Claims Against Escrow Fund. (a) Subject to the terms and conditions of this Agreement, the Escrow Fund shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to the Escrow Agent and the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) business days after the delivery to the Escrow Agent of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall withdraw from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees. (b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim. (c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid. (d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Claims Against Escrow Fund. (a) Subject to the terms and conditions provisions of this Article VII of the Merger Agreement, the Escrow Fund shall be applied Stockholders have agreed to indemnify and hold harmless each of Parent and the Buyer Indemnitees against Surviving Corporation from and against, and shall compensate and reimburse each of them for, Losses, as set forth therein. Upon compliance with the terms hereof, Parent shall be entitled to receive payment in Escrow Shares from the Escrow Fund for amounts owing in respect of Losses as set forth in any indemnification obligations or other claims under or pursuant to the Merger Agreement.
(a) Parent shall give written notice (a " Claim Certificate (as defined belowNotice") duly delivered to the Stockholders and the Escrow Agent specifying in reasonable detail the nature and the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification dollar amount of any claim (a "Claim") it is provided for asserting under the indemnification provisions of the Merger Agreement; provided, it or they however, that Parent may make more than one Claim with respect to any underlying state of facts. If any Stockholder wishes to object to any Claim raised in the Claim Notice, he shall deliver provide Parent and Escrow Agent with a notice, executed by him, specifying in reasonable detail the basis for his objection to the Claim (an "Objection Notice") within 30 business days following the date upon which the Stockholders received the Claim Notice. If no Stockholder shall have objected to any Claim raised in the Claim Notice, the Stockholders shall each promptly countersign the Claim Notice and return a copy to each of the Parent and the Escrow Agent.
(b) Upon the receipt by Parent and Escrow Agent of an Objection Notice, Parent and the Stockholders shall attempt in good faith to agree upon the rights of the respective parties with respect to each disputed Claim within 30 days. If Parent and the Stockholders are able to resolve the issues raised in the Objection Notice, Parent and the Stockholders shall provide the Escrow Agent and the Seller Stockholders with a certificate written notice (a "Claim CertificateSettlement Notice"), which shall be signed ) executed by each Stockholder and by an officer of the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate Parent and setting forth the basis for substance of such Losses. Upon receipt resolution of disputed issue(s).
(c) If at any such Claim Certificate and subject time prior to Section 5(b)the expiration of this Escrow Agreement, the Escrow Agent shallreceives a Settlement Notice, as soon as practicable (but not earlier than twelve (12) business days after a final non-appealable order of a court of competent jurisdiction, or other joint written instructions from both Parent and the delivery Stockholders, to the make payment to Parent, then Escrow Agent of shall make such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required to make a payment out of the Escrow Fund hereunderto the Parent in accordance with such instructions, unless the Escrow Fund shall be insufficient to comply with such instructions. In such a case, the Escrow Agent shall withdraw from pay the Escrow Fund, or any remaining portion thereof, to Parent and shall advise the Parent and the Stockholders in writing of the amount of such payment.
(d) If no such agreement can be reached after good faith negotiation (a "Dispute") within thirty (30) days after the receipt by Parent and Escrow Agent of the Objection Notice, such Dispute shall be submitted to mandatory and binding arbitration within 15 days of the end of such 30-day period. The arbitration shall be pursuant to the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") and the decision of the arbitrators as to the validity and amount of any Claim that is the subject of a Dispute shall be binding and conclusive upon the parties to this Agreement and Escrow Agent shall be entitled to act in accordance with such decision and make or withhold payments out of the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction the arbitrator's award. The arbitration hearing shall include a computation be held in Denver, Colorado. The arbitration panel will have no power or authority, under the Commercial Arbitration Rules of the value AAA or otherwise, to relieve the parties from their agreement hereunder, to arbitrate or otherwise to amend or disregard any provision of this Agreement, including without limitation, the provisions of this Section 4. It is understood and agreed that the artibrator's award in such shares arbitration shall relate solely to the dispute described in the Objection Notice, shall determine only whether or not the party giving the Claim Notice is entitled to all or part of Buyer Stock the amounts claimed in the Claim Notice, and Other Property calculated shall in accordance with Section 9.04(c) of no way involve any other matter relating to the Merger Agreement and or this Escrow AgreementAgreement unless Parent and the Stockholders shall otherwise agree through written directions to the arbitrator, which directions must be executed by Parent and the Stockholders. Further, in the event that the resolution of such dispute shall depend on the final disposition of a claim made by an unaffiliated third party against Parent, Stockholders, or the Company, such arbitrator shall defer final resolution of such dispute until such third party claim has been resolved or appropriate provision therefor has been made. Any award rendered by the arbitration panel will be final, conclusive and binding upon the parties and any judgment hereon may be entered and enforced in any court of competent jurisdiction. All costs and expenses of such arbitration (including legal expenses of either party) shall be paid as directed by the arbitrator or, in the absence of such a direction, responsibility of the party having incurred such expenses. The intent of the parties hereto is that, to the extent a party prevails in the arbitration, the other party shall be obligated to reimburse the prevailing party for its costs and expenses. In no event shall any of such costs or expenses be paid or payable by the Escrow Agent, and shall include a calculation which confirms that Parent and the payment shall be made for Stockholders (to the accounts of extent directed by the Seller Stockholders pro rata arbitrator in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (iforegoing) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The shall reimburse Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held for any costs incurred thereby or in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemniteesconnection therewith.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Claims Against Escrow Fund. Pursuant to Section 9.2 of the Merger Agreement, Radiance is entitled to make claims against the Escrow Fund for Radiance Indemnifiable Damages. Unless this Agreement is terminated at an earlier date, Radiance shall be entitled to make claims against the Escrow Fund for such purpose at any time through and including May __, 2003 (one year after the Effective Time) (the "Escrow Period") (unless this Agreement is terminated at an earlier date pursuant to Section 5 hereof), but not thereafter. Notwithstanding the foregoing, the Escrow Period shall be extended as it relates to any claims for Radiance Indemnifiable Damages made during the Escrow Period which remain in dispute and have not been resolved as of such date. Any claim by Radiance against the Escrow Fund for Radiance Indemnifiable Damages during the above time period shall be presented to the Escrow Agent as follows:
(a) Subject to the terms and conditions of this Agreement, the Escrow Fund Radiance shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to notify the Escrow Agent and the Seller Stockholders prior Holders' Representative in writing of any Radiance Indemnifiable Damages that Radiance claims are subject to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions Section 9.2 of the Merger Agreement, it or they . The notice ("Notice of Claim") shall deliver to describe the claim and specify the amount thereof.
(b) The Holders' Representative may contest Radiance's claim on behalf of the Holders by giving the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer Radiance written notice of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) contest within 20 business days after the delivery to the Escrow Agent receipt of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth claim for indemnification. If Radiance's indemnification claim remains in such Claim Certificate out dispute and unresolved for 30 days following Radiance's receipt of the Escrow Fund. Whenever the Escrow Agent is required to make a payment out written notice of the Escrow Fund hereundercontest, the Escrow Agent shall withdraw from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment disputed claim shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, submitted to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund arbitration in accordance with Section 8 hereof below.
("Other Property"). The c) If the Holders, or the Holders' Representatives, as applicable, do not contest Radiance's indemnification claim pursuant to Section 2(b) above, then the Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in Radiance an amount from the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered equal to the dollar amount of the Radiance Indemnifiable Damages claimed by Radiance in its Notice of Claim. For this purpose, Escrow Agent. Shares of Buyer Stock so delivered shall be valued in accordance with the terms provisions of Section 9.04(c2.1(b)(v) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority OwnersEscrow Share Price") give written notice to GLOBAL and ). In the event that the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Funds contains both Escrow Agent to take the action provided for in the preceding paragraph Shares and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificatecash, the Escrow Agent shall not assign deliver both Escrow Shares and cash to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it Radiance in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of same ratio as then existing in the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paidFund.
(d) If any dispute arises the Holders or the Holders' Representative, as applicable, contest Radiance's indemnification claim pursuant to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunderSection 2(b) above, the Escrow Agent mayshall deliver an amount from the Escrow Fund to Radiance upon receipt of either:
(i) a copy of a written settlement agreement signed by both Radiance and the Holders' Representative, at its option or at any time thereafter deposit or
(ii) a copy of a final and nonappealable arbitration award pursuant to the Escrowed Stock then being held arbitration procedure in Section 8 below. The amount to be delivered to Radiance by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent under this Section 2(d) shall thereby be discharged equal to the dollar amount of Radiance Indemnifiable Damages, as set forth in the settlement agreement or the arbitration award, as applicable, determined using the Escrow Share Price, and relieved of all liability hereundershall be delivered in the manner set forth in Section 2(c).
Appears in 1 contract
Samples: Merger Agreement (Radiance Medical Systems Inc /De/)
Claims Against Escrow Fund. (a) Subject to the terms and conditions of this AgreementAgreement including without limitation Section 4(c), the Escrow Fund shall be applied available as collateral security for Zygo's right to indemnify and hold harmless the Buyer Indemnitees against payment by a Shareholder or Shareholders for and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to the Escrow Agent and the Seller Stockholders prior to the Termination DateLosses. If the Buyer Indemnitees Zygo shall suffer or incur Losses, it shall provide such notice to the Indemnifying Party as is required in the Merger Agreement. In the event that Zygo does not receive payment of the amount(s) owed by the Indemnifying Party at the time the amount of any liability for Losses as to which indemnification is provided for on the part of the Indemnifying Party under the indemnification provisions Merger Agreement is finally determined in accordance with Article XI of the Merger Agreement, it or they Zygo at its option may, but shall not be obligated to, deliver simultaneously to the Escrow Agent and (in which case it shall also be delivered simultaneously to the Seller Stockholders Shareholder) a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer Financial Officer, or Chief Operating Officer a Vice President of GLOBAL Zygo, to the effect that Buyer Indemnitees have Zygo has suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon Subject to paragraph (c) and (d) below, upon receipt of any such Claim Certificate and subject to Section 5(b)Certificate, the Escrow Agent shall, as soon as practicable (but not earlier than twelve fifteen (1215) business days Business Days after the delivery to the Escrow Agent of such Claim Certificate), make a payment to Zygo from the Escrow Fund in accordance with this Section 4. Notwithstanding that the Escrow Agent is not required to make payment on a Claim Certificate, because, pursuant to Section 4(d) pay below, the aggregate Losses to Buyer Indemnitees an amount equal date (including the losses referred to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of Certificate) do not exceed the Threshold Amount, the Escrow Fund. Agent will nevertheless deliver a notice of such claim to the Shareholder or Shareholders, as the case may be.
(b) Whenever the Escrow Agent is required to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall shall, upon receipt of written instruction from Zygo and the Shareholder(s), withdraw from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction Zygo. In the event that the Losses referred to in a Claim Certificate are Joint Losses, then the Escrow Agent shall include a computation of withdraw from the value Escrow Fund and deliver to Zygo the full amount of such shares of Buyer Stock Joint Losses (to the extent available in the Escrow Fund) and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders Shareholders shall be reduced on a pro rata basis in accordance with the ratio of the original deposits of Buyer Zygo Common Stock which comprise initially comprising the Escrow Fund. In the event that the Losses referred to in a Claim Certificate are Several Losses, then the Escrow Agent shall withdraw from the Escrow Fund and deliver to Zygo an amount equal to such Several Losses, provided that the amount so withdrawn shall consist solely of Escrow Funds then allocated to the account of the Shareholder(s) responsible for such Several Losses (the "Several Shareholder"), . Any withdrawal of property from the Escrow Fund in accordance herewith shall be made in the following order of priority: (i) first, any cash comprising the Escrow Fund, shares of Zygo Common Stock (valued as set forth below) and (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Zygo Common Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property") comprising the Escrow Fund (which may be deposited in the Escrow Fund pursuant to Section 7 hereof). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees Zygo, as applicable, such cash, number of shares of Buyer Zygo Common Stock (adjusted for any stock split, dividend, etc.) (rounded to the next highest whole share) and/or Other Property held in the Escrow Fund and/or Other Property which shall be indicated within in the written instrument Claim Certificate of Buyer Indemnitees Zygo referred to hereinabove and required to be delivered to the Escrow Agent. Shares For purposes of Buyer determining the number of shares of Zygo Common Stock shall required to pay the Indemnity Claim or the number of shares of Zygo Common Stock deemed to have been paid if payment is made in cash, the Zygo Common Stock will be valued in accordance with at the terms of Section 9.04(c) average last sale price of the Merger Agreement Zygo Common Stock, as reported by the principal securities exchange on which the Zygo Common Stock is listed or admitted to trading, or, if the Zygo Common Stock is not listed or admitted to trading on any securities exchange or if any such exchange on which the Zygo Common Stock is listed is not its principal trading market, the average closing bid price as furnished by the National Association of Securities Dealers Inc. through Nasdaq, the OTC Bulletin Board or similar organization, for the twenty consecutive trading days ending on and including the trading day immediately preceding the Effective Date. Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBALZygo. The delivery by the Escrow Agent to Buyer Indemnitees Zygo of the shares of Buyer Zygo Common Stock determined by GLOBALZygo's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBALZygo, or its transfer agent, of the Escrow Certificates Certificate then in its possession, and GLOBALZygo, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Zygo Common Stock then remaining in the Escrow Fund as reduced by the number of shares of Zygo Common Stock surrendered to Buyer IndemniteesZygo.
(bc) Unless, within ten fifteen (1015) business days after delivery to the Seller Stockholders Shareholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held Majority Owners (in the Escrow Fund case of a claim in respect of Joint Losses) or the Several Shareholder (in the "Majority Owners") case of a claim for Several Losses), as the case may be, give written notice to GLOBAL Zygo and the Escrow Agent Agent, in good faith, that they question the accuracy of, or matters included in, such Claim CertificateCertificate (including, if applicable, a reasonably detailed explanation as to why such Majority Owners or Several Shareholders, as the case may be, question the accuracy of or matters included in, such Claim Certificate and whether such Shareholder is responsible for such loss), such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners or the Several Shareholder, as the case may be, give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees Zygo any Escrowed Stock Zygo Shares or make any indemnification payment to Buyer Indemnitees Zygo pursuant to this Section 5 4 until (i) it receives the written consent of the Majority Owners or the Several Shareholder, as the case may be, or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with or the Several Shareholder, as the case may be, questioning the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees Zygo (on the one hand) or the Seller StockholdersMajority Owners or the Several Shareholder, acting jointly but not severally as the case may be (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, prosecution or investigation of such claim.
(cd) Notwithstanding anything herein to the contrary, except as otherwise expressly provided in the Merger Agreement, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Threshold Amount, at which time, all accrued Losses theretofore accrued shall be paid.
(de) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its it option or at any time thereafter deposit the Escrowed Stock Zygo Shares then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Samples: Merger Agreement (Zygo Corp)
Claims Against Escrow Fund. Pursuant to Article X.2 of the Merger Agreement, Parent is entitled to make claims against the Escrow Fund for Parent Indemnifiable Damages. Unless this Agreement is terminated at an earlier date, Parent shall be entitled to make claims against the Escrow Fund for such purpose at any time through and including July 20, 2000 (xxx "Xxxxxx Xxxxxx"), (xxxxxx xxxs Agreement is terminated at an earlier date pursuant to Section 5 hereof), but not thereafter. Any claim by Parent against the Escrow Fund for Parent Indemnifiable Damages during the above time period shall be presented to the Escrow Agent as follows:
(a) Subject to the terms and conditions of this Agreement, the Escrow Fund Parent shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to notify the Escrow Agent and the Seller Stockholders prior Company Representative in writing of any Parent Indemnifiable Damages that Parent claims are subject to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions Article X.2 of the Merger Agreement, it or they . The notice shall deliver to describe the claim and specify the amount thereof.
(b) The Company Representative may contest Parent's claim on behalf of the Company by giving the Escrow Agent and the Seller Stockholders a certificate Parent written notice of such contest within twenty (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (1220) business days after the delivery to the Escrow Agent receipt of such Claim Certificateclaim for indemnification. If Parent's indemnification claim remains in dispute and unresolved for thirty (30) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out days following Parent's receipt of the Escrow Fund. Whenever the Escrow Agent is required to make a payment out written notice of the Escrow Fund hereundercontest, the Escrow Agent shall withdraw from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment disputed claim shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, submitted to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund arbitration in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claimbelow.
(c) Notwithstanding anything herein If the Company do not contest Parent's indemnification claim pursuant to Section 2(b) above, then the contrary, no payments Escrow Agent shall be made out of deliver to Parent an amount from the Escrow Fund for indemnity equal to the dollar amount of Losses until such Losses exceed the Base AmountParent Indemnifiable Damages claimed by Parent in its written notice. For this purpose, at which time, all Losses theretofore accrued Escrow Shares so delivered shall be paidvalued at the Indemnity Closing Price (as defined in Section 2(e) below) as of the date of the delivery to Parent.
(d) If any dispute arises as the Company contests Parent's indemnification claim pursuant to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunderSection 2(b) above, the Escrow Agent mayshall deliver an amount from the Escrow Fund to Parent upon receipt of either:
(i) a copy of a written settlement agreement signed by both Parent and the Company Representative, at its option or
(ii) a copy of a final and nonappealable arbitration award pursuant to the arbitration procedure in Section 8 below.
(iii) The amount to be delivered to Parent by the Escrow Agent under this Section 2(d) shall he equal to the dollar amount of Parent Indemnifiable Damages, as set forth in the settlement agreement or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdictionarbitration award, as applicable, determined using the Indemnity Closing Price, and shall be delivered in the manner set forth in Section 2(c).
(e) In this Agreement, the "Indemnity Closing Price" as of a particular date shall mean the average closing price of the Parent Common on the Nasdaq National Market for the twenty (20) trading days ending two (2) trading days before such date. In the event that the Indemnity Closing Price is not set forth in any notice or certificate delivered to the Escrow Agent with respect to a distribution of Escrow Shares to Parent under this Section 2, the Escrow Agent shall thereby be discharged and relieved accept a certificate from an executive officer of all liability hereunderParent certifying as to the Indemnity Closing Price for the date of such distribution, unless such certificate is contested by the Company Representative.
Appears in 1 contract
Claims Against Escrow Fund. (a) Subject From time to time during the terms and conditions term of this Agreement, a Seller (the "Requesting Seller") may request in writing (the "Reimbursement Notice") that the Escrow Agent deliver all or part of the Escrow Fund shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to the Requesting Seller in order to reimburse it for any amount that is due to the Requesting Seller under Section 1 of the Sellers' Contribution Agreement on account of a payment made to New PCI by the Requesting Seller on account of Pittencrieff Losses under the Pittencrieff Contribution Agreement. The Reimbursement Notice shall (i) specify the amount of the Pittencrieff Losses, and (ii) the Seller or Sellers who contributed the SMR Assets to New PCI that are the subject of the Pittencrieff Losses. The Escrow Agent and shall have no responsibility for determining or ascertaining the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer completeness or incur Losses as to which indemnification is provided for under the indemnification provisions accuracy of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such any Pittencrief Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the The Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) within five business days of receipt of a Reimbursement Notice, provide a copy of such Reimbursement Notice to all Sellers, and fifteen business days after the delivery Sellers are deemed pursuant to paragraph 13 to have received such Reimbursement Notice from the Escrow Agent Agent, disburse to Requesting Seller from the Escrow Account shares of such Claim CertificateCommon Stock (valued as provided in paragraph 5(c) pay to Buyer Indemnitees an amount hereof), equal to the amount of Losses so suffered or incurred the reimbursement requested by Buyer Indemnitees as set forth the Requesting Seller in such Claim Certificate out Reimbursement Notice, unless prior to the date of the Escrow Fund. Whenever disbursement the Escrow Agent is required to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall withdraw receives written notice from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own Sellers representing a majority in interest of the Escrowed Stock then held Escrow Fund, as reflected in Exhibit A (but excluding for this purpose the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out portion of the Escrow Fund for indemnity held by the Requesting Seller) disputing (the "Dispute Notice") the Requesting Seller's right to the amount of Losses until the reimbursement requested in such Losses exceed Reimbursement Notice (the Base "Disputed Amount"); provided, at which timehowever, all Losses theretofore accrued that if a Dispute Notice states that a portion of the amount of reimbursement requested in the Reimbursement Notice is not in dispute, the undisputed amount shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as disbursed to the meaning or applicability of any of the provisions hereof, or as to Requesting Seller from the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunderFund.
Appears in 1 contract
Samples: Escrow Agreement (FMR Corp)
Claims Against Escrow Fund. For a period of twenty-four (a24) Subject to months after the terms and conditions of this AgreementClosing Date, the Escrow Fund Parent shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to the Escrow Agent and the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) business days after the delivery to the Escrow Agent of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required entitled to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall withdraw from written claim against the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation the terms of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Escrow Agreement and this Escrow Agreementfor, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), without duplication: (i) firstTaxes imposed on or payable by the Company or any Subsidiary for any Pre-Closing Tax Period, any cash comprising except to the Escrow Fund, extent such Taxes have been accrued or reflected in the Final Working Capital Amount; (ii) secondTaxes imposed on the Company or any Subsidiary as a result of the Company or any Subsidiary being included in an Affiliated Group that files consolidated or combined returns by reason of U.S. Treasury Regulation Section 1.1502-6 or any comparable provision of state, local or foreign law, except to the extent that there is insufficient cash to pay such Taxes have been accrued or reflected in the Losses, shares of Buyer Stock and Final Working Capital Amount; (iii) third with respect to Straddle Periods, Taxes imposed on or payable by the Company or any Subsidiary which are allocable to the Pre-Closing Tax Period, except to the extent there is an insufficient number such Taxes have been accrued or reflected in the Final Working Capital Amount; and (iv) Taxes imposed on or payable by the Company or any Subsidiary as a result of shares a breach of Buyer Stock any representation or warranty set forth in Section 3.11 or this Section 5.12. Any such claim against the Escrow Fund shall be reduced by the amount of any Tax Benefit (as defined in Section 7.3(c)) realized with respect to pay the Losses, any other property delivered to, and remaining in, such Taxes for which a claim against the Escrow Fund is being sought. In no event shall any matter, facts or circumstances pertaining to any item (or the amount thereof) set forth on or reflected in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transferthe Company's Statement, deliver and assign to Buyer Indemnitees such cashthe Closing Balance Sheet, number of shares of Buyer Stock (rounded the Determination, the Final Closing Balance Sheet, the Preliminary Working Capital Amount or the Final Working Capital Amount which resulted in a post-closing adjustment to the next highest whole share) held in Initial Merger Consideration pursuant to Section 2.9 hereof give rise to any claim by Parent on the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to under this Section 5 until (i) it receives the written consent of the Majority Owners 5.12 or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claimArticle VII.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Claims Against Escrow Fund. (a) Subject At any time or time prior to the Expiration Date, the Purchaser may make indemnification claims against the Escrow Fund for amounts due to the Purchaser for indemnification under Article V of the Purchase Agreement. If the Purchaser wishes to make any such indemnification claim, it shall duly deliver to the Seller's Representative and the Escrow Agent a Claim Notice in accordance with Section 5.7 of the Purchase Agreement and this Section 4(a). Each such Claim Notice shall set forth:
(i) a representation from the Purchaser to the effect that the Purchaser has delivered a copy of such Claim Notice to the Seller's Representative prior to or simultaneously with its delivery to the Escrow Agent;
(ii) the specific representation and warranty in the Purchase Agreement alleged to have been breached by the Seller;
(iii) a summary of the facts and circumstances giving rise to the alleged breach of such representation and warranty by the Seller; and
(iv) a description of, and a reasonable estimate of the total amount of, the Damages actually incurred or expected to be incurred by the Purchaser as a result of such alleged breach. If a Claim Notice shall not have been delivered to the Seller's Representative and the Escrow Agent on or prior to the Expiration Date, then such Claim Notice shall not be deemed to have been delivered and shall be of no force or effect.
(b) Within sixty (60) days after the delivery of a Claim Notice to the Seller's Representative and the Escrow Agent in accordance with Section 5.7 of the Purchase Agreement and Section 4(a) hereof, the Seller's Representative may, in its sole discretion, deliver to the Purchaser and the Escrow Agent a written notice (the "Response Notice") containing (i) a statement substantially to the effect that the indemnification claim described in such Claim Notice is not being disputed and a portion of the Escrow Fund equal in value to the entire dollar amount of Damages set forth in such Claim Notice may accordingly be distributed from escrow to the Purchaser in accordance with the terms and conditions of this Agreement, (ii) a statement substantially to the effect that a portion of the Escrow Fund equal in value to a portion of the dollar amount of Damages (but not the entire dollar amount of Damages) set forth in such Claim Notice is to be distributed from escrow to the Purchaser in accordance with the terms of this Agreement, and that the remaining portion of the dollar amount of Damages set forth in such Claim Notice is being disputed (specifying the dollar amount of the portion that is not being disputed), or (iii)a statement substantially to the effect that the entire dollar amount of Damages set forth in such Claim Notice is being disputed. (Any portion of the dollar amount of such Damages that is not being disputed by the Seller's Representative shall be referred to in this Agreement as the "Undisputed Amount," and the remaining portion of such Damages shall be referred to in this Agreement as the "Disputed Amount.") If no Response Notice is delivered within sixty (60) days after the delivery of a Claim Notice to the Seller's Representative and the Escrow Agent, then the Seller's Representative shall be deemed not to be disputing the Damages described in the Claim Notice, and in such event the term "Undisputed Amount" shall be deemed to refer to the entire dollar amount of the Damages set forth in the Claim Notice (and, accordingly, in such event the "Disputed Amount" of the indemnification claim described in such Claim Notice shall be zero).
(c) If the Seller's Representative is disputing or is deemed to be disputing all or any portion of the dollar amount of the Damages set forth in a Claim Notice, then no distribution of any portion of the Escrow Fund shall be applied made by the Escrow Agent to indemnify the Purchaser with respect to the Disputed Amount until either (i) a settlement agreement executed by the Purchaser and hold harmless the Buyer Indemnitees against Seller's Representative containing a settlement of the indemnification claim described in such Claim Notice (and specifying the respective amounts of cash (if any) and Escrow Shares (if any) to be distributed to the Purchaser from the escrow) shall have been delivered to the Escrow Agent, or (ii) a final arbitration award (made pursuant to the arbitration procedures set forth in Section 4(d) hereof) containing a final binding resolution of the indemnification claim described in such Claim Notice (and specifying the amount of the Damages (if any) with respect to which the Purchaser is entitled to indemnification) (an "Arbitration Award") shall have been delivered to the Escrow Agent.
(d) If (i) the Seller's Representative is disputing or deemed to be disputing all or any portion of Losses as the dollar amount of the Damages set forth in a Claim Certificate Notice, and (ii) within ninety (90) days after the delivery of such Claim Notice by the Purchaser to the Seller's Representative and the Escrow Agent in accordance with Section 5.7 of the Purchase Agreement and Section 4(a) hereof, the Escrow Agent has not received a settlement agreement satisfying the requirements of clause "(i)" of Section 4(c) hereof, then the indemnification claim or claims described in such Claim Notice shall be referred to an arbitrator chosen jointly by the Seller's Representative and the Purchaser. If the Seller's Representative and the Purchaser do not agree on the selection of an arbitrator within ten (10) days after the expiration of the ninety (90) day period referred to in this Section 4(d), the Purchaser or the Seller's Representative may submit the matter in dispute for resolution pursuant to a binding arbitration proceeding under the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The venue for such arbitration proceeding shall be in London, England. The arbitrator's fees and other related expenses of any arbitration under this Agreement (such as expenses for transcripts of the arbitration proceedings) shall be borne by the Seller and the Purchaser in such proportions as shall be determined by the arbitrator, or if there is no such determination, then such fees and other expenses shall be borne equally by the Seller and the Purchaser; provided, however, that subject to Section 4(e) hereof, any such fees and other expenses that are required to be borne by the Seller (the "Seller's Arbitration Expenses") shall be paid (without deductions or set-offs of any nature) out of the Escrow Fund (assuming there are sufficient Escrow Shares and/or cash remaining in the Escrow Fund after satisfaction of any Arbitration Award) upon receipt by the Escrow Agent of written instructions executed by the Seller's Representative directing the Escrow Agent to pay such Seller's Arbitration Expenses. "Seller's Arbitration Expenses" shall not be deemed to include any costs or expenses that constitute "Defense Costs" for purposes of Section 8(c) hereof. The arbitrator shall have the authority to make an award specifying the dollar amount (if any) representing the portion of the Disputed Amount that is to be distributed by the Escrow Agent to the Purchaser from the Escrow Fund, but shall have no right to grant special, punitive or exemplary damages or indirect or consequential damages or to grant any form of equitable relief. The determination of the arbitrator as to the dollar amount (if any) representing the portion of the Disputed Amount that is payable out of the Escrow Fund shall be conclusive and binding upon the parties hereto and judgment may be entered thereon in any court having jurisdiction thereof. The determination of the combination of cash and Escrow Shares to be distributed to the Purchaser to satisfy any Arbitration Award shall be made by the Seller's Representative (in accordance with Section 5(b) hereof), and not by the arbitrator.
(e) If (i) the Escrow Agent has made distributions from the Escrow Fund to the Seller's Representative in respect of Seller's Arbitration Expenses or Seller's Representative Expenses (as defined below) duly delivered in accordance with Sections 4(d) and 8(b) hereof, and (ii) the actual indemnifiable Damages required to be paid under this Agreement to the Purchaser from the Escrow Agent and Fund shall exceed the amount available in the Escrow Fund, then the Seller Stockholders prior shall pay directly to the Termination Date. If Purchaser in cash (following the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions complete exhaustion of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12Fund) business days after the delivery to the Escrow Agent of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the lesser of: (A) the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth which the actual indemnifiable Damages required to be paid under this Agreement to the Purchaser from the Escrow Fund actually exceeds the amount available in such Claim Certificate out of the Escrow Fund. Whenever ; or (B) the sum of the amount of any Seller's Arbitration Expenses and Seller's Representative Expenses previously paid by the Escrow Agent is required to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall withdraw Seller's Representative from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock Sections 4(d) and Other Property calculated in accordance with Section 9.04(c8(b) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property")hereof. The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number amount of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and any payment required to be delivered made to the Escrow Agent. Shares of Buyer Stock Purchaser pursuant to the preceding sentence shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders aggregate amount of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners"payment(s) give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees previously made pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand4(e), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Samples: Escrow Agreement (Tulpan Yossi)
Claims Against Escrow Fund. (a) Subject At any time or times prior to the terms and conditions of this Agreement, the Escrow Fund shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate Expiration Date (as defined below) duly ), the Buyer may make claims against the Escrow Fund for amounts due for indemnification under Section 10 of the Merger Agreement. The Buyer shall notify the Shareholder Representative and the Escrow Agent in writing of each such claim, including a brief description of the amount and nature of such claim. Each such notice delivered to the Escrow Agent and by the Seller Stockholders Buyer shall contain a representation of the Buyer to the effect that the Buyer has delivered a copy of such notice to the Shareholder Representative prior to or simultaneously with its delivery to the Termination Escrow Agent. In the event that the amount subject to the claim is unliquidated, the Buyer shall make a good faith estimate as to the amount of the claim for purposes of determining the portion of the Escrow Fund to be withheld by the Escrow Agent if such claim is not resolved or otherwise adjudicated by the Expiration Date. If the Shareholder Representative disputes such claim, the Shareholder Representative shall give written notice thereof to the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions of the Merger Agreement, it or they shall deliver and to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) business within thirty days after the delivery date the Buyer's notice of claim was delivered to the Escrow Agent of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth Shareholder Representative, in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required to make a payment out of the Escrow Fund hereunder, which case the Escrow Agent shall withdraw from continue to hold the Escrow Fund in accordance with a written instruction the terms of GLOBAL (which written instruction this Agreement; otherwise, such claim shall include a computation be deemed to have been acknowledged to be payable from the Escrow Fund in the full amount thereof as set forth in the claim and the Escrow Agent shall pay such claim to the Buyer as soon as practicable after expiration of that thirty-day period. If the amount of the claim exceeds the aggregate value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, the Escrow Agent shall have no liability or responsibility for any deficiency. All claims paid out of the Escrow Shares shall be rounded to the extent that there is insufficient cash nearest whole share. Under no circumstances shall the Shareholders or the Shareholder Representative have any right to pay substitute other property for the Losses, shares of Buyer Stock and Escrow Shares or to change the Agreed Share Value.
(iiib) third If the Shareholder Representative gives notice to the extent there is an insufficient number of shares of Buyer Stock in and the Escrow Agent pursuant to Section 3(a) disputing a Buyer claim, no payment from the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery made by the Escrow Agent to the Buyer Indemnitees or to the Shareholders of the shares of Set Aside Amount under Section 4(a) with respect to such claim until either (i) such disputed claim has been resolved as evidenced by a written notice executed by the Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to Shareholder Representative instructing the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue as to the Escrow Agent a new stock certificate registered in its name for the number distribution of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, such Set Aside Amount or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners portion thereof or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement such dispute shall have been adjudicated in accordance with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other handarbitration procedures described in Section 4(b), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Samples: Escrow Agreement (Blais John F Jr)
Claims Against Escrow Fund. (a) Subject to the terms and conditions provisions of this Article IX of the Merger Agreement, the Escrow Fund shall be applied Company Stockholder has agreed to indemnify and hold harmless each of Parent and the Buyer Indemnitees against Surviving Corporation from and against, and shall compensate and reimburse each of them for, Losses, as set forth therein. Upon compliance with the terms hereof, Parent shall be entitled to receive payment from the Escrow Fund for amounts owing in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered any indemnification obligations or other claims under or pursuant to the Escrow Agent and the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions of the Merger Agreement, it or they .
(a) Parent shall deliver give written notice (a " Claim Notice") to the Escrow Agent Company Stockholder specifying in reasonable detail the nature and the Seller Stockholders a certificate dollar amount of any claim (a "Claim") it is asserting under the Merger Agreement; provided, however, that Parent may make more than one Claim Certificate")with respect to any underlying state of facts If the Company Stockholder wishes to object to a Claim, which he shall be signed provide Parent with a notice, executed by the PresidentCompany Stockholder, Chief Executive Officer or Chief Operating Officer of GLOBAL specifying in reasonable detail the basis for his objection to the effect that Buyer Indemnitees have suffered or incurred Losses Claim (an "Objection Notice") within fifteen (15) business days following the date the Company Stockholder received the Claim Notice. If he shall not object to any Claim raised in the amount specified Claim Notice, he shall promptly countersign the Claim Notice and return a copy to each of the Parent and the Escrow Agent.
(b) Upon the receipt by Parent of an Objection Notice, Parent and the Company Stockholder shall attempt in such Claim Certificate good faith to agree upon the rights of the respective parties with respect to each disputed Claim. If Parent and the Company Stockholder are able to resolve the issues raised in the Objection Notice, Parent and the Company Stockholder shall provide Escrow Agent with a written notice executed by both the Company Stockholder and an officer of Parent setting forth the basis for substance of such Losses. Upon receipt of any agreement.
(c) If no such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable agreement can be reached after good faith negotiation (but not earlier than twelve a "Dispute") within thirty (1230) business days after the delivery receipt by Parent of the Objection Notice, such Dispute shall be submitted to mandatory and binding arbitration within fifteen (15) days of the end of such 30-day period. The arbitration shall be pursuant to the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") and the decision of the arbitrators as to the validity and amount of any Claim that is the subject of a Dispute shall be binding and conclusive upon the parties to this Agreement and Escrow Agent of shall be entitled to act in accordance with such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered decision and make or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required to make a payment withhold payments out of the Escrow Fund in accordance therewith. The arbitration hearing shall be held in New York, New York. The arbitration panel will have no power or authority, under the Commercial Arbitration Rules of the AAA or otherwise, to relieve the parties from their agreement hereunder, the Escrow Agent shall withdraw from the Escrow Fund in accordance with a written instruction to arbitrate or otherwise to amend or disregard any provision of GLOBAL (which written instruction shall include a computation of the value of such shares of Buyer Stock and Other Property calculated in accordance with Section 9.04(c) of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining inincluding without limitation, the Escrow Fund in accordance with provisions of this Section 8 hereof ("Other Property")4. The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith Any award rendered by the Board of Directors of GLOBAL. The delivery by arbitration panel will be final, conclusive and binding upon the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above parties and stated any judgment hereon may be entered and enforced in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claimjurisdiction.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability of any of the provisions hereof, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunder.
Appears in 1 contract
Claims Against Escrow Fund. (a) Subject to the terms and conditions of this Agreement, the Escrow Fund A Parent Indemnified Party shall be applied to indemnify and hold harmless the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate (as defined below) duly delivered to the Escrow Agent and the Seller Stockholders prior to the Termination Date. If the Buyer Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (12) business days after the delivery to the Escrow Agent of such Claim Certificate) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out of the Escrow Fund. Whenever the Escrow Agent is required entitled to make a payment out of the Escrow Fund hereunder, the Escrow Agent shall withdraw from claims against the Escrow Fund in connection with any indemnification claim to recover Losses in accordance with a written instruction of GLOBAL (which written instruction shall include a computation Article X of the value Merger Agreement at any time after the date hereof and prior to 11:59 p.m. (Mountain Standard time) on the second anniversary of the Closing Date (the “Expiration Date”). A Parent Indemnified Party may make such shares of Buyer Stock and Other Property calculated a claim against the Escrow Fund by delivering an Indemnification Claim Notice to the Seller in accordance with Section 9.04(c) 10.5 of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that the payment shall be made for the accounts of the Seller Stockholders pro rata in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered copy thereof to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith by the Board of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the The Escrow Agent shall not assign to Buyer Indemnitees disburse any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out portion of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paid.
(d) If any dispute arises as to any matter arising under this Escrow Agreement or there arises any uncertainty as to the meaning or applicability in respect of any claim against the Escrow Fund unless and until the validity of such claim is finally resolved, either (i) by mutual agreement of the provisions hereofapplicable Parent Indemnified Party and the Seller, or as to the Escrow Agent's duties, rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held (ii) by it in escrow into a court having appropriate of competent jurisdiction, and the Escrow Agent receives written notice of such resolution from the applicable Parent Indemnified Party or the Seller (a “Resolved Claim Notice”) or (iii) upon written request by the Parent Indemnified Party to the Escrow Agent, if Seller shall thereby be discharged and relieved fail to object in writing to an Indemnification Claim Notice pursuant to Section 11.5(c) of the Merger Agreement to any individual item of Loss set forth in an Indemnification Claim Notice within thirty (30) calendar days after Seller’s receipt of such Indemnification Claim Notice. Within five (5) calendar days after receipt of a Resolved Claim Notice (or after the date that is thirty (30) calendar days following receipt of an Indemnification Claim Notice in the case of a failure to object in writing within thirty (30) days) that provides for the disbursement of all liability hereunderor part of the Escrow Fund to a Parent Indemnified Party, the Escrow Agent shall disburse to such Parent Indemnified Party an amount of the Escrow Fund equal to the recovery amount set forth in such Resolved Claim Notice or Indemnification Claim Notice in the case of a failure to object in a timely manner (a “Parent Escrow Payment”).
(c) In the event that any Escrowed Stock is used to satisfy indemnification claims set forth in a Resolved Claim Notice or Indemnification Claim Notice in the case of a failure to object in writing within thirty (30) days, such Escrowed Stock will be valued for such purpose at the closing price per share of Parent Common Stock as reported on the NASDAQ National Market (or such other principal exchange or automated quotation system on which Parent Common Stock is then trading) on the date of final resolution of the claim or the date of the tolling of the period in which Seller must timely object to an Indemnification Claim Notice, as the case may be.
(d) Notwithstanding anything else to the contrary set forth herein, the Escrow Agent shall disburse the Escrow Fund at any time and from time to time upon, and in accordance with, any joint written instructions that the Escrow Agent may receive from Parent and the Seller.
Appears in 1 contract
Claims Against Escrow Fund. The parties hereto agree that the SAFLINK -------------------------- Indemnitees shall be entitled to make claims against the Escrow Fund for indemnifiable Losses pursuant to this Agreement and Article IX of the Purchase Agreement. The SAFLINK Indemnitees shall be entitled to make claims against the Escrow Fund for such purpose at any time prior to 11:59 p.m., Pacific time, on December 15, 2002 (the "Escrow Period"), unless this Agreement is terminated at an earlier date pursuant to Section 5 hereof. Any claim by the SAFLINK Indemnitees against the Escrow Fund for indemnifiable Losses during the above time period shall be presented to the Escrow Agent as follows:
(a) Subject to the terms and conditions of this Agreement, The SAFLINK Indemnitees shall notify the Escrow Fund Agent and Jotter in writing of any indemnifiable Losses which the applicable SAFLINK Indemnitees claim are subject to indemnification under Article IX of the Purchase Agreement. The notice shall be applied to indemnify describe the claim and hold harmless specify the Buyer Indemnitees against and in respect of Losses as set forth in a Claim Certificate amount thereof.
(as defined belowb) duly delivered to Jotter may contest such claim by giving the Escrow Agent and the Seller Stockholders prior to the Termination Date. If the Buyer applicable SAFLINK Indemnitees shall suffer or incur Losses as to which indemnification is provided for under the indemnification provisions written notice of the Merger Agreement, it or they shall deliver to the Escrow Agent and the Seller Stockholders a certificate such contest within twenty (a "Claim Certificate"), which shall be signed by the President, Chief Executive Officer or Chief Operating Officer of GLOBAL to the effect that Buyer Indemnitees have suffered or incurred Losses in the amount specified in such Claim Certificate and setting forth the basis for such Losses. Upon receipt of any such Claim Certificate and subject to Section 5(b), the Escrow Agent shall, as soon as practicable (but not earlier than twelve (1220) business days after the delivery to the Escrow Agent receipt of such Claim Certificateclaim for indemnification. If such indemnification claim remains in dispute and unresolved for thirty (30) pay to Buyer Indemnitees an amount equal to the amount of Losses so suffered or incurred by Buyer Indemnitees as set forth in such Claim Certificate out days following receipt of the Escrow Fund. Whenever written notice of contest by the Escrow Agent is required applicable SAFLINK Indemnitees, the disputed claim shall be submitted to make a payment out of the Escrow Fund hereunderarbitration in accordance with Section 9 below.
(c) If Jotter does not contest such indemnification claim pursuant to Section 2(b) above, then the Escrow Agent shall withdraw deliver to SAFLINK that number of Shares from the Escrow Fund in accordance with a written instruction of GLOBAL (which written instruction shall include a computation value equal to the dollar amount of the value of indemnifiable Losses claimed by such shares of Buyer Stock and Other Property calculated indemnitees in accordance with its or their written notice. For this purpose, Shares so delivered shall be valued at the Indemnity Closing Price (as defined in Section 9.04(c2(e) below) as of the Merger Agreement and this Escrow Agreement, and shall include a calculation which confirms that date of delivery to the payment shall be made for the accounts of the Seller Stockholders pro rata applicable SAFLINK Indemnitees. Other property in accordance with the ratio of the original deposits of Buyer Stock which comprise the Escrow Fund), (i) first, any cash comprising the Escrow Fund, (ii) second, to the extent that there is insufficient cash to pay the Losses, shares of Buyer Stock and (iii) third to the extent there is an insufficient number of shares of Buyer Stock in the Escrow Fund to pay the Losses, any other property delivered to, and remaining in, the Escrow Fund in accordance with Section 8 hereof ("Other Property"). The Escrow Agent shall transfer, deliver and assign to Buyer Indemnitees such cash, number of shares of Buyer Stock (rounded to the next highest whole share) held in the Escrow Fund and/or Other Property which shall be indicated within the written instrument of Buyer Indemnitees referred to hereinabove and required to be delivered to the Escrow Agent. Shares of Buyer Stock shall be valued in accordance with the terms of Section 9.04(c) of the Merger Agreement and Other Property, if any, shall be valued in good faith as determined by the Board mutual agreement of Directors of GLOBAL. The delivery by the Escrow Agent to Buyer Indemnitees of the shares of Buyer Stock determined by GLOBAL's computation of their value as stated above SAFLINK and stated in the written instruction to the Escrow Agent shall be effected by surrender to GLOBAL, or its transfer agent, of the Escrow Certificates then in its possession, and GLOBAL, or its transfer agent, shall promptly issue to the Escrow Agent a new stock certificate registered in its name for the number of shares of Buyer Stock then remaining in the Escrow Fund as reduced by the number of shares surrendered to Buyer Indemnitees.
(b) Unless, within ten (10) business days after delivery to the Seller Stockholders of any Claim Certificate, Seller Stockholders who beneficially own a majority in interest of the Escrowed Stock then held in the Escrow Fund (the "Majority Owners") give written notice to GLOBAL and the Escrow Agent that they question the accuracy of, or matters included in, such Claim Certificate, such Claim Certificate shall constitute full authority to the Escrow Agent to take the action provided for in the preceding paragraph and shall be conclusive on all parties hereto. If the Majority Owners give notice questioning the accuracy of, or matters included in, such Claim Certificate, the Escrow Agent shall not assign to Buyer Indemnitees any Escrowed Stock or make any indemnification payment to Buyer Indemnitees pursuant to this Section 5 until (i) it receives the written consent of the Majority Owners or (ii) there is a Final Determination with respect to the dispute. After notice by the Majority Owners of disagreement with the accuracy of, or matters included in, a Claim Certificate, either Buyer Indemnitees (on the one hand) or the Seller Stockholders, acting jointly but not severally (on the other hand), may seek a declaratory judgment from any court of competent jurisdiction to resolve the disagreement. The party against whom such declaratory judgment is actually rendered shall reimburse the other party thereto for the reasonable expenses incurred by it in the defense, prosecution, or investigation of such claim.
(c) Notwithstanding anything herein to the contrary, no payments shall be made out of the Escrow Fund for indemnity of Losses until such Losses exceed the Base Amount, at which time, all Losses theretofore accrued shall be paidJotter.
(d) If any dispute arises as Jotter contests such indemnification claim pursuant to any matter arising Section 2(b) above, the Escrow Agent shall deliver an amount from the Escrow Fund to the applicable SAFLINK Indemnitees upon receipt of either:
(i) a copy of a written settlement agreement (authorizing the delivery of the amount from the Escrow Fund) signed by the SAFLINK Indemnitees making such claim and Jotter, or
(ii) a copy of a final and nonappealable arbitration award (authorizing the delivery of the amount from the Escrow Fund) pursuant to the arbitration procedure in Section 9 below. The number of Shares to be delivered to SAFLINK by the Escrow Agent under this Section 2(d) shall be equal in value based upon the Indemnity Closing Price to the dollar amount of such indemnitees' indemnifiable Losses, as set forth in the settlement agreement or the arbitration award, as applicable, and shall be delivered in the manner set forth in Section 2(c).
(e) In this Agreement, the "Indemnity Closing Price" shall mean the closing price of the SAFLINK Common Stock on the Nasdaq SmallCap Market on the Closing Date. In the event that the Indemnity Closing Price is not set forth in any notice or certificate delivered to the Escrow Agreement or there arises any uncertainty Agent with respect to a distribution of Shares to SAFLINK under this Section 2, the Escrow Agent shall accept a certificate from an executive of SAFLINK certifying as to the meaning or applicability Indemnity Closing Price for the date of any such distribution (a copy of such certificate shall be sent to Indemnifying Holder's Representative within three business days of the provisions hereof, or as date such certificate is delivered to the Escrow Agent's duties), rights or responsibilities hereunder, the Escrow Agent may, at its option or at any time thereafter deposit the Escrowed Stock then being held unless such certificate is contested by it in escrow into a court having appropriate jurisdiction, and the Escrow Agent shall thereby be discharged and relieved of all liability hereunderJotter.
Appears in 1 contract
Samples: Escrow Agreement (Saflink Corp)
