Common use of Security for the Indemnification Obligation Clause in Contracts

Security for the Indemnification Obligation. (a) Each Controlling Stockholder hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by Thane or any Affiliate thereof against the Corporation and/or the Controlling Stockholders (or any of them) hereunder may be satisfied by Thane or such Affiliate solely by recourse against the Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock. If the Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then Thane or any Affiliate thereof may take any action or exercise any remedy available to it against the Controlling Stockholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assets. (b) Thane hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party shall pay the indemnification amount claimed by the Indemnified Party in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) days after the Indemnified Party provides the Indemnifying Party with written notice of a Claim hereunder unless the Indemnifying Party in good faith disputes such Claim. If the Indemnifying Party disputes such Claim in good faith, then promptly after the resolution of such dispute, the amount finally determined to be due shall be paid by the Indemnifying Party to the Indemnified Party in immediately available funds within ten (10) days of such dispute resolution. In the event the Indemnifying Party fails to pay the Indemnified Party the amount of such indemnification Claim within such ten (10) day period the Indemnifying Party shall pay the Indemnified Party interest on the amount of such indemnification Claim at a rate of ten percent (10%) per annum, compounded monthly from the date of the original written notice of such indemnification Claim until the indemnification Claim is paid in full. (d) If any Indemnifying Party fails to comply with its obligations to make cash payments to an Indemnified Party in an aggregate amount sufficient to reimburse the Indemnified Party for all losses resulting from an indemnified Claim, the Indemnified Party may pursue any and all rights and remedies against the Indemnifying Party available in law or in equity, subject only to the limitations set forth in Section 9.2 above. In addition, and not in limitation of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified Party.

Security for the Indemnification Obligation. (a) Each Controlling Stockholder Subject to the limitations contained in this Article VIII, Sellers and Buyer hereby agrees agree that, subject to the following provisions of this Section 9.48.6, any Claims Actions for indemnification by Thane or any Affiliate thereof Sellers Indemnified Parties against the Corporation and/or the Controlling Stockholders Sellers (or any of them) hereunder may shall be satisfied by Thane or such Affiliate solely by recourse against first out of the portion of the Escrow Shares Fund, if any, then held and not previously distributed pursuant to the terms of the Escrow Agreement based on Agreement. All payments for indemnifiable Damages made pursuant to this Article VIII shall be treated as adjustments to the fair market value of a share of Thane Common StockPurchase Price. If the Escrow Shares are insufficient Sellers have an obligation to set off any Claim for indemnifiable damages made hereunder (or have been delivered provide indemnification pursuant to the holders prior terms and conditions, and subject to the making or resolution limitations, contained in this Article VIII in excess of such Claim)the then remaining Escrow Fund, then Thane or any Affiliate thereof Buyer may take any action or exercise any remedy available to it against the Controlling Stockholders Sellers by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assetsDamages. (b) Thane hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party Indemnitor shall pay the indemnification amount claimed by the Indemnified Party in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) days after the Indemnified Party provides the Indemnifying Party Indemnitor with written notice of a Claim an Action hereunder unless the Indemnifying Party Indemnitor in good faith disputes such ClaimAction. If the Indemnifying Party Indemnitor disputes such Claim Action in good faith, then promptly after the resolution of such dispute, the amount finally determined to be due shall be paid by the Indemnifying Party Indemnitor to the Indemnified Party in immediately available funds within ten (10) days of such dispute resolution. In being finally resolved and in the event the Indemnifying Party Indemnitor fails to pay the Indemnified Party the amount of such indemnification Claim Action within such ten (10) day period period, the Indemnifying Party Indemnitor shall pay the Indemnified Party interest on the amount of such indemnification Claim Action at a rate of ten six percent (106%) per annum, compounded monthly from the date of the original written notice final resolution of such indemnification Claim Action until the indemnification Claim Action is paid in full. (dc) If Subject to the limitations set forth in this Article VIII, if any Indemnifying Party Indemnitor fails to comply with its obligations to make cash payments to an Indemnified Party in an aggregate amount sufficient to reimburse the Indemnified Party for all losses Damages resulting from an indemnified ClaimAction, the Indemnified Party may pursue any and all rights and remedies against the Indemnifying Party Indemnitor available in law or in equity, subject only to the limitations set forth in Section 9.2 above. In addition, and not in limitation of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified Party.

Security for the Indemnification Obligation. As a security for the indemnification obligations contained in this Section 10, at the Closing, HomeSeekers shall set aside and hold certificates representing One Million Five Hundred Thousand Dollars of the HomeSeekers Shares into which the ISG Shares are converted pursuant to Section 2.1(b) of this Agreement (athe "Held Back Shares"), based on the average closing sale price of a share of HomeSeekers Common Stock as quoted on the Nasdaq Stock Market ("Nasdaq") Each Controlling Stockholder for the ten (10) consecutive trading days which precede the day immediately prior to the Closing Date, and the Principal Shareholders hereby agrees thatgrant HomeSeekers a first priority security interest in such Held Back Shares. HomeSeekers may set off against the Held Back Shares any Indemnifiable Damages, subject to the following provisions terms and conditions: (a) HomeSeekers shall give written notice to the holders of this Section 9.4, Held Back Shares of any Claims claim for indemnification by Thane Indemnifiable Damages or any Affiliate thereof other loss, damage, cost or expense which HomeSeekers claims to have sustained by reason thereof, and the basis of such claim; (b) Such set off shall be effected on the later to occur of the expiration of ten (10) days from the date of such notice or, if such claim is contested, the date the dispute is resolved; (c) For purposes of any set off against the Corporation and/or Held Back Shares, the Controlling Stockholders Held Back Shares shall be valued at the closing price for a share of HomeSeekers common stock on the date such set-off is effected. (d) All Held Back Shares shall be deemed to be owned by the Principal Shareholders and such parties shall be entitled to vote the Held Back Shares; provided, however, that there shall also be deposited with HomeSeekers all shares of HomeSeekers Common Stock or other assets issued to or paid upon Held Back Shares as a result of any of them) hereunder may be satisfied by Thane stock or such Affiliate solely by recourse against the Escrow Shares pursuant other dividend or distribution or stock split with respect to the terms Held Back Shares. (e) One year after the Effective Date, after payment to the Indemnified Parties of all of its indemnity claims approved as provided in this Agreement, HomeSeekers shall retain a sufficient number of Held Back Shares to provide for payment of any unresolved indemnity claims, and shall retain an additional number of Held Back Shares equal to (i) Seven Hundred Fifty Thousand Dollars ($750,000), divided by (ii) the Escrow Agreement based on the fair market value average closing sale price of a share of Thane HomeSeekers Common StockStock as quoted on the Nasdaq for the ten (10) consecutive trading days which precede the day immediately prior to the first year anniversary of the Effective Date, as reported (absent manifest error in the printing thereof) by The Wall Street Journal (Western Edition). If HomeSeekers shall release the Escrow remainder of the Held Back Shares to the ISG Shareholders pursuant to written instructions signed by each shareholder named in the certificates representing the Held Back Shares. For example, if the average closing sale price for a share of HomeSeekers common stock on the first anniversary of the Effective Date is $28.00, and if the unresolved indemnity claims are for $280,000 HomeSeekers shall retain 10,000 shares with respect to the unresolved indemnity claims plus an additional 26,786 shares, and shall release the remaining Held Back Shares. (f) HomeSeekers agrees to deliver to the Principal Shareholders no later than two years after the Closing Date any Held Back Shares (and distributions thereon or proceeds thereof) then held by HomeSeekers unless there then remains unresolved any claim for Indemnifiable Damages hereunder for which prior notice has been given, in which event HomeSeekers shall retain such number of Held Back Shares (and such amount of proceeds therefrom or distributions thereon) as is sufficient to satisfy any such unresolved claim, as well as the reasonable attorneys fees and costs associated therewith, and shall release the remaining Held Back Shares (and such remaining proceeds to the Principal Shareholders). Any Held Back Shares (and proceeds) remaining on deposit after all such claims shall have been satisfied shall be returned to the Principal Shareholders promptly after the time of satisfaction. (g) All payments for Indemnifiable damages shall be treated as adjustments to the Merger Consideration. (h) Except as limited by Section 10.2, if the Held Back Shares are insufficient to set off any Claim claim for indemnifiable damages Indemnifiable Damages made hereunder (or have been delivered to the holders Principal Shareholders prior to the making or resolution of such Claimclaim), then Thane or any Affiliate thereof HomeSeekers may take any action or exercise any remedy available to it against the Controlling Stockholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assetsIndemnifiable Damages. (bi) Thane hereby agrees that, subject to the following provisions of this Except as limited by Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party shall pay the indemnification amount claimed by the Indemnified Party in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) days after the Indemnified Party provides the Indemnifying Party with written notice of a Claim hereunder unless the Indemnifying Party in good faith disputes such Claim. If the Indemnifying Party disputes such Claim in good faith, then promptly after the resolution of such dispute10.2, the amount finally determined to be due remedies provided herein shall be paid by the Indemnifying Party to the Indemnified Party in immediately available funds within ten (10) days of such dispute resolution. In the event the Indemnifying Party fails to pay the Indemnified Party the amount of such indemnification Claim within such ten (10) day period the Indemnifying Party cumulative and shall pay the Indemnified Party interest on the amount of such indemnification Claim at a rate of ten percent (10%) per annumnot preclude HomeSeekers from asserting any other right, compounded monthly from the date of the original written notice of such indemnification Claim until the indemnification Claim is paid in full. (d) If or seeking any Indemnifying Party fails to comply with its obligations to make cash payments to an Indemnified Party in an aggregate amount sufficient to reimburse the Indemnified Party for all losses resulting from an indemnified Claim, the Indemnified Party may pursue any and all rights and other remedies against the Indemnifying Party available Principal Shareholders. The Principal Shareholders hereby waive any right to contribution or any other similar right they may have against ISG or the Surviving Corporation as a result of their agreement to indemnify in law or in equity, subject only to the limitations set forth in Section 9.2 above. In addition, and not in limitation of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified PartySection.

Security for the Indemnification Obligation. (a) Each Controlling Stockholder hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by Thane or any Affiliate thereof against the Corporation and/or the Controlling Stockholders (or any of them) hereunder may be satisfied by Thane or such Affiliate solely by recourse against the Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock. If the Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then Thane or any Affiliate thereof may take any action or exercise any remedy available to it against the Controlling Stockholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assets. (b) Thane hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party Indemnitor shall pay the indemnification amount claimed by the Indemnified Party Indemnitee in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) 30 days after the Indemnified Party Indemnitee provides the Indemnifying Party Indemnitor with written notice of a Claim hereunder unless the Indemnifying Party Indemnitor in good faith disputes such ClaimClaim by written notice to the Indemnitee. If the Indemnifying Party Indemnitor disputes such Claim in good faithfaith (“Disputed Claim”), then promptly after the resolution of such dispute, the amount finally determined to be due due, if any, shall be paid by the Indemnifying Party Indemnitor to the Indemnified Party Indemnitee in immediately available funds within ten (10) days of such dispute resolution. In the event the Indemnifying Party Indemnitor fails to pay the Indemnified Party Indemnitee the amount of such indemnification Claim within such ten (10) day period the Indemnifying Party Indemnitor shall pay the Indemnified Party Indemnitee interest on the amount of such indemnification Claim at a rate of ten percent (10%) 6% per annum, compounded monthly from the date of the original written notice of such indemnification Claim until the indemnification Claim is paid in full. (db) The parties shall use their best efforts to amicably resolve any Disputed Claims within fifteen (15) days of the date the Indemnitor gives written notice of the dispute to the Indemnitee. If they are unable to resolve the Disputed Claim within that time, either party may then initiate a binding arbitration proceeding. Such proceeding shall take place in Atlanta, Georgia and shall be conducted under the commercial dispute resolution rules of the American Arbitration Association before an arbitrator mutually acceptable to the parties, or if they are unable to agree upon an arbitrator, one chosen by the executive director of the American Arbitration Association. (c) If any Indemnifying Party Indemnitor fails to comply with its obligations to make cash payments to an Indemnified Party Indemnitee in an aggregate amount sufficient to reimburse the Indemnified Party Indemnitee for all losses resulting from an indemnified ClaimClaim within the times specified in Section 11.6(a), the Indemnified Party Indemnitee may pursue any and all legally available rights and remedies of collection against the Indemnifying Party available in law or in equityIndemnitor, subject only to the limitations set forth in Section 9.2 11.2 above. In addition, and not in limitation Such rights shall include the right on the part of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue Purchaser to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect set-off any such electionunpaid obligation of any Seller against Purchaser’s payment obligations under the Seller Note, Thane provided that Purchaser shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that not have any such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect right of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as set-off against any other future payment obligations it may determine in its sole discretion, so long as have to Sellers or to Parent other than the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purposeSeller Note, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver ordered by a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution court of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified Partycompetent jurisdiction.

Security for the Indemnification Obligation. (a) Each Controlling Stockholder The parties hereby agrees that, subject to the following provisions of this Section 9.412.6, any Claims for indemnification by Thane or any Affiliate thereof the Purchasers against the Corporation and/or the Controlling Stockholders (or any of them) Sellers hereunder may shall be satisfied by Thane or such Affiliate the Purchasers solely by recourse against the Escrow Shares Funds pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common StockAgreement. If the Escrow Shares are insufficient to set off any Claim All payments for indemnifiable damages made hereunder (or have been delivered pursuant to this Article XII shall be treated as adjustments to the holders prior to the making or resolution of such Claim), then Thane or any Affiliate thereof may take any action or exercise any remedy available to it against the Controlling Stockholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assetsPurchase Price. (b) Thane hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party Indemnitor shall pay the indemnification amount claimed by the Indemnified Party Indemnitee in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) days after the Indemnified Party Indemnitee provides the Indemnifying Party Indemnitor with written notice of a Claim hereunder unless the Indemnifying Party Indemnitor in good faith disputes such Claim. If the Indemnifying Party Indemnitor disputes such Claim in good faith, then promptly after the resolution of such dispute, the amount finally determined to be due shall be paid by the Indemnifying Party Indemnitor to the Indemnified Party Indemnitee in immediately available funds within ten (10) days of such dispute resolution. In the event the Indemnifying Party Indemnitor fails to pay the Indemnified Party Indemnitee the amount of such indemnification Claim within such ten (10) day period the Indemnifying Party Indemnitor shall pay the Indemnified Party Indemnitee interest on the amount of such indemnification Claim at a rate of ten percent (10%) per annum, compounded monthly from the date of the original written notice of such indemnification Claim until the indemnification Claim is paid in full. (dc) If any Indemnifying Party Indemnitor fails to comply with its obligations to make cash payments to an Indemnified Party Indemnitee in an aggregate amount sufficient to reimburse the Indemnified Party Indemnitee for all losses resulting from an indemnified Claim, the Indemnified Party Indemnitee may pursue any and all rights and remedies against the Indemnifying Party Indemnitor available in law or in equity, subject only to the limitations set forth in Section 9.2 above. In addition, 12.2 above and not in limitation of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes entitled to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution payment of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified Partyits reasonable attorneys' fees.

Security for the Indemnification Obligation. (a) Each Controlling Stockholder hereby agrees that, subject Subject to the following provisions of limitations contained in this Section 9.4Article 9, any Claims claims for indemnification by Thane or any Affiliate thereof a Purchaser Indemnified Party against the Corporation and/or the Controlling Stockholders (or any of them, and including the Company in the event of a pre-Closing indemnification claim) hereunder may pursuant to Section 9.3 will be satisfied by Thane or such Affiliate solely by recourse against the Escrow Shares pursuant applicable Stockholders in cash; provided that the Purchaser Indemnified Parties will be entitled to recover Losses equal to the terms amount of the Escrow Agreement based on the fair market value of a share of Thane Common Stock. If the Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such ClaimStockholder Deductible as provided under Section 9.2(a), then Thane or any Affiliate thereof may take any action or exercise any remedy available to it against the Controlling Stockholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then Thane agrees to first seek indemnification against the Escrow Shares prior to seeking redress against any of the Controlling Stockholders' other assets. (b) Thane hereby agrees that, subject Neither the exercise nor the failure to exercise a remedy will constitute an election of remedies or limit any Purchaser Indemnified Party and/or any of the Stockholders and/or the AOD Entity in any manner in the enforcement of any other remedies that may be available to them. All payments for indemnifiable Losses made pursuant to this Article 9 will be treated as adjustments to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assetsPurchase Price. (c) Each Indemnifying Party shall Indemnitor will pay the any required indemnification amount claimed by the Indemnified Party Indemnitee in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten thirty (1030) days after the Indemnified Party Indemnitee provides the Indemnifying Party Indemnitor with written notice of a Claim hereunder in accordance with this Agreement unless the Indemnifying Party Indemnitor in good faith disputes such Claim. If the Indemnifying Party Indemnitor disputes such Claim in good faith, then promptly after the resolution of such dispute, the amount finally determined to be due shall will be paid by the Indemnifying Party Indemnitor to the Indemnified Party Indemnitee in immediately available funds within ten five (105) days of such dispute resolution. In the event the Indemnifying Party Indemnitor fails to pay the Indemnified Party Indemnitee the amount of such indemnification Claim within such ten five (105) day period the Indemnifying Party shall Indemnitor will pay the Indemnified Party Indemnitee interest on the amount of such indemnification Claim at a rate of ten five percent (105%) per annum, compounded monthly from the date of the original written notice of such indemnification Claim annum until the indemnification Claim is paid in full. (d) If any Indemnifying Party Indemnitor fails to comply with its obligations to make cash payments to an Indemnified Party Indemnitee in an aggregate amount sufficient to reimburse the Indemnified Party Indemnitee for all losses Losses resulting from an indemnified Claim, the Indemnified Party Indemnitee may pursue any and all rights and remedies against the Indemnifying Party Indemnitor available in law at Law or in equity, subject only to the limitations set forth in Section 9.2 above. In addition, and not in limitation of or in substitution for the foregoing, in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that such securities are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified Party9.2.

Security for the Indemnification Obligation. (a) Each Controlling Stockholder Seller hereby agrees that, subject to the following provisions of this Section 9.413.6, any Claims for indemnification by Thane Buyer or Parent against Seller or any Affiliate thereof against the Corporation and/or the Controlling Stockholders Shareholder (or any of them) hereunder may be satisfied by Thane Buyer or such Affiliate solely Parent, as the case may be, by recourse against the Escrow Shares Stock pursuant to the terms of the Escrow Agreement based on Agreement. All payments for indemnifiable damages made pursuant to this Article 13 (including the fair market value cancellation of a share of Thane Common Stockany Escrow Shares) shall be treated as adjustments to the Purchase Price. If the Escrow Shares are Stock is insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then Thane or any Affiliate thereof Buyer and Parent may take any action or exercise any remedy available to it against Seller or the Controlling Stockholders Shareholders by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Escrow Shares are Stock is sufficient in value to cover the claimed amount of all of Buyer's or Parent's indemnification Claims, then Thane agrees Buyer and Parent agree to first seek indemnification against the Escrow Shares Stock prior to seeking redress against any of the Controlling Stockholders' Seller's or any Shareholder's other assets. (b) Thane hereby agrees that, subject to the following provisions of this Section 9.4, any Claims for indemnification by the Corporation or any Affiliate thereof against Thane hereunder may be satisfied by the Corporation or such Affiliate solely by recourse against the Thane Escrow Shares pursuant to the terms of the Escrow Agreement based on the fair market value of a share of Thane Common Stock at the time of such satisfaction. If the Thane Escrow Shares are insufficient to set off any Claim for indemnifiable damages made hereunder (or have been delivered to the holders prior to the making or resolution of such Claim), then the Corporation or any Affiliate thereof may take any action or exercise any remedy available to it against Thane by appropriate legal proceedings to collect such indemnifiable damages. To the extent the Thane Escrow Shares are sufficient in value to cover the claimed amount of all indemnification Claims, then the Corporation agrees to first seek indemnification against the Thane Escrow Shares prior to seeking redress against Thane's other assets. (c) Each Indemnifying Party Indemnitor shall pay the indemnification amount claimed by the Indemnified Party Indemnitee in immediately available funds promptly or as an adjustment to the securities as contemplated in Section 9.4(d) below within ten (10) 10 days after the Indemnified Party Indemnitee provides the Indemnifying Party Indemnitor with written notice of a Claim hereunder unless the Indemnifying Party Indemnitor in good faith disputes such Claim. If the Indemnifying Party Indemnitor disputes such Claim in good faith, then promptly after the resolution of such dispute, the amount finally determined to be due shall be paid by the Indemnifying Party Indemnitor to the Indemnified Party Indemnitee in immediately available funds within ten (10) 10 days of such dispute resolution. In the event the Indemnifying Party Indemnitor fails to pay the Indemnified Party Indemnitee the amount of such indemnification Claim within such ten (10) 10 day period the Indemnifying Party Indemnitor shall pay the Indemnified Party Indemnitee interest on the amount of such indemnification Claim at a rate of ten percent (10%) % per annum, compounded monthly from the date of the original written notice of such indemnification Claim until the indemnification Claim is paid in full. (d) . If any Indemnifying Party Indemnitor fails to comply with its obligations to make cash payments to an Indemnified Party Indemnitee in an aggregate amount sufficient to reimburse the Indemnified Party Indemnitee for all losses resulting from an indemnified Claim, the Indemnified Party Indemnitee may pursue any and all rights and remedies against the Indemnifying Party Indemnitor available in law or in equity, subject only to the limitations set forth in Section 9.2 13.2 above. (c) In addition to any other legends required by Parent, certificates representing the Escrow Shares that are issued to Seller as of the Closing Date as contemplated hereby shall bear a legend in substantially the following form: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE CONSTITUTE A PORTION OF THE PURCHASE PRICE AS DEFINED IN THE ASSET PURCHASE AGREEMENT, DATED AS OF FEBRUARY __, 2004, BY AND AMONG KESSLERS SPORT SHOP, INC. In addition("COMPANY"), and not in limitation of or in substitution for BOO ACQUISITION CORP., AND COLLEGIATE PACIFIC INC. ("PARENT") AND THE STOCKHOLDERS OF THE COMPANY (THE "AGREEMENT") AND ARE SUBJECT TO RETURN TO THE PARENT UNDER CERTAIN CIRCUMSTANCES PURSUANT TO THE TERMS SET FORTH IN AN ESCROW AGREEMENT, DATED AS OF MARCH __, 2004, BY AND BETWEEN BOO ACQUISITION CORP. AND COMPANY (THE "ESCROW AGREEMENT"). SUCH PROVISIONS SHALL CONTINUE TO APPLY TO ANY HOLDER OR TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH ESCROW AGREEMENT SHALL BE FURNISHED BY THE PARENT TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE." The certificates representing the foregoingEscrow Shares shall bear such legend, notwithstanding any transfer thereof, until such time as set forth in the event Thane is the Indemnified Party, Thane may cause the cancellation of shares of Thane Common Stock retained by the breaching Indemnifying Parties so long as the aggregate fair market value of such canceled securities does not exceed the amount of such indemnity obligations, Escrow Agreement and reissue to the Indemnified Party shares of Thane Common Stock so canceled in the amount of such indemnification Claim, plus any accrued and unpaid interest. To effect any such election, Thane Parent shall deliver to the breaching Indemnifying Party a written notice (i) identifying the breaching Indemnifying Party and stating that such breaching Indemnifying Party has failed to make the payments to such Indemnified Party in the respect of a loss in the full amounts required pursuant to this Article IX; (ii) the amount of such unreimbursed loss, and (iii) the number of shares of Thane Common Stock which the Indemnified Party has elected to cause the Corporation to cancel in satisfaction of such unpaid loss. Thane may designate for cancellation from each breaching Indemnifying Party such number of shares of Thane Common Stock as it may determine in its sole discretion, so long as the aggregate fair market value of such canceled holder new securities does not exceed the aggregate unreimbursed loss at the time of delivery of the applicable cancellation notice to the Indemnifying Parties. Upon delivery of a cancellation notice the securities identified in such notice as canceled securities shall be deemed for all purposes to be canceled and, accordingly, Thane's books and records shall thereafter reflect that representing such securities and not bearing such legend at any time after the Escrow Shares are no longer outstanding for any purpose, unless within fifteen (15) days following delivery thereof the Indemnifying Parties deliver a written notice to Thane objecting thereto, in which event such securities shall not be canceled but shall be held by the Indemnifying Party, and the Indemnifying Party shall (and Thane shall place stop transfer instructions on such shares to assist the Indemnifying Party to) ensure that no interest therein will be transferred, pending resolution of the dispute. Each party to such dispute shall seek to resolve such dispute expeditiously and in good faith. If and at such time as any securities are canceled pursuant to this Section 9.4(d), the holders thereof shall promptly surrender to Thane the certificates representing such canceled securities, duly endorsed for transfer as requested by Thane, so that new certificates representing any securities represented thereby which are not so canceled may be issued subject to the holder thereof and certificates representing the canceled securities may be destroyed by Thane or reissued to the Indemnified PartyEscrow Agreement.