Earnout Escrow Agreement

EARNOUT ESCROW AGREEMENT
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EARNOUT ESCROW AGREEMENT ("Escrow Agreement") made as of April 3, 1998, by and among Conley, Canitano & Assoc., Inc., an Ohio corporation ("CCAi"), Kelly-Levey & Associates, Inc., a Kentucky corporation (the "Company"), Burke & Company, P.L.L. (the "Shareholders' Representative") and Anthony F. Kelly, Ronnie Crumpler and Gary Levey (the "Controlling Shareholders").


RECITALS


WHEREAS, CCAi, the Company and the Controlling Shareholders are parties to the Stock Purchase Agreement dated as of April 3, 1998 (the "Purchase Agreement") and CCAi and the shareholders of the Company other than the Controlling Shareholders (the "Minority Shareholders") are parties to Minority Share Purchase Agreements dated as of April 3, 1998 (the "Minority Share Purchase Agreements") (the Purchase Agreement and the Minority Share Purchase Agreements collectively referred to as the "Purchase Agreement") pursuant to which CCAi acquired all of the capital stock of the Company from the shareholders of the Company;


WHEREAS, pursuant to the terms of the Purchase Agreement, an additional sum not to exceed One Million One Hundred Twenty Six Thousand Five Hundred Thirty Four Dollars ($1,126,534) (the "Kelly Earnout Consideration") is payable to Anthony F. Kelly ("Kelly") subject to Kelly complying with his Non-Compete Agreement;


WHEREAS, pursuant to the terms of the Purchase Agreement, an additional sum not to exceed Three Million Three Hundred Seventy Three Thousand Four Hundred Sixty Six Dollars ($3,373,466) (the "Shareholders Earnout Consideration") is payable to the shareholders of the Company other than Anthony F. Kelly (collectively the "Shareholders") if certain target financial objectives are met (the Kelly Earnout Consideration and the Shareholders Earnout Consideration are collectively referred to as the "Earnout Consideration");


WHEREAS, CCAi, the Company and the Controlling Shareholders entered into that certain Earnout Agreement dated as of April 3, 1998 (the "Earnout Agreement") whereby the parties thereto defined the target financial objectives and contingencies which will result in the distribution of the Earnout Consideration to the Shareholders and Kelly;


WHEREAS, each of the Minority Shareholders agreed to be bound by the terms and conditions of the Earnout Agreement; and


WHEREAS, the Earnout Consideration is to be deposited with the Shareholders' Representative and distributed as provided in this Escrow Agreement; and


WHEREAS, the parties to this Escrow Agreement have agreed upon and desire to set forth the terms and conditions with respect to the Earnout Consideration to be distributed to the Shareholders and Kelly.


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NOW THEREFORE, the parties agree as follows:


1. SHAREHOLDERS' REPRESENTATIVE. CCAi, the Company and the Controlling Shareholders hereby designate and appoint the Shareholders' Representative to serve in accordance with the terms, conditions and provisions of this Escrow Agreement, and the Shareholders' Representative hereby agrees to act as such upon the terms, conditions and provisions provided in this Escrow Agreement.


2. DEPOSITS OF FUNDS. Funds attributable to the Earnout Consideration (the "Earnout Deposits") shall be paid to the Shareholders' Representative to be distributed to the Shareholders and Kelly at such times and in such amounts as set forth in the Earnout Agreement. The payment of the Earnout Deposits by CCAi to the Shareholders' Representative under this Escrow Agreement shall constitute payments to each of the Shareholders and Kelly under the Purchase Agreement, each of the Minority Share Purchase Agreements and the Earnout Agreement.


3. EARNOUT CONSIDERATION. Earnout Deposits shall be distributed to the Shareholders and Kelly by the Shareholders' Representative as soon as practicable after being deposited as provided in this Escrow Agreement, but in no event later than thirty (30) days after such Earnout Deposits are deposited in this Escrow. Kelly and each Shareholder shall receive his or her proportionate share of such Earnout Deposit as set forth on EXHIBIT A; PROVIDED, HOWEVER, if a Termination Event (as defined in the Earnout Agreement) shall have occurred with respect to any Shareholder other than Kelly (the "Terminated Shareholder"), then such Terminated Shareholder shall not be entitled to receive any Earnout Deposits earned after the date of such Termination Event. In such event, each remaining Shareholder (other than Kelly) shall receive pro rata in accordance with his or her ownership interest in the Company immediately prior to the closing of the transactions contemplated by the Purchase Agreement as among themselves that amount of the Earnout Deposit that would have been due the Terminated Shareholder. The parties acknowledge that disbursements by the Shareholders' Representative hereunder shall be made (i) to the Shareholders and Kelly individually and (ii) into an escrow account established for purposes of distributing funds due to former employees of the Company under the Company's Retention Incentive Bonus Plan, all in accordance with EXHIBIT A.


4. RESPONSIBILITIES OF THE SHAREHOLDERS' REPRESENTATIVE. The Shareholders' Representative shall have no duties or responsibilities except those expressly set forth herein. The Shareholders' Representative shall have no responsibility or liability for the truth, accuracy or validity of any agreements referred to in this Escrow Agreement (including, without limitation, EXHIBIT A and the Earnout Agreement), or for the performance of any such agreements by any party thereto or for interpretation of any of the provisions of any of such agreements. The Shareholders' Representative shall not be liable for any action or determination taken or made in good faith with respect to this Escrow Agreement or any other agreements referenced herein. The liability of the Shareholders' Representative hereunder shall be limited solely to bad faith, willful misconduct or gross negligence on its part. The Shareholders' Representative shall be protected in acting upon any certificate, notice or other instrument whatsoever received by the Shareholders' Representative under this Escrow Agreement, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and accuracy of any informati ...