Disposition of Escrowed Shares. (a) If the Agent shall receive a written notice from 3dfx at any time from the date of this Agreement through the date that is three hundred eighty (380) days from the Closing Date certifying (i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition Agreement, and that, as a result, 3dfx is entitled to payment hereunder pursuant to Article X of the Acquisition Agreement, (ii) the total amount that 3dfx is entitled to be paid from the Escrowed Shares and the basis of calculation of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and the basis thereof, and (iv) that 3dfx has delivered a copy of such notice to the Securityholder Representative (as defined and described in Section 9 hereof) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) below. (b) If a conflict shall have arisen as described in Section 4(a) above, then upon receipt by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion of the Escrowed Shares, or (ii) a final, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of the Escrowed Shares held hereunder, the Agent shall promptly deliver to the person or persons specified, out of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or order, or as otherwise agreed in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) a number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or order, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation with respect to such amount or amounts of the Escrowed Shares delivered in accordance with this Agreement. (c) Unless otherwise notified by a joint instruction signed by 3dfx and the Securityholder Representative, in the event the escrow created hereunder is not sooner terminated pursuant to the provisions of Section 4(e) below or extended pursuant to the provisions of this Section 4(c), the escrow period and the escrow created hereunder shall terminate at the close of business on the date that is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year period following the Closing Date prior to such termination, which Claim has not been resolved in accordance with Section 4(a) or (b) above by the date of termination, the Agent shall release and pay to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims in accordance with this Section 4, including any distributions to 3dfx (which may be after the period provided herein, in which case the Escrow Period shall be extended to such time in which all Claims are resolved), the Agent shall release and pay to the Securityholders all Escrowed Shares held in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminated. (d) Notwithstanding the provisions of Section 4(c) above, at the conclusion of the Escrow Period, if any Claim has not been resolved in accordance with the terms hereof, the Agent shall have the right, in its sole discretion, to deposit with the registry of any state or federal court located in San Jose, California, the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders in any action filed with such court. (e) Unless otherwise notified in a joint instruction signed by 3dfx and the Securityholder Representative, if the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with the terms of this Section 4 prior to the date that is the one (1) year anniversary of the Closing Date, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representative.
Appears in 1 contract
Disposition of Escrowed Shares. The Escrowed Shares shall be delivered by the Escrow Agent as follows:
(a) If the Agent shall receive a Upon written notice from 3dfx at any time from the date of this Agreement through the date that is three hundred eighty (380) days from the Closing Date certifying (i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result an officer of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition AgreementSeller that all principal of, and thatinterest on, as a result, 3dfx is entitled to payment hereunder pursuant to Article X the Takeout Note has been paid in full and no further obligation of the Acquisition AgreementBuyer remains thereunder, the Escrowed Shares (iialong with the Stock Power) shall be delivered to Buyer;
(b) Upon written notice from an officer of the total amount Seller that 3dfx Buyer has delivered a partial payment of the principal balance of the Takeout Note, which notice shall instruct the Escrow Agent to release a pro rata number of shares according to the percentage of the outstanding principal balance paid to Seller as part of such partial payment, that portion of the Escrowed Shares shall be delivered to Buyer;
(c) Upon written notice from an officer of the Seller that an Event of Default has occurred (unless written evidence that such Event of Default has not occurred is entitled received from Guarantor within 48 hours thereof), the Escrow Agent is hereby authorized and directed to be paid from take any and all such actions (including delivery of certificates for the Escrowed Shares and the basis of calculation Stock Power to such broker or other party as the Seller shall direct) as may be necessary to cause the sale of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and the basis thereof, and (iv) that 3dfx has delivered a copy of such notice to the Securityholder Representative (as defined and described in Section 9 hereof) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) below.
(b) If a conflict shall have arisen as described in Section 4(a) above, then upon receipt by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion of the Escrowed Shares, or (ii) a final, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of the Escrowed Shares held hereunderas Escrow Agent reasonably determines in good faith is necessary to generate sufficient net cash proceeds to pay all outstanding principal of, and accrued and unpaid interest on, the Purchase Money Note or Takeout Note, as the case may be. Upon receipt of such net proceeds, the Escrow Agent shall deliver same to the Seller and, assuming such net proceeds equal the then outstanding principal of, and accrued and unpaid interest on, the Purchase Money Note or Takeout Note, Seller shall xxxx the original Purchase Money Note or Takeout Note, as the case may be, as "cancelled" and deliver same to the Escrow Agent. Escrow Agent shall promptly deliver thereafter remit such cancelled note to the person or persons specified, out Buyer along with any remaining Escrowed Shares and any cash proceeds from the sale of Escrow Shares in excess of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or order, or as otherwise agreed in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) a number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or orderamounts delivered to Seller to pay principal of, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation with respect to such amount or amounts of the Escrowed Shares delivered in accordance with this Agreement.
(c) Unless otherwise notified by a joint instruction signed by 3dfx and the Securityholder Representative, in the event the escrow created hereunder is not sooner terminated pursuant to the provisions of Section 4(e) below or extended pursuant to the provisions of this Section 4(c)interest on, the escrow period and the escrow created hereunder shall terminate at the close of business on the date that is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year period following the Closing Date prior to such termination, which Claim has not been resolved in accordance with Section 4(a) Purchase Money Note or (b) above by the date of termination, the Agent shall release and pay to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims in accordance with this Section 4, including any distributions to 3dfx (which may be after the period provided herein, in which case the Escrow Period shall be extended to such time in which all Claims are resolved), the Agent shall release and pay to the Securityholders all Escrowed Shares held in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminatedTakeout Note.
(d) Notwithstanding The obligation of Escrow Agent to cause the provisions sale of the Escrowed Shares on behalf of Seller under paragraph (c) of this Section 4(c) above3, is subject to any restriction on the transferability of the Escrowed Shares imposed on Guarantor under federal and state securities laws or any contractual obligation entered into by Guarantor at the conclusion request of the Escrow Period, if any Claim has not been resolved Seller or its underwriters in accordance connection with the terms hereofinitial public offering of its common stock. Escrow Agent may request, and will be entitled to rely on, an opinion from Seller's legal counsel as to its ability to sell or cause the Agent shall have the right, in its sole discretion, to deposit with the registry of any state or federal court located in San Jose, California, the number sale of Escrowed Shares under such laws or contractual restrictions. In that regard, Seller and the value Escrow Agent acknowledge that the Escrowed shares have not been registered under the Securities Act of which 1933, as amended (based on the closing price "Securities Act") and bear a legend to that effect. To the extent it determines that registration of such the Escrowed Shares on under the Closing DateSecurities Act is necessary, the Seller may file a registration statement relating thereto (at its sole expense) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders Buyer and Guarantor hereby agree to cooperate and take such actions as may be reasonably requested by Seller in any action filed with such courtorder to complete same.
(e) Unless otherwise notified in a joint instruction signed by 3dfx and the Securityholder Representative, if the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with the terms of this Section 4 prior to the date that is the one (1) year anniversary of the Closing Date, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representative.
Appears in 1 contract
Samples: Escrow Agreement (Transgenomic Inc)
Disposition of Escrowed Shares. (a) If the Agent shall receive a written notice from 3dfx at At any time from prior to the date Termination Date, Ballard may give notice of this Agreement through a Cxxxx xo Escrow Agent (the date that is three hundred eighty (380) days from the Closing Date certifying "Claim Notice"), with a copy thereof to Sellers. The Claim Notice shall set forth:
(i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result dollar amount of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition Agreement, and that, as a result, 3dfx is entitled to payment hereunder pursuant to Article X of the Acquisition Agreement, Claim;
(ii) the total amount that 3dfx is entitled to be paid from the Escrowed Shares and the basis of calculation of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and alleged breach of covenant, warranty, or representation under the basis thereof, and Exchange Agreement; and
(iviii) that 3dfx has delivered a copy of such notice statement to the Securityholder Representative (effect that Ballard properly gave txx xxxxten notice of default, followed by the requisite 30-day or longer period in which Sellers failed to cure said default or breach, as defined and described provided in Section 9 hereof10.2(a) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) belowExchange Agreement.
(b) If a conflict shall have arisen as described in Section 4(aEscrow Agent receives, within sixty (60) days following the date the Claim Notice is given under paragraph (a) above, a copy of a complaint and summons which have been filed in a federal or state court located in Salt Lake County, Utah, together with proof that said summons and complaint have been served on Ballard, which complaint seeks judicial determination of the Claim filed with Escrow Agent by Ballard, then Escrow Agent shall xxx xxxue or deliver to Ballard any Escrowed Shares on acxxxxx xf the Claim, until a Final Determination occurs with respect to the Claim. When a Final Determination occurs, if the Final Determination provides that a sum is owed to Ballard on account of xxx Xxxim, Escrow Agent shall, upon receipt of a copy of the Final Determination (certified by Ballard or any one or mxxx xx Sellers to be a true and complete copy of the original, or certified by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion clerk of the Escrowed Sharesapplicable court) and without further notice or consent being required, or (ii) a final, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of the Escrowed Shares held hereunder, the Agent shall promptly deliver immediately distribute and transfer to the person or persons specified, out of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or order, or as otherwise agreed in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) Ballard a number of Escrowed thx Xxxxxwed Shares in Determined Market Value (as of the value date of which (based Escrow Agent's receipt of said certified copy of the Final Determination) equal to the total dollar amount of said sum owed. If the Final Determination provides that no sum is owed to Ballard on account of the closing price of such Escrowed Claim, xx Xxxxowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or order, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation distributed to Ballard with respect to such amount or amounts the Claxx. Xxr this purpose, Escrow Agent may rely upon a copy of the Escrowed Shares delivered in accordance with this AgreementFinal Determination as certified by Ballard or any one or more of Sellers to be a true and complete copy of the original, or certified by the clerk of the applicable court.
(c) Unless otherwise notified by a joint instruction signed by 3dfx and If Escrow Agent does not receive, within the Securityholder Representative, in the event the escrow created hereunder is not sooner terminated pursuant to the provisions of Section 4(e) below or extended pursuant to the provisions of this Section 4(c), the escrow period and the escrow created hereunder shall terminate at the close of business on the date that is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year 60-day period following the Closing Date prior to such terminationdate the Claim Notice is given, which Claim has not been resolved a copy of a complaint and summons and proof of service strictly as provided in accordance with Section 4(a) or paragraph (b) above by above, Escrow Agent will promptly, without any further notice or consent being required, disburse and transfer to Ballard a number of the Xxxxxwed Shares in Determined Market Value as of the date of termination, the Agent shall release and pay distribution equal to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate dollar amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims Claim as set forth in accordance with this Section 4, including any distributions to 3dfx (which may be after the period provided herein, in which case the Escrow Period shall be extended to such time in which all Claims are resolved), the Agent shall release and pay to the Securityholders all Escrowed Shares held in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminatedClaim Notice.
(d) Notwithstanding At the provisions of Section 4(c) aboveTermination Date, at the conclusion Escrow Agent shall retain in escrow a sufficient number of the Escrow PeriodEscrowed Shares in Determined Market Value as of the Termination Date equal to one and one-quarter times the total dollar amount of all Unresolved Claims. The remaining Escrowed Shares will, if any Claim has not been resolved without further notice or consent being required, be promptly disbursed, transferred, and delivered in accordance with the terms hereof, the Agent shall have the rightrespective names of Sellers, in its sole discretion, to deposit with the registry of any state or federal court located proportions indicated in San Jose, California, the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders in any action filed with such court.Exhibit A.
(e) Unless otherwise notified in a joint instruction signed by 3dfx and Ballard shall deliver to Escrow Axxxx x copy of the Securityholder Representative, if first audited financial statements for the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with Company issued following the terms date of this Section 4 prior to the date that is the one (1) year anniversary of the Closing DateEscrow Agreement, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representativeas soon as they are issued.
Appears in 1 contract
Disposition of Escrowed Shares. Buyer shall hold and dispose of the Escrowed Shares as set forth in this Article III, subject in each case to Buyer's receipt of written instructions signed by both Buyer Sub and Seller (the "Joint Instructions") stating that the applicable conditions for disposition of the Escrowed Shares as set forth in this Article III have been satisfied (it being agreed that Buyer Sub and Seller shall act reasonably and in good faith in determining whether such conditions have been satisfied):
(a) If In the Agent event that Buyer Sub is entitled to indemnification from Seller pursuant to Section 7.2(f) of Article VII of the Asset Purchase Agreement and Buyer Sub has notified Buyer and Seller in writing of its claim, in reasonable detail, including the amount of such claim, and complied with all other terms and conditions of the Asset Purchase Agreement entitling it to indemnification from Seller thereunder (including seeking a final judgment for Damages), then prior to the first anniversary of the date hereof and subject to Buyer's receipt of Joint Instructions, Buyer shall receive transfer all rights, title and interest in and to that portion of the Escrowed Shares to Buyer Sub necessary to satisfy the applicable amount of such indemnity obligation (the "Indemnity Amount") by delivery of a written notice from 3dfx stock certificate representing that number of shares of Common Stock which is determined by dividing that portion of the Indemnity Amount then owed or accepted by Seller as owing to Buyer Sub pursuant to such Joint Instructions by the Fair Market Value of the Escrowed Shares (the "Stock Certificate") and the executed stock power relating thereto to Buyer. In determining the Fair Market Value of Escrowed Shares for credit toward an indemnification obligation hereunder, each Escrowed Share shall be valued at the average closing price of the Common Stock during normal trading hours (9:30 am to 4:00 pm) quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any time from exchange on which the Common Stock is listed, whichever is applicable, as published in The Wall Street Journal for the ten (10) days prior to such transfer date.
(b) As soon as practicable but no later than by the 15th day following the first anniversary of the date of this Agreement, Buyer shall release and deliver to Seller the Escrowed Shares or any portion thereof not transferred to Buyer Sub in accordance with subsection (a) above. For clarification, the amount of Escrowed Shares to be released to Seller pursuant to this Section 3.1(b) shall be determined by subtracting the amount of any Escrowed Shares already transferred to Buyer Sub in accordance with subsection (a) above and an amount sufficient to cover all outstanding claims (if any) claimed prior to the first anniversary of the date of this Agreement through the date that is three hundred eighty (380but having not yet reached final judgment) days from the Closing Date certifying (i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition Agreement, and that, as a result, 3dfx Joint Instructions.
(c) The Escrowed Shares may not be used for any purpose other than offsetting losses in respect of which Seller is entitled obligated to payment hereunder indemnify Buyer Sub pursuant to Article X VII of the Acquisition Agreement, (ii) the total amount that 3dfx is entitled to be paid from the Escrowed Shares Asset Purchase Agreement and the basis of calculation of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and the basis thereof, and (iv) that 3dfx has delivered a copy of such notice to the Securityholder Representative (as defined and described in Section 9 hereof) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) below.
(b) If a conflict shall have arisen as described in Section 4(a) above, then upon receipt by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion of the Escrowed Shares, or (ii) a final, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of the Escrowed Shares held hereunder, the Agent shall promptly deliver to the person or persons specified, out of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or order, or as otherwise agreed in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) a number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or order, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation with respect to such amount or amounts of the Escrowed Shares delivered in accordance with this Agreement.
(c) Unless otherwise notified by a joint instruction signed by 3dfx and the Securityholder Representative, in the event the escrow created hereunder is not sooner terminated pursuant to the provisions of Section 4(e) below or extended pursuant to the provisions of this Section 4(c), the escrow period and the escrow created hereunder shall terminate at the close of business on the date that is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year period following the Closing Date prior to such termination, which Claim has not been resolved in accordance with Section 4(a) or (b) above by the date of termination, the Agent shall release and pay to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims in accordance with this Section 4, including any distributions to 3dfx (which may be after the period provided herein, in which case the Escrow Period shall be extended to such time in which all Claims are resolved), the Agent shall release and pay to the Securityholders all Escrowed Shares held in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminated.
(d) Notwithstanding the provisions of Section 4(c) above, at the conclusion of the Escrow Period, if any Claim has not been resolved in accordance with the terms hereof, the Agent shall have the right, in its sole discretion, to deposit with the registry of any state or federal court located in San Jose, California, the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders in any action filed with such court.
(e) Unless otherwise notified in a joint instruction signed by 3dfx and the Securityholder Representative, if the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with the terms of this Section 4 prior to the date that is the one (1) year anniversary of the Closing Date, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representative.
Appears in 1 contract
Samples: Asset Purchase Agreement (Conversion Services International Inc)
Disposition of Escrowed Shares. (a) If the Agent shall receive a written notice from 3dfx at any time from the date of this Agreement through the date that is three hundred eighty (380) days from the Closing Date certifying (i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result The obligation of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition Agreement, and that, as a result, 3dfx is entitled to payment hereunder Shareholders pursuant to Article X of the Acquisition Agreement, (ii) the total amount that 3dfx is entitled to be paid from the Escrowed Shares and the basis of calculation of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and the basis thereof, and (iv) that 3dfx has delivered a copy of such notice to the Securityholder Representative (as defined and described in Section 9 hereof) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict 9.1 shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) below.
(b) If a conflict shall have arisen as described in Section 4(a) above, then upon receipt by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion satisfied only out of the Escrowed Shares, or (iibased on their Market Price computed in accordance with Section 1.7(c) a finalhereof as of any date on which payment is to be made pursuant to this Article IX. No later than the first anniversary of this Agreement, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of parties to the Escrow Agreement shall instruct the Escrow Agent to pay over to the Shareholders the Escrowed Shares then being held hereunder, the Agent shall promptly deliver pursuant to the person Escrow Agreement; unless at such time there is pending against the Shareholders or persons specified, out of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or orderGST Companies, or as otherwise agreed any of them, one or more Indemnifiable Claims, in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) a number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or order, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation with respect to such amount or amounts of case the Escrowed Shares delivered in accordance with this Agreement.
(c) Unless otherwise notified by a joint instruction signed by 3dfx and the Securityholder Representative, in shall be applied to satisfy all such Indemnifiable Claims based on their stated value. In the event the escrow created hereunder Shareholders believe that the ultimate value of an Indemnifiable Claim is less than its stated value, the Shareholders shall have the option of not sooner terminated having the Escrowed Shares be applied to satisfy any or all Indemnifiable Claims; PROVIDED, HOWEVER, that the Shareholders must first assume such Indemnifiable Claims pursuant to an agreement containing, among other things, such security provisions, as is satisfactory to the provisions of Section 4(e) below or extended Buyer. If and to the extent that from time to time pursuant to the provisions of this Section 4(c)Agreement, the escrow period and the escrow created hereunder shall terminate at the close of business on the date that it is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year period following the Closing Date prior to such termination, which Claim has not been resolved in accordance with Section 4(a) or (b) above by the date of termination, the Agent shall release and pay to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims determined in accordance with this Section 4Article IX that the GST Companies are entitled to indemnification with respect to Indemnifiable Claims, including any distributions the parties to 3dfx (which may be after the period provided herein, in which case the Escrow Period Agreement shall be extended instruct the Escrow Agent to such time in which all Claims are resolved), the Agent shall release and pay over to the Securityholders all GST Companies the Escrowed Shares held Shares, or portion thereof, necessary to satisfy in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminatedfull such Indemnifiable Claims.
(d) Notwithstanding the provisions of Section 4(c) above, at the conclusion of the Escrow Period, if any Claim has not been resolved in accordance with the terms hereof, the Agent shall have the right, in its sole discretion, to deposit with the registry of any state or federal court located in San Jose, California, the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders in any action filed with such court.
(e) Unless otherwise notified in a joint instruction signed by 3dfx and the Securityholder Representative, if the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with the terms of this Section 4 prior to the date that is the one (1) year anniversary of the Closing Date, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representative.
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Disposition of Escrowed Shares. Buyer shall hold and dispose of the Escrowed Shares as set forth in this Article III, subject in each case to Buyer’s receipt of written instructions signed by both Buyer and Primary Stockholder (the “Joint Instructions”) stating that the applicable conditions for disposition of the Escrowed Shares as set forth in this Article III have been satisfied (it being agreed that Buyer and Primary Stockholder shall act reasonably and in good faith in determining whether such conditions have been satisfied):
(a) If In the Agent event that Buyer is entitled to offset any: (i) amounts incurred in excess of $125,000 by Parent in connection with the audit of Seller’s financial statements for the twelve month period beginning December 1, 2002 and ending November 30, 2003 and the period beginning December 1, 2003 and ending October 15, 2004, (ii) liability for breach of warranties made by Seller or Primary Stockholder and which Buyer becomes aware of during the Escrow Term, or (iii) liability incurred pursuant to Section 6.12 of the Merger Agreement. Additionally, in the event that Buyer is entitled to indemnification from Seller pursuant to Section 9.2 of Article IX of the Merger Agreement and Buyer has notified Primary Stockholder in writing of its claim, in reasonable detail, including the amount of such claim, and complied with all other terms and conditions of the Merger Agreement entitling it to indemnification from Seller thereunder (including seeking a final judgment for Damages), then prior to the first anniversary of the date hereof and subject to Buyer’s receipt of Joint Instructions, Buyer shall receive a written notice from 3dfx cancel all Seller’s rights, title and interest in and to that portion of the Escrowed Shares necessary to satisfy the applicable amount of such indemnity obligation (the “Indemnity Amount”) by canceling that number of shares of Common Stock which is determined by dividing that portion of the Indemnity Amount then owed or accepted by Seller as owing to Buyer pursuant to such Joint Instructions by the Fair Market Value of the Escrowed Shares (the “Stock Certificate”) and the executed stock power relating thereto to Buyer. In determining the Fair Market Value of Escrowed Shares for credit toward either an offset of liabilities or toward an indemnification obligation hereunder, each Escrowed Share shall be valued at the average closing price of the Common Stock during normal trading hours (9:30 am to 4:00 pm) quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any time from exchange on which the Common Stock is listed, whichever is applicable, as published in The Wall Street Journal for the ten (10) days prior to such transfer date.
(b) As soon as practicable but no later than by the 15th day following the first anniversary of the date of this Agreement through (“Escrow Term”), Buyer shall release and deliver to Seller the Escrowed Shares or any portion thereof not cancelled in accordance with subsection (a) above. For clarification, the amount of Escrowed Shares to be released to Seller pursuant to this Section 3.1(b) shall be determined by subtracting the amount of any Escrowed Shares already canceled by Buyer in accordance with subsection (a) above and an amount sufficient to cover all outstanding claims (if any) claimed prior to the first anniversary of the date that is three hundred eighty of this Agreement (380but having not yet reached final judgment) days from the Closing Date certifying (i) that during the one (1) year period following the Closing Date 3dfx has suffered 3dfx Losses as a result of the Company's breach of any of its representations and warranties or its failure to perform any of its covenants, in each case as set forth in the Acquisition Agreement, Joint Instructions.
(c) The Escrowed Shares may not be used for any purpose other than pursuant to offsetting liabilities incurred by Buyer or Buyer Sub as identified in Section 3.1(a) above and that, as a result, 3dfx the offsetting of losses in respect of which Seller is entitled obligated to payment hereunder indemnify Buyer pursuant to Article X IX of the Acquisition Agreement, (ii) the total amount that 3dfx is entitled to be paid from the Escrowed Shares Merger Agreement and the basis of calculation of such amount (a "Claim") with respect to such 3dfx Losses, (iii) a description of the asserted Claim and the basis thereof, and (iv) that 3dfx has delivered a copy of such notice to the Securityholder Representative (as defined and described in Section 9 hereof) with respect to such Claim, then the Agent shall promptly (and in any event within ten (10) days following receipt of such notice from 3dfx) deliver a copy of such notice to the Securityholder Representative. If the Agent does not, within twenty (20) days after its delivery of such notice, receive a written objection from the Securityholder Representative with respect to such Claim, then the Agent shall promptly deliver to 3dfx a number of Escrowed Shares, the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount that 3dfx shall have specified as its Claim. If the Agent shall receive a written objection from the Securityholder Representative within such twenty (20) day period, then a conflict shall be deemed to have arisen, and the Agent shall, within five (5) days of the Agent's receipt of the written objection from the Securityholder Representative, deliver notice of such conflict to the parties hereunder. Thereafter, the Agent shall be entitled to refrain from taking any action until the Agent shall be directed otherwise in accordance with Section 4(b) below.
(b) If a conflict shall have arisen as described in Section 4(a) above, then upon receipt by the Agent during the term of this Agreement of (i) joint written instructions signed by 3dfx and the Securityholder Representative directing payment of all or a portion of the Escrowed Shares, or (ii) a final, non-appealable judgment or order of a court of competent jurisdiction directing the payment of an amount of the Escrowed Shares held hereunder, the Agent shall promptly deliver to the person or persons specified, out of the escrow created hereunder and in the manner specified in the applicable instructions, judgment or order, or as otherwise agreed in writing by 3dfx and the Securityholder Representative, (A) the number of Escrowed Shares specified therein, or (B) a number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the amount specified in such instructions, judgment or order, and the Agent shall thereupon be relieved and discharged from any responsibility or obligation with respect to such amount or amounts of the Escrowed Shares delivered in accordance with this Agreement.
(c) Unless otherwise notified by a joint instruction signed by 3dfx and the Securityholder Representative, in the event the escrow created hereunder is not sooner terminated pursuant to the provisions of Section 4(e) below or extended pursuant to the provisions of this Section 4(c), the escrow period and the escrow created hereunder shall terminate at the close of business on the date that is three hundred eighty (380) days from the Closing Date (the "Escrow Period"). Upon such termination, the Agent shall release and deliver to the Securityholders the Escrowed Shares remaining in escrow; provided, however, if 3dfx has filed a Claim with the Agent and the Securityholder Representative for a 3dfx Loss suffered during the one (1) year period following the Closing Date prior to such termination, which Claim has not been resolved in accordance with Section 4(a) or (b) above by the date of termination, the Agent shall release and pay to the Securityholders only the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) exceeds the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. Upon resolving all remaining Claims in accordance with this Section 4, including any distributions to 3dfx (which may be after the period provided herein, in which case the Escrow Period shall be extended to such time in which all Claims are resolved), the Agent shall release and pay to the Securityholders all Escrowed Shares held in escrow hereunder and close the escrow, whereupon the Escrow Period and the escrow created hereunder shall be terminated.
(d) Notwithstanding the provisions of Section 4(c) above, at the conclusion of the Escrow Period, if any Claim has not been resolved in accordance with the terms hereof, the Agent shall have the right, in its sole discretion, to deposit with the registry of any state or federal court located in San Jose, California, the number of Escrowed Shares the value of which (based on the closing price of such Escrowed Shares on the Closing Date) equals the aggregate amount of the outstanding and unresolved Claim(s) of 3dfx. The Agent shall implead 3dfx and the Securityholders in any action filed with such court.
(e) Unless otherwise notified in a joint instruction signed by 3dfx and the Securityholder Representative, if the Agent disburses to 3dfx all Escrowed Shares held in escrow in accordance with the terms of this Section 4 prior to the date that is the one (1) year anniversary of the Closing Date, then the Escrow Period and the escrow created hereunder shall immediately terminate, and the Agent shall close the escrow and give notice thereof to 3dfx and the Securityholder Representative.
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