the operational knowledge and experience of any Seller so employed or engaged after the Closing Date, as requested by Purchaser. The EBITDA for any Calculation Period shall not be increased or diminished by revenues earned or costs or expenses incurred on direction of Purchaser and its Affiliates in the acquisition or operation of any asset or business acquired without the agreement of Sellers. (c) On or before the date that is sixty (60) days after the last day of each of the two Calculation Periods (each such date, an "earn“Earn-out" Out Calculation Delivery Date”), Purchaser shall prepare and deliver to Sellers a written statement (in each case, an “Earn-Out Calculation Statement”) setting forth in reasonable detail its determination of EBITDA for the applicable Calculation Period and its calculation of the resulting Earn-Out Payment (in each case, an “Earn-Out Calculation”). Purchaser shall provide Sellers and their Representatives copies of such records and work papers used or created in connection with preparation of each Earn-Out Calculation Statement that are reasonably required to support such Earn-Out Calculation Statement. Such records and work papers shall be held in confidence by Sellers and their Representatives and not used for any purpose except in connection with the calculation of EBITDA and the related Earn-Out Payment and the resolution of any dispute arising with respect thereto. (d) Sellers shall have thirty (30) days after receipt of the Earn-Out Calculation Statement for each Calculation Period (in each case, the “Review Period”) to review the Earn-Out Calculation Statement and the Earn-Out Calculation set forth therein. During the Review Period, Sellers and their Representatives shall have the right to inspect the Purchaser’s Books and Records related to the Business during normal business hours at Purchaser’s offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of EBITDA and the resulting Earn-Out Payment. Prior to the expiration of the Review Period, Seller may object to the Earn-Out Calculation set forth in the Earn-Out Calculation Statement for the applicable Calculation Period by delivering a written notice of objection (an “Earn-Out Calculation Objection Notice”) to Purchaser. Any Earn-Out Calculation Objection Notice shall specify the items in the applicable Earn-Out Calculation disputed by Sellers and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute and Sellers’ calculation of each item in dispute. If Sellers fail to deliver an Earn-Out Calculation Objection Notice to Purchaser prior to the expiration of the Review Period, then the Earn-Out Calculation set forth in the Earn-Out Calculation Statement shall be final and binding on the parties hereto. If Sellers timely deliver an Earn-Out Calculation Objection Notice, Purchaser and Sellers shall 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 Calculation Period. If Purchaser and Sellers are unable to reach agreement within thirty (30) days after such an Earn- Out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to the Accounting Firm. The Accounting Firm shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-Out Calculation as promptly as practicable, but in no event greater than sixty (60) days after such submission to the Accounting Firm, and to resolve only those unresolved disputed items set forth in the Earn-Out Calculation Objection Notice. If unresolved disputed items are submitted to the Accounting Firm, Purchaser and Sellers shall each furnish to the Accounting Firm such work papers, schedules and other documents and information relating to the unresolved disputed items as the Accounting Firm may reasonably request. The Accounting Firm shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by Purchaser and Sellers, and not by independent review. In resolving the dispute, the Accounting Firm, acting in the capacity of an expert and not as an arbitrator, shall (i) limit its review to matters specifically set forth in the Earn-Out Calculation Objection notice (other than matters thereafter resolved by mutual written agreement of Purchaser and Sellers), and (ii) not assign a value to any item greater than the greatest value for such item or less than the smallest value for such item, in each case, claimed by Purchaser in the Earn-Out Calculation or Sellers in the Earn-Out Calculation Objection, as applicable. The resolution of the dispute and the calculation of EBITDA that is the subject of the applicable Earn-Out Calculation Objection Notice by the Accounting Firm shall be final and binding on the parties hereto. The fees and expenses of the Accounting Firm shall be borne by Sellers and Purchaser in proportion to the amounts by which their respective calculations of EBITDA differ from EBITDA as finally determined by the Accounting Firm. (e) Subject to Section 2.5(g), any Earn-Out Payment that Purchaser is required to pay pursuant to Section 2.5(a) hereof shall be paid in full no later than thirty (30) Business Days following the date upon operating margins attributable which the determination of EBITDA for the applicable Calculation Period becomes final and binding upon the parties as provided in Section 2.01(c) (including any final resolution of any dispute raised by Sellers in an Earn-Out Calculation Objection Notice). Purchaser shall pay to Sellers the applicable Earn-Out Payment in cash by wire transfer of immediately available funds to the bank account(s) for Sellers designated by the Sellers. (f) Subject to the terms of this Agreement, subsequent to the Closing, Purchaser shall have sole discretion with regard to all matters relating to the operation of the Business for the period commencing on the Closing Date and ending on the last day of the month closest to Acquired Companies, including, but not limited to, restructuring the first anniversary Acquired Companies; provided, that Purchaser shall not, directly or indirectly, take any actions in bad faith that would have the purpose of the Closing Date (the "Earn-Out Period"), as follows: (b) Within ninety (90) days of the end avoiding or reducing any of the Earn-Out PeriodPayments hereunder. Notwithstanding the foregoing, Buyer shall provide Seller (with appropriate supporting documentation) with its calculation Purchaser has no obligation to operate the Business of the "net sales" attributable Acquired Companies in order to achieve any Earn-Out Payment or to maximize the Business for such periodamount of any Earn-Out Payment. Sellers acknowledge that (i) there is no assurance that Sellers will receive any Earn-Out Payment and Purchaser has not promised or projected any Earn-Out Payment, as well as a calculation and (ii) the parties solely intend the express provisions of the "operating margin" for the Business for such periodthis Agreement to govern their contractual relationship. (cg) For purposes Purchaser shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to this Section 2.5 the amount of this Agreement(i) any Damages, as finally determined in accordance with the "operating margin" for provisions of Article 8, to which any Purchaser Indemnified Party may be entitled and (ii) any other amounts due Purchaser from Sellers. (h) The Parties understand and agree that (i) the Business contingent rights to receive any Earn-Out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in Purchaser or the Acquired Companies, (ii) Sellers shall not have any rights as a securityholder of Purchaser or the Acquired Companies as a result of Sellers’ contingent right to receive any Earn-Out Payment hereunder, and (iii) no interest is payable with respect to the Earn-any Earn- Out Period shall be calculated by dividing the earnings of the Business (calculated in accordance with GAAP) before interest, taxes, extraordinary items and any depreciation and/or amortization associated with the consummation of the transactions contemplated hereby for such period by the "net sales" attributable to the Business for such fiscal yearPayment. (d) The Buyer shall cause its auditors to calculate the "net sales" attributable to the Business for the Earn-Out Period in accordance with GAAP in a manner consistent with the calculation of the Seller's "net sales" as reflected on the Seller's audited financial statements at June 25, 2002. (e) The amount of the "earn-out" payable by Buyer to Seller shall be calculated by multiplying the sum of five hundred thousand and No/100 Dollars ($500,000.00) by the Percentage of Earn-Out set out below opposite the "Operating Margin" for the Business for the Earn-Out Period: Operating Margin Percentage of Earn-Out ---------------- ----------------------