Common use of Escrow Amount Clause in Contracts

Escrow Amount. In connection with the Stock Exchange and the Merger, Parent, the Stockholders’ Agent, Continental Stock Transfer and Trust Company (the “Escrow Agent”), ▇▇▇▇▇▇▇▇▇, individually, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”) are entering into the escrow agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, in connection with any payment hereunder, Parent shall withhold from the shares issued to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Escrow Shares”) in an amount equal to such holder’s Pro Rata Share of the Escrow Amount as set forth on the Payment Spreadsheet. For purposes of the foregoing, each such holder’s “Pro Rata Share” shall be a fraction whose numerator is the aggregate number of shares of Common Stock held by such holder immediately prior to the Stock Exchange, and whose denominator is the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued pursuant to Section 1.1. If the value of such withheld shares (which shall be valued at $5.98 per share) is insufficient to provide for such Rollover Stockholder’s Pro Rata Share of the Escrow Amount, then and only to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect of the Escrow Amount. Promptly following the Effective Time, Parent shall cause the Escrow Amount consisting of cash and shares to be deposited with the Escrow Agent and the Escrow Agent shall hold such shares in its vault and such cash in an interest bearing escrow account (collectively, the shares and cash, the “Escrow Fund”) as security for the indemnification obligations under Article 8 and for purposes of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders in accordance with this Agreement and the Escrow Agreement. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term of the Escrow Fund) distributed by the Escrow Agent from the Escrow Fund to the Common Stockholders pursuant to the terms of the Escrow Agreement shall be treated, for U.S. federal income tax purposes, as additional consideration paid to the Common Stockholders for their shares pursuant to the Stock Exchange and the Merger as and when that amount is distributed.

Escrow Amount. In connection with At the Stock Exchange and the MergerClosing, ParentPurchaser shall deposit, the Stockholders’ Agentor cause to be deposited, Continental Stock Transfer and Trust Company $5,000,000 (plus any interest or earnings thereon net any escrow fees, the “Escrow AgentAmount”), ▇▇▇▇▇▇▇▇▇in cash with the Escrow Agent. The Escrow Amount will be held by the Escrow Agent in accordance with the Escrow Agreement to be executed and delivered by Sellers, individually, Purchaser and ▇▇▇▇▇▇▇ ▇▇▇▇▇ the Escrow Agent at the Closing. The Escrow Amount shall be paid in whole or in part in accordance with the terms of the Escrow Agreement to (“▇▇▇▇▇”i) are entering into the escrow agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything Purchaser Indemnified Parties to the contrary set forth in this Agreement, in connection with extent necessary to satisfy any payment hereunder, Parent shall withhold from the shares issued to each obligation of the Rollover Stockholders Sellers pursuant to Section 1.1 8.2, (excluding ii) Purchaser, at its election, to satisfy a payment obligation of Sellers, if any, pursuant to Section 2.5(f), (iii) Sellers, on the Transferred Common Shares Considerationdate that is twelve (12) and months following the cash otherwise payable Closing Date, to each holder the extent of outstanding Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Escrow Shares”) in an amount equal to such holder’s Pro Rata Share excess, if any, of $1,300,000 of the Escrow Amount as set forth on deposited at the Payment Spreadsheet. For purposes Closing over the sum of the foregoing, each such holder’s “Pro Rata Share” shall be a fraction whose numerator is the aggregate number of shares of Common Stock held by such holder immediately prior (A) all amounts paid pursuant to the Stock Exchangeimmediately preceding clauses (i) and (ii), and whose denominator is plus (B) the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such maximum amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount that could reasonably be expected to be withheld from necessary to satisfy all claims by the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued Purchaser Indemnified Parties pursuant to Section 1.1. If 8.2 asserted in good faith on or prior to such date (with respect to clause (B) the value of such withheld shares “Escrow Claims Estimated Amount”), (which shall be valued at $5.98 per shareiv) is insufficient to provide for such Rollover Stockholder’s Pro Rata Share of the Escrow AmountSellers, then and only to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect any Escrow Amount as of the Purchaser Indemnification Deadline that is in excess of any unresolved Escrow Claims Estimated Amount. Promptly following ; provided, however, that if the Effective TimeLitigation Matter has not been finally resolved as of the Purchaser Indemnification Deadline, Parent shall cause the Escrow Amount consisting released pursuant to this clause (iv) will be the amount of cash any remaining Escrow Amount as of the Purchaser Indemnification Deadline in excess of the sum of $2.4 million and shares any unresolved Escrow Claims Estimated Amount, and, in such event, except to be deposited with the Escrow Agent extent extended by Section 6.11, upon the earlier of five days following the final resolution of the Litigation Matter and three (3) years following the Escrow Agent shall hold Closing Date (such shares in its vault and such cash in an interest bearing escrow account (collectively, the shares and cashdate, the “Litigation Matter Release Date”), any remaining Escrow Fund”) as security for the indemnification obligations under Article 8 and for purposes Amount in excess of paying any Adjustment unresolved Escrow Claims Estimated Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent released to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders in accordance with this Agreement and the Escrow AgreementSellers. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term of the Escrow Fund) distributed by the Escrow Agent from the Escrow Fund to the Common Stockholders Claims Estimated Amount will be released pursuant to the terms of the Escrow Agreement Agreement. Any amounts distributed to Sellers from the Escrow Amount shall be treated, for U.S. federal income tax purposes, divided among the Sellers as additional consideration paid to set forth on Schedule 2.3 of the Common Stockholders for their shares pursuant to the Stock Exchange and the Merger as and when that amount is distributedDisclosure Letter.

Escrow Amount. In connection Notwithstanding anything to the contrary contained in this Agreement, (i) an amount in cash equal to the Adjustment Escrow Amount shall not be paid to the Company Securityholders at the Effective Time, but shall instead be withheld in accordance with each Company Securityholder’s Closing Pro Rata Share of the Stock Exchange Adjustment Escrow Amount and the Mergerdeposited with PNC Bank, Parent, the Stockholders’ Agent, Continental Stock Transfer and Trust Company National Association (the “Escrow Agent”)) and (ii) an amount in cash (such amount, ▇▇▇▇▇▇▇▇▇, individually, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “▇▇▇▇▇Indemnity Escrow Cash”) are entering into the escrow agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, in connection with any payment hereunder, Parent shall withhold from the and shares issued to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Acquirer Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Indemnity Escrow Shares”) in with an amount aggregate value equal to the Indemnity Escrow Amount (with such holdershares of Acquirer Common Stock valued at the Closing Acquirer Stock Price) shall not be paid to the Company Securityholders at the Effective Time, but shall instead be withheld in accordance with each Company Securityholder’s Closing Pro Rata Share of the Indemnity Escrow Amount as set forth on the Payment Spreadsheet. For purposes of the foregoing, each such holder’s “Pro Rata Share” shall be a fraction whose numerator is the aggregate number of shares of Common Stock held by such holder immediately prior to the Stock Exchange, and whose denominator is the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such each Company Securityholder contributing a pro rata amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued pursuant to Section 1.1. If the value of such withheld shares (which shall be valued at $5.98 per share) is insufficient to provide for such Rollover Stockholder’s Pro Rata Share of the Escrow Amount, then and only to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect of the Escrow Amount. Promptly following the Effective Time, Parent shall cause the Escrow Amount consisting of cash and shares of Acquirer Common Stock (valued at the Closing Acquirer Stock Price) in proportion to be the cash and Acquirer Common Stock payable to such Company Securityholder pursuant to Sections 1.3(a)(i)(A), 1.3(a)(ii)(A), 1.3(a)(iii)(A), 1.3(a)(iv)(A) and 1.3(a)(v)(A) prior to giving effect to this Sections 1.3(a)(v) and 1.3(c)) and deposited with the Escrow Agent Agent. The Adjustment Escrow Funds and the Indemnity Escrow Agent shall hold such shares Funds will be held in its vault and such cash in an interest bearing escrow account segregated accounts (collectively, the shares and cash, the “Escrow FundAccount”) as security for the indemnification obligations under Article 8 and for purposes of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included governed by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable subject to the Common Stockholders in accordance with terms of this Agreement and the Escrow Agreement. The parties acknowledge Adjustment Escrow Funds and agree that Indemnity Escrow Funds shall be available for the benefit of Acquirer to satisfy any amounts (whether principal or income adjustment made in Acquirer’s favor pursuant to Section 1.6 and gains on principal earned during the term of the Indemnity Escrow Fund) distributed Funds shall also be available to satisfy any indemnification claims made by the Escrow Agent from the Escrow Fund Acquirer Indemnified Parties pursuant to the Common Stockholders pursuant Article VIII, in each case, in accordance with and subject to the terms of this Agreement, and shall be distributed in accordance with this Agreement. The adoption of this Agreement and the approval of the Transactions by the Company Stockholders shall constitute, among other things, approval of the Escrow Funds and the withholding of and the deposit with the Escrow Agent of the applicable Closing Pro Rata Share of the Escrow Amount from each Company Securityholder by Acquirer. No portion of the Escrow Funds (or any beneficial interest therein) may be pledged, subjected to any Encumbrance, sold, assigned or transferred by any Company Securityholder or be taken or reached by any legal or equitable process in satisfaction of any debt or other Liability of any Company Securityholder, in each case, prior to the distribution of such portion of the Escrow Funds to such Company Securityholder in accordance with Section 1.6 or Article VIII, as applicable, if any. The Company Securityholders shall have no right to vote the Indemnity Escrow Shares, and any dividends paid in respect of the Indemnity Escrow Shares shall be added to the Indemnity Escrow Funds (and not paid directly to the Company Securityholders at the time of payment of such dividend but shall instead be deposited in the Escrow Account and released in accordance with the Escrow Agreement). The parties hereto agree that, for Tax purposes only, Acquirer is the owner of the Escrow Funds and that all interest on or other taxable income, if any, earned from the investment of cash in the Escrow Funds pursuant to this Agreement shall be treated, treated for U.S. federal income tax purposes, Tax purposes as additional consideration paid to the Common Stockholders for their shares pursuant to the Stock Exchange and the Merger as and when that amount is distributedearned by Acquirer.

Escrow Amount. In connection with the Stock Exchange and the Merger, Parent, the Stockholders’ Agent, Continental Stock Transfer and Trust Company (the “Escrow Agent”), ▇▇▇▇▇▇▇▇▇) and the Signing Stockholders, individually, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”) are entering into the escrow agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, in connection with any payment hereunder, Parent shall withhold from the shares issued to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Common Company Capital Stock (the “Common Stockholders”) in accordance with Section 1.7(a), Stock Options in accordance with Section 1.7(b) and Warrants in accordance with Section 1.7(c) cash and and, in the case of the Rollover Stockholders, shares (the “Escrow Shares”) in an amount equal to such holder’s holders’ Pro Rata Share of the Escrow Amount as set forth on the Payment Spreadsheet. For purposes of the foregoing, each such holder’s Stockholder’s, holder of Stock Options or holder of Warrants “Pro Rata Share” shall be equal to such holders initial Escrow Percentage as set forth on the Payment Spreadsheet, which is a fraction whose numerator is the aggregate number of shares of Common Stock held by Merger Consideration payable to such holder immediately prior to as set forth in the Stock ExchangePayment Spreadsheet, and whose denominator is $11,308,650. When calculating the aggregate number Rollover Stockholders’ initial Pro Rata Share of shares the Escrow Fund, the value of Common Stock outstanding immediately prior to the Stock Exchange Escrow Shares shall be $750,245 for ▇▇▇▇▇▇ ▇▇▇▇▇ and $150,000 for ▇▇▇▇ ▇▇▇▇. For purposes of the foregoing, “Escrow Amount” shall initially mean $1,720,000 1,800,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreementtime)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each the Rollover Stockholder’s Stockholders’ Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued pursuant to Section 1.1. If the value of such withheld shares (which shall be valued at $5.98 5.99 per share) is insufficient to provide for such the Rollover Stockholder’s Stockholders’ Pro Rata Share of the Escrow Amount, then and only to the extent of such insufficiency shall cash otherwise payable to such the Rollover Stockholder Stockholders in respect of Common Company Capital Stock be withheld by Parent to satisfy such Rollover Stockholder’s Stockholders’ obligations in respect of the Escrow Amount. Promptly following the Effective Time, Parent shall cause the Escrow Amount consisting of cash and shares to be deposited with the Escrow Agent and the Escrow Agent shall hold such shares in its vault and such cash in an interest bearing escrow account (collectively, the shares and cash, the “Escrow Fund”) as security for the indemnification obligations under Article 8 and for purposes of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that may arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders Stockholders, holders of Stock Options and holders of Warrants in accordance with this Agreement and the Escrow Agreement. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term of the Escrow Fund) distributed by the Escrow Agent from the Escrow Fund to the Common Stockholders Stockholders, holders of Stock Options and holders of Warrants pursuant to the terms of the Escrow Agreement shall be treated, for U.S. federal income tax purposes, as additional consideration paid to the Common Stockholders Stockholders, holders of Stock Options and holders of Warrants for their shares pursuant to the Stock Exchange and the Merger as and when that amount is distributed.

Escrow Amount. In connection with (i) On the Stock Exchange and the Merger, Parent, the Stockholders’ Agent, Continental Stock Transfer and Trust Company (the “Escrow Agent”), ▇▇▇▇▇▇▇▇▇, individually, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”) are entering into the escrow agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, in connection with any payment hereunderClosing Date, Parent shall withhold from the shares issued transfer or cause to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Escrow Shares”) in an amount equal to such holder’s Pro Rata Share of the Escrow Amount as set forth on the Payment Spreadsheet. For purposes of the foregoing, each such holder’s “Pro Rata Share” shall be transfer a fraction whose numerator is the aggregate number of shares of Common Stock held by such holder immediately prior to the Stock Exchange, and whose denominator is the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued pursuant and cash equal to Section 1.1. If the value of such withheld shares (which shall be valued at $5.98 per share) is insufficient to provide for such Rollover Stockholder’s Pro Rata Share of the Escrow Amount, then and only to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect of the Escrow Amount. Promptly following the Effective Time, Parent shall cause the Escrow Amount consisting of cash and shares to be deposited with the Escrow Agent and the Escrow Agent shall to hold such shares in its vault and such cash in trust as an interest bearing escrow account fund (collectively, the shares and cash, the “Escrow Fund”) as security for under the indemnification obligations under Article 8 and for purposes terms of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders in accordance with this Agreement and the Escrow Agreement. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term Upon deposit of the Escrow Amount with the Escrow Agent in accordance with the foregoing sentence, Parent shall be deemed to have withheld from each Indemnifying Party its Pro Rata Portion of the Escrow Amount from the amounts that otherwise would be payable and issuable upon the First Effective Time to such Indemnifying Party pursuant to Section 1.6(b)(i), Section 1.6(c)(i), Section 1.6(d)(i) and Section 1.6(e)(i), and contributed on behalf of such Indemnifying Party its Pro Rata Portion of the Escrow Amount to the Escrow Fund; provided for the avoidance of doubt, (A) distributed with respect to (x) the Participating Individuals and (y) any other Indemnifying Parties that Parent has deemed Unaccredited Investors pursuant to Section 1.6(g), such amounts shall have been deemed withheld solely in cash and deposited into the Escrow Fund solely as cash and (B) with respect to all other Indemnifying Parties, such amounts shall have been deemed withheld in the same proportion that shares of Parent Common Stock (having a per share value equal to the Parent Trading Price as of the First Effective Time) and cash comprise the Total Consideration issuable and payable to such Indemnifying Party pursuant to Section 1.6(b)(i), Section 1.6(c)(i) and Section 1.6(d)(i) and contributed to the Escrow Fund as cash and Escrow Shares, respectively (excluding the Parent Common Stock issued by Parent’s transfer agent into a restricted account pursuant to Section 1.9(a)). If any Earnout Consideration becomes issuable or payable (including payable after giving effect to Section 1.6(g)) pursuant to Section 1.10 prior to the Expiration Date, an amount equal to twelve and one-half percent (12.5%) of such Earnout Consideration that is issuable or payable to Indemnifying Parties pursuant to Section 1.6(b)(i), Section 1.6(c)(i), Section 1.6(d)(i) and Section 1.6(e)(i) shall not be issued or paid to such Indemnifying Parties and shall instead be deposited with the Escrow Agent in the Escrow Fund, which amount shall be held by the Escrow Agent from pursuant to the Escrow Fund Agreement. If Parent authorizes its transfer agent to transfer the shares of Parent Common Stock comprising the Retention Based Payment out of the transfer agent’s restricted account pursuant to Section 1.9(c)(ii) prior to the Common Stockholders Expiration Date, an amount equal to twelve and one-half percent (12.5%) of the Indemnifying Parties’ aggregate Pro Rata Portions of the Retention Based Payment shall not be transferred or paid (including paid after giving effect to Section 1.6(g)) to the Indemnifying Parties and shall instead be deposited with the Escrow Agent in the Escrow Fund, which amount shall be held by the Escrow Agent pursuant to the terms of the Escrow Agreement Agreement. (ii) Until and to the extent there is a forfeiture of the Escrow Shares in connection with any indemnifiable Losses in accordance with the terms of this Agreement, the Escrow Shares shall be treatedissued and outstanding stock of Parent. The Indemnifying Parties deemed to have contributed Escrow Shares to the Escrow Fund shall be entitled to exercise the voting rights of the shares of Parent Common Stock transferred to the Escrow Fund and to receive dividends (if declared) with respect to such shares (other than non-taxable stock dividends, which shall be included as part of the Escrow Fund). (iii) The parties agree that, consistent with Proposed Treasury Regulation Section 1.468B-8 (as applicable), for U.S. federal income tax Tax reporting purposes, all interest or other income earned from the investment of the cash portion of the Escrow Amount in any Taxable year shall be reported as additional consideration paid allocated to Parent until the Common Stockholders for their shares pursuant to distribution of the Stock Exchange Escrow Amount (or portions thereof) is determined, and the Merger as and when that amount is distributedEscrow Agent will annually file information returns (including Internal Revenue Service Form 1099) consistent with such treatment.

Escrow Amount. In At the Closing, as security for the general obligations of Target and the Significant Target Shareholders under this Agreement, the lesser of (i) an amount of Merger Consideration having a value of 10% of the value of the total Merger Consideration (with each share of Acquiror Common Stock valued for this purpose at the closing price of Acquiror Common Stock on the NASDAQ on the day immediately preceding the Closing Date) and (ii) the amount calculated by part (i) of this Section, reducing the Merger Securities held in escrow by an amount necessary for the total value of the shares of Acquiror Common Stock included in the Merger Securities, less the total value of all shares of Acquiror Common Stock included in the Escrow Account, to be equal to the sum of: (x) the Cash Component, plus (y) the aggregate amount of Cash Out Amounts and Deal Expenses payable at the Closing, plus (z) the total value of shares of Acquiror Common Stock included in the Escrow Account (collectively, the "Escrow Amount") shall be delivered by Acquiror (on behalf of the Significant Target Shareholders, allocable to each of them on a pro rata basis compared with the value of Merger Consideration payable to each of them in connection with the Stock Exchange Merger) to NBD Bank, as escrow agent (the "Escrow Agent"), to be deposited and held in and released from escrow pursuant to the MergerEscrow Agreement to be entered into at the Closing, Parentand shall be deposited and held in escrow pursuant to the provisions of the Escrow Agreement until May 31, 1999. Subject to the foregoing, the Stockholders’ Agent, Continental Stock Transfer mix of Merger Securities and Trust Company (the “Escrow Agent”), ▇▇▇▇▇▇▇▇▇, individually, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”) are entering into the escrow agreement Cash Component in the form attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything Account shall be identical to the contrary set forth mix of Merger Securities and Cash Component payable to the Significant Target Shareholders, in this Agreementthe aggregate, in connection with any payment hereunderthe Merger, Parent or as Acquiror and each Significant Target Shareholder shall withhold from the shares issued to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Escrow Shares”) in an amount equal to such holder’s Pro Rata Share of the Escrow Amount as set forth on the Payment Spreadsheetagree. For purposes of the foregoingthis Section, each such holder’s “Pro Rata Share” share of Acquiror Common Stock shall be deemed to have a fraction whose numerator is value equal to the aggregate number closing price of shares of Acquiror Common Stock held by such holder immediately prior to the Stock Exchange, and whose denominator is the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the Escrow Amount shall be withheld first from shares of Parent Common Stock issued pursuant to Section 1.1. If the value of such withheld shares (which shall be valued at $5.98 per share) is insufficient to provide for such Rollover Stockholder’s Pro Rata Share of the Escrow Amount, then and only to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect of the Escrow Amount. Promptly following the Effective Time, Parent shall cause the Escrow Amount consisting of cash and shares to be deposited with the Escrow Agent and the Escrow Agent shall hold such shares in its vault and such cash in an interest bearing escrow account (collectively, the shares and cash, the “Escrow Fund”) as security for the indemnification obligations under Article 8 and for purposes of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund shall be included by Parent as taxable income or loss of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent (40%) of the taxable income recognized NASDAQ on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of day immediately preceding the Escrow Fund shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders in accordance with this Agreement and the Escrow Agreement. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term of the Escrow Fund) distributed by the Escrow Agent from the Escrow Fund to the Common Stockholders pursuant to the terms of the Escrow Agreement shall be treated, for U.S. federal income tax purposes, as additional consideration paid to the Common Stockholders for their shares pursuant to the Stock Exchange and the Merger as and when that amount is distributedClosing Date.

Escrow Amount. In connection 1.7.1 On the Closing Date, Purchaser shall deposit with the Stock Exchange and the Merger, Parent, the Stockholders’ Agent, Continental Stock Transfer and Trust Company Escrow Agent an aggregate cash amount equal to Six Hundred Fifty Thousand Dollars ($650,000) (the “Escrow AgentAmount”)) for the purpose of securing the indemnification obligations of Seller Companies and Parent and the post-closing adjustments of the Purchase Price set forth in this Agreement, ▇▇▇▇▇▇▇▇▇of which (i) Five Hundred Thousand Dollars ($500,000) (the “Indemnification Escrow Amount”) may be used by Purchaser, individuallyin its sole and absolute discretion, to satisfy any indemnification Claim under this Agreement or any agreement or instrument contemplated by this Agreement, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ (ii) One Hundred Fifty Thousand Dollars ($150,000) (the “▇▇▇▇▇Working Capital Escrow Amount”) are entering into may be used by Purchaser, in its sole and absolute discretion, to satisfy the post-Closing adjustments of the Purchase Price pursuant to Section 1.8. The Escrow Amount shall be held by the Escrow Agent pursuant to the terms of the escrow agreement substantially in the form of Exhibit 1.7.1 attached hereto as Exhibit C (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, in connection with any payment hereunder, Parent shall withhold from the shares issued to each of the Rollover Stockholders pursuant to Section 1.1 (excluding the Transferred Common Shares Consideration) and the cash otherwise payable to each holder of outstanding Common Stock (the “Common Stockholders”) in accordance with Section 1.7(a) cash and shares (the “Escrow Shares”) in an amount equal to such holder’s Pro Rata Share of the Escrow Amount as set forth on the Payment Spreadsheet. For purposes of the foregoing, each such holder’s “Pro Rata Share” shall be a fraction whose numerator is the aggregate number of shares of Common Stock held by such holder immediately prior to the Stock Exchange, and whose denominator is the aggregate number of shares of Common Stock outstanding immediately prior to the Stock Exchange and “Escrow Amount” shall initially mean $1,720,000 (with references to the Escrow Amount in this Agreement, as at any applicable date, giving effect to any reduction of such amount from time to time (including, without limitation, the Step-Down pursuant to Article 8 of this Agreement)). In calculating each Common Stockholder’s Pro Rata Share of the Escrow Amount to be withheld from the shares or cash to which such Common Stockholder is otherwise entitled under Section 1.1 and Section 1.7, the shares shall be valued at $5.98 per share. Amounts to be withheld in respect of each Rollover Stockholder’s Pro Rata Share of the The Escrow Amount shall be withheld first from shares held as a trust fund and shall not be subject to any Lien, attachment, trustee process or any other judicial process of Parent Common Stock issued pursuant to Section 1.1. If the value any creditor of such withheld shares (which any party, and shall be valued at $5.98 per share) is insufficient to provide held and disbursed solely for such Rollover Stockholder’s Pro Rata Share the purposes and in accordance with the terms of the Escrow Amount, then and only Agreement. 1.7.2 Subject to the extent of such insufficiency shall cash otherwise payable to such Rollover Stockholder in respect of Common Stock be withheld by Parent to satisfy such Rollover Stockholder’s obligations in respect terms and conditions of the Escrow Agreement, not later than six (6) months after the Closing Date, Purchaser and Parent will cause the Escrow Agent to remit to Parent Two Hundred Fifty Thousand Dollars ($250,000) of the Indemnification Escrow Amount. Promptly following , less the Effective Timesum of any amounts which are owed to or have been retained by Purchaser from the Indemnification Escrow Amount in satisfaction of any indemnification Claims of Purchaser, any pending, unresolved Claims of Purchaser, or any other obligations of any of the Seller Companies or Parent under this Agreement or any agreements, documents, instruments, and transactions contemplated hereby. 1.7.3 Subject to the terms and conditions of the Escrow Agreement, not later than twelve (12) months after the Closing Date, Purchaser and Parent will cause the Escrow Agent to remit to Seller the remaining Indemnification Escrow Amount held by Purchaser, less the sum of any amounts which are owed to or have been retained by Purchaser from the Indemnification Escrow Amount in satisfaction of any indemnification Claims of Purchaser, any pending, unresolved Claims of Purchaser, or any other obligations of any of Seller Companies or Parent under this Agreement or any agreements, documents, instruments, and transactions contemplated hereby (other than any amounts retained under Section 1.7.2). 1.7.4 Upon the final resolution of any unresolved Claims of Purchaser, if it is determined that all, or any portion of the remaining Indemnification Escrow Amount, is due to Parent, Purchaser and Parent shall cause the Escrow Agent to make such payment to Parent, less any amount due to Purchaser. 1.7.5 Purchaser shall have the right, in its sole and absolute discretion, to satisfy any amount owed to Purchaser in satisfaction of any indemnification Claim or any other obligations of any of the Seller Companies or Parent under this Agreement or any agreements, documents, instruments, and transactions contemplated hereby from the Indemnification Escrow Amount consisting or to recover such amounts directly from any of cash the Seller Companies and shares Parent, jointly and severally, or recover such amount from any remaining portion of the Working Capital Escrow Amount, or any combination of the foregoing. 1.7.6 None of the indemnification Claims of Purchaser under this Agreement or any agreements, documents, instruments, and transactions contemplated hereby shall be limited by the amount of the Indemnification Escrow Amount or limit Purchaser’s rights and remedies under this Agreement or any agreements, documents, instruments, and transactions contemplated hereby, including, but not limited to, Section 8. 1.7.7 Subject to the terms and conditions of the Escrow Agreement, the Working Capital Escrow Amount shall be deposited with held by the Escrow Agent and released on the Escrow Agent applicable Settlement Date. 1.7.8 Purchaser shall hold such shares have the right, in its vault sole and absolute discretion, to satisfy any amount owed to Purchaser in satisfaction of any Working Capital Shortfall, which shall not be subject to the Hurdle Rate, determined in accordance with Section 1.8 from the Working Capital Escrow Amount or to recover such cash in an interest bearing escrow account (collectivelyamounts directly from any of the Seller Companies and Parent, jointly and severally, or recover such amount from any remaining portion of the shares and cashIndemnification Escrow Amount, or any combination of the “Escrow Fund”) as security for foregoing. 1.7.9 None of the indemnification obligations Working Capital Shortfall Purchase Price adjustments under Article 8 and for purposes of paying any Adjustment Amount pursuant to Section 1.7(h)(iii). All income and gains earned on the Escrow Fund this Agreement shall be included limited by Parent as taxable income the amount of the Working Capital Escrow Amount or loss limit Purchaser’s rights and remedies under this Agreement, including, but not limited to, Section 1.8. 1.7.10 The adoption of this Agreement and the approval of the transactions hereby by the board of directors of Parent and the Escrow Agreement shall provide for the Escrow Agent to make quarterly distributions to Parent equal to forty percent stockholders (40%or members, as applicable) and board of directors (or similar managing body) of the taxable income recognized on the Escrow Fund in such quarter to satisfy any tax obligations that arise as a result of such income and gains being attributed to Parent. Any income and gains of the Escrow Fund each Seller Company shall be available to Parent as part of the Escrow Fund, but if not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnitee, or paid to Parent to cover Taxes, shall ultimately be distributable to the Common Stockholders in accordance with this Agreement and the Escrow Agreement. The parties acknowledge and agree that any amounts (whether principal or income and gains on principal earned during the term of the Escrow Fund) distributed by the Escrow Agent from the Escrow Fund to the Common Stockholders pursuant to the terms each constitute approval of the Escrow Agreement shall be treatedand of all of the arrangements relating thereto, for U.S. federal income tax purposes, as additional consideration paid to including without limitation the Common Stockholders for their shares pursuant to placement in escrow of the Stock Exchange and the Merger as and when that amount is distributedEscrow Amount.