Common use of Indemnity Fund Clause in Contracts

Indemnity Fund. The Company expressly agrees that proceedings or threatened litigation may jeopardise the ability of the Company to act expeditiously or in good faith, or which may place persons in a capacity to influence the Company to resist good faith compliance herewith, the Company will, within two (2) days of written request, advance up to $200,000 (CDN) to a trust fund (the “Indemnity Fund”) with counsel of the Indemnitee's choice as assurance and security against possible processes or as security for on-going process. The Company warrants and undertakes that it shall not attack or attach or seek to otherwise impair to diminish such Indemnity Fund and warrants that such trust is established with the Company as settler of the trust and the Indemnitee is for all purposes a trust beneficiary but with sole rights of direction of the same for the purposes hereof, such trust and the assets thereof vest and are established for all purposes in the Indemnitee in the hands of his counsel (as trustee) immediately upon funds being delivered to such counsel and the same is and shall be an irrevocable trust in favour of the Indemnitee for the purposes stated in this Agreement. Regardless of the funding of the Indemnity Fund the Company shall pay all Expenses and the Indemnitee is not required to employ the Indemnity Fund first for Expenses or indemnification (the Indemnity Fund is an assurance of last resort for the Indemnitee for Expenses) but, unless otherwise agreed by the Indemnitee, such fund shall be retained unimpaired as continuing security in the event that the Company fails to provide indemnity at any time or is unable to do so. The Indemnitee may elect to employ such Indemnity Fund to assist any other Agent of the Company, who the Company has failed or unreasonably refused to indemnify (such judgement shall be at the reasonable discretion of the Indemnitee unless the Company shall show just and reasonable cause why such other Agent has no right in law to indemnity and, if required by the Indemnitee, has shown such to the satisfaction of a court) similarly situated to the Indemnitee. At any time that the Indemnitee employs any part of the Indemnity Fund the Company shall replenish the Indemnity Fund immediately at the requirement of the Indemnitee.

Indemnity Fund. The Company expressly agrees that proceedings or threatened litigation may jeopardise the ability of the Company to act expeditiously or in good faith, or which may place persons in a capacity to influence the Company to resist good faith compliance herewith, the Company will, within two (2) days of written request, advance up to $200,000 (CDN) to a trust fund (the “"Indemnity Fund”") with counsel of the Indemnitee's Indemnitee 's. choice as assurance and security against possible processes or as security for on-going process. The Company warrants and undertakes that it shall not attack or attach or seek to otherwise impair to diminish such Indemnity Fund and warrants that such trust is established with the Company as settler of the trust and the Indemnitee is for all purposes a trust beneficiary but with sole rights of direction of the same for the purposes hereof, such trust and the assets thereof vest and are established for all purposes in the Indemnitee in the hands of his counsel (as trustee) immediately upon funds being delivered to such counsel and the same is and shall be an irrevocable trust in favour of the Indemnitee for the purposes stated in this Agreement. Regardless of the funding of the Indemnity Fund the Company shall pay all Expenses and the Indemnitee is not required to employ the Indemnity Fund first for Expenses or indemnification (the Indemnity Fund is an assurance of last resort for the Indemnitee for Expenses) but, unless otherwise agreed by the Indemnitee, such fund shall be retained unimpaired as continuing security in the event that the Company fails to provide indemnity at any time or is unable to do so. The Indemnitee may elect to employ such Indemnity Fund to assist any other Agent of the Company, who the Company has failed or unreasonably refused to indemnify (such judgement shall be at the reasonable discretion of the Indemnitee unless the Company shall show just and reasonable cause why such other Agent has no right in law to indemnity and, if required by the Indemnitee, has shown such to the satisfaction of a court) similarly situated to the Indemnitee. At any time that the Indemnitee employs any part of the Indemnity Fund the Company shall replenish the Indemnity Fund immediately at the requirement of the Indemnitee.

Indemnity Fund. The Company expressly agrees that proceedings or threatened litigation may jeopardise At the ability of Closing, Sellers shall deposit --------------- with the Company to act expeditiously or in good faithEscrow Agent $7,350,000 (together with all investment earnings thereon, or the "Indemnity Fund"), which may place persons shall be held by Escrow Agent in a capacity to influence the Company to resist good faith compliance herewith, the Company will, within two (2) days of written request, advance up to $200,000 (CDN) to a trust fund (the “Indemnity Fund”) with counsel of the Indemnitee's choice as assurance and security against possible processes or as security for on-going process. The Company warrants and undertakes that it shall not attack or attach or seek to otherwise impair to diminish such Indemnity Fund and warrants that such trust is established with the Company as settler of the trust and the Indemnitee is for all purposes a trust beneficiary but with sole rights of direction of the same for the purposes hereof, such trust and the assets thereof vest and are established for all purposes in the Indemnitee in the hands of his counsel (as trustee) immediately upon funds being delivered to such counsel and the same is segregated account and shall be an irrevocable trust invested only in favour Permitted Investments. The $7,350,000 amount deposited shall at all times be comprised, at Sellers' sole discretion, of (a) cash or (b) subject to any modification of the Indemnitee for the purposes stated escrow provisions set forth in this AgreementSection as may be reasonably required by Buyer, unconditional, irrevocable letters of credit issued by a Person reasonably acceptable to Buyer, and having terms, conditions and an expiration date reasonably acceptable to Buyer. Regardless In the event Buyer makes a claim or demand under this Contract or any other agreement entered into between Sellers and Buyer at Closing, and the Sellers do not dispute such claim or demand, or are determined to be liable pursuant to such claim or demand by a court of competent jurisdiction or otherwise in a mutually acceptable dispute resolution forum (after the funding expiration of all applicable and available appeal periods or the earlier resolution of such appeals), then if the applicable Sellers fail promptly to pay such claim or demand, Escrow Agent promptly upon the receipt of notice shall pay such claim or demand in full, in any event not to exceed the available funds in the Indemnity Fund. On the Termination Date the Escrow Agent promptly shall return all remaining funds or letters of credit in the Indemnity Fund the Company shall pay all Expenses and the Indemnitee is not required to employ the Indemnity Fund first for Expenses or indemnification (the Indemnity Fund is an assurance of last resort for the Indemnitee for Expenses) butSellers; provided, unless otherwise agreed by the Indemniteehowever, such fund shall be retained unimpaired as continuing security in the event that the Company fails to provide indemnity at any time or is unable to do so. The Indemnitee may elect to employ such Indemnity Fund to assist any other Agent of the Company, who the Company has failed or unreasonably refused to indemnify (such judgement shall be at the reasonable discretion of the Indemnitee unless the Company shall show just and reasonable cause why such other Agent has no right in law to indemnity and, if required by the Indemnitee, has shown such prior to the satisfaction Termination Date Buyer shall -------- ------- have either commenced litigation to enforce the terms of a court) similarly situated its rights hereunder or provided notice to Escrow Agent setting forth in reasonable detail the Indemnitee. At facts and circumstances of any time that the Indemnitee employs any part of the Indemnity Fund the Company shall replenish the Indemnity Fund immediately at the requirement of the Indemnitee.claim, liability, cost or expense to

Indemnity Fund. The Company expressly agrees that proceedings or threatened litigation may jeopardise At the ability of Closing, Seller shall deposit --------------- with the Company to act expeditiously or in good faithEscrow Agent $150,000 (together with all investment earnings thereon, or the "Indemnity Fund"), which may place persons shall be held by Escrow Agent in a capacity to influence the Company to resist good faith compliance herewith, the Company will, within two (2) days of written request, advance up to $200,000 (CDN) to a trust fund (the “Indemnity Fund”) with counsel of the Indemnitee's choice as assurance and security against possible processes or as security for on-going process. The Company warrants and undertakes that it shall not attack or attach or seek to otherwise impair to diminish such Indemnity Fund and warrants that such trust is established with the Company as settler of the trust and the Indemnitee is for all purposes a trust beneficiary but with sole rights of direction of the same for the purposes hereof, such trust and the assets thereof vest and are established for all purposes in the Indemnitee in the hands of his counsel (as trustee) immediately upon funds being delivered to such counsel and the same is segregated account and shall be an irrevocable trust invested only in favour Permitted Investments. The $150,000 amount deposited shall at all times be comprised, at Seller's sole discretion, of (a) cash or (b) subject to any modification of the Indemnitee for the purposes stated escrow provisions set forth in this AgreementSection as may be reasonably required by Buyer, unconditional, irrevocable letters of credit issued by a Person reasonably acceptable to Buyer, and having terms, conditions and an expiration date reasonably acceptable to Buyer. Regardless In the event Buyer makes a claim or demand under this Contract or any other agreement entered into between Seller and Buyer at Closing, and the Seller does not dispute such claim or demand, or is determined to be liable pursuant to such claim or demand by a court of competent jurisdiction or otherwise in a mutually acceptable dispute resolution forum (after the funding expiration of all applicable and available appeal periods or the earlier resolution of such appeals), then if Seller fails promptly to pay such claim or demand, Escrow Agent promptly upon the receipt of notice shall pay such claim or demand in full, in any event not to exceed the available funds in the Indemnity Fund. On the Termination Date the Escrow Agent promptly shall return all remaining funds or letters of credit in the Indemnity Fund to Seller; provided, however, that if -------- ------- on or before the Company Termination Date, Buyer shall pay have either commenced litigation to enforce the terms of its rights hereunder or provided notice to Escrow Agent setting forth in reasonable detail the facts and circumstances of any claim, liability, cost or expense to which Buyer is entitled to indemnification hereunder, the terms of this Section shall be extended until the final resolution of such litigation, including any appeal, provided that all Expenses and the Indemnitee is not required to employ amounts or letters of credit remaining in the Indemnity Fund first for Expenses at such time in excess of the amount of the alleged claim, liability, cost or indemnification expense (the Indemnity Fund is an assurance of last resort for the Indemnitee for Expensesplus reasonable estimated Attorneys' Fees) but, unless otherwise agreed by the Indemnitee, such fund or demand shall be retained unimpaired as continuing security returned to the Seller on the Termination Date. Buyer agrees that its sole remedy and recourse with respect to any claims arising under or in connection with this Contract that Buyer elects to pursue after the event that the Company fails to provide indemnity at any time or is unable to do so. The Indemnitee may elect to employ such Indemnity Fund to assist any other Agent of the Company, who the Company has failed or unreasonably refused to indemnify (such judgement Closing shall be at the reasonable discretion of the Indemnitee unless the Company shall show just and reasonable cause why such other Agent has no right in law made pursuant to indemnity and, if required by the Indemnitee, has shown such to the satisfaction of a court) similarly situated to the Indemnitee. At any time that the Indemnitee employs any part of the Indemnity Fund the Company shall replenish the Indemnity Fund immediately at the requirement of the Indemniteethis Section 6.13.