Common use of Indemnification Fund Clause in Contracts

Indemnification Fund. (a) With respect to any Company Member who has received Buyer Common Stock pursuant to Section 1.2(b) hereof (the “Restricted Stock”), the Company’s and/or Buyer’s remedy hereunder as to such Company Member is to be first recovered from such Restricted Stock. (b) At Closing, the Restricted Stock will be issued in the name of each Company Member but will be held by a third-party for the vesting period of the Restricted Stock pursuant to the terms of this Agreement (the “Indemnification Fund”) for the purpose of securing, to the extent of the Indemnification Fund, the obligations of each Company Member under Section 5.2 hereof. If, on the first anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, one-third of the amount in the Indemnification Fund shall be distributed by the third-party to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the first anniversary of the Closing Date and the above distribution shall remain in the Indemnification Fund, subject to the terms of this Agreement until the second anniversary of the Closing Date. If, on the second anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, an additional one-third of the amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the second anniversary of the Closing Date and the above distributions shall remain in the Indemnification Fund, subject to the terms of this Agreement until the third anniversary of the Closing Date. If, on the third anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, the remaining amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. (c) If it is determined that an Indemnification Claim under Section 5.2 hereof should be paid, Buyer shall first recover payment for such claim from the Indemnification Fund in an amount equal to the market value of the shares of Restricted Stock in the Indemnification Fund at the time of such payment. Notwithstanding anything to the contrary in Section 5.6(b) above, after each anniversary date, any amount in the Indemnification Fund that was subject to a pending Indemnification Claim pursuant to Section 5.2 hereof, shall be distributed to the Company Members pro rata, if and when such Indemnification Claim has been determined resolved (i) by the written agreement of the parties, (ii) by mediation, (iii) by a final judgment or decree of any court of competent jurisdiction, or (iv) by any other means agreed in writing by the Company Members and Buyer. A judgment or decree of a court shall be deemed final when the time for appeal, if any, has expired and no appeal shall have been taken or when all appeals taken have been fully determined. If an indemnification claim is to be paid from the Indemnification Fund, any Restricted Stock held in the Indemnification Fund shall be valued as if such Restricted Stock were freely tradeable shares of Buyer Common Stock.

Indemnification Fund. (ai) With respect to any Company Member who has received Any Buyer Common Stock Indemnitee making a claim for indemnification pursuant to Section 1.2(b9.2(a) hereof or Section 8.13(c) of the Purchase Agreement must give the Sellers’ Representative written notice of such claim (the an “Restricted StockIndemnification Claim Notice”), with a copy to the Company’s and/or Buyer’s remedy hereunder as to such Company Member is Escrow Agent, stating the aggregate amount the Buyer Indemnitee claims to be first recovered from such Restricted Stock. (b) At Closing, the Restricted Stock will be issued in the name of each Company Member but will be held by a third-party for the vesting period of the Restricted Stock pursuant to the terms of this Agreement (the “Indemnification Fund”) for the purpose of securing, to the extent of the Indemnification Fund, the obligations of each Company Member under Section 5.2 hereof. If, on the first anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, one-third of the amount in the Indemnification Fund shall be distributed by the third-party to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the first anniversary of the Closing Date and the above distribution shall remain in the Indemnification Fund, subject to the terms of this Agreement until the second anniversary of the Closing Date. If, on the second anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, an additional one-third of the amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the second anniversary of the Closing Date and the above distributions shall remain in the Indemnification Fund, subject to the terms of this Agreement until the third anniversary of the Closing Date. If, on the third anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, the remaining amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. (c) If it is determined that an Indemnification Claim under Section 5.2 hereof should be paid, Buyer shall first recover payment for such claim from the Indemnification Fund in an amount equal to the market value of the shares of Restricted Stock in the Indemnification Fund at the time of such payment. Notwithstanding anything to the contrary in Section 5.6(b) above, after each anniversary date, any amount in the Indemnification Fund that was subject to a pending Indemnification Claim pursuant to Section 5.2 hereof, shall be distributed to the Company Members pro rata, if and when such Indemnification Claim has been determined resolved (i) by the written agreement of the parties, (ii) by mediation, (iii) by a final judgment or decree of any court of competent jurisdiction, or (iv) by any other means agreed in writing by the Company Members and Buyer. A judgment or decree of a court shall be deemed final when the time for appeal, if any, has expired and no appeal shall have been taken or when all appeals taken have been fully determined. If an indemnification claim is entitled to be paid from the Indemnification Escrow Fund, promptly after the Buyer Indemnitee receives any Restricted Stock held written notice of any action, lawsuit, proceeding, investigation or other claim against or involving the Buyer Indemnitee by a Governmental Authority or other third person (a “Third Party Claim”) or otherwise discovers the liability, obligation or facts giving rise to such claim for indemnification. Such notice shall be accompanied by copies of all relevant documentation with respect to such claim for indemnification, including any summons, complaint or other pleading which may have been served, any written demand or any other document or instrument. Failure to give or delay in giving notice shall not excuse the party from whom indemnification is sought from liability for indemnification except to any extent to which the Buyer Indemnitee is actually prejudiced by such failure or delay. (ii) The Sellers’ Representative shall have thirty (30) days from its receipt of the Indemnification Claim Notice to dispute the claim or claims, the amount requested to be paid from the Escrow Fund or any other matter set forth in the Indemnification Claim Notice or other documents delivered by the Buyer hereunder or to consent to the payment of such claim or claims by delivering a notice to the Escrow Agent and the Buyer. In the event the Sellers’ Representative gives its consent to the payment of any such claim, the Escrow Agent shall pay to the Buyer the amount requested to be paid in the Indemnification Claim Notice. If the Escrow Agent does not receive any notice from the Sellers’ Representative within the thirty-day period after the receipt of an Indemnification Claim Notice by the Sellers’ Representative, the Escrow Agent shall seek to obtain written confirmation from the Sellers’ Representative that (i) the Sellers’ Representative received the Indemnification Claim Notice, and (ii) thirty (30) days have elapsed since the receipt of the Indemnification Claim Notice by the Sellers’ Representative. Upon (A) receipt of such written confirmation by the Escrow Agent, or (B) the Sellers’ Representative having failed to respond to the Escrow Agent’s request for such written confirmation for a period of five (5) business days, the Escrow Agent shall pay to the Buyer the amount requested to be paid in the Indemnification Claim Notice, from the Escrow Fund, by wire transfer of immediately available funds to an account designated in the Indemnification Claim Notice or otherwise by the Buyer. (iii) Subject to Section 3(b)(ii), if it is determined, in accordance with the terms of the Purchase Agreement, that a Buyer Indemnitee is entitled to any payment from the Escrow Fund in respect of an Indemnification Claim Notice, then, in each such case, the Buyer and the Sellers’ Representative shall promptly deliver to the Escrow Agent a joint written notice specifying the portion of the Escrow Fund that is equal to the amount to which the Buyer Indemnitee is entitled and the Escrow Agent shall promptly pay to the applicable Buyer Indemnitee, from the Escrow Fund, by wire transfer of immediately available funds to an account designated in such joint written notice, the amount requested to be valued as if paid in such Restricted Stock were freely tradeable shares of Buyer Common Stockjoint written notice.

Indemnification Fund. (a) With respect Notwithstanding the provisions of Article II of this Agreement, the Exchange Agent shall withhold from payment or exchange to any the stockholders of the Company Member who has received Buyer cash and a number of shares of Parent Common Stock equal, in the aggregate, to ten percent (10 %) of the maximum number of shares available for exchange hereunder for a period of one year from the Closing Date. Such withheld shares shall constitute the "Indemnification Fund". Except as provided in this Section 8.05, the shares of Parent Common Stock in the Indemnification Fund shall be held by the Exchange Agent in the name and for the benefit of the stockholders of the Company entitled to receive such shares pursuant to Section 1.2(b) hereof (the “Restricted Stock”), the Company’s and/or Buyer’s remedy hereunder as to such Company Member is to be first recovered from such Restricted StockArticle II. (b) At ClosingIf, at any time during the one year period following the Closing Date, Parent or any other Indemnified Party shall incur a Loss for which the Company is liable for indemnification under this Article VIII, Parent and the Company shall jointly notify the Exchange Agent of such occurrence and the Exchange Agent shall cause the sale of sufficient shares of Parent Common Stock from the Indemnification Fund (or the payment of sufficient cash from dividends accrued on such shares) to fully compensate the Indemnified Party for such Loss. In making any such payment, the Restricted Stock will be issued in Exchange Agent shall allocate the name of each Company Member but will be held by a third-party for the vesting period amount of the Restricted Stock payment among all of the stockholders of the Company entitled to receive such shares (or dividends) pursuant to the terms of this Agreement Article II on a pro rata basis. (the “Indemnification Fund”c) for the purpose of securing, to the extent of the Indemnification Fund, the obligations of each Company Member under Section 5.2 hereof. If, on Immediately following the first anniversary of the Closing Date, there is to the extent that no pending Indemnification Claim pursuant to Section 5.2 hereof, one-third unresolved notices of the amount in the Indemnification Fund shall be distributed claims for indemnification hereunder have been received by the third-party to each Company Member pro rata Company, all remaining shares and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the first anniversary of the Closing Date and the above distribution shall remain in the Indemnification Fund, subject to the terms of this Agreement until the second anniversary of the Closing Date. If, on the second anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, an additional one-third of the amount cash in the Indemnification Fund shall be distributed to each the stockholders of the Company Member entitled to receive such shares (or dividends) pursuant to Article II on a pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the second anniversary of the Closing Date and the above distributions shall remain in the Indemnification Fund, subject to the terms of this Agreement until the third anniversary of the Closing Datebasis. If, on the third as of such first anniversary of the Closing Date, there unresolved notices of claims for indemnification hereunder have been received by the Company, Parent and the Company shall negotiate in good faith for a period not to exceed 20 days to resolves such claims. Any such claims so resolved shall be paid as described above. To the extent any claims remain unresolved following such 20-day negotiation period, all such outstanding claims shall be submitted to an arbitrator jointly selected by Parent and a representative of the stockholders (or, if they should fail to agree on an arbitrator, one appointed by the American Arbitration association) for final, fully-binding (except in the case of fraud or interest on the part of the arbitrator) arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. All parties shall use their best efforts to conclude any such arbitration within 30 days of the expiration of the 20-day negotiation period. Upon conclusion of any such arbitration, any claims for which the Company is no pending Indemnification Claim pursuant to Section 5.2 hereof, the deemed liable shall be paid as described above and any shares or cash remaining amount in the Indemnification Fund Account shall be distributed paid out to each the stockholders of the Company Member entitled to receive such shares (or dividends) pursuant to Article II on a pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereofbasis. (c) If it is determined that an Indemnification Claim under Section 5.2 hereof should be paid, Buyer shall first recover payment for such claim from the Indemnification Fund in an amount equal to the market value of the shares of Restricted Stock in the Indemnification Fund at the time of such payment. Notwithstanding anything to the contrary in Section 5.6(b) above, after each anniversary date, any amount in the Indemnification Fund that was subject to a pending Indemnification Claim pursuant to Section 5.2 hereof, shall be distributed to the Company Members pro rata, if and when such Indemnification Claim has been determined resolved (i) by the written agreement of the parties, (ii) by mediation, (iii) by a final judgment or decree of any court of competent jurisdiction, or (iv) by any other means agreed in writing by the Company Members and Buyer. A judgment or decree of a court shall be deemed final when the time for appeal, if any, has expired and no appeal shall have been taken or when all appeals taken have been fully determined. If an indemnification claim is to be paid from the Indemnification Fund, any Restricted Stock held in the Indemnification Fund shall be valued as if such Restricted Stock were freely tradeable shares of Buyer Common Stock.

Indemnification Fund. To provide a fund (the "Indemnification Fund") for Seller's potential indemnification obligations hereunder, ten percent (10%) of the Purchase Price shall be delivered to the Escrow Agent, to be held after the Closing Date in accordance with the terms of the Escrow Agreement attached hereto as Exhibit A, subject to any changes (reasonably acceptable to Buyer and Seller) which may be requested by the Escrow Agent. In the event Buyer elects to adjust the Purchase Price at Closing pursuant to Section 1.5(c), then within ten (10) days of completion of any Adjustment Certificate pursuant to Section 1.6, (a) With respect in the event of a Purchase Price adjustment that results in an increase in the Purchase Price, Seller shall pay the Indemnification Fund such amounts as may be required to any Company Member who has received Buyer Common Stock pursuant to Section 1.2(b) hereof (make the “Restricted Stock”)Indemnification Fund equal 10% of the final Adjusted Purchase Price, the Company’s and/or Buyer’s remedy hereunder as to such Company Member is to be first recovered from such Restricted Stock. or (b) At Closing, the Restricted Stock will be issued in the name event of each Company Member but will a Purchase Price adjustment that results in an decrease in the Purchase Price, Buyer and Seller shall instruct the Escrow Agent to release to Seller from the Indemnification Fund such amounts as may be held by a third-party for required to make the vesting period Indemnification Fund equal 10% of the Restricted Stock pursuant final Adjusted Purchase Price. Eighteen (18) months after the Closing Date that portion of the Indemnification Fund remaining after satisfaction of all indemnification obligations, but excluding any reserves for pending unresolved Actions, shall be returned to Seller by the Escrow Agent on that date in accordance with the terms of this Agreement (the “Indemnification Fund”) for the purpose of securing, to the extent of the Indemnification Fund, the obligations of each Company Member under Section 5.2 hereofEscrow Agreement. If, on the first anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, one-third of the amount in the Such Indemnification Fund shall be distributed by the third-party to each Company Member pro rata held, disposed of and the trading restrictions on such shares shall lapse released in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the first anniversary terms of the Closing Date and the above distribution Escrow Agreement; provided however, that Buyer's claims for indemnification shall remain in be limited to the Indemnification Fund, subject to the terms of this Agreement until the second anniversary of the Closing Date. If, on the second anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, an additional one-third of the amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. The amount remaining in the Indemnification Fund following the second anniversary of the Closing Date and the above distributions shall remain in the Indemnification Fund, subject to the terms of this Agreement until the third anniversary of the Closing Date. If, on the third anniversary of the Closing Date, there is no pending Indemnification Claim pursuant to Section 5.2 hereof, the remaining amount in the Indemnification Fund shall be distributed to each Company Member pro rata and the trading restrictions on such shares shall lapse in accordance with Section 1.2(b) hereof. (c) If it is determined that an Indemnification Claim under Section 5.2 hereof should be paid, Buyer shall first recover payment for such claim from the Indemnification Fund in an amount equal to the market value of the shares of Restricted Stock in the Indemnification Fund at the time of such payment. Notwithstanding anything to the contrary in Section 5.6(b) above, after each anniversary date, any amount in the Indemnification Fund that was subject to a pending Indemnification Claim pursuant to Section 5.2 hereof, shall be distributed to the Company Members pro rata, if and when such Indemnification Claim has been determined resolved (i) by the written agreement of the parties, (ii) by mediation, (iii) by a final judgment or decree of any court of competent jurisdiction, or (iv) by any other means agreed in writing by the Company Members and Buyer. A judgment or decree of a court shall be deemed final when the time for appeal, if any, has expired and no appeal shall have been taken or when all appeals taken have been fully determined. If an indemnification claim is to be paid from the Indemnification Fund, any Restricted Stock held in the Indemnification Fund shall be valued as if such Restricted Stock were freely tradeable shares of Buyer Common Stock.