Common use of Earnout Payment Clause in Contracts

Earnout Payment. (i) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. (i) As promptly as practicable after In addition to the end of the Earnout PeriodClosing Payment Shares, but in no event later than 60 days following if Madhouse meets certain performance requirements during a three-year performance period ending December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting 2022 as set forth the Net Revenues for the 12-month period ended December 31, 2005 on Schedule II (the “Earnout ReportProvisions”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent the Purchaser shall pay or cause to be paid make the one-time payment (the “Earnout Payment Amount Payment”) determined in accordance with the terms of this AgreementEarnout Provisions, subject payable to the right Seller and the long-term incentive plan (described below). As set forth in more detail in, and subject to, the Earnout Provisions, the Earnout Payment will be made in the form of offset provisions of Sections 2.4(a)(a) the Purchaser issuing to the Seller additional Purchaser Common Shares (the “Earnout Payment Shares”) in the amount calculated pursuant to the Earnout Provisions, (b) and a cash payment, (c) a subordinated promissory note issued by the Purchaser to the Seller, or (d). ) a combination of the foregoing payment methods. The Earnout Payment shall be made by the Purchaser within five (ii5) Parent Business Days after a final determination of payment due to the Seller pursuant to this Section 3.1. The Purchaser hereby covenants and agrees to perform its obligations set forth in the Earnout Provisions and to maintain the highest number of Purchaser Common Shares potentially issuable under the terms of the Earnout Provisions (which number shall keep full, clear and accurate books and records not be less than 22,200,000) available for issuance with respect to Earnout Payment Shares without any restriction or limitation thereof, at all times after the BusinessClosing until all of the payment obligations set forth in the Earnout Provisions have been satisfied or have expired. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf amount of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date Earnout Payment (which estimate i) is subject to change reduction as set forth in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1Provisions and Article VIII and, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined belowii) as set forth in Section 2.4(c)(iii) below, then the Earnout Report Provisions, has been partially and irrevocably assigned by Seller to fund a long-term incentive plan to be established for the Earnout Period benefit of designated individuals employed by or associated with the Group Company business, in a manner that shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the reportdetermined in Seller’s discretion, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event provided that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant Seller shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in receive any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILYassigned Earnout Payment. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. (i) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 forty-five (45) calendar days following December 31, 2005, Parent shall provide the Stockholderseither Shareholders’ Agent with a report, setting forth the Net Revenues Revenue for the 12-month period ended December 31, 2005 Earnout Period and the form of consideration of the Third Payment as elected by Parent pursuant to Section 2.5(a)(iii) above (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii3.2(c) below, then in no event later than 105 days ten (10) Business Days following December 31, 2005the expiration of the Earnout Dispute Period, Parent shall pay or cause to be paid the Earnout Payment Amount in accordance with the terms of this Agreement. If, at any time prior to the expiration of the Earnout Dispute Period, the Shareholders’ Agents jointly notify Parent in writing that they agree with all of the information and calculations set forth by Parent in the Earnout Report and irrevocably agrees on behalf of the Holders that the Shareholders’ Agents and the Holders will not dispute any information set forth by Parent in the Earnout Report (the “Shareholders’ Agents’ Notice”), then Parent shall pay or cause to be paid the Earnout Amount in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), within ten (b10) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days Days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the StockholdersShareholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the StockholdersAgents’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the disputeNotice. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. (i) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books verifiable and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the HoldersAgent, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 30 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties)negotiations, the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the StockholdersStockholder’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 30 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of If the Independent Accountant’s decisiondecision indicates that the Holders are not entitled to the disputed portion of the Earnout Payment Amount, then all reasonable costs and expenses incurred by Parent in connection with the dispute, including all costs and expenses of the Independent Accountant shall be split equally between deducted by Parent from the partiesEarnout Payment Amount. In If the event Independent Accountant’s decision indicates that the Holders are entitled to the disputed portion of the Earnout Payment Amount, then Parent shall be responsible for payment of all reasonable costs and expenses incurred by the Stockholders’ Agent does not pay in connection with the full amount of one-half of the Independent Accountant’s costs and expensesdispute, Parent shall be entitled to deduct the difference between one-half of the including all costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company Company, or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above)misconduct. Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, stating the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, any Holder or the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) fees incurred in connection with the arbitration; however, the parties agree that, to the extent permitted by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. Due to the difficulty in determining the value of the assets involved in the Transaction, part of the Purchase Price is being paid via the issuance of contingent stock upon terms that comply with Rev. Proc. 84-42 (i“Rev Proc. 84-42”). On the terms and subject to the conditions of the Agreement and this Exhibit D, Future Health will deliver (or cause to be delivered) As promptly to Seller or, in connection with Seller’s liquidation following the Closing or as practicable otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the shareholders of the Seller, the Earnout Shares (“Earnout Payment”) within five (5) Business Days after the filing (but in no event later than the fifth anniversary of the Closing Date) of the first Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K (each prepared in accordance with GAAP) in which Consolidated Revenues (determined in accordance with GAAP) of Future Health in the most recent fiscal quarter included therein shall have exceeded One Hundred Fifty Million U.S. Dollars ($150,000,000), provided that such Earnout Shares shall only be payable if the filing of such Form 10-Q or Form 10-K occurs prior to the fifth anniversary of the Closing Date (the “Earnout Period”). The parties will endeavor in good faith to establish a mutually acceptable dispute resolution mechanism in connection with the calculations of Consolidated Revenues pursuant hereto. Notwithstanding anything to the contrary herein, all Earnout Shares required to be paid will be paid within 5 years of the Closing In the event, and only in the event, of a Going Private Transaction prior to the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 Future Health will deliver (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid delivered) to Seller or, in connection with Seller’s liquidation following the Earnout Payment Amount in accordance with Closing or as otherwise permitted by Rev. Proc. 84-42, to an Affiliate of Seller or the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf shareholders of the HoldersSeller, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation pro rata portion of the Earnout ReportShares (the “Going Private Earnout”), within five (5) as promptly as practicable thereafter; provided that Business Days after the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment closing of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report orGoing Private Transaction, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Reportmost recently filed Future Health Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, then, within 60 calendar days following with such Going Private Earnout being the date number of the delivery by Parent shares of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties Future Health Common Stock equal to the dispute may elect product of (a) 20,000,000 multiplied by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence Consolidated Revenues (determined in accordance with GAAP) of an allegation by Future Health in the Stockholders’ Agent of any claim which may arise for fraud most recent fiscal quarter included in such Form 10-Q or intentional misconduct under this subsection (iv) or Form 10-K less (B) $88,000,000, being the receipt agreed quarterly revenue for the first quarter of 2022, divided by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (ivc) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY$62,000,000. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. (ia) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent The Members shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 be entitled to an earnout payment (the “Earnout ReportPayment”) in the amount equal to two times (2x) the revenues of the Business (determined on a cash basis) during the period from July 1, 2007 through December 31, 2007 (the “Earnout Period”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid Schedule 2.8 sets forth the Earnout Payment Amount in accordance with the terms Company’s calculation of this Agreement, subject to the right revenues of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by during the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on period from July 1, 2005. If 2007 through August 31, 2007, and any calculation of revenues of the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for Business during the Earnout Period shall be deemed final and binding and neither consistent with the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment calculation set forth on Schedule 2.8. (b) Each Member’s percentage of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent to be paid to such Member shall dispute the information be set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”)Estimated Statement. The Stockholders’ Agent and entire Earnout Payment will be paid in cash. The Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant the Earnout Payment to make its determination within 60 calendar days of accepting its selection. Within 10 business days after be calculated and paid no later than January 31, 2008 or, if necessary, as soon as possible thereafter. (c) Prior to any Earnout Payment being paid, the date of determination of such Independent Accountant, Parent shall pay or cause notify the Member Representative of the amount of revenues of the Business during the Earnout Period and the amounts to be paid to the Holders Members (the “Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (dNotice”). The decision Parent and the Surviving Company shall provide the Member Representative with reasonable access to the Records and the employees, accountants and customers of the Independent Accountant shall be a final, bindingSurviving Company (during normal business hours and with reasonable advance notice) to review the revenues of the Business, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent Member Representative shall be entitled to deduct the difference between one-half review any accounts receivable, accounts payable, working papers of the costs Surviving Company, trial balances and expenses similar materials relating to the Earnout Notice prepared by the Parent; provided, however, that neither the Surviving Company nor the Parent shall have the obligation to require its independent accountant to provide access to its working papers. If the Member Representative objects to the Parent’s determination of revenue or any amounts set forth in the Earnout Notice, the Member Representative shall notify the Parent and the Surviving Company no later than thirty (30) days after receipt of the Independent Accountant Earnout Notice and specify and describe in reasonable detail the basis for such objection. The parties agree that the dispute resolution mechanism set forth in Sections 2.4(c)-(d) shall be used to resolve disputes under this Section 2.8; provided, however, that notwithstanding any objection of the Member Representative to the Earnout Notice, the Parent shall immediately pay to the Members in accordance with this Section 2.8 all amounts set forth in the Earnout Notice. If the Member Representative accepts the amounts set forth in the Earnout Notice or does not make a written objection within thirty (30) days after receipt of the Earnout Notice, the amounts set forth in the Earnout Notice shall be final and binding on all Members and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the disputeMember Representative. (ivd) The Holders will be deemed toparties acknowledge that (i) after the Closing and until December 31, as part of their approval 2008, the Parent and adoption the Surviving Company shall operate the business of the Merger Agreement Surviving Company in a manner that the board of directors of the Surviving Company deems, in its reasonable business judgment, to be in the best interests of the Surviving Company and the transactions contemplated therein and hereinParent, considered as a whole, and the Stockholders’ Agent herebyParent’s stockholders, generally(ii) after the Closing and until December 31, irrevocably2008, unconditionally the Surviving Company shall have reasonable access to and completely agree that (1) the Company and Parent (as the controlling stockholder use of the Company Parent’s sales and marketing teams, (iii) except as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine set forth in their sole and absolute discretionthis Section 2.8, and shall have Parent is under no obligation to operate the Business in any manner that would maximize, maintain or protect with the value sole goal of maximizing the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRsEarnout Payment, and (3iv) each there is no assurance that Members will receive any specific Earnout Payment and the Parent has not promised or projected any specific amount. Notwithstanding the foregoing or anything to the contrary in this Agreement, (i) neither the Parent nor the Surviving Company shall take (or fail to take) any action if such action (or failure to take such action) could reasonably be expected to be materially adverse to the interests of the Holders and Parent or the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Surviving Company, Parent or and (ii) any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, statingaction, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying extent that it negatively affects the amount of the Claim Earnout Payment in any material respect, shall result in the Earnout Payment in the amount of $3,200,000 becoming immediately due and making a request shall be payable no later than January 31, 2008. The parties agree that during the Earnout Period all accounts receivable of the Company shall be collected in the ordinary course of business consistent with past practice. (e) The Earnout Payment shall be treated by the parties to this Agreement for any payment then believed due (all Tax purposes as part of the “Notice”). Upon receipt Merger Consideration being paid to the holders of any the Merger Interests in exchange for such Notice by Parentinterests, within the next 45 days thereafter, and the parties shall use report the transaction on their reasonable best efforts to cooperate United States federal and arrive at state tax return in a mutually acceptable resolution manner consistent with this treatment (which, for the avoidance of such dispute. If a mutually acceptable resolution cannot be reached between doubt, shall include the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel Parent’s treatment of three arbitrators selected from the panels its acquisition of arbitrators all of the American Arbitration Association in Santa Xxxxx County, California; provided, however, Merger Interests as causing a termination of the Company as a partnership for U.S. Federal tax purposes that (i) one arbitrator shall be selected is followed by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected purchase by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by Parent of the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion assets of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILYCompany). (vf) Notwithstanding anything Any revenue related to any contract assigned from Market Direct to the contrary set forth in this Section 2.4(c), Company that is not recognizable as revenue by the Parent or the Surviving Corporation due to such contract not being properly assigned to the Company by Market Direct shall not be included in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless calculation of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assetsPayment.

Earnout Payment. (ia) As promptly as practicable after Simultaneously with the end of Closing, Sellers hereby have the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant right to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid receive the Earnout Payment Amount in accordance with the terms of this Agreement, (subject to the right of offset provisions of Sections 2.4(a), (b) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) adjustment as set forth in Section 2.4(c)(iii1(c)). (b) belowImmediately following the Closing, then Sellers hereby transfer, assign, convey and deliver to Blue Torch the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of receive the Earnout Payment Amount(subject to adjustment as set forth in Section 1(c)), with such rights, powers, preferences and privileges as provided herein, in exchange for Blue Torch and the Lenders releasing any and all Liens, Claims and encumbrances on the Purchased Assets, and in satisfaction of Sellers’ obligations under the Financing Agreement and the DIP Agreement remaining after Blue Torch receives the Cash Payment. (iiic) In the event that the Stockholders’ Agent The amount payable to Sellers (as further assigned to Blue Torch) pursuant to this Agreement shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent be $23,111,459 (the “Earnout Dispute NoticePayment”). (d) specifying Following the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect assignment contemplated by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other partiesSection 1(a), the Stockholders’ Agent and Parent Earnout Payment shall jointly select an independent accountant be paid by Buyer to Blue Torch from time to time, by wire transfer of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services immediately available funds to the Stockholders’ Agentaccount or accounts designated by Blue Torch prior to any such payment, the Company or Parent or its affiliates during the five-year period preceding the date as follows: 155111807v18 i. Buyer shall make quarterly cash payments to Blue Torch equal to 75% of its selection Cash Available for Earnout Payment (the “Independent Accountant”as defined below). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause , until such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be time as Buyer has paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay Blue Torch the full amount of one-half the Earnout Payment. ii. Concurrently with delivery of the Independent Accountant’s costs and expensesquarterly financial statements in accordance with Section 4(e)(ii), Parent Buyer shall provide to Blue Torch its calculation of Cash Available for Earnout Payment for the relevant quarter, along with all reasonable supporting documentation used to prepare such calculation. Payment of each such quarterly cash payment shall be entitled to deduct the difference between one-half made within five (5) Business Days after delivery of the costs and expenses of the Independent Accountant quarterly financial statements in accordance with Section 4(e)(ii) and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the calculation of Cash Available for Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection accordance with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the disputethis Section 1(d)(ii). (iv) The Holders will be deemed toiii. For purposes hereof, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including“Cash Available for Earnout Payment” means, without limitationduplication, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence gross cash receipts of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected Buyer resulting from the panels operations of arbitrators of the American Arbitration Association in Santa Xxxxx CountyBuyer, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and less (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed gross cash receipts used to the Holderspay, Parent shallor establish reserves for, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs all operating expenses (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(cshared services expenses), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) capitalized and other than an acquisition cash expenditures, working capital, debt service payments and other liabilities and contingencies of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assetsBuyer.

Earnout Payment. In addition to the Total Closing Consideration issuable to the Company Stockholders pursuant to Section 2.1(a)(iii) hereof, the Company Stockholders shall, subject to, and upon achievement of, the goals set forth below, be entitled to receive the following (any such distributions made by Parent pursuant to Section 2.3(a) shall be hereinafter sometimes referred to individually as an “Earn Out Payment” and collectively as the “Earn Out Payments”): (i) As promptly as practicable after Upon receipt of written acknowledgement by the end Surviving Entity or Parent or any of their Affiliates from the Earnout PeriodFDA regarding the acceptability of pivotal trial(s) for NDA approvability of Brostallicin (such NDA to be based on “context of vulnerability” studies focused on indications such as, but in no event later than 60 days following December 31not limited to, 2005fibrosarcoma (t12/16), tumors with DNA mismatched repair defects or GSH/.GST over-expressing tumors), Parent shall shall: (1) within five (5) days of receipt of such written acknowledgement provide the Stockholders’ Agent Stockholder Representatives with a report, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount written notice thereof in accordance with the terms Section 10.8 of this Agreement, subject (2) on or before ten (10) days following the receipt of such written acknowledgement, Parent shall deposit with the Exchange Agent an aggregate amount of five million dollars ($5,000,000) to be paid to the right Company Stockholders and the Nonaccredited Holders as follows: to each of offset provisions the Company Stockholders, such Company Stockholder’s Pro Rata Share as set forth on the Spreadsheet provided to Parent pursuant to Section 5.12 hereof in either (A) immediately available cash deposited by wire transfer or (B) stock certificates of Sections 2.4(a)Parent Common Stock, (b) such election to be made by the Parent in its sole discretion, and to each Nonaccredited Holder, such Nonaccredited Holder’s Pro Rata Share as set forth on the Spreadsheet provided to Parent pursuant to Section 5.12 hereof in cash pursuant to the Cancellation Agreements, and (d)3) cause the Exchange Agent to pay cash or distribute shares of Parent Common Stock, as the case may be, in any case without interest, to the extent of the payments to be made to each Company Stockholder and each Nonaccredited Investor as set forth in clause (B) above. For purposes of this provision, the written acknowledgement from the FDA for NDA approvability based on pivotal trial(s) may be satisfied, for example, by receipt by the Surviving Entity or Parent or any of their Affiliates of a Special Protocol Assessment providing for approval of a protocol for such pivotal trial(s) that will act as the primary basis of an efficacy claim for such an NDA filing for Brostallicin or meeting minutes from the FDA. (ii) Parent shall keep full, clear and accurate books and records with respect to Upon the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection receipt by the Stockholders’ Agent Surviving Entity or the Parent or any attorney of their Affiliates from the FDA of notice of approval of a NDA for Brostallicin, Parent shall: (1) within five (5) days of receipt of such notice provide the Stockholder Representatives with written notice thereof in accordance with Section 10.8 of this Agreement, (2) on or accountant engaged by before ten (10) days following the Stockholders’ Agent to act on behalf receipt of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agentsuch notice, Parent shall provide deposit with the Stockholders’ Exchange Agent with a report reflecting an aggregate amount of ten million dollars ($10,000,000) to be paid to the estimate Company Stockholders and the Nonaccredited Holders as follows: to each of the Net Revenue to date (which estimate is subject to change in Company Stockholders, such holder’s Pro Rata Share as set forth on the preparation of the Earnout Report) as promptly as practicable thereafter; Spreadsheet provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice pursuant to Section 5.12 hereof in either (A) immediately available cash deposited by wire transfer or (B) stock certificates of Parent Common Stock, such election to be made by the Parent in its sole discretion, and to each Nonaccredited Holder, such holder’s Pro Rata Share Pro Rata Share as defined belowset forth on the Spreadsheet provided to Parent pursuant to Section 5.12 hereof in cash pursuant to the Cancellation Agreements, and (3) cause the Exchange Agent to pay cash or distribute shares of Parent Common Stock, as the case may be, in any case without interest, pursuant to the payments to be made to each Company Stockholder and each Nonaccredited Investor as set forth in Section 2.4(c)(iiiclause (B) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount.above (iii) In the event that either or both of the Stockholders’ Agent Earn Out Payments to the Company Stockholders are paid in shares of Parent Common Stock, the per share value of the Xxxxxx Xxxxxx Stock for such purpose shall dispute the information set forth by Parent in the Earnout Report or, if be calculated based on the Stockholders’ Agent’s review of Parent Stock Price. Notwithstanding anything to the books and records of the Business contrary herein, unless Parent obtains shareholder approval in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date NASDAQ rules to issue a greater number of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountantshares, Parent shall pay or cause to be paid to not issue any Parent Common Stock as Earn Out Payments if such issuance would, when aggregated with all other issuances of stock under any provision of this Agreement, constitute the Holders issuance of greater than 19.9% of Parent’s outstanding stock at the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right time of offset provisions of Sections 2.4(a), (b) and (d). The decision this Agreement for purposes of the Independent Accountant rules and regulations of the NASDAQ Stock Market, including but not limited to Rule 4350. All payments shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, made in either Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the disputeCommon Stock or cash. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v)the foregoing, “NDA” means a “Change of Control” shall mean (1) new drug application filed with the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting FDA as more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent fully defined in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets21 C.F.R. §314.50 et. seq.

Earnout Payment. The Sellers shall be entitled to additional consideration, payable by TeamStaff in cash to the Sellers in accordance with the Sellers Ownership Schedule, as follows, which cash payment shall not exceed the aggregate sum of $2,000,000 (the "Earnout Payment"): (i) As From and after the Closing Date and until the Final Payment Date, TeamStaff shall maintain a separate income statement for the Business and operate the Business as a wholly-owned subsidiary of TeamStaff and shall not sell its assets or capital stock, merge it with, consolidate its assets with or otherwise combine it in any way with TeamStaff or any other business, subsidiary or affiliate of TeamStaff or otherwise; (ii) From the Closing Date until the date that is 12 months following the Closing Date (the "Earnout Period"), TeamStaff agrees: (A) to operate the Business in good faith; and (B) that, except upon prior consultation (but nothing contained herein shall require prior approval) with the Sellers regarding the proposed action, it shall not take any action or adopt any policy that the President of RS has reasonably asserted (in advance of or promptly as practicable following such action or adoption), in good faith and in writing, can reasonably be expected to result (directly or indirectly) in a reduction of the earnings before interest, taxes and depreciation ("EBITDA") of the Business for any financial period during the Earnout Period. (iii) Within 45 days after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent TeamStaff shall provide calculate the Stockholders’ Agent with a report, setting forth EBITDA of the Net Revenues for the 12-month period ended December 31, 2005 Business as follows: (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iiiA) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to EBITDA will be paid the Earnout Payment Amount calculated in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) GAAP and (d).otherwise in accordance with TeamStaff's accounting policies consistently applied; (iiB) Parent shall keep fullDuring the Earnout Period, clear and accurate books and records with respect to the Business. The books and records shall any proposed arrangement whereby services will be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to provided by the Business shall to TeamStaff or its direct or indirect subsidiaries must be available for inspection made on terms and conditions approved by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf at least one of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date Sellers; (which estimate is subject to change in the preparation of the Earnout ReportC) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report EBITDA for the Earnout Period shall will be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue adjusted as follows (with deductions taken or payment of the Earnout Payment Amount. additions made (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties only to the dispute may elect extent not previously taken or made in calculating EBITDA): i. All reasonable charges by mutual agreement to extend the period of negotiation TeamStaff for services actually and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have directly provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation directly on behalf of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRscash management, insurance, legal and (3) each of the Holders accounting services, employee benefit administration, information technology resources and the Stockholders’ Agent advertising, shall be prohibited deducted from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, CaliforniaEBITDA; provided, however, that such deductions will not exceed the amounts RS would have paid for such services if such services were obtained directly by RS; ii. Six percent (i6%) one arbitrator of any revenue derived by TeamStaff as a result of services provided to any third party where the establishment of TeamStaff's relationship with such third party was a direct or indirect result of an existing relationship between such third party and RS or the Sellers will be added to EBITDA; iii. Appropriate adjustments will be made to insure that there is no material or substantial upward or downward adjustment of income during any period due to the acceleration or deferral of income into a period other than that in which same should normally accrue or occur, or due to the acceleration of deferral of any losses, costs or expenses into any period other than that in which same would normally accrue or occur; iv. the amount of any salary under the Durham Employment Agreements will be added to EBITDA, provided Durham does not accept or pays back to RS any such amounts paid or to have been paid to Durham under his Employment Agreement; v. Any costs or expenses incurred by RS and related to any action taken to integrate the operational aspects of the Business, including, without limitation, cash management, insurance, legal and accounting services, employee benefit administration, information technology resources and advertising, with the business of Teamstaff will be added to EBITDA. (D) the calculation of EDITDA shall not include any workers compensation insurance program refunds which may be obtained pursuant to Section 9(e) below. (iv) the EBITDA of the Business shall be selected finally determined as follows: (A) The independent auditors of TeamStaff (the "TeamStaff Auditor"), at TeamStaff's expense, shall review the calculations of RS' EBITDA as provided in clause (iii) above, and shall deliver a written letter stating that they have reviewed such calculations and are in agreement with such EBITDA calculations (the "RS EBITDA Statement"). TeamStaff shall provide the RS EBITDA Statement to Sellers as promptly as practicable. The Sellers shall have the right to contest the accuracy of the RS EBITDA Statement by the Stockholders’ Agentjoint written notice, which shall state, in reasonable detail, the second arbitrator shall be selected by Parent Seller's objections and the third arbitrator shall basis or bases therefor (the "RS Objection"). Any such RS Objection must be selected received by the two previously selected arbitrators and TeamStaff no later than thirty (ii30) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from after the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal RS EBITDA Statement was delivered to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, Sellers. (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERIf the Sellers contest the accuracy of the RS EBITDA Statement, AND in accordance with the foregoing, the Sellers shall engage, within thirty (30) days after delivery of the RS Objection to TeamStaff, a firm of independent certified public accountants (the "Sellers' Auditor") to review those items being contested. In such review, the Sellers' Auditor shall be entitled to reasonable access to the TeamStaff Auditor's work papers, and to meet with the TeamStaff Auditor to discuss those items in dispute. In addition, TeamStaff will cooperate fully in all reasonable requests made by the Sellers' Auditor for information or access relating to the determination of EBITDA. The Sellers' Auditor shall expeditiously complete its review and provide the Sellers and TeamStaff with a written statement of its conclusions and the basis or bases therefor in reasonable detail. (C) IT MAKES SUCH WAIVER VOLUNTARILYNo later than seventy-five (75) days following delivery of the RS Objection to TeamStaff, the Sellers shall advise TeamStaff in writing (containing reasonable detail) of their continuing objections to the RS EBITDA Statement, if any, and the basis or bases therefor. Any items remaining in dispute will be referred to the Determining Auditor for a determination, and the determination of the Determining Auditor shall be final, binding and conclusive and not subject to challenge by the Parties. The fees and expenses of the Determining Auditor shall be borne by the Party whose position is farthest, in gross dollars, from the amounts finally determined by the Determining Auditor with respect to the disputed items. (v) Notwithstanding anything to The Earnout Payment shall be calculated as follows: for every $1.00 of EBITDA of the contrary set forth in this Section 2.4(c), in Business for the event of a Change of Control (as defined below) of Parent before December 31, 2005Earnout Period over $1,800,000, the Aggregate Sellers shall be entitled to $4.00 up to a maximum of $2,000,000. For example, if EBITDA of the Business is determined to be $2,300,000, the Earnout Payment Amount payable pursuant to this Section 2.4(c) would be $2,000,000. The Earnout Payment, if any, shall be at least $14,000,000 regardless made by TeamStaff by wire transfer of immediately available federal funds on or before the actual Net Revenue recognized during thirtieth (30th) day following the Earnout Period, subject, however, to the offset provisions final determination of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent EBITDA as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assetsprovided above.

Earnout Payment. As additional consideration for the Merger and subject to the conditions set forth in this Section 1.9, Section 1.12 (iDissenting Shares) As promptly as practicable after the end and Section 8.6 (Right of the Earnout Period, but in no event later than 60 days following December 31, 2005Off-Set), Parent shall provide make an additional payment (an "Earnout Payment") to the Stockholders’ Payment Agent with a report, setting forth for distribution to those Shareholders who are not otherwise Dissenting Shareholders (as defined in Section 1.12) ("Participating Shareholders") in an amount equal to (A) the product of the Net Product Revenues for the 12-month Payment Period (as defined below) multiplied by three (3), less (B) Forty Million Dollars ($40,000,000); provided however, that the Earnout Payment shall not exceed One Hundred Ten Million Dollars ($110,000,000). As used herein, the term "Payment Period" shall refer to a period ended of four consecutive fiscal quarters of Parent, determined pursuant to subsection (b) below, occurring between the first day of Parent's fiscal quarter beginning on December 29, 2002 and ending on the last day of Parent's fiscal quarter ending on or about December 31, 2005 (the “"Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount in accordance with the terms of this Agreement, subject to the right of offset provisions of Sections 2.4(a), (b) and (dPeriod"). (iia) During the period commencing on the Closing Date and ending on the Earnout Payment Date (as defined below), Parent shall keep full, clear and accurate books and records with respect deliver quarterly to the BusinessShareholders' Representative, no later than thirty (30) days following the last day of Parent's fiscal quarter, a statement with reasonable detail reflecting Parent's calculation of Net Product Revenues for the prior fiscal quarter, which such statement shall be prepared in accordance with GAAP on a basis consistent with the accounting principles and revenue recognition policies followed by Parent in the preparation of its financial statements. In his discretion, the Shareholders' Representative may distribute these statements to Participating Shareholders who held at least 250,000 shares of Company Capital Stock immediately prior to the Effective Time (except that such threshold shall not apply if the Shareholder Representative is seeking a Shareholder consent pursuant to Section 1.9(b)), provided in each case that such Participating Shareholders have agreed to be bound by the confidentiality obligations set forth in Section 4.4 herein. The books Shareholders' Representative may cause an audit to be made, at his sole cost and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf expense, of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the those books and records of Parent that are necessary to review and audit the quarterly statement and Parent's calculation of Net Product Revenues. Any such audit shall be conducted only by an independent certified accountant selected by the Shareholders' Representative and reasonably acceptable to Parent, after prior written notice to Parent, and shall be conducted during regular business hours at Parent's offices and in such a manner so as not to interfere with respect Parent's normal business activities. Parent agrees to permit such accountants, during normal business hours, to have reasonable access to, and to examine and make copies of, those books and records of Parent that are necessary to review and audit the Business quarterly statement and Parent's calculation of Net Product Revenues. Neither the Shareholders' Representative nor such auditors will have the right to review or audit any other books and records of Parent. In no event shall remain confidentialthe audits be made more than once in any nine (9) month period, nor shall the records supporting any statements be audited more than once for the same purpose. Notwithstanding In the foregoing, upon written request event any such audit reveals any discrepancy less than five percent (5%) of the Stockholders’ AgentNet Product Revenues for the respective quarterly period, Shareholders shall pay for the reasonable third party costs and expenses of such audit. In the event any such audit reveals any discrepancy greater than or equal to five percent (5%) of the Net Product Revenues for the respective quarterly period, Parent shall provide pay for the Stockholders’ Agent with a report reflecting the estimate reasonable third party costs and expenses of the Net Revenue to date such audit. (which estimate is subject to change in the preparation of b) At any time during the Earnout ReportPeriod and within sixty (60) as promptly as practicable thereafter; days of receipt of a quarterly statement, and provided that the Stockholders’ Agent Shareholders' Representative receives the written consent of at least a majority in interest, on a class voting basis, of the Participating Shareholders, the Shareholders' Representative may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver send notice to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or demanding payment of the Earnout Payment Amount. (iiithe "Earnout Demand Notice") In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on Net Product Revenues for the Stockholders’ Agent’s review consecutive four (4) fiscal quarters of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following Parent immediately preceding the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Demand Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent Shareholders' Representative does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, deliver an Earnout Demand Notice to Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, then the relevant Payment Period under which the Earnout Payment is to be calculated shall be the offset provisions of Section 2.4(a), final consecutive four (b4) and (d). In event of a Change of Control fiscal quarters of Parent occurring during the Earnout Period. (c) Within thirty (30) days after delivery of the Earnout Demand Notice, or Parent's last fiscal quarter in the Earnout Period, as set forth hereinapplicable, Parent shall make proper provisions so deliver to Shareholders' Representative a statement with reasonable detail reflecting Parent's calculation of Net Product Revenues for the Payment Period (the "Earnout Calculation"), which such statement shall be prepared in accordance with GAAP from the books and records of Parent, on a basis consistent with the accounting principles and revenue recognition policies followed by Parent in the preparation of its financial statements. The Earnout Calculation shall be accompanied by a schedule showing Net Product Revenues by fiscal quarter during the Payment Period and by a written confirmation of Parent stating that, to Parent's knowledge, the Earnout Calculation has been made in accordance with GAAP. In his discretion, the Shareholders' Representative may distribute the Earnout Calculation and accompanying schedules to the Participating Shareholders provided that such Participating Shareholders have agreed to be bound by the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as confidentiality obligations set forth herein. For purposes of this in Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.4.4

Earnout Payment. (i) As promptly as practicable after the end of the Earnout Period, but in no event later than 60 days following December 31, 2005additional Merger Consideration, Parent shall provide the Stockholders’ Agent with a reportpay, setting forth the Net Revenues for the 12-month period ended December 31, 2005 (the “Earnout Report”). If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid paid, to the Earnout Payment Amount Stockholders (other than, for the avoidance of doubt, the holders of shares Company Series C Preferred Stock with respect to such shares), in accordance with their Pro Rata Portion, the terms of Earnout Amount, when, as and if any such amount becomes payable pursuant to this Agreement, on the terms and subject to the right conditions set forth on Schedule 1.6(c)(i). Any portion of offset provisions the Earnout Amount payable pursuant to this Section 1.6(c) does not constitute compensation for services, but rather constitutes part of Sections 2.4(a), (b) and (d)the consideration for the Company Capital Stock owned by the Stockholders. (ii) Parent shall keep full, clear and accurate books and records with respect Notwithstanding anything to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect contrary herein, to the Business shall be available for inspection by extent the Stockholders’ Agent Escrow Fund has been exhausted or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agentdistributed, Parent shall provide be entitled to set off any and all Losses incurred by the Stockholders’ Agent with a report reflecting Indemnified Parties, to the estimate of extent (and solely to the Net Revenue extent) such Indemnified Parties would otherwise be entitled to date indemnification therefor (which estimate is subject subject, in each case, to change the terms and limitations set forth in the preparation Article VII), against any portion of the Earnout ReportAmount otherwise payable and not yet paid by Parent; provided, that any such set off shall be in the same ratio of cash to Parent Common Stock (valued at the Parent Trading Price) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In Following the event that Closing Date, for so long as the Stockholders’ Agent Earnout Amount may become payable hereunder, (A) Parent shall dispute provide, within 20 days following the information set forth public announcement by Parent in of Parent’s selected financial results (but not preliminary financial results) for any fiscal quarter that may be used to determine the achievement of the Earnout Report Target (or, if based the shares of Parent Common Stock or Parent’s ultimate parent entity are not then publicly traded on a national securities exchange, the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar date that is 45 days following the date completion of such quarter), a written report to the delivery by Parent of Stockholder Representative setting forth in reasonable detail the Aggregate Offering Bookings for such fiscal quarter and the Aggregate Offering Bookings for the latest Measurement Period that included such fiscal quarter (each such report, an “Update Report”); and (B) Parent shall notify the Stockholders’ Agent shall provide written notice to Parent Stockholder Representative whether the Earnout Target has been achieved. Within 20 days after delivery of an Update Report, if the Stockholder Representative requests (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties subject to the dispute may elect by mutual agreement to extend the period Stockholder Representative’s execution of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other partiescustomary non-disclosure agreement), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid (1) make available for a meeting with the Stockholder Representative at least one officer with substantial knowledge of the activities of Parent related to the Holders achievement of the Earnout Payment Amount, if any, Target to discuss such report and (2) make such documents available for inspection as may be reasonably necessary to allow the Stockholder Representative and its representatives to validate the information provided in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the disputeUpdate Report. (iv) The Holders will be deemed toPromptly, as part of their approval and adoption but no more than twenty (20) Business Day following the determination of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder successful achievement of the Earnout Target, Parent shall transfer or issue, or cause to be transferred or issued, the Earnout Amount to the Exchange Agent for further distribution to the Stockholders (other than, for the avoidance of doubt, the holders of shares Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Series C Preferred Stock CVRs, and as a result of with respect to such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2shares) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with the provisions of Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”1.6(b), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in herein, Parent shall have sole discretion over its operations following the Closing, including the right to discontinue any of its products or service offerings (including after Closing, the products or service offerings of the Surviving Corporation) at any time, provided, however, that Parent shall use commercially reasonable efforts (as determined from time to time after the Closing by mutual agreement between Parent’s chief executive officer and the Founder; provided, that this Section 2.4(c)parenthetical shall apply only when (A) there has not been a Change of Control of Parent or (B) there has been a Change of Control of Parent and the chief executive officer of Parent on the date hereof is the chief executive officer of the combined company (or any successor thereto) following such Change of Control of Parent) to assist with the achievement of the Earnout Target. For purposes of clarity, in the termination or non-renewal of any contracts with any Partners, and any failure to pursue or enter into any contracts with any Partners, by Parent, the Company or any of their respective subsidiaries for a legitimate business purpose (other than for the purpose of avoiding the payment of the Earnout Amount) shall not be deemed to be a violation of Parent’s obligation to use commercially reasonable efforts to assist with the achievement of the Earnout Target. In the event of a Change of Control (as defined below) of Parent before December 31, 2005Parent, the Aggregate Earnout Payment Amount payable pursuant acquiring entity in such change of control may elect to this Section 2.4(c) shall be at least $14,000,000 regardless accelerate the payment of the actual Net Revenue recognized during Earnout Amount in full or permit the payment of the Earnout Period, subject, however, Amount to continue to be governed by the offset provisions of Section 2.4(a), (b) terms and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes conditions of this Section 2.4(c)(v)Agreement. As used herein, a “Change Partner” means a customer, user, reseller, distributor, OEM or other licensee that has the right, or that would like to obtain the right, (X) to integrate any threat intelligence or other Intellectual Property Rights of Control” the Company, Parent or any of their respective subsidiaries into such customer’s, user’s, reseller’s, distributor’s, OEM’s or other licensee’s own product or service offering (or offerings) to third parties or (Y) to resell any threat intelligence or other Intellectual Property Rights of the Company, Parent or any of their respective subsidiaries. (vi) If the Stockholder Representative in good faith believes that that the information provided in an Update Report or Update Reports is not or was not accurate, then the Stockholder Representative may provide Parent with written notice (such notice, a “Earnout Dispute Notice”) thereof and Parent shall mean work together with the Stockholder Representative to schedule an in-person meeting, if reasonably feasible, at a mutually acceptable location or will schedule one or more conference calls to address the asserted inaccuracies, and Parent and the Stockholder Representative shall endeavor in good faith to resolve any such dispute. (1vii) If the consummation parties do not reach agreement resolving the dispute in accordance with Section 1.6(c)(vi), then, within thirty (30) days after the Stockholder Representative’s delivery of any transactionan Earnout Dispute Notice, either the Stockholder Representative or Parent, as the case may be, may submit such dispute to Ernst & Young LLP, or if such firm cannot or does not accept such engagement, another nationally recognized independent accounting firm, reasonably acceptable to Parent and Stockholder Representative, which shall not be the independent accountants of Parent (such firm, the “Accounting Firm”). Parent and the Stockholder Representative shall instruct the Accounting Firm (A) to determine the amount of Aggregate Offering Bookings for each fiscal quarter set forth in the Earnout Dispute Notice(s) that remains subject to dispute, (B) to determine, if applicable, whether the Earnout Target has been achieved under the terms of this Agreement and (C) to make such determination no later than the date that is 90 calendar days following the selection of such Accounting Firm. The dispute shall be resolved by submission of documents unless the Accounting Firm determines that an oral hearing is necessary. The Accounting Firm shall, within the 10 Business Days of appointment, determine what shall be conclusively deemed to be fair and appropriate deadlines for submitting documents and dates, if any, of oral hearings. The parties shall cooperate with all reasonable requests of the Accounting Firm for such documents or information as they may require in support of their determination, and provide responses to all reasonable questions or interrogatories in connection therewith. Each of Parent and the Securityholder Representative (solely on behalf of the Stockholders) shall pay its own expenses of arbitration, and the fees, costs and expenses of the Accounting Firm shall initially be equally shared between Parent and the Stockholder Representative (solely on behalf of the Stockholders); provided that the reasonable out-of-pocket costs and expenses of the prevailing party in such dispute (as determined by the Accounting Firm), including without limitationits share of the arbitration, its attorneys’ fees, costs and expenses, and the fees, costs and expenses of the Accounting Firm, shall be reimbursed by the other party. With respect to any Earnout Dispute Notice, any merger or consolidation, pursuant decision rendered by the Accounting Firm with respect to which any of Aggregate Offering Bookings and/or whether the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately Earnout Target has been achieved prior to such transaction is converted into or exchanged for voting stock of Earnout Dispute Notice shall be final and binding upon Parent and the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity Stockholder Representative (immediately after giving effect including with respect to such issuance) any Update Reports and other than an acquisition of Parent Earnout Dispute Notices thereafter). All proceedings conducted by the Selected Expert shall take place in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assetsSan Francisco, California.

Earnout Payment. (ia) As promptly as practicable after If, and only if, the end consolidated EBITDA of the Earnout Period, but in no event later than 60 days following December 31, 2005, Parent shall provide the Stockholders’ Agent with a report, setting forth the Net Revenues Company’s Business for the 12-month period fiscal year ended December 31, 2005 2006 (the “2006 EBITDA”) is equal to or greater than SEVEN MILLION NINE HUNDRED THOUSAND DOLLARS ($7,900,000), then, subject to Section 3.4(b) below, the Purchaser shall pay the Earnout ReportAmount to the Members, in proportion to their respective percentage ownership of the Company Interests set forth on Schedule 4.2(a), by wire transfer of immediately available federal funds. (b) Notwithstanding any other provision in this Agreement to the contrary, in the event that the Purchaser becomes entitled to indemnification under Article VII, the Purchaser may offset all or any portion of the Earnout Amount on a dollar-for-dollar basis, against the full amount of any such adjustment or right to indemnification. (c) On or before the earlier of (i) thirty (30) days after the Purchaser’s receipt of its outside auditor’s report with respect to the audit of the financial statements of the Purchaser for the fiscal year ending December 31, 2006 or (ii) March 30, 2007, the Purchaser shall provide to the Members a statement (the “2006 EBITDA Statement”) setting forth in reasonable detail the 2006 EBITDA. The Purchaser shall provide the Members and their authorized representatives access to the Purchaser’s books and records (including financial statements) during normal business hours for the sole purpose of verifying the 2006 EBITDA. The Earnout Amount, to the extent not offset in accordance with Section 3.4(b). If an Earnout Dispute Notice is not delivered , shall be payable within five (5) days after (i) receipt by the Purchaser of written notice from the Members that they have accepted the 2006 EBITDA Statement, or (ii) becoming conclusive and binding pursuant to Section 2.4(c)(iii3.4(d) below. The Earnout Amount, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount extent not offset in accordance with Section 3.4(b), shall be paid by wire transfer of immediately available federal funds to an account or accounts designated by the terms of this Agreement, subject Members and shall be made in proportion to the right Member’s respective percentage ownership of offset provisions of Sections 2.4(a), (b) and (dthe Company Interests set forth on Schedule 4.2(a). (iid) Parent The Members shall keep full, clear and accurate books and records with respect to notify the Business. The books and records shall be maintained Purchaser in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent writing (the “Earnout 2006 EBITDA Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar within thirty (30) days following the after receipt of the written notice defining and describing the nature 0000 XXXXXX Xxxxxxxxx, with respect to its acceptance or dispute of the disputesuch 2006 EBITDA Statement. In the event that the Members dispute such 2006 EBITDA Statement, the Members shall set forth in such notice the facts of the dispute and, to the best of their ability, their calculation of 2006 EBITDA. The Purchaser and the Members shall meet and use commercially reasonable efforts to resolve the items or amounts in dispute. If the parties are unable to finally resolve reach an agreement within thirty (30) days after the dispute within such 30 calendar-day periodPurchaser’s receipt of the 2006 EBITDA Dispute Notice, then the Auditor shall be requested to conduct a review of the disputed items or amounts and compute the 2006 EBITDA. In making its calculation, the parties Auditor shall consider only the items or amounts in dispute (and to the dispute may elect by mutual agreement extent required, any other amounts necessary to extend derive the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company disputed items or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”amounts). The Stockholders’ Agent and Parent Such determination shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination be made within 60 calendar days of accepting its selection. Within 10 business thirty (30) days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to on which the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) Auditor begins its review and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between binding on the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half Fifty percent (50%) of the costs and expenses of the Independent Accountant Auditor contemplated by this Section 3.4(d) shall be borne by the Purchaser and the amount actually remainder of such costs shall be borne jointly and severally by the Members. (e) 0000 XXXXXX shall not include any management charges paid by the Stockholders’ Agent Company to the Independent Accountant Purchaser of its Affiliates. Although extraordinary, one-time or non-recurring items are excluded from the Earnout Payment Amount. Notwithstanding definition of EBITDA for purposes of this Agreement, any extraordinary, one-time or non-recurring items may be included in the foregoingdefinition of EBITDA, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally but only if such items are agreed upon between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement Purchaser and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there Members. These items may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution caninclude but will not be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that limited to: (i) one arbitrator shall be selected by the Stockholders’ Agentacquisitions of other medical device manufacturers, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) material changes in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all benefit programs or a portion of such Claim amount is owed incentive plans or (iii) additional overhead incurred unrelated to the Holders, Parent shall, within 10 days Company’s Business as of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILYClosing. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes of this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets.

Earnout Payment. ITEX shall make earnout payments (i“Earnout Payments”) As promptly as practicable after to the end BXI Stockholders with respect to each of the Earnout Periodfirst 12 full fiscal quarters following the Signing Date, but in no event later than 60 days following December 31, 2005, Parent shall provide beginning with the Stockholders’ Agent with a report, setting forth the Net Revenues for the 12-month period ended December fiscal quarter ending October 31, 2005 (the “Earnout ReportPeriod”). If , in an Earnout Dispute Notice is not delivered pursuant aggregate amount equal to Section 2.4(c)(iii5% of the amount by which the revenue recognized by ITEX and its Subsidiaries (including BXI) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Earnout Payment Amount on a consolidated basis (calculated in accordance with the terms of this AgreementGAAP, subject to the right of offset provisions of Sections 2.4(a), (bbut excluding “Trade Unit Revenue” as defined below) and (d). (ii) Parent shall keep full, clear and accurate books and records with respect to the Business. The books and records shall be maintained in during each such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidentialquarter exceeds $3,000,000. Notwithstanding the foregoing, upon written request in no event shall the aggregate Earnout Payment with respect to any quarter exceed $37,500. Failure to recognize at least $3,000,000 in revenue in any quarter will result in no Earnout Payment being made for that quarter. No liability with respect to any quarter for an Earnout Payment in excess of $37,500 shall be accrued or carried forward to a subsequent quarterly period. Each Earnout Payment shall be paid by ITEX to the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate Representative within 55 days of the Net Revenue to date (end of the quarter for which estimate such Earnout Payment relates, provided that if the quarter is the last quarter of ITEX’s fiscal year, such payment may be made within 100 days of the end of such quarter, and provided further that if ITEX is subject to change in the preparation periodic reporting requirements of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such Securities Exchange Act of 1934 but a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the quarterly or annual report, the computation of Net Revenue or payment of the Earnout Payment Amount. (iii) In the event that the Stockholders’ Agent shall dispute the information set forth by Parent in the Earnout Report or, if based on the Stockholders’ Agent’s review of the books and records of the Business in accordance with subsection (c)(ii) above, omitted from the Earnout Report, as the case may be, thenis filed late, within ITEX shall be granted a grace period for such payment until such filing is actually made (except that no such grace period shall extend for more than 60 calendar days following days). The Earnout Payments shall be subject to reduction as specified in Section 1.9 hereof. Any such reduction shall be made pro rata amongst the date BXI Stockholders in accordance with their respective ownership of shares of BXI Common Stock as of the delivery Effective Time. The Earnout Payment shall be made by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services ITEX to the Stockholders’ AgentRepresentative acting on behalf of each BXI Stockholder, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The other than Dissenting Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment Amount, if any, in the manner set forth herein, subject to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be who are entitled to deduct receive Merger Consideration at the difference between one-half Closing, based upon each BXI Stockholder’s ownership of the costs and expenses shares of the Independent Accountant and the amount actually paid by the Stockholders’ Agent to the Independent Accountant from the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company BXI Common Stock as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, California; provided, however, that (i) one arbitrator shall be selected by the Stockholders’ Agent, the second arbitrator shall be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation to pay the Aggregate Earnout Payment Amount as set forth hereinTime. For purposes of this Section 2.4(c)(v)calculating the Earnout Payment, a “Change of Control” Trade Unit Revenue shall mean (1) any non-cash revenue recognized based on an exchange of assets for trade or barter credits, based on the consummation fair value of goods or services received in accordance with the guidance of APB 29, EITF 93-11 and EITF 93-17 and any transaction, including without limitation, any merger non-cash revenue or consolidation, pursuant to which any of the voting stock of Parent is converted into ITEX Trade Dollar revenue that may be earned for transaction or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assetsassociation fees.

Earnout Payment. In addition to the Base Purchase Price, promptly following the completion of the Purchaser's audited financial statements for the calendar year ending December 31, 2011 (the "Earnout Period"), the Purchaser will pay the Company an aggregate amount of three million four hundred thousand United States Dollars (US $3,400,000) (the "Earnout Payment"), subject to adjustment as provided below in this Section 1.7 (a) For purposes of calculating revenues under this Section 1.7 (but not for purposes of keeping the Purchaser's books), (i) As promptly only the Purchaser's revenues from the OEM Agreements as practicable after reflected in the end Purchaser’s financial statements shall be utilized or taken into account, and (ii) the Purchaser shall recognize revenue in accordance with GAAP as in effect as of the Closing Date. To the extent that the Purchaser Auditors propose to recognize revenue on any of the OEM Agreements differently than the Company has recognized revenue on such OEM Agreement, the Purchaser Auditors shall consult with the Company Auditors regarding such change, provided that (y) notwithstanding such consultation, the decision of the Purchaser Auditors regarding such recognition shall be final and binding on the Company, and (z) the maximum reduction in the Earnout Payment attributable to the manner in which the Purchaser Auditors recognize revenue on the OEM Agreement identified in Section 1.7(a) of the Company Disclosure Schedule shall not exceed the amount listed in Section 1.7(a) of the Company Disclosure Schedule. (b) The Purchaser is obliged to provide services to OEM customers for whom deferred revenues were previously recognized and payments already received by the Company, as specified in Section 1.7(b) of the Company Disclosure Schedule. These deferred revenues shall not be deemed to be revenues recognized during the Earnout Period, and shall not otherwise be utilized or taken into account in any manner, in relation to the calculation of the Earnout Payment. The adjustment to the Earnout Payment shall be calculated as follows: (i) If the aggregate annual revenues recognized from the OEM Agreements in the Purchaser's audited financial statements for the Earnout Period are less than three million four hundred thousand United States Dollars (US $3,400,000), then the Earnout Payment will be reduced by US $2.00 for every US $1.00 of shortfall (below US $3,400,000) in aggregate 2011 annual revenues recognized by the Purchaser from the OEM Agreements; however, notwithstanding the foregoing, if the aggregate annual revenues recognized by the Purchaser during 2011 from the OEM Agreements are two million three hundred thousand United States Dollars (US $2,300,000) or less, then the Earnout Payment shall be reduced to zero. (ii) If the aggregate annual revenues recognized from the OEM Agreements in the Purchaser's audited financial statements for the Earnout Period exceed four million United States Dollars (US $4,000,000), then the Earnout Payment shall be increased by US $0.50 for each US $1.00 of excess (above US $4,000,000) in aggregate 2011 annual revenues recognized by the Purchaser from the OEM Agreements. (c) Upon reasonable request of the Company during the Earnout Period, but in no event more than quarterly during such period, the Purchaser shall provide to the Company a report and reasonable supporting detail showing the revenue recognized for each of the OEM Agreements from the beginning of the Earnout Period and until the end of the calendar quarter immediately preceding the date of such report. (d) The Purchaser shall present its Earnout Payment calculation (the "Earnout Payment Calculation") to the Company no later than 60 days following December March 31, 20052012 in a written statement setting forth the calculations and supporting information (for each of the OEM Agreements) in such reasonable detail as to permit the Company to review and confirm the accuracy of the Earnout Payment Calculation. (e) Upon receipt of the Earnout Payment Calculation, Parent the Company shall have the right to review and confirm or dispute the accuracy of such calculations. The Purchaser shall provide the Stockholders’ Agent Company, its legal counsel, and its financial advisors with reasonable access, subject to appropriate confidentiality restrictions, to such books and records (at the location such books and records are regularly kept, which may be in Israel; provided that, if requested by the Company, the Purchaser will make such books and records available via secure email transmission to the Company or via a reportsecure online data room), setting forth as may be reasonably necessary to enable the Net Revenues for the 12-month period ended December 31Company, 2005 (the “Earnout Report”)its legal counsel, and its financial advisors to review and verify such calculations. If an Earnout Dispute Notice is not delivered pursuant to Section 2.4(c)(iii) below, then in no event later than 105 days following December 31, 2005, Parent shall pay or cause to be paid the Company notifies the Purchaser of its confirmation of the Earnout Payment Amount in accordance Calculation, or if the Company does not notify the Purchaser of a disagreement with the terms calculations set forth in the Earnout Payment Calculation in writing within forty-five (45) days after receipt of this Agreementthe Earnout Payment Calculation, subject to the Earnout Payment Calculation will become final. (f) If the Company disagrees with the calculations set forth in the Earnout Payment Calculation, the Company shall notify the Purchaser of such disagreement in writing within forty-five (45) calendar days after receipt of the Earnout Payment Calculation, which notice shall set forth the amount and nature of the disagreement in reasonable detail. (i) If the Purchaser does not accept the position of the Company or otherwise negotiate a settlement within thirty (30) calendar days after receipt of such written notice by the Company, then the Company shall have the right to require a final and binding determination by submission of offset provisions the disputed accounting and calculation issues to a mutually agreeable neutral accountant (the "Neutral Accountant") selected by the parties. If the parties cannot agree on a Neutral Accountant within ten (10) calendar days, the Purchaser Auditors and Company Auditors shall select the Neutral Accountant. The final determination of Sections 2.4(a), (b) the Neutral Accountant shall fall within the range of difference between the Earnout Payment Calculations provided by the Purchaser and (d)the amounts proposed by the Company. (ii) Parent shall keep full, clear and accurate books and records with respect If the final determination by the Neutral Accountant as to the Business. The books and records shall be maintained in such a manner that Net Revenue shall be readily verifiable. All books and records with respect to the Business shall be available for inspection by the Stockholders’ Agent amount of any change or any attorney or accountant engaged by the Stockholders’ Agent to act on behalf of the Holders, in all cases upon reasonable prior notice and during normal business hours. The information contained in the books and records of Parent with respect to the Business shall remain confidential. Notwithstanding the foregoing, upon written request of the Stockholders’ Agent, Parent shall provide the Stockholders’ Agent with a report reflecting the estimate of the Net Revenue to date (which estimate is subject to change in the preparation of the Earnout Report) as promptly as practicable thereafter; provided that the Stockholders’ Agent may only make such a request once every six months commencing on July 1, 2005. If the Stockholders’ Agent does not deliver to Parent an Earnout Dispute Notice (as defined below) as set forth in Section 2.4(c)(iii) below, then the Earnout Report for the Earnout Period shall be deemed final and binding and neither the Stockholders’ Agent nor the Holders shall have any further right to contest the report, the computation of Net Revenue or payment correction of the Earnout Payment AmountCalculation is not more than eighty thousand United States Dollars (US $80,000) greater in favor of the Company than the Earnout Payment Calculation provided by the Purchaser (or, if greater, the last settlement offer made by the Purchaser), then the costs and fees of such dispute resolution shall be borne solely by the Company. Otherwise, if the final determination results in a net change or correction which is more than eighty thousand United States Dollars (US $80,000) in favor of the Company than the Earnout Payment Calculation provided by the Purchaser (or, if greater, the last settlement offer made by the Purchaser), then the costs and fees of such dispute resolution shall be borne solely by the Purchaser. (iiig) In The Purchaser shall pay 80% of the event that amount due to the Stockholders’ Agent shall dispute the information set forth by Parent in Company as shown on the Earnout Report orPayment Calculation concurrent with delivery of the Earnout Payment Calculation, if based and the Purchaser shall pay the remaining 20% on the Stockholders’ Agent’s review earlier of (i) the books and records of the Business in accordance with subsection date that is fifty (c)(ii50) above, omitted from the Earnout Report, as the case may be, then, within 60 calendar days following the date delivery of the delivery by Parent of such report, the Stockholders’ Agent shall provide written notice to Parent (the “Earnout Dispute Notice”) specifying the amount disputed and the basis for the dispute, together with supporting documentation reflecting the analysis of and justification for any recomputation made. Parent and the Stockholders’ Agent shall make good faith efforts to resolve the dispute through negotiations for a period of 30 calendar days following the receipt of the written notice defining and describing the nature of the dispute. In the event that the parties are unable to finally resolve the dispute within such 30 calendar-day period, the parties to the dispute may elect by mutual agreement to extend the period of negotiation and may elect by mutual agreement to engage a mediator to assist in such negotiation. To the extent that any matter remains unresolved following negotiations (as determined by notice by any party to the other parties), the Stockholders’ Agent and Parent shall jointly select an independent accountant of recognized national standing to resolve any remaining disagreements, which independent accountant shall not have provided services to the Stockholders’ Agent, the Company or Parent or its affiliates during the five-year period preceding the date of its selection (the “Independent Accountant”). The Stockholders’ Agent and Parent shall use their respective commercially reasonable efforts to cause such Independent Accountant to make its determination within 60 calendar days of accepting its selection. Within 10 business days after the date of determination of such Independent Accountant, Parent shall pay or cause to be paid to the Holders the Earnout Payment AmountCalculation, if any, in the manner set forth herein, subject and (ii) five (5) days following notification to the right of offset provisions of Sections 2.4(a), (b) and (d). The decision of the Independent Accountant shall be a final, binding, and conclusive resolution of the parties’ dispute, shall be non-appealable, and shall not be subject to further review. Irrespective of the Independent Accountant’s decision, the costs and expenses of the Independent Accountant shall be split equally between the parties. In the event that the Stockholders’ Agent does not pay the full amount of one-half of the Independent Accountant’s costs and expenses, Parent shall be entitled to deduct the difference between one-half of the costs and expenses of the Independent Accountant and the amount actually paid Purchaser by the Stockholders’ Agent to the Independent Accountant from Company that it agrees with the Earnout Payment Amount. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs Calculation and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the partieswaives its right under Section 1.7(f) incurred in connection with the dispute. Notwithstanding the foregoing, in any case, the parties shall be responsible for the payment of their respective costs and expenses, including any attorneys’ and accountants’ fees (other than any accountants’ fees payable to the Independent Accountant, which shall be split equally between the parties) incurred in connection with the dispute. (iv) The Holders will be deemed to, as part of their approval and adoption of the Merger Agreement and the transactions contemplated therein and herein, and the Stockholders’ Agent hereby, generally, irrevocably, unconditionally and completely agree that (1) the Company and Parent (as the controlling stockholder of the Company as of the Effective Time of the Merger) and each of their respective Affiliates shall be entitled to operate the Business after the Effective Time as they determine in their sole and absolute discretion, and shall have no obligation to operate the Business in any manner that would maximize, maintain or protect the value of the Common Stock CVRs and the Preferred Stock CVRs, and as a result of such operation of the Business, there may be a diminution in or elimination of the value of the CVRs, (2) the Common Stock CVRs and the Preferred Stock CVRs represent contractual obligations of Parent, and none of Parent, the Company or any of their respective Affiliates owes any fiduciary duty of any type (including, without limitation, any duty of loyalty or care) to any Holder of Common Stock CVRs and/or Preferred Stock CVRs, and (3) each of the Holders and the Stockholders’ Agent shall be prohibited from asserting any dispute, right, claim, action, cause of action, controversy or remedy of any kind and nature against any of the Company, Parent or any of their Affiliates resulting from the operation of the Business after the Effective Time or resulting from any allegation of breach of fiduciary duty of any nature, other than claims for fraud or intentional misconduct (and other than the right of the Stockholders’ Agent to dispute the Closing Balance Sheet Earnout Payment under Section 2.4(b)(iii) and/or the Earnout Report under Section 2.4(c)(iii) above). Upon either (A) the occurrence of an allegation by the Stockholders’ Agent of any claim which may arise for fraud or intentional misconduct under this subsection (iv) or (B) the receipt by the Stockholders’ Agent of written notice made in accordance with Section 1.3 by any Holder to the Stockholders’ Agent of the occurrence of any claim which such Holder has a good faith belief has arisen for fraud or intentional misconduct under this subsection (iv) (in each case, a “Claim”), the Stockholders’ Agent shall provide notice of such Claim to Parent, stating, to the best of his or her understanding, the circumstances giving rise to the Claim, specifying the amount of the Claim and making a request for any payment then believed due (the “Notice”). Upon receipt of any such Notice by Parent, within the next 45 days thereafter, the parties shall use their reasonable best efforts to cooperate and arrive at a mutually acceptable resolution of such dispute. If a mutually acceptable resolution cannot be reached between the parties within such 45-day period, the Stockholders’ Agent may submit the dispute for resolution by a panel of three arbitrators selected from the panels of arbitrators of the American Arbitration Association in Santa Xxxxx County, CaliforniaCalculation; provided, however, that (i) one arbitrator shall be selected by if the Stockholders’ AgentEarnout Payment Calculation is disputed, the second arbitrator Purchaser shall not be selected by Parent and the third arbitrator shall be selected by the two previously selected arbitrators and (ii) in all respects, such panel shall be governed by the American Arbitration Association’s then existing Commercial Arbitration Rules. If it is finally determined that all or a portion of such Claim amount is owed to the Holders, Parent shall, within 10 days of such determination, pay the Holders such amount owed, together with interest from the date that the Stockholders’ Agent initially requested such payment until the date of actual payment, at an annual rate equal to the prime interest rate then generally in effect on the date of payment as set forth in The Wall Street Journal. The arbitration panel’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by any party. The parties shall be responsible for their respective fees and costs (including any attorneys’ or accountants’ fees) incurred in connection with the arbitration. EACH HOLDER AND THE STOCKHOLDERS’ AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE FOR FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO FRAUD OR INTENTIONAL MISCONDUCT UNDER THE PRECEDING SENTENCE. EACH HOLDER AND THE STOCKHOLDERS’ AGENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, AND (C) IT MAKES SUCH WAIVER VOLUNTARILY. (v) Notwithstanding anything to the contrary set forth in this Section 2.4(c), in the event of a Change of Control (as defined below) of Parent before December 31, 2005, the Aggregate Earnout Payment Amount payable pursuant to this Section 2.4(c) shall be at least $14,000,000 regardless of the actual Net Revenue recognized during the Earnout Period, subject, however, to the offset provisions of Section 2.4(a), (b) and (d). In event of a Change of Control of Parent as set forth herein, Parent shall make proper provisions so that the continuing or surviving corporation or entity shall assume the obligation required to pay the Aggregate Earnout Payment Amount as set forth herein. For purposes remaining 20% until a final determination, and in such case the Purchaser shall pay the amount finally determined to be due within fifteen (15) calendar days of a final determination in accordance with this Section 2.4(c)(v), a “Change of Control” shall mean (1) the consummation of any transaction, including without limitation, any merger or consolidation, pursuant to which any of the voting stock of Parent is converted into or exchanged for cash, securities or other property, other than any transaction where the voting stock of Parent outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee entity constituting more than 50% of such voting stock of such surviving or transferee entity (immediately after giving effect to such issuance) and other than an acquisition of Parent in which the management of Parent participates in ten percent or more of the fully-diluted equity of the acquiror; or (2) a sale of all or substantially all of Parent’s assets1.7.