Common use of Administration of Escrow Account Clause in Contracts

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred or suffered Damages for which it is entitled to indemnification under Article V of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, the Indemnification Representatives shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 4 contracts

Samples: Merger Agreement (Tekgraf Inc), Merger Agreement (Tekgraf Inc), Merger Agreement (Tekgraf Inc)

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Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 3.1 If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the first anniversary of the date of the expiration of the representationhereof, warranty, covenant or agreement to which such claim relates, give written deliver a notice of such claim (a "Claim NoticeNotice Of Claim") to the Indemnification Representatives Shareholders' Agent and to the Escrow Agent. Each Notice of Claim Notice shall (a) state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Merger Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9 of the Merger Agreement, (b) contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a possible breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement, and (c) if practicable, contain a good faith, non-binding, preliminary estimate of the aggregate dollar amount of claimed the actual and potential Damages that have arisen and may arise as a result of such breach or other matter as set forth on such Notice of Claim (the "Claimed Amount") ). 3.2 Within 30 days after receipt by the Shareholders' Agent and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery Escrow Agent of a Notice of Claim Notice(the "Dispute Period"), the Indemnification Representatives shall provide Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Notice of Claim and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallShareholders' Agent: (ia) agree agrees that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) cash in an amount equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (iib) agree agrees that Escrow Shares having a Fair Market Value cash in an amount equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iiic) contest indicates that any no part of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyIndemnitee in respect of the Claimed Amount. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion Any part of the Claimed Amount only based upon that is not agreed to be released to the Indemnitee pursuant to the Response Notice shall be the "Contested Amount." If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered not received by the Indemnification Representatives within such 20-day periodEscrow Agent prior to the expiration of the Dispute Period, then the Indemnification Representatives Shareholders' Agent shall be conclusively deemed to have agreed that Escrow Shares having a Fair Market Value cash in an amount equal to all of the Claimed Amount may be released to the Indemnified Party Indemnitee from the Escrow Account. 3.3 If (ca) If the Indemnification Representatives in the Shareholders' Agent delivers a Response Notice agree (or are deemed to have agreed) agreeing that Escrow Shares having a Fair Market Value cash in an amount equal to all of the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or (b) the Shareholders' Agent does not deliver a Response Notice on a timely basis in accordance with Section 3.2, the Escrow Agent shall, promptly shall within 10 days following the earlier receipt of the required delivery date for the such Response Notice or (or, if the delivery of the Escrow Agent has not received a Response Notice, transferwithin 10 days following the expiration of the Dispute Period), deliver and assign to the Indemnified Party such number of Escrow Shares held Indemnitee cash in the Escrow Account which have a Fair Market Value an amount equal to the full Claimed Amount Amount, in each case from (or such lesser number of Escrow Shares as is then held in but only to the extent of) the Escrow Account). (d) 3.4 If the Indemnification Representatives in the Shareholders' Agent delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Value cash in an amount equal to part, but not all, of less than the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly shall, within 10 days following the delivery receipt of the such Response Notice transferNotice, deliver and assign to the Indemnified Party such number of Escrow Shares held Indemnitee cash in the Escrow Account which have a Fair Market Value an amount equal to the Agreed Amount from (but only to the extent of) the Escrow Account. 3.5 If the Shareholders' Agent delivers a Response Notice indicating that there is a Contested Amount, the Shareholders' Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Shareholders' Agent resolve such dispute, such resolution shall be binding on the Shareholders' Agent, the Escrow Agent and such Indemnitee and a settlement agreement shall be signed by such Indemnitee and the Shareholders' Agent and sent to the Escrow Agent, which shall, within 10 days following the receipt thereof (or such lesser number of Escrow Shares shorter period as is then held may be set forth in such settlement agreement), if applicable, release funds from (but only to the extent of) the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made Account in accordance with subsection 4(e) belowthe terms of such settlement agreement and the terms of this Agreement. Unless and until the Escrow Agent shall receive written notice that any such dispute has been resolved by the Indemnitee and the Shareholders' Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. (e) 3.6 If the Indemnification Representatives in Shareholders' Agent and the Response Notice contest Indemnitee are unable to resolve the release of Escrow Shares having a Fair Market Value equal dispute relating to all or part any Contested Amount within 30 days after the delivery of the Claimed Amount Notice of Claim to the Shareholders' Agent (the "Contested AmountInitial Resolution Period"), then either the matter shall Indemnitee or the Shareholders' Agent may submit the claim described in the Notice of Claim to arbitration to be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators the County of San Mateo in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules")Association. The Indemnification Representatives Arbitration will be conducted by one arbitrator, mutually selected by Parent and the Indemnified Party shall each designate one Shareholders' Agent. If Parent and the Shareholders' Agent fail to mutually select an arbitrator within 15 10 days following the expiration of the delivery Initial Resolution Period, then arbitration will be conducted by three arbitrators: one selected by Parent; one selected by the Shareholders' Agent; and the third selected by the first two arbitrators. If either Parent or the Shareholders' Agent fails to select an arbitrator within 10 days following the expiration of the Indemnification Representatives' Response Notice contesting Initial Resolution Period, then the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator other shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 75 days after the appointment of the mutually-selected arbitrator or the last arbitratorof the three arbitrators, as the case may be, and to use all reasonable efforts to cause the decision of the arbitrator(s) to be furnished within 90 days after the appointment of the mutually-selected arbitrator or the last of the three arbitrators, as the case may be. The arbitrators' parties further agree that discovery shall be completed at least 10 days prior to the date of the arbitration hearing. The decision of the arbitrator(s) shall relate solely solely: (a) to whether the Indemnified Party Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof), and the portion of such Contested Amount the Indemnitee is entitled to recover; and (b) pursuant to the applicable terms determination of the Merger Agreement and this Agreementnon-prevailing party as provided below. The final decision of the majority of the arbitrators arbitrator(s) shall be furnished to the Indemnification RepresentativesShareholders' Agent, the Indemnified Party Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue issue(s) in question, binding upon the Indemnification RepresentativesShareholders' Agent, the Indemnifying Shareholders, the Indemnified Party Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose prevailing party, any additional reasonable fees and expenses (including reasonable attorneys' fees) of seeking enforcement of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that this Section 3.6, the Claimed Amount is contested non-prevailing party shall be determined solely by the Indemnification Representatives, arbitrator(s). Any amounts payable by the Shareholders' Agent shall be paid out of the Escrow Account pursuant to the written decision of the arbitrator(s). 3.7 The Escrow Agent shall continue to hold in release funds from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount within 10 days after the delivery to it of: (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (ia) delivery of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Shareholders' Agent setting forth instructions to the Escrow Agent as to the release of Escrow Sharesamount, if any, that shall to be made released from (but only to the extent of) the Escrow Account to the Indemnitee, with respect to the such Contested Amount Amount; or (iib) delivery of a copy of the final award of the majority of the arbitrators arbitrator(s) referred to and as provided in Section 3.6 setting forth instructions to the Escrow Agent as to the release of Escrow Sharesamount, if any, that shall to be made released from (but only to the extent of) the Escrow Account to the Indemnitee, with respect to the such Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 2 contracts

Samples: Merger Agreement (Siebel Systems Inc), Merger Agreement (Siebel Systems Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 2.6.1 If an any Acquirer Indemnified Party Person determines in good faith that it has incurred or suffered Damages Losses for which it is or may be entitled to indemnification under Article V of the Merger Purchase Agreement, the Indemnified Party Active shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice behalf of such claim Acquirer Indemnified Person, deliver a copy of a Notice of Claim (each, a "Claim Notice"“Notice of Claim”) to the Indemnification Representatives Seller and to the Escrow Agent. Each Notice of Claim Notice shall state contain a good faith, non-binding, preliminary estimate of the amount of claimed Damages Loss such Acquirer Indemnified Person claims to have so incurred or suffered (the "Claimed Amount") and shall describe such indemnifiable event in reasonable detail with reference to the basis for provisions of the Purchase Agreement in respect of which such claim. The date which right of indemnification is eighteen (18) months after the Date of Closingclaimed. (b) 2.6.2 Within 20 days 15 Business Days after delivery receipt by the Seller and the Escrow Agent of a Claim NoticeNotice of Claim, the Indemnification Representatives shall provide Seller may deliver to the Indemnified Party, with a copy Active and to the Escrow AgentAgent a notice disputing the Notice of Claim (a “Dispute Notice”). If a Dispute Notice is not received by the Escrow Agent within 15 Business Days, a written response (then the "Response Notice") in which the Indemnification Representatives shall: (i) agree Seller shall be conclusively deemed to have agreed that Escrow Shares having Stock with a Fair Market Value (as computed pursuant to Section 6) value equal to the full Claimed Amount may be released from the Escrow Account to Active. 2.6.3 If the Indemnified PartySeller does not deliver a Dispute Notice on a timely basis in accordance with Section 2.6.2 the Escrow Agent shall within 5 Business Days following the end of the 15 Business Day period referred to in Section 2.6.2 (and provided that Active complies with its obligations under Section 2.6.9), (ii) agree deliver, in accordance with the procedures set forth in Section 2.6.9, such Escrow Stock pursuant to the written direction of Active. 2.6.4 If the Seller delivers a Dispute Notice agreeing that Escrow Shares having Stock with a Fair Market Value value equal to part, but not all, of less than the full Claimed Amount (the "Agreed Amount"“Admitted Liability”) may be released from the Escrow Account Account, the Escrow Agent shall, within 5 Business Days following the receipt of such Dispute Notice, deliver Escrow Stock pursuant to the Indemnified Party or (iii) contest that any written direction of Active with a value equal to the Admitted Liability. Such payment shall not be deemed to be made in full satisfaction of the Escrow Shares may be released from claim described in such Notice of Claim, but shall count toward the Escrow Account to satisfaction of the Indemnified Party. The Indemnification Representatives may contest claim described in such Notice of Claim. 2.6.5 If the release of Escrow Shares having Seller delivers a Fair Market Value equal Dispute Notice indicating that there is a dispute as to all or a portion of the Claimed Amount only based upon a (“Contested Amount”), the Seller and Active shall attempt in good faith belief that all or such portion of to resolve the Claimed Amount does not constitute Damages for which dispute related to the Indemnified Party is entitled to indemnification under Article V of the Merger AgreementContested Amount. If no Response Notice is delivered by Active and the Indemnification Representatives within Seller resolve such 20-day perioddispute, the Indemnification Representatives such resolution shall be deemed binding on the Seller and Active and Active and the Seller shall deliver joint written instructions setting forth the number of shares of Escrow Stock, if any, to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyActive, the Escrow Agent shall, promptly following the earlier with respect to such Contested Amount. Upon receipt of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Partyjoint written instructions, the Escrow Agent shall promptly following release Escrow Stock from the Escrow Account in accordance with such instructions. Unless and until the Escrow Agent shall receive joint written instructions that any such dispute has been resolved by Active and the Seller, the Escrow Agent may assume without inquiry that such dispute has not been resolved. 2.6.6 If the Seller and Active are unable to resolve the dispute relating to any Contested Amount within 30 days after the delivery of the Response Notice transferof Claim (“Initial Resolution Period”), deliver then the claim described in the Notice of Claim shall be settled in accordance with Articles 8, 9 and assign to 11 of the Indemnified Party such number of Purchase Agreement, including, without limitation, the dispute resolution procedures set forth therein. 2.6.7 The Escrow Shares held in Agent shall release Escrow Stock from the Escrow Account which have in connection with any Contested Amount within 5 Business Days after the delivery to it of: (i) a Fair Market Value equal to copy of joint written instructions from Active and the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination Seller with respect to the remainder thereto; or (ii) a final decision or award of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"arbitrator(s), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators as same are selected and authorized in accordance with the Commercial Arbitration Rules then dispute resolution procedures set forth in effect Articles 8, 9 and 11 of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedPurchase Agreement, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth the instructions to the Escrow Agent as to the release amount of Escrow SharesStock, if any, to be released from the Escrow Account with respect to such Contested Amount. 2.6.8 If the Escrow Agent determines that shall be made it is confronted with conflicting demands with respect to the Contested Amount or (ii) delivery of a copy Escrow Account such that it risks incurring liability regardless of the final award of the majority of the arbitrators setting forth instructions to action it takes or refrains from taking in connection with such demands, the Escrow Agent as may, at its option, and with 30 days’ notice to the release other parties of Escrow Sharesits intention to do so, if any, that shall be made with respect file an action of interpleader requiring the parties to the Contested Amountanswer and litigate any claims and rights among themselves. The Escrow Agent shall thereupon release is authorized, at its option, to deposit with the court in which such interpleader action is filed all Escrow Shares from the Escrow Account (to the extent Escrow Shares are then Stock, documents and funds held in escrow. Expenses for such filing will be borne equally by the Escrow Account) in accordance with Seller and Active. Upon initiating such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigationaction, the Escrow Agent shall not release be fully released and discharged of and from all obligations and liability imposed by the terms of this Agreement. 2.6.9 In order to effectuate the purpose of this Agreement, the Seller shall execute and deliver to Escrow Agent a stock power substantially in the form attached hereto as Exhibit B. Any distribution of Escrow Stock to an Acquirer Indemnified Person shall cause an equal reduction in the number of shares of Escrow Stock held in Escrow on behalf of the Seller. In the event that pursuant to Section 2.6.3 or 2.6.7 less than all of the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares Stock is to be released from the Escrow Account (Account, Active shall, prior to the extent release of any such Escrow Shares are then Stock from the Escrow Account, promptly, and in any event within 5 Business Days of the final determination of the number of shares of Escrow Stock to be distributed pursuant to this Agreement and the Purchase Agreement, issue in exchange for the cancellation of the stock certificate held in the Escrow AccountAccount new certificates representing (i) in accordance with the name of the applicable Acquirer Indemnified Person, the number of shares of Escrow Stock to be released to such final order or final resolution or settlementAcquirer Indemnified Person and (ii) in the name of the Seller, the balance of the Escrow Stock to be retained in the Escrow Account.

Appears in 2 contracts

Samples: Stock Acquisition Agreement (Active Network Inc), Stock Acquisition Agreement (Active Network Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If Upon receipt of a written demand for payment ("Demand") from the Escrow Account signed by an Indemnified Party has incurred officer of Parent or suffered Damages for which it is entitled by Stockholder Agent (as the case may be and hereinafter referred to indemnification under Article V of as the Merger Agreement"Demanding Party"), the Indemnified Party Escrow Agent shall, on or before for a period of 20 calendar days after such receipt, make no delivery of money pursuant to the date of Demand unless the expiration of Escrow Agent shall have received written authorization from the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim other party (a the "Claim NoticeOther Party") to make such delivery. The Demanding Party shall send a copy of the Indemnification Representatives and Demand to the Other Party at the same time that it sends the Demand to the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, If the Indemnification Representatives shall provide to the Indemnified Party, with a copy Other Party does not deliver to the Escrow Agent, Agent within such 20-day period a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal objection to the full Claimed Amount may be released from claim, then upon the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, expiration of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives Escrow Agent shall be deemed deliver to have agreed that Escrow Shares having a Fair Market Value equal to all of Demanding Party the Claimed Amount may be released to amount requested in the Indemnified Party from Demand in accordance with the Escrow AccountDemand. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed Other Party does deliver to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account Agent within such 20-day period a written objection to the Indemnified Partyclaim, then the Escrow Agent shall make no delivery of money pursuant to the Demand until the Escrow Agent shall have received (i) written authorization executed by both Parent and the Stockholder Agent directing delivery of money or (ii) a copy of a final non-appealable order of a court of competent jurisdiction directing delivery of money together with, at the written request of Escrow Agent, a legal opinion by counsel for the party presenting the order that the order is final and non-appealable, and upon receipt of such authorization or a copy of such order, the Escrow Agent shall, promptly following shall make delivery in accordance with the earlier of the required delivery date for the Response Notice instructions contained in such authorization or the delivery of the Response Notice, transfer, deliver order. Escrow Agent shall act on any such court order and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount accompanying legal opinion (or such lesser number of Escrow Shares as is then held in the Escrow Account)if any) without further question. (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal In delivering any funds to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent or Stockholder Agent under this Section 3, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive rely entirely on the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement procedures specified herein and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party upon any Demands and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested written authorizations received by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amountdescribed in such procedures. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (any escrow funds to the extent Escrow Shares are then held in the Escrow Account) Stockholders except in accordance with such final order or final resolution or settlementSection 4, below.

Appears in 2 contracts

Samples: Merger Agreement (Reid Clifford A), Merger Agreement (Eloquent Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party the Buyer, the Company or any Subsidiary has incurred or suffered Damages for which it is entitled to indemnification under Article V VI of the Merger Agreement, the Indemnified Party it shall, on or before the date of prior to the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. The Buyer may make a Claim Notice only based upon a good faith belief that it has incurred Damages for which it is entitled to indemnification under Article VI of the Merger Agreement. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date on which is eighteen (18) months after all of the Date representations, warranties, covenants and agreements of Closingthe Company expire in accordance with Section 6.5 of the Merger Agreement shall be referred to herein as the "Termination Date." (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VI of the Merger Agreement. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 30 days after delivery of a Claim Notice, Notice the Indemnification Representatives shall provide to the Indemnified PartyBuyer, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares Property having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, (ii) agree that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Buyer, or (iii) contest that any of the Escrow Shares Property may be released from the Escrow Account to the Indemnified PartyBuyer. The Indemnification Representatives may contest the release of Escrow Shares Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Buyer is entitled to indemnification under Article V VI of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 2030-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party Buyer from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party Buyer such number amount of Escrow Shares Property held in the Escrow Account which have has a Fair Market Value equal to the Claimed Amount (or such lesser number amount of Escrow Shares Property as is then held in the Escrow Account). The relative amount of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party Buyer such number amount of Escrow Shares Property held in the Escrow Account which have has a Fair Market Value equal to the Agreed Amount (or such lesser number amount of Escrow Shares Property as is then held in the Escrow Account). A determination with respect The relative amount of Escrow Cash and Escrow Units to the remainder of the Claimed Amount be released shall be made determined in accordance with subsection 4(e) the provisions of Section 5 below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares Property having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Indemnification Representatives and the Buyer shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Indemnification Representatives and the Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and the Escrow Agent shall transfer, assign and deliver to the Buyer an amount of Escrow Property which has a Fair Market Value equal to the amount so agreed. The relative amount of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. If no such agreement can be reached after good faith negotiation over a period of 30 days (or such longer period as the Buyer and the Indemnification Representatives may mutually agree), the matter shall be settled by binding arbitration in AtlantaBoston, GeorgiaMassachusetts. All claims shall be settled by a single arbitrator mutually agreeable to the Buyer and the Indemnification Representatives, or if they cannot agree to a single arbitrator in 30 days, by three arbitrators arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The If a single arbitrator has not been mutually agreed upon, the Indemnification Representatives and the Indemnified Party Buyer shall each designate one arbitrator within 15 60 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Response

Appears in 1 contract

Samples: Escrow Agreement (Thermo Process Systems Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: 3.1 If: (a) If an Indemnified Party has incurred on or suffered Damages for which it is entitled prior to indemnification under Article V February 5, 2006 the Closing occurs then BSML and Buyer shall notify the Escrow Agent of the Merger AgreementClosing and, upon receipt of such notification, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement Escrow Fund shall be released to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing.Buyer; or (b) Within 20 at any time the Purchase Agreement is terminated by any Party pursuant to Sections 9.1(a), 9.1(b), 9.1(c), 9.1(d) (except for any failure of the conditions set forth in Section 7.10 relating to Buyer’s financing), 9.1(e), 9.1(f) (unless BSML delivers a certification pursuant to Section 3.1(f)(i)(2) or 3.1(f)(ii)(3) of this Agreement), or 9.1(g) of the Purchase Agreement then BSML and Buyer shall notify the Escrow Agent of such termination and, upon receipt of such notification, the Escrow Fund shall be released to Buyer; or (c) the Escrow Fund is not earlier released and if by February 5, 2006, Buyer has obtained and delivered to BSML and the Escrow Agent the Commitment Letter and within five (5) business days after delivery of a Claim Noticethe Commitment Letter, the Indemnification Representatives shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount BSML does not constitute Damages for which the Indemnified Party is entitled deliver to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, Buyer and the Escrow Agent shall, promptly following a written objection (a “Dispute Notice”) objecting to the earlier conformity of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign Commitment Letter to the Indemnified Party such number requirements of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is this Agreement, then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have Fund to Buyer, provided that if BSML does deliver such a Fair Market Value equal Dispute Notice to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party Buyer and the Escrow Agent, the Escrow Fund shall be released to Buyer if the Commitment Letter is determined to conform to the requirements of this Agreement according to the dispute resolution procedure set forth in Section 3.3 and shall be held and subject to further release under other subsections of Section 3.1 if the Commitment Letter is determined not to conform to the requirements of this Agreement; or (d) the Escrow Fund is not earlier released and at any time after February 5, 2006 the Closing occurs then BSML and Buyer shall notify the Escrow Agent of the Closing and, upon receipt of such notification, the Escrow Fund shall be contested released to BSML; or (e) the Escrow Fund is not earlier released and (i) (1) by February 21, 2006 Buyer has not obtained and delivered to BSML and the Escrow Agent the Commitment Letter (or has delivered a commitment letter under Section 3.1(e)(ii) that is determined not to conform to the requirements of this Agreement), (2) at any time following February 21, 2006 BSML delivers to the Escrow Agent and to Buyer a certification that, as of February 21, 2006 all of the closing conditions set forth in Sections 7.1 (assuming that the Closing Date were February 21, 2006), 7.2, 7.3, 7.4, 7.6, 7.7, 7.8, 7.9, 7.11 and 7.12 of the Purchase Agreement have been materially satisfied (including in the case of Section 7.7 of the Purchase Agreement a statement that Sellers have obtained signature pages from all parties other than Buyer and its affiliates on the Litigation Settlement Documents) or had been waived by Buyer as of February 21, 2006 or that any of them. Such decision may be used in a court such conditions were not satisfied as of law only for the purpose of seeking enforcement February 21, 2006 because of the arbitrators' award. After failure of Buyer to comply with its obligations under the Purchase Agreement and (3) within five (5) business days after delivery of BSML’s certification pursuant to clause (2) above Buyer does not deliver to BSML and the Escrow Agent a Response Dispute Notice that objecting to the Claimed Amount is contested by the Indemnification Representativesaccuracy of BSML’s certificate pursuant to clause (2) above, then the Escrow Agent shall continue to hold in deliver the Escrow Account Fund to BSML, provided that if Buyer does deliver such a number of Dispute Notice to BSML and the Escrow Shares having a Fair Market Value sufficient Agent, the Escrow Fund shall be released to cover the Contested Amount BSML if BSML’s certification delivered pursuant to clause (up 2) above was accurate or shall be delivered in accordance with Section 3.1(f) if BSML’s certification was not accurate, which accuracy or inaccuracy shall be determined according to the number of Escrow Shares then available dispute resolution procedure set forth in Section 3.3, further provided that if BSML does not deliver a certification pursuant to clause (2) above, the Escrow AccountFund shall be released in accordance with Section 3.1(f); or (ii) (1) by February 21, notwithstanding 2006, Buyer has obtained a Commitment Letter and has delivered the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions Commitment Letter to the Escrow Agent as and to BSML and (2) within five (5) business days after Buyer has delivered the Commitment Letter to BSML, BSML does not deliver to Buyer and the Escrow Agent a Dispute Notice objecting to the release conformity of the Commitment Letter to the requirements of this agreement, then the Escrow SharesAgent shall deliver the Escrow Fund in accordance with Section 3.1(f) (subject to Section 3.1(d)), provided that if anyBSML does deliver such a Dispute Notice to Buyer and the Escrow Agent, that the Escrow Fund shall be made released in accordance with respect Section 3.1(f) if the Commitment Letter conforms to the Contested Amount requirements of this Agreement or in accordance with Section 3.1(e)(i) if the Commitment Letter does not conform to the requirements of this Agreement, which conformity or non conformity shall be determined according to the dispute resolution procedure set forth in Section 3.3; or (iif) delivery the Escrow Fund is not earlier released and, (i) (1) by the End Date Buyer has not obtained and delivered to BSML and the Escrow Agent the Commitment Letter (or has delivered a commitment letter under Section 3.1(f)(ii) that is determined not to conform to the requirements of a copy of this Agreement), (2) at any time following the final award of the majority of the arbitrators setting forth instructions End Date BSML delivers to the Escrow Agent and to Buyer a certification that, as of the End Date all of the closing conditions set forth in Sections 7.1 (assuming that the Closing Date were the End Date), 7.2, 7.3, 7.4, 7.6, 7.7, 7.8, 7.9, 7.11 and 7.12 of the Purchase Agreement have been materially satisfied (including in the case of Section 7.7 of the Purchase Agreement a statement that Sellers have obtained signature pages from all parties other than Buyer and its affiliates on the Litigation Settlement Documents) or had been waived by Buyer as of the End Date or that any of such conditions were not satisfied as of the End Date because of the failure of Buyer to comply with its obligations under the Purchase Agreement and (3) within five (5) business days after delivery of BSML’s certification pursuant to clause (2) above Buyer does not deliver to BSML and the Escrow Agent a Dispute Notice objecting to the release accuracy of Escrow SharesBSML’s certificate pursuant to clause (2) above, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release deliver the Escrow Shares being held Fund to BSML, provided that if Buyer does deliver such a Dispute Notice to BSML and the Escrow Agent, the Escrow Fund shall be released to BSML if BSML’s certification delivered pursuant to clause (2) above was accurate or shall be delivered to Buyer if BSML’s certification was not accurate, which accuracy or inaccuracy shall be determined according to the dispute resolution procedure set forth in connection with Section 3.3, and further provided that if BSML does not deliver a certification pursuant to clause (2) above, the Contested Amount of such third party claim until Escrow Fund shall be released to Buyer; or (1) by the End Date Buyer has obtained a final order or other final resolution or settlement Commitment Letter and has been entered or reached in delivered the underlying litigation determining the amount of such claim, whereupon Commitment Letter to the Escrow Agent shall release Escrow Shares from and to BSML, and (2) within five (5) business days after Buyer has delivered the Commitment Letter to BSML, BSML does not deliver to Buyer and the Escrow Account (Agent a Dispute Notice objecting to the extent conformity of the Commitment Letter to the requirements of this agreement, and (3) at any time within thirty (30) days after the End Date BSML delivers to the Escrow Shares are then held Agent and to Buyer a certification that all of the closing conditions set forth in Sections 7.1, 7.2, 7.3, 7.4, 7.6, 7.7, 7.8, 7.9, 7.11 and 7.12 of the Purchase Agreement were materially satisfied as of the End Date (including in the Escrow Accountcase of Section 7.7 of the Purchase Agreement a statement that Sellers have obtained signature pages from all parties other than Buyer and its affiliates on the Litigation Settlement Documents) in accordance or had been waived by Buyer as of the End Date or that any of such conditions were not satisfied as of the End Date because of the failure of Buyer to comply with such final order or final resolution or settlement.its obligations under the Purchase Agreement, and (4) within five (5) business days after delivery of BSML’s certification pursuant to clause (3) of this Section 3.1(f)

Appears in 1 contract

Samples: Financing Escrow Agreement (Britesmile Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification setoff rights under Article V Section 9.3 of the Merger Reorganization Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such Indemnitee may deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Shareholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes in good faith and after investigation that there is or has been a breach of a representation, warranty or covenant contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to setoff rights under the Reorganization Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to setoff rights and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 business days after delivery receipt by the Shareholders' Agent of a Claim Notice, the Indemnification Representatives shall provide Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shall: Shareholders' Agent: (i) agree agrees that a portion of the Escrow Shares Fund having a Fair Market Value (as computed pursuant to Section 6) value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that a portion of the Escrow Shares Fund having a Fair Market Value value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 20 business-day period, then the Shareholders' Agent shall be deemed to have agreed that a portion of the Escrow Fund having a value equal to the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Shareholders' Agent delivers a Response Notice agreeing that a portion of the Escrow Fund having a value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnitee, or if the Shareholders' Agent does not deliver a Response Notice in accordance with Section 3(b), the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if the Shareholders' Agent has not delivered a Response Notice, promptly following the earlier expiration of the required delivery date for 20 business-day period referred to in Section 3(b)), deliver (or cause the Response Notice or the delivery stock transfer agent of the Response Notice, transfer, deliver and assign Setoff Shares to the Indemnified Party deliver) to such number Indemnitee such portion of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Fund. (d) If the Indemnification Representatives in the Shareholders' Agent delivers a Response Notice agree agreeing that a portion of the Escrow Shares Fund having a Fair Market Value value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign (or cause the stock transfer agent of the Setoff Shares to the Indemnified Party deliver) to such number Indemnitee a portion of Escrow Shares held in the Escrow Account which have Fund having a Fair Market Value value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowAmount. (e) If the Indemnification Representatives Shareholders' Agent delivers a Response Notice indicating that there is a Contested Amount, the Shareholders' Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Shareholders' Agent shall resolve such dispute, such resolution shall be binding on all of the Shareholders and a settlement agreement containing the terms and conditions of such resolution shall be signed by the Indemnitee and the Shareholders' Agent and sent to the Escrow Agent, who shall, upon receipt thereof, release a portion of the Escrow Fund from the Escrow Account in accordance with such agreement. (f) If the Shareholders' Agent and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 business days after the delivery of the Claim Notice, then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaWilmington, Georgia. All claims shall be settled by three arbitrators Delaware in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Parent, one selected by the Shareholders' Agent and the Indemnified Party shall each designate one third selected by the first two arbitrators. If either the Shareholders' Agent or Parent fails to select an arbitrator within 15 days prior to the expiration of the delivery 30-business day period commencing on the expiration of the Indemnification Representatives30-business day period referred to in the first sentence of this Section 3(f), then either the Shareholders' Response Notice contesting Agent or Parent, as the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedcase may be, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts in the circumstances to cause the arbitrators' decision to be furnished within 95 calendar days after the appointment of the last of the three arbitrators. The parties further agree that, to the extent practicable, discovery shall be completed at least 20 business days prior to the date of the arbitration hearing. The arbitrators' decision shall relate solely to whether the Indemnified Party Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Indemnitee is entitled to the applicable terms of the Merger Agreement and this Agreementrecover. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesShareholders' Agent, the Indemnified Party Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose prevailing party, any additional reasonable fees and expenses (including reasonable legal fees) of seeking enforcement of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesthis Section 3(f), the non-prevailing party shall be deemed to be the Indemnitee if it is entitled to recover less than 50% of the Contested Amount; otherwise it shall be the Shareholders. (g) The Escrow Agent shall continue to hold in release any applicable portion of the Escrow Fund from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount (up within 5 business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Shareholders' Agent setting forth instructions to the Escrow Agent as to the release portion of the Escrow SharesFund, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release portion of the Escrow SharesFund, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount. The . (h) Any portion of the Escrow Agent shall thereupon release Escrow Shares Fund released from the Escrow Account (to an Indemnitee shall be deemed to reduce the extent Escrow Shares are then held Fund pro rata with respect to each Shareholder in accordance with each Shareholder's Percentage Interest in the Escrow Account) Fund as set forth in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Exhibit B.

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Acuson Corp)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) : If an Indemnified Party any Chordiant Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 4 of the Merger Purchase Agreement, the Indemnified Party shallsuch Chordiant Indemnitee may, on or before prior to the date of the expiration of the representationTermination Date, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Sellers' Agent and to the Escrow Agent. Each Claim Notice shall state that such Chordiant Indemnitee believes that there is or has been a breach of a representation, warranty, covenant or other provision contained in the Purchase Agreement or that such Chordiant Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Purchase Agreement and contain a brief description of the circumstances supporting such Chordiant Indemnitee's belief that there is or has been such a breach or that such Chordiant Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Chordiant Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim). The date which is eighteen (18) months after the Date of Closing. (b) Within 20 business days after delivery of a Claim Notice, the Indemnification Representatives shall provide Sellers' Agent may deliver to the Indemnified Party, with a copy Chordiant Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallSellers' Agent: (i) agree agrees that Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Chordiant Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Chordiant Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyChordiant Indemnitee. Any part of the Claimed Amount that is not to be released to the Chordiant Indemnitee shall be the "Contested Amount." If a Response Notice is not delivered by the Sellers' Agent to the Chordiant Indemnitee and the Escrow Agent within such 20 business-day period, the Sellers' Agent shall be deemed to have agreed that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released to the Chordiant Indemnitee from the Escrow Account. If the Sellers' Agent in the Response Notice agrees that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Chordiant Indemnitee, or if a Response Notice is not delivered in accordance with Section 3(b), the Escrow Agent shall, promptly within five (5) business days following the earlier receipt of the required delivery date for the Response Notice or (or, if a Response Notice is not duly delivered, within five (5) business days following the delivery expiration of the Response Notice20 business-day period referred to in Section 3(b)), transferdeliver, deliver and assign or cause to the Indemnified Party be delivered, to such number of Chordiant Indemnitee such Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) Shares. If the Indemnification Representatives Sellers' Agent in the Response Notice agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyChordiant Indemnitee, the Escrow Agent shall promptly within five (5) business days following the delivery receipt of the Response Notice transferdeliver, deliver and assign or cause to the Indemnified Party be delivered, to such number of Chordiant Indemnitee Escrow Shares held in the Escrow Account which have having a Fair Market Stipulated Value equal to the Agreed Amount (or Amount. If any Response Notice indicates that there is a Contested Amount, the Sellers' Agent and the Chordiant Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Chordiant Indemnitee and the Sellers' Agent shall resolve such lesser number of dispute, a settlement agreement shall be signed by the Chordiant Indemnitee and the Sellers' Agent and sent to the Escrow Agent, who shall upon receipt thereof, release Escrow Shares as is then held in from the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made Account in accordance with subsection 4(e) below. (e) such agreement. If the Indemnification Representatives Sellers' Agent and the Chordiant Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 business days after the delivery of the Claim Notice, then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators the County of Santa Xxxxx in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Chordiant, one selected by the Sellers' Agent and the Indemnified Party shall each designate one arbitrator within 15 days of third selected by the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amountfirst two arbitrators. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually parties agree to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail use all reasonable efforts to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts to cause the arbitrators' decision to be furnished within 95 calendar days after the appointment of the last of the three arbitrators. The arbitrators' decision shall relate solely to whether the Indemnified Party Chordiant Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Chordiant Indemnitee is entitled to the applicable terms of the Merger Agreement and this Agreementrecover. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesSellers' Agent, the Indemnified Party Chordiant Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesSellers' Agent, the Indemnifying ShareholdersSellers, the Indemnified Party Chordiant Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party (as determined by the arbitrator) in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose of seeking enforcement of prevailing party and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the The Escrow Agent shall continue to hold in release Escrow Shares from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount within five (up 5) business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Chordiant Indemnitee and the Indemnification Representatives Sellers' Agent setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account with respect to the such Contested Amount Amount; or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares released from the Escrow Account (with respect to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementAmount.

Appears in 1 contract

Samples: Stock Purchase Agreement (Chordiant Software Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party the Buyer has incurred or suffered Damages for which it believes it is entitled to indemnification under Article V VI of the Merger Agreement, or if the Buyer is entitled to receive a portion of the Escrow Fund pursuant to the post-closing adjustment provisions set forth in Sections 1.8 and 1.9 of the Merger Agreement, the Indemnified Party Buyer shall, on or before prior to the date of the expiration of the representation, warranty, covenant or agreement Termination Date (as defined in Section 9) with respect to which such claim relatesa particular claim, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Shareholders' Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages or, in the case of a claim for a post-closing adjustment, the amount of such adjustment (the "Claimed Amount") ), and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Claims for indemnification (other than those by the Escrow Agent) involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VI of the Merger Agreement and the provisions of this Section 5. Claims for payment of amounts to the Buyer based on the post-closing adjustment provisions set forth in Sections 1.8 and 1.9 of the Merger Agreement shall be made in accordance with Sections 1.8 and 1.9 of the Merger Agreement and Section 5(a) hereof. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 30 calendar days after delivery of a Claim NoticeNotice is sent, the Indemnification Representatives Shareholders' Representative shall provide to the Indemnified PartyBuyer, with a copy to the Escrow Agent, a written response (the "Response NoticeResponse") in which the Indemnification Representatives Shareholders' Representative shall: (i) agree that an amount of the Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) Fund equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, (ii) agree that an amount of the Escrow Shares having a Fair Market Value Fund equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Buyer or (iii) contest that (c) If the Shareholders' Representative in the Response agrees (or is deemed to have agreed) that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives Fund in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value an amount equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall, promptly promptly, but no sooner than two days, following the earlier of the required delivery date for the Response Notice or the delivery of the Response NoticeResponse, transfer, deliver and assign disburse to the Indemnified Party such number Buyer an amount of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Claimed Amount (or such lesser number amount of the Escrow Shares Fund as is then held in the Escrow Account). (d) If the Indemnification Representatives Shareholders' Representative in the Response Notice agree agrees that all or a portion of the Escrow Shares having a Fair Market Value Fund in an amount equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall promptly promptly, but no sooner than two days, following the delivery of the Response Notice transferResponse, deliver and assign disburse to the Indemnified Party such number Buyer an amount of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Agreed Amount (or such lesser number amount of the Escrow Shares Fund as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives Shareholders' Representative in the Response Notice contest contests the release of any portion of the Escrow Shares having a Fair Market Value Fund in an amount equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaBoston, GeorgiaMassachusetts. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). Discovery relating to such claims shall be conducted pursuant to the rules of the applicable Federal rules relating to discovery. The Indemnification Representatives Shareholders' Representative, on the one hand, and the Indemnified Party Buyer, on the other hand, shall each designate one arbitrator within 15 days of the delivery of the Indemnification RepresentativesShareholders' Representative's Response Notice contesting the Claimed Amount. The Indemnification Representatives Shareholders' Representative and the Indemnified Party Buyer shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedPROVIDED, howeverHOWEVER, that (i) failing such agreement within 45 days of delivery of the Indemnification RepresentativesShareholders' Response NoticeRepresentative's Response, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives Shareholders' Representative or the Indemnified Party fail Buyer fails to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders Company Shareholders, with respect to the arbitrator designated by the Shareholders' Representative, and the Indemnified Party Buyer, with respect to the arbitrator designated by the Buyer, shall pay the fees and expenses of their respectively designated respective arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives Shareholders' Representative and the Indemnified Party Buyer shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party Buyer is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. . (f) After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesShareholders' Representative, the Escrow Agent shall continue to hold in the Escrow Account a number an amount of the Escrow Shares having a Fair Market Value Fund sufficient to cover the Contested Amount (up to the number amount of the Escrow Shares Fund then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Buyer and the Indemnification Representatives Shareholders' Representative setting forth instructions to the Escrow Agent as to the release of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, setting forth instructions to the Escrow Agent as to the release of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release the Escrow Shares Fund from the Escrow Account (up to the extent amount of the Escrow Shares are Fund then held available in the Escrow Account) in accordance with such agreement or instructions; provided. (g) If, however, if the claim related to as a third result of any third-party claim or legal proceeding subject to the amount of which is contested and indemnification procedures set forth in the subject of litigationMerger Agreement, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or any settlement has been entered into, or reached any judgment entered in favor of any third party (which is not subject to further appeal), the underlying litigation determining Buyer may give notice of the resulting Damages to the Escrow Agent, together with a copy of the settlement or judgment and the Escrow Agent shall, promptly, but no sooner than two days, following the receipt of such notice, disburse to the Buyer an amount of the Escrow Fund equal to such Damages (up to the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are Fund then held available in the Escrow Account) in accordance with such final order or final resolution or settlement).

Appears in 1 contract

Samples: Agreement and Plan of Merger (Rsa Security Inc/De/)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) a. If an Indemnified Party Person has incurred or suffered Damages for which it is entitled to indemnification under Article V VI of the Merger Agreement, the Indemnified Party Person shall, on or before the date of prior to the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") the number of Escrow Shares which equal the Claimed Amount determined in accordance with Section 6 herein and the basis for such claim. The date on which is eighteen (18) months after all of the Date representations, warranties, covenants and agreements of Closingthe Company expire in accordance with Section 6.3 of the Merger Agreement shall be referred to herein as the "Termination Date." (b) b. Within 20 days after delivery of a Claim Notice, the Indemnification Representatives shall provide to the Indemnified PartyPerson, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that the number of Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, (ii) agree that the number of Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Person or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified PartyPerson. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Person is entitled to indemnification under Article V VI of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives and received by the Escrow Agent within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount as set forth in the Claim Notice may be released to the Indemnified Party Person from the Escrow Account. (c) c. If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares held in the Escrow Account Account, as specified in such Response Notice or Claim Notice, as the case may be, which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account).held (d) d. If the Indemnification Representatives in the Response Notice agree that a number of Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) e. If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgiathe State of Delaware. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party Person shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders Stockholders and the Indemnified Party Person shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party Person shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party Person and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying ShareholdersStockholders, the Indemnified Party Person and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.the

Appears in 1 contract

Samples: Escrow Agreement (Eclipsys Corp)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 10 of the Merger Reorganization Agreement, once the Indemnified Party shallaggregate of such Damages exceeds $100,000, such Indemnitee may, on or before prior to the date of the expiration of the representationTermination Date, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") signed by any Authorized Officer (as defined below) of Parent (an "Officer's Certificate") to the Indemnification Representatives NetMind Shareholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant or other provision contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Reorganization Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") ). For purposes hereof, the term Authorized Officer shall refer to each of Parent's Chief Executive Officer, President and the basis for such claim. The date which is eighteen (18) months after the Date of ClosingChief Financial Officer. (b) Within 20 30 business days after delivery of a Claim Notice, the Indemnification Representatives shall provide NetMind Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallNetMind Shareholders' Agent: (i) agree agrees that Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not delivered by the NetMind Shareholders' Agent to the Indemnitee and the Escrow Agent shallwithin such 30 business-day period, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign NetMind Shareholders' Agent shall be deemed to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree agreed that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the NetMind Shareholders' Agent in the Response Notice agrees that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if a Response Notice is not delivered in accordance with Section 3(b), the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer(or, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesnot duly delivered, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.promptly following the

Appears in 1 contract

Samples: Merger Agreement (Puma Technology Inc)

Administration of Escrow Account. The Escrow Agent shall administer the -------------------------------- Escrow Account as follows: (a) If an Indemnified Party Person has incurred or suffered Damages for which it believes it is entitled to indemnification under Article V VI or Article VII of the Merger Agreement, the Indemnified Party Person or the Buyer, as the case may be, shall, on or before prior to the date of the expiration of the representation, warranty, covenant or agreement Termination Date with respect to which such claim relatesa particular claim, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages Damages, or in the case of a post-closing adjustment, the amount of such adjustment (the "Claimed Amount") ), and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Claims for indemnification (other than those by the Escrow Agent) involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VI or Article VII of the Merger Agreement and the provisions of this Section 4. For indemnification claims not involving any claim or legal proceeding by a third party or for post- closing adjustment claims, the procedures herein shall apply. Within 20 calendar days after delivery of a Claim NoticeNotice is sent, the Indemnification Representatives Representative shall provide to the Indemnified PartyPerson, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Representative shall: (i) agree that Escrow Shares Property having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, (ii) agree that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Person or (iii) contest that any of the Escrow Shares Property may be released from the Escrow Account to the Indemnified PartyPerson. The Indemnification Representatives Representative may contest the release of Escrow Shares Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Person is entitled to indemnification under Article V VI or Article VII of the Merger Agreement. If no Response Notice is delivered by, and received by the Escrow Agent from, the Indemnification Representatives Representative within such 20-day period, the Indemnification Representatives Representative shall be deemed to have agreed that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party Person from the Escrow Account. (c) If the Indemnification Representatives Representative in the Response Notice agree agrees (or are is deemed to have agreed) that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign disburse to the Indemnified Party such number of Person Escrow Shares held in the Escrow Account which have Property having a Fair Market Value equal to the Claimed Amount (or such lesser number amount of Escrow Shares Property as is then held in the Escrow Account). (d) If the Indemnification Representatives Representative in the Response Notice agree agrees that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign disburse to the Indemnified Party such number of Person Escrow Shares held in the Escrow Account which have Property having a Fair Market Value equal to the Agreed Amount (or such lesser number amount of Escrow Shares Property as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives Representative in the Response Notice contest contests the release of Escrow Shares Property having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaBoston, GeorgiaMassachusetts. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Representative and the Indemnified Party Person shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Representative's Response Notice contesting the Claimed Amount. The Indemnification Representatives Representative and the Indemnified Party Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Representative's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives Representative or the Indemnified Party Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.timely

Appears in 1 contract

Samples: Escrow Agreement (Idx Systems Corp)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred Purchaser, RT Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Purchaser (the “Surviving Corporation”), or suffered Damages for which it is other party entitled under the Merger Agreement to indemnification under Article V from the Closing Payees (each an “Indemnitee”), in good faith determines that the Closing Payees have become obligated to Purchaser, the Surviving Corporation or a third party pursuant to the Holdback Indemnity Obligations, then Purchaser shall, on behalf of the Indemnitee, give written notice to Escrow Agent of the amount of such claimed obligation (the “Notice”) and the basis therefor and shall also simultaneously transmit the Notice to Securityholder Agent. To ensure that Securityholder has received notice of the claim, Escrow Agent agrees to promptly notify Securityholder Agent in writing of each Notice. Escrow Agent shall distribute to Indemnitee from the Escrow Account funds in the amount of the claimed obligation (or such lesser amount then remaining in the Escrow Account) within fifteen (15) calendar days from the date the Notice was sent, unless within that fifteen (15) day period, Escrow Agent receives written notice from Securityholder Agent that Securityholder Agent disputes the claim or any portion thereof, which written notice shall include the reason or reasons for disputing the claim. (b) If Purchaser has given the Notice as provided in Subsection 2(a) hereof, which Notice has been forwarded to Securityholder Agent as provided in Subsection 2(a) hereof, and either Securityholder Agent has given timely written notice that it disputes the claim or any portion thereof in accordance with Subsection 2(a) hereof, then Escrow Agent (A) shall not distribute from the Escrow Account funds in the amount of the disputed portion of such claim (the “Disputed Amount”), unless and until directed by joint written instructions by Purchaser and Securityholder Agent, or pursuant to an arbitration award rendered pursuant to Section 9.2(g) of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement and (B) shall distribute to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and Purchaser from the Escrow Agent. Each Claim Notice shall state Account funds in the amount of claimed Damages (the "Claimed Amount") and the basis for any undisputed portion of such claim. The date which is eighteen (18foregoing procedure shall be followed by Escrow Agent each time a Notice has been given by Purchaser as provided in Subsection 2(a) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Noticehereof, the Indemnification Representatives shall provide subject to the Indemnified Party, with a copy to limitation provided in Subsection 2(c) hereof on the Escrow Agent, a written response (the "Response Notice") in period of time within which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may any Notice can be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered given by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow AccountPurchaser. (c) If Upon and subject to receiving written instructions from Purchaser, Escrow Agent shall distribute to Securityholder Agent, on behalf of the Indemnification Representatives in Closing Payees, on the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to earliest of the first day on which all of the Claimed Amount may be released from Closing Payees’ Holdback Indemnity Obligations are settled and discharged in full or on the first business day after January 9, 2007 (“Holdback Claim Date”) any remaining balance held in Escrow Account (other than any Disputed Amount). Notwithstanding the foregoing, if there are any Holdback Indemnity Obligations that remain outstanding and unresolved at the Holdback Claim Date, Purchaser shall not provide such written instructions until the amount of a Holdback Reserve is reasonably determined as provided in the Merger Agreement. The Escrow shall continue after the Holdback Claim Date with respect to such amount as is necessary to satisfy any unsatisfied Losses (as defined in the Merger Agreement), Disclosed Matters (as defined in the Merger Agreement) and Tax Liabilities (as defined in the Merger Agreement) concerning facts or circumstances existing prior to the Indemnified Party, Holdback Claim Date or as set forth in the Merger Agreement and specified in an Officer’s Certificate (as defined in the Merger Agreement) delivered to Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign Securityholder Agent prior to the Indemnified Party such number of Escrow Shares held Holdback Claim Date. All other amounts remaining in the Escrow Account which have a Fair Market Value equal shall be distributed pro rata to the Claimed Amount (or such lesser number Closing Payees as soon as practicable following the Holdback Claim Date. Thereafter, as each claim is resolved, any sums reserved for the payment of Escrow Shares the claim in excess of the amount actually paid to satisfy the claim shall be promptly distributed pro rata to the Closing Payees; provided, however, a sufficient amount as is then held necessary to satisfy Tax Liabilities shall remain in the Escrow AccountAccount until the expiration of the Statute of Limitations (as defined in the Merger Agreement). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, Upon distribution of the Claimed Amount may be released from the entire Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowthis Escrow Agreement, Escrow Agent’s obligations hereunder shall cease. (e) If All distributions from the Indemnification Representatives Escrow Account shall be by personal delivery and shall be sent by recognized overnight express courier as follows: To: Securityholder Agent (on behalf of Closing Payees) Mr. Jxxxx Xxxxx c/o RapidText, Inc. 1000 Xxxx Xxxxxx, Xxxxx 000 Xxxxxxx Xxxxx, XX 00000 To: Purchaser PeopleSupport, Inc. 1000 Xxxxxxx Xxxxxx, Suite 1250 Los Angeles, CA 90024 Attn: Legal Officer (f) Any distributions payable to the Closing Payees shall be made by Escrow Agent sending to Securityholder Agent for each Closing Payee a check in an amount equal to such Closing Payee’s pro rata portion of the remaining funds in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal Account then available for distribution pursuant to all or part Section 2(c) hereof. Each Closing Payee and their pro rata portion of the Claimed Amount Escrow Account is set forth on Exhibit B attached hereto. (i) Any controversy, claim or dispute between the "Contested Amount")parties to this Agreement arising out of, in connection with, or in relation to the matter shall interpretation, validity, performance or breach of this Agreement shall, at the request of either party, be settled by arbitration conducted by one (1) arbitrator who has experience in and is familiar with the businesses of Purchaser and Company. Purchaser and Securityholder Agent will within twenty (20) days of the demand mutually agree and select one (1) arbitrator. If Purchaser and Securityholder Agent fail to appoint an arbitrator within that time period, then Judicial Arbitration and Mediation Services, Inc. (“JAMS”) will appoint the arbitrator. The arbitrator will set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator but at a minimum containing the right of each party to obtain all discoverable documents, to obtain from the other party the name of all witnesses, to obtain from the other party’s expert a written report, and to take the deposition of all witnesses and experts. The arbitrator will rule upon motions to compel or motions to quash or limit discovery and will have the authority to impose sanctions, including attorneys’ fees and costs, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator will be binding arbitration in Atlantaand conclusive upon the parties to this Agreement, Georgia. All claims shall and Escrow Agent will be settled by three arbitrators entitled to act in accordance with such decision and make or withhold payments out of the Escrow Account in accordance therewith. Such decision will be written and will be supported by written findings of fact and conclusions which will set forth the award, judgment, decree or order awarded by the arbitrator. (ii) Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Any such arbitration will be held in Los Angeles, California, under the Comprehensive Commercial Arbitration Rules then in effect of the American Arbitration Association JAMS. (the "AAA Rules"). iii) The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days fees of the delivery of arbitration and arbitrator will be paid by the Indemnification Representatives' Response Notice contesting party who does not prevail in the Claimed Amountarbitration. The Indemnification Representatives Any fees and costs, including attorney’s fees, incurred by Securityholder Agent will be paid from the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate Escrow Account. Securityholder Agent will provide Escrow Agent with a third arbitrator; providedparty statement (in the case of legal fees, however, that (iredacted to protect attorney-client privilege and work product) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) support each disbursement pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agentsubsection, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue be authorized to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient disburse directly to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of set forth in such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementthird party statement.

Appears in 1 contract

Samples: Merger Agreement (PeopleSupport, Inc.)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 3.1 If an Indemnified Party the Purchaser has or claims to have incurred or suffered Damages damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V 12 of the Merger Asset Purchase Agreement, the Indemnified Party shallPurchaser may, on or before prior to the date first anniversary of the expiration of Closing Date (the representation"Termination Date"), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to Escrow Agent with a copy to the Indemnification Representatives and the Escrow AgentVendor. Each Claim Notice shall state that the Purchaser believes that there is or has been a breach of a representation, warranty or covenant contained in the Asset Purchase Agreement or that the Purchaser is otherwise entitled to indemnification, compensation or reimbursement under Article 12 of the Asset Purchase Agreement (a "Claim"), and contain a brief description of the circumstances supporting the Purchaser's belief that there is or has been such a breach or that the Purchaser is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a good faith, non-binding, preliminary estimate of the amount of claimed Damages damages the Purchaser claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) 3.2 Within 20 days after delivery receipt by the Vendor of a the Claim Notice, the Indemnification Representatives shall provide Vendor may deliver to the Indemnified Party, Purchaser with a copy to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives Vendor shall: (a) affirmatively elect to (i) agree contest the Claim, (ii) contest the amount of the Claim or (iii) contest the payment to the Purchaser of an amount equal to the Claimed Amount from the Escrow Account; or (b) indicate that all or a part of the Escrow Shares having a Fair Market Value (as computed Fund may be released from the Escrow Account to the Purchaser in respect of the Claimed Amount. Any part of the Claimed Amount that is contested by the Vendor pursuant to Section 6) the Response Notice shall be deemed the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 20-day period, then the Vendor shall be conclusively deemed to have agreed that an amount equal to the full Claimed Amount may be released from to the Purchaser by the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party Agent from the Escrow Account. (c) 3.3 If the Indemnification Representatives in the Vendor delivers a Response Notice agree (or are deemed in which it affirmatively elects not to have agreed) that Escrow Shares having a Fair Market Value equal to all of contest the Claim, the full Claimed Amount may be released by the Escrow Agent from the Escrow Account and paid to the Indemnified PartyPurchaser, or if the Escrow Agent shall, promptly following the earlier of the required delivery date for the Vendor does not deliver a Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held on a timely basis in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Partyaccordance with section 3.2, the Escrow Agent shall promptly within five (5) Business Days following the delivery receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within five (5) Business Days following the expiration of the Response Notice transfer20-day period referred to in section 3.2), deliver and assign pay to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value Purchaser an amount equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)full Claimed Amount. A determination with respect to the remainder Payment of the Claimed Amount by the Escrow Agent to the Purchaser shall be made deemed to fully satisfy the Claim described in accordance with subsection 4(e) belowsuch Claim Notice in full. (e) 3.4 If the Indemnification Representatives in the Vendor delivers a Response Notice in which it affirmatively elects not to contest the release of Escrow Shares having a Fair Market Value Claim in an amount equal to all or part of less than the full Claimed Amount (the amount so acknowledged by the Vendor as owed by it being referred to as the "Contested Agreed Amount"), the matter Escrow Agent shall within five (5) Business Days following the receipt of such Response Notice pay to the Purchaser an amount equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the Agreed Amount only. 3.5 If the Vendor delivers a Response Notice indicating that there is a Contested Amount, the Vendor and the Purchaser shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Purchaser and the Vendor resolve such dispute, a settlement agreement shall be signed by such Purchaser and the Vendor and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, make payment to the Purchaser from the Escrow Account in accordance with such agreement. Unless and until the Escrow Agent shall receive written notice from the Purchaser and the Vendor that any such dispute has been resolved by the Purchaser and the Vendor, the Escrow Agent may assume without inquiry that such dispute has not been resolved. 3.6 If the Vendor and the Purchaser are unable to resolve the dispute relating to any Contested Amount within 30 days after the delivery of the Claim Notice ("Initial Resolution Period"), then the Claim in question shall be settled by binding arbitration in Atlantathe City of Xxxxxxxx, Georgia. All claims shall be settled by three arbitrators Xxxxxx, Xxxxxx in accordance with the Commercial Arbitration Rules then in effect provisions of the American Arbitration Association Code of Civil Procedure (the "AAA Rules"Québec). The Indemnification Representatives Arbitration will be conducted by one (1) arbitrator, mutually selected by the Purchaser and the Indemnified Party shall each designate one Vendor. If either the Purchaser and the Vendor fail to mutually select an arbitrator within 15 days three (3) Business Days following the expiration of the delivery Initial Resolution Period, then arbitration will be conducted by three (3) arbitrators: one selected by the Purchaser, one selected by the Vendor and the third selected by the first two arbitrators. If the Purchaser or the Vendor fails to select an arbitrator within 10 days following the expiration of the Indemnification Representatives' Response Notice contesting Initial Resolution Period, then the Claimed Amountother shall be entitled to select the second arbitrator. The Indemnification Representatives and parties agree to use all reasonable efforts to cause the Indemnified Party shall cause such designated arbitrators mutually arbitration hearing to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement be conducted within 45 days of delivery after the appointment of the Indemnification Representatives' Response Notice, the third mutually-selected arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses last of the third arbitrator. The Indemnification Representatives three arbitrators, as the case may be, and the Indemnified Party shall to use all reasonable efforts to cause the arbitrators to decide decision of the matter arbitrator(s) to be arbitrated pursuant hereto furnished within 60 days after the appointment of the mutually-selected arbitrator or the last arbitratorof the three arbitrators, as the case may be. The arbitrators' parties further agree that discovery shall be completed at least 10 days prior to the date of the arbitration hearing. The decision of the arbitrator(s) shall relate solely solely: (a) to whether the Indemnified Party Purchaser is entitled to receive recover the Contested Amount (or a portion thereof), and the portion, if any, of such Contested Amount the Purchaser is entitled to recover; and (b) pursuant to the applicable terms determination of the Merger Agreement and this Agreement"non-prevailing party" as provided below. The final decision of the majority of the arbitrators arbitrator(s) shall be furnished to the Indemnification RepresentativesVendor, the Indemnified Party Purchaser and the Escrow Agent in writing and shall constitute a conclusive determination of the issue issue(s) in question, binding upon the Indemnification RepresentativesVendor, the Indemnifying Shareholders, the Indemnified Party Purchaser and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party in a court any arbitration shall pay the reasonable expenses (including lawyers/attorneys' fees) of law only for the purpose prevailing party, any additional reasonable fees and expenses (including reasonable lawyer/attorney fees) of seeking enforcement of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that this section 3.6, the Claimed Amount is contested non-prevailing party shall be determined solely by the Indemnification Representatives, the arbitrator(s). 3.7 The Escrow Agent shall continue to hold in pay from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount within five (up 5) Business Days after the delivery to the number it of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (ia) delivery of a copy of a settlement agreement executed by the Indemnified Party Purchaser and the Indemnification Representatives Vendor setting forth instructions to the Escrow Agent as to the release of amount to be paid from the Escrow Shares, if any, that shall be made Fund with respect to the such Contested Amount or (iib) delivery of a copy of the final award of the majority of the arbitrators arbitrator(s) referred to and as provided in section 3.6 setting forth instructions to the Escrow Agent as to the release of amount to be paid from the Escrow Shares, if any, that shall be made Fund with respect to the such Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Photon Dynamics Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred or suffered Damages for which it is entitled to indemnification under Article V of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, the Indemnification Representatives Representative shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Representative shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives Representative may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives Representative within such 20-day period, the Indemnification Representatives Representative shall be deemed to have agreed that Escrow Shares having a Fair Market Value 3 value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives Representative in the Response Notice agree agrees (or are is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives Representative in the Response Notice agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives Representative in the Response Notice contest contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Representative and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Representative's Response Notice contesting the Claimed Amount. The Indemnification Representatives Representative and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Representative's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives Representative and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesRepresentative, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesRepresentative, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesRepresentative, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination DateDate (as hereinafter defined), until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives Representative setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Escrow

Appears in 1 contract

Samples: Pledge, Security and Escrow Agreement (Tekgraf Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an any Stockholder Indemnified Party Person has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V 8 of the Merger Agreement, the such Stockholder Indemnified Party shallPerson may, on or before prior to the date first anniversary of the expiration Effective Time of Merger I (the representation"Termination Date"), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholder Representative and to the Escrow Agent. Each Any Claim Notice shall state that such Stockholder Indemnified Person believes that there is or has been a breach of a representation, warranty or covenant contained in the Merger Agreement or that such Stockholder Indemnified Person is otherwise entitled to indemnification, compensation or reimbursement under Section 8.4 of the Merger Agreement, and contain a brief description of the circumstances supporting such Stockholder Indemnified Person's belief that there is or has been such a breach or that such Stockholder Indemnified Person is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a good faith, non-binding, preliminary estimate of the amount of claimed Damages such Stockholder Indemnified Person claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 30 days after delivery receipt by the Stockholder Representative of a Claim Notice, the Indemnification Representatives shall provide Stockholder Representative may deliver to the Stockholder Indemnified Party, with a copy Person who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholder Representative: (i) agree agrees that Escrow Shares (or other property held in the Escrow Account) collectively having a Fair Market Value "Stipulated Value" (as computed pursuant to defined in Section 65.1) equal to the full Claimed Amount may be released from the Escrow Account to the Stockholder Indemnified Party, Person; (ii) agree agrees that Escrow Shares (or other property held in the Escrow Account) collectively having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Stockholder Indemnified Party Person; or (iii) contest indicates that any no part of the Escrow Shares Fund may be released from the Escrow Account to the Stockholder Indemnified PartyPerson in respect of the Claimed Amount. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion Any part of the Claimed Amount only based upon that is not agreed to be released to the Stockholder Indemnified Person pursuant to the Response Notice shall be the "Contested Amount." If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered not received by the Indemnification Representatives Escrow Agent within such 2030-day period, then the Indemnification Representatives Stockholder Representative shall be conclusively deemed to have agreed that Escrow Shares (or other property held in the Escrow Account) collectively having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released to the Stockholder Indemnified Party Person from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Merger Agreement (Vaxgen Inc)

Administration of Escrow Account. The Buyer, as Escrow Agent Agent, shall administer the Escrow Account as follows: (a) If an Indemnified Party the Buyer has incurred or suffered Damages for which it is entitled to indemnification under Article V Section 9 of the Merger Purchase Agreement, the Indemnified Party Buyer shall, on or before prior to the date which is two years following of the expiration of Closing Date under the representation, warranty, covenant or agreement to which such claim relatesPurchase Agreement (the "Termination Date"), give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow AgentSeller. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, Notice the Indemnification Representatives Seller shall provide to the Indemnified PartyBuyer, with a copy to the on its own behalf and as Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Seller shall: (i) agree that a portion of the Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) Fund equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, (ii) agree that Escrow Shares having a Fair Market Value equal to partportion, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Buyer or (iii) contest that any of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyBuyer. The Indemnification Representatives Seller may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount Escrow Fund only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Buyer is entitled to indemnification under Article V Section 9 of the Merger Purchase Agreement. If no Response Notice is delivered by the Indemnification Representatives Seller within such 20-day period, the Indemnification Representatives Seller shall be deemed to have agreed that a portion of the Escrow Shares having a Fair Market Value Fund equal to all of the Claimed Amount may be released to the Indemnified Party Buyer from the Escrow Account. (c) If the Indemnification Representatives Seller in the Response Notice agree agrees (or are is deemed to have agreed) that a portion of the Escrow Shares having a Fair Market Value Fund equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall, promptly following the earlier Buyer may transfer and deliver to itself such portion of the required delivery date for Escrow Fund (or if the Response Notice or Escrow Fund is less than the delivery amount to be so released, all of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow AccountFund). (d) If the Indemnification Representatives Seller in the Response Notice agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account Fund to the Indemnified PartyBuyer, the Escrow Agent shall promptly following the delivery Buyer may transfer and deliver to itself for its own account a portion of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder part of the Claimed Amount shall (or if the Escrow Fund is less than the amount to be made in accordance with subsection 4(e) belowso released, all of the Escrow Fund). (e) If the Indemnification Representatives Seller in the Response Notice contest contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect provisions of Section 15 of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Purchase Agreement. The final decision of the majority of the arbitrators arbitrator shall be furnished to the Indemnification Representatives, the Indemnified Party Seller and the Buyer, on its own behalf and as Escrow Agent Agent, in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party Seller and the Buyer, on its own behalf and as Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' arbitrator's award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesSeller, the Buyer, as Escrow Agent Agent, shall continue to hold in the Escrow Account a number portion of the Escrow Shares having a Fair Market Value Fund sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account)Amount, notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Buyer and the Indemnification Representatives Seller setting forth instructions to the Buyer, as Escrow Agent Agent, as to the release of the portion of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators arbitrator setting forth instructions to the Buyer, as Escrow Agent Agent, as to the release of the portion of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount. The Buyer, as Escrow Agent Agent, shall thereupon release a portion of the Escrow Shares Fund from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Choices Entertainment Corp)

Administration of Escrow Account. The Escrow Agent Except as otherwise provided herein, Parent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9.2(a) of the Merger Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the date first anniversary of the expiration of Closing Date (the representation"10% Escrow Termination Date"), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to each of the Indemnification Representatives Stockholders and the Escrow Agentto Parent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Merger Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Merger Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) If any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification, compensation or reimbursement under Section 9.2(c) of the Merger Agreement, such Indemnitee may, on or prior to the date that all claims under Section 9.2(c) of the Merger Agreement relating to the alleged failure of the Companies to make required Form 8300 filings in the years 1990, 1991 and 1992 are fully and finally resolved (the "Form 8300 Escrow Termination Date"), deliver a Claim Notice to each of the Stockholders and to Parent. Each such Claim Notice shall state that such Indemnitee believes that such Indemnitee is entitled to indemnification, compensation or reimbursement under Section 9.2(c) of the Merger Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that it is entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the Claimed Amount. (c) Indemnification claims based on Section 9.2(a) of the Merger Agreement are limited to the 10% Escrow. Indemnification claims based on Section 9.2(c) of the Merger Agreement shall be satisfied first out of the Form 8300 Escrow but such claims shall not be limited to the Form 8300 Escrow. (d) Within 20 business days after delivery receipt by Parent of a Claim Notice, the Indemnification Representatives shall provide Stockholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Parent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholders' Agent: (i) agree agrees that a whole number of Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account applicable escrow to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account applicable escrow to the Indemnified Party Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account applicable escrow to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Indemnitee. A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or Any part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter is not to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant released to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Indemnitee

Appears in 1 contract

Samples: Merger Agreement (Ebay Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 3.1 If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Reorganization Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to (a) the date of Initial Termination Date, with respect to all claims other than Extended Period Claims, and (b) the expiration of the representationExtended Termination Date, warranty, covenant or agreement with respect to which such Extended Period Claims deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Shareholders' Representative and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9 of the Reorganization Agreement, and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a good faith, non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) 3.2 Within 20 30 days after delivery receipt by the Shareholders' Representative of a Claim Notice, the Indemnification Representatives shall provide Shareholders' Representative may deliver, both to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shallShareholders' Representative: (i) agree agrees that Escrow Shares (or cash, as described further in Section 5) collectively having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount (the "Full Amount") may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares (or cash, as described further in Section 5) collectively having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iii) contest indicate that any no part of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyIndemnitee in respect of the Claimed Amount. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion Any part of the Claimed Amount only based upon that is not agreed to be released to the Indemnitee pursuant to the Response Notice shall be the "Contested Amount." If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered not received by the Indemnification Representatives Escrow Agent within such 2030-day period, then the Indemnification Representatives Shareholders' Representative shall be conclusively deemed to have agreed that Escrow Shares (or cash, as described further in Section 5) collectively having a Fair Market Stipulated Value equal to all of the Claimed Full Amount may be released to the Indemnified Party Indemnitee from the Escrow Account. (c) 3.3 If the Indemnification Representatives in the Shareholders' Representative delivers a Response Notice agree (or are deemed to have agreed) agreeing that Escrow Shares (or cash, as described further in Section 5) collectively having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if the Shareholders' Representative does not deliver a Response Notice on a timely basis in accordance with Section 3.2, the Escrow Agent shall, promptly shall within five business days following the earlier receipt of the required delivery date for the such Response Notice or (or, if the delivery of the Escrow Agent has not received a Response Notice, transferwithin five business days following the expiration of the 30-day period referred to in Section 3.2), deliver and assign to the Indemnified Party such number of Indemnitee such Escrow Shares held (or cash, as described further in Section 5). 3.4 If the Shareholders' Representative delivers a Response Notice agreeing that Escrow Account which have Shares (or cash, as described further in Section 5) collectively having a Fair Market Stipulated Value equal to less than the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Full Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly shall, within five business days following the delivery receipt of the such Response Notice transferNotice, deliver and assign to the Indemnified Party such number of Indemnitee Escrow Shares held (or cash, as described further in the Escrow Account which have Section 5) collectively having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Amount. A determination with respect Such payment shall not be deemed to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowfull satisfaction of the claim described in such Claim Notice, but shall count toward the satisfaction of the claim described in such Claim Notice. (e) 3.5 If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification RepresentativesShareholders' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of Representative delivers a Response Notice indicating that the Claimed Amount there is contested by the Indemnification Representativesa Contested Amount, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Shareholders' Representative and the Indemnification Representatives setting forth instructions Indemnitee shall attempt in good faith to resolve the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim dispute related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.the

Appears in 1 contract

Samples: Merger Agreement (Graphon Corp/De)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred or suffered Damages for which it is entitled to indemnification under Article V of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, the Indemnification Representatives Representative shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Representative shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives Representative may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives Representative within such 20-day period, the Indemnification Representatives Representative shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives Representative in the Response Notice agree agrees (or are is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives Representative in the Response Notice agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives Representative in the Response Notice contest contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Representative and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Representative's Response Notice contesting the Claimed Amount. The Indemnification Representatives Representative and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Representative's Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives Representative and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesRepresentative, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesRepresentative, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesRepresentative, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination DateDate (as hereinafter defined), until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives Representative setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Pledge, Security and Escrow Agreement (Rychel William M)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an In the event Parent, Acquiror, the Company, the License Subsidiaries or any of their Affiliates (the “Indemnified Party has incurred or suffered Damages for which it is Parties”) shall be entitled to indemnification under Article V for any Taxes, costs (including reasonable attorneys’ or accountants’ fees), interest, penalties or other losses arising out of, based upon or relating or attributable to any Indemnifiable Losses, Acquiror and NextWave Opco shall send joint written notice to the Escrow Agent identifying the amount of funds from the Merger Agreement, Escrow Account to be paid to the relevant Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice Agent shall state pay such amount in cash by wire transfer of immediately available funds to an account designated by the amount relevant Indemnified Parry within three (3) days of claimed Damages receipt by the Escrow Agent of such written notice; provided, however, that the Indemnified Parties shall not be entitled to any indemnity for Indemnifiable Losses to the extent such Indemnifiable Losses exceed the Escrow Amount (as reduced for any prior payments pursuant to this Section 3); provided, further, that any Increased Amount shall be available solely to pay the "Claimed Tax liability relating to such Increased Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing, as set forth on Exhibit C hereto. (b) Within 20 days after delivery of a Claim NoticeIf any Increased Amount is agreed upon by Parent, Acquiror, the Indemnification Representatives shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed Company and NextWave Opco pursuant to Section 67.2( j) equal of the Acquisition Agreement, such Increased Amount shall be set forth on Exhibit C hereto, showing the allocation of such Increased Amount among specific Tax liabilities. In the event of the payment of any Tax liability referred to in Section 7.2(j) clause (y) of the Acquisition Agreement, there shall be paid out of the Escrow Amount to the full Claimed Company (so as to enable the Company to pay, or cause to be paid, such amount to the relevant taxing authority) the amount of such Tax liability (to the extent of the Increased Amount may relevant to such Tax liability as set forth on Exhibit C hereto) notwithstanding anything in Section 5.7(d) of the Acquisition Agreement to the contrary and the excess, if any, of the relevant Increased Amount over the actual amount of such Tax liability paid out of the escrow shall be released to NextWave Opco. The payments made pursuant to this Section 3(b) shall be made by the Escrow Agent within three (3) days of receipt by the Escrow Agent of a joint written notice from Acquiror and NextWave Opco, identifying the amount of funds from the Escrow Account to the Indemnified Partybe paid pursuant hereto, (iiin cash by wire transfer of immediately available funds to an account(s) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered designated by the Indemnification Representatives within Acquiror and NextWave Opco in such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Accountjoint written notice. (c) If In the Indemnification Representatives in event that the Response Notice agree (Company and/or the License Subsidiaries or are deemed any of their respective representatives and heirs, successors and assigns, suffer any Losses pursuant to have agreedSection 7.2(g)(iii) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from Acquisition Agreement, Parent and/or Acquiror, as applicable, shall have access to the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares Amount (but not any Increased Amount) held in the Escrow Account which to satisfy such Losses; provided, however, that the provisions of Section 4(a) hereof have a Fair Market Value equal been fulfilled by Parent or Acquiror, as applicable, and NextWave Opco has been given the opportunity to assume the Claimed Amount (defense of such Losses. Any payments made to Parent or such lesser number of Escrow Shares as is then held in the Escrow Account). (dAcquiror pursuant to this Section 3(c) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(eSection 4 hereof. (d) belowAfter the payment of any Losses or Indemnifiable Losses, the Escrow Amount shall be released to NextWave Opco upon the expiration of all relevant survival periods set forth in Section 5.7(h) of the Acquisition Agreement; provided, that the release of any Increased Amount shall be governed by paragraph (b) above. Notwithstanding anything to the contrary contained in the immediately preceding sentence, at any time, NextWave Opco may request that Parent and Acquiror instruct the Escrow Agent to release to NextWave Opco an amount equal to the excess of (x) the Escrow Amount (excluding any Increased Amount) over (y) the aggregate amount, in the reasonable judgment of Parent and Acquiror, of potential remaining Indemnifiable Losses at such time (i.e., adjusted for all items and periods for which the Company, in the reasonable judgment of Parent and Acquiror or pursuant to a legally binding agreement with the IRS, has received finality). Each such release of any portion of the Escrow Amount to NextWave Opco shall be deemed to include an amount of interest thereon (net of the previously made tax disbursements under Section 20(b) hereof that are attributable thereto) at the rate actually earned on the Escrow Amount in accordance with Section 2 hereof. Any portion of the Escrow Amount to be released in accordance with this Section 3(d) shall be paid by the Escrow Agent out of the Escrow Amount in cash by wire transfer of immediately available funds to an account designated by NextWave Opco within three (3) days of the Escrow Agent’s receipt of a joint written notice from Acquiror and NextWave Opco specifying the portion of the Escrow Amount to be released to NextWave Opco. (e) If In the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, event that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the any dispute shall be resolved by arise between the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant parties with respect to the applicable terms obligation of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished Acquiror and/or NextWave Opco to the Indemnification Representatives, the Indemnified Party and instruct the Escrow Agent in writing and shall constitute a conclusive determination to disburse the funds out of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesAccount, the Escrow Agent shall continue to hold refrain from taking any action contemplated by this Agreement until such dispute is resolved in accordance with Section 15 hereof. (f) The Escrow Agent shall not disburse any funds from the Escrow Account a number except as provided in this Section 3 and Section 20(b). (g) In the event fund transfer instructions are given (other than in writing at the time of the execution of the Agreement), whether in writing, by telecopier or otherwise the Escrow Shares having a Fair Market Value sufficient Agent is authorized to cover the Contested Amount (up seek confirmation of such instructions by telephone call-back to the number person or persons designated on the call-back schedule attached hereto as Exhibit A, and the Escrow Agent may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in writing actually received and acknowledged by the Escrow Shares then available Agent. If the Escrow Agent is unable to contact any of the authorized representatives identified in the Call-Back Schedule, the Escrow AccountAgent is hereby authorized to seek confirmation of such instructions by telephone call-back to any one or more of Acquiror’s or NextWave Opco’s executive officers (“Executive Officers”), notwithstanding which shall include the occurrence titles of President, Vice President, Treasurer or Secretary, as the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions Escrow Agent may select. Such “Executive Officer” shall deliver to the Escrow Agent as to the release of Escrow Sharesa fully executed incumbency certificate, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to and the Escrow Agent as may rely upon the confirmation of anyone purporting to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amountany such officer. The Escrow Agent shall thereupon release and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by Acquiror or NextWave Opco to identify (i) the beneficiary, (ii) the beneficiary’s bank or (iii) an intermediary bank. The Escrow Shares from Agent may apply any of the Escrow Account (to escrowed funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the extent Escrow Shares are then held in beneficiary being paid, or the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related transfer of funds to a third party claim bank other than the amount of which beneficiary’s bank or an intermediary bank designated. The parties to this Agreement acknowledge that such security procedure is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementcommercially reasonable.

Appears in 1 contract

Samples: Acquisition Agreement (NextWave Wireless LLC)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account and Escrow Shares as follows: (a) If an Indemnified Party has incurred or suffered Damages an Indemnified Loss for which it which, based on its good faith belief, such Person is entitled to indemnification under Article V be indemnified by the Stockholders pursuant to the terms of this Agreement (the "Claim"), it may request the release of some or all of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give Escrow Shares by giving written notice of such claim its Claim in accordance with the provisions of Section 12 hereof (a the "Claim Notice") to the Indemnification Representatives Escrow Agent and the Escrow Agent. Each Claim Notice shall state other parties hereto prior to or on the Termination Date (as hereinafter defined), describing in such notice the amount of the claimed Damages (the "Claimed Amount") Indemnified Losses and a reasonable description of the basis for such claimClaim; provided, however, that a Claim Notice shall be deemed to be sufficient and properly made even if at the time of the giving of the Claim Notice the amount of the Claim has not been determined, is not known or can only be described in general terms so long as the Claim Notice so states and in such event, the Claim shall be deemed to be an Open Claim (as hereinafter defined) and the Escrow Agent shall reserve all Escrow Shares remaining in the Escrow Account (plus all dividends received on the Escrow Shares, which shall constitute part of the Escrow Account), which shall be deemed a Claim Reserve (as hereinafter defined) until a subsequent Claim Notice relating to the original Claim Notice that contains a specific amount is delivered to the Escrow Agent and at that time Stockholders may make a written objection to such Claim pursuant to Section 6(c) hereof. The date which is eighteen one (181) months after year anniversary of the Date consummation of Closingthe Merger shall be referred to herein as the "Termination Date." (b) Within 20 If the Escrow Agent has not received written objection to a Claim by an Indemnified Party from Stockholders within thirty (30) days after delivery of a Claim Notice, the Indemnification Representatives shall provide to the Escrow Agent and Stockholders of the Claim Notice with respect to such Claim from such Indemnified Party, with a copy the Claim stated in such notice shall be conclusively deemed to be approved by Stockholders, and the Escrow Agent shall on the second (2nd) banking day thereafter issue to the Escrow Agent, a written response (applicable Indemnified Party the "Response Notice") in which the Indemnification Representatives shall: (i) agree that number of Escrow Shares from the Escrow Account having a Fair Market Value (as computed pursuant to Section 6hereinafter defined) equal to the full Claimed Amount may amount of the Claim. (c) If within such thirty (30) days the Escrow Agent shall have received from Stockholders a written objection to any Claim or any portion of a Claim made by an Indemnified Party, reasonably specifying the nature of and grounds for such objection (a copy of which shall in each case be released from sent to such Indemnified Party in accordance with the provisions of Section 12 below), then such Claim or such portion of the Claim shall be deemed to be an "Open Claim" and the Escrow Agent shall reserve within the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release number of Escrow Shares having a Fair Market Value equal to all the amount of the Open Claim (which amount for each Open Claim is referred to herein as a "Claim Reserve"). Any portion of the Claim that Stockholders have not specifically objected to pursuant to this subsection shall be deemed to be approved by Stockholders, and the Escrow Agent shall on the second (2nd) banking day after expiration of such thirty (30) day period release to such Indemnified Parties from the Escrow Account the number of Escrow Shares having a Value equal to the portion of the Claim not objected to pursuant to this Section. Notwithstanding the foregoing, Stockholders may object to a Claim or a portion of the Claimed Amount a Claim pursuant to this Section 6 only based upon a good faith belief that all or such any portion of the Claimed Amount Claim does not constitute Damages Indemnified Losses for which the such Indemnified Party is Parties are entitled to indemnification under Article V this Agreement or that the amount of any Claim is overstated. (d) The amount constituting the Merger Agreement. If no Response Notice is delivered Claim Reserve for each Open Claim shall be paid by the Indemnification Representatives within Escrow Agent from the Escrow Account to such 20Indemnified Parties only in accordance and consistent with (i) a joint written instruction by such Indemnified Parties and Stockholders (a "Joint Instruction") or (ii) a final non-day period, the Indemnification Representatives appealable order of a court of competent jurisdiction (a "Final Determination"). The Escrow Agent shall be deemed to have agreed that Escrow Shares having act on a Fair Market Value equal to all Joint Instruction or a Final Determination without further question. Any portion of the Claimed Amount may be released an Open Claim not payable to the Indemnified Party from Parties shall be no longer subject to the Claim Reserve and shall remain part of the Escrow Account. (ce) If For purposes of this Agreement, the Indemnification Representatives in "Value" of each of the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all shall be $3.33 per share. (f) In connection with the performance of this Agreement each of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, parties expressly acknowledges and agrees that the Escrow Agent shallis not providing legal services in connection with its escrow services rendered under this Agreement but that, promptly for other matters, Escrow Agent is legal counsel to the Company, and following the earlier consummation of the required delivery date for Merger, will be legal counsel to Parent, and therefore agrees that in no event shall the Response Notice mere fact that the Escrow Agent is serving as the escrow agent hereunder give rise to any conflict of interest or other grounds by which the delivery Company, or subsequent to the Merger, the Parent, shall be deprived of the Response Notice, transfer, deliver and assign to the Indemnified Party such number benefit of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree Agent's legal counsel, provided that Escrow Shares having a Fair Market Value equal to part, but not all, if there shall arise any dispute between any of the Claimed Amount may be released from parties hereto in connection with the Escrow Account to the Indemnified Partyperformance of this Agreement, the Escrow Agent shall promptly following the delivery resign its position as Escrow Agent hereunder in favor of the Response Notice transfer, deliver and assign a new escrow agent mutually agreed to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementparties hereto.

Appears in 1 contract

Samples: Indemnification and Escrow Agreement (CCP Worldwide Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9.2 of the Merger Reorganization Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the first anniversary of the date of the expiration of Effective Time (the representation"Termination Date"), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Shareholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes in good faith and after investigation that there is or has been a breach of a representation, warranty or covenant contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Reorganization Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 business days after delivery receipt by the Shareholders' Agent of a Claim Notice, the Indemnification Representatives shall provide Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallShareholders' Agent: (i) agree agrees that a whole number of Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 20 business-day period, then the Shareholders' Agent shall be deemed to have agreed that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Shareholders' Agent delivers a Response Notice agreeing that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnitee, or if the Shareholders' Agent does not deliver a Response Notice in accordance with Section 3(b), the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if the Shareholders' Agent has not delivered a Response Notice, promptly following the earlier expiration of the required delivery date for 20 business-day period referred to in Section 3(b)), deliver (or cause the Response Notice or the delivery stock transfer agent of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the to deliver) to such Indemnitee such Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Shares. (d) If the Indemnification Representatives in the Shareholders' Agent delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to (or cause the Indemnified Party such number stock transfer agent of the Escrow Shares held in the to deliver) to such Indemnitee Escrow Account which have Shares having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowAmount. (e) If the Indemnification Representatives Shareholders' Agent delivers a Response Notice indicating that there is a Contested Amount, the Shareholders' Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Shareholders' Agent shall resolve such dispute, such resolution shall be binding on all of the Shareholders and a settlement agreement containing the terms and conditions of such resolution shall be signed by the Indemnitee and the Shareholders' Agent and sent to the Escrow Agent, who shall, upon receipt thereof, release (or cause the stock transfer agent of the Escrow Shares to release) Escrow Shares from the Escrow Account in accordance with such agreement. (f) If the Shareholders' Agent and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 business days after the delivery of the Claim Notice, then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaWilmington, Georgia. All claims shall be settled by three arbitrators Delaware in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Parent, one selected by the Shareholders' Agent and the Indemnified Party shall each designate one third selected by the first two arbitrators. If either the Shareholders' Agent or Parent fails to select an arbitrator within 15 days prior to the expiration of the delivery 30-business day period commencing on the expiration of the Indemnification Representatives30-business day period referred to in the first sentence of this Section 3(f), then either the Shareholders' Response Notice contesting Agent or Parent, as the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedcase may be, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts in the circumstances to cause the arbitrators' decision to be furnished within 95 calendar days after the appointment of the last of the three arbitrators. The parties further agree that, to the extent practicable, discovery shall be completed at least 20 business days prior to the date of the arbitration hearing. The arbitrators' decision shall relate solely to whether the Indemnified Party Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Indemnitee is entitled to the applicable terms of the Merger Agreement and this Agreementrecover. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesShareholders' Agent, the Indemnified Party Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose prevailing party, any additional reasonable fees and expenses (including reasonable legal fees) of seeking enforcement of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesthis Section 3(f), the non-prevailing party shall be deemed to be the Indemnitee if it is entitled to recover less than 50% of the Contested Amount; otherwise it shall be the Shareholders. (g) The Escrow Agent shall continue to hold in release Escrow Shares from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount (up within 5 business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Shareholders' Agent setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount. The Escrow Agent shall thereupon release . (h) Any Escrow Shares released from the Escrow Account (to an Indemnitee shall be deemed to reduce the extent Escrow Shares are then held pro rata with respect to each Shareholder in accordance with each Shareholder's percentage interest in the Escrow Account) Fund as set forth in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Exhibit B.

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Acuson Corp)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 3.1 If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 or Section 10.3 of the Merger Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the date first anniversary of the expiration of Closing Date (the representation“Termination Date”), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholders’ Agent and to the Escrow Agent. Each Claim Notice shall state that (i) it is a Claim Notice under the Cavium/MontaVista 2009 Escrow; (ii) such Indemnitee believes in good faith that there is or has been a breach of a representation, warranty or covenant contained in the Merger Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9 or Section 10.3 of the Merger Agreement, and (iii) contain a brief description of the circumstances supporting such Indemnitee’s belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a good faith, non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing”). (b) 3.2 Within 20 30 days after delivery receipt by the Stockholders’ Agent of a Claim Notice, the Indemnification Representatives shall provide Stockholders’ Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholders’ Agent: (i) agree states that Escrow Shares having it is a Fair Market Value Response Notice under the Cavium/MontaVista 2009 Escrow; (as computed pursuant to Section 6ii) agrees that an amount equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (iiiii) agree agrees that Escrow Shares having a Fair Market Value an amount equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iiiiv) contest indicates that any no part of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyIndemnitee in respect of the Claimed Amount. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion Any part of the Claimed Amount only based upon that is not agreed to be released to the Indemnitee pursuant to the Response Notice shall be the “Contested Amount.” If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered not received by the Indemnification Representatives Escrow Agent within such 2030-day period, then the Indemnification Representatives Stockholders’ Agent shall be conclusively deemed to have agreed that Escrow Shares having a Fair Market Value an amount equal to all of the full Claimed Amount may be released to the Indemnified Party Indemnitee from the Escrow Account. (c) 3.3 If the Indemnification Representatives in the Stockholders’ Agent delivers a Response Notice agree (or are deemed to have agreed) agreeing that Escrow Shares having a Fair Market Value an amount equal to all of the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 3.2, the Escrow Agent shall, promptly shall within five business days following the earlier receipt of the required delivery date for the such Response Notice or (or, if the delivery of the Escrow Agent has not received a Response Notice, transferwithin five business days following the expiration of the 30-day period referred to in Section 3.2), deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value Indemnitee an amount equal to the Claimed Amount (or such lesser number based on the Stipulated Value of Escrow Shares as is then held in the Escrow AccountShares). (d) 3.4 If the Indemnification Representatives in the Stockholders’ Agent delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Value an amount equal to part, but not all, of less than the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly shall, within five business days following the delivery receipt of the such Response Notice transferNotice, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value Indemnitee an amount equal to the Agreed Amount (or such lesser number based on the Stipulated Value of Escrow Shares as is then held in the Escrow AccountShares). A determination with respect Such payment shall not be deemed to the remainder of the Claimed Amount shall be made in full satisfaction of the claim described in such Claim Notice, but shall count toward the satisfaction of the claim described in such Claim Notice. 3.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Stockholders’ Agent resolve such dispute, such resolution shall be binding on all of the Merger Stockholders and all of the Indemnitees and a settlement agreement shall be signed by such Indemnitee and the Stockholders’ Agent (a “Settlement Agreement”) and sent to the Escrow Agent, who shall, upon receipt thereof, if applicable, release Escrow Funds from the Escrow Account (based on the Stipulated Value of the Escrow Shares) in accordance with subsection 4(e) belowsuch Settlement Agreement. Unless and until the Escrow Agent shall receive written notice that any such dispute has been resolved by the Indemnitee and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. (e) 3.6 If the Indemnification Representatives Stockholders’ Agent and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 60 days after the delivery of the Claim Notice (“Initial Resolution Period”), then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators the County of Santa Xxxxx in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by one arbitrator, mutually selected by Parent and the Indemnified Party shall each designate one Stockholders’ Agent. If Parent and the Stockholders’ Agent fail to mutually select an arbitrator within 15 three business days following the expiration of the delivery Initial Resolution Period, then arbitration will be conducted by three arbitrators: one selected by Parent; one selected by the Stockholders’ Agent; and the third selected by the first two arbitrators. If Parent or the Stockholders’ Agent fails to select an arbitrator within 10 days following the expiration of the Indemnification Representatives' Response Notice contesting Initial Resolution Period, then the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator other shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 75 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.mutually-selected

Appears in 1 contract

Samples: Merger Agreement (Cavium Networks, Inc.)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 2.1 If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V either of the Merger AgreementAgreements, the Indemnified Party shallsuch Indemnitee may, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Agent and to the Escrow AgentAgent in accordance with Section 10 below. Each Claim Notice shall state that such Indemnitee believes in good faith and after investigation that there is or has been a breach of a representation, warranty or covenant contained in one of the Agreements or that such Indemnitee is entitled to indemnification, compensation or reimbursement under the Exchange Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") ). 2.2 Within 30 business days after receipt by the Agent and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery Escrow Agent of a Claim Notice, the Indemnification Representatives shall provide Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallAgent: (i) agree agrees that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, (ii) agree agrees that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicates that any of the no Escrow Shares Stock may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest Indemnitee; provided, however, that in no event shall the Agent agree to release a whole number of Escrow Shares having a Fair Market Stock with an aggregate value that exceeds the Stipulated Value equal to all for any Claimed Amount or a portion otherwise. Any part of the Claimed Amount only based upon that is not to be released to the Indemnitee shall be the "Contested Amount." If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered not received by the Indemnification Representatives Escrow Agent within such 2030 business-day period, then the Indemnification Representatives Agent shall be deemed to have agreed that a whole number of Escrow Shares Stock having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released to the Indemnified Party Indemnitee from the Escrow AccountAccount up to the whole number of shares of Escrow Stock equal to the Stipulated Value. (c) 2.3 If the Indemnification Representatives in the Agent delivers a Response Notice agree (or are deemed to have agreed) agreeing that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if the Agent does not deliver a Response Notice in accordance with Section 2.2 above, the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if the Agent has not delivered a Response Notice, promptly following the earlier expiration of the required delivery date for 30 business-day period referred to in Section 2.2 above), deliver to such Indemnitee such Escrow Stock. 2.4 If the Agent delivers a Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such agreeing that a whole number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number shares of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares Stock having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Indemnitee Escrow Shares held in the Escrow Account which have a Fair Market Value Stock equal to the Agreed Amount (or Amount. 2.5 If the Agent delivers a Response Notice indicating that there is a Contested Amount, the Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Agent shall resolve such lesser number dispute, such resolution shall be binding on all of Escrow Shares as is then held in the Stockholders and a settlement agreement containing the terms and conditions of such resolution shall be signed by the Indemnitee and the Agent and delivered to the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules")Agent. The Indemnification Representatives and Escrow Agent shall release Escrow Stock from the Indemnified Party shall each designate one arbitrator Escrow Account in connection with any Contested Amount within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 5 business days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely delivery to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery it of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Agent setting forth instructions to the Escrow Agent as to the release Stipulated Value of the Escrow SharesStock, if any, that shall to be made released from the Escrow Account, with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the such Contested Amount. The . 2.6 Any Escrow Agent shall thereupon release Escrow Shares Stock released from the Escrow Account (to an Indemnitee shall be deemed to reduce the extent Escrow Shares are then held Stock pro rata with respect to each Stockholder in accordance with each Stockholder's percentage interest in the Escrow Account) Fund as set forth in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Exhibit D.

Appears in 1 contract

Samples: Exchange Agreement (Alteon Websystems Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an the Purchaser, on behalf of itself or any other Purchaser Indemnified Party Party, has or claims to have incurred or suffered Damages Losses for which it is or may be entitled to indemnification or reimbursement under Article V of the Merger Purchase Agreement, the Indemnified Party Purchaser shall, on behalf of itself or before the date of the expiration of the representationsuch Purchaser Indemnified Party, warranty, covenant or agreement to which such deliver a written claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholder Representative and to the Escrow Agent. No Claim Notice may be delivered after the Escrow Account Release Date (as hereinafter defined). Each Claim Notice shall state or provide (i) that such Purchaser Indemnified Party believes that it is entitled to indemnification or reimbursement pursuant to Article X of the amount Purchase Agreement, (ii) a reasonably detailed description of claimed Damages (the "Claimed Amount") and circumstances supporting the basis for such claimPurchaser Indemnified Party’s belief that it is entitled to indemnification or reimbursement under Article X of the Purchase Agreement, and (iii) the estimated amount of Losses (if estimable) such Purchaser Indemnified Party claims to have so incurred or suffered (the “Claimed Amount”). The date which Claim Notice delivered to the Escrow Agent shall include a certification to the Escrow Agent that a copy of the Claim Notice has been also been delivered to the Stockholder Representative. The Escrow Agent shall have no responsibility to determine whether any Claim Notice was sent to or has been received by the Stockholder Representative or to provide any Claim Notice to such Stockholder Representative. The Escrow Agent may rely conclusively on any Claim Notice it receives hereunder and it will be presumed that any such notice satisfies the conditions set forth herein. Furthermore, the Escrow Agent shall have no responsibility to determine if the Claim Notice satisfies the conditions set forth in the Purchase Agreement for making a claim, including whether there is eighteen (18) months after a basis for making a claim and whether the Date of Closingclaim is set forth in sufficient detail. (b) Within 20 thirty (30) days after delivery receipt by the Stockholder Representative of a Claim Notice, the Indemnification Representatives Stockholder Representative shall provide deliver to the Indemnified Party, with a copy Purchaser and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholder Representative: (i) agree agrees that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) an amount of cash equal to the full Claimed Amount may be released from the Escrow Account to the Purchaser Indemnified Party, ; (ii) agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, an amount of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value cash equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Purchaser Indemnified Party; or (iii) indicates that no part of the Escrow Account may be released from the Escrow Account to the Purchaser Indemnified Party in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to the Purchaser Indemnified Party pursuant to the Response Notice shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent prior to 5 P.M. New York time on the last day of such 30-day period or if such day is not a business day for the Escrow Agent in New York City, then on the next succeeding business day, then the Stockholder Representative shall be conclusively deemed to have agreed that an amount of cash equal to the full Claimed Amount (plus a pro rata portion of the interest and investment income deposited in the Escrow Account from the date hereof which is attributable to such Claimed Amount) shall be released to the Purchaser Indemnified Party from the Escrow Account. (c) If the Stockholder Representative delivers a Response Notice agreeing that an amount of cash equal to the full Claimed Amount may be released from the Escrow Account to the Purchaser Indemnified Party, or if the Stockholder Representative does not deliver a Response Notice on a timely basis in accordance with Section 2(b), the Escrow Agent shall promptly within five (5) Business Days following the delivery receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within five (5) Business Days following the expiration of the Response Notice transfer30-day period referred to in Section 2(b)), deliver and assign to the such Purchaser Indemnified Party such number amount of Escrow Shares held cash equal to the Claimed Amount (plus a pro rata portion of the interest and investment income deposited in the Escrow Account from the date hereof which have is attributable to such Claimed Amount). (d) If the Stockholder Representative delivers a Fair Market Value Response Notice agreeing that an amount of cash equal to less than the full Claimed Amount may be released from the Escrow Account to the Purchaser Indemnified Party (the “Agreed Amount”), the Escrow Agent shall, within five (5) Business Days following the receipt of such Response Notice, deliver to such Purchaser Indemnified Party an amount of cash equal to the Agreed Amount (or such lesser number plus a pro rata portion of Escrow Shares as is then held the interest and investment income deposited in the Escrow AccountAccount from the date hereof which is attributable to such Agreed Amount). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of Stockholder Representative delivers a Response Notice indicating that the Claimed Amount there is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with pay the Contested Amount to the applicable Purchaser Indemnified Party until the earlier of (A) the Escrow Agent’s receipt of a final, non- appealable judgment of a court or other judicial body of competent jurisdiction with respect to such amount (a “Final Judgment”), which is presented to the Escrow Agent by the prevailing party with an opinion of counsel attesting to the finality of such third party claim until court order, or (B) the Escrow Agent’s receipt of a final order notice in writing signed jointly by the Purchaser and the Stockholder Representative. If, at any time prior to, on or other final resolution after the Escrow Account Release Date, the Escrow Agent receives either (i) a Final Judgment pursuant to clause (A) of this Section 2(e) or settlement has been entered (ii) a joint direction pursuant to clause (B) of this Section 2(e), in either case showing all or reached in any portion of the underlying litigation determining Contested Amount as due or payable to the amount of such claimapplicable Purchaser Indemnified Party, whereupon then the Escrow Agent shall release Escrow Shares disburse to such Purchaser Indemnified Party cash from the Escrow Account (in an amount equal to the extent Escrow Shares are then held amount set forth in such joint direction or Final Judgment (plus a pro rata portion of the interest and investment income deposited in the Escrow Account from the date hereof which is attributable to such amount) to such Purchaser Indemnified Party within five (5) Business Days of the date of such receipt and shall retain the remaining portion of the Contested Amount as part of the Escrow Account. (f) in accordance with such final order or final resolution or settlementNotwithstanding anything to the contrary herein, any release of funds by the Escrow Agent to a Purchaser Indemnified Party pursuant to this Section 2 shall be made to the Purchaser (for distribution to the Purchaser Indemnified Party). (g) All disbursements of funds from the Escrow Funds shall be subject to the fees and claims of Escrow Agent and the Indemnified Parties (as defined below) pursuant to Section 5 and Section 6 below.

Appears in 1 contract

Samples: Stock Purchase Agreement (Biomarin Pharmaceutical Inc)

Administration of Escrow Account. The Buyer, as Escrow Agent Agent, shall administer the Escrow Account as follows: (a) If an Indemnified Party the Buyer has incurred or suffered Damages for which it is entitled to indemnification under Article V Section 9 of the Merger Purchase Agreement, the Indemnified Party Buyer shall, on or before prior to the date which is 540 days following of the expiration of Closing Date under the representation, warranty, covenant or agreement to which such claim relatesPurchase Agreement (the "Termination Date"), give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow AgentSeller. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, Notice the Indemnification Representatives Seller shall provide to the Indemnified PartyBuyer, with a copy to the on its own behalf and as Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Seller shall: (i) agree that a portion of the Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) Fund equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, (ii) agree that Escrow Shares having a Fair Market Value equal to partportion, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Buyer or (iii) contest that any of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyBuyer. The Indemnification Representatives Seller may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount Escrow Fund only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Buyer is entitled to indemnification under Article V Section 9 of the Merger Purchase Agreement. If no Response Notice is delivered by the Indemnification Representatives Seller within such 20-day period, the Indemnification Representatives Seller shall be deemed to have agreed that a portion of the Escrow Shares having a Fair Market Value Fund equal to all of the Claimed Amount may be released to the Indemnified Party Buyer from the Escrow Account. (c) If the Indemnification Representatives Seller in the Response Notice agree agrees (or are is deemed to have agreed) that a portion of the Escrow Shares having a Fair Market Value Fund equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall, promptly following the earlier Buyer may transfer and deliver to itself such portion of the required delivery date for Escrow Fund (or if the Response Notice or Escrow Fund is less than the delivery amount to be so released, all of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow AccountFund). (d) If the Indemnification Representatives Seller in the Response Notice agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account Fund to the Indemnified PartyBuyer, the Escrow Agent shall promptly following the delivery Buyer may transfer and deliver to itself for its own account a portion of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder part of the Claimed Amount shall (or if the Escrow Fund is less than the amount to be made in accordance with subsection 4(e) belowso released, all of the Escrow Fund). (e) If the Indemnification Representatives Seller in the Response Notice contest contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect provisions of Section 15 of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Purchase Agreement. The final decision of the majority of the arbitrators arbitrator shall be furnished to the Indemnification Representatives, the Indemnified Party Seller and the Buyer, on its own behalf and as Escrow Agent Agent, in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party Seller and the Buyer, on its own behalf and as Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' arbitrator's award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesSeller, the Buyer, as Escrow Agent Agent, shall continue to hold in the Escrow Account a number portion of the Escrow Shares having a Fair Market Value Fund sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account)Amount, notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Buyer and the Indemnification Representatives Seller setting forth instructions to the Buyer, as Escrow Agent Agent, as to the release of the portion of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators arbitrator setting forth instructions to the Buyer, as Escrow Agent Agent, as to the release of the portion of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount. The Buyer, as Escrow Agent Agent, shall thereupon release a portion of the Escrow Shares Fund from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Escrow Agreement (Choices Entertainment Corp)

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Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the date of the expiration of the representationTermination Date, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") signed by any Authorized Officer (as defined below) of Packeteer (an "Officer's Certificate") to the Indemnification Representatives Workfire Stockholder Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant or other provision contained in the Merger Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Merger Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") ). For purposes hereof, the term Authorized Officer shall refer to each of Packeteer's Chief Executive Officer, President and the basis for such claim. The date which is eighteen (18) months after the Date of ClosingChief Financial Officer. (b) Within 20 30 business days after delivery of a Claim Notice, the Indemnification Representatives shall provide Workfire Stockholder Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallWorkfire Stockholder Agent: (i) agree agrees that Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not delivered by the Workfire Stockholder Agent to the Indemnitee and the Escrow Agent shallwithin such 30 business-day period, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign Workfire Stockholder Agent shall be deemed to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree agreed that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Workfire Stockholder Agent in the Response Notice agrees that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if a Response Notice is not delivered in accordance with Section 3(b), the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer(or, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesnot duly delivered, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.promptly following the

Appears in 1 contract

Samples: Escrow Agreement (Packeteer Inc)

Administration of Escrow Account. The Except as otherwise provided herein, with respect to any claim pursuant to Section 9 of the Purchase Agreement (other than Section 9.2 or Section 9.3), the Escrow Agent shall be entitled to rely on the instructions of the Designated Company Agent on behalf of the Selling Members and shall administer the Escrow Account as follows: (a) If an Indemnified Party any Parent Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9.4 of the Merger Purchase Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such Parent Indemnitee may deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Designated Company Agent and to the Escrow Agent, on or prior to, but not after, the one year anniversary of the Closing Date under the Purchase Agreement (such one year anniversary being referred to herein as the "Termination Date"); provided, however, that if, at any time on or prior to the Termination Date, any Parent Indemnitee (acting in good faith) delivers to the Designated Company Agent and the Escrow AgentAgent a Claim Notice, then the claim asserted in such Claim Notice will survive the Termination Date until such time as such claim is fully and finally resolved in accordance with the provisions of this Section 3. The Escrow Agent shall not be deemed to have knowledge of termination of this Agreement earlier than the Termination Date unless notice in writing of such earlier date has been provided by Parent. Each Claim Notice shall state that such Parent Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Purchase Agreement or that such Parent Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9.4 of the Purchase Agreement and shall contain a brief description of the circumstances supporting such Parent Indemnitee's belief that there is or has been such a breach or that such Parent Indemnitee is so entitled to indemnification, compensation or reimbursement and shall contain a non-binding, preliminary estimate of the amount of claimed Damages such Parent Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 45 business days after delivery receipt by the Designated Company Agent of a Claim Notice, the Indemnification Representatives shall provide Designated Company Agent may deliver to the Indemnified Party, with a copy Parent Indemnitee who delivered the Claim Notice and to the Escrow Agent, a written Xxxxxx Xxxxx x xritten response (the "Response Notice") in which the Indemnification Representatives shallDesignated Company Agent: (i) agree agrees that a whole number of Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Parent Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Parent Indemnitee or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent Indemnitee. Any part of the Claimed Amount that is not to be released to the Parent Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 45 business-day period, then the Designated Company Agent shall be deemed to have agreed that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released to the Parent Indemnitee from the Escrow Account, subject to the limitation set forth in Section 5(d). (c) If the Designated Company Agent delivers a Response Notice agreeing that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Parent Indemnitee, or if the Designated Company Agent does not deliver a Response Notice in accordance with Section 3(b) within the 45 business-day period specified in Section 3(b), the Escrow Agent shall, promptly shall within five (5) business days following the earlier receipt of the required delivery date for the Response Notice or (or, if the delivery of the Escrow Agent has not received a Response Notice, transferwithin three (3) business days following the expiration of the 45 business-day period referred to in Section 3(b)), deliver and assign or cause to be delivered to such Parent Indemnitee such Escrow Shares, subject to the Indemnified Party limitation set forth in Section 5(d). Such payment shall be deemed to be made in full satisfaction of the claim described in such number of Claim Notice and Escrow Shares held in Agent shall not be liable for the Escrow Account which have a Fair Market Value equal to the Claimed Claim Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)so released. (d) If the Indemnification Representatives in the Designated Company Agent delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent Indemnitee, the Escrow Agent shall promptly within five (5) business days following the delivery receipt of the Response Notice transfer, deliver and assign or cause to the Indemnified Party be delivered to such number of Parent Indemnitee Escrow Shares held in the Escrow Account which have having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect Amount, subject to the remainder of the Claimed Amount shall be made limitation set forth in accordance with subsection 4(e) belowSection 5(d). (e) If the Indemnification Representatives in the Designated Company Agent delivers a Response Notice contest indicating that there is a Contested Amount, the Designated Company Agent and the Parent Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Parent Indemnitee and the Designated Company Agent shall resolve such dispute, such resolution shall be binding on all of the Selling Members and all of the Parent Indemnitees and a settlement agreement shall be signed by the Parent Indemnitee and the Designated Company Agent and sent to the Escrow Agent, who shall, within five (5) business days following receipt thereof, if applicable, release of Escrow Shares from the Escrow Account in accordance with such agreement and having a Fair Market Stipulated Value equal to all or part of the Claimed Amount amount set forth in such settlement agreement (the "Contested Settlement Amount"), subject to the matter shall limitation set forth in Section 5(d). (f) If the Designated Company Agent and the Parent Indemnitee are unable to resolve the dispute relating to any Contested Amount within 45 business days after the delivery of the Claim Notice, then either party may submit the claim described in the Claim Notice to be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators the County of Los Angeles in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules")) by delivering written notice of such submission (the "Submission Notice") to the other party. The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Parent, one selected by the Designated Company Agent and the Indemnified Party shall each designate one third selected by the first two arbitrators. If Parent or the Designated Company Agent fails to select an arbitrator within 15 10 business days of after the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days date of delivery of the Indemnification Representatives' Response Submission Notice, then the third arbitrator other shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 90 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts to cause the arbitrators' decision to be furnished within 120 calendar days after the appointment of the last of the three arbitrators. The parties further agree that discovery shall be completed at least 20 business days prior to the date of the arbitration hearing. The arbitrators' decision shall relate solely to whether the Indemnified Party Parent Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Parent Indemnitee is entitled to the applicable terms of the Merger Agreement and this Agreementrecover. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesA-44 50 Designated Company Agent, the Indemnified Party Parent Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, be final and binding upon the Indemnification RepresentativesSelling Members, the Indemnifying ShareholdersParent Indemnitees and the Escrow Agent. The non-prevailing party in any arbitration shall pay the reasonable expenses (including attorneys' fees) of the prevailing party, the Indemnified Party any additional reasonable fees and expenses (including reasonable legal fees) of the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that this Section 3(f), the Claimed Amount prevailing party shall be deemed to be the Parent Indemnitee if it is contested entitled to recover more than 50% of the Contested Amount; otherwise it shall be the Selling Members. Any amounts for fees and expenses payable by the Indemnification RepresentativesSelling Members under this subsection (f) shall be paid out of Escrow Shares, the after payment of any amounts then payable to Parent Indemnitees. (g) The Escrow Agent shall continue release, subject to hold the limitation set forth in Section 5(d), Escrow Shares from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount within three (up 3) business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Parent Indemnitee and the Indemnification Representatives Designated Company Agent setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount. The Escrow Agent shall thereupon release . (h) Any Escrow Shares released from the Escrow Account (to a Parent Indemnitee shall be deemed to reduce the extent Escrow Shares are then held pro rata with respect to each Selling Member in accordance with each Selling Member's percentage interest in the Escrow Account) Fund as set forth in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.Exhibit A.

Appears in 1 contract

Samples: Purchase Agreement (Quokka Sports Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 10 of the Merger Exchange Agreement, once the Indemnified Party shallaggregate of such Damages exceeds $50,000, such Indemnitee may, on or before prior to the date of the expiration of the representationTermination Date, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") signed by any Authorized Officer (as defined below) of Mercury (an "Officer's Certificate") to the Indemnification Representatives Conduct Shareholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant or other provision contained in the Exchange Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Exchange Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") ). For purposes hereof, the term Authorized Officer shall refer to each of Mercury's Chief Executive Officer, President and the basis for such claim. The date which is eighteen (18) months after the Date of ClosingChief Financial Officer. (b) Within 20 30 business days after delivery of a Claim Notice, the Indemnification Representatives shall provide Conduct Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallConduct Shareholders' Agent: (i) agree agrees that Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not delivered by the Conduct Shareholders' Agent to the Indemnitee and the Escrow Agent shallwithin such 30 business-day period, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign Conduct Shareholders' Agent shall be deemed to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree agreed that Escrow Shares having a Fair Market Stipulated Value equal to partthe full Claimed Amount may be released to the Indemnitee from the Escrow Account, but not all, of only to the extent such Claimed Amount exceeds $50,000. (c) If the Conduct Shareholders' Agent in the Response Notice agrees that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if a Response Notice is not delivered in accordance with Section 3(b), the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer(or, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesnot duly delivered, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.promptly following the

Appears in 1 contract

Samples: Share Exchange Agreement (Mercury Interactive Corporation)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Reorganization Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such Indemnitee may deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholders' Agents and to the Escrow AgentAgent on or prior to February 28, 2002 (the "Termination Date"). Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9 of the Reorganization Agreement and describe in reasonable detail of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement (including the identity, contact person and address of any third party claimant, and copies of any formal demand or other documents given to the Indemnitee by the third party and any other documentation relating to the claim as the Indemnitee may possess or have within the Indemnitee's control) and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 30 business days after delivery receipt by the Stockholders' Agents of a Claim Notice, the Indemnification Representatives shall provide Stockholders' Agents may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholders' Agents: (i) agree that a whole number of Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicate that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 30 business-day period, then the Stockholders' Agents shall be deemed to have agreed that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Stockholders' Agents deliver a Response Notice agreeing that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnitee, or if the Stockholders' Agents do not deliver a Response Notice in accordance with Section 3(b), the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if the Escrow Agent has not received a Response Notice, promptly following the earlier expiration of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer30 business-day period referred to in Section 3(b)), deliver and assign to the Indemnified Party such number of Indemnitee such Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Shares. (d) If the Indemnification Representatives in the Stockholders' Agents deliver a Response Notice agree agreeing that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Indemnitee Escrow Shares held in the Escrow Account which have having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowAmount. (e) If the Indemnification Representatives Stockholders' Agents deliver a Response Notice indicating that there is a Contested Amount, the Stockholders' Agents and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Stockholders' Agents shall resolve such dispute, such resolution shall be binding on all of the Stockholders and all of the Indemnitees and a settlement agreement shall be signed by the Indemnitee and the Stockholders' Agents and sent to the Escrow Agent, who shall, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Account in accordance with such agreement. (f) If the Stockholders' Agents and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 business days after the delivery of the Claim Notice, then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal may be submitted to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration by either Parent or the Stockholders' Agents in Atlanta, Georgia. All claims shall be settled by three arbitrators Santa Clarx Xxxnty in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Parent, one selected by the Stockholders' Agents and the Indemnified Party shall each designate one third selected by the first two arbitrators. If Parent or the Stockholders' Agents fail to select an arbitrator within 15 days prior to the expiration of the delivery 30-business day period referred to in the first sentence of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedthis Section 3(f), however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Noticeor if later, the third arbitrator date specified by the AAA as of which the arbitrators shall have been chosen, then the other shall be appointed in accordance with entitled to select the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third second arbitrator. The Indemnification Representatives and the Indemnified Party shall parties agree to use all reasonable efforts to cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts to cause the arbitrators' decision to be furnished within 95 calendar days after the appointment of the last of the three arbitrators. The arbitrators' decision shall relate solely to whether the Indemnified Party Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Indemnitee is entitled to the applicable terms of the Merger Agreement and this Agreementrecover. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesStockholders' Agents, the Indemnified Party Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesStockholders' Agents, the Indemnifying ShareholdersStockholders, the Indemnified Party Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose prevailing party, any additional reasonable fees and expenses (including reasonable legal fees) of seeking enforcement of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators' awardfees and expenses). After delivery For purposes of a Response Notice that the Claimed Amount is contested by the Indemnification Representativesthis Section 3(f), the non-prevailing party shall be deemed to be the Indemnitee if it is entitled to recover less than 50% of the Contested Amount; otherwise it shall be the Stockholders. (g) The Escrow Agent shall continue to hold in release Escrow Shares from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount (up within 5 business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Stockholders' Agents setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount. The . (h) Notwithstanding anything to the contrary contained in this Agreement, the parties hereto agree that as soon as practicable after the Escrow Agent shall thereupon receive (i) written instructions from Parent that Parent or the Company is repurchasing any Escrow Shares from any Stockholder in accordance with applicable repurchase rights available to Parent or the Company under a restricted stock purchase agreement with a Stockholder or otherwise and (ii) a revised version of EXHIBIT B setting new percentage interests in the Escrow Fund (or a statement that EXHIBIT B will not be changed), the Escrow Agent shall release such Escrow Shares from the Escrow Account to Parent. (i) If Parent is required under the terms of the Registration Rights Agreement being entered into in connection with the Merger to cause the Escrow Agent to release Escrow Shares to the extent Escrow Shares are then held in Stockholders, Parent shall deliver written instructions to the Escrow Account) in accordance with Agent to so release such agreement or Escrow Shares. Promptly following the Escrow Agent's receipt of such written instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the such Escrow Shares being held to the Stockholders in connection accordance with the Contested Amount terms of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release instructions. (j) Any Escrow Shares released from the Escrow Account to an Indemnitee (other than pursuant to Section 3(h)) shall be deemed to reduce the extent Escrow Shares are then held pro rata with respect to each Stockholder in accordance with each Stockholder's percentage interest in the Escrow Account) Fund as set forth in accordance with such final order or final resolution or settlement.EXHIBIT B.

Appears in 1 contract

Samples: Agreement and Plan of Merger and Reorganization (Axys Pharmecueticals Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) a. The Escrow Agent shall hold and safeguard the Escrow Shares, shall treat such fund as a trust fund in accordance with the terms of this Agreement and not as property of the Buyer, and shall hold and dispose of the Escrow Shares only in accordance with the terms hereof. The Escrow Agent shall have no responsibility for the genuiness, validity, market value, title or sufficiency for any intended purpose of any shares held by it in escrow under this Agreement. b. If an Indemnified Party Person has incurred or suffered Damages for which it is entitled to indemnification under Article V VI of the Merger Agreement, the Indemnified Party Person shall, on or before the date of prior to the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Securityholder Agents and the Escrow Agent. Each Claim Notice shall state specify in reasonable detail the individual Damages included in the amount of claimed Damages so stated (the "Claimed Amount") ), the date each such item was paid or properly accrued and the basis for such claimnature of the misrepresentation or breach to which it was related. The date which is eighteen (18) months after the Date For purposes of Closing. (b) Within 20 days after delivery of a Claim Noticethis Agreement, the Indemnification Representatives "Termination Date" shall provide to mean the Indemnified Partydate on which all of the representations and warranties, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, exception of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V representations and warranties contained in Section 2.9 and Section 2.21 of the Merger Agreement. If no Response Notice is delivered by , covenants and agreements of the Indemnification Representatives within such 20-day periodCompany expire, the Indemnification Representatives which shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of one year after the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitratorClosing Date; provided, however, that (i) failing such agreement within 45 days of delivery those representations and warranties of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders Company and the Indemnified Party Buyer that relate to contingencies that are subject to resolution through the audit process shall pay only survive the fees execution and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms delivery of the Merger Agreement and this Agreement. The final decision the Closing Date until the earlier of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery the public issuance of the first independent audit report on the Buyer following the Closing Date which covers a period subsequent to the Closing Date, a copy of a settlement agreement executed by which report the Indemnified Party and the Indemnification Representatives setting forth instructions Buyer shall provide to the Escrow Agent as to the release a form of Escrow Sharesnotice of termination of this Agreement, if any, that shall be made with respect to the Contested Amount or and (ii) delivery of a copy the first anniversary of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementClosing Date.

Appears in 1 contract

Samples: Escrow Agreement (Intrinsix Corp)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified If, as of the Release Date, the Escrow Agent has not received written notice of any Indemnification Claims, then the Escrow Account, less the amount of all Claimed Amounts that have not been paid or otherwise resolved as of the Release Date (the “Retained Amount”) shall promptly (and in any event no later than 10 Business Days thereafter) be released to the Stockholders in whose names they have been issued as detailed in a written notice from Party has B detailing the delivery instructions. Upon resolution of all Claim Notices made prior to the Release Date, that portion of the Retained Amount that is not paid to Party A in satisfaction of such Claim Notices shall immediately be disbursed to the Stockholders as set forth in Party B’s delivery instructions delivered as of the Release Date. (b) Subject to the terms and conditions set forth in Section 9.04 of the Merger Agreement, if, at any time prior to 5:00 p.m. Central Time on September 20, 2008, Party A desires to make a claim against the Escrow Account with respect to any Indemnification Claim, then Party A shall, on or prior 5:00 p.m. Central Time on September 20, 2008, deliver a written claim notice (a “Claim Notice”) to Party B and to the Escrow Agent. Such Claim Notice shall contain (i) a description and a good faith estimate of the amount of any Damages incurred or suffered Damages for which it reasonably expected to be incurred by Party A (the “Claimed Amount”); (ii) a statement that Party A is entitled to indemnification under Article V IX of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis Agreement for such claimDamages; and (iii) a demand for payment. The date which is eighteen (18number of Escrowed Shares, if any, to be released shall be determined in accordance with Section7(d) months after the Date of Closingbelow. (bc) Within 20 days Prior to 5:00 p.m. Central Time on the 30th day after delivery receipt by Escrow Agent of a Claim Notice, the Indemnification Representatives shall provide Party B may deliver to the Indemnified Party, with a copy Party A and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallParty B may: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Party A; (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party A; or (iii) contest indicate that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to Party A. Any part of the Indemnified PartyClaimed Amount that is not to be released to Party A shall be the “Contested Amount.” (A) If Party B does not deliver a Response Notice within such 30-day period, then Party B shall be deemed to have indicated that the entire Claimed Amount may be released from Escrow Account to Party A. (B) If Party B delivers a Response Notice agreeing that the full Claimed Amount may be released from the Escrow Account to Party A, the Escrow Agent shall, shall promptly following the earlier of the required delivery date for the Response Notice or the delivery receipt of the Response Notice, transfer, deliver and assign to the Indemnified Party A such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Amount. (dC) If the Indemnification Representatives in the Party B delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParty A, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transferdeliver to Party A such Agreed Amount. (D) If Party B delivers a Response Notice indicating that there is a Contested Amount, deliver Party B and assign Party A shall attempt in good faith to resolve the dispute related to the Contested Amount. If Party A and Party B shall resolve such dispute, such resolution shall be binding on Party B and Party A and any other Parent Indemnified Person and Securityholder Indemnitee, as applicable, and a settlement agreement shall be signed by Party such number of A and Party B and sent to the Escrow Agent, who shall, upon receipt thereof, if applicable, release Escrowed Shares held in and Escrowed Cash from the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the specific instructions provided in such agreement, subject to Section 7(e). (E) If Party B and Party A are unable to resolve the dispute relating to any Contested Amount within 45 days after the delivery of the Claim Notice, the settlement of such Contested Amount shall take place by a binding arbitration proceeding which shall take place in Austin, Texas, unless an alternative location is otherwise mutually agreed to by Party A and Party B, and be conducted by an arbitrator who has not been affiliated with or engaged by either party for a period of five years preceding the commencement of the arbitration proceeding, and the Escrow Agent shall continue to hold the Contested Amount until Escrow Agent receives either: (i) a written notice signed by Party A and Party B, providing specific written instructions regarding the delivery of the Contested Amount, if any, to be released from the Escrow Account; or (ii) a final arbitration decision, in accordance with the following procedures, providing specific written instructions regarding the delivery of any or all of such Contested Amount. The Contested Amount shall be settled in accordance with the Expedited Procedures of the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules")Association. The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' 's decision shall relate solely to whether the Indemnified Party A is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Account pursuant to the applicable terms of the Merger Agreement and this Escrow Agreement. The final decision of the majority of the arbitrators arbitrator shall be furnished to the Indemnification RepresentativesParty A, the Indemnified Party B and the Escrow Agent in writing and shall constitute a the conclusive determination of the issue in question, be binding upon the Indemnification RepresentativesParty A, the Indemnifying Shareholders, the Indemnified Party Stockholders and the Escrow Agent. The prevailing party in any arbitration (which determination shall be made by the arbitrator) shall be entitled to an award of attorneys’ fees and costs to be paid by the losing party (which determination shall be made by the arbitrator), and the losing party shall also be liable for all costs of arbitration, including, but not limited to, the compensation to be contested by paid to the arbitrator in any proceeding and the transcript and other expenses of themsuch proceeding. (d) Any amounts distributed to Party A from the Escrow Account shall be satisfied pro rata from each Stockholder’s Escrowed Deposit in accordance with each Stockholder’s Percentage Interest set forth on Annex I to this Escrow Agreement. Such decision Any such Claimed Amount, Agreed Amount, portion of the Contested Amount which may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' awarded to Party A or other award. After delivery of a Response Notice that the Claimed Amount is contested , as applicable, to be released to Party A by the Indemnification Representatives, the Escrow Agent shall continue to hold in be done on the Escrow Account a basis of 60% of any such amount from Escrowed Cash and 40% of any such amount from Escrowed Shares (such number of Escrow Escrowed Shares having a Fair Market Value sufficient to cover the Contested Amount be determined in accordance with Section 7(e)). (up to the e) The number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Escrowed Shares, if any, that shall to be made with respect to released in payment and settlement of any Claimed Amount, Agreed Amount or all or any portion of the Contested Amount which may be awarded to Party A pursuant to Section 7(d) above shall be determined by dividing 40% of such Claimed Amount, Agreed Amount or (ii) delivery award, as applicable, by the average closing sale price per share of a copy Buyer Common Stock as reported on the Nasdaq Global Select Market for the 30 consecutive trading days ending on the date that is one trading day immediately preceding the closing date of the final award of the majority of the arbitrators setting forth instructions Merger Agreement (as adjusted as appropriate to the Escrow Agent as to the release of Escrow Sharesreflect any stock splits, if anystock dividends, that shall be made with respect to the Contested Amountcombinations, reorganizations, reclassifications or similar events). The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall will not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation be responsible for determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementshare price.

Appears in 1 contract

Samples: Escrow Agreement (Perficient Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: 8.1. If, as of the Release Date, the Escrow Agent has not received notice of any Indemnification Claims, then (ai) If an Indemnified Party has incurred the Escrow Fund shall promptly (and in any event no later than 10 business days thereafter) be released to the Company Stockholders in accordance with each Company Stockholder’s Percentage Interest set forth on Exhibit B to this Agreement, or suffered Damages for which such other proportions as may be specified in writing by the Stockholder Representative (it being expressly acknowledged and agreed that Parent and the Escrow Agent are entitled to rely on such specified proportions) and (ii) the Escrowed Shares and the stock powers then held by the Escrow Agent shall promptly (and in any event no later than 10 business days thereafter) be released to the Company Stockholders. 8.2. If, at any time on or prior to the Release Date, the Parent desires to make a claim against the Escrow Account with respect to Indemnification Claims, then the Parent shall, on or prior to the Release Date, deliver a written claim notice (a “Claim Notice”) to the Stockholder Representative and to the Escrow Agent. Such Claim Notice shall (i) state that Parent believes that it is entitled to indemnification under all or a portion of the Escrow Account and certify that all requirements set forth in Article V XI of the Merger Agreement, the Indemnified Party shall, on or before the date Agreement with respect to such indemnification have been satisfied; (ii) contain a brief description of the expiration circumstances supporting such belief; and (iii) indicate the claimed amount of Damages necessary to satisfy such Indemnification Claim (the representation, warranty, covenant or agreement “Claimed Amount”). The amount to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and be released from the Escrow Agent. Each Claim Notice Account shall state the amount of claimed Damages (the "Claimed Amount") be determined in accordance with Sections 8.4 and the basis for such claim. The date which is eighteen (18) months after the Date of Closing8.5 below. (b) 8.3. Within 20 days after delivery receipt by the Stockholder Representative of a Claim Notice, the Indemnification Representatives Stockholder Representative shall provide deliver to the Indemnified Party, with a copy Parent and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholder Representative may: (i) agree that an amount held in the Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) Account equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Parent; (ii) agree that an amount held in the Escrow Shares having a Fair Market Value Account equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Parent; or (iii) contest indicate that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent. Any part of the Claimed Amount that is not to be released to the Parent shall be the “Contested Amount.” 8.3.1. If the Stockholder Representative does not deliver a Response Notice within such 20 day period, then the Company Stockholders shall be deemed to have indicated that the entire Claimed Amount may be released from the Escrow Account to the Parent. 8.3.2. If the Stockholder Representative delivers a Response Notice agreeing that an amount held in the Escrow Account equal to the full Claimed Amount may be released from the Escrow Account to the Parent, the Escrow Agent shall, shall promptly following the earlier of the required delivery date for the Response Notice or the delivery receipt of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Parent an amount from the Escrow Shares Account equal to the Claimed Amount. 8.3.3. If the Stockholder Representative delivers a Response Notice agreeing that an amount held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party Parent such number of Escrow Shares held in amount from the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or Amount. 8.3.4. If the Stockholder Representative delivers a Response Notice indicating that there is a Contested Amount, the Stockholder Representative and the Parent shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Parent and the Stockholder Representative shall resolve such lesser number dispute, such resolution shall be binding on all of Escrow Shares as is then held in the Company Stockholders and the Parent and a settlement agreement shall be signed by the Parent and the Stockholder Representative and sent to the Escrow Account). A determination with respect to Agent, who shall, upon receipt thereof, if applicable, release such amount from the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators Account in accordance with the specific instructions provided in such agreement. 8.3.5. If the Stockholder Representative and the Parent are unable to resolve the dispute relating to any Contested Amount within 45 days after the delivery of the Claim Notice, the settlement of such Contested Amount shall take place by a binding arbitration proceeding which shall take place in Phoenix, Arizona, unless an alternative location is otherwise mutually agreed to by the parties, and be conducted by an arbitrator who has not been affiliated with or engaged by either party for a period of five years preceding the commencement of the arbitration proceeding, and the Escrow Agent shall continue to hold the Contested Amount until Escrow Agent receives either: (i) a written notice signed by Parent and the Stockholder Representative, providing specific instructions regarding the delivery of the Contested Amount, if any, to be released from the Escrow Account; or (ii) a final arbitration decision, in accordance with the following procedures, providing specific instructions regarding the delivery of any or all of such Contested Amount. The Contested Amount shall be settled in accordance with the Expedited Procedures of the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules")Association. The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' 's decision shall relate solely to whether the Indemnified Party Parent is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Account pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators arbitrator shall be furnished to the Indemnification RepresentativesParent, the Indemnified Party Stockholder Representative and the Escrow Agent in writing and shall constitute a the conclusive determination of the issue in question, be binding upon the Indemnification RepresentativesParent, Surviving Entity, the Indemnifying Shareholders, the Indemnified Party Company Stockholders and the Escrow Agent, and shall not be contested by . The prevailing party in any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount arbitration (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that which determination shall be made with respect by the arbitrator) shall be entitled to the Contested Amount or (ii) delivery of a copy of the final an award of attorneys’ fees and costs to be paid by the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that losing party (which determination shall be made with respect by the arbitrator), and the losing party shall also be liable for all costs of arbitration, including, but not limited to, the compensation to be paid to the Contested Amountarbitrator in any proceeding and the transcript and other expenses of such proceeding. 8.4. The Escrow Agent shall thereupon release Escrow Shares For purposes of this Agreement, any amounts distributed to Parent from the Escrow Account (to shall be satisfied equally from the extent Escrow Shares are then held in Escrowed Cash and the Escrow Account) in accordance with such agreement or instructionsEscrowed Shares; provided, however, if that the claim related to a third party claim the amount of which is contested and the subject of litigation, Stockholder Representative may direct the Escrow Agent shall not release to make the Escrow Shares being held in connection with distribution to the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in Parent entirely from the underlying litigation determining the amount of such claimEscrowed Cash, whereupon the Escrow Agent shall release Escrow Shares and further provided, however, that (i) any amounts distributed to Parent from the Escrow Account related to Indemnification Claims arising from the breach of representations, warranties and covenants contained in Section 4.06, Section 4.08 and Section 4.11 of the Merger Agreement and (ii) any Indemnification Claims arising from Section 2.07(c) and Section 11.01(a)(ii) of the Merger Agreement shall be satisfied (A) first, from the Escrowed Cash and (B) second, from the Escrowed Shares (to the extent Escrow the Escrowed Cash is insufficient to satisfy such Indemnification Claims). 8.5. The number of Escrowed Shares are then held to be released in payment and settlement of any Claimed Amount, Agreed Amount or all or any portion of the Escrow AccountContested Amount which may be awarded to Parent pursuant to Section 8.3.4 above shall be determined by dividing such Claimed Amount, Agreed Amount or award, as applicable, by the average closing sales price of one share of Parent Common Stock as reported on the NASDAQ National Market for the thirty (30) in accordance with consecutive trading days ending on the date that is one (1) trading day immediately preceding the release of such final order Escrowed Shares as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or final resolution or settlementsimilar events.

Appears in 1 contract

Samples: Escrow Agreement (Perficient Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) 2.1 If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V of the Merger Exchange Agreement or this Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such Indemnitee shall deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholders and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes in good faith and after investigation that there is or has been a breach of a representation, warranty or covenant contained in the Exchange Agreement or this Agreement or that such Indemnitee is entitled to indemnification, compensation or reimbursement under the Exchange Agreement and contain a brief description of the circumstances supporting such Indemnitee’s belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a nonbinding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount"”). 2.2 Within 30 Business Days (“Business Day” shall mean any day other than a day on which the Nasdaq National Market is closed) after receipt by the Stockholders and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery Escrow Agent of a Claim Notice, the Indemnification Representatives shall provide Stockholders may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholders: (i) agree that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value (as computed pursuant to defined below in Section 63) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, (ii) agree that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicate that any of the no Escrow Shares Stock may be released from the Escrow Account to the Indemnified PartyIndemnitee. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion Any part of the Claimed Amount only based upon that is not to be released to the Indemnitee shall be referred to as the “Contested Amount.” If a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is not delivered by to the Indemnification Representatives Escrow Agent within such 2030 Business-day Day period, then the Indemnification Representatives Stockholders shall be deemed to have agreed that a whole number of Escrow Shares Stock having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released to the Indemnified Party Indemnitee from the Escrow Account. (c) . If the Indemnification Representatives in the Stockholders deliver a Response Notice agree (or are deemed to have agreed) agreeing that a whole number of shares of Escrow Shares Stock having a Fair Market Stipulated Value equal to all of the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if the Stockholders do not deliver a Response Notice in accordance with Section 2.2 above, the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if the Stockholders have not delivered a Response Notice, promptly following the earlier expiration of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer30 Business-Day period referred to in Section 2.2 above), deliver and assign to the Indemnified Party such Indemnitee such number of shares of Escrow Shares held in the Escrow Account which have Stock having a Fair Market Stipulated Value equal to the full Claimed Amount (or such lesser Amount. 2.3 If the Stockholders deliver a Response Notice agreeing that a whole number of shares of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares Stock having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party such Indemnitee such number of shares of Escrow Shares held in the Escrow Account which have Stock having a Fair Market Stipulated Value equal to the Agreed Amount. 2.4 If the Stockholders deliver a Response Notice indicating that there is a Contested Amount or that no Escrow Stock may be released from the Escrow Account to the Indemnitee, the Stockholders and the Indemnitee shall attempt, as soon as practicable, in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Stockholders shall resolve such dispute, a settlement agreement containing the terms and conditions of such resolution shall be signed by the Indemnitee and the Stockholders and delivered to the Escrow Agent (or the “Settlement Agreement”). The Escrow Agent shall release from the Escrow Account such lesser number of Escrow Shares Stock as is then held set forth in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount")Settlement Agreement, the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of 5 Business Days after the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery it of a copy of a settlement agreement the Settlement Agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Stockholders setting forth instructions to the Escrow Agent as to the release number of the Escrow SharesStock, if any, that shall to be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to released from the Escrow Agent as to the release of Escrow SharesAccount, if any, that shall be made with respect to the Contested Amount. The If the Indemnitee and the Stockholders have not resolved such dispute prior to the Escrow Account Release Date, the Escrow Agent shall thereupon release retain a number of shares of Escrow Shares Stock having a Stipulated Value equal to the Contested Amount (according to written instructions it will receive from the Purchaser) (the “Retained Stock”) in the Escrow Account until the earlier of: (i) such time as the Escrow Agent receives a Settlement Agreement, in which case the Escrow Agent shall use the Retained Stock as provided for in such Settlement Agreement; or (ii) such time as the Escrow Agent receives a judicial order or decree respecting the Retained Stock, in which case the Escrow Agent shall use the Retained Stock as provided for in such order or decree. Following the Escrow Account Release Date, and until the Retained Stock is released in accordance with this Agreement, this Agreement shall continue in full force and effect with respect to the Retained Stock. 2.5 Any Escrow Stock released from the Escrow Account (to an Indemnitee shall be deemed to reduce the Escrow Stock pro rata with respect to each Stockholder in accordance with each Stockholder’s percentage interest in the Escrow Fund as set forth in Exhibit A. 2.6 The timing of the giving of a Claim Notice shall be within the exclusive prerogative of the Indemnitee. No delay on the part of the Indemnitee in giving a Claim Notice Pursuant to Section 2 shall relieve the Stockholders of any liability or obligation under this Agreement or the Exchange Agreement, except to the extent Escrow Shares are then held in that such delay materially prejudices the Escrow Account) in accordance with such agreement or instructionsStockholders; provided, however, if the claim related that to be effective, a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order Claim Notice must be filed on or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from prior to the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementRelease Date.

Appears in 1 contract

Samples: Share Exchange Agreement (Vyyo Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) 4.1 If an Indemnified Party Person has incurred or suffered Damages Damages, prior to the one-year anniversary of the date of this Agreement (the "Termination Date"), for which it is entitled to indemnification under Article V of the Merger Agreement, the Indemnified Party Person shall, on or before prior to the date of the expiration of the representation, warranty, covenant or agreement to which such claim relatesTermination Date, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount amount, determined in good faith, of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) 4.2 Within 20 days after delivery of a Claim Notice, the Indemnification Representatives shall provide to the Indemnified PartyPerson, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Person or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified PartyPerson. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Person is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party Person from the Escrow Account. (c) 4.3 If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreedagreed pursuant to Section 4(b) of this Agreement by not responding within such 20 day period) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall, promptly within 10 days following the earlier of (i) the required delivery date for the Response Notice or (ii) the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) 4.4 If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall promptly within 10 days following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) 4.5 If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaBoston, GeorgiaMassachusetts. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party Person shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party Person shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party Person fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders Stockholders and the Indemnified Party Person shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party Person shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party Person and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying ShareholdersStockholders, the Indemnified Party Person and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Person and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Merger Agreement (Flexiinternational Software Inc/Ct)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred or suffered Damages for which it is entitled to indemnification under Article V If, as of the Merger AgreementRelease Date, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give Escrow Agent has not received written notice of such claim any Indemnification Claims, then the Escrowed Shares shall promptly (a "Claim Notice"and in any event no later than 5 business days thereafter) be released to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of ClosingSeller. (b) Subject to the terms and conditions set forth in Section 9.04 of the Asset Purchase Agreement, if, at any time on or prior to the Release Date, Parent desires to make a claim against the Escrowed Shares with respect to any Indemnification Claim, then Parent shall, on or prior to the Release Date, deliver a written claim notice (a “Claim Notice”) to Seller and to the Escrow Agent. Such Claim Notice shall (i) state that Parent believes in good faith that it is entitled to all or any portion of the Escrowed Shares and certify that all requirements set forth in Article IX of the Asset Purchase Agreement with respect to such indemnification have been satisfied; (ii) contain a reasonably detailed description of the circumstances supporting such belief; and (iii) indicate the good faith claimed amount of Damages necessary to satisfy such Indemnification Claim (the “Claimed Amount”) and what portion of the Escrowed Shares are expected in good faith to be necessary to satisfy such Indemnification Claim. The number of Escrowed Shares, if any, to be released shall be determined in accordance with Section 8(d) below. (c) Within 20 30 days after delivery receipt by Seller of a Claim Notice, the Indemnification Representatives shall provide Seller may deliver to the Indemnified Party, with a copy Parent and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallSeller may: (i) agree that Escrow a whole number of Escrowed Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Parent; (ii) agree that Escrow Escrowed Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Parent; or (iii) contest indicate that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to Parent. Any part of the Indemnified PartyClaimed Amount that is not to be released to Parent shall be the “Contested Amount.” (A) If Seller does not deliver a Response Notice within such 30-day period, then Seller shall be deemed to have indicated that the entire Claimed Amount may be released from Escrow Account to Parent. (B) If Seller delivers a Response Notice agreeing that Escrowed Shares equal to the full Claimed Amount may be released from the Escrow Account to Parent, the Escrow Agent shall, shall promptly following the earlier of the required delivery date for the Response Notice or the delivery receipt of the Response Notice, transfer, deliver and assign to the Indemnified Party Parent such number of Escrow Escrowed Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Amount. (dC) If the Indemnification Representatives in the Seller delivers a Response Notice agree agreeing that Escrow Escrowed Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyParent, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party Parent such number of Escrow Escrowed Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount. (D) If Seller delivers a Response Notice indicating that there is a Contested Amount, Seller and Parent shall attempt in good faith to resolve the dispute related to the Contested Amount. If Parent and Seller shall resolve such dispute, such resolution shall be binding on Seller and Parent and any other Seller Indemnitee and Purchaser Indemnitee, as applicable, and a settlement agreement shall be signed by Parent and Seller and sent to the Escrow Agent, who shall, upon receipt thereof, if applicable, release Escrowed Shares from the Escrow Account in accordance with the specific instructions provided in such agreement. (E) If Seller and Parent are unable to resolve the dispute relating to any Contested Amount within 45 days after the delivery of the Claim Notice, the settlement of such Contested Amount shall take place by arbitration, in accordance with the below procedures, and then Escrow Agent shall continue to hold the Contested Amount until Escrow Agent receives either: (or such lesser number i) a written notice signed by Parent and Seller, providing specific instructions regarding the delivery of Escrow Shares as is then held in the Contested Amount, if any, to be released from the Escrow Account). A determination with respect to ; or (ii) a final arbitration decision providing specific instructions regarding the remainder delivery of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release any or all of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "such Contested Amount"), the matter . The Contested Amount shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled conducted by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of to be mutually agreed to by the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitratorparties; provided, however, that (i) failing such agreement if the parties cannot mutually agree on an arbitrator within 45 15 days of delivery any such written notice, then the arbitration shall be conducted by a panel of three arbitrators, one selected jointly by Parent and Buyer, the second selected by Seller and the third to be mutually agreed upon by the arbitrator selected by Parent and Buyer and the arbitrator selected by Seller. The decision of the Indemnification Representatives' Response Noticearbitrator(s), the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitratorwhich, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision except as set forth below, shall relate solely to whether the Indemnified Party Parent is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Fund pursuant to the applicable terms of the Merger Asset Purchase Agreement and this Agreement. The final , shall be written and (a) shall be supported by written findings of fact and conclusions of law which shall set forth the basis for the decision of the majority of arbitrator(s) and (b) shall provide specific instructions regarding the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number any or all of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent costs of any such arbitration proceeding shall thereupon release Escrow Shares from be shared equally by the Escrow Account (parties unless otherwise determined by the arbitrator(s). The arbitrator(s) will also determine if the prevailing party is entitled to any award of attorneys’ fees and costs, which award, if any, will be paid by the extent Escrow Shares are then non-prevailing party. The decision of the arbitrator(s) shall be binding and conclusive upon the parties to this Agreement. Any such arbitration shall be held in Xxxxxx County, Texas under the Escrow Accountexpedited procedures of the commercial arbitration rules then in effect of the American Arbitration Association. (d) The number of Escrowed Shares to be released in accordance with such agreement payment and settlement of any Claimed Amount, Agreed Amount or instructions; provided, however, if the claim related to a third party claim the amount all or any portion of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount which may be awarded to Parent pursuant to Section 8(c)(E) above shall be determined by dividing such Claimed Amount, Agreed Amount or award, as applicable, by the average closing sales price of one share of Parent Common Stock as reported on the Nasdaq Global Market for the thirty (30) consecutive trading days ending on the date that is one (1) trading day immediately preceding the release of such third party claim until a final order shares (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementsimilar events).

Appears in 1 contract

Samples: Escrow Agreement (Perficient Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party has incurred or suffered Damages for which it is entitled to indemnification under Article V of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Company Shareholder and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Within 20 days after delivery of a Claim Notice, the Indemnification Representatives Company Shareholder shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Company Shareholder shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives Company Shareholder may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives Company Shareholder within such 20-day period, the Indemnification Representatives Company Shareholder shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives Company Shareholder in the Response Notice agree agrees (or are is deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives Company Shareholder in the Response Notice agree agrees that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives Company Shareholder in the Response Notice contest contests the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Company Shareholder and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Company Shareholder's Response Notice contesting the Claimed Amount. The Indemnification Representatives Company Shareholder and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification RepresentativesCompany Shareholder' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives Company Shareholder or the Indemnified Party fail fails to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders Company Shareholder and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives Company Shareholder and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesCompany Shareholder, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying ShareholdersCompany Shareholder, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification RepresentativesCompany Shareholder, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination DateDate (as hereinafter defined), until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives Company Shareholder setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount Amount, or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Pledge, Security and Escrow Agreement (Tekgraf Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Reorganization Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the date of the expiration of the representationTermination Date, warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Shareholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty, covenant or other provision contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under the Reorganization Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 business days after delivery of a Claim Notice, the Indemnification Representatives shall provide Shareholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallShareholders' Agent: (i) agree agrees that Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant to Section 6defined below) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Indemnitee; or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not delivered by the Shareholders' Agent to the Indemnitee and the Escrow Agent within such 20 business-day period, the Shareholders' Agent shall be deemed to have agreed that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Shareholders' Agent in the Response Notice agrees that Escrow Shares having a Stipulated Value equal to the full Claimed Amount may be released from the Escrow Account to the Indemnitee, or if a Response Notice is not delivered in accordance with Section 3(b), the Escrow Agent shallshall promptly following the receipt of the Response Notice (or, if a Response Notice is not duly delivered, promptly following the earlier expiration of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer20 business-day period referred to in Section 3(b)), deliver and assign to the Indemnified Party such number of Indemnitee such Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account)Shares. (d) If the Indemnification Representatives Shareholders' Agent in the Response Notice agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly following the delivery receipt of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Indemnitee Escrow Shares held in the Escrow Account which have having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowAmount. (e) If any Response Notice indicates that there is a Contested Amount, the Indemnification Representatives Shareholders' Agent and the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnitee and the Shareholders' Agent shall resolve such dispute, a settlement agreement shall be signed by the Indemnitee and the Shareholders' Agent and sent to the Escrow Agent, who shall upon receipt thereof, release Escrow Shares from the Escrow Account in accordance with such agreement. (f) If the Shareholders' Agent and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 business days after the delivery of the Claim Notice, then the claim described in the Response Claim Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators the County of Santa Xxxxx in the State of California in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Arbitration will be conducted by three arbitrators; one selected by Parent, one selected by the Shareholders' Agent and the Indemnified Party shall each designate one arbitrator within 15 days of third selected by the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amountfirst two arbitrators. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually parties agree to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail use all reasonable efforts to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter arbitration hearing to be arbitrated pursuant hereto conducted within 60 calendar days after the appointment of the last arbitratorof the three arbitrators and to use all reasonable efforts to cause the arbitrators' decision to be furnished within 95 calendar days after the appointment of the last of the three arbitrators. The arbitrators' decision shall relate solely to whether the Indemnified Party Indemnitee is entitled to receive recover the Contested Amount (or a portion thereof) pursuant ), and the portion of such Contested Amount the Indemnitee is entitled to recover and to which party is the applicable terms of prevailing party in the Merger Agreement and this Agreementarbitration. The final decision of the majority of the arbitrators shall be furnished to the Indemnification RepresentativesShareholders' Agent, the Indemnified Party Indemnitee and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesShareholders' Agent, the Indemnifying Shareholders, the Indemnified Party Indemnitee and the Escrow Agent, Agent and shall not be contested by any of them. Such decision may be used The non-prevailing party (as determined by the arbitrator) in a court any arbitration shall pay the reasonable expenses (including attorneys' fees) of law only for the purpose of seeking enforcement of prevailing party and the fees and expenses associated with the arbitration (including the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the fees and expenses). (g) The Escrow Agent shall continue to hold in release Escrow Shares from the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the in connection with any Contested Amount within five (up 5) business days after the delivery to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until it of: (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Indemnitee and the Indemnification Representatives Shareholders' Agent setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount Amount; or (ii) delivery of a copy of the final award of the majority of the arbitrators referred to and as provided in Section 3(f) setting forth instructions to the Escrow Agent as to the release number of Escrow Shares, if any, that shall to be made released from the Escrow Account, with respect to the such Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Merger Agreement (Puma Technology Inc)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9.2 or Section 10.3 of the Merger Reorganization Agreement, the Indemnified Party shallsuch Indemnitee may, on or before prior to the date first anniversary of the expiration of Closing Date (the representation"Termination Date"), warranty, covenant or agreement to which such deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholders' Agent and to the Escrow Agent. Each Claim Notice shall state that such Indemnitee believes that there is or has been a breach of a representation, warranty or covenant contained in the Reorganization Agreement or that such Indemnitee is otherwise entitled to indemnification, compensation or reimbursement under Section 9.2 or Section 10.3 of the Reorganization Agreement and contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a breach or that such Indemnitee is so entitled to indemnification, compensation or reimbursement and shall, to the extent possible, contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 30 business days after delivery receipt by the Stockholders' Agent of a Claim Notice, the Indemnification Representatives shall provide Stockholders' Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallStockholders' Agent: (i) agree agrees that a whole number of Escrow Shares having a Fair Market Value "Stipulated Value" (as computed pursuant defined below) equal to the full Claimed Amount, and/or, subject to Section 63(j) and the availability in the Escrow Account, cash equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Stipulated Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") and/or, subject to Section 3(j) and the availability in the Escrow Account, cash equal to the Agreed Amount may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, Indemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent shallwithin such 30 business-day period, promptly following then the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign Stockholders' Agent shall be deemed to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree agreed that Escrow Shares having a Fair Market Stipulated Value equal to partthe full Claimed Amount may be released to the Indemnitee from the Escrow Account. (c) If the Stockholders' Agent delivers a Response Notice agreeing that Escrow Shares having a Stipulated Value and/or cash value, but not all, of equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee, or if the Stockholders' Agent does not deliver a Response Notice in accordance with Section 3(b), the Escrow Agent shall promptly within three (3) business days following the delivery receipt of the Response Notice transfer(or, if the Escrow Agent has not received a Response Notice, within three (3) business days following the expiration of the 30 business-day period referred to in Section 3(b)), deliver and assign to such Indemnitee such Escrow Shares and/or cash equal to the Indemnified Party such number of Claimed Amount, provided that the Escrow Agent shall not be liable for the Claimed Amount so released hereunder. (d) If the Stockholders' Agent delivers a Response Notice agreeing that Escrow Shares held in the Escrow Account which have having a Fair Market Stipulated Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Accountand/or, subject to Section 3(j). A determination with respect , cash equal to the remainder of the Claimed Agreed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares released from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.the

Appears in 1 contract

Samples: Merger Agreement (Ask Jeeves Inc)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If an Indemnified Party the Buyer has incurred or suffered Damages for which it believes it is entitled to indemnification under Article V Section 6.6 of the Merger Agreement, the Indemnified Party Buyer shall, on or before prior to the date of the expiration of the representation, warranty, covenant or agreement Termination Date (as defined in Section 9) with respect to which such claim relatesa particular claim, give written notice of such claim (a "Claim Notice") to McLaren, the Indemnification Representatives Shareholders' Representative and the Escrow Agent. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") ), and the basis for such claim. The date which is eighteen (18) months after the Date of Closing. (b) Claims for indemnification (other than those by the Escrow Agent) involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Section 6.6 of the Merger Agreement and the provisions of this Section 5. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 20 30 calendar days after delivery of a Claim NoticeNotice is sent, McLaren and the Indemnification Representatives Shareholders' Representative shall jointly provide to the Indemnified PartyBuyer, with a copy to the Escrow Agent, a written response (the "Response NoticeResponse") in which McLaren and the Indemnification Representatives Shareholders' Representative shall: (i) agree that an amount of the Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) Fund equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, (ii) agree that an amount of the Escrow Shares having a Fair Market Value Fund equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Buyer or (iii) contest that any portion of the Escrow Shares Fund may be released from the Escrow Account to the Indemnified PartyBuyer. The Indemnification Representatives McLaren and the Shareholders' Representative, acting jointly, may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account.Fund in an amount equal to (c) If McLaren and the Indemnification Representatives Shareholders' Representative in the Response Notice agree (or are deemed to have agreed) that all or a portion of the Escrow Shares having a Fair Market Value Fund in an amount equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall, promptly promptly, but no sooner than two days, following the earlier of the required delivery date for the Response Notice or the delivery of the Response NoticeResponse, transfer, deliver and assign disburse to the Indemnified Party such number Buyer an amount of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Claimed Amount (or such lesser number amount of the Escrow Shares Fund as is then held in the Escrow Account). (d) If McLaren and the Indemnification Representatives Shareholders' Representative in the Response Notice agree that all or a portion of the Escrow Shares having a Fair Market Value Fund in an amount equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyBuyer, the Escrow Agent shall promptly promptly, but no sooner than two days, following the delivery of the Response Notice transferResponse, deliver and assign disburse to the Indemnified Party such number Buyer an amount of Escrow Shares held in the Escrow Account which have a Fair Market Value Fund equal to the Agreed Amount (or such lesser number amount of the Escrow Shares Fund as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If McLaren and the Indemnification Representatives Shareholders' Representative in the Response Notice contest the release of any portion of the Escrow Shares having a Fair Market Value Fund in an amount equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in AtlantaBoston, GeorgiaMassachusetts. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives Discovery relating to such claims shall be conducted pursuant to the rules of the applicable Federal rules relating to discovery. McLaren and the Indemnified Party Shareholders' Representative, on the one hand, and the Buyer, on the other hand, shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives McLaren, the Shareholders' Representative and the Indemnified Party Buyer shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; providedPROVIDED, howeverHOWEVER, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response NoticeResponse, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either McLaren and the Indemnification Representatives Shareholders' Representative, on the one hand, or the Indemnified Party fail Buyer, on the other hand, fails to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders McLaren and the Indemnified Party Company Shareholders, with respect to the arbitrator designated by McLaren and the Shareholders' Representative, and the Buyer, with respect to the arbitrator designated by the Buyer, shall pay the fees and expenses of their respectively designated respective arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives McLaren, the Shareholders' Representative and the Indemnified Party Buyer shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party Buyer is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The costs and expenses incurred in connection therewith shall be payable as determined by the arbitrator. The final decision of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, shall be furnished to the Indemnification RepresentativesBuyer, McLaren, the Indemnified Party Shareholders' Representative and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification RepresentativesCompany Shareholders, McLaren, the Indemnifying Shareholders' Representative, the Indemnified Party Buyer and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. . (f) After delivery of a Response Notice that the Claimed Amount is contested by McLaren and the Indemnification RepresentativesShareholders' Representative, the Escrow Agent shall continue to hold in the Escrow Account a number an amount of the Escrow Shares having a Fair Market Value Fund sufficient to cover the Contested Amount (up to the number amount of the Escrow Shares Fund then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, ) until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Buyer, McLaren and the Indemnification Representatives Shareholders' Representative setting forth instructions to the Escrow Agent as to the release of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, setting forth instructions to the Escrow Agent as to the release of the Escrow SharesFund, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release the Escrow Shares Fund from the Escrow Account (up to the extent amount of the Escrow Shares are Fund then held available in the Escrow Account) in accordance with such agreement or instructions; provided. (g) If, however, if the claim related to as a third result of any third-party claim or legal proceeding subject to the amount of which is contested and indemnification procedures set forth in the subject of litigationMerger Agreement, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or any settlement has been entered into, or reached any judgment entered in favor of any third party (which is not subject to further appeal), the underlying litigation determining Buyer may give notice of the resulting Damages to the Escrow Agent, together with a copy of the settlement or judgment and the Escrow Agent shall, promptly, but no sooner than two days, following the receipt of such notice, disburse to the Buyer an amount of the Escrow Fund equal to such Damages (up to the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are Fund then held available in the Escrow Account) in accordance with such final order or final resolution or settlement).

Appears in 1 contract

Samples: Agreement and Plan of Merger (Rsa Security Inc/De/)

Administration of Escrow Account. The Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Account as follows: (a) If an If, as of the Initial Release Date, the Escrow Agent has not received any Claim Notices (as hereinafter defined) pertaining to the Escrow Shares (or has received Claim Notices in aggregate amount less than the value of the First Shares as of the Initial Release Date), then the First Shares (or such portion thereof representing the excess of the value of the First Shares as of the Initial Release Date, over the aggregate amount of such Claim Notices) shall promptly (and in any event no later than 10 business days thereafter) be released and delivered to the Indemnifying Stockholders, in accordance with each Indemnifying Stockholder’s pro rata interest as set forth on Exhibit A. (b) If, as of the Second Release Date, the Escrow Agent has not received any Claim Notices pertaining to the Escrow Shares then held in escrow (or has received Claim Notices in aggregate amount less than the value of the Second Shares as of the Second Release Date), then the Second Shares (or such portion thereof representing the excess of the value of the Second Shares as of the Second Release Date, over the amount of such Claim Notices) shall promptly (and in any event no later than 10 business days thereafter) be released and delivered to the Indemnifying Stockholders, in accordance with each Indemnifying Stockholder’s pro rata interest as set forth on ExhibitA. (c) If, as of the Final Release Date, the Escrow Agent has not received any Claim Notices pertaining to the Escrow Shares then held in escrow (or has received Claim Notices in aggregate amount less than the value of the Final Shares as of the Final Release Date), then the Final Shares (or such portion thereof representing the excess of the value of the Final Shares as of the Final Release Date, over the amount of such Claim Notices) shall promptly (and in any event no later than 10 business days thereafter) be released and delivered to the Indemnifying Stockholders, in accordance with each Indemnifying Stockholder’s pro rata interest as set forth on ExhibitA. (d) If, at any time prior to any of the respective Release Dates, Parent on its own behalf or on behalf of the Parent Indemnified Party has incurred Parties desires to make a claim for Damages against the Escrow Shares, then Parent shall, on or suffered Damages for which prior to a Release Date, deliver a written claim notice (a “Claim Notice”) to the Representatives and to the Escrow Agent. Such Claim Notice shall (i) state that Parent believes that it is entitled to all or any portion of the Escrow Shares; (ii) contain a brief description of the circumstances supporting such belief; and (iii) indicating the claimed amount of Damages and the number of Escrow Shares (valued as provided in Section 15.1(b) of the Merger Agreement) necessary to satisfy such indemnification claim (such shares, the “Damage Shares”). If the Representatives do not contest any portion of the claim described in a Claim Notice and all of such claim becomes an Uncontested Claim under Article V Section 15.4(e) (i) of the Merger Agreement, Escrow Agent shall release the Indemnified Party shall, on Damage Shares to Parent in satisfaction of such Uncontested Claim. If the Representatives contest all or before the date any portion of the expiration of the representation, warranty, covenant a claim described in a Claim Notice and all or agreement to which such claim relates, give written notice a portion of such claim becomes a Contested Claim under Section 15.4(e) (ii) of the Merger Agreement, Escrow Agent shall release Damage Shares that are the subject of a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. Each Claim Notice shall state only after such Contested Claim has been resolved in accordance with Section 15.4(e) (ii) of the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of ClosingMerger Agreement. (be) Within 20 days after delivery of a Claim NoticeAnything to the contrary set forth herein notwithstanding, the Indemnification Representatives Escrow Agent shall provide to the Indemnified Party, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified Party, (ii) agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party or (iii) contest that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the also release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of Escrow Shares if the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered Escrow Agent receives joint written instructions executed by the Indemnification Representatives within Representatives, on the one hand, and Parent, on the other hand, authorizing such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Accountrelease. (cf) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). (d) If the Indemnification Representatives in the Response Notice agree that Escrow Shares having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified Party, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Indemnified Party such number of Escrow Shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon Whenever the Escrow Agent shall release Escrow Shares from the Escrow Account (for the account of the Indemnifying Stockholders, Escrow Agent shall instruct the transfer agent for Parent’s Common Stock to cancel such certificate and to divide the extent Escrow Shares are then held in the Escrow Account) shares evidenced thereby in accordance with pro rata interests of the Indemnifying Stockholders as set forth on Exhibit A hereto. Parent will take also such final order or final resolution or settlementfurther actions that may be reasonably necessary to authorize the transfer agent to effectuate any such distribution of shares released from the Escrow Account to the Indemnifying Stockholders.

Appears in 1 contract

Samples: Merger Agreement (Pharmos Corp)

Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) a. If an Indemnified Party Person has incurred or suffered Damages for which it has a good faith belief that it is entitled to indemnification by the Stockholder and the AEI Stockholders under Article V IX of the Merger Purchase Agreement, the Indemnified Party Person shall, for receipt by the Escrow Agent on or before prior to the date of the expiration of the representation, warranty, covenant or agreement to which such claim relatesTermination Date (as defined below), give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Stockholder and the Escrow Agent. Each Claim Notice shall state that the deliveror of such notice is an Indemnified Person, the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) six months after from the Date date of Closingthis Agreement shall be referred to herein as the "Initial Distribution Date" and the first anniversary of the date of this Agreement shall be referred to herein as the "Termination Date." (b) b. Within 20 days after delivery of a Claim NoticeNotice to the Escrow Agent and the Stockholder, the Indemnification Representatives Stockholder shall provide to the Indemnified PartyPerson, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives Stockholder shall: (i) agree that Escrow Shares Property having a Fair Market Value (as computed pursuant to Section 65) equal to the full Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, (ii) agree that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Indemnified Party Person or (iii) contest that any of the Escrow Shares Property may be released from the Escrow Account to the Indemnified PartyPerson. The Indemnification Representatives Stockholder may contest the release of Escrow Shares Property having a Fair Market Value equal to all or a portion of the Claimed Amount based only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party Person is entitled to indemnification under Article V IX of the Merger Purchase Agreement. If no Response Notice is delivered received by the Indemnification Representatives Escrow Agent from the Stockholder within such 20-day period20 days after delivery of a Claim Notice to the Escrow Agent, the Indemnification Representatives Stockholder shall be deemed to have agreed that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party Person from the Escrow Account. (c) c. If the Indemnification Representatives Stockholder in the Response Notice agree agrees (or are is deemed to have agreed) that Escrow Shares Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares Property held in the Escrow Account which have a Fair Market Value equal to the Claimed Amount (or such lesser number of Escrow Shares Property as is then held in the Escrow Account). (d) d. If the Indemnification Representatives Stockholder in the Response Notice agree agrees that Escrow Shares Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyPerson, the Escrow Agent shall shall, promptly following the delivery of the Response Notice Notice, transfer, deliver and assign to the Indemnified Party Person such number of Escrow Shares shares held in the Escrow Account which have a Fair Market Value equal to the Agreed Amount (or such lesser number amount of Escrow Shares property as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) below. (e) e. If the Indemnification Representatives Stockholder in the Response Notice contest contests the release of shares in the Escrow Shares Account having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Buyer and Stockholder shall attempt in good faith for a period of 10 days to resolve each of such claims. If the Stockholder and the Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by the Buyer and the Stockholder and shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum and distribute the Escrow Property in accordance with the terms thereof. If no such agreement has been reached within 10 days, the matter shall be settled by final and binding arbitration following the procedures set forth in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect Section 1.6 of the American Arbitration Association (the "AAA Rules")Purchase Agreement. The Indemnification Representatives Stockholder and the Indemnified Party Person shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually use their reasonable best efforts to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators arbitrator to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' arbitrator's decision shall relate solely to whether the Indemnified Party Person is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Purchase Agreement and this Agreement. The final decision of the majority of the arbitrators arbitrator shall be furnished to the Indemnification RepresentativesStockholder, the Indemnified Party Person and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying ShareholdersStockholder, the Indemnified Party Person and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' arbitrator's award. After delivery of a Response Notice to the Escrow Agent (as prescribed in Section 3(b)) that the Claimed Amount is contested by the Indemnification RepresentativesStockholder, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party Person and the Indemnification Representatives Stockholder setting forth instructions to the Escrow Agent as to the release of Escrow SharesProperty, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators arbitrator setting forth instructions to the Escrow Agent as to the release of Escrow SharesProperty, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon promptly release Escrow Shares Property from the Escrow Account (to the extent Escrow Shares Property are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however. f. Following the determination pursuant to Section 1.6 of the Purchase Agreement of the Shares to be returned to the Buyer, if any, the claim related to a third party claim the amount of which is contested Buyer and the subject Stockholder shall within five business days following such determination, jointly instruct the Escrow Agent to release to the Buyer such number of litigationshares as is equal to the shares to be returned to the Buyer and, upon receipt of such joint instruction, the Escrow Agent shall not so release the Escrow Shares being held in connection with the Contested Amount specified number of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon shares. g. Each Interested Party acknowledges and agrees that the Escrow Agent (i) shall not be responsible for any of the agreements referred to or described herein (including, without limitation, the Purchase Agreement), or for determining or compelling compliance therewith, and shall not otherwise be bound thereby, (ii) shall be obligated only for the performance of such duties as are expressly and specifically set forth in this Escrow Agreement on its part to be performed, each of which is ministerial (and shall not be construed to be fiduciary) in nature, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of the Escrow Agent, (iii) shall not be obligated to take any legal or other action hereunder which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification, (iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction (including, without limitation, wire transfer instructions, whether incorporated herein or provided in a separate written instruction), instrument, statement, certificate, request or other document furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper person, and shall have no responsibility for determining the accuracy thereof, and (v) under no circumstances shall the Escrow Agent be required to release or distribute Escrow Shares from Property (or take similar action, such as making a draw on an underlying letter of credit) sooner than two (2) business days after the Escrow Agent has received the requisite notices or paperwork in good form, or passage of the applicable claims period or release date, as the case may be. The Escrow Agent shall effect distributions of Escrow Property hereunder by delivery to Boston EquiServe LP, as the transfer agent for the Buyer (the "Transfer Agent"), of the certificate representing the Escrow Property and related stock transfer powers as necessary to transfer the required number of shares. h. The Escrow Agent shall not be liable to anyone for any action taken or omitted to be taken by it hereunder except in the case of the Escrow Agent's gross negligence or willful misconduct in breach of the terms of this Agreement. In no event shall the Escrow Agent be liable for indirect, punitive, special or consequential damage or loss (including, but not limited to, lost profits) whatsoever, even if the Escrow Agent has been informed of the likelihood of such loss or damage and regardless of the form of action. i. The Escrow Agent shall have no more or less responsibility or liability on account of any action or omission of any book-entry depository, securities intermediary or other subescrow agent employed by the Escrow Agent than any such book-entry depository, securities intermediary or other subescrow agent has to the Escrow Agent, except to the extent that such action or omission of any book-entry depository, securities intermediary or other subescrow agent was caused by the Escrow Agent's own gross negligence, bad faith or willful misconduct in breach of this Agreement. j. If less than all of the Escrow Property is to be released to the Stockholder, if any, in accordance with the terms herein and the Agreement, the first such property to be released shall be the shares deposited into the Escrow Account (to on the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlementdate hereof.

Appears in 1 contract

Samples: Escrow Agreement (Casella Waste Systems Inc)

Administration of Escrow Account. The Except as otherwise provided herein, with respect to any claim pursuant to Section 9 of the Merger Agreement, the Escrow Agent shall be entitled to rely on the instructions of the Designated Company Agent on behalf of the Escrow Stockholders and shall administer the Escrow Account as follows: (a) If an Indemnified Party any Indemnitee has or claims to have incurred or suffered Damages for which it is or may be entitled to indemnification indemnification, compensation or reimbursement under Article V Section 9 of the Merger Agreement, the Indemnified Party shall, on or before the date of the expiration of the representation, warranty, covenant or agreement to which such Indemnitee may deliver a claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives Designated Company Agent and to the Escrow Agent, on or prior to, but not after, the one year anniversary of the Closing Date under the Merger Agreement (such one year anniversary being referred to herein as the "Termination Date"); provided, however, that if, at any time on or prior to the Termination Date, any Indemnitee (acting in good faith) delivers to the Designated Company Agent and the Escrow AgentAgent a Claim Notice, then the claim asserted in such Claim Notice will survive the Termination Date until such time as such claim is fully and finally resolved in accordance with the provisions of this Section 3. The Escrow Agent shall not 5. 102 be deemed to have knowledge of termination of this Agreement earlier than the Termination Date unless notice in writing of such earlier date has been provided by Parent. Each Claim Notice shall state that such Indemnitee is entitled to indemnification, compensation or reimbursement under Section 9.2(a) of the Merger Agreement and shall contain a brief description of the circumstances supporting such Indemnitee's belief and shall contain a non-binding, preliminary estimate of the amount of claimed Damages such Indemnitee claims to have so incurred or suffered (the "Claimed Amount") and the basis for such claim. The date which is eighteen (18) months after the Date of Closing). (b) Within 20 45 business days after delivery receipt by the Designated Company Agent of a Claim Notice, the Indemnification Representatives shall provide Designated Company Agent may deliver to the Indemnified Party, with a copy Indemnitee who delivered the Claim Notice and to the Escrow Agent, Agent a written response (the "Response Notice") in which the Indemnification Representatives shallDesignated Company Agent: (i) agree agrees that a whole number of Escrow Shares having a Fair Market Value (as computed pursuant to Section 6) value equal to the full Claimed Amount shall be sold by the Escrow Agent pursuant to Sections 2(f) and (g) and the Escrow Cash realized by the sale may be released from the Escrow Account to the Indemnified Party, Indemnitee; (ii) agree agrees that Escrow Shares having a Fair Market Value value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") shall be sold by the Escrow Agent pursuant to Sections 2(f) and (g) and the Escrow Cash realized by the sale may be released from the Escrow Account to the Indemnified Party Indemnitee or (iii) contest indicates that any of the Escrow Shares may be released from the Escrow Account to the Indemnified Party. The Indemnification Representatives may contest the release of Escrow Shares having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnified Party is entitled to indemnification under Article V of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 20-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Shares having a Fair Market Value equal to all of the Claimed Amount may be released to the Indemnified Party from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Shares having a Fair Market Value equal to all part of the Claimed Amount may be released from the Escrow Account to the Indemnified PartyIndemnitee. Any part of the Claimed Amount that is not to be released to the Indemnitee shall be the "Contested Amount." If a Response Notice is not received by the Escrow Agent within such 45 business-day period, then the Designated Company Agent shall be deemed to have agreed that Escrow Shares having a value equal to the full Claimed Amount shall be sold by the Escrow Agent pursuant to Sections 2(f) and (g) and the Escrow Cash realized by the sale may be released to the Indemnitee from the Escrow Account. (c) If the Designated Company Agent delivers a Response Notice agreeing that Escrow Shares having a value equal to the full Claimed Amount shall be sold by the Escrow Agent pursuant to Sections 2(f) and (g) and the Escrow Cash realized by the sale may be released from the Escrow Account to the Indemnitee, or if the Designated Company Agent does not deliver a Response Notice in accordance with Section 3(b) within the 45 business-day period specified in Section 3(b), the Escrow Agent shall, promptly shall within five (5) business days following the earlier receipt of the required delivery date for the Response Notice or (or, if the delivery of the Escrow Agent has not received a Response Notice, transferwithin three (3) business days following the expiration of the 45 business-day period referred to in Section 3(b)), deliver and assign sell or cause to the Indemnified Party be sold such number of Escrow Shares held in pursuant to Sections 2(f) and (g) and the Escrow Account which have a Fair Market Value equal Agent shall deliver or cause to the Claimed Amount (or be delivered to such lesser number of Escrow Shares as is then held in Indemnitee the Escrow Account)Cash realized by the sale. Such payment shall be deemed to be made in full satisfaction of the claim described in such Claim Notice and Escrow Agent shall not be liable for the Claim Amount so released. (d) If the Indemnification Representatives in the Designated Company Agent delivers a Response Notice agree agreeing that Escrow Shares having a Fair Market Value value equal to part, but not all, of the Claimed Amount shall be sold by the Escrow Agent pursuant to Sections 2(f) and (g) and the Escrow Cash realized by the sale may be released from the Escrow Account to the Indemnified PartyIndemnitee, the Escrow Agent shall promptly within five (5) business days following the delivery receipt of the Response Notice transfer, deliver and assign sell or cause to the Indemnified Party be sold such number of Escrow Shares held in pursuant to Sections 2(f) and (g) and the Escrow Account which have a Fair Market Value Agent shall deliver or cause to be delivered to such Indemnitee the Escrow Cash equal to the Agreed Amount (or such lesser number of Escrow Shares as is then held in the Escrow Account). A determination with respect to the remainder of the Claimed Amount shall be made in accordance with subsection 4(e) belowAmount. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Shares having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the matter shall be settled by binding arbitration in Atlanta, Georgia. All claims shall be settled by three arbitrators in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). The Indemnification Representatives and the Indemnified Party shall each designate one arbitrator within 15 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Indemnified Party shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 45 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules and (ii) if either the Indemnification Representatives or the Indemnified Party fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Shareholders and the Indemnified Party shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator. The Indemnification Representatives and the Indemnified Party shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Indemnified Party is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the majority of the arbitrators shall be furnished to the Indemnification Representatives, the Indemnified Party and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Shareholders, the Indemnified Party and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account a number of Escrow Shares having a Fair Market Value sufficient to cover the Contested Amount (up to the number of Escrow Shares then available in the Escrow Account), notwithstanding the occurrence of the Termination Date, until (i) delivery of a copy of a settlement agreement executed by the Indemnified Party and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount or (ii) delivery of a copy of the final award of the majority of the arbitrators setting forth instructions to the Escrow Agent as to the release of Escrow Shares, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such agreement or instructions; provided, however, if the claim related to a third party claim the amount of which is contested and the subject of litigation, the Escrow Agent shall not release the Escrow Shares being held in connection with the Contested Amount of such third party claim until a final order or other final resolution or settlement has been entered or reached in the underlying litigation determining the amount of such claim, whereupon the Escrow Agent shall release Escrow Shares from the Escrow Account (to the extent Escrow Shares are then held in the Escrow Account) in accordance with such final order or final resolution or settlement.

Appears in 1 contract

Samples: Merger Agreement (Quokka Sports Inc)

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