Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows: 2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX of the Merger Agreement, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary of the basis for the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”). 2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; (b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parent; or (c) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt. 2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two (2) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount. 2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parent, the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit to Parent’s transfer agent an amount of Escrow Shares equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2. 2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement. 2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein. 2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable. 2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
Appears in 2 contracts
Samples: Escrow Agreement (Quikbyte Software Inc), Escrow Agreement (Quikbyte Software Inc)
Administration of Escrow Fund. Except as otherwise provided hereinherein (including Section 8.13(a)), the Escrow Agent shall administer the Escrow Fund as follows:
2.1 3.1 If Parent any Indemnitee has or claims to have incurred or suffered Losses Damages for which it is or may be entitled to indemnification under Article IX of the Merger Agreementindemnification, Parent Representative shall promptly deliver compensation or reimbursement pursuant to the Stockholders’ Agent and Acquisition Agreement or for which it is or may be entitled to a monetary remedy relating to the Transactional Documents (as defined in the Acquisition Agreement) or the transactions contemplated thereby, such Indemnitee may, on or prior to the Escrow Agent Termination Date, deliver a written claim notice (a “Claim Notice”)) to the Stockholders' Representative and to the Escrow Agent. Each Claim Notice shall shall: (a) state that such Indemnitee believes that such Indemnity is entitled to indemnification, compensation or reimbursement pursuant to the Acquisition Agreement or is otherwise entitled to a monetary remedy relating to the Transactional Documents or the transactions contemplated thereby; (b) contain a reasonably detailed summary brief description of the basis for circumstances supporting such Indemnitee's claim; and (c) to the claimextent possible, the provision or provisions contain a good faith, non-binding, preliminary estimate of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected Damages such Indemnitee claims to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought entitled (the “Claimed Amount”).
2.2 3.2 Within fifteen (15) calendar 30 days after receipt by the Stockholders’ Agent ' Representative of a Claim Notice, the Stockholders’ Agent ' Representative may deliver to Parent Representative and to the Escrow Agent and to the Indemnitee who delivered the Claim Notice a written response (the “Response Notice”) in which the Stockholders’ Agent' Representative: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from is owed to the Escrow Fund to ParentIndemnitee; (b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (is owed to the “Agreed Amount”) may be released from the Escrow Fund to ParentIndemnitee; or (c) indicates that no part of the Escrow Fund may be released from Claimed Amount is owed to the Escrow Fund to Parent Indemnitee. If the Response Notice is delivered in respect accordance with clause “(b)” or “(c)” of the preceding sentence, the Response Notice shall also contain a brief description of the facts and circumstances supporting the Stockholders' Representative's claim that only a portion or no part of the Claimed Amount. Any Amount is owed to the Indemnitee (any part of the Claimed Amount that is not agreed to be released owed to Parent the Indemnitee pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be Indemnitee's Claim Notice being referred to as the “Contested Amount.” ”). If a Response Notice is not received by the Indemnitee and the Escrow Agent within such fifteen (15) 30-day period, then the Stockholders’ Agent ' Representative (and the Company and the Selling Stockholders) shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released is owed to Parent from the Escrow Fund and Indemnitee.
3.3 If the Escrow Agent shall release such amount Stockholders' Representative in its Response Notice agrees that the full Claimed Amount is owed to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim the Indemnitee, or if no Response Notice required to be delivered to is received by the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify Indemnitee within such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.230-day period, the Escrow Agent shall within two (2) Business Days five business days following the Escrow Agent's receipt of such Response Notice (or, if the Escrow Agent has and the Indemnitee have not received a Response Notice, within two (2) Business Days five business days following the expiration of the fifteen (15) 30-day period referred to in Section 2.23.2), submit deliver to Parent’s transfer agent an amount of such Indemnitee Escrow Shares Property having a value equal to the full Claimed Amount.
2.4 3.4 If the Stockholders’ Agent delivers a ' Representative in the Response Notice agreeing agrees that an amount equal to less than part, but not all, of the full Claimed Amount may be released from is owed to the Escrow Fund to ParentIndemnitee (the “Agreed Amount”), the Escrow Agent shall, within two (2) Business Days five business days following the Escrow Agent's receipt of such Response Notice, submit deliver to Parent’s transfer agent an amount of such Indemnitee Escrow Shares Property having a value equal to the full Agreed Amount. Such payment shall not be deemed to 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 and to the remaining amount shall be extent of the Contested Amount as provided in Section 2.2Agreed Amount.
2.5 3.5 If the Stockholders’ Agent ' Representative delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent ' Representative and Parent Representative the Indemnitee shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)Amount. If Parent Representative the Indemnitee and the Stockholders’ Agent ' Representative resolve such dispute, such written resolution shall be binding on all of the Stockholders' Representative, the Selling Stockholders and Parent, and a such Indemnitee. Such settlement agreement shall be signed by Parent Representative such Indemnitee and the Stockholders’ Agent ' Representative and sent to the Escrow Agent, which shall, upon Escrow Agent's receipt thereof, if applicable, release deliver to such Indemnitee Escrow Shares Property from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives shall receive written notice that any such dispute has been resolved by Parent Representative the Indemnitee and the Stockholders’ Agent' Representative, the Escrow Agent may assume without inquiry that such dispute has not been resolved. resolved and shall continue to retain Escrow Property in the amount equal to the Contested Amount in the Escrow Fund.
3.6 If Parent the Stockholders' Representative and the Indemnitee are unable to resolve the dispute relating to any Contested Amount within 30 days after the delivery of the Response Notice, such dispute (an “Arbitrable Dispute”) shall be settled by binding arbitration. Notwithstanding the preceding sentence, nothing in this Agreement shall prevent the Indemnitee from seeking preliminary injunctive relief from a court of competent jurisdiction pending settlement of any Arbitrable Dispute.
(a) Except as herein specifically stated, any Arbitrable Dispute shall be resolved by arbitration between the Stockholders’ Agent fail ' Representative and the Indemnitee; provided, however, if the Claim Notice relates solely to reach agreement a breach of the Transaction Documents by a particular Selling Stockholder (the “Indemnitor”) and not the Company nor any other Selling Stockholder, such Arbitrable Dispute shall be resolved by arbitration between the Indemnitor and the Indemnitee. Any Arbitrable Dispute shall be resolved by arbitration in Tokyo, Japan in accordance with the Commercial Arbitration Rules of The Japan Commercial Arbitration Association (“JCAA”). However, in all events, the provisions contained herein shall govern over any conflicting rules which may now or hereafter be contained in the relevant arbitration rules. Any judgment upon the award rendered by the end arbitrator shall be entered in any court having jurisdiction over the subject matter thereof. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available if any judicial proceeding was instituted to resolve an Arbitrable Dispute. The final decision of the Negotiation Periodarbitrator, as entered by a court of competent jurisdiction, will be furnished by the arbitrator to the Stockholders' Representative or the Indemnitor, if applicable, and the Indemnitee in writing and will constitute a final, conclusive and non-appealable determination of the issue in question, binding upon the Company, the Stockholders' Representative and Selling Stockholders, the Indemnitor, if applicable and the Indemnitee, and an order with respect thereto may be entered in any court of competent jurisdiction.
(b) Any such arbitration will be conducted before a single arbitrator who will be compensated for his or her services at a rate to be determined by the Indemnitee and Stockholders' Representative, or the Indemnitor, if applicable, or by JCAA, but based upon reasonable hourly or daily consulting rates for the arbitrator in the event the parties are not able to agree upon his or her rate of compensation.
(c) The arbitrator shall be mutually agreed upon by the Indemnitee and the Stockholders' Representative, or the Indemnitor, if applicable. In the event the Indemnitee and the Stockholders' Representative, or the Indemnitor, if applicable, are unable to agree within 20 days following submission of the dispute to JCAA, by one of the parties, JCAA will have the authority to select an arbitrator from a list of arbitrators who satisfy the criteria set forth in clause “(iv)” hereof.
(d) No arbitrator shall have any past or present family, business or other relationship with the Indemnitee, the Company, the Stockholders' Representative, any of the Indemnitor or any “affiliate” (as such term is defined in Rule 12b-2 of the Securities Act of 1933, as amended (the “Securities Act”)), director or officer thereof, unless following full disclosure of all such relationships, the Indemnitee and the Stockholders' Representative, or the Indemnitor, if applicable agree in writing to waive such requirement with respect to an individual in connection with any dispute.
(e) The arbitrator shall be instructed to hold an up to eight hour, one day hearing regarding the disputed matter within 60 days of his designation and to render an award (without written opinion) no later than 10 days after the conclusion of such hearing, in each case unless otherwise mutually agreed in writing by the Indemnitee and the Stockholders' Representative or the Indemnitor, if applicable.
(f) No discovery other than an exchange of relevant documents may occur in any arbitration commenced under the provisions of this Agreement. The Indemnitee and the Stockholders' Representative, or the Indemnitor, if applicable, agree to act in good faith to promptly exchange relevant documents.
(g) The Indemnitee and the Stockholders' Representative (on behalf of the Company and Selling Stockholders) or the Indemnitor, if applicable, will each pay 50% of the initial compensation to be paid to the arbitrator in any such arbitration and 50% of the costs of transcripts and other normal and regular expenses of the arbitration proceedings; provided, however, that: (A) the prevailing party shall in any arbitration will be entitled to its legal remedies an award of reasonable attorneys' fees and costs; and (B) all costs of arbitration, other than those provided for above, will be paid by the losing party, and the arbitrator will be authorized to determine the identity of the prevailing party and the losing party and the amount of attorneys' fees and costs and arbitration costs to be so awarded, which shall be reasonably based on the relative success of the parties with respect to the disputed amount.
(h) The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or any other provisions contained in this Escrow Agreement and the Merger Agreement.
2.6 (i) Except as specifically otherwise provided in this Agreement, arbitration will be the sole and exclusive remedy of the parties for any Arbitrable Dispute or any other dispute arising out of or relating to this Agreement.
(j) The final decision of the arbitrator shall indicate the dollar amount of the award to the Indemnitee, if any (the “Award Amount”), shall be furnished to the Stockholders' Representative, the Indemnitor, if applicable, the Indemnitee and the Escrow Agent and shall constitute a conclusive determination of the issue(s) in question, binding upon the Stockholders' Representative and Selling Stockholders, the Indemnitor, if applicable, the Indemnitee, the Company, the Escrow Participants and the Escrow Agent and shall not be contested by any of them. The Escrow Agent shall submit shall, within three business days following the receipt of the arbitrator's decision, or such shorter period of time as may be set forth in the arbitrator's decision, deliver to Parent’s transfer agent the Indemnitee cash in an amount equal to the Award Amount from (but only to the extent of) the Escrow Shares Fund.
3.7 Notwithstanding anything to the contrary herein, the Escrow Agent shall disburse funds from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it ofaccordance with: (i) a copy of a settlement agreement executed by Parent Representative joint written notice from Purchaser and the Stockholders’ Agent setting forth instructions to ' Representative that instructs the Escrow Agent as to release to either Purchaser or the Selling Stockholders a specified amount of Escrow Shares to be released from the Escrow Fund, with respect to such Contested AmountFund (“Payment Instructions”); or (ii) a certified copy decision of an arbitrator appointed pursuant to this Agreement (“Arbitration Decision”); or (iii) a final and final, non-appealable binding order, decree or judgment order issued or rendered by a court of competent jurisdiction relating to the disbursement of any amount from the Escrow Fund (“Court Order”). Promptly (and in any event within five business days) following receipt of Payment Instructions, Arbitration Decision or a certified copy of a final arbitration awardCourt Order, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to shall disburse the resulting disbursement of funds from the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder persons and in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as manner set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contraryin such Payment Instructions, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; Arbitration Decision or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicableCourt Order.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
Appears in 1 contract
Samples: Stock Purchase Agreement (Silicon Graphics International Corp)
Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent any Purchaser Parties on their own behalf or on behalf of any Purchaser Indemnitee has or claims to have incurred or suffered Losses a Loss for which it is or may be entitled to indemnification under Article IX VIII of the Merger Purchase Agreement, Parent Representative shall promptly Purchaser shall, on behalf of such Purchaser Indemnitee, deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”)) to Comarco and to the Escrow Agent. Each Claim Notice shall contain state (a) that Purchaser reasonably believes in good faith that there is or has been a reasonably detailed summary breach of a representation, warranty or covenant contained in the Purchase Agreement specifying the section of the Purchase Agreement or that such Purchaser Indemnitee is otherwise entitled to indemnification pursuant to Article VIII of the Purchase Agreement, (b) a description of the facts and circumstances in reasonable detail supporting the basis for such belief that there is or has been such a breach or the claim, the provision or provisions basis for which such Purchaser Indemnitee is so entitled to indemnification under Article VIII of the Merger Agreement alleged to have been inaccurate or breached andPurchase Agreement, if known, (c) the estimated amount of the Losses such Purchaser Indemnitee has so incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought suffered (the “Claimed Amount”), and (d) the extent to which the Basket has been applied against the current and/or previous Claim Notices.
2.2 Within fifteen thirty (1530) calendar days after receipt by the Stockholders’ Agent Comarco of a Claim Notice, the Stockholders’ Agent Comarco may deliver to Parent Representative Purchaser and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ AgentComarco either: (a) agrees that an amount of Escrow Shares cash equal to the full Claimed Amount may be released from the Escrow Fund to ParentPurchaser on behalf of the Purchaser Indemnitee; (b) agrees that an amount of Escrow Shares cash equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to ParentPurchaser on behalf of the Purchaser Indemnitee; or (c) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent the Purchaser on behalf of the Purchaser Indemnitee in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent the Purchaser pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, Notice shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen thirty (1530) day period, then the Stockholders’ Agent Comarco shall be conclusively deemed to have agreed that an amount of Escrow Shares cash equal to the full Claimed Amount may be released to Parent the Purchaser on behalf of the Purchaser Indemnitee from the Escrow Fund and the Escrow Agent shall release such amount to Parent the Purchaser as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent Comarco delivers a Response Notice agreeing that an amount of Escrow Shares cash equal to the full Claimed Amount may be released from the Escrow Fund to Parentthe Purchaser on behalf of such Purchaser Indemnitee, or if the Stockholders’ Agent Comarco does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two five (25) Business Days business days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two five (25) Business Days business days following the expiration of the fifteen thirty (1530) day period referred to in Section 2.2), submit deliver to Parent’s transfer agent an the Purchaser on behalf of such Purchaser Indemnitee such amount of Escrow Shares cash equal to the full Claimed Amount. Such payment shall be deemed to be made in full satisfaction of the claim described in such Claim Notice.
2.4 If the Stockholders’ Agent Comarco delivers a Response Notice agreeing that an amount of cash equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentthe Purchaser, the Escrow Agent shall, within two five (25) Business Days business days following the receipt of such Response Notice, submit deliver to Parent’s transfer agent the Purchaser on behalf of such Purchaser Indemnitee an amount of Escrow Shares cash equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and Notice, but shall count toward the satisfaction of the claim described in such Claim Notice, with the remaining amount shall be being the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent Comarco delivers a Response Notice indicating that there is a Contested Amount, Comarco and the Stockholders’ Agent and Parent Representative Purchaser shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)Amount. If Parent Representative the Purchaser and the Stockholders’ Agent Comarco resolve such dispute, such written resolution shall be binding on all of the Stockholders Purchaser Parties and Parentsuch Purchaser Indemnitee, and a settlement agreement shall be signed by Parent Representative Purchaser and the Stockholders’ Agent Comarco and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares cash from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives shall receive written notice that any such dispute has been resolved by Parent Representative the Purchaser and the Stockholders’ AgentComarco, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative the Purchaser and the Stockholders’ Agent Comarco fail to reach agreement by within thirty (30) days after Comarco’s delivery of a Response Notice indicating that there is a Contested Amount, then the end claim described in the Claim Notice shall be settled pursuant to the provisions set forth in Section 10.11 of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Purchase Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares release funds from the Escrow Fund in connection with any Contested Amount within two five (25) Business Days business days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative Purchaser and the Stockholders’ Agent Comarco setting forth instructions to the Escrow Agent as to the amount of Escrow Shares cash, if any, to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) in the absence of such a certified settlement agreement, a copy of a final and non-appealable binding orderconclusive decision or award of an arbitrator appointed pursuant to Section 10.11 of the Purchase Agreement.
2.7 In the event of any ambiguity or uncertainty under this Agreement, decree or judgment issued in any notice, instruction, or rendered other communication received by the Escrow Agent hereunder, the Escrow Agent may, in its discretion: (a) refrain from taking action, and may retain the Escrow Fund until and unless it receives written instruction signed by the parties hereto that eliminates such uncertainty or ambiguity; (b) resign so a successor can be appointed pursuant to Section 7 hereof; or (c) file a suit in interpleader and obtain an order from a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative requiring the parties to interplead and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified thereinlitigate in such court their several claims and rights among themselves.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
Appears in 1 contract
Samples: Escrow Agreement (Comarco Inc)
Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 (a) Upon joint written notice signed by the Purchaser and the Stockholders’ Representative that the Specified Indebtedness has been determined in accordance with Section 1.7(g) of the Stock Purchase Agreement, the Escrow Agent shall, within two (2) Business Days after the receipt of such notice (and in any event prior to the Escrow Fund Release Date), deliver to the Purchaser, using the delivery instructions in Section 13(b), an amount in cash out of the Closing Cash Consideration from the Escrow Fund equal to the amount by which the Specified Indebtedness exceeds $250,000 (if any). The Escrow Agent will receive joint written direction as to the amount to be disbursed and will not be responsible for any calculations.
(b) If Parent any Indemnified Party has or claims to have incurred or suffered Losses any loss, liability, demand, claim, action, cause of action, cost, damage, deficiency, tax, penalty, fine or expense, whether or not arising out of third-party claims (including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing) (collectively, “Losses”), for which it is or may be entitled to indemnification or reimbursement under Article IX the Stock Purchase Agreement, an Authorized Representative of the Merger AgreementPurchaser shall, Parent Representative shall promptly on behalf of such Indemnified Party, deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”) to the Escrow Agent, with a copy to the Stockholders’ Representative, no later than 11:59 p.m. Eastern Time on [●], 2017 (the “Escrow Fund Release Date”). Each Claim Notice shall contain state or provide (i) that such Indemnified Party believes that it is entitled to indemnification or reimbursement pursuant to Article X of the Stock Purchase Agreement, (ii) a reasonably detailed summary description in reasonable detail of the circumstances supporting the basis for the claim, the provision such Indemnified Party’s belief that it is entitled to indemnification or provisions reimbursement under Article X of the Merger Agreement alleged to have been inaccurate or breached andStock Purchase Agreement, if knownand (iii) a non-binding, preliminary, good faith estimate of the estimated aggregate United States dollar amount of the actual and potential Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought Indemnified Party (the “Claimed Amount”).
2.2 Within fifteen (15c) calendar days By 5:00 p.m. Eastern Time on the tenth day, or if such day is not a Business Day, by 10:00 a.m. Eastern Time on the first Business Day following the tenth day, after the Escrow Agent’s receipt by the Stockholders’ Agent of a Claim Notice, an Authorized Representative of the Stockholders’ Agent may Representative shall deliver to Parent Representative and to the Escrow Agent Agent, with a copy to the Purchaser, a written response (the “Response Notice”) in which the Stockholders’ AgentRepresentative: (ai) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parentthe Indemnified Party; (bii) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parentthe Indemnified Party; or (ciii) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent the Indemnified Party in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent the Indemnified Party pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ AgentRepresentative, shall be the “Contested Amount.” If a Response Notice is not received by 5:00 p.m. Eastern Time on the Escrow Agent within last day of such fifteen (15) 10-day period, or if such day is not a Business Day, by 10:00 a.m. Eastern Time on the first Business Day following the tenth day, then the Stockholders’ Agent Representative shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may (plus a pro rata portion of the interest and investment income deposited in the Escrow Fund from the date hereof which is attributable to such Claimed Amount, if any) shall be released to Parent the Purchaser from the Escrow Fund and Fund, using the Escrow Agent shall release such amount to Parent as provided delivery instructions in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt13(b).
2.3 (d) If the Stockholders’ Agent Representative delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parentthe Purchaser, or if the Stockholders’ Agent Representative does not deliver a Response Notice on a timely basis in accordance with Section 2.24(c), the Escrow Agent shall within two five (25) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response NoticeNotice within the required 10-day period, within two five (25) Business Days following the expiration of the fifteen ten (15) day 10)-day period referred to in Section 2.24(c)), submit deliver to Parent’s transfer agent the Purchaser an amount of Escrow Shares equal to the full Claimed Amount (plus a pro rata portion of the interest and investment income deposited in the Escrow Fund from the date hereof which is attributable to the full Claimed Amount, if any), using the delivery instructions in Section 13(b).
2.4 (e) If an Authorized Representative of the Stockholders’ Agent Representative delivers a timely Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentthe Purchaser (the “Agreed Amount”), the Escrow Agent shall, within two five (25) Business Days following the receipt of such Response Notice, submit deliver to Parent’s transfer agent the Purchaser an amount of Escrow Shares equal to the Agreed Amount (plus a pro rata portion of the interest and investment income deposited in the Escrow Fund from the date hereof which is attributable to such Agreed Amount, if any), using the delivery instructions in Section 13(b). Such payment delivery shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount (not taking into account any interest or earnings earned on the Agreed Amount and distributed to the Indemnified Party pursuant to the preceding sentence, if any) shall be the Contested Amount as provided in Section 2.24(c).
2.5 (f) If an Authorized Representative of the Stockholders’ Agent Representative delivers a timely Response Notice indicating that there is a Contested Amount, without limiting the Escrow Agent’s obligations under Section 4(e), the Stockholders’ Agent Representative and Parent Representative the Purchaser shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen ten (1510) calendar days Business Days of Parent Representativethe Purchaser’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative the Purchaser and the Stockholders’ Agent Representative resolve such dispute, such written resolution shall be binding on all the Stockholders’ Representative, each of the Stockholders and Parentthe Indemnified Party, and a settlement agreement shall be signed by Parent an Authorized Representative of the Purchaser (on behalf of such Indemnified Party) and the Stockholders’ Agent Representative and sent to the Escrow Agent, which shall, upon within three Business Days of receipt thereof, if applicable, release Escrow Shares from the Escrow Fund an amount of Escrowed Closing Consideration in accordance with such settlement agreement (plus a pro rata portion of the interest and investment income deposited in the Escrow Fund from the date hereof which is attributable to such amount, if any, to be released pursuant to such settlement agreement, if any), using the delivery instructions in Section 13(b). Unless and until the Escrow Agent receives joint written notice that any such dispute has been resolved by Parent Representative the Purchaser and the Stockholders’ AgentRepresentative, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative the Purchaser and the Stockholders’ Agent Representative fail to reach agreement by the end of the Negotiation Period, each party Party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Stock Purchase Agreement and the Escrow Agent shall continue to hold such Contested Amount in escrow in accordance with the terms of this Agreement.
2.6 (g) The Escrow Agent shall submit deliver to Parent’s transfer agent the Escrow Shares applicable Party an amount of Escrowed Closing Consideration from the Escrow Fund in connection with any Contested Amount within two five (25) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent an Authorized Representative of the Purchaser and the Stockholders’ Agent Representative setting forth instructions to the Escrow Agent as to the amount of Escrow Shares Escrowed Closing Consideration, if any, to be released from the Escrow Fund, Fund with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final, non-appealable arbitration award from the prevailing Party along with a certification from its counsel attesting to the finality and binding nature of the final order or arbitration award, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing that instructs the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein, in each case, plus any interest or earnings earned on any portion of the amount to be distributed, if any, using the delivery instructions in Section 13(b). The Escrow Agent shall be entitled conclusively to rely upon any such certification and instruction and shall have no responsibility to review the order, decree or judgment to which such certification and instruction refers or to make any determination as to whether such order, decree or judgment is final.
2.7 (h) At any time that a payment, distribution or holdback is required to be made pursuant to this Agreement and written instructions have been provided to the Escrow AgreementAgent, the such payment, distribution or holdback shall be made as directed by the Stockholders’ Representative from the Escrow Fund with an aggregate value equal to the amount of such payment, distribution or holdback (it being understood that the Stockholders’ Representative may direct that such amount be released to the Transfer Agent for disbursement to the Stockholders in accordance with the payment instructions provided by the Stockholders’ Representative, and the Purchaser agrees to assist the Stockholders’ Representative in coordinating such disbursement with the Transfer Agent). For purposes of the Stockholders’ Representative, the respective interests of the Stockholders are set forth on Exhibit A hereto, and, as to each Stockholder, the respective Consideration Percentage for such Stockholder are set forth in the same proportion as such Stockholder’s proportionate interest in Exhibit A hereto. Each Stockholder shall be entitled to that portion of the Escrow Fund as set forth is equal to the total value of the Escrow Fund multiplied by such Stockholder’s Consideration Percentage. For purposes of determining the value of each Escrow Share as of a particular date, each Escrow Share shall be valued at the average of the daily volume weighted average price of the Purchaser Common Stock for the twenty (20) trading days then preceding the determination date, as reported by Bloomberg L.P. on Exhibit B attached heretothe determination date (the “VWAP Per Share Price”). The Escrow Agent shall not be responsible for any calculations or valuations.
(i) Notwithstanding anything herein to the contrarycontrary herein, any and all calculations required release of funds by the Escrow Agent to be made an Indemnified Party pursuant to a disbursement request this Section 4 shall be made in accordance with the following sentence and shall be provided to the Purchaser (for distribution to the Indemnified Party).
(j) The Escrow Agent may rely conclusively on any Claim Notice it receives hereunder. The Escrow Agent shall have no responsibility to determine whether any Claim Notice satisfies the conditions set forth in the Stock Purchase Agreement for making an indemnification claim, including whether there is a writing signed basis for making a claim, whether the claim is set forth in sufficient detail, or that a copy of the Claim Notice was sent to or received by Parent Representative the Stockholders’ Representative, or that a Response Notice was sent to or received by the Purchaser or any Indemnified Party.
(k) The Purchaser and the Stockholders’ Representative each agree to deliver Claim Notices and Response Notices to the other Party in the same manner and at the same time as delivery to the Escrow Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of .
(il) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount Each of the applicable indemnifiable Losses as fully parties to this Agreement acknowledges and finally determined agrees that, after the Closing, the Purchaser shall have authority to be due, by settle all claims under this Agreement and the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending Purchase Agreement on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary behalf of the Closing Date (the “Termination Date”)Company or any of its Affiliates.
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Administration of Escrow Fund. Except as otherwise provided herein, the The Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX of the Merger Agreement, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary of the basis for the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”).
2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of The Escrow Agent shall hold and safeguard the First Escrow Shares equal in the First Escrow Fund up to the full Claimed Amount may be released from First Escrow Termination Date and the Second Escrow Shares in the Second Escrow Fund to Parent; until the Second Escrow Termination Date. The Escrow Agent shall treat each of the First Escrow Fund and the Second Escrow Fund as separate trust funds in accordance with the terms of this Agreement and the Purchase Agreement and not as the property of Purchaser and shall hold and dispose of the First Escrow Fund and the Second Escrow Fund only in accordance with the terms hereof.
(b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parent; or (c) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received Upon receipt by the Escrow Agent within such fifteen (15) at any time on or before the last day period, then of the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of First Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund Period and the Second Escrow Agent shall release Period (as the case may be) of a certificate signed by the Chief Financial Officer of Purchaser (an "Officer's Certificate"):
(i) stating that Purchaser has paid or reasonably anticipates that it will have to pay or incur Damages, and
(ii) specifying in reasonable detail the individual items of Damages included in the amount so stated, the date each such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent item was paid or incurred, and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two (2) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following the expiration nature of the fifteen (15) day period referred misrepresentation, breach of warranty or claim to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentwhich such item is related, the Escrow Agent shall, within two subject to the provisions of Section 4(c) below and the other provisions of this Agreement and the Purchase Agreement, deliver to Purchaser out of the First Escrow Fund or the Second Escrow Fund (2as appropriate) Business Days following (to the receipt of such Response Noticeextent then available), submit as promptly as practicable, First Escrow Shares or the Second Escrow Shares or other assets held in the Escrow Fund (as the case may be) (to Parent’s transfer agent the extent then available) in an amount equal to such Damages. The number of Escrow Shares equal or New Shares of each Warrantor to be so delivered to Purchaser shall be determined pro rata according to the Agreed Amount. Such payment shall not be deemed percentages that their respective values bear to the total value of the Escrow Shares in the relevant Escrow Fund.
(iii) For the purposes of determining the number of shares to be made in full satisfaction delivered to Purchaser out of either the First Escrow Fund or Second Escrow Fund pursuant to Section 4(b), the shares of Purchaser Stock shall be valued at the average of the claim described in such Claim Notice and closing prices of Purchaser's Common Stock on the remaining amount shall be Nasdaq National Market over the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related thirty-day period ending three (3) days prior to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)delivery date. If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit effect such payment of the First Escrow Shares or the Second Escrow Shares (as the case may be) to Parent’s Purchaser by surrendering such First Escrow Shares or Second Escrow Shares (as the case may be) to Purchaser's transfer agent (US Stock Transfer Corporation) for cancellation upon receipt by the Escrow Shares from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it of: (i) Agent of a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions letter from Purchaser to its transfer agent irrevocably instructing such transfer agent to issue new certificates to the Escrow Agent as to for the amount of remaining Escrow Shares to be released from the Escrow FundShares, with respect after giving effect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified thereinpayment.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
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Samples: Escrow Agreement (Geron Corporation)
Administration of Escrow Fund. Except (a) Subject to the provisions of Article XII of the Merger Agreement and Sections 5 of this Agreement, (i) the General Escrow Fund shall be available to compensate the Acquiror Indemnified Parties for any General Indemnified Losses and (ii) the Special Escrow Fund shall be available to compensate the Acquiror Indemnified Parties for any Special Indemnified Losses.
(b) No Escrowed Shares or any beneficial interest therein or any other portion of the applicable Escrow Fund may be pledged, sold, assigned or transferred, including by operation of law, by any Stockholder or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such Stockholder, prior to the delivery and transfer to such Stockholder of such Stockholder's Proportional Interest of the applicable Escrow Fund by the Escrow Agent as otherwise provided herein.
(c) The Escrow Agent shall hold and safeguard the Escrow Fund during the term of this Agreement, shall not treat the Escrow Fund as the property of Acquiror and shall hold and dispose of the Escrow Fund only in accordance with the terms hereof. Any distributions declared in respect of Escrowed Shares, but unpaid prior to the dates such Escrowed Shares are distributed from the Escrow Fund shall not be added to the Escrow Fund pursuant to Section 5 hereof but shall be distributed to the record holders of such Escrowed Shares immediately prior to the date of such distribution.
(d) Each Stockholder shall be deemed the record holder of, and shall have voting, dividend, distribution and all other rights in respect of, the shares of Acquiror Common Stock held in the Escrow Fund on behalf of such Stockholder in accordance with the Stockholder List. The Escrow Agent shall promptly forward, or cause to be forwarded, copies of any proxies, proxy statements and other soliciting materials which it receives to the Stockholders, and shall vote the applicable portion of the Escrowed Shares in accordance with any written instructions timely received from the Stockholders. Absent any such written instructions, the Escrow Agent shall administer not vote any Escrowed Shares.
(e) Within 10 days following the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX second anniversary of the Merger Agreement, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary of the basis for the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought Effective Time (the “Claimed Amount”"General Escrow Termination Date").
2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; (b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parent; or (c) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two deliver to the Stockholders, in accordance with their respective Proportional Interest in Cash and Proportional Interest in Shares, all remaining amounts in the General Escrow Fund (2collectively, the "Escrow Assets Available for Release") Business Days following that are not then subject to any unsatisfied Claims specified in any Claim Certificate delivered to the receipt of such Response Notice (or, if Stockholder Representative and the Escrow Agent has not received before the General Escrow Termination Date with respect to facts and circumstances existing prior to the General Escrow Termination Date ("Pending Claims"); provided, however, that (i) a Response Notice, within two (2) Business Days following the expiration Claim Certificate shall be deemed to have been given hereunder with respect to any General Indemnified Loss sought to be collected from an insurance company by an Acquiror Indemnified Party under Section 12.4 of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal Merger Agreement if such General Indemnified Loss was incurred within six months prior to the full Claimed AmountGeneral Escrow Termination Date, and notwithstanding such collection efforts the Acquiror shall deliver such Claim Certificate prior to the General Escrow Termination Date and (ii) promptly upon the resolution of all of such Pending Claims in accordance with the provisions of Article XII of the Merger Agreement and Section 5 of this Agreement, Escrow Agent shall deliver to the Stockholders, in accordance with their respective Proportional Interests, all remaining amounts in the General Escrow Fund not required to satisfy the Pending Claims.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal (f) Within 10 days after delivery to less than the full Claimed Amount may be released from the Escrow Fund to ParentAgent of either of the following documents (the "Special Escrow Termination Date"), the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit to Parent’s transfer agent an amount of Escrow Shares equal shall deliver to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Fund in accordance with such agreement. Unless their respective Proportional Interest in Cash and until Proportional Interest in Shares, all remaining amounts in the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Special Escrow Fund after payment in connection with any Contested Amount within two (2) Business Days after full of all claims relating to the delivery to it ofParker/Hunter Dispute: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree appealablx xxxxcxxx xxder or judgment issued setting forth the Claim Amount (as defined in Section 5(a) below), if any, that the Acquiror Indemnified Parties are entitled to receive out of the Special Escrow Fund with respect to the Parker/Hunter Dispute or rendered by (ii) a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative memorandum signed xx xx Acquiror Indemnified Party and the Stockholders’ Agent instructing Stockholder Representative setting forth the Claim Amount, if any, that the Acquiror Indemnified Parties are entitled to receive out of the Special Escrow Agent as Fund with respect to the resulting disbursement of the Escrow Fund specified thereinParker/Hunter Dispute.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
Appears in 1 contract
Administration of Escrow Fund. Except The Escrow Fund shall be disbursed in cash by the Escrow Agent as otherwise provided hereinfollows:
(a) Within five (5) business days after receipt by the Escrow Agent of joint written instructions from Parent and the Company, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX of the Merger Agreement, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary of the basis for the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”).
2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; (b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parent; or (c) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two (2) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parent, the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit to Parent’s transfer agent an amount of Escrow Shares equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares from disburse the Escrow Fund in accordance with such agreement. Unless and until instructions.
(b) If the Escrow Agent receives written notice from Parent and the Company that any such dispute the Merger has been resolved by Parent Representative and the Stockholders’ Agentconsummated, then within five (5) business days after receipt thereof, the Escrow Agent may assume without inquiry shall disburse any remaining Escrow Fund to Depositor.
(c) If the Escrow Agent receives written notice from Parent that such dispute the Merger Agreement has been terminated under circumstances that do not been resolved. If require the payment by Parent Representative and to the Stockholders’ Agent fail to reach agreement by the end Company of the Negotiation Period, each party shall be entitled Parent Termination Fee pursuant to its legal remedies in accordance with this Escrow Agreement and the provisions of Section 8.03 of the Merger Agreement.
2.6 The , then within five (5) business days after receipt thereof, the Escrow Agent shall submit forward a copy of such notice to the Company. If, within five (5) business days after the receipt by the Company of such notice from the Escrow Agent, the Company has not objected to the disbursement of the Escrow Fund to Parent’s transfer agent , then the Escrow Shares Agent shall disburse to Depositor any remaining Escrow Fund. If the Escrow Agent does receive a timely notice from the Company that it is entitled to the Parent Termination Fee and that it objects to the disbursement of any Escrow Fund, then the Escrow Agent shall only make disbursements from the Escrow Fund in connection with any Contested Amount pursuant to written directions executed by both Parent and the Company or as directed by judgment of a court of competent jurisdiction, which judgment has not been appealed within two 30 days.
(2d) Business Days If the Escrow Agent receives written notice from the Company that the Merger Agreement has been terminated under circumstances that require the payment by Parent to the Company of the Parent Termination Fee pursuant to the provisions of Section 8.03 of the Merger Agreement, then within five (5) business days after receipt thereof, the delivery to it of: (i) Escrow Agent shall forward a copy of a settlement agreement executed such notice to Parent. If, within five (5) business days after the receipt by Parent Representative and of such notice from the Stockholders’ Agent setting forth instructions Escrow Agent, Parent has not objected to the disbursement of the Parent Termination Fee to the Company, then the Escrow Agent as shall disburse to the amount Company from the Escrow Fund the Escrow Amount and following such disbursement, if applicable, disburse to Depositor any remaining Escrow Fund. If the Escrow Agent does receive a timely notice from Parent that the Company is not entitled to the Parent Termination Fee and that Parent objects to the disbursement to the Company of Escrow Shares to be released the Parent Termination Fee from the Escrow Fund, with respect then the Escrow Agent shall only make disbursements from the Escrow Fund pursuant to such Contested Amount; written directions executed by both Parent and the Company or (ii) a certified copy as directed by judgment of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration awardjurisdiction, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified thereinwhich judgment has not been appealed within 30 days.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
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Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX of the Merger Agreement, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary of the basis for the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”).
2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from Agent shall hold and safeguard the Escrow Fund to Parent; (b) agrees that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from during the Escrow Fund to Parent; or Period (c) indicates that no part as defined in Section 5 below), shall treat such fund as a trust fund in accordance with the terms of this Agreement and not as the property of Buyer and shall hold and dispose of the Escrow Fund may only in accordance with the terms hereof.
(b) Upon receipt by Escrow Agent at any time on or before the last day of the Escrow Period of a certificate signed by any officer of Buyer (an “Officer’s Certificate”):
(i) stating that Buyer or any other Indemnified Person has paid or reasonably anticipates that it will have to pay or incur Losses, and
(ii) specifying in reasonable detail the individual items of Losses included in the amount so stated, the date each such item was paid or incurred, or the basis for such anticipated liability, and the nature of the misrepresentation, breach of warranty or claim to which such item is related, Escrow Agent shall, subject to the provisions of Section 3(c) below, deliver to Buyer out of the Escrow Fund, as promptly as practicable, the number of Exchange Shares claimed in such Officer’s Certificate. The Exchange Shares so delivered will be released withdrawn on a pro rata basis from the Escrow Fund to Parent in respect Exchange Shares of each Shareholder. As between the Claimed Amount. Any part of Buyer Common Stock and the Claimed Amount that is not agreed to be released to Parent pursuant to the Response NoticeWarrant Shares, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within shall deliver shares of Buyer Common Stock to Buyer until such fifteen (15) day periodtime as such Buyer Common Stock is exhausted, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and at which time the Escrow Agent shall release deliver the Warrants representing the number of Warrant Shares equal to such amount losses. Buyer will provide a written letter of instruction to Parent as provided in Section 2.3. The Escrow Agent may assume contemporaneously with any Officer’s Certificate that will specify delivery instructions.
(iii) For the purpose of compensating Buyer or any Claim Notice required Indemnified Person for its Losses pursuant to this Agreement, the value per share of the Exchange Shares (i.e., of the Buyer Common Stock and the Warrant Shares comprising the Escrow Fund) shall be the average closing price of Buyer Common Stock for the five trading days immediately prior to the Closing Date. Buyer shall set forth in any Officer’s Certificate delivered to the Escrow Agent pursuant to Section 3(b)(ii) above the value per share of the Exchange Shares calculated pursuant to the provisions of this Section 3(b)(iii) and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into corresponding number of shares of Buyer Common Stock or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2, the Escrow Agent shall within two (2) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parent, the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit to Parent’s transfer agent an amount of Escrow Shares equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Warrant Shares to be released delivered from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
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Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX (a) If, as of the Merger AgreementRelease Date, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent has not received written notice of any Indemnification Claims, then the Escrowed Shares, 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 ten Business Days thereafter) be released to Seller or to the Seller Interest Holders in whose names they have been issued as detailed in a joint written notice from Party A and Party 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 Claims Notice shall immediately be disbursed to Seller or to the Seller Interest Holders as set forth in the joint delivery instructions delivered as of the Release Date.
(b) Subject to the terms and conditions set forth in Section 9.04 of the Purchase Agreement, if Party A desires to make a claim against the Escrow Fund with respect to any Indemnification Claim, then Party A shall, on or prior 5:00 p.m. Central Time on June 25, 2008, deliver a written claim notice (a “Claim Notice”)) to Party B and to the Escrow Agent. Each Such Claim Notice shall (i) state that Party A believes in good faith that it is entitled to all or any portion of the Escrow Fund and certify that all requirements set forth in Article IX of the Purchase Agreement with respect to such indemnification have been satisfied; (ii) contain a reasonably detailed summary description of the basis for circumstances supporting such belief; and (iii) indicate the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated good faith claimed amount of the Losses incurred or reasonably expected Damages necessary to be incurred by Parent as a result of such inaccuracy or breach under which satisfy such indemnification is sought claim (the “Claimed Amount”)) and what portion of the Escrow Funds 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 Section7(d) below.
2.2 Within fifteen (15c) calendar days Prior to 5:00 p.m. Central Time on the (30th) thirtieth day after receipt by the Stockholders’ Escrow Agent of a Claim Notice, the Stockholders’ Agent Party B may deliver to Parent Representative Party A and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ AgentParty B may: (ai) agrees agree that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to ParentParty A; (bii) agrees agree that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to ParentParty A; or (ciii) indicates indicate that no part of the Escrow Fund Claimed Amount may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Party A. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, Party A shall be the “Contested Amount.” ”
(A) If Party B does not deliver a Response Notice is not received by the Escrow Agent within such fifteen (15) 30-day period, then the Stockholders’ Agent Party B shall be conclusively deemed to have agreed indicated that an amount of Escrow Shares equal to the full entire Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.Party A.
2.3 (B) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2Party A, the Escrow Agent shall within two (2) Business Days promptly following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following deliver to Party A such number of Escrowed Shares, if any, equal in the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal aggregate to the full Claimed Amount.
2.4 (C) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount equal to less than part, but not all, of the full Claimed Amount may be released from the Escrow Fund to ParentParty A, the Escrow Agent shall, within two (2) Business Days shall promptly following the receipt of the Response Notice deliver to Party A such Response Noticenumber of Escrowed Shares, submit to Parent’s transfer agent an amount of Escrow Shares if any, equal in the aggregate to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 (D) If the Stockholders’ Agent Party B delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent Party B and Parent Representative Party A shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)Amount. If Parent Representative Party A and the Stockholders’ Agent Party B shall resolve such dispute, such written resolution shall be binding on all of the Stockholders Party B and ParentParty A and any other Buyer Indemnitee and Seller Indemnitee, as applicable, and a settlement agreement shall be signed by Parent Representative Party A and the Stockholders’ Agent Party B and sent to the Escrow Agent, which who shall, upon receipt thereof, if applicable, release Escrow Shares Escrowed Shares, if any, from the Escrow Fund in accordance with the specific instructions provided in such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit (E) If Party B and Party A are unable to Parent’s transfer agent resolve the Escrow Shares from the Escrow Fund in connection with dispute relating to any Contested Amount within two (2) Business Days 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 it ofby 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 copy written notice signed by Party A and Party B, providing specific written instructions regarding the delivery of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares Contested Amount, if any, to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration awarddecision, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and procedures, providing specific written instructions regarding the delivery of any or all of such Contested Amount. The Contested Amount shall be provided settled in accordance with the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association. The arbitrator's decision shall relate solely to whether Party A is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Fund pursuant to the applicable terms of the Purchase Agreement and this Escrow Agreement. The final decision of the arbitrator shall be furnished to Party A, Party B and the Escrow Agent in a writing signed by Parent Representative and shall constitute the conclusive determination of the issue in question, be binding upon Party A, the Seller Interest Holders and the Stockholders’ Escrow Agent. The aggregate 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 paid to the arbitrator in any proceeding and the transcript and other expenses of such proceeding.
(d) In the event Seller has transferred record ownership of the Escrowed Shares to the Seller Interest Holders, any amounts distributed to Party A from the Escrow Fund shall be satisfied pro rata from each Seller Interest Holder’s Escrowed Shares in accordance with each Seller Interest Holder’s Percentage Interest set forth on Annex I to this Escrow Agreement.
(e) The number of Escrow Shares Escrowed Shares, if any, to be delivered to Parent released in satisfaction payment and settlement of (i) the full any Claimed Amount under Section 2.3; (ii) the Amount, Agreed Amount under Section 2.4; or (iii) in connection with all or any portion of the Contested Amount under which may be awarded to Party A pursuant to Section 2.6, 7(c)(E) above shall be determined by dividing the amount of the applicable indemnifiable Losses such Claimed Amount, Agreed Amount or award, as fully and finally determined to be dueapplicable, by the volume weighted average closing sale price per share of Parent Buyer Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Nasdaq Global Select Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time for the 30 consecutive trading days ending on the date that is one (1) trading day immediately preceding the first-year anniversary release of such shares (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events). The Escrow Agent will not be responsible for determining the Closing Date (the “Termination Date”)share price.
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Samples: Escrow Agreement (Perficient Inc)
Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX of the Merger Agreement, Parent Representative shall promptly deliver (a) Subject to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”). Each Claim Notice shall contain a reasonably detailed summary provisions of the basis for the claim, the provision or provisions Article XII of the Merger Agreement alleged to have been inaccurate or breached and, if knownand Sections 5 of this Agreement, the estimated amount of Escrow Fund shall be available to compensate the Acquiror Indemnified Parties (as such term is defined in the Merger Agreement) for any Indemnified Losses incurred or reasonably expected to be incurred by Parent (as a result of such inaccuracy or breach under which such indemnification is sought (defined in the “Claimed Amount”Merger Agreement).
2.2 Within fifteen (15) calendar days after receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may deliver to Parent Representative and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ Agent: (a) agrees that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; (b) agrees that an amount of Escrow No Escrowed Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to Parent; or (c) indicates that no part any beneficial interest therein or any other portion of the Escrow Fund may be released pledged, sold, assigned or transferred, including by operation of law, by any Stockholder or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such Stockholder, prior to the delivery and transfer to such Stockholder of such Stockholder's Proportional Interest of the Escrow Fund by the Escrow Agent as provided herein.
(c) The Escrow Agent shall hold and safeguard the Escrow Fund during the Escrow Period, shall not treat the Escrow Fund as the property of Acquiror and shall hold and dispose of the Escrow Fund only in accordance with the terms hereof. Any distributions in respect of shares of Acquiror Common Stock transferred from the Escrow Fund shall not be added to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund but shall be distributed to the record holders thereof.
(d) Each Stockholder shall be deemed the record holder of, and shall have voting, dividend, distribution and all other rights in respect of, the shares of Acquiror Common Stock contributed to the Escrow Agent shall release Fund on behalf of such amount to Parent as provided Stockholder in Section 2.3accordance with the Stockholder List. The Escrow Agent may assume that any Claim Notice required shall promptly forward, or cause to be delivered forwarded, copies of any proxies, proxy statements and other soliciting materials which it receives to the Escrow Agent Stockholders, and shall vote the Stockholders’ Agent has been applicable portion of the Escrowed Shares in accordance with any written instructions timely received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify . Absent any such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2written instructions, the Escrow Agent shall within two not vote any Escrowed Shares.
(2e) Business Days Within 10 days following the receipt second anniversary of such Response Notice the Effective Time (orthe "Escrow Termination Date"), if Escrow Agent shall deliver to the Stockholders, in accordance with their respective Proportional Interest in Cash and Proportional Interest in Shares, all remaining amounts in the Escrow Fund that are not then subject to any unsatisfied Claims specified in any Claim Certificate delivered to the Stockholder Representative and the Escrow Agent has not received a Response Notice, within two (2) Business Days following the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from before the Escrow Fund Termination Date with respect to Parent, the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit to Parent’s transfer agent an amount of Escrow Shares equal to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice facts and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent circumstances existing prior to the Escrow AgentTermination Date ("Pending Claims"); provided, which shallhowever, upon receipt thereof, if applicable, release Escrow Shares from the Escrow Fund in accordance with such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it of: (i) a copy Claim Certificate shall be deemed to have been given hereunder with respect to any Indemnified Loss sought to be collected from an insurance company by an Acquiror Indemnified Party under Section 12.4 of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions Merger Agreement if such Indemnified Loss was incurred within six months prior to the Escrow Agent as Termination Date, and notwithstanding such collection efforts the Acquiror shall deliver such Claim Certificate prior to the amount of Escrow Shares to be released from the Escrow Fund, with respect to such Contested Amount; or Termination Date and (ii) a certified copy promptly upon the resolution of a final all of such Pending Claims in accordance with the provisions of Article XII of the Merger Agreement and non-appealable binding orderSections 5 of this Agreement, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions from Parent Representative and Escrow Agent shall deliver to the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreementin accordance with their respective Proportional Interests, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest all remaining amounts in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations not required to be made pursuant to a disbursement request shall be made in accordance with satisfy the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicablePending Claims.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”).
Appears in 1 contract
Samples: Indemnification Escrow Agreement (North American Scientific Inc)
Administration of Escrow Fund. Except as otherwise provided herein, the The Escrow Agent shall administer the ----------------------------- Escrow Fund as follows:
2.1 (a) If Parent a Buyer Person has or claims to have incurred or suffered Losses Buyer Damages for which it is or may be entitled to indemnification under Article IX VII (Indemnification) of the Merger Stock Purchase Agreement, Parent Representative shall promptly deliver the Buyer Person shall, prior to 5:00 p.m. Boston time on December 30, 2000 in connection with claims made pursuant to the Stockholders’ Agent and Escrow (the "Termination Date") deliver written notice of such claim (a "Claim Notice") to the Escrow Agent a written claim notice and those Sellers obligated to indemnify the Buyer Person from and against such Buyer Damages pursuant to Article VII (a “Claim Notice”)Indemnification) of the Stock Purchase Agreement. Each Claim Notice shall contain a reasonably detailed summary state the amount of claimed Buyer Damages (the "Claimed Amount") and the basis for the such claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”).
2.2 (b) Within fifteen (15) calendar 20 days after receipt by the Stockholders’ Agent delivery of a Claim Notice, the Stockholders’ Agent may Sellers so notified shall deliver to Parent Representative and the Buyer Person, with a copy to the Escrow Agent Agent, a written response (the “"Response Notice”") in which the Stockholders’ Agentsuch Sellers shall: (ai) agrees agree that an amount all of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; the Buyer Person, (bii) agrees agree that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “"Agreed Amount”") may be released from the Escrow Fund to Parent; the Buyer Person or (ciii) indicates contest that no part any of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, the Buyer Person. Any of the Sellers may contest the release from escrow of all or if a portion of the Stockholders’ Agent Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not deliver a constitute Buyer Damages for which the Buyer Person is entitled to indemnification under Article VII (Indemnification) of the Stock Purchase Agreement. If no Response Notice on a timely basis in accordance with Section 2.2, is delivered by such Sellers and received by the Escrow Agent within such 20-day period, such Sellers shall within two be deemed to have agreed that all of the Claimed Amount may be released to the Buyer Person from the Escrow Fund.
(2c) Business Days following If the receipt of such Sellers in the Response Notice unanimously agree (or, if the Escrow Agent has not received a Response Notice, within two (2or are deemed to have agreed) Business Days following the expiration that all of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentthe Buyer Person, the Escrow Agent shall, within two (2) Business Days following shall promptly be given written instructions from the receipt of such Response Notice, submit Buyer and the Sellers to Parent’s transfer agent an amount of Escrow Shares equal disburse to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares Buyer Person from the Escrow Fund an amount equal to the Claimed Amount (or such lesser amount as is then held in accordance with such agreement. Unless the Escrow Fund) and until the Escrow Agent receives shall follow such written notice that any such dispute has been resolved by Parent Representative instructions and shall retain the Stockholders’ Agentbalance, if any, in the Escrow Agent may assume without inquiry Fund.
(d) If the Sellers in the Response Notice agree that such dispute has part, but not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end all, of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Escrow Fund in connection with any Contested Claimed Amount within two (2) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares to may be released from the Escrow Fund to the Buyer Person, the Escrow Agent shall promptly be given written instructions from the Buyer and the Sellers to disburse to the Buyer Person from the Escrow Fund an amount equal to the Agreed Amount set forth in such Response Notice (or such lesser amount as is then held in the Escrow Fund) and the Escrow Agent shall follow such written instructions and shall retain the balance, if any, in the Escrow Fund.
(e) If the Escrow Agent receives instructions pursuant to this Section 9 to release all or a portion of the Claimed Amount, such distribution (the "Distributable Amount") shall with respect to such Contested Amount; or each Seller, be made:
(iii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint written instructions first from Parent Representative and any cash attributable to the Stockholders’ Agent instructing Seller that is then held in the Escrow Agent as Account, provided, however, that the actual amount of such Distributable Amount shall be equal to the resulting disbursement amount of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest cash then held in the Escrow Fund received from the proceeds of the sale of that number of Escrow Shares having a Fair Market Value (as defined in Section 1.2 (Consideration and Payment) of the Stock Purchase Agreement) and the investment earnings then held in the Escrow Account from the investment of such cash proceeds, with such cash amount deemed equal to such Distributable Amount (notwithstanding that the actual amount of such cash proceeds may be more than, or less than, the Distributable Amount); and
(ii) thereafter be made from that number of Escrow Shares having a Fair Market Value (as defined in Section 1.2 (Consideration and Payment) of the Stock Purchase Agreement) equal to such Distributable Amount not otherwise satisfied pursuant to subsection (i) above. To the extent required to satisfy the release of the Claimed Amount or Agreed Amount, as applicable, the Escrow Agent shall deliver, as soon as practicable, to Buyer's transfer agent (the "Transfer Agent") the Escrow Shares in exchange for a new stock certificate representing a number of shares of Buyer Stock (which will remain Escrow Shares) equal to the number of Escrow Shares previously held by the Escrow Agent, less the number of Escrow Shares having a Fair Market Value (as defined in Section 1.2 (Consideration and Payment) of the Stock Purchase Agreement) equal to the Claimed Amount or the Agreed Amount, as the case may be, and not otherwise satisfied by a cash payment in the manner contemplated in this Section 9. Subject to the limitation set forth on Exhibit B attached in Section 4 (Establishment of Escrow; Escrow Fund) hereto, upon any distribution of Escrow Property to Buyer in satisfaction of a Claim Notice by the Escrow Agent, the amount of Escrow Property held for the account of each Seller will be reduced by its Pro Rata Portion of the Escrow Property distributed to satisfy the Claim Notice. Notwithstanding anything herein Any fractional interests will be carried forward until the distribution of Escrow Property to the contrarySellers, at which time fractional interests will be rounded in the discretion of Buyer.
(f) If any and of the Sellers in the Response Notice contest the release of all calculations required to be made pursuant to a disbursement request or part of the Claimed Amount (the "Contested Amount"), the matter shall be made settled by binding arbitration in Boston, Massachusetts. All claims shall be settled by three arbitrators in accordance with the following sentence and shall be provided to Commercial Arbitration Rules then in effect of the Escrow Agent in a writing signed by Parent Representative American Arbitration Association (the "AAA Rules"). Such Sellers and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, Buyer Person shall be determined by dividing the amount each designate one arbitrator within 15 days of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary delivery of the Closing Date (the “Termination Date”).Sellers' Response
Appears in 1 contract
Administration of Escrow Fund. The Escrow Agent shall maintain the Escrowed Cash and Escrowed Shares in an account and shall create subaccounts for each Stockholder with Escrowed Cash. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent (a) If, as of the Release Date, the Escrow Agent has or claims not received written notice of any Indemnification Claims, then the Escrowed Cash shall promptly (and in any event no later than five business days thereafter) be released to the Stockholders who substituted Escrowed Cash for Escrowed Shares in accordance with each Stockholder’s account maintained by the Escrow Agent and the Escrowed Shares shall promptly (and in any event no later than ten Business Days thereafter) be released to the Stockholders in whose names they have incurred or suffered Losses for which it is or may be entitled been issued as detailed in a written notice from Party B detailing the delivery instructions.
(b) Subject to indemnification under Article IX the terms and conditions set forth in Section 10.04 of the Merger Agreement, Parent Representative shall promptly deliver if, at any time prior to the Stockholders’ Agent and 5:00 p.m. Central Time on February 20th, 2008, Party A desires to make a claim against the Escrow Agent Fund with respect to any Indemnification Claim, then Party A shall, on or prior 5:00 p.m. Central Time on February 20th, 2008, deliver a written claim notice (a “Claim Notice”)) to Party B and to the Escrow Agent. Each Such Claim Notice shall (i) state that Party A believes in good faith that it is entitled to all or any portion of the Escrow Fund and certify that all requirements set forth in Article X of the Merger Agreement with respect to such indemnification have been satisfied; (ii) contain a reasonably detailed summary description of the basis for circumstances supporting such belief; and (iii) indicate the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated good faith claimed amount of the Losses incurred or reasonably expected Damages necessary to be incurred by Parent as a result of satisfy such inaccuracy or breach under which such indemnification is sought Indemnification Claim (the “Claimed Amount”)) and what portion of the Escrow Funds 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.
2.2 Within fifteen (15c) calendar days Prior to 5:00 p.m. Central Time on the (30th) thirtieth day after receipt by the Stockholders’ Escrow Agent of a Claim Notice, the Stockholders’ Agent Party B may deliver to Parent Representative Party A and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ AgentParty B may: (ai) agrees agree that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to ParentParty A; (bii) agrees agree that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to ParentParty A; or (ciii) indicates indicate that no part of the Escrow Fund Claimed Amount may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Party A. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, Party A shall be the “Contested Amount.” ”
(A) If Party B does not deliver a Response Notice is not received by the Escrow Agent within such fifteen (15) 30-day period, then the Stockholders’ Agent Party B shall be conclusively deemed to have agreed indicated that an amount of Escrow Shares equal to the full entire Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.Party A.
2.3 (B) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2Party A, the Escrow Agent shall within two (2) Business Days promptly following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following deliver to Party A Escrowed Cash, if any, and such number of Escrowed Shares, if any, equal in the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal aggregate to the full Claimed Amount.
2.4 (C) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount equal to less than part, but not all, of the full Claimed Amount may be released from the Escrow Fund to ParentParty A, the Escrow Agent shall, within two (2) Business Days shall promptly following the receipt of the Response Notice deliver to Party A Escrowed Cash, if any, and such Response Noticenumber of Escrowed Shares, submit to Parent’s transfer agent an amount of Escrow Shares if any, equal in the aggregate to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 (D) If the Stockholders’ Agent Party B delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent Party B and Parent Representative Party A shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)Amount. If Parent Representative Party A and the Stockholders’ Agent Party B shall resolve such dispute, such written resolution shall be binding on all of the Stockholders Party B and ParentParty A and any other Parent Indemnified Person and Stockholder Indemnitee, as applicable, and a settlement agreement shall be signed by Parent Representative Party A and the Stockholders’ Agent Party B and sent to the Escrow Agent, which who shall, upon receipt thereof, if applicable, release Escrow Shares Escrowed Cash, if any, and Escrowed Shares, if any, from the Escrow Fund in accordance with the specific instructions provided in such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit (E) If Party B and Party A are unable to Parent’s transfer agent resolve the Escrow Shares from the Escrow Fund in connection with dispute relating to any Contested Amount within two (2) Business Days 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 it ofby 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 copy written notice signed by Party A and Party B, providing specific written instructions regarding the delivery of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares Contested Amount, if any, to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration awarddecision, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and procedures, providing specific written instructions regarding the delivery of any or all of such Contested Amount. The Contested Amount shall be provided settled in accordance with the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association. The arbitrator's decision shall relate solely to whether Party A is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Fund pursuant to the applicable terms of the Merger Agreement and this Escrow Agreement. The final decision of the arbitrator shall be furnished to Party A, Party B and the Escrow Agent in a writing signed by Parent Representative and shall constitute the conclusive determination of the issue in question, be binding upon Party A, the Surviving Corporation, the Stockholders and the Stockholders’ Escrow Agent. The aggregate number prevailing party in any arbitration (which determination shall be made by the arbitrator) shall be entitled to an award of Escrow Shares attorneys’ fees and costs to be delivered 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 Parent be paid to the arbitrator in satisfaction any proceeding and the transcript and other expenses of such proceeding.
(d) Any amounts distributed to Party A from the Escrow Fund shall be satisfied pro rata from each Stockholder’s Escrowed Cash and Escrowed Shares in accordance with each Stockholder’s Percentage Interest set forth on Annex I to this Escrow Agreement as follows: (i) the full Claimed Amount under Section 2.3; first, from each Stockholder’s Escrowed Cash, if any, and (ii) second, from each Stockholder’s Escrowed Shares (to the extent a Stockholder’s Escrowed Cash is insufficient to satisfy such Indemnification Claims). In the event any individual Stockholder’s Escrowed Cash and Escrowed Shares are exhausted prior to the Escrowed Cash and Escrowed Shares of any other Stockholder, the amounts remaining to be distributed to Party A from the Escrow Fund shall continue to be satisfied in accordance with each remaining Stockholder’s Percentage Interest set forth on Annex I to this Agreement and any Stockholder whose Escrowed Cash and Escrowed Shares are exhausted prior to the Escrowed Cash and Escrowed Shares of any other Stockholder shall be personally liable to Party A for such Stockholder’s Percentage Interest of the amounts remaining due to Party A or becoming due to Party A in accordance with this Escrow Agreement or the Merger Agreement and the Escrow Agent shall have no liability or responsibility with respect to same.
(e) The number of Escrowed Shares, if any, to be released in payment and settlement of any Claimed Amount, Agreed Amount under Section 2.4; or (iii) in connection with all or any portion of the Contested Amount under which may be awarded to Parent pursuant to Section 2.6, 8(c)(E) above shall be determined by dividing the amount of the applicable indemnifiable Losses such Claimed Amount, Agreed Amount or award, as fully and finally determined to be dueapplicable, by the volume weighted average closing sales price of one share of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Nasdaq Global Select Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time for the 30 consecutive trading days ending on the date that is one (1) trading day immediately preceding the first-year anniversary release of such shares (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events). The Escrow Agent will not be responsible for determing the Closing Date (the “Termination Date”)share price.
Appears in 1 contract
Samples: Escrow Agreement (Perficient Inc)
Administration of Escrow Fund. Except as otherwise provided herein, the The Escrow Agent shall administer the ----------------------------- Escrow Fund as follows:
2.1 (a) If Parent a Buyer Person has or claims to have incurred or suffered Losses Buyer Damages for which it is or may be entitled to indemnification under Article IX VII of the Merger Stock Purchase Agreement, Parent Representative shall promptly deliver the Buyer Person shall, prior to 5:00 p.m. Boston time on (i) July 31, 1998 in connection with claims made pursuant to the Stockholders’ Agent and General Escrow (the "General Termination Date") or (ii) November 30, 1998 in connection with claims made pursuant to the Special Escrow (the "Special Termination Date"), deliver written notice of such claim (a "Claim Notice") to the Escrow Agent a written claim notice (a “Claim Notice”)and those Sellers obligated to indemnify the Buyer Person from and against such Buyer Damages pursuant to Article VII of the Stock Purchase Agreement. Each Claim Notice shall contain a reasonably detailed summary state the amount of claimed Buyer Damages and shall specify the number of Escrow Shares at Fair Market Value required to pay such amount (the "Claimed Amount") and the basis for the such claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated amount of the Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought (the “Claimed Amount”).
2.2 (b) Within fifteen (15) calendar 20 days after receipt by the Stockholders’ Agent delivery of a Claim Notice, the Stockholders’ Agent may Sellers so notified shall deliver to Parent Representative and the Buyer Person, with a copy to the Escrow Agent Agent, a written response (the “"Response Notice”") in which the Stockholders’ Agentsuch Sellers shall: (ai) agrees agree that an amount all of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent; the Buyer Person, (bii) agrees agree that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “"Agreed Amount”") may be released from the Escrow Fund to Parent; the Buyer Person or (ciii) indicates contest that no part any of the Escrow Fund may be released from the Escrow Fund to Parent in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within such fifteen (15) day period, then the Stockholders’ Agent shall be conclusively deemed to have agreed that an amount of Escrow Shares equal to the full Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.
2.3 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, the Buyer Person. The Sellers may contest the release from escrow of all or if a portion of the Stockholders’ Agent Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not deliver a constitute Buyer Damages for which the Buyer Person is entitled to indemnification under Article VII of the Stock Purchase Agreement. If no Response Notice on a timely basis in accordance with Section 2.2, is delivered by such Sellers and received by the Escrow Agent within such 20-day period, such Sellers shall within two be deemed to have agreed that all of the Claimed Amount may be released to the Buyer Person from the Escrow Fund.
(2c) Business Days following If the receipt of such Sellers in the Response Notice agree (or, if the Escrow Agent has not received a Response Notice, within two (2or are deemed to have agreed) Business Days following the expiration that all of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal to the full Claimed Amount.
2.4 If the Stockholders’ Agent delivers a Response Notice agreeing that an amount equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentthe Buyer Person, the Escrow Agent shall, within two (2) Business Days following shall promptly be given written instructions from the receipt of such Response Notice, submit Buyer and the Sellers to Parent’s transfer agent an amount of Escrow Shares equal disburse to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 If the Stockholders’ Agent delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent and Parent Representative shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative and the Stockholders’ Agent resolve such dispute, such written resolution shall be binding on all of the Stockholders and Parent, and a settlement agreement shall be signed by Parent Representative and the Stockholders’ Agent and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares Buyer Person from the Escrow Fund an amount equal to the Claimed Amount (or such lesser amount as is then held in accordance with such agreement. Unless the Escrow Fund) and until the Escrow Agent receives shall follow such written notice instructions.
(d) If the Sellers in the Response Notice agree that any such dispute has been resolved by Parent Representative and the Stockholders’ Agentpart, the Escrow Agent may assume without inquiry that such dispute has but not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end all, of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares from the Escrow Fund in connection with any Contested Claimed Amount within two (2) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares to may be released from the Escrow FundFund to the Buyer Person, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration award, accompanied by joint the Escrow Agent shall promptly be given written instructions from Parent Representative the Buyer and the Stockholders’ Agent instructing Sellers to disburse to the Buyer Person from the Escrow Fund an amount equal to the Agreed Amount set forth in such Response Notice (or such lesser amount as is then held in the Escrow Fund) and the Escrow Agent as shall follow such written instructions.
(e) If the Escrow Agent receives instructions pursuant to this Section 7 to release all or a portion of the Claimed Amount, the Escrow Agent shall deliver to Buyer's transfer agent (the "Transfer Agent") the Escrow Shares in exchange for a new stock certificate representing a number of shares of Buyer Stock (which will remain Escrow Shares) equal to the resulting disbursement number of Escrow Shares previously held by the Escrow Agent, less the number of Escrow Shares having a Fair Market Value (as defined in Section 1.2 of the Stock Purchase Agreement) equal to the Claimed Amount or the Agreed Amount, as the case may be, as soon as practicable. Subject to the limitation set forth in Section 4 hereto, upon any distribution of Escrow Shares to Buyer in satisfaction of a Claim Notice by the Escrow Agent, the number of Escrow Shares held for the account of each Seller will be reduced by its Pro Rata Portion of the Escrow Fund specified thereinShares distributed to satisfy the Claim Notice. Any fractional interests will be carried forward until the distribution of Escrow Shares to the Sellers, at which time fractional interests will be rounded in the discretion of Buyer.
2.7 At any time that a payment, distribution (f) If the Sellers in the Response Notice contest the release of all or holdback is required to be made pursuant to this Escrow Agreementpart of the Claimed Amount (the "Contested Amount"), the payment, distribution or holdback matter shall be from or to each Stockholder settled by binding arbitration in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached heretoBoston, Massachusetts. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request All claims shall be made settled by three arbitrators in accordance with the following sentence and shall be provided to Commercial Arbitration Rules then in effect of the Escrow Agent in a writing signed by Parent Representative American Arbitration Association (the "AAA Rules"). Such Sellers and the Stockholders’ Agent. The aggregate number of Escrow Shares to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; or (iii) in connection with any Contested Amount under Section 2.6, Buyer Person shall be determined by dividing the amount each designate one arbitrator within 15 days of the applicable indemnifiable Losses as fully and finally determined to be due, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary delivery of the Closing Date (the “Termination Date”).Sellers' Response
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Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 (a) If any of Parent or Subsidiary or any officer, director, employee or authorized agent or successor or permitted assign of Parent or Subsidiary (each, a “Buyer Indemnified Party” and collectively, the “Buyer Indemnified Parties”) has or claims to have incurred or suffered Losses any debts, liabilities, obligations, losses, damages, costs and expenses (including, interest and prejudgment interest in any litigated matter), penalties, fines, court costs and reasonable consultants’ and attorneys’ fees and expenses, judgments, settlements and assessments totaling more than $25,000 (“Losses”) for which it is or may be entitled to indemnification or reimbursement under Article IX of the Merger Purchase Agreement, Parent Representative shall promptly shall, on behalf of such Buyer Indemnified Party, deliver to the Stockholders’ Agent and the Escrow Agent a written claim notice (a “Claim Notice”)) to the Escrow Agent, with a copy to Seller, no later than 11:59 p.m. PT on the last Business Day immediately prior to the Escrow Fund Release Date, as defined in Section 4 below. Each Claim Notice shall contain state or provide (i) that such Buyer Indemnified Party believes that it is entitled to indemnification or reimbursement pursuant to Article 6 of the Purchase Agreement, (ii) a reasonably detailed summary description of the circumstances supporting the basis for the claim, the provision such Buyer Indemnified Party’s belief that it is entitled to indemnification or provisions reimbursement under Article 6 of the Merger Agreement alleged to have been inaccurate or breached andPurchase Agreement, if knownand (iii) a non‑binding, preliminary estimate of the estimated aggregate dollar amount of the actual and potential Losses incurred or reasonably expected to be incurred by Parent as a result of such inaccuracy or breach under which such indemnification is sought Buyer Indemnified Party (the “Claimed Amount”).
2.2 Within fifteen (15b) calendar days By 5:00 p.m. PT on the tenth (10th) day, or if such day is not a Business Day, by 8:00 a.m. PT on the following Business Day, after Escrow Agent’s receipt by the Stockholders’ Agent of a Claim Notice, the Stockholders’ Agent may Seller shall deliver to Parent Representative and to the Escrow Agent Agent, with a copy to Parent, a written response (the “Response Notice”) in which the Stockholders’ AgentSeller: (ai) agrees that an amount of Escrow Shares cash equal to the full Claimed Amount Amount, not to exceed the Escrow Fund, may be released from the Escrow Fund to Parentthe Buyer Indemnified Party; (bii) agrees that an amount of Escrow Shares cash equal to part, but not all, of the Claimed Amount (Amount, not to exceed the “Agreed Amount”) Escrow Fund, may be released from the Escrow Fund to Parentthe Buyer Indemnified Party; or (ciii) indicates that no part of the Escrow Fund may be released from the Escrow Fund to Parent the Buyer Indemnified Party in respect of the Claimed Amount. Any part of the Claimed Amount that is not agreed to be released to Parent the Buyer Indemnified Party pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ AgentSeller, shall be the “Contested Amount.” If a Response Notice is not received by the Escrow Agent within by 5:00 p.m. PT on the last day of such fifteen ten (15) day 10)-day period, or if such a day is not a Business Day, by 8:00 a.m. PT on the following Business Day, then the Stockholders’ Agent Seller shall be conclusively deemed to have agreed that an amount of Escrow Shares cash equal to the full Claimed Amount may Amount, up to the full Escrow Fund, shall be released to Parent the Buyer Indemnified Party from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receiptFund.
2.3 (c) If the Stockholders’ Agent Seller delivers a Response Notice agreeing that an amount of Escrow Shares cash equal to the full Claimed Amount may be released from the Escrow Fund to Parentthe Buyer Indemnified Party, or if the Stockholders’ Agent Seller does not deliver a Response Notice on a timely basis in accordance with Section 2.22(b), the Escrow Agent shall within two (2) Business Days following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response NoticeNotice within the required ten (10)‑day period, within two (2) Business Days following the expiration of the fifteen ten (15) day 10)‑day period referred to in Section 2.22(b)), submit deliver to Parent’s transfer agent an such Buyer Indemnified Party such amount of Escrow Shares cash equal to the full Claimed Amount, up to the full Escrow Fund.
2.4 (d) If the Stockholders’ Agent Seller delivers a Response Notice agreeing that an amount of cash equal to less than the full Claimed Amount may be released from the Escrow Fund to Parentthe Buyer Indemnified Party (the “Agreed Amount”), the Escrow Agent shall, within two (2) Business Days following the receipt of such Response Notice, submit deliver to Parent’s transfer agent such Buyer Indemnified Party an amount of Escrow Shares cash equal to the Agreed Amount, up to the full Escrow Fund. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.22(b).
2.5 (e) If the Stockholders’ Agent Seller delivers a Response Notice indicating that there is a Contested Amount, Seller and the Stockholders’ Agent and Parent Representative Buyer Indemnified Party shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen ten (1510) calendar days Business Days of Parent RepresentativeParent’s receipt of such Response Notice (the “Negotiation Period”). If Parent Representative the Buyer Indemnified Party and the Stockholders’ Agent Seller resolve such dispute, such written resolution shall be binding on all of the Stockholders Seller and Parentsuch Buyer Indemnified Party, and a settlement agreement shall be signed by an Authorized Representative of Parent (on behalf of such Buyer Indemnified Party) and an Authorized Representative and the Stockholders’ Agent of Seller and sent to the Escrow Agent, which shall, upon receipt thereof, if applicable, release Escrow Shares an amount of cash from the Escrow Fund in accordance with such settlement agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative the Buyer Indemnified Party and the Stockholders’ AgentSeller, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative the Buyer Indemnified Party and the Stockholders’ Agent Seller fail to reach agreement by the end of the Negotiation Period, each party Party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Purchase Agreement and the Escrow Agent shall continue to hold such Contested Amount in escrow in accordance with the terms of this Agreement.
2.6 (f) The Escrow Agent shall submit to Parent’s transfer agent the Escrow Shares release an amount of cash from the Escrow Fund in connection with any Contested Amount within two (2) Business Days after the delivery to it of: (i) a copy of a settlement agreement executed by Parent Representative and the Stockholders’ Agent Seller setting forth instructions to the Escrow Agent as to the amount of Escrow Shares cash to be released from the Escrow Fund, Fund with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final, non-appealable arbitration award from the prevailing Party along with a certification from its counsel attesting to the finality and binding nature of the final order or arbitration award, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing that instructs the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein, in each case, plus any interest or earnings earned on any portion of the amount to be distributed.
2.7 At (g) Notwithstanding anything to the contrary herein, any time that release of funds by the Escrow Agent to a payment, distribution or holdback is required to be made Buyer Indemnified Party pursuant to this Escrow Agreement, the payment, distribution or holdback Section 2 shall be from made to Parent (for distribution to the Buyer Indemnified Party in accordance with such Buyer Indemnified Party’s instructions).
(h) The Escrow Agent may rely conclusively on any Claim Notice it receives hereunder. The Escrow Agent shall have no responsibility to determine whether any Claim Notice satisfies the conditions set forth in the Purchase Agreement for making an indemnification claim, including whether there is a basis for making a claim, whether the claim is set forth in sufficient detail, or that a copy of the Claim Notice was sent to or received by Seller, or that a Response Notice was sent to or received by the Parent or any Buyer Indemnified Party.
(i) Buyer and Seller each Stockholder agree to deliver Claim Notices and Response Notices to the other Party in the same proportion manner and at the same time as such Stockholder’s proportionate interest in delivery to the Escrow Fund as set forth on Exhibit B attached heretoAgent. Notwithstanding anything herein to the contrary, any and all calculations required to be If delivery of a Claim Notice or Response Notice is made pursuant to a disbursement request shall be made in accordance with the following sentence and shall be provided to the Escrow Agent in a writing signed by Parent Representative and the Stockholders’ Agent. The aggregate number of Escrow Shares electronic mail, delivery must also be made to be delivered to Parent in satisfaction of (i) the full Claimed Amount under Section 2.3; (ii) the Agreed Amount under Section 2.4; Buyer or (iii) in connection with any Contested Amount under Section 2.6Seller, shall be determined by dividing the amount of the applicable indemnifiable Losses as fully and finally determined to be duerespectively, by the volume weighted average closing price of Parent Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment another method in satisfaction of such indemnification obligation, as reported on the Eligible Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time on the date that is the first-year anniversary of the Closing Date (the “Termination Date”accordance with Section 10(b).
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Administration of Escrow Fund. Except as otherwise provided herein, the Escrow Agent shall administer the Escrow Fund as follows:
2.1 If Parent has or claims to have incurred or suffered Losses for which it is or may be entitled to indemnification under Article IX (a) If, as of the Merger AgreementRelease Date, Parent Representative shall promptly deliver to the Stockholders’ Agent and the Escrow Agent has not received written notice of any Indemnification Claims, then the Escrowed Shares, 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 ten Business Days thereafter) be released to Seller or to the Seller Interest Holders in whose names they have been issued as detailed in a joint written notice from Party A and Party 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 Claims Notice shall immediately be disbursed to Seller or to the Seller Interest Holders as set forth in the joint delivery instructions delivered as of the Release Date.
(b) Subject to the terms and conditions set forth in Section 9.04 of the Purchase Agreement, if Party A desires to make a claim against the Escrow Fund with respect to any Indemnification Claim, then Party A shall, on or prior 5:00 p.m. Central Time on June 25, 2008, deliver a written claim notice (a “Claim Notice”)) to Party B and to the Escrow Agent. Each Such Claim Notice shall (i) state that Party A believes in good faith that it is entitled to all or any portion of the Escrow Fund and certify that all requirements set forth in Article IX of the Purchase Agreement with respect to such indemnification have been satisfied; (ii) contain a reasonably detailed summary description of the basis for circumstances supporting such belief; and (iii) indicate the claim, the provision or provisions of the Merger Agreement alleged to have been inaccurate or breached and, if known, the estimated good faith claimed amount of the Losses incurred or reasonably expected Damages necessary to be incurred by Parent as a result of such inaccuracy or breach under which satisfy such indemnification is sought claim (the “Claimed Amount”)) and what portion of the Escrow Funds 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 Section7(d) below.
2.2 Within fifteen (15c) calendar days Prior to 5:00 p.m. Central Time on the (30th) thirtieth day after receipt by the Stockholders’ Escrow Agent of a Claim Notice, the Stockholders’ Agent Party B may deliver to Parent Representative Party A and to the Escrow Agent a written response (the “Response Notice”) in which the Stockholders’ AgentParty B may: (ai) agrees agree that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to ParentParty A; (bii) agrees agree that an amount of Escrow Shares equal to part, but not all, of the Claimed Amount (the “Agreed Amount”) may be released from the Escrow Fund to ParentParty A; or (ciii) indicates indicate that no part of the Escrow Fund Claimed Amount may be released from the Escrow Fund to Parent in respect of the Claimed Amount. toParty A. Any part of the Claimed Amount that is not agreed to be released to Parent pursuant to the Response Notice, which determination shall be made in good faith by the Stockholders’ Agent, Party A shall be the “Contested Amount.” ”
(A) If Party B does not deliver a Response Notice is not received by the Escrow Agent within such fifteen (15) 30-day period, then the Stockholders’ Agent Party B shall be conclusively deemed to have agreed indicated that an amount of Escrow Shares equal to the full entire Claimed Amount may be released to Parent from the Escrow Fund and the Escrow Agent shall release such amount to Parent as provided in Section 2.3. The Escrow Agent may assume that any Claim Notice required to be delivered to the Escrow Agent and the Stockholders’ Agent has been received by the Stockholders’ Agent on the date it has been received by the Escrow Agent, but the Escrow Agent need not inquire into or verify such receipt.Party A.
2.3 (B) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount of Escrow Shares equal to the full Claimed Amount may be released from the Escrow Fund to Parent, or if the Stockholders’ Agent does not deliver a Response Notice on a timely basis in accordance with Section 2.2Party A, the Escrow Agent shall within two (2) Business Days promptly following the receipt of such Response Notice (or, if the Escrow Agent has not received a Response Notice, within two (2) Business Days following deliver to Party A such number of Escrowed Shares, if any, equal in the expiration of the fifteen (15) day period referred to in Section 2.2), submit to Parent’s transfer agent an amount of Escrow Shares equal aggregate to the full Claimed Amount.
2.4 (C) If the Stockholders’ Agent Party B delivers a Response Notice agreeing that an amount equal to less than part, but not all, of the full Claimed Amount may be released from the Escrow Fund to ParentParty A, the Escrow Agent shall, within two (2) Business Days shall promptly following the receipt of the Response Notice deliver to Party A such Response Noticenumber of Escrowed Shares, submit to Parent’s transfer agent an amount of Escrow Shares if any, equal in the aggregate to the Agreed Amount. Such payment shall not be deemed to be made in full satisfaction of the claim described in such Claim Notice and the remaining amount shall be the Contested Amount as provided in Section 2.2.
2.5 (D) If the Stockholders’ Agent Party B delivers a Response Notice indicating that there is a Contested Amount, the Stockholders’ Agent Party B and Parent Representative Party A shall attempt in good faith to resolve the dispute related to the Contested Amount within fifteen (15) calendar days of Parent Representative’s receipt of such Response Notice (the “Negotiation Period”)Amount. If Parent Representative Party A and the Stockholders’ Agent Party B shall resolve such dispute, such written resolution shall be binding on all of the Stockholders Party B and ParentParty A and any other Buyer Indemnitee and Seller Indemnitee, as applicable, and a settlement agreement shall be signed by Parent Representative Party A and the Stockholders’ Agent Party B and sent to the Escrow Agent, which who shall, upon receipt thereof, if applicable, release Escrow Shares Escrowed Shares, if any, from the Escrow Fund in accordance with the specific instructions provided in such agreement. Unless and until the Escrow Agent receives written notice that any such dispute has been resolved by Parent Representative and the Stockholders’ Agent, the Escrow Agent may assume without inquiry that such dispute has not been resolved. If Parent Representative and the Stockholders’ Agent fail to reach agreement by the end of the Negotiation Period, each party shall be entitled to its legal remedies in accordance with this Escrow Agreement and the Merger Agreement.
2.6 The Escrow Agent shall submit (E) If Party B and Party A are unable to Parent’s transfer agent resolve the Escrow Shares from the Escrow Fund in connection with dispute relating to any Contested Amount within two (2) Business Days 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 it ofby 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 copy written notice signed by Party A and Party B, providing specific written instructions regarding the delivery of a settlement agreement executed by Parent Representative and the Stockholders’ Agent setting forth instructions to the Escrow Agent as to the amount of Escrow Shares Contested Amount, if any, to be released from the Escrow Fund, with respect to such Contested Amount; or (ii) a certified copy of a final and non-appealable binding order, decree or judgment issued or rendered by a court of competent jurisdiction or a certified copy of a final arbitration awarddecision, accompanied by joint written instructions from Parent Representative and the Stockholders’ Agent instructing the Escrow Agent as to the resulting disbursement of the Escrow Fund specified therein.
2.7 At any time that a payment, distribution or holdback is required to be made pursuant to this Escrow Agreement, the payment, distribution or holdback shall be from or to each Stockholder in the same proportion as such Stockholder’s proportionate interest in the Escrow Fund as set forth on Exhibit B attached hereto. Notwithstanding anything herein to the contrary, any and all calculations required to be made pursuant to a disbursement request shall be made in accordance with the following sentence and procedures, providing specific written instructions regarding the delivery of any or all of such Contested Amount. The Contested Amount shall be provided settled in accordance with the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association. The arbitrator's decision shall relate solely to whether Party A is entitled to receive the Contested Amount (or a portion thereof) from the Escrow Fund pursuant to the applicable terms of the Purchase Agreement and this Escrow Agreement. The final decision of the arbitrator shall be furnished to Party A, Party B and the Escrow Agent in a writing signed by Parent Representative and shall constitute the conclusive determination of the issue in question, be binding upon Party A, the Seller Interest Holders and the Stockholders’ Escrow Agent. The aggregate 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 paid to the arbitrator in any proceeding and the transcript and other expenses of such proceeding.
(d) In the event Seller has transferred record ownership of the Escrowed Shares to the Seller Interest Holders, any amounts distributed to Party A from the Escrow Fund shall be satisfied pro rata from each Seller Interest Holder’s Escrowed Shares in accordance with each Seller Interest Holder’s Percentage Interest set forth on Annex I to this Escrow Agreement.
(e) The number of Escrow Shares Escrowed Shares, if any, to be delivered to Parent released in satisfaction payment and settlement of (i) the full any Claimed Amount under Section 2.3; (ii) the Amount, Agreed Amount under Section 2.4; or (iii) in connection with all or any portion of the Contested Amount under which may be awarded to Party A pursuant to Section 2.6, 7(c)(E) above shall be determined by dividing the amount of the applicable indemnifiable Losses such Claimed Amount, Agreed Amount or award, as fully and finally determined to be dueapplicable, by the volume weighted average closing sale price per share of Parent Buyer Common Stock over the 30 trading-day period ending on the date immediately preceding the date of any payment in satisfaction of such indemnification obligation, as reported on the Eligible Nasdaq Global Select Market or other applicable exchange, as applicable.
2.8 Parent Representative may submit a Claim Notice at any time prior to 11:59 p.m. Pacific Time for the 30 consecutive trading days ending on the date that is one (1) trading day immediately preceding the first-year anniversary release of such shares (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events). The Escrow Agent will not be responsible for determining the Closing Date (the “Termination Date”)share price.
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Samples: Escrow Agreement (Perficient Inc)