Upon a Class A Member Exit, the total Bonuses payable to all Participants will be an amount equal to 2.5% of the Company Value up to $85 million, plus 4% of the Company Value in excess of $85 million. For example, if a Class A Member Exit occurs when the Company Value of Telos ID is $50 million, the total Bonuses payable to all Participants will be $1.25 million (i.e., .025 × $50 million = $1.25 million); and, if a Class A Member Exit occurs when the Company Value of Telos ID is $125 million, the total Bonuses payable to all Participants will be $3.725 million (i.e., (.025 x $85,000,000) + (.04 x ($125,000,000 - $85,000,000)) = $3,725,000).

Upon a Sale, the total Bonuses payable to all Participants will be an amount equal to 5.0% of the Sale Proceeds up to $85 million, plus 8.0% of the Sales Proceeds in excess of $85 million or, if a Sale occurs subsequent to a Class A Member Exit, an amount equal to 5.0% of the Sale Proceeds up to $85 million plus 8.0% of the Sales Proceeds in excess of $85 million, less the total Bonuses paid to all Participants pursuant to section 3.2(a) in connection with the prior Class A Member Exit. For example, if a Sale of all or substantially all of the assets of Telos ID results in Sale Proceeds in an amount equal to $50 million, the total Bonuses payable to all Participants will be $2.5 million (i.e., 0.05 × $50 million = $2.5 million); and, if a Sale of all or substantially all of the assets of Telos ID results in Sale Proceeds in an amount equal to $125 million, the total Bonuses payable to all Participants will be $7.45 million (i.e., (.050 x $85,000,000) + (.08 x ($125,000,000 - $85,000,000)) = $7.45 million); and