Common use of Escrow Fund Clause in Contracts

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Street Shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent Street after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Street Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Street Shareholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National AssociationN.A., or a trust company (or other institution acceptable to Parent Street and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each Company Street Shareholder shall be in proportion to the aggregate Parent Select Common Stock to and/or Select Series H Preferred Stock, as the case may be, which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent). The Escrow Fund shall be available to compensate Parent Select and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense defense, net of any benefits or proceeds of insurance (hereinafter individually a "Loss" and collectively "Losses") incurred by ParentSelect, its officers, directors, or affiliates directly or indirectly (including the Surviving Corporation) as a result of any inaccuracy or breach of a representation or warranty of the Company Street contained in Article 2 herein (as modified by the Company Street Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing Street to perform or comply with any covenant (except as Parent may contained herein. Select and Street each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have expressly waived led to a reduction in writing) contained the aggregate Merger consideration. Nothing herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims shall limit the liability of Street for any Losses must breach of any representation, warranty or covenant if the Merger does not close. Resort to the Escrow Fund shall be asserted on the exclusive contractual remedy of Select for any breach by Street of any representation or before 5:00 p.m. (California Time) on warranty if the earlier to occur of (i) the date Merger does close; provided, however, that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Companynothing herein shall limit any remedy for fraud. Parent Select may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000100,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent Select may recover from the Escrow Fund all Losses the total of its Losses, in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options100,000.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, shares of ISSI Common Stock which comprise the Escrow Amount, without any act of any Company ShareholderNexcom shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent selected by ISSI (which shall be reasonably acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)Nexcom) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and at a cost and expense to be maintained at Parent's cost and expenseborne by ISSI. The portion of the Escrow Amount contributed on behalf of each Company Shareholder holder of Nexcom Common Stock shall be in proportion to the aggregate Parent Common Stock to Merger Consideration which such holder would otherwise be entitled under Section 1.6(b) and 3.1. The Escrow Agent shall not be in responsible for confirming that the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund comprise the Escrow Amount or that the portion contributed on behalf of each holder of Nexcom Common Stock is in the proper proportion, which determination shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parentmade by ISSI. The Escrow Fund shall be available to compensate Parent ISSI and its affiliates Affiliates for any and all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, liabilities, damages, deficiencies, costsexpenses, and expensesfees, including court costs and reasonable attorneys' fees and expenses and in connection with any action, suit or proceeding to the extent of the amount of such actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses or fees (collectively "LOSSES") that ISSI or any of investigation and defense its Affiliates has incurred by Parentreason of the breach by Nexcom or the Majority Shareholders of any representation, its officerswarranty, directorscovenant or agreement of Nexcom or either of the Majority Shareholders contained herein, or affiliates directly or indirectly as a result by reason of any inaccuracy misrepresentation by Nexcom or breach of a representation or warranty either of the Company contained herein (as modified by Majority Shareholders made herein; ISSI, Nexcom and the Company Schedules) or Majority Shareholders each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the certificates, delivered pursuant aggregate Merger Consideration. Resort to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless shall be the exclusive contractual remedy of ISSI and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto its Affiliates against Nexcom or any objection has been resolved in accordance with the provisions of this Article VII; in such caseits directors, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection officers, representatives, agents or any objection has been resolved in accordance with the provisions of this Article VII. No portion shareholders or either of the Escrow Amount Majority Shareholders for any such breaches and misrepresentations if the Merger does close; provided, however, that nothing herein shall be contributed in respect of limit any Company Options.remedy for fraud. In addition, notwithstanding

Escrow Fund. At the Effective Time, each shareholder of Closing the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Shareholders receiving NEON Common Stock will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount Shares (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent NEON after the Effective Time with respect Closing) pursuant to shares constituting the Escrow Amount) Agreement attached hereto as Exhibit B hereto, without any act required on the part of any Company Shareholder. As soon as practicable after the Effective TimeClosing, the Escrow AmountShares, without any act required on the part of any Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent NEON and the Securityholder Agent Shareholder Representative (as defined in Section 7.2(g7.2(h)(i) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at ParentNEON's cost and expense. The portion of the Escrow Amount Fund contributed on behalf of each Company Shareholder shall be as set forth in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached heretoSchedule 1.1. Any shares of Parent Common contributed to the The Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor comprised entirely of the Surviving Corporation or ParentEscrow Shares. The Escrow Fund shall be available to compensate Parent NEON and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by ParentNEON, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company or the Shareholders, contained in Articles II and III herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cDisclosure Schedule), or any failure by the Company prior to or the Closing Shareholders to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), herein; provided that claims for NEON shall not receive any Losses must be asserted on or before 5:00 p.m. (California Time) on shares from the earlier Escrow Fund with respect to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent any individual Loss not exceeding $5,000 and the Company. Parent may shall not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which such Losses exceed $50,000500,000 in the aggregate, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover at which time NEON shall receive shares from the Escrow Fund all for such first $500,000 in Losses and to the extent of such excess. NEON and the Company each acknowledge that such Losses, if any, would relate to unasserted contingent liabilities existing at the Closing, which if resolved at the Closing would have led to a reduction in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VIIaggregate Purchase Price. No portion The foregoing limitations shall not apply to the obligations of the Escrow Amount shall be contributed Shareholders to pay the income taxes described in respect of any Company OptionsSection 5.6.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholdershareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other an institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b1.6(a) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any comprised of shares of Parent Common contributed Stock which have vested in such shareholder to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor maximum extent possible. No portion of the Surviving Corporation Escrow Amount shall be contributed in respect of any Company Options or ParentWarrants. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses")herein; provided, provided however, that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined such Losses exceed in Section 7.2(d)(i) below) identifying the aggregate $350,000, in which event Parent shall receive shares equal in value to the full amount of such Losses. Parent and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate amount of which exceed $50,000, have been delivered to Merger Consideration. Nothing herein shall limit the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion liability of the Escrow Amount shall be contributed in respect Company for any breach of any Company Optionsrepresentation, warranty or covenant if the Merger does not close.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's shareholders ----------- will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect Time) pursuant to shares constituting an Escrow Agreement on customary terms to be mutually agreed among Parent, the Company and the Escrow Amount) Agent (as defined below), without any act required on the part of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholdershareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g6.2(i)(i) below)) as Escrow Agent (the "Escrow Agent"), such deposit to ------------ constitute an escrow fund (the "Escrow Fund") to be governed by the terms set ----------- forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to Shares which such holder would otherwise be entitled under Section 1.6(b) and 1.6. The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Shares issuable upon the Escrow Fund shall not be unvested or subject to any right Merger in respect of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentCompany Common Stock. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and ---- collectively "Losses") incurred by Parent, its officers, directors, or ------ affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of herein. Parent and the CompanyCompany each acknowledge that such Losses, if any, would relate to unasserted contingent liabilities existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger consideration. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (e) below) identifying Losses, the aggregate amount of which exceed $50,000100,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in f). In such case, Parent may recover from the Escrow Fund all its Losses in excess of the first $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options100,000.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholdershareholder, will be deposited with Chase Manhattan U.S. Bank and Trust Company, National Association, or a trust company NA (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each shareholder of Capital Stock Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a) and (b) and shall be in the respective share amounts and percentages listed opposite each Company Shareholdersuch Company's name shareholder's names listed in Exhibit G attached heretoa schedule to be executed by the Company and delivered to Parent at Closing (the "Escrow Schedule"). Any All shares of Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedulesin connection with the Merger) or in the certificates, delivered pursuant to Sections 9.3(b(ii) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained herein other than, in the case of clauses (except as Parent may have expressly i) and (ii) above, any inaccuracy, breach or failure to perform or comply that is waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), writing by Parent; provided that claims for arising out of an inaccuracy or breach of any Losses representations and warranties and failure to perform or comply with any covenant of the Company contained in this Agreement and in any certificate, instrument, schedule or document delivered by the Company at the Closing in connection with this Agreement or the Merger must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyExpiration Date. Provided, however, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i8.2(d) below) identifying Losses, the aggregate amount of which exceed $50,000250,000, have been delivered to the Escrow Agent as provided in paragraph (de) and either such amount is determined pursuant to this Article VIII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses in excess of the $250,000 threshold for which there is no objection thereto or any objection has had been resolved in accordance with the provisions of this Article VIIVIII; PROVIDED, HOWEVER, that to the extent third-party expenses, including, without limitation, legal and accounting fees incurred by the Company in connection with this Agreement and the Merger exceed $150,000 in the aggregate, such case, excess amount shall be deemed a Loss for purposes of Article VIII and shall be immediately reimbursable to Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion VIII (without regard to the $250,000 minimum threshold for Losses and without counting toward the $250,000 threshold); PROVIDED FURTHER, HOWEVER, that to the extent Parent incurs a Loss in connection with (A) the Company's failure to comply with U.S. Export Laws, or (B) Section 4(d)(ii) of the Escrow Amount Capella Agreement (including any Losses incurred in connection with the termination or amendment of such section and regardless of whether Parent has waived under Section 7.3(b) hereof any failure of the Company to perform or comply with the covenant specified in Section 6.27 hereto), then any such Loss shall be contributed immediately reimbursable to Parent in respect of any Company Optionsaccordance with this Article VIII (without regard to the $250,000 minimum threshold for Losses and without counting toward the $250,000 threshold).

Escrow Fund. At the Effective Time, each shareholder Time the holders of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Series B Preferred Stock and Series D Preferred Stock will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholderholder, will be deposited with Chase Manhattan Bank and Trust CompanyThe Pacific Bank, National Association000 Xxxxxxxxxx Xxxxxx, or a trust company San Francisco, California 94104 (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each shareholder of Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.9(a) and (b) and shall be in the respective share amounts and percentages listed opposite each Company Shareholdersuch Company's name shareholder's names listed in Exhibit G attached heretoa schedule to be executed by the Company and -43- delivered to Parent at Closing (the "Escrow Schedule"). Any All shares of Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of of: (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedulesin connection with the Merger) or of the shareholders of the Company made in any instrument executed by the certificates, delivered pursuant to Sections 9.3(bshareholders in connection with the transactions contemplated hereby; (ii) and 9.3(c), or any failure by the Company prior to the Closing or its shareholders to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein or in any agreement or instrument contemplated hereby; and (hereinafter individually a "Loss" iii) any legal or other fees and collectively "Losses")expenses, provided that claims for any Losses must be asserted on interest, fees or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Companypenalties related thereto. Parent may not receive any shares from the Escrow Fund Fund, however, unless and until Officer's Certificates (as defined in Section 7.2(d)(i8.2(d) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (de) and either there such amount is no objection thereto or any objection has been resolved in accordance with the provisions of determined pursuant to this Article VIIVIII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses in excess of the $50,000 threshold for which there is no objection or any objection has had been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsVIII.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholdershareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company N.A. (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(h) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective share amounts and percentages listed opposite each Company ShareholderCompany's name shareholder's names listed in Exhibit G attached hereto. Any shares of a schedule to be executed by the Company and delivered to Parent Common contributed to at Closing (the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent"ESCROW SCHEDULE"). The Escrow Fund shall be available to compensate Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedules) or in connection with the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cMerger), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) or obligation contained herein or (hereinafter individually a "Loss" and collectively "Losses"), iii) any claims brought by employees or consultants of the Company who were or are terminated prior to the Closing; provided that such claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyExpiration Date. Except as otherwise provided herein, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i8.2(d) below) identifying Losses, the aggregate amount of which exceed $50,00050,000 (except in the case of Losses arising from any breach or inaccuracy of Section 2.3, as to which such threshold shall not apply), have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options.as

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act required on the party of any Company ShareholderStockholder. As soon as practicable after the Effective Time, Parent will deposit the Escrow Amount, without any act of any Company Shareholder, will be deposited Amount with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Stockholder entitled to receive Merger Shares or Merger Cash shall be in proportion determined with reference to the aggregate Parent Common Stock to which Pro Rata Portion of each such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentStockholder. The Escrow Fund shall be is available to compensate Parent and its affiliates officers, directors and affiliates, including the Surviving Corporation (each, an "INDEMNIFIED PARTY" and collectively, the "INDEMNIFIED PARTIES") for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense incurred defenses (hereinafter individually a "LOSS" and collectively "LOSSES") paid, incurred, accrued or sustained by Parent, its officers, directorsthe Indemnified Parties, or affiliates any of them, directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein as of the date of this Agreement or as of the Closing Date, as though then made (except to the extent that such representation or warranty speaks as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cof an earlier date), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement or (except iii) any claim made by any person that such person is or was entitled (by contract or otherwise) to receive any amount or property in such person's capacity (or asserted capacity) as Parent may have expressly waived a holder of equity interests in writingthe Company or contingent equity interests or as a beneficiary of any rights in excess of the consideration set forth in this Agreement by virtue of or as a result of the Merger; provided, however, that there shall be no liability under this Section 7.2 unless the aggregate of all Losses exceeds One Hundred Thousand Dollars ($100,000) contained herein (hereinafter individually a the "Loss" and collectively "LossesAGGREGATE THRESHOLD"); provided, provided further, however, that claims for in the event the entire amount of any Losses must accrued exceeds the Aggregate Threshold, such entire amount may be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares recovered from the Escrow Fund unless Fund. Parent, Merger Sub and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate amount of which exceed $50,000, have been delivered to Merger Consideration Value. Nothing herein shall limit the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion liability of the Escrow Amount shall be contributed in respect Company for any breach of any Company Optionsrepresentation, warranty or covenant if the Merger does not close.

Escrow Fund. At Prior to or simultaneously with the Closing, ----------- the Stockholders' Representative and Parent shall enter into an escrow agreement (the "Escrow Agreement") with an escrow agent selected by Parent and reasonably ---------------- acceptable to the Stockholders' Representative (the "Escrow Agent") ------------ substantially in the form of Exhibit B hereto. Pursuant to the terms of the --------- Escrow Agreement, within 20 days after the Closing, Parent shall deposit one or more certificates representing, in the aggregate, the Escrow Shares into an escrow account, which account is to be managed by the Escrow Agent (the "Escrow ------ Account"). Any Escrow Shares in the Escrow Account are referred to herein as the ------- "Escrow Fund". In connection with such deposit of the Escrow Shares with the ----------- Escrow Agent and as of the Effective Time, each shareholder holder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Common Stock will be deemed to have received and deposited with the Escrow Agent (as defined below) each stockholder's pro rata interest in the Escrow Amount Fund as determined as of Closing by reference to such stockholder's ownership of shares of Company Common Stock (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow AmountFund), without any act of any the stockholders of the Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentCompany Stockholders"), such deposit to constitute an escrow fund (. Distributions of any -------------------- Escrow Shares from the "Escrow Fund") to Account shall be governed by the terms set forth herein and to be maintained at Parent's cost and expenseconditions of the Escrow Agreement. The adoption of this Agreement and the approval of the Merger by the Company Stockholders shall constitute approval of the Escrow Agreement and of all the arrangements relating thereto, including, without limitation, the placement of the Escrow Shares in escrow and the appointment of the Stockholders' Representative. No portion of the Escrow Amount contributed on behalf of each Company Shareholder Fund shall be contributed in proportion to respect of any Company Option or any other security exercisable or convertible into Company Common Stock. To the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any extent possible, no shares of Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsCorporation.

Escrow Fund. At the Effective Time, each shareholder Time holders of the Company Capital ----------- Stock (individually, a "Company Shareholder" and, collectively, the "Company Shareholders"other than holders of Dissenting Shares) will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholdershareholder, will be deposited with Chase Manhattan Bank and First Trust Companyof California, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the ------------ "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost ------------ and expense. The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and 1.7(a). No portion of the Escrow Amount shall be contributed in the respective amounts listed opposite each respect of any Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentOptions. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and ---- collectively "Losses") incurred by Parent, its officers, directors, or ------ affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company including any contained in Article II herein (as modified by the Company Schedules) or in ). Subject to Section 8.2 below, nothing herein shall limit the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by liability of the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on breach of any representation, warranty or before 5:00 p.m. (California Time) on covenant if the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyMerger does not close. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,00060,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent may recover from the Escrow Fund all the amount of its Losses in excess of which exceed $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options60,000.

Escrow Fund. At the Effective Time, each shareholder Time the holders of the Company Capital ----------- Stock entitled to receive Merger Consideration pursuant to Section 1.6 hereof (individually, a "Company Shareholder" and, collectively, the "Company ShareholdersIndemnifying Stockholders") will not receive the Escrow Amount but such stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act required on the part of any Company Shareholdersuch stockholder. As Instead, as soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited by Parent with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) Stockholder Representative as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each holder of Company Shareholder Capital Stock shall be in proportion determined with reference to the aggregate Parent Common Stock to which each such holder would otherwise be entitled under Section 1.6(b) and stockholder's Pro Rata Escrow Basis. The Escrow Amount shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor entirely out of the Surviving Corporation or ParentMerger Consideration payable upon the Merger in respect of the Company Capital Stock. The Escrow Fund shall be is available to compensate Parent and its affiliates officers, directors and affiliates, including the Surviving Corporation (each, an "Indemnified Party" and collectively, the "Indemnified Parties") for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense incurred defenses (hereinafter individually a "Loss" and collectively "Losses") paid, incurred, accrued or sustained by Parent, its officers, directorsthe Indemnified Parties, or affiliates any of them, directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein as of the date of this Agreement or as of the Closing Date, as though then made (except to the extent that such representation or warranty speaks as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cof an earlier date), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement, (except iii) any Dissenting Share Payments, (iv) any claim made by any person that such person is or was entitled (by contract or otherwise) to receive any amount or property in such person's capacity (or asserted capacity) as Parent may have expressly waived a holder of equity interests in writingthe Company or contingent equity interests or as a beneficiary of any rights in excess of the consideration set forth in this Agreement by virtue of or as a result of the Merger, other than any claim described in clause (iii) contained herein above, (hereinafter individually a "Loss" and collectively "Losses"), provided that v) any claims for made by foreign employees of the Company or any Losses must be asserted on of its subsidiaries whether or before 5:00 p.m. (California Time) not disclosed on the earlier Disclosure Schedule, (vi) any claims made by Parametric Technology Corporation or its subsidiaries relating to occur of the Company Intellectual Property, including, without limitation, any claims related to trade secret misappropriation, whether or not disclosed on the Disclosure Schedule, (ivii) the date that is one year following the Closing Date Acceleration or (iiviii) the date of Cash Dividend; provided, however, that to the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates extent that a specific Liability (as defined in Section 7.2(d)(i2.7 hereof) below) identifying is used to reduce the amount of the Cash Dividend (as calculated pursuant to Schedule 5.21 hereof), such Liability shall not be considered a Loss for purposes of this Article VII. Parent and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate amount Merger consideration. Nothing herein shall limit the liability of which exceed the Company for any breach of any representation, warranty or covenant if the Merger does not close. No Indemnified Party may recover any Losses unless and until one or more Officer's Certificates identifying a Loss or Losses in excess of $50,000, 100,000 in the aggregate (the "Threshold Amount") has or have been delivered to the Escrow Agent as provided in paragraph Section 7.2(d) hereof, in which case such Indemnified Party -------------- shall be entitled to recover all Losses (dincluding the Threshold Amount) so identified to the extent then available in the Escrow Fund. Notwithstanding the foregoing, Parent shall be entitled to recover for, and either there is no objection thereto the Threshold Amount shall not apply as a threshold to, any and all claims or any objection has been resolved in accordance payments made with the provisions respect to (i) all Losses incurred pursuant to clauses (iii), (iv), (v) or (vi) of this Article VII; in such caseSection 7.2(a), Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options(ii) fraud, intentional misrepresentation or willful misconduct.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Time White Amber's Stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent Recruitsoft after the Effective Time with respect to shares constituting the Escrow Amount) Time), without any act required on the part of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust CompanyU.S. Bank, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) N.A. as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at ParentRecruitsoft's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Xxxxx Xxxxx Stockholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and as set forth on Schedule 6.2 hereof. The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Series D Preferred Stock issuable upon the Escrow Fund shall not be unvested or subject to any right Merger in respect of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentXxxxx Xxxxx Capital Stock. The Escrow Fund shall be is available to compensate Parent Recruitsoft and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense defenses (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by ParentRecruitsoft, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company Xxxxx Xxxxx contained herein in ARTICLE II herein, (as modified by the Company Schedulesii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing Xxxxx Xxxxx to perform or comply with any covenant contained herein, (except as Parent may have expressly waived iii) any third party claims alleging that Xxxxx Xxxxx does not own all intellectual property in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"to the work product referenced in Schedule 2.11(d), provided (iv) any claim by Micro Notes Consultants, Inc. ("MICRO NOTES") that claims Xxxxx Xxxxx does not own all intellectual property in and to the work product or otherwise have sufficient rights with respect to any other deliverables created by Micro Notes for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date Xxxxx Xxxxx or (iiv) the date any claim by Xxx Xxxxxxx alleging that Xxxxx Xxxxx has any liability to Xx. Xxxxxxx in repect of taxes owed by him in connection with that certain payment made to Xx. Xxxxxxx as described on Schedules 2.8(b)(ix) and 2.20(i) of the issuance by Parent's independent accountants of its first audit report relating Xxxxx Xxxxx Schedules. Recruitsoft and Xxxxx Xxxxx each acknowledge that such Losses, if any, would relate to Parent's financial statements unasserted contingent liabilities existing at the Effective Time, which if resolved at the Effective Time would include an audit of have led to a reduction in the combined operations of Parent and the Companyaggregate Merger Consideration. Parent Recruitsoft may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below6.2(d)) identifying Losses, the aggregate amount of which exceed $50,000, 50,000 have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent Recruitsoft may recover from the Escrow Fund all only its Losses in excess of $50,000 threshold 50,000. The liability of the Xxxxx Xxxxx Stockholders shall be several but not joint. Recruitsoft shall not be entitled to any recourse against Xxxxx Xxxxx for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion Losses other than by way of the Escrow Amount shall be contributed in respect of any Company OptionsFund except for fraud, bad faith, misrepresentation or willful misconduct.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other an institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a), (b) and (c). No portion of the Escrow Amount shall be contributed in the respective amounts listed opposite each respect of any Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested Options or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parentwarrants. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, reasonable costs and expenses, including reasonable attorneys' fees and expenses expenses, and reasonable expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived contained in writingSections 4.1(a) contained to 4.1(w) or the first clause of Section 4.1(x) herein (hereinafter individually a "LossLOSS" and collectively "LossesLOSSES"); provided, provided however, that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Lossesshall only be available to compensate Parent, its officers, directors or affiliates to extent that the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there Losses is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for 150,000, in which there is no objection or any objection has been resolved in accordance with event the provisions of this Article VII. No portion full amount of the Escrow Amount Fund shall be contributed available to so compensate Parent for any Losses. Parent and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in respect the aggregate Merger consideration. The Escrow Fund shall be the sole source of damages to Parent arising from any claim hereunder (other than for damages due to fraud or willful misrepresentation). Nothing herein shall limit the liability of the Company for any breach of any Company Optionsrepresentation, warranty or covenant if the Merger does not close.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, 600,000 shares of Aspec Common Stock which comprise the Escrow Amount, without any act of any Company Inbox Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent selected by Aspec (which shall be reasonably acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)Inbox) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and at a cost and expense to be maintained at Parent's cost and expenseborne by Aspec. The portion of the Escrow Amount contributed on behalf of each Company Shareholder holder of Inbox Common Stock shall be in proportion to the aggregate Parent Common Stock to Merger Consideration which such holder would otherwise be entitled under Section 1.6(b) and 3.1. The Escrow Agent shall not be in responsible for confirming that the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund comprise the Escrow Amount or that the portion contributed on behalf of each holder of Inbox Common Stock is in the proper proportion, which determination shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parentmade by Aspec. The Escrow Fund shall be available to compensate Parent Aspec and its affiliates Affiliates for any and all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, liabilities, damages, deficiencies, costsexpenses, and expensesfees, including court costs and reasonable attorneys' fees and expenses and in connection with any action, suit or proceeding to the extent of the amount of such actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses or fees (collectively "LOSSES") that Aspec or any of investigation and defense its Affiliates has incurred by Parentreason of the breach by Inbox or the Majority Shareholders of any representation, warranty, covenant or agreement of Inbox or the Majority Shareholders contained herein, or by reason of any misrepresentation by Inbox or the Majority Shareholders made herein. Aspec, Inbox and the Majority Shareholders each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger Consideration. Resort to the Escrow Fund shall be the exclusive remedy of Aspec and its Affiliates against Inbox or any of its directors, officers, representatives, agents or shareholders or the Majority Shareholders for any such breaches and misrepresentations if the Merger does close. Notwithstanding the foregoing, for any claim based upon actual fraud brought during the period twelve (12) months from the Effective Time, Aspec and its Affiliates shall have recourse severally against Inbox or any of its directors, officers, representatives, agents or affiliates directly shareholders or indirectly as a result the Majority Shareholders, respectively, in an amount up to the aggregate consideration received by each such individual in the Merger; provided, however, that to the extent Losses exceed such amount, Aspec will be entitled to proceed against the individual assets of any inaccuracy or breach of a representation or warranty Anmix Xxxxx, Xxhn Xxxx xx Charxxx X. Xxxxx, xxspectively, but only to the extent that such actual fraud was committed by such individual, and then only to the extent of the Company contained herein (as modified by assets of the Company Schedules) or in individual. In addition, notwithstanding the certificates, delivered foregoing and except for amounts recoverable pursuant to Sections 9.3(b) and 9.3(c)Section 3.2, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent Aspec may not receive any shares Escrow Amounts from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,00075,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in e). In such case, Parent case Aspec may recover from the Escrow Fund all the total of its Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with including the provisions of this Article VII. No portion of the Escrow Amount first 75,000 provided that Aspec shall be contributed in respect of any Company Optionsuse its reasonable efforts to mitigate its Losses hereunder.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Ventures' stockholders and Warrant and Option holders will be deemed to have received and deposited the Escrow Shares with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholderstockholder, Warrant holder or Option holder. As soon as practicable after At the Effective TimeClosing, the Escrow AmountShares, without any act of any Company Shareholderstockholder, Warrant holder or Option holder will be deposited with Chase Manhattan State Street Bank and Trust Company, National Association, or a trust company Company (or other institution acceptable to Parent Purchaser and the Securityholder Agent (as defined in Section 7.2(g) belowStockholder Representatives)) , as Escrow Agent (the "Escrow Agent"), such deposit for a period of one year from the Closing Date to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of in the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentAgreement. The Escrow Fund shall be available to compensate Parent Purchaser and its affiliates for any claims, and all losses, liabilities, damages, deficiencies, costsliabilities, obligations, actions, claims, suits, proceedings, demands, assessments, judgments, recoveries, fees, costs and expenses (including, without limitation, all out-of-pocket expenses, including reasonable attorneys' investigation expenses and reasonable fees and expenses disbursements of accountants and expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates directly or indirectly as a result counsel) of any inaccuracy nature whatsoever, net of insurance proceeds actually realized or breach of a representation or warranty of the Company contained herein to be realized by Purchaser (as modified by the Company Schedules) or in the certificatescollectively, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for arising out of, based upon or resulting from (1) any inaccuracy in or breach of any representation and warranty of Ventures which is contained in this Agreement or any Schedule or certificate delivered pursuant hereto or thereto; (2) any breach or non- fulfillment of, or any failure to perform, any of the covenants, agreements or undertakings of Ventures (which covenants, agreements or undertakings were to be performed or complied with on or prior to the consummation of the Merger) which are contained in or made pursuant to the terms and conditions of this agreement; (3) any losses of Purchaser or any Wired Company (whether or not disclosed on a Schedule hereto) to the extent arising out of the Wired Companies' obligations to provide indemnification in excess of the amount of the Advance Escrow pursuant to Section 10.3(b) of the Advance Agreement or otherwise resulting from or relating to the operation or sale of the Business (as such term is defined in the Advance Agreement); or (4) any Losses must be asserted on or before 5:00 p.m. resulting from the delayed form filings described in paragraph (California Timec) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanySchedule 2.12. Parent Purchaser may not receive any shares payment from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) belowthe Escrow Agreement) identifying Losses, the aggregate amount of which exceed $50,000500,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIEscrow Agreement; in such case, Parent Purchaser may recover from the Escrow Fund all its Losses in excess of the first $50,000 threshold for which there 500,000 (the "Deductible"); provided, however, that in no event shall the Deductible apply to the Losses resulting from any inaccuracy or breach of any representation and warranty contained in Sections 2.1(b), 2.2, 2.14 or 2.18, any Losses arising under clause (3) or (4) above, any fees and costs that Purchaser is no objection entitled to recover pursuant to Section 10.1(c), or any objection negative Adjustment Amount determined pursuant to Section 10.1(d), and provided, further, that any such Losses or fees and costs or Adjustment Amount shall not be taken into account in determining whether aggregate Losses exceed the threshold of the Deductible or whether the Deductible has been resolved in accordance with the provisions satisfied for purposes of this Article VII. No portion of calculating Purchaser's recovery from the Escrow Amount shall be contributed in respect of any Company OptionsFund.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Ventures' stockholders will be deemed to have received and deposited the Escrow Shares with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholderstockholder. As soon as practicable after At the Effective TimeClosing, the Escrow AmountShares, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan State Street Bank and Trust Company, National Association, or a trust company Company (or other institution acceptable to Parent Purchaser and the Securityholder Agent (as defined in Section 7.2(g) belowStockholder Representatives)) , as Escrow Agent (the "Escrow Agent"), such deposit for a period of one year from the Closing Date to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained in the Escrow Agreement at ParentPurchaser's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent Purchaser and its affiliates for any claims, and all losses, liabilities, damages, deficiencies, costsliabilities, obligations, actions, claims, suits, proceedings, demands, assessments, judgments, recoveries, fees, costs and expenses (including, without limitation, all out-of-pocket expenses, including reasonable attorneys' investigation expenses and reasonable fees and expenses disbursements of accountants and expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates directly or indirectly as a result counsel) of any inaccuracy nature whatsoever, net of insurance proceeds actually realized or breach of a representation or warranty of the Company contained herein to be realized by Purchaser (as modified by the Company Schedules) or in the certificatescollectively, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for arising out of, based upon or resulting from (1) any Losses must inaccuracy in or breach of any representation and warranty of Ventures which is contained in this Agreement or any Schedule or certificate delivered pursuant hereto or thereto; (2) any breach or non-fulfillment of, or any failure to perform, any of the covenants, agreements or undertakings of Ventures (which covenants, agreements or undertakings were to be asserted performed or complied with on or before 5:00 p.m. (California Time) on prior to the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date consummation of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements Merger) which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined are contained in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered or made pursuant to the Escrow Agent as provided in paragraph (d) terms and either there is no objection thereto or any objection has been resolved in accordance with the provisions conditions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options.Agreement;

Escrow Fund. At the Effective Time, each shareholder stockholder of the Company (individually, a "Company ShareholderStockholder" and, collectively, the "Company ShareholdersStockholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan Bank and Trust CompanyChaseMellon Shareholder Services LLC, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Stockholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company ShareholderStockholder's name listed in Exhibit G EXHIBIT K attached hereto. Any Except as provided in Section 1.6(d)(iv) any shares of Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate the Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' attorneys= fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, directors or affiliates (including the Surviving Corporation) (i) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company or of any Affiliate Stockholder contained herein (as modified herein, or in any certificate, instrument, schedule or document delivered by the Company Schedules) or any Affiliate Stockholder at the Closing in connection with this Agreement or the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)Merger, or any failure by the Company or any Affiliate Stockholder prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein or (ii) in the event the Company prior to the Closing, or the Securityholder Agent after the Closing, agrees to any cash settlement with the Distributor for the purposes of terminating the exclusivity provisions of the Distribution Agreement as provided in Section 6.16 above (hereinafter individually a "Loss" ALOSS@ and collectively "LossesLOSSES"), provided that claims for arising out of an inaccuracy or breach of any Losses representations and warranties and any covenant of the Company or the Affiliate Stockholders contained in this Agreement and in any certificate, instrument, schedule or document delivered by the Company or the Affiliate Stockholders at the Closing in connection with this Agreement or the Merger must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or and provided further, that a Loss for purposes of clause (ii) above shall be deemed to include only the date amount of such cash settlement, exclusive of any expenses or costs incurred in attorneys' fees or other expenses or costs incidental to such cash settlement. No portion of the issuance by Parent's independent accountants Escrow Amount shall be contributed in respect of its first audit report any Company Options. Except as provided in Section 11.2 relating to Parent's financial statements Third Party Expenses (as defined therein) exceeding $150,000, which would include an audit of excess shall be payable from the combined operations of Parent and the Company. Escrow Fund, Parent may not receive any shares from the Escrow Fund unless and until Officer's =s Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,00075,000 (of which no individual Loss shall be less than $5,000), have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIVIII; in such case, Parent may recover from the Escrow Fund all Losses in excess of (including any Losses within the $50,000 75,000 threshold and any individual Losses that may be less than $5,000) for which there is no objection or any objection has had been resolved in accordance with the provisions of this Article VII. No portion VIII in accordance with the provisions of the Escrow Amount shall be contributed in respect of any Company Optionsthis Section 8.2.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Principal Shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Principal Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Principal Shareholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) ), as Escrow Agent (the "“Escrow Agent"”), such deposit to constitute an escrow fund (the "“Escrow Fund"”) to be governed by the terms set forth herein and to be maintained at Parent's ’s cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' ’ fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a “Loss” and collectively “Losses”) incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of herein. Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate amount Merger Consideration. Losses shall be satisfied first against shares of which exceed $50,000Parent Common Stock that are not subject to a right of repurchase or similar right granted pursuant to a Stock Restriction Agreement or otherwise, have been delivered and then satisfied against shares of Parent Common Stock that are not subject to any such right. Nothing herein shall limit the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion liability of the Escrow Amount shall be contributed in respect Company for any breach of any Company Options.representation, warranty or covenant if the Merger does not close. (b)

Escrow Fund. At As security for the Effective Timeindemnity provided for in SECTION 8.2, each shareholder of the Company (individuallyEscrow Shares shall be registered in the name of, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Cash, be deposited with, an escrow agent selected by Acquiror with the consent of the Stockholders' Agent (as defined belowwhich consent shall not be unreasonably withheld) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow Fund") Fund to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of in the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentAgreement. The Escrow Fund shall be available allocated among the Former Target Stockholders on a pro-rata basis in accordance with SECTION 1.6 (the "ESCROW ALLOCATION") (excluding for purposes of this calculation any Dissenting Shares). Upon compliance with the terms hereof and subject to compensate Parent the provisions of this ARTICLE VIII, Acquiror and its affiliates the Surviving Corporation shall be entitled to obtain indemnity from the Escrow Fund for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred Damages covered by Parent, its officers, directors, or affiliates directly or indirectly as a result the indemnity provided for in SECTION 8.2. In determining the amount of any inaccuracy Damages resulting from any misrepresentation, breach or default or whether a misrepresentation, breach of a representation or warranty of the Company default has occurred, any materiality standard contained herein (as modified by the Company Schedules) or in the certificatesapplicable representation, delivered pursuant to Sections 9.3(b) and 9.3(c)warranty or covenant shall be disregarded. Notwithstanding the foregoing, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent Acquiror may not receive any shares or cash from the Escrow Fund unless and until an Officer's Certificates Certificate (as defined in Section 7.2(d)(i) belowSECTION 8.5) identifying LossesDamages, the aggregate amount of which exceed exceeds $50,00025,000 (the "ESCROW BASKET"), have has been delivered to the Escrow Agent as provided in paragraph SECTION 8.5 and such amount is determined pursuant to this ARTICLE VIII to be payable, in which case Acquiror shall receive a combination of shares and cash (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No cash portion comprising 20% of the Escrow Amount value of any such payment) equal in value to the full amount of Damages. In determining the amount of any Damage resulting from any misrepresentation, breach or default or whether a misrepresentation, breach or default has occurred, any materiality standard contained in the applicable representation, warranty or covenant shall be contributed in respect of any Company Optionsdisregarded.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company N.A. (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g7.2(h) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b1.6(a) and shall be in the respective share amounts and percentages listed opposite each Company ShareholderCompany's name stockholder's names listed in Exhibit G attached hereto. Any shares of a schedule to be executed by the Company and delivered to Parent Common contributed to at Closing (the "Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentSchedule"). The Escrow Fund shall be available to compensate indemnify Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cthis Agreement), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) or obligation contained herein (hereinafter individually a "Loss" and collectively "Losses"), herein; provided that such claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier Expiration Date, (iii) any Tax obligations of the Company arising from the dissolution of the LLC and formation of the Company, including related asset transfers and transactions, (iv) any actions or failure to occur of act by the Company with respect to Clients and Profits, Inc. and the Clients and Profits trademark, including but not limited to claims that the Company engaged in trademark infringement or unfair competition and (iv) any state sales and use Taxes incurred but not paid by the date that is one year following Company prior to the Closing Date or (iiregardless, with respect to items (iii), (iv) and (v), of any disclosure of such matters in the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyCompany Schedules). Except as otherwise provided herein, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i7.2(d) below) identifying Losses, the aggregate amount of which exceed $50,00050,000 (except in the case of Losses arising from intentional fraud, willful misconduct or any breach or inaccuracy of Section 2.3, as to which such threshold shall not apply), have been delivered to the Escrow Agent as provided in paragraph (df) and either such amount is determined pursuant to this Article VII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses (including any Losses within the $50,000 threshold) for which there is no objection thereto or any objection has had been resolved in accordance with the provisions of this Article VII; provided, however, that to the extent third-party expenses, including, without limitation, legal and accounting fees incurred by the Company in such case, Parent may recover from connection with this Agreement and the Escrow Fund all Losses in excess of Merger exceed $50,000 threshold in the aggregate, such excess shall be deemed a Loss for which there is no objection or any objection has been resolved purposes of Article VII and shall be immediately reimbursable to Parent in accordance with this Article VII (without regard to the provisions $50,000 minimum threshold for Losses and without counting toward the $50,000 threshold). For purposes of this Article VII. No portion , the phrases "Company stockholders" and "stockholders of the Escrow Amount Company" shall be contributed in respect refer to the stockholders of any the Company Optionsimmediately prior to the Effective Time.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received from Merger Sub and deposited with the Escrow Agent (as defined below) the Escrow Amount Shares (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act on the part of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow AmountShares, without any act on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan First Union National Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expensein the Escrow Agreement. The portion number of the Escrow Amount contributed Shares deposited on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a) and (b) and shall be in the respective share amounts and percentages listed opposite each Company Shareholderstockholder's name listed in Exhibit G attached heretoa schedule in form and substance reasonably acceptable to Parent to be executed by the Company and delivered to Parent at Closing (the "ESCROW SCHEDULE"). Any No shares of Parent Common contributed to Stock deposited in the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Company or the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate reimburse Parent and its affiliates Affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, agents or affiliates Affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy in, or breach of of, a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedulesin connection with the Merger) or in the certificates, delivered pursuant to Sections 9.3(b(ii) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), herein; provided that claims for arising out of an inaccuracy in, or breach of, any Losses representations and warranties or any covenant of the Company contained in this Agreement and in any certificate, instrument, schedule or document delivered by the Company at the Closing in connection with this Agreement or the Merger must be asserted on or before 5:00 p.m. (California Time) on the earlier Expiration Date. Parent shall provide notice to occur the Securityholder Agent (as defined below) within 30 days of (i) Parent becoming aware of any claims for Losses if such claims are reasonably identifiable and determinable; PROVIDED, HOWEVER, that no delay or failure on the date that is one year following part of Parent in notifying the Closing Date Securityholder Agent shall relieve the Securityholder Agent or (ii) the date stockholders of the issuance by Parent's independent accountants Company on whose behalf the Escrow Amount was contributed from any obligation unless they are materially prejudiced thereby (and then only to the extent of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Companysuch prejudice). Except as otherwise provided herein, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) belowthe Escrow Agreement) identifying Losses, the aggregate amount of which exceed $50,000500,000, have been delivered to the Escrow Agent as provided in paragraph (d) the Escrow Agreement and either there such amount is no objection thereto or any objection has been resolved in accordance with determined pursuant to the provisions of this Article VIIEscrow Agreement to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses in excess of (including any Losses within the $50,000 threshold 500,000 threshold) for which there is no objection or any objection has had been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount Agreement; PROVIDED, HOWEVER, that to the extent the aggregate premiums for the Company's Directors' and Officers' Liability insurance policy exceed $40,000, such excess shall be contributed in respect deemed a Loss for purposes of any Company Optionsthis Section 8.2(a) and the Escrow Agreement.

Escrow Fund. At As security for the Effective Time, each shareholder indemnity provided for in this Section 8.02 and by virtue of the Company (individually, a "Company Shareholder" and, collectivelythis Agreement, the "Company Shareholders") Stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent Stockholder Representative (as defined in Section 7.2(g) below8.03)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein herein. The Escrow Agent may execute this Agreement following the date hereof and prior to be maintained at Parent's cost the Effective Time, and expensesuch later execution, if so executed after the date hereof, shall not affect the binding nature of this Agreement as of the date hereof between the other signatories hereto. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Stockholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent1.06. The Escrow Fund Stockholders shall be available to compensate indemnify and hold Parent and its officers, directors and affiliates for any (the "Indemnified Parties") harmless against all claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses and expenses of investigation (hereinafter individually a "Loss" and defense collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein in this Agreement, (as modified by the Company Schedulesii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement, or (except iii) any action, suit or proceeding which is pending or threatened against the Company as Parent may of the Effective Time. No Stockholder shall have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims any right to contribution from the Company for any Losses must be asserted on or before 5:00 p.m. (California claim made by Parent after the Effective Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) Time), without any act required on the part of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the General Escrow AmountAmount and the Special Escrow Amounts (collectively, the "ESCROW AMOUNT") without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Stockholder Agent (as defined in Section 7.2(g7.2(g)(i) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and Sections 1.6(a)(i). The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common Stock issuable upon the Merger in respect of Capital Common Stock, and no portion of the Escrow Amount shall be contributed to out of the shares of Parent Common Stock reserved for issuance in respect of Company Options. That portion of the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor comprised of the Surviving Corporation or Parent. The General Escrow Fund shall be Amount is available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and out-of-pocket expenses of investigation (hereinafter individually a "LOSS" and defense collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)Article II herein, or any failure by the Company prior to the Closing to perform or comply with any covenant contained herein. That portion of the Escrow Fund comprised of the Special Escrow Amount I is available as an Offset as provided in Section 1.6(g)(viii) hereof. That portion of the Escrow Fund comprised of the Special Escrow Amount II is available to compensate Parent and its affiliates from any Losses incurred by Parent, its officers, directors or affiliates (except including the Surviving Corporation) directly or indirectly as Parent may have expressly waived a result of any claims of current or former stockholders of the Company or former stockholders of Orcim Acquisition Corp. ("ORCIM") that are due to, arise out of or otherwise relate to the merger between the Company and Orcim which became effective November 15, 1993, or the rights of the stockholders in writing) contained connection therewith (herein (hereinafter individually a "Loss" and collectively "LossesORCIM CLAIMS"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of . Parent and the CompanyCompany each acknowledge that such Losses, if any, would relate to unasserted contingent liabilities existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger consideration. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, 250,000 have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent may recover from the Escrow Fund all Losses its Losses, including the first $250,000. The foregoing limitations shall not apply to (i) any Offset under Section 1.6(g)(viii), (ii) any Orcim Claims or (iii) any claim for indemnification arising from a breach of any representation or warranty set forth in excess of $50,000 threshold for which there is no objection or any objection has been resolved Section 2.8 (relating to Taxes) and Parent shall not be limited to the amount in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsFund to compensate for such Losses.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's shareholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect Time) pursuant to shares constituting the Escrow Amount) Agreement attached hereto as Exhibit H, without any act required on the part of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholdershareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g7.2(h)(i) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to Shares which such holder would otherwise be entitled under Section 1.6(b) and 1.6(a). The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Shares issuable upon the Escrow Fund shall not be unvested or subject to any right Merger in respect of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentCompany Common Stock. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses")herein; provided, provided however, that claims for any Losses must the Escrow Fund shall not be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) available after the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's of financial statements which would include an audit of the containing combined operations of Parent and the CompanyCompany for those contingencies that would be expected to be encountered in the audit process. Parent and the Company each acknowledge that such Losses, if any, would relate to unasserted contingent liabilities existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger consideration. Subject to Section 8.5 below, nothing herein shall limit the liability of the Company for any breach of any representation, warranty or covenant if the Merger does not close. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000300,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent may recover from the Escrow Fund all its Losses in excess of the first $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options300,000.

Escrow Fund. At As security for the Effective Time, each shareholder indemnity provided for in Section ----------- ------- 7.2 hereof and by virtue of this Agreement and the approval of this Agreement --- and the Merger by the Company's Board of Directors and the Company (individually, a "Company Shareholder" and, collectivelyShareholders, the "Company Shareholders") Shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholder, will be deposited with Chase Manhattan U.S. Bank and Trust Company, National Association, or a trust company (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)Company Shareholders) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein herein. The Escrow Agent may execute this Agreement following the date hereof and prior to be maintained at Parent's cost the Effective Time, and expensesuch later execution, if so executed after the date hereof, shall not affect the binding nature of this Agreement as of the date hereof between the other signatories hereto. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b1.6(a). -------------- By virtue of the approval of this Agreement and the Merger by the Company Board of Directors and the Company Shareholders, the Company Shareholders jointly agree to indemnify and hold Parent and its officers, directors and affiliates (the "Indemnified Parties") harmless against all claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses of investigation (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in this Agreement, (ii) any failure by the Company to perform or comply with any covenant contained in this Agreement, or (iii) any violation of California securities laws with respect to the Company's employee stock or stock option plan; provided, however, that, except -------- ------- as set forth in Section 7.4, the aggregate amount for which the Company ----------- Shareholders are required to indemnify the Indemnified Parties shall be not exceed the amount deposited in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentFund. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses such Losses. The Company Shareholders shall not have any right of investigation and defense incurred contribution from the Company with respect to any Loss claimed by Parent, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty Parent after the Effective Time. Nothing herein shall limit the liability of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on breach of any representation, warranty or before 5:00 p.m. (California Time) on covenant if the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Merger does not close for reasons other than Parent's independent accountants breach of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Companyobligations hereunder. Parent may not receive any shares from the Escrow Fund unless and until an Officer's Certificates Certificate (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, have Losses has been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsbelow.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders ----------- will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) ), as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense incurred (hereinafter individually a "Loss" and collectively "Losses") incurred, sustained or paid by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) contained in this Agreement or in the certificatesany certificate, instrument or other document delivered pursuant to Sections 9.3(b) and 9.3(c)the terms of this Agreement, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses")herein, provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date payment by Parent or the Surviving Corporation of any amount on the account of Dissenting Shares which such payment or payments exceed the aggregate consideration that otherwise would have been payable in respect of such shares, (iii) the amount of any Third Party Obligations that the Company fails to satisfy pursuant to Section 5.6 above prior to the Effective Time and/or the amount of any cash in excess of the issuance by Parent's independent accountants amounts set forth in Section 5.6 expended for such purpose, (iv) the payment of its first audit report relating to Parent's financial statements which would include an audit any Legal Expenses, or (v) the amount that the Final Cash Balance (as defined in Section 7.3 below) is less than the lesser of (A) the applicable Minimum Cash Balance required in Section 5.27 and (B) the Cash Amount reflected on the Estimated Closing Date Balance Sheet. Nothing herein shall limit the liability of the combined operations Company for any breach of Parent and any representation, warranty or covenant if the CompanyMerger does not close. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, Losses in the aggregate amount in excess of which exceed $50,000, 2,000,000 (the "Threshold Amount") have been delivered to the Escrow Securityholder Agent (as provided defined in paragraph (dg) and either there is no objection thereto or any objection below), in which event Parent shall be entitled to recover only amounts in excess of the Threshold Amount; provided that notwithstanding the foregoing, Parent shall be entitled to indemnification on a first dollar basis, without regard to whether the Threshold Amount has been resolved exceeded, with respect to (i) the payment by Parent or the Surviving Corporation of any amount on account of Dissenting Shares, (ii) the amount of any Third Party Obligations that the Company fails to satisfy pursuant to Section 5.6 above and/or the amount of any cash in accordance excess of the amounts set forth in Section 5.6 expended for such purpose, (iii) the payment of any Legal Expenses, and (iv) the amount that the Final Cash Balance (as defined in Section 7.3 below) is less -52- than the lesser of (A) the applicable Minimum Cash Balance required in Section 5.27 and (B) the Cash Amount reflected on the Estimated Closing Date Balance Sheet. The Company Stockholders shall not have any right of contribution from the Company or Parent with the provisions respect to any Loss pursuant to this Article VII. For purposes of this Article VII; , references to the terms "material," "materially," "in such caseall material respects" and "Material Adverse Effect" shall be disregarded for purposes of determining whether there was a breach or inaccuracy in any representation or warranty of the Company in Article II, Parent may recover from as modified by the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection Company Schedules attached hereto, or any objection has been resolved in accordance with certificate, instrument or other document delivered pursuant to the provisions terms of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsAgreement.

Escrow Fund. At As security for the Effective Timeindemnity provided for in this Section 7.2 and by virtue of this Agreement, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan Bank and Trust D.L. Xxxxxxx Xxxrow Company, National Association, or a trust company Inc. (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)Company Stockholders) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein herein. The Escrow Agent may execute this Agreement following the date hereof and prior to be maintained at Parent's cost the Effective Time, and expensesuch later execution, if so executed after the date hereof, shall not affect the binding nature of this Agreement as of the date hereof between the other signatories hereto. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Stockholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b1.6(a). The Company and the Company Stockholders jointly agree to indemnify and hold Parent and its officers, directors and affiliates (the "INDEMNIFIED PARTIES") harmless against all claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses of investigation (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in this Agreement, or (ii) any failure by the Company to perform or comply with any covenant contained in this Agreement or any failure by Jonaxxxx Xxxxx xx Waynx Xxxxxxxx xx comply with the provisions of Section 5.17 herein; provided, however, that (except for indemnification obligations due to any breach of the Extended Representations and Warranties for which there is no limitation) the aggregate amount for which the Company and the Company Stockholders are required to indemnify the Indemnified Parties shall not exceed the amount held by the Escrow Agent in the Escrow Fund; and provided, further, that (except for indemnification obligations due to any breach of the Extended Representations and Warranties) the sole recourse of the Indemnified Parties for indemnification obligations of the Company and the Company Stockholders shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to make claims upon the Escrow Fund shall not be unvested or subject pursuant to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentSection 7.2(d) hereof. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses such Losses. The Company Stockholders shall not have any right of investigation and defense incurred contribution from the Company with respect to any Loss claimed by Parent, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty Parent after the Effective Time. Nothing herein shall limit the liability of the Company contained herein (as modified by for any breach of any representation, warranty or covenant if the Merger does not close for reasons other than Parent's breach of its obligations hereunder; but the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must Stockholders shall not be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Companypersonally liable therefor. Parent may not receive any shares from the Escrow Fund unless and until an Officer's Certificates Certificate (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, have Losses has been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsbelow.

Escrow Fund. At As security for the Effective Time, each shareholder indemnity provided for in this Article 8 and by virtue of the Company (individually, a "Company Shareholder" and, collectivelythis Agreement, the "Company Shareholders") Parent will be deemed to have received and deposited deposit with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company the Escrow Agent (or other institution acceptable to Parent and the Securityholder Agent Stockholder Representative (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"this Article 8)), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein herein. The Escrow Agent may execute this Agreement following the date hereof, and to be maintained at Parent's cost and expensesuch later execution, if so executed after the date hereof, shall not affect the binding nature of this Agreement as of the date hereof between the other signatories hereto. The portion of the Escrow Amount contributed on behalf of each Company Shareholder Stockholder shall be in proportion to the aggregate Parent Common Stock Merger Consideration contributed at the Closing to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent2.02. The Escrow Fund Stockholders shall be available to compensate indemnify and hold Parent and its officers, directors and affiliates for any (the "Indemnified Parties") harmless against all claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses and expenses of investigation (hereinafter individually a "Loss" and defense collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein in this Agreement, (as modified by the Company Schedulesii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement, (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (iiii) the Company's commitments and liabilities in accordance with Generally Accepted Accounting Principles ("GAAP") at the date that hereof being in excess of the amount set forth in Schedule A (such excess commitments and liabilities can be offset by a corresponding asset recordable under GAAP, (iv) any action, suit or proceeding which is one year following pending or threatened against the Company as of the Effective Time, (v) any liabilities of the Company for Taxes attributable to a Pre- Closing Tax Period ending prior to the Closing Date which are not reserved for on Schedule A, (vi) any payments in respect of Dissenting Shares that are recoverable pursuant to Section 2.04(c) (which shall include Parent's reasonable legal and other fees incurred in connection with any appraisal proceeding), or (iivii) any License Fee Make Whole which arises after the date Closing Date. No Stockholder shall have any right to contribution from the Company for any claim made by Parent after the Effective Time. Notwithstanding anything in the preceding language to the contrary, and subject to the procedures set forth in paragraphs (e) and (f) of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. this Section 8.02, Parent may not receive any shares of the Escrow Amount from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (e) below) identifying Losses, which in the aggregate amount of which exceed $50,000100,000 (the "Basket Amount"), have been delivered to the Escrow Agent as provided in paragraph (de) and either there is no objection thereto or below in which case Parent shall be entitled to recover all Losses including the Basket Amount; provided, however, that any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover Loss pursuant to Sections 2.04(c) hereof shall be recoverable from the Escrow Fund all Losses first dollar and not subject to the Basket Amount nor shall it be included in excess of $50,000 threshold for which there is no objection or any objection calculating whether the Basket Amount has otherwise been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsexceeded.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) Time), without any act required on the part of any Company Shareholderstockholder in accordance with the terms and provisions of an Escrow Agreement in substantially the form attached hereto as Exhibit G (the "Escrow Agreement"). As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Stockholder Agent (as defined in Section 7.2(g7.2(g)(i) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained in the Escrow Agreement and at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a) and 1.6(b). The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Stock issuable upon the Escrow Fund shall not be unvested or subject to any right Merger in respect of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentCompany Common Stock. The Escrow Fund shall be is available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense defenses (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)Article II herein, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses")herein, provided that claims or for any Losses must be asserted on suffered by Parent or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date Company as a result of the issuance failure by Parent's independent accountants of its first audit report relating Administaff to Parent's financial statements which would include an audit provide the Benefit Services or the improper provision of the combined operations Benefit Services as a result of which Parent and or the Company is subject to liability to the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto employees or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsa governmental agency.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Securityholders ----------- will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus as increased by any additional shares as may be issued with respect to the Escrow Amount upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholder. As soon as practicable after Securityholder, to be maintained for the Effective Time, benefit of the Escrow Amount, without any act Company Securityholders and to secure the representations and warranties of any the Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent")hereunder, such deposit to constitute an escrow fund (the "Escrow Fund") to be ----------- governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate compensate, reimburse, defend, indemnify and hold harmless the Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, directors or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any material inaccuracy or breach of a representation or warranty of the Company contained herein (as modified and not waived by the Parent, or in any certificate, instrument, schedule or document delivered by the Company Schedulesin connection with this Agreement or the Merger, (ii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any material failure by the Company prior to the Closing to perform or comply with any covenant contained herein, (except as Parent may have expressly waived iii) for any untrue statement of a material fact or omission to state any material fact necessary in writingorder to make the statements, in the light of the circumstances under which made, not misleading in any documents mailed, delivered or otherwise furnished to the Company Securityholders in connection with soliciting their consent to this Agreement and the Merger, to the extent prepared by the Company or (iv) contained herein any payment made to Information Builders, Inc. after the date hereof with respect to the December 31, 1997 termination of its license agreement with Company (hereinafter individually a "Loss" and collectively ---- "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund ------ unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in favor of the Parent in accordance with the provisions of this Article VIIVIII; in such case, Parent may recover from the Escrow Fund all any Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved so identified in accordance with the provisions of this Article VIISection 8.2. No portion of the The Escrow Amount Fund shall be contributed in respect the sole source of damages to Parent arising from any Company Optionsclaim hereunder (other than for damages due to fraud or willful misrepresentation).

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act required on the party of any Company ShareholderStockholder. As soon as practicable after the Effective Time, Parent will deposit the Escrow Amount, without any act of any Company Shareholder, will be deposited Amount with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent Stockholder Representative (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each the Company Shareholder Stockholders shall be in proportion to the aggregate Parent Common Stock Merger Consideration to which each such holder Company Stockholder would otherwise be entitled under to receive pursuant to Section 1.6(b) and 1.6. The Escrow Amount shall be allocated in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed proportion to the Escrow Fund shall not be unvested or subject number of Merger Shares and amount of Merger Cash payable at the Effective Time to any right of repurchase, risk of forfeiture, or other condition in favor each of the Surviving Corporation or ParentCompany Stockholders. The Escrow Fund shall be is available to compensate Parent and its affiliates officers, directors and affiliates, including the Surviving Corporation (each, an "INDEMNIFIED PARTY" and collectively, the "INDEMNIFIED PARTIES") for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense incurred defenses (hereinafter individually a "LOSS" and collectively "LOSSES") paid, incurred, accrued or sustained by Parent, its officers, directorsthe Indemnified Parties, or affiliates any of them, directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein as of the date of this Agreement or as of the Closing Date, as though then made (except to the extent that such representation or warranty speaks as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cof an earlier date), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement, (except iii) any Dissenting Share Payments, (iv) any claim made by any person that such person is or was entitled (by contract or otherwise) to receive any amount or property in such person's capacity (or asserted capacity) as Parent may a beneficiary of any rights in excess of the consideration set forth in this Agreement by virtue of or as a result of the Merger, other than any claim described in clause (iii) above and (v) the items listed on Schedule 7.2(a). Parent, Merger Sub and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have expressly waived led to a reduction in writing) contained the aggregate Merger Consideration. Nothing herein (hereinafter individually a "Loss" and collectively "Losses")shall limit the liability of Parent, provided that claims Merger Sub or the Company for any Losses must be asserted on breach of any representation, warranty or before 5:00 p.m. (California Time) on covenant if the earlier to occur of (i) Merger does not close. For the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions purpose of this Article VII; VII only, when determining the amount of any Loss resulting from such inaccuracy or breach, any such representation or warranty of the Company that is qualified in scope as to materiality (including Company Material Adverse Effect) shall be deemed to be made or given without such case, Parent qualification. There shall be no right of contribution from any Indemnified Party with respect to any Loss. The Escrow Agent may recover from execute the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with Agreement following the provisions date hereof and prior to the Closing, and such later execution, if so executed after the date hereof, shall not affect the binding nature of this Article VII. No portion Agreement as of the Escrow Amount shall be contributed in respect of any Company Optionsdate hereof between the other signatories hereto.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective TimeClosing, that number of Exchangeable Shares comprising the Escrow AmountAmount will be deposited by the Surviving Corporation, without any act of any Holder in Escrow, with Bank of Montreal Trust Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, (or a trust company or other another institution acceptable to BackWeb Parent and the Securityholder Agent (as defined in Section 7.2(g7.2(f) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each Company Shareholder any Holder in Escrow shall be in proportion a fraction of the total Escrow Amount equal to such Holder's Proportional Escrow Amount, and shall be deducted from the aggregate Parent Common Stock portion of the Amalgamation Consideration to which such holder of Lanacom Common Shares would otherwise be entitled under to receive pursuant to Section 1.6(b) and 1.5. A list of the respective Escrow Amounts contributed by the Holders shall be provided to the Escrow Agent. The Escrow Amount deposited in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject used effectively to reduce the Amalgamation Consideration in the event of (y) a reduction required pursuant to Section 1.7 of this Agreement and (z) any right of repurchaseclaim, risk of forfeitureloss, expense, liability or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expensesdamage, including reasonable attorneys' fees and expenses and expenses fees, to the extent of investigation and defense the amount of such claim, loss, expense, liability or other damage (collectively with any amounts payable pursuant to Section 1.7, the "Losses") that BackWeb Parent or any of its affiliates have incurred by reason of the breach by Lanacom of any representation, warranty, covenant or agreement of Lanacom contained in this Agreement. BackWeb Parent, its officersLanacom and the Agent each acknowledge that such Losses, directorsif any, shall be deemed to relate to unresolved contingencies existing at the Closing Date which, if resolved at the Closing Date, would have led to a reduction in the Amalgamation Consideration. Nothing herein shall limit the liability of Lanacom, the Founder or affiliates directly or indirectly as a result any holder of Lanacom Common Shares for any breach of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)covenant, or any failure by willful breach of any representation or warranty, if the Company prior Amalgamation does not close. In addition, notwithstanding the foregoing, the Surviving Corporation shall not be entitled to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares Escrow Amounts from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000an aggregate US$50,000 deductible amount, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII); in such casecase the Escrow Agent shall deliver to the Surviving Corporation for cancellation for no consideration, and in full satisfaction of the aggregate claims of BackWeb Parent may recover from (or its affiliates) the number of Exchangeable Shares remaining in the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with having an aggregate value (based on the provisions of this Article VII. No portion value of the Escrow Amount Exchangeable Shares on the Closing Date of US$0.50 per share) equal to one-third of the aggregate amount of such Losses (reflecting the parties' agreement that one-third of the risk of such event shall be contributed in respect borne by the shareholders of any Company OptionsLanacom and two-thirds of the risk shall be borne by BackWeb Parent) minus the one time aggregate deductible amount of US$50,000.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders ----------- will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan U.S. Bank and Trust Company, National Association, or a trust company NA (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund ------------ (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's ----------- cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and 1.6(a). No portion of the Escrow Amount shall be contributed in the respective amounts listed opposite each respect of any Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested Options or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parentwarrants. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively ---- "Losses") incurred by Parent, its officers, directors, or affiliates (including ------ the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company or any contained in Article II herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or (ii) any failure by the Company prior to the Closing to perform or comply with any covenant contained herein, (except as Parent may have expressly waived iii) the payment of $500,000 in writing) contained herein (hereinafter individually connection with the obligation of the Company set forth in Schedule 2.19, which payment shall be deemed a "Loss" and collectively for purposes of this Agreement (the "LossesFee Payment") or (iv) the payment by the Parent of cash to Imperial Bank in connection with the exercise of the put right contained in that certain Warrant dated June 27, 1997 (the "Warrant Payment"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,00075,000, have been delivered to the Escrow Agent as provided in paragraph (de) and either there such amount is no objection thereto or any objection has been resolved in accordance with the provisions of determined pursuant to this Article VIIVII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all Losses indemnified Losses; provided, however, that in excess of $50,000 threshold for which there is no objection or any objection has been resolved connection with the ----------------- Fee Payment, Parent shall receive shares from the Escrow Fund immediately following the Closing in an amount equal to the Fee Payment and/or the Warrant Payment (in accordance with the provisions of this Article VII. No portion of the Escrow Amount Section 7.2(d)(ii) below) and such shares shall be contributed in respect of any Company Optionspaid without regard to the $75,000 limitation referenced above.

Escrow Fund. At In addition to the indemnification obligation of the Principal Stockholders which shall not be limited to the Escrow Amount, as security for the indemnity provided for in Section 7.2 hereof and by virtue of this Agreement and the Company Stockholders' approval thereof, at the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g7.3(g) below)) ), as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense Losses incurred by Parent, its officers, directors, or affiliates directly or indirectly (including the Surviving Corporation) as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein herein, (as modified by the Company Schedulesii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained herein, (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (iiii) the date failure of the Company's Cash Account to contain an amount of cash that is one year following equals or exceeds the Closing Date Third Party Expenses incurred by the Company for which failure the Total Consideration has not been previously reduced, or (iiiv) the date payment by Parent or the Company of any amount on account of Dissenting Shares in excess of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements consideration which would include an audit have otherwise been received if such shares were not Dissenting Shares. Other than with respect to knowing, willful or intentional breaches of the combined operations of Parent and representations, warranties or covenants made in connection with this Agreement or the Company. Merger, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000the Threshold Amount, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent may recover from the Escrow Fund all the total of its Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with including the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsThreshold Amount.

Escrow Fund. At Prior to or simultaneously with the Closing, the ----------- Shareholders' Representative (as defined in Section 9.04) and Parent shall enter into an escrow agreement (the "Escrow Agreement") with an escrow agent selected ---------------- by Parent and reasonably acceptable to the Shareholders' Representative (the "Escrow Agent") substantially in the form of Exhibit B hereto. Pursuant to the ------------ --------- terms of the Escrow Agreement, at the Closing, Parent shall deposit one or more certificates representing, in the aggregate, the Escrow Shares, into an escrow account, which account is to be managed by the Escrow Agent (the "Escrow ------- Account"). Any Escrow Shares in the Escrow Account are referred to herein as the ------- "Escrow Fund." In connection with such deposit of the Escrow Shares with the ----------- Escrow Agent and as of the Effective Time, each shareholder holder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stock will be deemed to have received and deposited with the Escrow Agent (as defined below) each shareholder's pro rata interest in the Escrow Amount Fund as determined as of Closing by reference to such shareholder's pro rata share of shares Parent Common Stock deliverable at the Closing pursuant to Section 2.01(a)(i) (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow AmountFund), without any act of any the shareholders of the Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow AgentCompany ------- Shareholders"), such deposit to constitute an escrow fund (. Distributions of any Escrow Shares from the "Escrow Fund") to Account shall ------------ be governed by the terms set forth herein and to be maintained at Parent's cost and expenseconditions of the Escrow Agreement. The adoption of this Agreement and the approval of the Merger by the Company Shareholders shall constitute approval of the Escrow Agreement and of all the arrangements relating thereto, including, without limitation, the placement of the Escrow Shares in escrow and the appointment of the Shareholders' Representative. No portion of the Escrow Amount contributed on behalf of each Company Shareholder Fund shall be contributed in proportion to respect of any Company Options or other security exercisable or convertible into Company Stock. To the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any extent possible, no shares of Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior To avoid ambiguity with regard to the Closing to perform or comply with foregoing sentence, any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations shares of Parent and the Company. Parent may not receive any shares from Common Stock deposited into the Escrow Fund unless and until Officer's Certificates (as defined on behalf of the individuals listed in Section 7.2(d)(iSchedule 6.05(b) below) identifying Losses, the aggregate amount hereto shall be comprised of which exceed $50,000, have been shares that would otherwise be delivered to the Escrow Agent such individuals as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsfully vested shares.

Escrow Fund. At As provided in Section 1.8, promptly following the ----------- Effective Time, each shareholder of the Company Splash shall deposit with Comerica Bank (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other another institution acceptable to Parent Splash and the Securityholder Stockholders' Agent (as defined in Section 7.2(g) below)) ), as Escrow Agent (the "Escrow Agent"), such deposit to cash equaling the Escrow Amount, ------------ which shall constitute an escrow fund (the "Escrow Fund") to be governed by the ----------- terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each Major Company Shareholder Stockholder shall be in proportion correspond to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholderstockholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Proportionate Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentInterest. The Escrow Fund shall be available to compensate Parent Splash and its affiliates subsidiaries (i) for the payment to Splash of any adjustments to the Merger Consideration pursuant to Section 1.13 of this Agreement and (ii) for any claimsclaim, lossesloss, liabilitiesexpense, damages, deficiencies, costs, and expensesliability or other damage, including reasonable attorneys' fees and expenses and expenses disbursements in connection with any action, suit or proceeding, to the extent of investigation and defense the amount of such claim, loss, expense, liability or other damage (collectively "Losses") that Splash or any of its affiliates has ------ actually incurred (or, in the case of an extension of the Escrow Period pursuant to Section 7.2(b)(ii), reasonably anticipates incurring), by Parent, its officers, directors, or affiliates directly or indirectly as a result reason of (x) the breach by the Company of any inaccuracy representation, warranty, covenant or breach of a representation or warranty agreement of the Company contained herein or (as modified y) the breach by any of the Company SchedulesStockholders of any representation, warranty, covenant or agreement contained in such Company stockholder's Stockholders Agreement; provided, however, that (1) -------- ------- for purposes of determining whether a breach of any representation or in warranty or covenant has occurred, and the certificatesamount of any losses attributable to any such breach, delivered pursuant any qualification as to Sections 9.3(bmateriality set forth therein shall not be given effect to and (2) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must incurred as a result of a breach by a Company stockholder shall be asserted on or before 5:00 p.m. (California Time) on the earlier to occur satisfied out of (i) the date that is one year following the Closing Date or (ii) the date such stockholder's Proportionate Interest of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless until such Proportionate Escrow Interest is exhausted, and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount then shall be satisfied out of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved Fund in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or Agreement. Splash shall not be entitled to receive any objection has been resolved in accordance disbursement with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed respect to any Loss under Section 7.2(a)(ii) arising in respect of any Company Options.of:

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective TimeClosing, that number of Exchangeable Shares comprising the Escrow AmountAmount will be deposited by the Surviving Corporation, without any act of any Holder in Escrow, with Bank of Montreal Trust Company Shareholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, (or a trust company or other another institution acceptable to BackWeb Parent and the Securityholder Agent (as defined in Section 7.2(g7.2(f) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. The portion of the Escrow Amount contributed on behalf of each Company Shareholder any Holder in Escrow shall be in proportion a fraction of the total Escrow Amount equal to such Holder's Proportional Escrow Amount, and shall be deducted from the aggregate Parent Common Stock portion of the Amalgamation Consideration to which such holder of Lanacom Common Shares would otherwise be entitled under to receive pursuant to Section 1.6(b) and 1.5. A list of the respective Escrow Amounts contributed by the Holders shall be provided to the Escrow Agent. The Escrow Amount deposited in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject used effectively to reduce the Amalgamation Consideration in the event of (y) a reduction required pursuant to Section 1.7 of this Agreement and (z) any right of repurchaseclaim, risk of forfeitureloss, expense, liability or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expensesdamage, including reasonable attorneys' fees and expenses and expenses fees, to the extent of investigation and defense the amount of such claim, loss, expense, liability or other damage (collectively with any amounts payable pursuant to Section 1.7, the "Losses") that BackWeb Parent or any of its affiliates have incurred by reason of the breach by Lanacom of any representation, warranty, covenant or agreement of Lanacom contained in this Agreement. BackWeb Parent, its officersLanacom and the Agent each acknowledge that such Losses, directorsif any, shall be deemed to relate to unresolved contingencies existing at the Closing Date which, if resolved at the Closing Date, would have led to a reduction in the Amalgamation Consideration. Nothing herein shall limit the liability of Lanacom, the Founder or affiliates directly or indirectly as a result any holder of Lanacom Common Shares for any breach of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)covenant, or any failure by willful breach of any representation or warranty, if the Company prior Amalgamation does not close. In addition, notwithstanding the foregoing, the Surviving Corporation shall not be entitled to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares Escrow Amounts from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000an aggregate US_______ deductible amount, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII); in such casecase the Escrow Agent shall deliver to the Surviving Corporation for cancellation for no consideration, and in full satisfaction of the aggregate claims of BackWeb Parent may recover from (or its affiliates) the number of Exchangeable Shares remaining in the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with having an aggregate value (based on the provisions of this Article VII. No portion value of the Escrow Amount Exchangeable Shares on the Closing Date of US_____ per share) equal to one-third of the aggregate amount of such Losses (reflecting the parties' agreement that one-third of the risk of such event shall be contributed in respect borne by the shareholders of any Company OptionsLanacom and two-thirds of the risk shall be borne by BackWeb Parent) minus the one time aggregate deductible amount of US_______.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders ----------- will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan U.S. Bank and Trust Company, National Association, or a trust company NA (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an ------------ escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. ----------- The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b1.6(a) and shall be in the respective share amounts and percentages listed opposite each Company ShareholderCompany's name stockholder's names listed in Exhibit G attached heretoa schedule to be executed by the Company and delivered to Parent at Closing (the "Escrow Schedule"). Any All shares of Parent --------------- Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation Corporation. No portion of the Escrow Amount shall be contributed with respect to Company Options or ParentWarrants. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") incurred by Parent, its ---- ------ officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedulesin connection with the Merger) or in the certificates, delivered pursuant to Sections 9.3(b(ii) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), herein; provided that claims for arising out of an inaccuracy or breach of any Losses representations and warranties and any covenant of the Company contained in this Agreement and in any certificate, instrument, schedule or document delivered by the Company at the Closing in connection with this Agreement or the Merger must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyExpiration Date. Except as otherwise provided herein, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) 8.2 below) identifying Losses, the aggregate amount of which exceed $50,000300,000, have been delivered to the Escrow Agent as provided in paragraph (de) and either such amount is determined pursuant to this Article VIII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses (including any Losses within the $300,000 threshold) for which there is no objection thereto or any objection has had been resolved in accordance with the provisions of this Article VIIVIII; in such caseprovided, Parent may recover from however, that to the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection extent either legal fees or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options.-------- ------- investment

Escrow Fund. At Prior to or simultaneously with the ----------- Closing, the Stockholders' Representative and Parent shall enter into an escrow agreement (the "Escrow Agreement") with an escrow agent selected by Parent and ---------------- reasonably acceptable to the Stockholders' Representative (the "Escrow Agent"), ------------ substantially in the form of Exhibit C hereto. Pursuant to the terms of the ---------------- Escrow Agreement, at the Closing, Parent shall deposit one or more certificates representing, in the aggregate, the Escrow Shares to be deposited by each holder of Company Stock into an escrow account, which account is to be managed by the Escrow Agent (the "Escrow Account"). Any Escrow Shares in the Escrow Account are -------------- referred to herein as the "Escrow Fund." In connection with such deposit of the ----------- Escrow Shares with the Escrow Agent and as of the Effective Time, each shareholder holder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stock will be deemed to have received and deposited with the Escrow Agent (as defined below) each stockholder's pro rata interest in the Escrow Amount Fund as determined as of Closing by reference to such stockholder's ownership of shares of Company Stock (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow AmountFund), without any act of any Company Shareholder, will be deposited with Chase Manhattan Bank and Trust stockholder of the Company, National Association, or a trust company or other institution acceptable to Parent and . Distributions of any Escrow Shares from the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to Account shall be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion conditions of the Escrow Amount contributed on behalf Agreement. The adoption of each this Agreement and the approval of the Merger by the stockholders of the Company Shareholder (the "Company Stockholders") shall constitute ------- ------------ approval of the Escrow Agreement and of all the arrangements relating thereto, including, without limitation, the placement of the Escrow Shares in escrow and the appointment of the Stockholders' Representative. No Escrow Shares shall be contributed in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each respect of any Company Shareholder's name listed in Exhibit G attached heretoOption or any other security exercisable or convertible into Company Stock. Any shares The percentage of Parent Common Shares contributed to the Escrow Fund shall not be with respect to each holder of Company Stock that are unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available proportional to compensate Parent and its affiliates for the percentage of such holder's Company Stock that are unvested or subject to any claimsright of repurchase, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses risk of investigation and defense incurred by Parent, its officers, directors, forfeiture or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty other condition in favor of the Company contained herein (as modified by the Company Schedules) or in the certificatesCompany; provided, delivered pursuant however, that any payments due to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses-------- ------- shall first be satisfied by delivering to Parent, the aggregate amount of which exceed $50,000, have been delivered to the extent available, with respect to each holder of Company Stock, such Escrow Agent as provided Shares that are fully vested or otherwise not subject to any right of repurchase, risk of forfeiture or other restriction in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion favor of the Escrow Amount shall be contributed in respect of any Company OptionsSurviving Corporation.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company ShareholderStockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company ShareholderStockholder, will be deposited with Chase Manhattan U.S. Bank and Trust CompanyTrust, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) ), as Escrow Agent (the "“Escrow Agent"”), such deposit to constitute an escrow fund (the "“Escrow Fund"”) to be governed by the terms set forth herein and to be maintained at Parent's ’s cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent. The Escrow Fund shall be available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' ’ fees and expenses expenses, and expenses of investigation and defense incurred (hereinafter individually a “Loss” and collectively “Losses”) incurred, sustained or paid by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) contained in this Agreement or in the certificatesany certificate, instrument or other document delivered pursuant to Sections 9.3(b) and 9.3(c)the terms of this Agreement, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses")herein, provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date payment by Parent or the Surviving Corporation of any amount on the account of Dissenting Shares which such payment or payments exceed the aggregate consideration that otherwise would have been payable in respect of such shares, (iii) the amount of any Third Party Obligations that the Company fails to satisfy pursuant to Section 5.6 above prior to the Effective Time and/or the amount of any cash in excess of the issuance by Parent's independent accountants amounts set forth in Section 5.6 expended for such purpose, (iv) the payment of its first audit report relating to Parent's financial statements which would include an audit any Legal Expenses, or (v) the amount that the Final Cash Balance (as defined in Section 7.3 below) is less than the lesser of (A) the applicable Minimum Cash Balance required in Section 5.27 and (B) the Cash Amount reflected on the Estimated Closing Date Balance Sheet. Nothing herein shall limit the liability of the combined operations Company for any breach of Parent and any representation, warranty or covenant if the CompanyMerger does not close. Parent may not receive any shares from the Escrow Fund unless and until Officer's ’s Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, Losses in the aggregate amount in excess of which exceed $50,000, 2,000,000 (the “Threshold Amount”) have been delivered to the Escrow Securityholder Agent (as provided defined in paragraph (dg) and either there is no objection thereto or any objection below), in which event Parent shall be entitled to recover only amounts in excess of the Threshold Amount; provided that notwithstanding the foregoing, Parent shall be entitled to indemnification on a first dollar basis, without regard to whether the Threshold Amount has been resolved exceeded, with respect to (i) the payment by Parent or the Surviving Corporation of any amount on account of Dissenting Shares, (ii) the amount of any Third Party Obligations that the Company fails to satisfy pursuant to Section 5.6 above and/or the amount of any cash in accordance excess of the amounts set forth in Section 5.6 expended for such purpose, (iii) the payment of any Legal Expenses, and (iv) the amount that the Final Cash Balance (as defined in Section 7.3 below) is less -52- than the lesser of (A) the applicable Minimum Cash Balance required in Section 5.27 and (B) the Cash Amount reflected on the Estimated Closing Date Balance Sheet. The Company Stockholders shall not have any right of contribution from the Company or Parent with the provisions respect to any Loss pursuant to this Article VII. For purposes of this Article VII; , references to the terms “material,” “materially,” “in such caseall material respects” and “Material Adverse Effect” shall be disregarded for purposes of determining whether there was a breach or inaccuracy in any representation or warranty of the Company in Article II, Parent may recover from as modified by the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection Company Schedules attached hereto, or any objection has been resolved in accordance with certificate, instrument or other document delivered pursuant to the provisions terms of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsAgreement.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholderstockholder. As soon as practicable after the Effective TimeTime but within five (5) days thereafter, the Escrow Amount, without any act of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other an institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each Company Shareholder stockholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto1.6. Any shares of Parent Common Stock contributed to the Escrow Fund shall (to the extent feasible at the Effective Time) not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition repurchase in favor of the Surviving Corporation or ParentCorporation. No portion of the Escrow Amount shall be contributed in respect of any Company Options. The Escrow Fund shall be available to compensate the Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense incurred by Parent, its officers, directors, directors or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified herein, or in any certificate, instrument, schedule or document delivered by the Company Schedulesin connection with this Agreement or the Merger, (ii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained herein, (except iii) the infringement by the business of the Company as Parent may have expressly waived currently conducted or by any of the Company Intellectual Property Rights on any proprietary right of any third party, or (iv) for any untrue statement of a material fact or omission to state any material fact necessary in writing) contained herein order to make the statements, in the light of the circumstances under which made, not misleading in any documents 49 mailed, delivered or otherwise furnished to the stockholders of the Company in connection with soliciting their consent to this Agreement and the Merger, to the extent prepared by the Company (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIVIII; in such case, Parent may recover from the Escrow Fund all any Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved so identified in accordance with the provisions of this Article VIISection 8.2. No portion The Escrow Fund shall be the sole source of damages to Parent arising from any claim hereunder (other than for damages due to fraud or willful misrepresentation). The limitation in the immediately preceding sentence shall not limit the liability of the Escrow Amount shall be contributed in respect Company for any breach of any Company Optionsrepresentation, warranty or covenant if the Merger does not close.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's shareholders ----------- will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow AmountTime) without any act of any Company Shareholdershareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholdershareholder, will be deposited with Chase Manhattan U.S. Bank and Trust Company, National Association, or a trust company NA (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g8.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an ------------ escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and to be maintained at Parent's cost and expenseherein. ----------- The portion of the Escrow Amount contributed on behalf of each shareholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a) and (b) and shall be in the respective share amounts and percentages listed opposite each Company ShareholderCompany's name shareholder's names listed in Exhibit G attached heretoa schedule to be executed by the Company and delivered to Parent at Closing (the "Escrow Schedule"). Any All shares of --------------- Parent Common Stock contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, forfeiture or other condition in favor of the Surviving Corporation or ParentCorporation. The Escrow Fund shall be available to compensate Parent and its affiliates (including the Surviving Corporation) for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense (hereinafter individually a "Loss" and collectively "Losses") ---- ------ incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified or in any certificate, instrument, schedule or document attached to this Agreement and delivered by the Company Schedulesin connection with the Merger) or in the certificates, delivered pursuant to Sections 9.3(b(ii) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), herein; provided that claims for arising out of an inaccuracy or breach of any Losses representations and warranties and any covenant of the Company contained in this Agreement and in any certificate, instrument, schedule or document delivered by the Company at the Closing in connection with this Agreement or the Merger must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the CompanyExpiration Date. Except as otherwise provided herein, Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) 8.2 below) identifying Losses, the aggregate amount of which exceed $50,000100,000, have been delivered to the Escrow Agent as provided in paragraph (de) and either such amount is determined pursuant to this Article VIII to be payable; in such case, Parent may recover shares from the Escrow Fund equal in value to all indemnified Losses (including any Losses within the $100,000 threshold) for which there is no objection thereto or any objection has had been resolved in accordance with the provisions of this Article VIIVIII; provided, however, that to the extent legal fees incurred -------- ------- by the Company in connection with this Agreement and the Merger exceed $125,000, such case, excess shall be deemed a Loss for purposes of Article VIII and shall be immediately reimbursable to Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of VIII (without regard to the Escrow Amount shall be contributed in respect of any Company Options$100,000 minimum threshold for Losses and without counting toward the $100,000 threshold).

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) Time), without any act required on the part of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Stockholder Agent (as defined in Section 7.2(g7.2(g)(i) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(bSections 1.6(a) and 1.6(b). The Escrow Amount shall be in contributed entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Stock issuable upon the Merger in respect of Capital Common Stock, and no portion of the Escrow Fund Amount shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor contributed out of the Surviving Corporation or Parentshares of Parent Common Stock reserved for issuance in respect of Company Options. The Escrow Fund shall be is available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense defenses (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c)Article II herein, or any failure by the Company prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of herein. Parent and the CompanyCompany each acknowledge that such Losses, if any, would relate to unassented contingent liabilities existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger consideration. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(iparagraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, 100,000 have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VIIe); in such case, Parent may recover from the Escrow Fund all Losses in excess of its Losses, including the first $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Options100,000.

Escrow Fund. At As security for the Effective Time, each shareholder indemnity provided for in this Article 8 and by virtue of the Company (individually, a "Company Shareholder" and, collectivelythis Agreement, the "Company Shareholders") Shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) without any act of any Company Shareholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act of any Company Shareholder, will be deposited with Chase Manhattan Bank and J.X. Xxxxxx Trust Company, National Association, or a trust company Association (or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)Shareholder Representative) as Escrow Agent (the "“Escrow Agent"”), such deposit to constitute an escrow fund (the "“Escrow Fund"”) to be governed by the terms set forth herein herein. The Escrow Agent may execute this Agreement following the date hereof, and to be maintained at Parent's cost and expensesuch later execution, if so executed after the date hereof, shall not affect the binding nature of this Agreement as of the date hereof between the other signatories hereto. The portion of the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled as provided under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or Parent2.04. The Escrow Fund Shareholders shall be available to compensate indemnify and hold Parent and its officers, directors and affiliates for any (the “Indemnified Parties”) harmless against all claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' ’ fees and expenses and expenses of investigation (hereinafter individually a “Loss” and defense collectively “Losses”) incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained herein in this Agreement, (as modified by the Company Schedulesii) or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(c), or any failure by the Company prior to the Closing to perform or comply with any covenant contained in this Agreement, or (except iii) any action, suit or proceeding which is pending or threatened against the Company as Parent may of the Effective Time. No Shareholder shall have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims any right to contribution from the Company for any Losses must be asserted on or before 5:00 p.m. (California claim made by Parent after the Effective Time) on . Notwithstanding anything in the earlier preceding language to occur of (i) the date that is one year following contrary, the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares distribution from the Escrow Fund in respect of any Loss subject to indemnification pursuant to this Article 8 unless the amount of any such Loss equals or exceeds $25,000 and until Officer's Certificates (as defined in Section 7.2(d)(i) below) an Officers’ Certificate identifying Losses, which in the aggregate amount of which exceed $50,0001,000,000 (the “Basket Amount”), have been delivered to the Escrow Agent as provided in paragraph (de) below in which case Parent shall be entitled to recover all Losses including the Basket Amount; provided, however, that any Loss resulting from the inaccuracy or breach of Section 2.03(c), 4.05 or 6.20 hereof shall be recoverable from the first dollar and either there is no objection thereto not subject to the Basket Amount nor shall it be included in calculating whether the Basket Amount has otherwise been exceeded; and provided, further, that any claim resulting from the inaccuracy or breach of Section 4.26 shall be reduced to the extent that such inaccuracy or breach actually reduces any Tax otherwise payable by Parent, the Company, or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion Subsidiary of the Escrow Amount shall be contributed Company in respect of any Company Optionstaxable year (or portion thereof) ending on or prior to the Expiration Date.

Escrow Fund. At the Effective Time, Closing each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Shareholder will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by Parent after the Effective Time with respect pursuant to shares constituting the Escrow Amount) Agreement attached hereto as Exhibit C, without any act required on the part of any Company Shareholderthe Shareholders. As soon as practicable after the Effective TimeClosing, the Escrow Amount, without any act required on the part of any Company Shareholderthe Shareholders, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent")into an interest-bearing account, such deposit to constitute an escrow fund (the "Escrow Fund") Fund to be governed by the terms set forth herein and to be maintained at ParentNEON's cost and expense. The portion of Shareholders shall bear the Escrow Amount contributed on behalf of each Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and shall be in the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed tax for all interest attributable to the Escrow Fund shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentAccount. The Escrow Fund shall be comprised entirely of the Escrow Amount. The Escrow Fund is available to indemnify and compensate Parent NEON and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, and expenses, including reasonable attorneys' fees and expenses and expenses of investigation and defense Losses incurred by ParentNEON, its officers, directors, or affiliates directly or indirectly as a result of any inaccuracy or breach of a representation or warranty or covenant of the Company Shareholders, contained herein (as modified by the Company Schedules) or in the certificates, delivered pursuant to Sections 9.3(b) Articles II and 9.3(c)III and VI herein, or any failure by the Company prior to the Closing Shareholders to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for herein. NEON shall not be entitled to recover any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) the date that is one year following the Closing Date or (ii) the date of the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares amount from the Escrow Fund unless until its Losses exceed $50,000 in the aggregate, at which time NEON may recover all of its Losses including the first $50,000; provided, however, that any Losses incurred by NEON relating to any representation, warranty or covenant related to Taxes set forth in Sections 2.10 and until Officer's Certificates (as defined in 6.7 or to Section 7.2(d)(i) below) identifying 2.3 or Article III hereof shall not be subject to such minimum amount. NEON and the Shareholders each acknowledge that such Losses, if any, would relate to unasserted contingent liabilities existing at the Closing, which if resolved at the Closing would have led to a reduction in the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company OptionsPurchase Price.

Escrow Fund. At the Effective Time, each shareholder of the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited consented to the deposit of the Escrow Amount with the Escrow Agent (as defined below) upon payment of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, or recapitalization effected by 90th Day Parent after Obligation on the Effective Time with respect to shares constituting the Escrow Amount) Second Payment Date without any act required on the part of any Company Shareholdersuch stockholders. As soon as practicable after Upon payment of the Effective Time90th Day Parent Obligation on the Second Payment Date, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution acceptable to Parent and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The pro rata portion of the Escrow Amount contributed on behalf to which each stockholder of each the Company Shareholder shall be entitled upon distribution of the remaining Escrow Amount, if any, at the termination of the Escrow Period shall be in proportion to the aggregate Parent Common Stock Merger Consideration to which such holder would otherwise be entitled under Section 1.6(b) and 1.6 as set forth on Schedule 2.2. The Escrow Amount shall be contributed entirely out a portion of the Secondary Merger Consideration issuable upon the Merger in respect of the Company Capital Stock; provided, however that in the respective amounts listed opposite case of Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx, 50% of each Company Shareholderindividual's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed contribution to the Escrow Fund Amount shall not be unvested or subject to any right of repurchase, risk of forfeiture, or other condition in favor contributed from such holder's portion of the Surviving Corporation Holdback Amount and all references herein to deposits to or Parentwithdrawals from the Escrow Fund or relating to the Escrow Amount for such individuals shall include such amounts. The Escrow Fund shall be is available to compensate Parent and its affiliates for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense defenses (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directors, or affiliates (including the Surviving Corporation) directly or indirectly as a result of any inaccuracy or breach of a representation or warranty of the Company contained herein (as modified by the Company Schedules) in this Agreement or in the certificates, any certificate or instrument delivered pursuant to Sections 9.3(b) and 9.3(c)this Agreement , or any failure by the Company prior to the Closing to perform or comply with any covenant contained herein. The Escrow Fund shall be the sole and exclusive remedy to compensate Parent, its officers, directors, or affiliates (except as Parent may have expressly waived in writingincluding the Surviving Corporation) contained herein (hereinafter individually a "Loss" and collectively "Losses"), provided that claims for any Losses, except in the case of fraud or intentional misrepresentation. The maximum amount of Losses must for which each stockholder of the Company shall be asserted on or before 5:00 p.m. (California Time) liable is such stockholder's proportionate amount of the Escrow Fund based on the earlier percentage of Merger Consideration received by such stockholder. In the event any payment pursuant to occur of (i) the date that is one year following the Closing Date or (ii) the date indemnity obligations of the issuance stockholders of the Company set forth in this Agreement is required to be made, each stockholder will satisfy such payment by Parent's independent accountants forfeiture of its first audit report relating to Parent's financial statements which would include an audit proportionate share of the combined operations of Parent and the CompanyEscrow Fund. Parent may shall not be entitled to receive any shares amounts from the Escrow Fund unless and until Parent shall have delivered an Officer's Certificates Certificate (as defined in Section 7.2(d)(i) below6.2(d)) identifying the Losses, the aggregate amount of which exceed $50,000, have been delivered . Notwithstanding anything to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto contrary, neither Parent or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover its affiliates shall have any right to compensation from the Escrow Fund all unless and until the aggregate Losses exceed an aggregate of Five Thousand Dollars ($5,000) (the "DEDUCTIBLE"), in excess which event Parent shall be entitled to compensation from the Escrow Fund only to the extent to which the amount of Losses exceed $50,000 threshold for which there is no objection or 5,000 (and not the initial $5,000 of Losses), provided, however, that any objection has been resolved Losses incurred in accordance connection with the provisions Company's use of this Article VII. No portion commercial software in a production environment that has not been appropriately licensed shall not be subject to the Deductible and Parent shall be entitled to recovery of any and all such Losses up to the amount of the Escrow Amount shall be contributed in respect of any Company OptionsFund without regard to the Deductible.

Escrow Fund. At the Effective Time, each shareholder of Time the Company (individually, a "Company Shareholder" and, collectively, the "Company Shareholders") Company's stockholders will be deemed to have received and deposited consented to the deposit with the Escrow Agent (as defined below) of the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend, dividend or recapitalization effected by Parent after the Effective Time with respect to shares constituting the Escrow Amount) Time), without any act required on the part of any Company Shareholderstockholder. As soon as practicable after the Effective Time, the Escrow Amount, without any act required on the part of any Company Shareholderstockholder, will be deposited with Chase Manhattan Bank and Trust Company, National Association, or a trust company or other institution an escrow agent acceptable to Parent and the Securityholder Agent Stockholder Representative (as defined in Section 7.2(g7.2(i)(i) below)) as Escrow Agent (the "Escrow AgentESCROW AGENT"), such deposit to constitute an escrow fund (the "Escrow FundESCROW FUND") to be governed by the terms set forth herein and to be maintained at Parent's cost and expense. The portion of the Escrow Amount contributed on behalf of each stockholder of the Company Shareholder shall be in proportion to the aggregate Parent Common Stock to which such holder would otherwise be entitled under Section 1.6(b) and ). The Escrow Amount shall be in funded entirely out of the respective amounts listed opposite each Company Shareholder's name listed in Exhibit G attached hereto. Any shares of Parent Common contributed to Stock issuable upon the Escrow Fund shall not be unvested or subject to any right Merger in respect of repurchase, risk of forfeiture, or other condition in favor of the Surviving Corporation or ParentCompany Capital Stock. The Escrow Fund shall be is available to compensate Parent and its affiliates officers, directors and affiliates, including the Surviving Corporation (any, an "INDEMNIFIED PARTY" and collectively, the "INDEMNIFIED PARTIES"), for any claims, losses, liabilities, damages, deficiencies, costs, costs and expenses, including reasonable attorneys' fees and expenses expenses, and expenses of investigation and defense defenses (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Parent, its officers, directorsthe Indemnified Parties, or affiliates any of them, directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein, (ii) any failure by the Company to perform or comply with any covenant contained herein, (iii) any Dissenting Share Payments, or (iv) any claim made by any person that such person is or was entitled (by contract or otherwise) to receive any amount or property in such person's -57- capacity (or asserted capacity) as a holder of equity interests in the Company or contingent equity interests or as a beneficiary of any rights in excess of the consideration set forth in the Merger Agreement by virtue of or as a result of the Merger, other than any claim described in clause (iii) above. Parent and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Effective Time, which if resolved at the Effective Time would have led to a reduction in the aggregate Merger consideration. Nothing herein shall limit the liability of the Company for any breach of any representation, warranty or covenant if the Merger does not close. For the purpose of this Article VII only, in the event of any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules) determined giving effect to any requirement in any representation or in the certificates, delivered pursuant to Sections 9.3(b) and 9.3(cwarranty that an event or fact be material or have a Material Adverse Effect), the amount of any Loss resulting from such inaccuracy or breach of such representation or warranty shall be determined without giving effect to any failure by requirement in any representation or warranty that an event or fact be material or have a Material Adverse Effect, and any such requirement shall be disregarded for such purpose. There shall be no right of contribution from any Indemnified Party with respect to any Loss. The Escrow Agent may execute this Agreement following the Company date hereof and prior to the Closing to perform or comply with any covenant (except as Parent may have expressly waived in writing) contained herein (hereinafter individually a "Loss" Closing, and collectively "Losses")such later execution, provided that claims for any Losses must be asserted on or before 5:00 p.m. (California Time) on the earlier to occur of (i) if so executed after the date that is one year following hereof, shall not affect the Closing Date or (ii) binding nature of this Agreement as of the date of hereof between the issuance by Parent's independent accountants of its first audit report relating to Parent's financial statements which would include an audit of the combined operations of Parent and the Company. Parent may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in Section 7.2(d)(i) below) identifying Losses, the aggregate amount of which exceed $50,000, have been delivered to the Escrow Agent as provided in paragraph (d) and either there is no objection thereto or any objection has been resolved in accordance with the provisions of this Article VII; in such case, Parent may recover from the Escrow Fund all Losses in excess of $50,000 threshold for which there is no objection or any objection has been resolved in accordance with the provisions of this Article VII. No portion of the Escrow Amount shall be contributed in respect of any Company Optionsother signatories hereto.