Common use of Deferred Purchase Price Clause in Contracts

Deferred Purchase Price. The deferred purchase price (the “Deferred Purchase Price”) shall be equal to the sum of (A) an amount, not to exceed Six Million and No/100ths Dollars ($6,000,000.00) (the “Maximum Initial Deferred Payment”), equal to the amount by which Pre-Tax Underwriting Income for the period (the “Earnout Period”) beginning on the Closing Date and extending to and including December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and ending on December 31, 2016, exceeds Fourteen Million and No/100ths Dollars ($14,000,000.00), and (B) the Additional Deferred Payment Amount. The Deferred Purchase Price shall be payable in the following separate installments (each of which shall be a “Deferred Purchase Price Payment”): (i) On or before September 1, 2016, the Buyer shall pay to the Seller an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including June 30, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015; (ii) On or before March 1, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period from the Closing Date to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015, less (2) the amount paid to Seller in subsection (b)(i) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016; (iii) On or before September 1, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016, less (2) the amount paid to Seller in subsection (b)(ii)(B) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016; (iv) On or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to the difference between (A) the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), less the amount paid to the Seller in subsection (b)(iii)(B) above; (v) In the event the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), exceeds Twenty Million Dollars ($20,000,000.00), then on or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to twenty five percent (25%) of such excess amount (the “Additional Deferred Payment Amount”); and (vi) For purposes of calculating the Pre-Tax Underwriting Income for the periods referenced in subsections (b)(iv) and (b)(v) above, to the extent there is unearned premium as of December 31, 2017 with respect to Bluestone Premium written on or prior to December 31, 2016, then the Pre-Tax Underwriting Income for such period shall be adjusted by (A) adding thereto the amount of such unearned premium, and (B) subtracting therefrom (1) an estimate of the losses projected to be incurred with respect to such unearned premium based on the loss ratios as of December 31, 2017 applicable to the lines of business that principally comprise such unearned premium, and (2) any costs or expenses directly attributable to such unearned premium (e.g., deferred acquisition costs). Buyer and Seller shall work in good faith to determine the adjustments set forth in this subsection (b)(vi).

Deferred Purchase Price. (a) The deferred purchase price payment of a portion of the Purchase Price (the “Deferred Purchase Price”) shall be deferred and shall be paid by Purchaser at such times, in such manner and in such amounts as are set forth in this Section 2.04. (b) Purchaser shall pay the Deferred Purchase Price in three annual installments, on the fifth Business Day after each of the first, second and third anniversaries of the Closing Date (each such payment date being an “Installment Payment Date”). (c) On each Installment Payment Date, Purchaser shall pay to Sellers, in payment of the installment of the Deferred Purchase Price then due, an amount (the “Installment Amount”) equal to the sum greater of (A) an amount, not to exceed Six Million and No/100ths Dollars ($6,000,000.00) (the “Maximum Initial Deferred Payment”), equal to the amount by which Pre-Tax Underwriting Income for the period (the “Earnout Period”) beginning on the Closing Date and extending to and including December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and ending on December 31, 2016, exceeds Fourteen Million and No/100ths Dollars ($14,000,000.00), and (B) the Additional Deferred Payment Amount. The Deferred Purchase Price shall be payable in the following separate installments (each of which shall be a “Deferred Purchase Price Payment”): (i) On $4,000,000 or before September 1, 2016, the Buyer shall pay to the Seller an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including June 30, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015; (ii) On or before March 1, 2017, the Buyer shall pay to value of the Seller an amount Measurement Shares based on the related Delivery Date Average Share Price. (d) If the value of the Measurement Shares is equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period from the Closing Date to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015, less (2) the amount paid to Seller in subsection (b)(i) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016; (iii) On or before September 1, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016, less (2) the amount paid to Seller in subsection (b)(ii)(B) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016; (iv) On or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to the difference between (A) the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), less the amount paid to the Seller in subsection (b)(iii)(B) above; (v) In the event the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), exceeds Twenty greater than Four Million Dollars ($20,000,000.004,000,000), based on the related Delivery Date Average Share Price for a given Installment Payment Date, then Purchaser shall deliver to Sellers the Measurement Shares in payment of the Installment Amount due on or before March 1that Installment Payment Date. If the value of the Measurement Shares is less than Four Million Dollars ($4,000,000), 2018based on the related Delivery Date Average Share Price for a given Installment Payment Date, then Purchaser, at its sole option and discretion, may pay the Buyer shall pay related Installment Amount (i) in cash, (ii) by delivering to the Seller an amount Sellers that number of MuniMae Common Shares as is equal to twenty five percent or most nearly exceeding the quotient of Four Million Dollars (25%$4,000,000) divided by the related Delivery Date Average Share Price, or (iii) in any combination of such excess amount (the “Additional Deferred Payment Amount”); and (vi) For purposes of calculating the Pre-Tax Underwriting Income for the periods referenced in subsections (b)(ivi) and (b)(vii) above. If on any given Installment Payment Date MuniMae Common Shares are no longer listed or traded on a national securities exchange or the NASDAQ stock market, to Purchaser shall pay the extent there is unearned premium as of December 31related Installment Amount in cash. Purchaser shall pay the Installment Amount (i) if in cash, 2017 with respect to Bluestone Premium written on or prior to December 31, 2016, then the Pre-Tax Underwriting Income for such period shall be adjusted by (A) adding thereto the amount of such unearned premiumwire transfer in immediately available funds, and (Bii) subtracting therefrom (1) an estimate of the losses projected to be incurred with respect if in MuniMae Common Shares, by transfer, in each case, to such unearned premium based on the loss ratios accounts as of December 31, 2017 applicable Sellers shall designate in writing to the lines of business that principally comprise such unearned premium, and Purchaser at least two (2) any costs or expenses directly attributable Business Days prior to such unearned premium (e.g.the applicable Installment Payment Date. Exhibit F attached hereto sets forth an example, deferred acquisition costs). Buyer and Seller shall work in good faith to determine by way of illustration only, of the adjustments set forth in application of the provisions of this subsection (b)(viSection 2.04(d).

Deferred Purchase Price. The (a) As additional consideration for the sale, assignment, transfer and delivery of the Assets by Seller to Buyer, Buyer will pay Seller a deferred purchase price based on the percentage of Buyer's Total Covered Sales according to the percentages and minimum amounts set forth on Schedule 2.4 (the “"Deferred Purchase Price”) shall be equal to "). Payment of the sum of (A) an amount, not to exceed Six Million and No/100ths Dollars ($6,000,000.00) (the “Maximum Initial Deferred Payment”), equal to the amount by which Pre-Tax Underwriting Income for the period (the “Earnout Period”) beginning on the Closing Date and extending to and including December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and ending on December 31, 2016, exceeds Fourteen Million and No/100ths Dollars ($14,000,000.00), and (B) the Additional Deferred Payment Amount. The Deferred Purchase Price shall be payable in made quarterly based on a calendar year, with payments being due forty-five (45) days after the following separate installments (end of each of which shall be a “Deferred Purchase Price Payment”):quarter. (i) On or before September 1, 2016, the Buyer shall pay make payments of the Deferred Purchase Price in accordance with Schedule 2.4(a) for a period (the "Deferred Payment Period") equal to the Seller an amount equal to forty percent longer of: (40%a) four (4) years, or (b) until the combined total of payments of the Pre-Tax Underwriting Income for the period beginning on the Closing Date Deferred Purchase Price and extending to and including June 30, 2016, Royalty Payments (as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015;defined in Section 2.5 below) equals Two Million Dollars ($2,000,000) ("Minimum Deferred Purchase Price"). (ii) On or before March 1, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Preat least twenty-Tax Underwriting Income for the period from the Closing Date to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015, less (2) the amount paid to Seller in subsection (b)(i) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016; (iii) On or before September 1, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016, less (2) the amount paid to Seller in subsection (b)(ii)(B) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016; (iv) On or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to the difference between (A) the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), less the amount paid to the Seller in subsection (b)(iii)(B) above; (v) In the event the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), exceeds Twenty Million Dollars ($20,000,000.00), then on or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to twenty five percent (25%) of such excess amount (the “Additional minimum Deferred Purchase Price Payment for each year as set forth in Schedule 2.4(b) on a quarterly basis; provided, that, in the year in which the Minimum Deferred Purchase Price is met and for the remainder of that Deferred Payment Amount”); andPeriod, the annual minimum payment requirement shall not apply. Any minimum quarterly payments to be paid shall be paid forty-five (45) days after the end of each calendar quarter. (viiii) For purposes Upon a Change in Control in Buyer, Buyer shall pay Seller the difference between the Minimum Deferred Purchase Price and the sum of calculating the Pre-Tax Underwriting Income for Deferred Purchase Price Payments and Royalty Payments through the periods referenced effective date of the Change in subsections Control Transaction. If the Deferred Payment Period has not exceeded the four (b)(iv4) and year period when the Change in Control occurs, then the successor in interest to the Buyer shall continue to make payments of the Deferred Purchase Price according to Schedule 2.4(a) through the end of the four (b)(v4) aboveyear period from the Closing Date hereof, but only to the extent there and in the amount that the Deferred Purchase Price, determined under Schedule 2.4(a) exceeds the applicable Annual Minimum Payment, set forth in Schedule 2.4(b). (b) Payments shall be made by wire transfer or delivery of other immediately available funds as directed by Seller. (c) Buyer shall have its financial records reviewed by a certified public accountant each year during the Deferred Payment Period. Promptly after the end of each calendar year during the Deferred Payment Period, Buyer shall provide Seller with statements prepared by Buyer's certified public accountant for the preceding year containing a compilation of sales and a statement of the Total Covered Sales ("Statement "). During the Deferred Payment Period, Seller shall have the right to review those books and records of the Buyer necessary for purposes of determining the Total Covered Sales and Royalty Payments during regular business hours and upon reasonable notice. Seller may object to any item or information contained in the Statement by providing Buyer a written statement in reasonable detail of Seller's objections thereto (an "Objection Notice"). Seller's failure to deliver an Objection Notice to the Buyer within thirty (30) days after the Buyer's delivery of the Statement to Seller shall constitute Seller's binding acceptance of the Statement and all matters identified therein. If the Buyer and Seller fail to resolve any objection described in the Objection Notice within ten (10) days after the date the Objection Notice is unearned premium as of December 31, 2017 with respect delivered to Bluestone Premium written on or prior to December 31, 2016Buyer, then at the Pre-Tax Underwriting Income for such period shall be adjusted by (A) adding thereto the amount request of such unearned premiumeither party, and (B) subtracting therefrom (1) an estimate of the losses projected to be incurred with respect to such unearned premium based on the loss ratios as of December 31, 2017 applicable to the lines of business that principally comprise such unearned premium, and (2) any costs or expenses directly attributable to such unearned premium (e.g., deferred acquisition costs). Buyer and Seller shall work meet in good faith an attempt to determine resolve an objection described in the adjustments set forth Objection Notice and reach a written agreement with respect thereto. If the parties enter into a settlement agreement, the Statement shall be deemed to be as agreed thereon. If the parties are unable to resolve the objection described in the Objection Notice, then the Buyer and Seller shall select an independent accounting firm ("Independent Accountants") and submit the Statement and Objection Notice to the independent accounting firm; provided, however, that such selected accounting firm shall not be performing services for either Seller or Buyer (i) at the time of the selection, (ii) within twenty-four (24) months of the time of selection, or (iii) during the period commencing on the selection and ending upon its delivery of the Independent Accountant Decision . The Independent Accountings referred to in the previous sentence shall resolve such objection as promptly as possible and a decision by the Independent Accountants as to the resolution of such objection shall be conclusive and binding upon the parties for purposes of this subsection Agreement (b)(vithe "Independent Accountant's Determination"). The Independent Accountant's Determination shall be (i) in writing, (ii) made in accordance with GAAP, and (iii) nonappealable and incontestable by either party. All fees and costs payable to the Independent Accountants shall be borne by the nonprevailing party (it being understood that the "nonprevailing party" shall be the party who benefits less from the Independent Accountant's Determination.

Deferred Purchase Price. The deferred purchase price (Any amounts due and owing by Buyer to Seller pursuant to this Section 3.4 shall be the “Deferred Purchase Price”) shall be equal to the sum of (A) an amount, not to exceed Six Million and No/100ths Dollars ($6,000,000.00) (the “Maximum Initial Deferred Payment”), equal to the amount by which Pre-Tax Underwriting Income for the period (the “Earnout Period”) beginning on the Closing Date and extending to and including December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and ending on December 31, 2016, exceeds Fourteen Million and No/100ths Dollars ($14,000,000.00), and (B) the Additional Deferred Payment Amount. .” The Deferred Purchase Price shall be payable in the following separate two installments (each of which shall be a “Deferred Purchase Price Payment”):as follows: (ia) On or before September 1the end of the second full month following the Initial Revenue Period, 2016, the Buyer shall pay to the Seller an amount equal to forty percent two times the Revenues generated during the Initial Revenue Period (40%) of the Pre-Tax Underwriting Income for the period beginning on the Closing Date and extending to and including June 30, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015;“Initial Revenue Payment”). (iib) On or before March 1the end of the second full month following the Secondary Revenue Period, 2017, the Buyer shall pay to the Seller an amount equal to the sum excess of (i) the Revenues generated during the Secondary Revenue Period over (ii) the Revenues generated during the Initial Revenue Period (the “Secondary Revenue Payment” and, together with the Initial Revenue Payments, the “Revenue Payments”). (c) On or before the end of the second full month following the Initial Revenue Period or the Secondary Revenue Period, as applicable, Buyer shall deliver to Seller a calculation of the applicable Revenue Payment, certified by an officer of Buyer (a “Revenue Payment Statement”). (d) A Revenue Payment Statement shall become final and binding upon the parties on the 30th day following receipt thereof by Seller unless Seller gives a Notice of Disagreement to Buyer before that date. The Notice of Disagreement must set forth in reasonable detail the nature of any disagreement with the Revenue Payment Statement. If a valid Notice of Disagreement is received by Buyer in a timely manner, then the Revenue Payment Statement (as finally determined in accordance with clause (i) or (ii) below) shall become final and binding upon the parties on the earlier of (i) the date Buyer and Seller resolve in writing any differences they have with respect to all matters specified in the Notice of Disagreement or (ii) the date any disputed matters are finally resolved in writing by the Arbitrator. (e) During the 30-day period following the delivery of a Notice of Disagreement, Buyer and Seller shall seek in good faith to resolve in writing any differences that they may have with respect to any matter specified in the Notice of Disagreement. If, at the end of such 30-day period, Buyer and Seller have not reached agreement on all such matters, then the matters that remain in dispute shall be promptly submitted to the Arbitrator for review and resolution. The procedures for the arbitration shall be determined by the Arbitrator. The parties shall use commercially reasonable efforts to cause the Arbitrator to render a decision resolving the matters in dispute within 30 days following completion of the submissions to the Arbitrator. (f) Buyer and Seller shall each pay one half of the fees and expenses of the Arbitrator. Each party shall pay its own expenses incurred with respect to any submission to the Arbitrator. (g) Buyer shall give Seller (and its accountants, attorneys, and authorized representatives) reasonable access during business hours to the properties, books, records, and personnel of Buyer relating to the Assets solely for purposes of preparing, reviewing, and resolving any disputes relating to a Revenue Payment Statement, but only if Seller enters into a customary confidentiality agreement with respect thereto. (h) The Revenue Payments shall be payable as follows: (i) Following the fatal determination of the amount of each of the Initial Revenue Payment and the Secondary Revenue Payment, Buyer shall provide Seller with the report of the investment banking firm engaged to determine Fair Value as of the last day of the Initial Revenue Period and Secondary Revenue Period, as applicable. Buyer shall use its Best Efforts to engage such investment banking firm a sufficient time in advance so that the events contemplated by this Section 3.4(h) are not materially delayed. (ii) Within five Business Days after the delivery of such report, Seller shall give Buyer a written notice (a “Share Purchase Election”) stating the amount of the applicable Revenue Payment (if any) that it will use to purchase Common Shares (as to a Revenue Payment, the “Share Portion”), and also designating the account into which such Revenue Payment is to be deposited. (iii) Within five Business Days after receipt of a Share Purchase Election, Buyer shall pay the full amount of the applicable Revenue Payment as specified in the Share Purchase Election by wire transfer of immediately available funds into the account designated by Seller for such purpose in the Share Purchase Election. (iv) Within 10 Business Days after receipt of a Share Purchase Election, Parent shall issue to Seller the number of Common Shares equal to (A) the difference between applicable Share Portion divided by (1B) the Pre-Tax Underwriting Income for Fair Value as of the period from date of the Closing Date to and including December 31, 2016final determination of the Initial Revenue Payment or the Secondary Revenue Payment, as reflected on applicable, rounded to the Pre-Tax Underwriting Income Statement dated as of December 31, 2016nearest whole share (such quotient, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015, less (2) the amount paid to Seller in subsection (b)(i) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016; (iii) On or before September 1, 2017each Share Purchase Election, the Buyer shall pay to the “Subsequent Common Shares”) in exchange for a cash payment from Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016, less (2) the amount paid to Seller in subsection (b)(ii)(B) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016; (iv) On or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to the difference between (A) the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), less the amount paid to the Seller in subsection (b)(iii)(B) above;applicable Share Portion. (v) In the event of a Change of Control, Seller shall be offered the Pre-Tax Underwriting Income for opportunity to receive any future Initial Revenue Payment or Secondary Revenue Payment in cash, in voting securities of the period beginning on surviving or acquiring entity in a Business Combination giving rise to the Closing Date and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as Change of December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2016 Control (as adjusted as set forth in subsection (b)(vi) belowor such entity’s direct or indirect parent), exceeds Twenty Million Dollars or both in the same proportions as received by Parent or its shareholders. ($20,000,000.00), then on or before March 1, 2018, the i) Buyer shall pay not be obligated to issue any Common Shares pursuant to Section 3.4(h) unless and until Seller executes and delivers to Buyer a Seller Investment Letter. For the avoidance of doubt, Seller an amount equal must execute and deliver a Seller Investment Letter for each Revenue Payment for which it elects to twenty five percent (25%) of such excess amount (the “Additional Deferred Payment Amount”); and (vi) For purposes of calculating the Pre-Tax Underwriting Income for the periods referenced in subsections (b)(iv) and (b)(v) above, to the extent there is unearned premium as of December 31, 2017 with respect to Bluestone Premium written on or prior to December 31, 2016, then the Pre-Tax Underwriting Income for such period shall be adjusted by (A) adding thereto the amount of such unearned premium, and (B) subtracting therefrom (1) an estimate receive any portion of the losses projected to be incurred with respect to such unearned premium based on the loss ratios as of December 31, 2017 applicable to the lines of business that principally comprise such unearned premium, and (2) any costs or expenses directly attributable to such unearned premium (e.g., deferred acquisition costs). Buyer and Seller shall work payment in good faith to determine the adjustments set forth in this subsection (b)(vi)Common Shares.

Deferred Purchase Price. The deferred purchase price (a) Payment of the “Deferred Purchase Price”) , if any, shall be subject to and conditioned upon a bona fide, third party sale, lease or other transfer or re-development of the Hospital or any part thereof by the Purchaser to an entity unrelated to Purchaser or Seller, or the taking by any governmental entity or a conveyance in lieu thereof that results in payment of cash consideration for the Digital Hospital Parcel or any part thereof, or except as otherwise set forth in subparagraph (b), any other occurrence that results in the receipt by Purchaser of monetary consideration with respect to the Hospital or the Digital Hospital Parcel (a “Hospital Disposition”). In such event, subject to the provisions of Section 3.4(b) below, the Deferred Purchase Price shall be payable to Seller as provided in Section 3.1(b) hereof within thirty (30) days after the closing of a Hospital Disposition. The amount of the Deferred Purchase Price shall be determined in accordance with the provisions of Section 3.4(b) below. (b) Except as otherwise provided in subparagraph (c), the Deferred Purchase Price shall be an amount equal to forty percent (40%) of the sum of (A) Net Profit, if any, realized by Purchaser on a Hospital Disposition. The “Net Profit” shall be an amount, not to exceed Six Million and No/100ths Dollars ($6,000,000.00) (the “Maximum Initial Deferred Payment”), amount equal to the amount by which Pre-Tax Underwriting Income for the period Disposition Proceeds (herein defined) exceed the sum of the following: (i) $1,500,000; (ii) the “Earnout Period”Hospital Acquisition Cost” (herein defined), (iii) beginning on the Closing Date and extending to and including December 31“Carry Cost” (herein defined), 2017(iv) the “Improvement Cost” (as herein defined), with respect to Bluestone Premium written for (v) the period beginning on the Closing Date and ending on December 31, 2016, exceeds Fourteen Million and No/100ths Dollars “Parcel I Subdivision Costs” ($14,000,000.00herein defined), and (Bvi) the Additional Deferred Payment Amount. The “Preferred Return” (herein defined); provided, however, that if payment of any portion of the Disposition Proceeds is deferred (i.e., purchase money financing), then the payment of the Deferred Purchase Price shall also be payable deferred until such time as Seller has received Disposition Proceeds in a cash amount equal to the following separate installments (each sum of which shall be a “Deferred Purchase Price Payment”): the amounts specified in (i) On or before September 1through (vi) hereof, 2016, the Buyer at which time Purchaser shall be obligated to pay to the Seller an amount equal to forty percent (40%) of any cash payment of Disposition Proceeds received by Purchaser, which shall be due and payable within thirty (30) days of Purchaser’s receipt of said payment. It is specifically agreed and understood that if the PrePurchaser elects to donate the Hospital or any part of the Hospital Parcel in exchange for tax abatements or any other non-Tax Underwriting Income cash benefits, any such tax abatements or non-cash benefits shall not be deemed Disposition Proceeds for purposes of the period beginning on the Closing Date provisions of this Section 3.4. However, any such donation shall be treated as being donated from both Seller and extending to and including June 30, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2016, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2015;Purchaser. (iic) On or before March 1If, 2017, the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period from at any time prior to April 12, 2008, Seller (if before the Closing Date to and including December 31, 2016, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, with respect to Bluestone Premium written for the period beginning on Date) or Purchaser (if after the Closing Date Date) enters into a definitive agreement with the U.S. Department of Defense or any agency, department or branch of the United States government for a Hospital Disposition and extending to and including December 31such definitive agreement is duly consummated within ninety (90) days of its effective date, 2015, less or (2) at any time prior to April 12, 2008, Seller (if before the amount paid Closing Date) or Purchaser (if after the Closing Date) enters into a letter of intent (or other nonbinding expression of interest) with the U.S. Department of Defense or any agency, department or branch of the United States government for a Hospital Disposition, and such letter of intent is reduced to Seller a definitive agreement within ninety (90) days of the letter of intent, and such definitive agreement is duly consummated within ninety (90) days of its effective date, then, in subsection either of the events described in (b)(i1) aboveor (2), plus (B) an amount the Deferred Purchase Price shall be equal to forty sixty percent (4060%) of the Pre-Tax Underwriting Income for Net Profit realized by Purchaser on such Hospital Disposition. It is specifically understood and agreed that any such agreement with the period beginning on January 1U.S. Department of Defense or any agency, 2016 department or branch of the United States shall be subject to the prior written approval of Purchaser, which such approval may be granted or refused by Purchaser in its sole discretion, and extending any agreement entered into by Seller (if prior to the Closing Date) without such prior written approval shall be null and including December 31void as to the Purchaser. Seller covenants and agrees that it will disclose the Purchaser’s exclusive approval rights to the U.S. Department of Defense or any agency, 2016, as reflected on department or branch of the Pre-Tax Underwriting Income Statement dated as of December 31, 2016, United States government with respect whom Seller may be negotiating in order to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016;preserve Purchaser’s rights under this paragraph. (iiid) On or before September 1, 2017, The following terms shall have the Buyer shall pay to the Seller an amount equal to the sum of (A) the difference between (1) the Pre-Tax Underwriting Income for the period beginning on January 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on January 1, 2016 and extending to and including June 30, 2016, less (2) the amount paid to Seller in subsection (b)(ii)(B) above, plus (B) an amount equal to forty percent (40%) of the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including June 30, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of June 30, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016; (iv) On or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to the difference between (A) the Pre-Tax Underwriting Income for the period beginning on July 1, 2016 and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on July 1, 2016 and extending to and including December 31, 2016 (as adjusted as meanings set forth in subsection (b)(vi) below), less the amount paid to the Seller in subsection (b)(iii)(B) above; (v) In the event the Pre-Tax Underwriting Income below for the period beginning on the Closing Date and extending to and including December 31, 2017, as reflected on the Pre-Tax Underwriting Income Statement dated as of December 31, 2017, with respect to Bluestone Premium written for the period beginning on the Closing Date and extending to and including December 31, 2016 (as adjusted as set forth in subsection (b)(vi) below), exceeds Twenty Million Dollars ($20,000,000.00), then on or before March 1, 2018, the Buyer shall pay to the Seller an amount equal to twenty five percent (25%) of such excess amount (the “Additional Deferred Payment Amount”); and (vi) For purposes of calculating the Pre-Tax Underwriting Income for the periods referenced in subsections (b)(iv) and (b)(v) above, to the extent there is unearned premium as of December 31, 2017 with respect to Bluestone Premium written on or prior to December 31, 2016, then the Pre-Tax Underwriting Income for such period shall be adjusted by (A) adding thereto the amount of such unearned premium, and (B) subtracting therefrom (1) an estimate of the losses projected to be incurred with respect to such unearned premium based on the loss ratios as of December 31, 2017 applicable to the lines of business that principally comprise such unearned premium, and (2) any costs or expenses directly attributable to such unearned premium (e.g., deferred acquisition costs). Buyer and Seller shall work in good faith to determine the adjustments set forth in this subsection (b)(vi).Section 3.4: