Common use of Administration of Escrow Account for Indemnification Claims Clause in Contracts

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification under Section 7.1(a) of the Merger Agreement, the Indemnified Person shall, prior to the Termination Date with respect to a particular claim, give written notice of such claim (a "Claim Notice") to the Company Stockholder and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Agreement and the provisions of this Section 5. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 days after delivery of a Claim Notice the Company Stockholder shall provide to the Indemnified Person, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Company Stockholder shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Indemnified Person. The Company Stockholder may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII of the Merger

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- With respect to indemnification claims, the Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) The release of Escrow Shares shall be applied to each Shareholder in the proportion that the Escrow Shares of such Shareholder bears to the sum of Escrow Shares then remaining in the Escrow. In lieu of releasing any fractional Escrow Shares, any fraction of a released Escrow Share that would otherwise be released shall be rounded to the nearest whole share of Parent Common Stock (with one-half of a share being rounded upward). (b) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification by the Shareholders under Section 7.1(a) of the Merger Stock Purchase Agreement, the Indemnified Person LP Agent shall, prior to the Termination Date with respect to a particular claimDate, give written notice of such claim (a "Claim Notice") to the Company Stockholder and Shareholders' Agent with a copy to the Escrow Agent. Each Claim Notice shall state the amount of Damages claimed Damages (the "Claimed Amount") and the basis for such claim. (bc) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Stock Purchase Agreement and the provisions of this Section 56. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein alone shall apply. Within 20 twenty (20) business days after delivery of receipt by the Shareholders' Agent of a Claim Notice Notice, the Company Stockholder Shareholders' Agent shall provide to the Indemnified Person, party providing the Claim Notice (with a copy to the Escrow Agent, ) a written response (the "Response Notice") in which the Company Stockholder shallShareholders' Agent shall either: (i) agree that Escrow Property Shares having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property Shares may be released from the Escrow Account to the Indemnified Person. The Company Stockholder Shareholders' Agent may contest the release of Escrow Property Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon if the Shareholders' Agent has a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII the Stock Purchase Agreement. If no Response Notice is delivered to, and received by the Escrow Agent prior to twenty (20) business days of receipt of the MergerClaim Notice by the Shareholders' Agent, the Shareholders' Agent shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. Notwithstanding any terms of this Agreement to the contrary, no Claim Notice or Response Notice shall be deemed to have been delivered to the Escrow Agent until it is actually received by the Escrow Agent at the address set forth in Section 12 hereof. (d) If the Shareholders' Agent agrees (or is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall promptly thereafter transfer, deliver and assign to the Indemnified Person the Escrow Shares having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (e) If the Shareholders' Agent agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Partial Agreed Amounts") may be released from the Escrow Account to the Indemnified Person, the Escrow Agent promptly shall transfer, deliver and assign to the Indemnified Person Escrow Shares having a Fair Market Value equal to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (f) If the Shareholders' Agent contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Shareholders' Agent and the Indemnified Person or LP Agent, as applicable, shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the parties should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the LP Agent, the Escrow Agent shall promptly transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Shares having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached within 15 days, the matter shall be settled by binding arbitration in New York City, New York. Notwithstanding the foregoing, the parties may defer arbitration to a mutually agreeable later date. All claims shall be settled by a single arbitrator mutually agreeable to the LP Agent and the Shareholders' Agent, or if they cannot agree on a single arbitrator in 20 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). One of such arbitrators shall be chosen by the LP Agent, one shall be chosen by the Shareholders' Agent and the third shall be chosen by the first two arbitrators selected pursuant to this sentence. The Party against whom a judgment is made or against whom an award is entered shall pay the costs of arbitration and the other Party's reasonable out of pocket costs and expenses, including without limitation, reasonable attorney's fees. The arbitrator's decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Stock Purchase Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Shareholders' Agent and the LP Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Shareholders and LP, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrator's award. Either the Shareholders' Agent or an LP Agent may deliver a memorandum to the Escrow Agent setting forth such arbitrator's decision in accordance with the second sentence of this paragraph. The parties hereto agree that all arbitration proceedings conducted pursuant to this Agreement shall be held confidential. (g) After delivery of a Response Notice that the Claimed Amount is contested by the Shareholders' Agent, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by an LP Agent and the Shareholders' Agent setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, and the memo referenced in the last sentence of the preceding paragraph setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (up to the amount of Escrow Shares then available in the Escrow Account) in accordance with such agreement or instructions.

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification under Section 7.1(a) VII of the Merger Stock Purchase Agreement, the Indemnified Person shall, prior to the Termination Date with respect to a particular claim, give written notice of such claim (a "Claim NoticeCLAIM NOTICE") to the Company Stockholder Telxon Representative, FED and the Escrow Agent. Each Claim EXECUTION COPY -------------- Notice shall state the amount of claimed Claimed Damages (the "Claimed AmountCLAIMED AMOUNT") and the basis for such claim. (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Stock Purchase Agreement and the provisions of this Section 56. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 thirty business days after delivery of receipt by the Telxon Representative of a Claim Notice Notice, the Company Stockholder Telxon Representative shall provide to the Indemnified Person, with a copy to the Escrow AgentAgent and FED, a written response (the "Response NoticeRESPONSE NOTICE") in which the Company Stockholder Telxon Representative shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PersonPerson on the Termination Date, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified PersonPerson on the Termination Date, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Indemnified PersonPerson on the Termination Date. The Company Stockholder Telxon Representative may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount only only, if Telxon asserts in good faith that it requires more information to evaluate the merits of the claim, based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII of the MergerStock Purchase Agreement. If no Response Notice is delivered by, and received by the Escrow Agent and FED from, the Telxon Representative prior to thirty business days of receipt of the Claim Notice, the Telxon Representative shall be deemed to have agreed that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account on the Termination Date. Notwithstanding any terms of this Agreement to the contrary, no Claim Notice or Response Notice shall be deemed to have been delivered to the Escrow Agent until it is actually received by the Escrow Agent and FED at the address set forth in Section 12 hereof. (c) If the Telxon Representative in the Response Notice agrees (or is deemed to have agreed) that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, upon the Termination Date transfer, deliver and assign to the Indemnified Person the Escrow Property having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (d) If the Telxon Representative in the Response Notice agrees that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall upon the Termination Date transfer, deliver and assign to the Indemnified Person Escrow Property having a Fair Market Value equal to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow Property as is then held in the Escrow Account). (e) If the Telxon Representative in the Response Notice contests the release of Escrow Property having a Fair Market Value equal to all or part of the Claimed Amount (the EXECUTION COPY -------------- "CONTESTED AMOUNT"), the Telxon Representative and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Telxon Representative and the Indemnified Person should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and FED and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the Indemnified Person, the Escrow Agent shall upon the Termination Date transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Property having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached after good faith negotiation over a period of 45 days (or such longer period as the Indemnified Person and the Telxon Representative may mutually agree), the matter shall be settled by binding arbitration in New York. All claims shall be settled by a single arbitrator mutually agreeable to the Indemnified Person and the Telxon Representative, or if they cannot agree on a single arbitrator in 45 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA RULES"), as follows: If a single arbitrator has not been mutually agreed upon, the Telxon Representative and the Indemnified Person shall each designate one arbitrator within 45 days of the delivery of the Telxon Representative's Response Notice contesting the Claimed Amount. The Telxon Representative and the Indemnified Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 75 days of delivery of the Telxon Representative's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules, and (ii) if either the Telxon Representative or the Indemnified Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Telxon Representative on the one hand, and the Indemnified Person, on the other hand, shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator (or of the sole arbitrator, in the event a single arbitrator decides the matter). The Telxon Representative and the Indemnified Person shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Stock Purchase Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Telxon Representative and the Indemnified Person in writing and shall constitute a conclusive determination of the issue in question, binding upon Telxon and the Indemnified Person, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. The Telxon Representative and the Indemnified Person shall deliver a memorandum to the Escrow Agent and FED setting forth such arbitrators decision in accordance with the second sentence of this paragraph. (f) After delivery of a Response Notice that the Claimed Amount is contested by the Telxon Representative, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Property having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Property then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Person and the Telxon Representative setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount EXECUTION COPY -------------- or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, and the memo referenced in the last sentence of the preceding paragraph setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Property from the Escrow Account (up the amount of Escrow Property then available in the Escrow Account) in accordance with such agreement or instructions.

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- With respect to indemnification claims, the Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) The release of Escrow Shares shall be applied to each Stockholder in the proportion that the Escrow Shares of such Stockholder bears to the sum of Escrow Shares then remaining in the Escrow. In lieu of releasing any fractional Escrow Shares, any fraction of a released Escrow Share that would otherwise be released shall be rounded to the nearest whole share of Parent Common Stock (with one-half of a share being rounded upward). (b) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification by the Stockholders under Section 7.1(a) of the Merger Agreement, the Indemnified Person or a Micromuse Agent shall, prior to the Termination Date with respect to a particular claimDate, give written notice of such claim (a "Claim Notice") to the Company Stockholder and Stockholders' Agent. The Stockholders Agent shall provide copies of such notice to the Escrow AgentStockholders. Each Claim Notice shall state the amount of Damages claimed Damages (the "Claimed Amount") and the basis for such claim. (bc) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Agreement and the provisions of this Section 56. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein alone shall apply. Within 20 twenty (20) business days after delivery of receipt by the Stockholders' Agent of a Claim Notice Notice, the Company Stockholder Stockholders' Agent shall provide to the Indemnified Person, party providing the Claim Notice (with a copy to the Escrow Agent, ) a written response (the "Response Notice") in which the Company Stockholder shallStockholders' Agent shall either: (i) agree that Escrow Property Shares having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property Shares may be released from the Escrow Account to the Indemnified Person. The Company Stockholder Stockholders' Agent may contest the release of Escrow Property Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon if the Stockholders' Agent has a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII the Merger Agreement. If no Response Notice is delivered to, and received by the Escrow Agent and the party providing the Claim Notice prior to twenty (20) business days of receipt of the MergerClaim Notice, the Stockholders' Agent shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. Notwithstanding any terms of this Agreement to the contrary, no Claim Notice or Response Notice shall be deemed to have been delivered to the Escrow Agent until it is actually received by the Escrow Agent at the address set forth in Section 12 hereof. (d) If the Stockholders' Agent agrees (or is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall promptly thereafter transfer, deliver and assign to the Indemnified Person the Escrow Shares having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (e) If the Stockholders' Agent agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Partial Agreed Amounts") may be released from the Escrow Account to the Indemnified Person, the Escrow Agent promptly shall transfer, deliver and assign to the Indemnified Person Escrow Shares having a Fair Market Value equal to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (f) If the Stockholders' Agent contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Stockholders' Agent and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the parties should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the Indemnified Person, the Escrow Agent shall promptly transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Shares having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached within 15 days, the matter shall be settled by binding arbitration in New York City, New York. Notwithstanding the foregoing, the parties may defer arbitration to a mutually agreeable later date. All claims shall be settled by a single arbitrator mutually agreeable to the Micromuse Agent and the Stockholders' Agent, or if they cannot agree on a single arbitrator in 20 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Party against whom a judgment is made or against whom an award is entered shall pay the costs of arbitration and the other Party's reasonable out of pocket costs and expenses, including without limitation, reasonable attorney's fees. The arbitrator's decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Stockholders' Agent and the Micromuse Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Stockholders and Micromuse, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrator's award. Either the Stockholders' Agent or a Micromuse Agent may deliver a memorandum to the Escrow Agent setting forth such arbitrator's decision in accordance with the second sentence of this paragraph. The parties hereto agree that all arbitration proceedings conducted pursuant to this Agreement shall be held confidential. (g) After delivery of a Response Notice that the Claimed Amount is contested by the Stockholders' Agent, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by a Micromuse Agent and the Stockholders' Agent setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, and the memo referenced in the last sentence of the preceding paragraph setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (up to the amount of Escrow Shares then available in the Escrow Account) in accordance with such agreement or instructions.

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Purchase Agreement as follows: (a) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification under Section 7.1(a) of the Merger Purchase Agreement, the Indemnified Person shall, prior to the Termination Date with respect to a particular claim, give written notice of such claim (a "Claim Notice") to the Company Stockholder Stockholders' Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Purchase Agreement and the provisions of this Section 5. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 days after delivery of a Claim Notice the Company Stockholder Stockholders' Representative shall provide to the Indemnified Person, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Company Stockholder Stockholders' Representative shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Indemnified Person. The Company Stockholder Stockholders' Representative may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII of the MergerPurchase Agreement. If no Response Notice is delivered by, and received by the Escrow Agent from, the Stockholders' Representative within such 20-day period, the Stockholders' Representative shall be deemed to have agreed that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. (c) If the Stockholders' Representative in the Response Notice agrees (or is deemed to have agreed) that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, disburse to the Indemnified Person Escrow Property having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (d) If the Stockholders' Representative in the Response Notice agrees that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall promptly following the delivery of the Response Notice disburse to the Indemnified Person Escrow Property having a Fair Market Value equal to the Agreed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (e) If the Stockholders' Representative in the Response Notice contests the release of Escrow Property having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Stockholders' Representative and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Stockholders' Representative and the Indemnified Person should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the Indemnified Person, the Escrow Agent shall disburse to the Indemnified Person from the Escrow Account an amount of Escrow Property having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached after good faith negotiation over a period of 15 days (or such longer period as the Indemnified Person and the Stockholders' Representative may mutually agree), the matter shall be settled by binding arbitration in Boston, Massachusetts. All claims shall be settled by a single arbitrator mutually agreeable to the Indemnified Person and the Stockholders' Representative, or if they cannot agree on a single arbitrator in 15 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"), as follows: If a single arbitrator has not been mutually agreed upon, the Stockholders' Representative and the Indemnified Person shall each designate one arbitrator within 45 days of the delivery of the Stockholders' Representative's Response Notice contesting the Claimed Amount. The Stockholders' Representative and the Indemnified Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 75 days of delivery of the Stockholders' Representative's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules, and (ii) if either the Stockholders' Representative or the Indemnified Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Company Stockholders, on the one hand, and the Indemnified Person, on the other hand, shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator (or of the sole arbitrator, in the event a single arbitrator decides the matter). The Stockholders' Representative and the Indemnified Person shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Purchase Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Stockholders' Representative, the Indemnified Person and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Stockholders' Representative, the Company Stockholders, the Indemnified Person and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. (f) After delivery of a Response Notice that the Claimed Amount is contested by the Stockholder's Representative, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Property having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Property then available in the Escrow Account), notwithstanding the occurrence of the first anniversary of the Closing Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Person and the Stockholders' Representative setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Property from the Escrow Account (up to the amount of Escrow Property then available in the Escrow Account) in accordance with such agreement or instructions. (g) If, as a result of any third party claim or legal proceeding subject to the indemnification procedures set forth in the Purchase Agreement, any settlement has been entered into, or any judgment entered in favor of any third party (which is not subject to further appeal), the Indemnified Person may give notice of the resulting Damages to the Escrow Agent, together with a copy of the settlement or judgement and the Escrow Agent shall, promptly following the receipt of such notice, disburse to the Indemnified Person an amount of Escrow Property having a Fair Market Value equal to such Damages (up to the amount of Escrow Property then available in the Escrow Account).

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- With respect to indemnification claims, the Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) The release of Escrow Shares shall be applied to each Shareholder in the proportion that the Escrow Shares of such Shareholder bears to the sum of Escrow Shares then remaining in the Escrow. In lieu of releasing any fractional Escrow Shares, any fraction of a released Escrow Share that would otherwise be released shall be rounded to the nearest whole share of Parent Common Stock (with one-half of a share being rounded upward). (b) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification by the Shareholders under Section 7.1(a) of the Merger Stock Purchase Agreement, the Indemnified Person LP Agent shall, prior to the Termination Date with respect to a particular claimDate, give written notice of such claim (a "Claim NoticeCLAIM NOTICE") to the Company Stockholder and Shareholders' Agent with a copy to the Escrow Agent. Each Claim Notice shall state the amount of Damages claimed Damages (the "Claimed AmountCLAIMED AMOUNT") and the basis for such claim. (bc) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Stock Purchase Agreement and the provisions of this Section 56. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein alone shall apply. Within 20 twenty (20) business days after delivery of receipt by the Shareholders' Agent of a Claim Notice Notice, the Company Stockholder Shareholders' Agent shall provide to the Indemnified Person, party providing the Claim Notice (with a copy to the Escrow Agent, ) a written response (the "Response NoticeRESPONSE NOTICE") in which the Company Stockholder shallShareholders' Agent shall either: (i) agree that Escrow Property Shares having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property Shares may be released from the Escrow Account to the Indemnified Person. The Company Stockholder Shareholders' Agent may contest the release of Escrow Property Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon if the Shareholders' Agent has a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII the Stock Purchase Agreement. If no Response Notice is delivered to, and received by the Escrow Agent prior to twenty (20) business days of receipt of the MergerClaim Notice by the Shareholders' Agent, the Shareholders' Agent shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. Notwithstanding any terms of this Agreement to the contrary, no Claim Notice or Response Notice shall be deemed to have been delivered to the Escrow Agent until it is actually received by the Escrow Agent at the address set forth in Section 12 hereof. (d) If the Shareholders' Agent agrees (or is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall promptly thereafter transfer, deliver and assign to the Indemnified Person the Escrow Shares having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (e) If the Shareholders' Agent agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "PARTIAL AGREED AMOUNTS") may be released from the Escrow Account to the Indemnified Person, the Escrow Agent promptly shall transfer, deliver and assign to the Indemnified Person Escrow Shares having a Fair Market Value equal to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow Shares as are then held in the Escrow Account). (f) If the Shareholders' Agent contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "CONTESTED AMOUNT"), the Shareholders' Agent and the Indemnified Person or LP Agent, as applicable, shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the parties should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the LP Agent, the Escrow Agent shall promptly transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Shares having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached within 15 days, the matter shall be settled by binding arbitration in New York City, New York. Notwithstanding the foregoing, the parties may defer arbitration to a mutually agreeable later date. All claims shall be settled by a single arbitrator mutually agreeable to the LP Agent and the Shareholders' Agent, or if they cannot agree on a single arbitrator in 20 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA RULES"). One of such arbitrators shall be chosen by the LP Agent, one shall be chosen by the Shareholders' Agent and the third shall be chosen by the first two arbitrators selected pursuant to this sentence. The Party against whom a judgment is made or against whom an award is entered shall pay the costs of arbitration and the other Party's reasonable out of pocket costs and expenses, including without limitation, reasonable attorney's fees. The arbitrator's decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Stock Purchase Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Shareholders' Agent and the LP Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Shareholders and LP, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrator's award. Either the Shareholders' Agent or an LP Agent may deliver a memorandum to the Escrow Agent setting forth such arbitrator's decision in accordance with the second sentence of this paragraph. The parties hereto agree that all arbitration proceedings conducted pursuant to this Agreement shall be held confidential. (g) After delivery of a Response Notice that the Claimed Amount is contested by the Shareholders' Agent, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by an LP Agent and the Shareholders' Agent setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, and the memo referenced in the last sentence of the preceding paragraph setting forth instructions to the Escrow Agent as to the release of Escrow Shares that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (up to the amount of Escrow Shares then available in the Escrow Account) in accordance with such agreement or instructions.

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification under Section 7.1(a) of the Merger Agreement, the Indemnified Person shall, prior to the Termination Date with respect to a particular claim, give written notice of such claim (a "Claim Notice") to the Company Stockholder Escrow Committee and the Escrow Agent. Each Claim Notice shall state the amount of claimed Claimed Damages (the "Claimed Amount") and the basis for such claim. (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Agreement and the provisions of this Section 5. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 days after delivery of a Claim Notice Notice, the Company Stockholder Escrow Committee shall provide to the Indemnified Person, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Company Stockholder Escrow Committee shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Indemnified Person. The Company Stockholder Escrow Committee may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Person is entitled to indemnification under Article VII of the MergerMerger Agreement. If no Response Notice is delivered by, and received by the Escrow Agent from, the Escrow Committee within such 20-day period, the Escrow Committee shall be deemed to have agreed that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. (c) If the Escrow Committee in the Response Notice agrees (or is deemed to have agreed) that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Person the Escrow Property having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (d) If the Escrow Committee in the Response Notice agrees that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Person Escrow Property having a Fair Market Value equal to the Agreed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (e) If the Escrow Committee in the Response Notice contests the release of Escrow Property having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Escrow Committee and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Escrow Committee and the Indemnified Person should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the Indemnified Person, the Escrow Agent shall transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Property having a Fair Market Value equal to the amount so agreed. If no such agreement can be reached after good faith negotiation over a period of 15 days (or such longer period as the Indemnified Person and the Escrow Committee may mutually agree), the matter shall be settled by binding arbitration in New York. All claims shall be settled by a single arbitrator mutually agreeable to the Indemnified Person and the Escrow Committee, or if they cannot agree on a single arbitrator in 15 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"), as follows: If a single arbitrator has not been mutually agreed upon, the Escrow Committee and the Indemnified Person shall each designate one arbitrator within 45 days of the delivery of the Escrow Committee's Response Notice contesting the Claimed Amount. The Escrow Committee and the Indemnified Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 75 days of delivery of the Escrow Committee's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules, and (ii) if either the Escrow Committee or the Indemnified Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Escrow Committee on the one hand, and the Indemnified Person, on the other hand, shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator (or of the sole arbitrator, in the event a single arbitrator decides the matter). The Escrow Committee and the Indemnified Person shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Escrow Committee and the Indemnified Person in writing and shall constitute a conclusive determination of the issue in question, binding upon the Principal MODE Stockholders and the Indemnified Person, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. The Escrow Committee and the Indemnified Person shall deliver a memorandum to the Escrow Agent setting forth such arbitrators decision in accordance with the second sentence of this paragraph. (f) After delivery of a Response Notice that the Claimed Amount is contested by the Escrow Committee, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Property having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Property then available in the Escrow Account), notwithstanding the occurrence of the Release Date (as defined in Section 6(a) below), until (i) delivery of a copy of a settlement agreement executed by the Indemnified Person and the Escrow Committee setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, and the memo referenced in the last sentence of the preceding paragraph setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Property from the Escrow Account (up the amount of Escrow Property then available in the Escrow Account) in accordance with such agreement or instructions. (g) If, as a result of any third party claim or legal proceeding subject to the indemnification procedures set forth in the Merger Agreement, any settlement has been entered into, or any judgment entered in favor of any third party (which is not subject to further appeal), the Indemnified Person may give notice of the resulting Damages to the Escrow Agent, together with a copy of the settlement or judgement and the Escrow Agent shall, promptly following the receipt of such notice, transfer, deliver and assign to the Indemnified Person an amount of Escrow Property having a Fair Market Value equal to such Damages (up to the amount of Escrow Property then available in the Escrow Account).

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- With respect to indemnification claims, the Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII of the Merger Agreement as follows: (a) If an Indemnified Person has incurred or suffered Damages for which it is entitled to indemnification under Section 7.1(a) of the Merger Agreement, the Indemnified Person shall, prior to the Termination Date with respect to a particular claim, give written notice of such claim (a "Claim NoticeCLAIM NOTICE") to the Company Stockholder and Stockholders Representatives (with a copy to the Escrow Agent). Each Claim Notice shall state the amount of claimed Claimed Damages (the "Claimed AmountCLAIMED AMOUNT") and the basis for such claim. (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VII of the Merger Agreement and the provisions of this Section 56. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein alone shall apply. Within 20 twenty (20) business days after delivery of receipt by the Stockholders Representatives of a Claim Notice, the Stockholders Representatives receiving the Claim Notice the Company Stockholder shall provide to the Indemnified Person, a 724 Representative (with a copy to the Escrow Agent, ) a written response (the "Response NoticeRESPONSE NOTICE") in which the Company Stockholder Stockholders Representatives shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Indemnified Person. The Company Stockholder If no Response Notice is delivered to, and received by the Escrow Agent and a 724 Representative prior to twenty (20) business days of receipt of the Claim Notice, the Stockholders Representatives shall be deemed to have agreed that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Person from the Escrow Account. Notwithstanding any terms of this Agreement to the contrary, no Claim Notice or Response Notice shall be deemed to have been delivered to the Escrow Agent until it is actually received by the Escrow Agent at the address set forth in Section 12 hereof. (c) If the Stockholders Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, promptly thereafter transfer, deliver and assign to the Indemnified Person the Escrow Property having a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). (d) If the Stockholders Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "PARTIAL AGREED AMOUNTS") may be released from the Escrow Account to the Indemnified Person, the Escrow Agent promptly shall transfer, deliver and assign to the Indemnified Person Escrow Property having a Fair Market Value equal to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow Property as is then held in the Escrow Account). (e) If the Stockholders Representatives in the Response Notice contest the release of Escrow Property having a Fair Market Value equal to all or part of the Claimed Amount (the "CONTESTED AMOUNT"), the Stockholders Representatives and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Stockholders Representatives and the Indemnified Person should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Claimed Contested Amount only based upon is to be paid to the Indemnified Person, the Escrow Agent shall promptly transfer, assign and deliver to the Indemnified Person from the Escrow Account an amount of Escrow Property having a good faith belief that all Fair Market Value equal to the amount so agreed. If no such agreement can be reached within 30 days, the matter shall be settled by binding arbitration in Chicago, Illinois. Notwithstanding the foregoing, the parties may mutually agree to defer arbitration to a mutually agreeable later date. All claims shall be settled by a single arbitrator mutually agreeable to a 724 Representative and the Stockholders Representatives, or such portion if they cannot agree on a single arbitrator in 45 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the Claimed Amount does not constitute Damages for which American Arbitration Association (the "AAA RULES"). Within 15 days after the expiration of said 45-day period, each of the Parent and the Stockholders Representatives will select one arbitrator and the two selected arbitrators will be instructed to choose a third arbitrator within 10 days after the expiration of said 15-day period. The Stockholders on the one hand, and 724, on the other hand, shall bear equally the fees and expenses of the arbitrator (or of the arbitrators, in the event three arbitrators decide the matter). The arbitrator's decision shall relate solely to whether the Indemnified Person is entitled to indemnification under Article VII receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the MergerMerger Agreement and this Agreement. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Stockholders Representatives and a 724 Representative in writing and shall constitute a conclusive determination of the issue in question, binding upon the Stockholders and 724, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrator's award. Either the Stockholders Representatives or a 724 Representative may deliver a memorandum to the Escrow Agent setting forth such arbitrator's decision in accordance with the second sentence of this paragraph.

Administration of Escrow Account for Indemnification Claims. The ----------------------------------------------------------- Escrow Agent shall administer the Escrow Account in connection with the indemnification provisions of Article VII XII of the Merger Agreement Stock Purchase Agreement, and as follows: (a) If an Indemnified Person (i) any member of the Raytel Group has incurred or suffered Damages Raytel CVI-Related Losses for which it believes in good faith it is entitled to indemnification under Section 7.1(athe Stock Purchase Agreement or (ii) Raytel, CVI or any Raytel subsidiary has incurred any CVI 401(k) Expenses (Raytel, CVI, any such Raytel subsidiary or any such member of the Merger AgreementRaytel Group being referred to herein as an "Indemnified Person"), the Indemnified Person shall, prior to the earlier of (i) 60 days after the date of the delivery (in the manner provided for the sending of notices pursuant to this Agreement) to Raytel of the CVI 1997 Audited Financials or (ii) November 30, 1997 (the "Termination Date Date") with respect to a particular each such claim, give written notice of such claim (a "Claim Notice") to the Company Stockholder CVI Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages Escrow Losses (the "Claimed Amount") and shall set forth in reasonable detail, to the extent then ascertainable, the basis for such claimclaim and such Claimed Amount. (b) No Indemnifying CVI Stockholder shall be required to indemnify any member of the Raytel Group for any Raytel CVI-Related Losses until the aggregate of all Raytel CVI-Related Losses under all claims shall exceed $50,000 (the "Floor"); provided, however, that if the aggregate amount of Raytel CVI-Related Losses in respect of such claims exceeds the Floor, the Indemnifying CVI Securityholders shall indemnify any member or members of the Raytel Group for all such Raytel CVI-Related Losses (including the initial $50,000 in respect of such claims), subject to the further limitations set forth herein and in Article XII of the Stock Purchase Agreement. Claims for CVI 401(k) Expenses shall be neither subject to the Floor nor included as claims for purposes of determining whether the Floor has been exceeded. (c) Claims for indemnification involving a claim or legal proceeding (other than those by a third party the Escrow Agent) shall be made in accordance with the procedures set forth in Article VII of the Merger Stock Purchase Agreement and the provisions of this Section 5. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply3. Within 20 calendar days after delivery of (such 20 day period, the "Response Period") following the date a Claim Notice is sent, the Company Stockholder CVI Representatives shall provide deliver (in the manner provided for the sending of notices pursuant to this Agreement) to the Indemnified Person, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Company Stockholder CVI Representatives shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 7 below) Funds equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Person, (ii) agree that Escrow Property having a Fair Market Value Funds equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Person, or (iii) contest that any of the Escrow Property Funds may be released from the Escrow Account to the Indemnified Person. The Company Stockholder CVI Representatives may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount Funds only based upon a good faith belief that the Indemnified Person is not entitled to indemnification for all or such portion of such amount under the Stock Purchase Agreement. If no Response Notice is delivered by the CVI Representatives within such 20-day period, the CVI Representatives shall be deemed to have agreed that Escrow Funds equal to all of such Claimed Amount may be released to the Indemnified Person from the Escrow Account. (d) If the CVI Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Funds equal to all of such Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, promptly following either (i) the delivery of the Response Notice or (ii) if no Response Notice is delivered within the Response Period, the expiration of the Response Period, disburse to the Indemnified Person Escrow Funds equal to the Claimed Amount does (or such lesser amount of Escrow Funds as is then held in the Escrow Account). (e) If the CVI Representatives in the Response Notice agree that Escrow Funds equal to part, but not constitute Damages for which all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Person, the Escrow Agent shall, promptly following the delivery of the Response Notice, disburse to the Indemnified Person Escrow Funds equal to the Agreed Amount (or such lesser amount of Escrow Funds as is entitled to indemnification under Article VII then held in the Escrow Account). (f) If the CVI Representatives in the Response Notice contest the release of Escrow Funds in satisfaction of all or part of the MergerClaimed Amount (the "Contested Amount"), the CVI Representatives and the Indemnified Person shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the CVI Representatives and the Indemnified Person so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent and, if such agreement provides that all or a portion of the Contested Amount is to be paid to the Indemnified Person, the Escrow Agent shall promptly disburse to the Indemnified Person from the Escrow Account an amount of Escrow Funds equal to the amount so agreed (or such lesser amount of Escrow Funds as is then held in the Escrow Account). If after good faith negotiation no such agreement can be reached within 15 calendar days after the date the Request Notice is sent (or such longer period as the Indemnified Person and the CVI Representatives may mutually agree), the matter shall be settled by binding arbitration in accordance with Article XIII of the Stock Purchase Agreement. (g) After delivery of a Response Notice that the Claimed Amount is contested by the CVI Representatives, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Funds sufficient to cover the Contested Amount (up to the amount of Escrow Funds then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Person and the CVI Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Funds, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the Presiding Arbitrator setting forth instructions to the Escrow Agent as to the release of Escrow Funds, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Funds from the Escrow Account (up to the amount of Escrow Funds then available in the Escrow Account) in accordance with such agreement or instructions and disburse any remaining Escrow Funds in accordance with Section 4. (h) If, as a result of any third-party claim or legal proceeding giving rise to Raytel CVI-Related Losses and subject to the indemnification procedures set forth in Article XII of the Stock Purchase Agreement, any settlement has been entered into or any judgment has been entered in favor of any third party (which is not subject to further appeal) in accordance with Article XII of the Stock Purchase Agreement, the Indemnified Person may give notice of the resulting Raytel CVI-Related Losses to the Escrow Agent, together with a copy of the settlement or judgment and the Escrow Agent shall, promptly following the receipt of such notice, disburse to the Indemnified Person an amount of Escrow Funds equal to such Raytel CVI-Related Losses (up to the amount of Escrow Funds then available in the Escrow Account).