Earn-out Agreement

Exhibit 10.8

EARN-OUT AGREEMENT

by and between

WOODLAND HOLDINGS CORP.,

and

NED TIMMER

Dated as of February 23, 2009


EARN-OUT AGREEMENT

This EARN-OUT AGREEMENT (this " Agreemen t" ), dated as of February 23, 2009 and effective as of the Closing Date (as defined below), if one occurs, is by and between Woodland Holdings Corp., a Delaware corporation (" Buyer" ) and Ned Timmer, an individual (" Seller" ).

RECITALS

WHEREAS, concurrently herewith, Seller, Buyer and other parties thereto are entering into that certain Stock Purchase Agreement, dated as of the date hereof (as amended from time to time in accordance with its terms, the " Stock Purchase Agreement" ) and Seller and Buyer are entering into that certain Unit Purchase Agreement, dated the date hereof (as amended from time to time in accordance with its terms, the " Unit Purchase Agreement" , and, together with the Stock Purchase Agreement, the " Purchase Agreements" ) pursuant to which Buyer shall purchase all of the issued and outstanding equity interests of each of Woodland Wireless Solutions, Ltd., a Michigan corporation, Phone Services and More, LLC, a Michigan limited liability company, West Michigan Co-Location Services, LLC, a Michigan limited liability company, T2 TV LLC, a Michigan limited liability company, and T2 Communications LLC, a Michigan limited liability company (each a " Company ," and together the " Companies" ) from Seller as set forth therein; and

WHEREAS, pursuant to Section 1.2(a)(v) of the Stock Purchase Agreement and Section1.2(a)(ii) of the Unit Purchase Agreement, Seller shall be entitled to receive certain earn-out purchase price payments, subject to the terms and conditions of this Agreement, in respect of each of years2009, 2010, 2011 and 2012.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the meanings indicated:

" AAA" shall mean the American Arbitration Association.

" Actual Audited EBITDA" shall mean EBITDA as set forth in the Buyer' s Audited Financial Statements.

" Adjusted EBITDA" shall mean for any Earn-Out Year, EBITDA less the Capital Charge.

" Affiliate" with respect to any Person shall mean any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such specified Person. For the purposes of this definition, " control," when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. In the case of any


Person who is an individual, such Person' s Affiliates shall include such Person' s spouse, siblings, parents, children, grandchildren, and trusts for the benefit of any of the foregoing.

" Agreement" shall have the meaning set forth in the preamble.

" Annual Earn-Out Amount" means Six Hundred Seventy-Five Thousand Dollars ($675,000.00).

" Applicable Contingent Purchase Price Payment Date" shall have the meaning set forth in Section 4(a) hereof.

" Audited Financial Statements" shall mean the audited combined consolidated financial statements of the Buyer for fiscal years ending April 30th.

" Business Day" means any day that is not a Saturday or Sunday or a legal holiday on which banks are authorized or required by law to be closed in New York, New York.

" Buyer" shall have the meaning set forth in the preamble.

" Capital Charge" shall be the cumulative (i) combined capital expenditures by the Buyer, and (ii) increase in Working Capital of the Buyer, in each case from the beginning of the then-current Earn-Out Year through the end of the then-current Earn-Out Year.

" Closing Date" shall have the meaning set forth in the Purchase Agreements.

" Company" or " Companies" shall have the meaning set forth in the recitals.

" Company Entity" shall mean any of (i) the Companies (ii) any entity that is a successor to the Companies or any Company or (iii) any entity that was a Subsidiary of any of the Companies immediately prior to the Closing.

" Contingent Purchase Price Payment" shall have the meaning set forth in Section 2(a) hereof.

" Contingent Purchase Price Statement" shall have the meaning set forth in Section 3(a) hereof.

" Dispute" shall have the meaning set forth in Section 16 hereof.

" Dispute Notice" shall have the meaning set forth in Section 3(b) hereof.

" Disputing Party" shall have the meaning set forth in Section 16 hereof.

" Earn-Out Year" shall mean the twelve month period ending on January 31st for each of 2010, 2011, 2012 and 2013.

" Earn-Out Period" shall mean the period commencing on the date hereof and ending on February 31, 2013.

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" EBITDA" shall mean, for the Buyer,(a) net sales, less, without duplication, the sum of (i) cost of sales, (ii) selling and distribution expenses, (iii) design and production expenses, (iv) general administrative expenses and (v) any allocation of corporate overhead to the Buyer and its subsidiaries and (vi) payments made in connection with the Employment Agreement, plus (b) to the extent included in expenses in clause (a) of this definition, the sum of (i) interest expense, (ii) tax expense (including payments in respect of any tax sharing or other similar agreement) other than international VAT or other similar tax, (iii) depreciation and amortization expense and (iv) the expenses of the Buyer incurred on or before the date hereof in connection with the transactions contemplated by the Transaction Documents (as defined in the Stock Purchase Agreement), including, without limitation, attorney' s fees, accounting fees, broker fees, banker fees, and related expenses. Each amount in clause (a) and clause (b) of this definition shall be determined on a consolidated basis in accordance with GAAP consistently applied from the Closing Date.

" Employment Agreement" shall mean the employment agreement, dated as of the date hereof, between the Woodland Wireless Solutions, Ltd. and Seller, executed and delivered simultaneously with the execution and delivery of this Agreement.

" Final Contingent Purchase Price Statement" shall have the meaning set forth in Section 3(c) hereof.

" Final Financial Statements" shall have the meaning set forth in Section 3(c) hereof.

" Financial Statements" shall mean for any Earn-Out Year, combined consolidated financial statements for the Buyer for such Earn-Out Year, which shall be prepared in accordance with GAAP.

" GAAP" shall mean United States generally accepted accounting principles, as in effect on the date of this Agreement, consistently applied.

" Independent Accounting Firm" shall have the meaning set forth in Section 3(b) hereof.

" June 2008 Adjusted EBITDA" shall mean Three Million Five Hundred and Seventy Four Thousand and 00/100 Dollars.

" Notice of Set-Off Dispute" shall have the meaning set forth in Section 6(b) hereof.

" Person" shall mean an individual, partnership, venture, unincorporated association, organization, syndicate, corporation, limited liability company, or other entity, trust, trustee, executor, administrator or other legal or personal representative or any government or any agency or political subdivision thereof.

" Prime Rate" shall mean the rate of interest that The JPMorgan Chase Bank (or its successor and assign) announces from time to time as its prime lending rate as then in effect, or if no such rate is announced by The JPMorgan Chase Bank (or its successor or assign), the prime

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lending rate announced by a New York City money center bank selected by Buyer and reasonably acceptable to the Seller.

" Revised Contingent Purchase Price Statement" shall have the meaning set forth in Section 3(b) hereof.

" Revised Financial Statements" shall have the meaning set forth in Section 3(b) hereof.

" Rules" shall have the meaning set forth in Section 16 hereof.

" Seller" shall have the meaning set forth in the preamble.

" Set-Off Notice" shall have the meaning set forth in Section 6(b) hereof.

" Set-Off Review Period" shall have the meaning set forth in Section 6(b) hereof.

" Shortfall" means, with respect to an Earn-Out Year, the amount by which such Earn-Out Year' s EBITDA was less than the June 2008 Adjusted EBITDA.

" Stock Purchase Agreement" shall have the meaning set forth in the recitals.

" Subsidiary" means with respect to an entity (A) any corporation or other organization, whether incorporated or unincorporated, of which more than fifty percent (50%) of either the ownership interests in, or the voting control of, such corporation or other organization is, directly or indirectly through Subsidiaries or otherwise, beneficially owned by such entity or (B) any other Person whose financial statements and results of operations would be required, under GAAP, to be consolidated into the financial statements and results of operations of such entity without regard to the preceding clause (A).

" Unit Purchase Agreement" shall have the meaning set forth in the recitals.

" Working Capital" means (x) the sum of the Buyer' s accounts receivable, net of applicable reserves, inventory, net of applicable reserves, cash, cash equivalents, marketable securities, prepaid expenses and other current assets, less (y) current liabilities, determined in accordance with GAAP.

2. Contingent Purchase Price Calculation .

(a) If the Adjusted EBITDA for any Earn-Out Year is greater than or equal to the June 2008 Adjusted EBITDA, the aggregate amount of the contingent purchase price payment payable to Seller with respect to such Earn-Out Year (the " Contingent Purchase Price Payment" ) shall equal the Annual Earn-Out Amount. If the Adjusted EBITDA for any Earn-Out Year is less than the June 2008 Adjusted EBITDA, no Contingent Purchase Price Payment shall be payable to Seller with respect to such Earn-Out Year.

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(b) Adjustment for Shortfall . If, at the end of any Earn-Out Year, a Contingent Purchase Price Payment was not payable because the Adjusted EBITDA for such Earn-Out Year was less than the June 2008 Adjusted EBITDA, and

(i) the amount of the Shortfall (the " Outstanding Contingent Payment Shortfall" ) associated with such Contingent Purchase Price Payment was equal to or less than ten percent (10%) of the June 2008 Adjusted EBITDA (such a Contingent Purchase Price Payment, an " Outstanding Contingent Payment" ); and ...