Common use of Earnout Clause in Contracts

Earnout. (a) Axsys shall or shall cause Buyer to, as promptly as possible, but not later than five days after the earlier of (i) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by Seller. (b) Within 30 days following Seller’s receipt of the Earnout Income Statement and Earnout Schedule for the relevant Earnout Period, Seller shall deliver written notice to Buyer of any dispute it has with respect to the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. (a) Axsys Each Earnout Amount shall or shall cause Buyer to, as promptly as possible, but not later than five days after the earlier of (i) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the Earnout Income Statement Section 1.8 and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon be subject to Seller by wire transfer of immediately available funds to an account designated in writing by SellerArticle VIII. (b) Within 30 45 days following Seller’s receipt of after the Earnout Income Statement and Earnout Schedule for the relevant each applicable Earnout Period, Seller Acquirer shall deliver written to the Stockholders’ Agent a statement (each, an “Earnout Statement”) setting forth Acquirer’s good faith calculation of (i) the applicable Earnout Period revenue and (ii) the applicable Earnout Amount, in each case for such applicable Earnout Period. Acquirer shall provide the Stockholders’ Agent and its representatives reasonable access upon reasonable notice to Buyer the records, properties, personnel and (subject to the execution of any dispute it has with respect customary work paper access letters if requested) auditors relating to the preparation or content of each Earnout Statement and shall cause its personnel to reasonably cooperate with the Stockholders’ Agent in connection with its review of each Earnout Statement. (c) The Stockholders’ Agent shall have 30 days within which to review an Acquirer Earnout Statement after Acquirer’s delivery thereof. The Stockholders’ Agent may object to any calculation set forth in the Acquirer Earnout Statement by providing written notice of such objection to Acquirer within 30 days after Acquirer’s delivery of the Acquirer Earnout Income Statement or (the “Notice of Earnout ScheduleObjection”), which notice must specify together with the disputed item or items basis of its objection in reasonable detail and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule any supporting documentation, information and the reason(s) thereforcalculations. If Seller does a Notice of Earnout Objection is not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule provided within such 30-day period, such the Acquirer Earnout Income Statement (and Earnout Schedule will each of the calculations set forth therein) shall be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for If the First Stockholders’ Agent provides the Notice of Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”)Objection, then Axsys Acquirer and the Stockholders’ Agent shall pay or cause confer in good faith for a period of up to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess 30 days following Acquirer’s receipt of the First Period Tier One Threshold; plus (ii) 30% Notice of all Business Revenue for Earnout Objection in an attempt to resolve any disputed matter set forth in the First Earnout Period in excess Notice of $15,777,000 (the “First Period Tier Two Threshold”); providedObjection, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder and any resolution by them shall be reduced by an amount equal to the aggregate of all sales commissions in writing and employee bonuses shall be final and binding on the revenue of parties hereto and the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d)Company Stockholders. (e) Subject to Sections 2.6(h) and 2.6(kIf, after the 30-day period set forth in Section 1.8(c), if, for Acquirer and the Second Stockholders’ Agent cannot resolve any matter set forth in the Notice of Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”)Objection, then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold Acquirer and the Second Period Tier One Threshold; plus (ii) Stockholders’ Agent shall engage the lesser Reviewing Accountant to review only the matters in the Notice of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold Objection that are still disputed by Acquirer and the Second Period Tier Two ThresholdStockholders’ Agent and any calculations to the extent relevant thereto. After such review, the Reviewing Accountant shall promptly (and in any event within 45 days following its engagement) determine the resolution of such remaining disputed matters, which determination shall (absent fraud or manifest error) be final and binding on the parties hereto and the Company Stockholders. (f) Subject As soon as reasonably practicable after the final determination of each Earnout Amount in accordance with this Section 1.8, subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined adjustment or withholding pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”)Article VIII, then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paidAcquirer shall, or caused to be paidshall cause a direct or indirect subsidiary of Acquirer or its Paying Agent to, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus pay the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery portion of the applicable Earnout Income Statement Amount comprised of cash to the Company Series A Stockholders and Earnout Schedule under Section 2.6(aCompany Common Stockholders (other than Cashed Out Common Stockholders), as applicable, and to instruct its transfer agent to issue to the Company Series A Stockholders and Company Common Stockholders (other than Cashed Out Common Stockholders) that are to be made within five Business Days Accredited Investors, as applicable, the portion of the final determination applicable Earnout Amount comprised of Business Revenue shares of Acquirer Common Stock, in each case in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. 1.4 (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Sellerissuance, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect theretoan “Earnout Payment”).

Earnout. (a) Axsys Subject to the terms and conditions of this Section 1.5, the Sellers shall or shall cause Buyer to, be entitled to additional consideration for the Shares if the Purchaser meets certain EBITDA targets as promptly as possible, but not later than five days after the earlier of set forth below: (i) For the filing by Axsys 2017 Earnout Period, the Purchaser shall pay to the Sellers the amount of its Annual Report the Guaranteed Earnout as set forth on Form 10-K Exhibit B for the preceding fiscal year ended December 31 2017 Earnout Period; provided, however, if the actual EBITDA amount of the Company during the 2017 Earnout Period is equal to or greater than the EBITDA Floor (as set forth on Exhibit B for the 2017 Earnout Period), then the Purchasers shall pay to the Sellers’ Representative (on behalf of the Sellers) an amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2017 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2017 Earnout Period); provided, further, that if the actual EBITDA of the Company for the 2017 Earnout Period is equal to or greater than the Target EBITDA (as set forth on Exhibit B for the 2017 Earnout Period), then the Purchaser shall pay to the Sellers’ Representative (on behalf of the Sellers) an amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2017 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2017 Earnout Period), plus (z) 60% of the amount in excess of the Target EBITDA (as set forth on Exhibit B for the 2017 Earnout Period). (ii) For the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant 2018 Earnout Period, which the Purchaser shall include a calculation pay to the Sellers the amount of any the Guaranteed Earnout Payment proposed to be paid as set forth on Exhibit B for the relevant 2018 Earnout Period; provided, however, if the actual EBITDA amount of the Company during the 2018 Earnout Period is equal to or greater than the EBITDA Floor (as set forth on Exhibit B for the 2018 Earnout Period), then the Purchasers shall pay to the Sellers’ Representative (on behalf of the Sellers) an amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2018 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2018 Earnout Period); provided, further, that if the actual EBITDA of the Company for the 2018 Earnout Period is equal to or greater than the Target EBITDA (as set forth on Exhibit B for the 2018 Earnout Period), then the Purchaser shall pay to the Sellers’ Representative (on behalf of the Sellers) an amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2018 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2018 Earnout Period), plus (z) 60% of the amount in excess of the Target EBITDA (as set forth on Exhibit B for the 2018 Earnout Period). (iii) For the 2019 Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer Purchaser shall pay to the Sellers the amount of any the Guaranteed Earnout Payment shown as due thereon set forth on Exhibit B for the 2019 Earnout Period; provided, however, if the actual EBITDA amount of the Company during the 2019 Earnout Period is equal to Seller by wire transfer or greater than the EBITDA Floor (as set forth on Exhibit B for the 2019 Earnout Period), then the Purchasers shall pay to the Sellers’ Representative (on behalf of immediately available funds the Sellers) an amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2019 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2019 Earnout Period); provided, further, that if the actual EBITDA of the Company for the 2019 Earnout Period is equal to or greater than the Target EBITDA (as set forth on Exhibit B for the 2019 Earnout Period), then the Purchaser shall pay to the Sellers’ Representative (on behalf of the Sellers) an account designated amount equal to the sum of (x) the amount of the Guaranteed Earnout (as set forth on Exhibit B for the 2019 Earnout Period) plus (y) the amount of the Variable Earnout (as set forth on Exhibit B for the 2019 Earnout Period), plus (z) 60% of the amount in writing by Sellerexcess of the Target EBITDA (as set forth on Exhibit B for the 2019 Earnout Period). (b) Within 30 days following Seller’s receipt All payments due and payable by the Purchaser to the Sellers pursuant to this Section 1.5 shall be paid to the Sellers’ Representative (on behalf of the Earnout Income Statement and Earnout Schedule for Sellers) by wire transfer within ninety (90) days after the relevant end of the 2017 Earnout Period, 2018 Earnout Period and 2019 Earnout Period, respectively. The Sellers’ Representative shall distribute to each Seller shall deliver written notice to Buyer an amount of any dispute it has with respect received Earnout Consideration equal to the preparation or content product of (A) such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(sEquity Ownership Percentage multiplied by (B) to such the Earnout Income Statement and/or Earnout Schedule and Consideration received from the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosurePurchaser. (c) For purposes The obligations of complying with the terms set forth in Purchaser pursuant to this Section 2.61.5 are subject to (i) that certain Subordination Agreements dated as of the date hereof by and among the Company, Buyer and Seller shall cooperate with and make available to the other party and its representatives and Purchaser, the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the BusinessSellers, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement Lenders, respectively (the “Subordination Agreements”) and Earnout Schedule and (ii) the resolution Purchaser’s right of any disputes set off pursuant to Section 8.7 hereof in order to secure the Sellers’ indemnification obligations under this Section 2.6Article VIII (Indemnification). (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except no Seller shall be entitled to any Earnout Consideration for any upcoming Earnout Period (and the extent provided in this Section 2.6(l), Buyer Purchaser shall have no further obligation under to pay any such Earnout Consideration) pursuant to this Section 2.6 1.5 if both Employee Shareholders’ employment or under consulting relationships with the Company are terminated (i) by the Purchaser for Cause or (ii) by such Seller without Good Reason; provided, however, that upon the termination of both Employee Shareholders, Xxxxxx Xxxxx shall enter into an employment arrangement with the Company on terms no less favorable than the employment terms of each Employee Shareholder immediately prior to such Employee Shareholder’s termination in order to maintain the Sellers’ rights to the Earnout Consideration; provided, further, that, upon a Change in Control, the Earnout Consideration shall accelerate in accordance with the terms and conditions of Section 2.7 from 1.5(f). For the avoidance of doubt, any Seller whose employment or consulting arrangement with the Company is terminated shall still be entitled to Earnout Consideration so long as any of the Sellers are still in an employment or consulting relationship with the Company at the time such Earnout Consideration is payable in accordance with this Section 1.5. (e) Sellers and after Purchaser shall mutually agree on a business plan for the Company through the Fiscal Year-Ended 2019 (the “Business Plan”) to be implemented by the Purchaser and Sellers (as employees of Purchaser). (f) Subject to the continued employment or consulting relationship of at least one (1) Seller as set forth in Section 1.5(d), upon a Change in Control the Earnout Consideration shall accelerate as follows: (i) if the Change in Control occurs on or prior to the end of the 2017 Earnout Period, the Earnout Consideration due and payable upon the consummation of any such sale the Change in Control transaction shall equal $1,791,204; (ii) if the Change in Control occurs after the end of the Business 2017 Earnout Period and on or material portion thereof other than earnout obligations accrued prior to such sale but unpaid.the end of the 2018 Earnout Period, the Earnout Consideration due and payable upon the consummation of the Change in Control transaction shall equal $1,337,996 in addition to the Earnout Consideration already paid for the 2017 Earnout Period; and (miii) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be if the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% Change in Control occurs after the end of the aggregate amount of any such payments 2018 Earnout Period and Xxxx Xxxxx being entitled on or prior to 25% the end of the aggregate amount 2019 Earnout Period, the Earnout Consideration due and payable upon the consummation of any such payments. If Buyer or Axsys makes payment the Change in Control transaction shall equal $736,364 in addition to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s the Earnout Consideration paid for the 2017 and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto2018 Earnout Periods.

Earnout. (a) Axsys shall or shall cause Buyer to, as promptly as possible, but not later than five days after If at any time from the earlier of (i) Closing Date until the filing by Axsys of its Annual Report on Form 10three-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect anniversary of the Business Closing, the VWAP of Acquiror Common Stock quoted on Nasdaq is greater than or equal to $12.50 for any twenty (each such income statement20) Trading Days within any thirty (30) Trading Day period, Acquiror shall promptly issue to the Earnout Participants an aggregate amount of 7,500,000 shares of Acquiror Common Stock (the “First Earnout Income StatementShares”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the their Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by SellerPro Rata Portion. (b) Within 30 days following Seller’s receipt If at any time from the Closing Date until the five-year anniversary of the Earnout Income Statement and Earnout Schedule Closing, the VWAP of Acquiror Common Stock quoted on Nasdaq is greater than or equal to $15.00 for the relevant Earnout Periodany twenty (20) Trading Days within any thirty (30) Trading Day period, Seller Acquiror shall deliver written notice to Buyer of any dispute it has with respect promptly issue to the preparation or content Earnout Participants an aggregate amount of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer 7,500,000 shares of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant Acquiror Common Stock (the “Arbitration FirmSecond Earnout Shares”, and together with the First Earnout Shares, the “Earnout Shares”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance accordance with this Section 2.6, including compliance with provisions requiring access and disclosuretheir Earnout Pro Rata Portion. (c) For purposes of complying with the terms The Acquiror Common Stock price targets set forth in this Section 2.6, Buyer 3.07(a) and Seller shall cooperate with Section 3.07(b) and make available the number of shares to be issued pursuant to the other party and its representatives and foregoing shall be equitably adjusted for any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event affecting the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm Acquiror Common Stock after the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers date of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6Agreement. (d) Subject Any Option Earnout Shares payable to Sections 2.6(h) holders of unvested Exchanged Options shall be subject to terms and 2.6(kconditions that are substantially similar to those that applied to the award of such Company Option immediately prior to the Effective Time (including vesting and forfeiture conditions, but taking into account any changes thereto provided for in the Company Stock Plans, in any award agreement evidencing such Company Option or by reason of this Agreement or the Transactions), if, for . The issuance of the First Option Earnout Period, Business Revenue (as finally determined Shares will also be subject to any withholding required pursuant to applicable Law pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d)3.08. (e) Subject Any Warrant Earnout Shares payable to Sections 2.6(h) holders of Exchanged Warrants shall be subject to terms and 2.6(k), if, for conditions that are substantially similar to those that applied to the Second award of such Company Warrant immediately prior to the Effective Time. The issuance of the Warrant Earnout Period, Business Revenue (as finally determined Shares will also be subject to any withholding required pursuant to applicable Law pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold3.08. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. (a1) Axsys An earnout ("Earnout") shall or shall cause Buyer to, be payable to Seller as promptly as possible, but not later than five days after the earlier of set forth below in cash in an amount equal to (i) three multiplied by (ii) the filing amount by Axsys of its Annual Report which earnings before interest, taxes, depreciation and amortization attributable to the Business ("EBITDA"), as such amount is calculated in accordance with generally accepted accounting principles ("GAAP") exceeds the applicable threshold set forth below (the "Post-Closing EBITDA Threshold"). The Post-Closing EBITDA Threshold shall be calculated for two time periods and the Earnout, if any, shall be paid on Form 10two dates. The first time period shall be the full 12 months after January 1, 2003 ("First Anniversary Earnout Period") and the Post-K Closing EBITDA Threshold for the preceding fiscal year ended December 31 First Anniversary Earnout Period shall be $1,400,000. The second time period shall be the full 12 months after January 1, 2004 ("Second Anniversary Earnout Period") and the Post-Closing EBITDA Threshold for the Second Anniversary Earnout Period shall be EBITDA for the First Anniversary Earnout Period. Buyer shall pay the Earnout attributable to the First Anniversary Earnout Period, if any, on July 1, 2004 ("First Anniversary Payout Date") and shall pay the Earnout attributable to the Second Anniversary Earnout Period, if any, on July 1, 2005 ("Second Anniversary Payout Date"); provided, however, that Buyer shall not be required to pay the applicable Earnout if on the First Anniversary Payout Date or the Second Anniversary Payout Date, as applicable, the Shareholder's employment with Buyer has been terminated (i) by Shareholder without Good Reason (as defined in the Employment Agreement between Buyer and Shareholder of even date herewith) or (ii) by the Buyer for Cause (as defined in the Employment Agreement between Buyer and Shareholder of even date an earnings press releaseherewith). Seller agrees that if any amount remains outstanding under the Note at the time of payment of any Earnout, which contains revenue numbers, is issued by Axsys for then outstanding amounts under the preceding fiscal year ended December 31, deliver to Seller an income statement in respect Note shall be set off against the amount of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained by Buyer to Seller under this subsection in the applicable Earnout Income Statement but calculated order specified in accordance with the terms of this AgreementNote. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon Earnout, if any, to Seller by wire transfer of immediately available funds to an account designated in writing by Seller. (b2) For purposes of this Section, EBITDA shall be calculated in good faith in accordance with GAAP on the accrual basis of accounting and in a manner consistent with Buyer's consolidated audited financial statements, taking into account the need to segregate the Business from Buyer's other business. After the Closing, the Business shall become known as the Travel Nurse International Group (the "TNI Group") of Buyer's Travel Nurse Division. Buyer agrees (i) to provide sufficient working capital to support the growth of the TNI Group as determined reasonably and in good faith by Buyer in consultation with Shareholder, as manager of the TNI Group and (ii) not to limit the geographic scope of the TNI Group's client base. Buyer agrees not to charge any corporate administrative, management and/or accounting fees to the TNI Group's operations post-Closing. If Buyer decides to merge, consolidate or otherwise join the TNI Group with any other business, Buyer shall take all necessary steps to ensure that the Earnout can be clearly and properly calculated after such merger, consolidation or other event resulting in the TNI Group not being operated as a separate business unit of Buyer. (3) After the Closing and until December 31, 2005, upon written request of Seller or Shareholder, Buyer shall permit Seller or Shareholder, or an agent of Seller or Shareholder reasonably acceptable to Buyer (the "Auditor"), to have access during normal business hours to such of the records of Buyer as may be reasonably necessary to verify Buyer's calculation of any portion of the Earnout ("Buyer's Calculation"). Within 30 15 days following after concluding its review of Buyer records, Seller’s , Shareholder or the Auditor, as applicable, shall provide a written report setting forth in reasonable detail its calculation of the Earnout (the "Seller Calculation"). If the Seller Calculation shows that Buyer underpaid the applicable portion of the Earnout, Buyer shall have 15 days after its receipt of the Earnout Income Statement and Earnout Schedule for Seller Calculation to review such calculation. If Buyer disagrees with the relevant Earnout PeriodSeller Calculation, Buyer shall give Seller shall deliver written notice of its intent to Buyer of any dispute it has with respect to retain an independent certified public accounting firm (the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s"Independent Auditor") to such audit the Earnout Income Statement and/or Earnout Schedule and the reason(s) thereforcalculation. If the Independent Auditor's calculation of the Earnout (the "Independent Auditor Calculation") results in an Earnout that is the same as the Buyer Calculation or the Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day periodCalculation, such Earnout Income Statement and Earnout Schedule will the Independent Auditor Calculation shall be deemed final, conclusive final and binding on the parties. If the Independent Auditor Calculation differs from the Buyer Calculation and the Seller delivers a notice of dispute within such 30-day periodCalculation, Buyer and Seller shall negotiate in good faith mutually select an independent certified public accounting firm (the "Final Auditor") to resolve such dispute. If review the Buyer Calculation, the Seller Calculation and Sellerthe Independent Auditor Calculation, notwithstanding such good faith effortto determine the Earnout, fail if any, due to resolve such dispute within 30 days after Seller advises Buyer and to provide a report of its objections, then findings to Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”"Final Audit"), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses results of the Arbitration Firm equally. All determinations made by the Arbitration Firm will Final Audit shall be final, conclusive final and binding on the parties. The Arbitration Firm Buyer shall have pay any additional amount found due as a result of the power to compel compliance with this Section 2.6Final Audit within 30 days after Buyer's receipt of the Final Audit report. If it is determined that Buyer underpaid the Earnout, including compliance with provisions requiring access any fees and disclosure. (c) For purposes of complying with expenses charged by the terms set forth in this Section 2.6Auditor, Buyer and Seller shall cooperate with and make available to the other party and its representatives Independent Auditor and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions Auditor shall be paid in fullby Buyer. If it is determined that Buyer overpaid the Earnout, irrespective any fees and expenses charged by the Auditor, the Independent Auditor and the Final Auditor shall be paid by Seller and Shareholder. Seller may request to audit the calculation of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission PlansEarnout not more than once during any 12 month period. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) Seller and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys Shareholder shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Thresholdnot, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay cause third parties retained by Seller or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller Shareholder pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount not to, disclose any financial or other confidential information of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing received pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaidSection. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. The Earnout Amounts payable in the aggregate for all Earnout Periods to the Sellers shall be determined as follows: (a) Axsys shall or shall cause Buyer to, as promptly as possible, but not later than five days after the earlier of (i) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect of the Business (For each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with and for each Target Level listed on Exhibit 1.4 (a) attached hereto, the Earnout Income Statement, Buyer Amounts listed on Exhibit 1.4 (a) shall deliver be determined separately. If a schedule (each such schedule, Target Level is achieved for an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which then the corresponding Earnout Amount for such Target Level shall include a calculation of any be due and payable to the Sellers for such Earnout Payment proposed Period pursuant to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by Seller. (b) Within 30 days following Seller’s receipt of Notwithstanding anything to the Earnout Income Statement and Earnout Schedule contrary herein, if a Target Level is not achieved for the relevant 2005 Earnout Period, Seller shall deliver written notice to Buyer of any dispute it has with respect the Earnout Amount for the 2005 Earnout Period can subsequently be earned by achieving the combined Target Levels for the 2005 Earnout Period and the 2006 Earnout Period. By achieving such combined Target Levels, the Sellers would be entitled to the preparation or content Earnout Amounts for the 2005 and 2006 Earnout Periods. In addition, if the Target Level is not achieved for the 2006 Earnout Period, the Earnout Amount for the 2006 Earnout Period can subsequently be earned by achieving the combined Target Levels for the 2006 Earnout Period and the 2007 Earnout Period. By achieving such combined Target Levels, the Sellers would be entitled to the Earnout Amounts for the 2006 and 2007 Earnout Periods. See Exhibit 1.4(b) for examples of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosurecalculations. (c) For Notwithstanding anything to the contrary herein, if a Target Level is exceeded for the 2004 Earnout Period, 2005 Earnout Period or 2006 Earnout Period, the amount by which the applicable Target Level was exceeded in such Earnout Period can be applied to and aggregated with the Target Level for the Earnout Period immediately following for purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (determining if applicablesuch Target Level is achieved for such immediately following Earnout Period. See Exhibit 1.4(c) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers for examples of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6such calculations. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to if the extent provided in this Section 2.6(l)Target Level is not achieved for the 2005 Earnout Period, Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from the Earnout Amount for the 2005 Earnout Period can subsequently be earned by achieving the combined Target Levels for the 2005 Earnout Period, 2006 Earnout Period and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments2007 Earnout Period. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Sellercombined Target Levels are achieved, such payment shall fully discharge Buyer’s the Earnout Amounts for the 2005 Earnout Period, 2006 Earnout Period and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, the 2007 Earnout Period would be been attained and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.would be due and payable. See Exhibit 1.4

Earnout. (a) Axsys Following the Closing, the Seller Indemnifying Parties shall or shall cause be entitled to receive from Buyer to, as promptly as possible, but not later than five days after (subject to the earlier of terms and conditions set forth in this Section 2.5) additional cash consideration based on the Company’s performance during the twelve month period beginning on the Closing Date (ithe “First Earnout Period”) and the filing by Axsys of its Annual Report on Form 10-K for twelve month period following the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect end of the Business First Earnout Period (each such income statementthe “Second Earnout Period” and the First Earnout Period each, an “Earnout Income StatementPeriod” and collectively, the “Earnout Periods”). The amount (if any) for paid with respect to the most recently completed First Earnout Period showing all Business Revenue thereon. Together (the “First Earnout Payment”), the initial amount (if any) paid with respect to the Second Earnout Period (the “Second Base Earnout Payment”), the amount in addition to the Second Base Earnout Payment (if any) paid with respect to the Second Earnout Period (the “Second Upside Earnout Payment” together with the First Earnout Income StatementPayment and the Second Base Earnout Payment, Buyer shall deliver a schedule (the “Earnout Payments” and each such schedule, an “Earnout SchedulePayment”) setting forth Business Revenue for the relevant Earnout Period), which each shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated determined in accordance with the terms of this AgreementSection 2.5. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay Within ten (10) days after the amount of any such Earnout Payment shown as due thereon has been finally determined pursuant to Seller this Section 2.5, if any, Buyer shall make payment to the Paying Agent by wire transfer of immediately available funds an amount equal to an account designated in writing by Seller. (b) Within 30 days following Seller’s receipt of the any such Earnout Income Statement and Earnout Schedule Payment for the relevant Earnout Period, Seller shall deliver written notice to Buyer of any dispute it has with respect disbursement to the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and SellerSeller Indemnifying Parties in accordance with each Seller Indemnifying Party’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”)Fully Diluted Pro Rata Percentage; provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue Paying Agent’s disbursement of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date portion of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller the Former In-the-Money Option Holders in connection with the acquisition respect of their In-the-Money Vested Options who are or were employees of the Business and after Company shall be distributed to the Closing pursuant to this Article 2, Company (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (CAffiliate thereof or successor thereto) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx via payroll in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto2.3(b)(ii).

Earnout. (a) Axsys shall or shall cause Buyer toAt the Closing, as promptly as possible, but not later than five days after 1,500,000 additional PubCo Shares (the earlier of (i“Earnout Shares”) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is will be issued by Axsys for PubCo to the preceding fiscal year ended December 31, deliver to Seller Company Shareholders (other than holders of Dissenting Company Shares) and placed in an income statement in respect of escrow account with Trustee (the Business (each such income statement, an “Earnout Income StatementEscrow Account” and such Earnout Shares placed in the Earnout Escrow Account, the “Escrowed Earnout Shares”) for the most recently completed benefit of such Company Shareholders pursuant to an Escrow Agreement between PubCo, Trustee and the Principal Shareholder, as the representative of the Company Shareholders (the “Earnout Period showing all Business Revenue thereon. Together with Escrow Agreement”) in form and substance reasonably satisfactory to the parties thereto; provided, that the Principal Shareholder shall only be a party to the Earnout Income Statement, Buyer Escrow Agreement in his capacity as the Company Shareholder Representative if duly appointed by the Company Shareholders. Each Company Shareholder (other than holders of Dissenting Company Shares) shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for be shown as the relevant Earnout Period, which shall include a calculation registered owner of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery its pro rata portion of the Escrowed Earnout Income Statement Shares on the books and records of PubCo, as set forth on Section 4.6 of the Company Disclosure Schedules (in respect of each Company Shareholder, its “Pro Rata Portion”), and shall be entitled to exercise voting rights and all share rights with respect to such Escrowed Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by SellerShares. (b) Within 30 days following Seller’s receipt of Subject to adjustment pursuant to Section 4.6(d) below, the Earnout Income Statement and Earnout Schedule for the relevant Earnout Period, Seller shall deliver written notice to Buyer of any dispute it has with respect to the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm Company Shareholders shall have the power right to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis receive their Pro Rata Portion of the applicable Escrowed Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through Shares after the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum offollows: (i) the lesser Pro Rata Portion of 750,000 Earnout Shares (Acollectively, the “2024 Earnout Shares”) 45% will be issued and delivered by PubCo to each Pre-Closing Company Shareholder within five (5) Business Days following the date of all Business Revenue filing of an annual report on Form 20-F or 10-K whichever is applicable by PubCo with the SEC containing an audited report issued by the independent auditor of PubCo for the Second Earnout Period PubCo’s audited consolidated annual financial statements for the fiscal year ending December 31, 2024 prepared in accordance with U.S. GAAP (the “PubCo 2024 Audited Financials”), if and only if, such PubCo 2024 Audited Financial reflects net income in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One ThresholdUS$5,000,000 during fiscal year 2024; plusand (ii) subject to clause (iii) below, the lesser Pro Rata Portion of 750,000 Earnout Shares (Acollectively, the “2025 Earnout Shares”) 30% will be issued and delivered by PubCo to each Pre-Closing Company Shareholder within five (5) Business Days following the date of all Business Revenue filing of an annual report on Form 20-F or 10-K whichever is applicable by PubCo with the SEC containing an audited report issued by the independent auditor of PubCo for the Second Earnout Period PubCo’s audited consolidated annual financial statements for the fiscal year ending December 31, 2025 prepared in accordance with U.S. GAAP (the “PubCo 2025 Audited Financials”), if and only if, such PubCo 2025 Audited Financial reflects net income in excess of $26,488,000 US$10,000,000 during fiscal year 2025; provided, that (iii) if the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods PubCo 2024 Audited Financials do not reflect net income in excess of US$5,000,000 during fiscal year 2024, but the sum PubCo 2025 Audited Financials reflect net income in excess of US$15,000,000 during fiscal year 2025, the Pro Rata Portion of 1,500,000 Earnout Shares will be issued and delivered by PubCo to each Pre-Closing Company Shareholder within five (5) Business Days following the date of filing of the First Period Tier Two Threshold PubCo 2025 Audited Financials. For the avoidance of doubt, and the Second Period Tier Two Threshold. (f) Subject subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined adjustment pursuant to Section 2.6(b)4.6(d) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Thresholdbelow, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser maximum aggregate number of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject Shares available to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller Pre-Closing Company Shareholders pursuant to this Section 2.6 4.6 shall not exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d)1,500,000. (ic) Any payments due Escrowed Earnout Shares remaining in the Earnout Escrow Account following the Final Earnout Release Date, will be surrendered back to Seller under PubCo without consideration by the foregoing provisions Company Shareholders execution of this Section 2.6 not paid upon delivery an irrevocable surrender of shares. The Company Shareholder Representative, on behalf of the applicable Company Shareholders, shall instruct Continental to unconditionally release the surrendered portion of such Escrowed Earnout Income Statement Shares from the Earnout Escrow Account to PubCo, and PubCo shall cancel such surrendered portion of such Escrowed Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue Shares in accordance with Section 2.6(b) by wire transfer the Earnout Escrow Agreement and the Company Shareholder Representative shall execute an irrevocable surrender of immediately available funds to an account designated shares on behalf of the Company Shareholders in writing by Seller to Buyer at least two Business Days prior form and substance satisfactory to the date payment is required Sponsor and surrender such Earnout Shares to be made to Seller hereunderPubCo without consideration. (jd) Each member The applicable number of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amountShares, if any, in complete discharge of Axsys’ obligations under this Section 2.6 shall be subject to equitable adjustment for share splits, share dividends, reorganizations, combinations, recapitalizations and under Section 2.7, equal to similar transactions affecting the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and PubCo Shares after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything prior to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaidEarnout Release Date. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. (1) Additional purchase price ("Earnout") shall be payable to Sellers as set forth below in cash in an amount equal to (a) Axsys two times the amount by which earnings (without any deduction or expense for accrued vacation and sick pay) before interest, taxes, depreciation and amortization attributable to the Business ("Post-Closing EBITDA") for the first full 12 months after the Closing Date ("First Anniversary Earnout Period") exceed $2,501,094; plus (b) two times the amount by which Post-Closing EBITDA for the second 12 months after the Closing Date ("Second Anniversary Earnout Period") exceeds Post-Closing EBITDA for the First Anniversary Earnout Period. Buyer shall or shall cause Buyer topay the Earnout attributable to the First Anniversary Earnout Period, as promptly as possibleif any, but not later than five within 60 days after the earlier first anniversary of the Closing Date and shall pay the Earnout attributable to the Second Anniversary Earnout Period, if any, within 60 days after the second anniversary of the Closing Date unless Sellers dispute Buyer's statement of Post-Closing EBITDA or the Earnout delivered pursuant to Section 4(b)(2), in which case Buyer shall pay the applicable Earnout, if any, within 10 days after resolution of such dispute. The Earnout, if any, shall be paid to Sellers by wire transfer to accounts designated by Sellers or by cashier's checks drawn on a federally insured Florida lending institution. Post-Closing EBITDA shall be calculated in accordance with generally accepted accounting principles ("GAAP") on the accrual basis of accounting and in a manner consistent with the procedures set forth on Schedule 4(b). (2) Within 30 days after (i) the filing by Axsys first anniversary of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or Closing Date in the case of the First Anniversary Earnout Period and (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect second anniversary of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained Closing Date in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery case of the Earnout Income Statement and the Earnout Schedule for the applicable Second Anniversary Earnout Period, Buyer shall pay deliver to Sellers a statement setting forth the applicable calculation of Post-Closing EBITDA for the First Anniversary Earnout Period or the Second Anniversary Earnout Period, as applicable, and the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by Seller. (b) Within 30 days following Seller’s receipt of the Earnout Income Statement and Earnout Schedule for the relevant Earnout PeriodEarnout, Seller shall deliver written notice to Buyer of any dispute it has with respect to the preparation or content of if any, resulting from such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) thereforcalculation. If Seller does not Sellers dispute or question Buyer's statement of Post-Closing EBITDA or the Earnout, Sellers shall so notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises receipt of the statement. If Sellers do not notify Buyer within 30 days after receipt of its objectionsthe statement, then Buyer the statement shall be deemed accepted and Seller payments pursuant to this Subsection shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant be immediately made based on the statement. If Sellers shall timely dispute Buyer's statement of Post-Closing EBITDA or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafterEarnout, Buyer and Seller Sellers shall each prepare meet at Buyer's offices located in Boca Raton, Florida within 30 days after Sellers' notice that they dispute Buyer's statement in an attempt to reconcile such issues. If the efforts do not succeed, then any of the parties after the said thirty 30 day period may demand and submit file a presentation detailing each party’s complete claim that the dispute be resolved by binding arbitration. The dispute shall thereafter be subject to binding arbitration before a sole arbitrator selected in accordance with the Commercial Arbitration Rules of the American Arbitration Association in Palm Beach County, Florida. Immediately after reconciliation by the parties or the arbitrator's determination, as applicable, of the Post-Closing EBITDA and the Earnout, payment shall be made pursuant to this Subsection based upon such reconciliation or determination, as applicable. If it is determined by arbitration that Buyer's statement of proposed resolution of all disputed matters to the Arbitration Firm, Post-Closing EBITDA and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer Earnout was correct, Sellers and Seller. The parties shall share the Shareholders, jointly and severally, agree to pay all costs and expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6Buyer, including compliance with provisions requiring access attorneys' fees and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6expenses, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis such arbitration. If it is determined by arbitration that Buyer's statement of the applicable Earnout Income Statement and Earnout Schedule Post-Closing EBITDA and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closingwas incorrect, Buyer owns agrees to pay all costs and controls the Business expenses of Sellers, including attorneys' fees and the Acquired Assetsexpenses, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaidarbitration. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. (a) Axsys Purchaser shall or shall cause Buyer to, as promptly as possible, but not later than five days after the earlier of (i) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver pay to Seller an income statement in respect of aggregate amount not to exceed the Business (each such income statement, an “Maximum Aggregate Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery of the Earnout Income Statement and the Earnout Schedule for the applicable Earnout Period, Buyer shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by Seller. (b) Within 30 days following Seller’s receipt of the Earnout Income Statement and Earnout Schedule for the relevant Earnout Period, Seller shall deliver written notice to Buyer of any dispute it has with respect to the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding Payments on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer following terms and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant (the “Arbitration Firm”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes of complying with the terms set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available to the other party and its representatives and the Arbitration Firm (if applicable) all information, records, data and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis of the applicable Earnout Income Statement and Earnout Schedule and the resolution of any disputes under this Section 2.6. (d) Subject to Sections 2.6(h) and 2.6(k), if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum ofconditions: (i) 45% for each of all Business Revenue for (A) the First Earnout Period in excess of period constituting the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for first twelve full months following the First Earnout Period in excess of $15,777,000 Closing Date (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder shall be reduced by an amount equal to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d). (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for period beginning the First and Second Earnout Periods in excess of day after the sum end of the First Earnout Period Tier Two Threshold and ending on the twelve month anniversary thereof (the “Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) Earnout Period” and 2.6(k), if, for together with the Third First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the each, an “Third Period Tier One ThresholdEarnout Period”), then Axsys Purchaser shall pay or cause to be paid make a cash payment (each, an “Earnout Payment”) to Seller based on the sum of:Business EBITDA for that Earnout Period; (iii) the lesser of for each Earnout Period, (A) 45% if the Business EBITDA for that Earnout Period is equal to or exceeds the Target Business EBITDA for such Earnout Period, the Earnout Payment shall be an amount equal to the Maximum Annual Earnout Payment for such Earnout Period, (B) if the Business EBITDA for that Earnout Period is greater than the Minimum Target Business EBITDA for that Earnout Period but less than the Target Business EBITDA for that Earnout Period, the Earnout Payment shall be an amount equal to (I) the Maximum Annual Earnout Payment for that Earnout Period multiplied by (II) a fraction, the numerator of all which is the Business Revenue EBITDA for the Third that Earnout Period in excess of the Third Minimum Target Business EBITDA for that Earnout Period Tier One Threshold and (B) 45% the denominator of which is the aggregate difference between the Target Business Revenue EBITDA for that Earnout Period and the Minimum Target Business EBITDA for that Earnout Period or (C) if the Business EBITDA for that Earnout Period is equal to or less than the Minimum Target Business EBITDA for that Earnout Period, the Earnout Payment shall equal zero (in the event that the Business EBITDA for an Earnout Period is less than the Target Business EBITDA for that Earnout Period, it is referred to herein as a “Business EBITDA Shortfall”); (iii) if in either Earnout Period, the Business EBITDA for such Earnout Period exceeds the Target Business EBITDA for the FirstEarnout Period, Second such excess (“Excess Business EBITDA”) may be applied to the previous or subsequent Earnout Period in which there was a Business EBITDA Shortfall in the following manner: (A) if the Excess Business EBITDA is applied to the previous Earnout Period and Third Earnout Periods in excess of if the sum of the First Business EBITDA for that previous Earnout Period Tier One Thresholdplus the Excess Business EBITDA would have resulted in an Earnout Payment greater than the Earnout Payment actually earned in the previous Earnout Period as calculated under Section 2.5(a)(ii), Purchaser shall make a “catch-up” payment (a “Catch-Up Payment”) to Seller in an amount equal to (x) the Second Earnout Payment that Seller would have earned in the previous Earnout Period Tier One Threshold and if the Third Excess Business EBITDA had applied to such Earnout Period Tier One Thresholdless (y) the Earnout Payment actually earned in the previous Earnout Period; plusand (iiB) if the lesser of (A) 30% of all Excess Business Revenue for EBITDA is applied to the Third future Earnout Period in which a Business EBITDA Shortfall exists, such excess of $33,816,000 (shall be added to the “Third Business EBITDA for the later Earnout Period Tier Two Threshold”) and (B) 30% to determine the amount of the aggregate Business Revenue for the FirstEarnout Payment, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Thresholdif any, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold.payable under Section 2.5(a)(ii); (giv) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period notwithstanding anything in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein this Agreement to the contrary, in no event shall the Purchaser be obligated to pay to Seller aggregate Earnout Payments paid(including any Catch-Up Payment) in excess of the Maximum Aggregate Earnout Payments; and (v) the Earnout Payments and Catch-Up Payment, or caused if any, are subject to be paidset-off in accordance with Sections 2.5(f) and 12.6. (b) Within ninety (90) days after the end of each Earnout Period, Purchaser shall provide to Seller a statement, including work papers and schedules supporting such statement certified by Axsys Purchaser’s Chief Financial Officer (each an “Earnout Statement”), setting forth Purchaser’s calculation of (i) the Business EBITDA for that Earnout Period; and (ii) the Earnout Payment (and any Catch-Up Payment) for that Earnout Period based thereon. (c) Within thirty (30) days after an Earnout Statement is delivered to Seller pursuant to this Section 2.6 exceed 2.5(b), Seller shall complete its examination thereof and shall deliver to Purchaser either (i) a maximum amount equal written acknowledgement accepting such Earnout Statement; or (ii) a written report setting forth in reasonable detail any proposed adjustments to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid such Earnout Statement (each an “Earnout Adjustment Report”). If Seller fails to respond to Purchaser within such thirty (30) day period, Seller shall be deemed to have accepted and agreed to such Earnout Statement (and the calculations thereon) as delivered pursuant to Section 2.6(d2.5(b). During such thirty (30) day period, Purchaser shall provide to Seller reasonable access to the appropriate personnel, accountants, financial books and records of Purchaser and the Company, as well as any additional relevant information and work papers as it may reasonably request, to enable it to properly evaluate each Earnout Statement. (id) Any payments due In the event Seller and Purchaser fail to agree on any of Seller’s proposed adjustments contained in an Earnout Adjustment Report within thirty (30) days after Purchaser receives such Earnout Adjustment Report, then Seller under and Purchaser agree that the foregoing Independent Auditors shall make the final determination with respect to the correctness of the proposed adjustments in such Earnout Adjustment Report in light of the terms and provisions of this Section 2.6 not paid upon delivery Agreement. Purchaser and Seller shall use their commercially reasonable efforts to cause the Independent Auditors to resolve all disagreements as soon as practicable, but in any event within sixty (60) days after submission of the applicable Earnout Income Statement dispute to the Independent Auditors. The decision of the Independent Auditors shall be final and Earnout Schedule under Section 2.6(abinding on Seller and Purchaser. The fees and expenses of the Independent Auditors incurred in connection with the determination of the disputed items by the Independent Auditors shall be borne by Purchaser, on the one hand, and Seller, on the other hand, based upon the percentage that the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Auditors. (e) are All payments to be made within five Business Days of pursuant to this Section 2.5 with respect to any Earnout Period shall be by the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds within fifteen (15) Business Days following the final determination of the Earnout Payment (and any Catch-Up Payment) for such Earnout Period to an account designated in writing by Seller to Buyer at least two Business Days prior Purchaser in writing in advance of the payment thereof; provided that (i) with respect to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges thatEarnout Payment, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges thatif any, for each the First Earnout Period, Buyer said Earnout Payment shall not be obligated paid until determination of the Insurance Deficiency, if any, pursuant to expend more than 5% of Business Revenue on sales Section 2.5(f) for the Seller policy years 2015/2016 and marketing expenses relating 2016/2017, and (ii) respect to the Business. (k) In Earnout Payment, if any, for the event that, prior to the end of the Third Second Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelvesaid Earnout Payment (including any Catch-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller Up Payment) shall be credited with all revenue generated subject to set off by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge by which the Deficiency Offset Amount, if any, exceeds the amount determined to be the Earnout Payment for the First Earnout Period (f) Seller and Purchaser agree that Purchaser shall have the right to set off against any Earnout Payment (including the Catch-Up Payment) the Deficiency Offset Amount. Seller shall prepare and deliver to Purchaser on or about August 1, 2018 a written report (together with all supporting documentation) setting forth a calculation for the 2015/2016 policy year of Axsys’ obligations under this Section 2.6 the Business (but excluding claims prior to January 1, 2016) and under Section 2.7the 2016/2017 policy year of the Business (but excluding claims after December 31, equal to the sum of: 2016) of any Deficiency Offset Amount. The “Deficiency Offset Amount” shall be (i) 50% of zero if the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by Insurance Deficiency is less than zero, or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% if the Insurance Deficiency is greater than zero, the product of any net proceeds 6.75 multiplied by the Insurance Deficiency, but (as calculated under clause (i)iii) in excess of no event greater than $85,000,0005,400,000. Notwithstanding anything Truline losses shall be excluded from the determination. Any dispute as to the contrary contained herein, except determination of an Insurance Deficiency shall be submitted to the extent Independent Auditor to be resolved as provided in this Section 2.6(l2.5(d), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.

Earnout. (a) Axsys At the Closing, Parent shall issue electronically through The Depository Trust Company (“DTC”), using DTC’s Deposit/Withdrawal At Custodian System, to the Earnout Securityholders and such Earnout Securityholders will deliver to the Earnout Escrow Agent (as defined below), the Earnout Warrants (as such Earnout Warrants may be adjusted for any stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination) which Earnout Warrants shall cause Buyer tobe released to the Earnout Securityholders based on their Pro Rata Earnout Portion of the Per Share Earnout Consideration as set forth in the Consideration Spreadsheet, if, at any time during the five (5) year period following the Closing (the “Earnout Period”), the VWAP of PubCo Common Stock for any 20 Trading Days within any 30 Trading Day period is greater than $12.50 (the “Earnout Trigger”). The parties agree that the Earnout Securityholders shall be treated, on a pro rata basis, as promptly as possible, but not later than five days after the earlier of (i) the filing by Axsys of its Annual Report on Form 10-K for the preceding fiscal year ended December 31 or (ii) the date an earnings press release, which contains revenue numbers, is issued by Axsys for the preceding fiscal year ended December 31, deliver to Seller an income statement in respect of the Business (each such income statement, an “Earnout Income Statement”) for the most recently completed Earnout Period showing all Business Revenue thereon. Together with the Earnout Income Statement, Buyer shall deliver a schedule (each such schedule, an “Earnout Schedule”) setting forth Business Revenue for the relevant Earnout Period, which shall include a calculation of any Earnout Payment proposed to be paid for the relevant Earnout Period, in each case derived from the information contained in the applicable Earnout Income Statement but calculated in accordance with the terms of this Agreement. Concurrently with the delivery owners of the Earnout Income Statement and Warrants for so long as they are in the Earnout Schedule Escrow Account for the applicable Earnout Periodincome Tax purposes, Buyer and shall pay the amount of any Earnout Payment shown as due thereon to Seller by wire transfer of immediately available funds to an account designated in writing by Sellerfile all Tax Returns consistent with such treatment. (b) Within 30 days following Seller’s Upon receipt of the Earnout Income Statement and Earnout Schedule for the relevant Earnout PeriodWarrants, Seller shall deliver written notice an escrow agent mutually agreed to Buyer of any dispute it has with respect to the preparation or content of such Earnout Income Statement or Earnout Schedule, which notice must specify the disputed item or items and Seller’s proposed revision(s) to such Earnout Income Statement and/or Earnout Schedule by Parent and the reason(s) therefor. If Seller does not notify Buyer of a dispute with respect to such Earnout Income Statement or Earnout Schedule within such 30-day period, such Earnout Income Statement and Earnout Schedule will be deemed final, conclusive and binding on the parties. If Seller delivers a notice of dispute within such 30-day period, Buyer and Seller shall negotiate in good faith to resolve such dispute. If Buyer and Seller, notwithstanding such good faith effort, fail to resolve such dispute within 30 days after Seller advises Buyer of its objections, then Buyer and Seller shall jointly engage a mutually acceptable nationally recognized independent accounting firm, other than Buyer accountant or Seller’s accountant Company (the “Arbitration FirmEarnout Escrow Agent”) will place such Earnout Warrants in an escrow account (the “Earnout Escrow Account”) established pursuant to an escrow agreement in a form reasonably acceptable to Parent, the Company and the Earnout Escrow Agent, to be entered into at the Closing by Parent, the Stockholders’ Representative and the Earnout Escrow Agent (the “Earnout Escrow Agreement”), to resolve such dispute. As promptly as practicable thereafter, Buyer and Seller shall each prepare and submit a presentation detailing each party’s complete statement of proposed resolution of all disputed matters to the Arbitration Firm, and the Arbitration Firm can only consider those items in dispute based solely upon the presentations by Buyer and Seller. The parties shall share the expenses of the Arbitration Firm equally. All determinations made by the Arbitration Firm will be final, conclusive and binding on the parties. The Arbitration Firm shall have the power to compel compliance with this Section 2.6, including compliance with provisions requiring access and disclosure. (c) For purposes Promptly upon the occurrence of complying with the terms Earnout Trigger, PubCo and the Stockholders’ Representative shall prepare and deliver, or cause to be prepared and delivered, a joint written release instruction to the Earnout Escrow Agent (a “Release Notice”), which Release Notice shall set forth in this Section 2.6, Buyer and Seller shall cooperate with and make available reasonable detail the triggering event giving rise to the other party and its representatives requested release and the Arbitration Firm specific release instructions with respect thereto (if applicable) all information, records, data including the number of Earnout Warrants to be released and working papers, books and records reasonably required to confirm the Business Revenue, including Buyer’s financial statements, its general ledger and invoices, in each case as related to the Business, and will permit access to its facilities and personnel, including meeting with the appropriate senior officers of Buyer and Axsys for the purpose of understanding the computation of Business Revenue, in each case, as may be reasonably required in connection with the preparation and analysis identity of the applicable Earnout Income Statement Securityholder to whom they should be released). The Earnout Warrants that are not earned on or before the expiration of the Earnout Period shall be automatically forfeited and Earnout Schedule and the resolution of any disputes under this Section 2.6cancelled. (d) Subject If the number of Earnout Warrants to Sections 2.6(h) and 2.6(k)which an Earnout Securityholder is entitled hereunder is a fractional amount, if, for the First Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $11,844,000 (the “First Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) 45% of all Business Revenue for the First Earnout Period in excess of the First Period Tier One Threshold; plus (ii) 30% of all Business Revenue for the First Earnout Period in excess of $15,777,000 (the “First Period Tier Two Threshold”); provided, however, that the Earnout Payment for the First Earnout Period otherwise payable hereunder such amount shall be reduced by an amount equal rounded down to the aggregate of all sales commissions and employee bonuses on the revenue of the Business prior to the Closing earned under the sales commission and non-sales employee bonus plans of the Business (the “Sales Commission Plans”) based on sales by Seller between January 1, 2007 through the Closing Date and not paid to any Transferred Employee on or prior to the Closing Date or accrued for on the Final Working Capital Statement, calculated as set forth on Schedule 2.6(d) (“Sales Commissions”), which Sales Commissions shall be paid in full, irrespective of the period relative to the Closing to which such Sales Commissions relate, by Axsys or Buyer to the applicable Transferred Employee(s) entitled thereto under the terms of the Sales Commission Plans. Buyer will not amend or nullify in any material respect (including as to thresholds or amounts due) the Sales Commission Plans as set forth on Schedule 2.6(d)nearest whole number. (e) Subject to Sections 2.6(h) and 2.6(k), if, for the Second Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $17,218,000 (the “Second Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Second Earnout Period in excess of the Second Period Tier One Threshold, and (B) 45% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier One Threshold and the Second Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Second Earnout Period in excess of $26,488,000 (the “Second Period Tier Two Threshold”), and (B) 30% of the aggregate Business Revenue for the First and Second Earnout Periods in excess of the sum of the First Period Tier Two Threshold and the Second Period Tier Two Threshold. (f) Subject to Sections 2.6(h) and 2.6(k), if, for the Third Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $16,208,000 (the “Third Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Third Earnout Period in excess of the Third Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier One Threshold, the Second Period Tier One Threshold and the Third Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Third Earnout Period in excess of $33,816,000 (the “Third Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the First, Second and Third Earnout Periods in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold and the Third Period Tier Two Threshold. (g) Subject to Sections 2.6(h) and 2.6(k), if, for the Fourth Earnout Period, Business Revenue (as finally determined pursuant to Section 2.6(b)) exceeds $4,430,000 (the “Fourth Period Tier One Threshold”), then Axsys shall pay or cause to be paid to Seller the sum of: (i) the lesser of (A) 45% of all Business Revenue for the Fourth Earnout Period in excess of the Fourth Period Tier One Threshold and (B) 45% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier One Threshold, the Second Period One Threshold, the Third Period Tier One Threshold and the Fourth Period Tier One Threshold; plus (ii) the lesser of (A) 30% of all Business Revenue for the Fourth Earnout Period in excess of $10,159,000 (the “Fourth Period Tier Two Threshold”) and (B) 30% of the aggregate Business Revenue for the Total Earnout Period in excess of the sum of the First Period Tier Two Threshold, the Second Period Tier Two Threshold, the Third Period Tier Two Threshold and the Fourth Period Tier Two Threshold. (h) Notwithstanding anything herein to the contrary, in no event shall the aggregate Earnout Payments paid, or caused to be paid, by Axsys to Seller pursuant to this Section 2.6 exceed a maximum amount equal to $42,500,000 minus the aggregate amount of any Sales Commissions actually paid pursuant to Section 2.6(d). (i) Any payments due to Seller under the foregoing provisions of this Section 2.6 not paid upon delivery of the applicable Earnout Income Statement and Earnout Schedule under Section 2.6(a) are to be made within five Business Days of the final determination of Business Revenue in accordance with Section 2.6(b) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two Business Days prior to the date payment is required to be made to Seller hereunder. (j) Each member of Seller Group acknowledges that, effective as of the Closing, Buyer owns and controls the Business and the Acquired Assets, and that Buyer may operate the Business and the Acquired Assets in such manner as it determines in its sole discretion to be in its best interests. Without limiting the generality of the foregoing, from and after the Closing, Seller Group agrees and acknowledges that, for each Earnout Period, Buyer shall not be obligated to expend more than 5% of Business Revenue on sales and marketing expenses relating to the Business. (k) In the event that, prior to the end of the Third Earnout Period, Buyer or its Affiliate acquires another company or business and combines such other company or business with the Business, then each of the First Period Tier One Threshold, the First Period Tier Two Threshold, the Second Period Tier One Threshold, the Second Period Tier Two Threshold, the Third Period Tier One Threshold, the Third Period Tier Two Threshold, the Fourth Period Tier One Threshold and the Fourth Period Tier Two Threshold shall, as of the effective date of such acquisition, be increased by an amount equal to the actual Business Revenue of such acquired company or business for the trailing twelve-month period immediately preceding the effective date of such acquisition (prorated as necessary and appropriate for a partial Earnout Period), and, for purposes of this Section 2.6, Seller shall be credited with all revenue generated by such acquired company or business that constitutes Business Revenue. (l) If, prior to the end of the Fourth Earnout Period, Buyer sells the Business or any material portion thereof to a Person that is not an Affiliate of Axsys (other than in ordinary course transactions involving sales of inventory or the replacement of equipment and other tangible personal property used in the Business), then Axsys shall pay or cause to be paid to Seller a liquidated amount, if any, in complete discharge of Axsys’ obligations under this Section 2.6 and under Section 2.7, equal to the sum of: (i) 50% of the net proceeds realized by Buyer upon such sale in excess of (A) any amounts paid by or caused to be paid by Axsys to Seller in connection with the acquisition of the Business and after the Closing pursuant to this Article 2, (B) any amounts paid by or caused to be paid by Axsys or any of its Affiliates in connection with the consummation of any acquisition contemplated by Section 2.6(k), (C) any amounts paid by Buyer or any of its Affiliates for capital expenditures for the benefit of the Business between the Closing and the consummation of such sale, and (D) any Sales Commissions, subject to a maximum payment under this clause (i) of $42,500,000; plus (ii) 5% of any net proceeds (as calculated under clause (i)) in excess of $85,000,000. Notwithstanding anything to the contrary contained herein, except to the extent provided in this Section 2.6(l), Buyer shall have no further obligation under this Section 2.6 or under Section 2.7 from and after the consummation of any such sale of the Business or material portion thereof other than earnout obligations accrued prior to such sale but unpaid. (m) Upon written notice to Buyer, Seller may designate Helinet and Xxxx Xxxxx to be the direct recipients of any payments otherwise owed by Buyer or Axsys to Seller under this Section 2.6 or Section 2.7, with Helinet being entitled to 75% of the aggregate amount of any such payments and Xxxx Xxxxx being entitled to 25% of the aggregate amount of any such payments. If Buyer or Axsys makes payment to Helinet and/or Xxxx Xxxxx in accordance with such written notice from Seller, such payment shall fully discharge Buyer’s and Axsys’s obligations under this Section 2.6 and/or Section 2.7 to make such payment to Seller, and neither Buyer nor Axsys shall have any further liability to any member of Seller Group with respect thereto.