Common use of Indemnity Escrow Clause in Contracts

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 2 contracts

Samples: Business Combination Agreement (Proficient Alpha Acquisition Corp), Business Combination Agreement (Proficient Alpha Acquisition Corp)

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Indemnity Escrow. The initial source for New Operators’ Indemnified Parties to recover Losses for which they are entitled to be indemnified under this Article V and for the New Owners to recover for Losses (ias defined in the Purchase Agreement) At or prior for which they are entitled to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as be indemnified under Article VIII of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco Purchase Agreement shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated from that certain escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with to be held by the escrow agent thereunder (the “Indemnity Escrow Agent”) pursuant to the terms of this that certain Escrow Agreement dated on or about the Effective Date, by and among the parties hereto, New Owners and Indemnity Escrow Agent, in the form attached hereto as Exhibit G (the “Indemnity Escrow Agreement”). From the sales proceeds due to Seller at the closing of the APA Sale Transaction, Sellers and/or Existing Operators shall deposit the amount of $500,000 into the Indemnity Escrow Account which amount shall fully-fund such account. The portion of the Class B Exchange Shares that Indemnity Escrow Account shall be withheld at interest-bearing (payable proportionately to the Closing for deposit recipients of distributions with respect thereto), shall be reduced to the amount of $250,000 on August 1, 2014, and shall terminate and be fully released no later than August 1, 2015, all as set forth in the Indemnity Escrow AccountAgreement, subject in each case to any unresolved claims filed by New Operators on or prior to the applicable disbursement date, and any disbursement from such funds in the Indemnity Escrow Account to Pubco, shall be allocated between remain on deposit with the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as Agent until the sole final resolution of such claims. All fees and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than costs associated with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated borne by the Parties as an adjustment New Operators. Notwithstanding anything to the Exchange Consideration received by contrary in the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner foregoing, if any Professional Liability Losses are paid out of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention then Sellers and Existing Operators shall within seven (7) days of any dividends, distributions and other earnings thereon in such withdrawal deposit into the Indemnity Escrow Account until disbursed therefrom in accordance with an amount equal to the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in amount withdrawn from the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after for the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) payment of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyProfessional Liability Losses.

Appears in 2 contracts

Samples: Operations Transfer Agreement, Operations Transfer Agreement (CNL Healthcare Properties, Inc.)

Indemnity Escrow. (ia) At or prior to In the Closing, Pubcoevent Closing occurs, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser Deposit and the Company)Closing Holdback shall be maintained in the General Escrow Account in order to provide security for Seller’s indemnification obligations under this Article 11 and Seller’s special warranty granted in the Assignment, as escrow agent Deed and Xxxx of Sale (the “Escrow AgentIndemnity Escrow”), . The Indemnity Escrow shall enter into an be held by Escrow Agent and disbursed by Escrow Agent after the Closing in accordance with this Section 11.7 and the General Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory . (b) With respect to each claim for indemnification asserted by Purchaser and the Company (the “Escrow Agreement”), against Seller pursuant to which Pubco shall cause to be delivered this Article 11 or special warranty claim asserted by Purchaser pursuant to the Escrow Agent a number Assignment, Deed and Xxxx of Class B Exchange Shares (each valued at Sale and Section 3.1(c) during the Redemption Price) equal to (x) fifteen percent (15%) of period from and after the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable Closing Date up to the Sellers at date that is twelve (12) months following the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account Date (the “Indemnity Escrow AccountTermination Date) and disbursed ), upon final resolution or determination of such an indemnity or special warranty claim by the Parties or in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow AccountSection 11.4, and any disbursement from the Indemnity Escrow Account to Pubcoas applicable, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company Purchaser and Seller Fundamental Representationsshall jointly instruct Escrow Agent to disburse to Purchaser the amount set forth in such joint instruction, for which the Main Seller shall will be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) that portion of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are being held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity General Escrow Account as Indemnity Escrow Shareswould satisfy such finally resolved or determined indemnity or special warranty claim. (iic) (A) Within three (3) Business Days Promptly after the twelve six (126) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within but in no event more than three (3) Business Days after the twenty-four thereafter) (24) month anniversary (such anniversary, the “Expiration DateInitial Indemnity Holdback Release Time”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the jointly instruct Escrow Agent directing the release of all remaining Indemnity Escrow Property to disburse to Seller fifty percent (if any50%) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount value of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to Initial Indemnity Holdback Release Time, less the aggregate amount of the Pending Claims set forth Damages in the respect of any claims for indemnification in any Claim Notice provided delivered prior to the Initial Indemnity Holdback Release Time. If such amount is a negative number, then no release will be made from the Indemnity Escrow as of the Initial Indemnity Holdback Release Time. (d) On the Indemnity Escrow Termination Date, Seller shall be entitled to receive the Indemnity Escrow balance as of such time and such amount shall be distributed to Seller pursuant to the terms of the General Escrow Agreement (and Purchaser and Seller shall jointly instruct Escrow Agent to take any necessary actions in order to accomplish the foregoing). If there are remaining amounts due by Seller to Purchaser pursuant to the indemnity obligations under this Article 11 after the Indemnity Escrow balance is exhausted, then such amounts shall be promptly paid to Purchaser by Seller as they are agreed by the Purchaser Representative Parties or finally determined in accordance with the terms of this Agreement. (e) To the extent that Purchaser asserts any Damages for which it believes it is entitled to indemnification pursuant to this Article 11 or any special warranty claims pursuant to the Assignment, Deed and Xxxx of Sale and Section 9.4 (3.1(c), and without limitation to Purchaser’s rights to seek injunctive relief if and as adjusted permitted by the terms hereof, Purchaser shall pursue such claims against the Indemnity Escrow first, and Seller shall not have any personal liability for such claims unless and until the Indemnity Escrow is exhausted, and then only as further limited in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions terms of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertythis Agreement.

Appears in 2 contracts

Samples: Purchase and Sale Agreement (Earthstone Energy Inc), Purchase and Sale Agreement (Earthstone Energy Inc)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchaser shall, on behalf of Seller, pay to the ClosingXxxxx Fargo Bank, PubcoN.A., the Seller Representative and American Stock Transfer & Trust Company (or such other escrow as agent mutually acceptable to Purchaser and the Company), as escrow agent Seller (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of to the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”), an amount equal to five percent (5%) and disbursed of the Purchase Price (the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement and that certain Escrow Agreement by and among Purchaser, Seller and the Escrow Agent, dated as of November 8, 2013, a copy of which is attached hereto as Exhibit F (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X shall be withheld at recovered solely by release of funds to the Closing for deposit in the Indemnity Escrow Account, and any disbursement Purchaser Indemnified Parties from the Indemnity Escrow Account to Pubco, in accordance with the terms of the Escrow Agreement and shall be allocated between accordingly reduce the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as Amount; provided, however, that to the sole extent, and exclusive source of solely to the extent, (a) Seller is obligated to make a payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors to any Purchaser Indemnified Parties pursuant to this Article IX (other than X with respect to a claim based upon, attributable to or resulting from a breach of the Specified IP Representation and (Ab) Fraud Claims or the Escrow Agent has released the Indemnity Escrow Amount (B) to the extent not utilized to pay Purchaser Indemnified Parties for any indemnification claims for breach of any Company and Seller Fundamental Representationsclaim) to Seller, for which the Main then Seller shall be solely responsible). Unless otherwise required by Law, all distributions pay directly the remaining sums due in connection with such claim following the payments made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment in connection therewith; provided, further, however that to the Exchange Consideration received by extent, and solely to the Sellers extent, (a) Seller is obligated to make a payment to any Purchaser Indemnified Parties pursuant to this Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions X with respect to such shares a claim based upon, attributable to or into which such shares are exchanged resulting from a Fundamental Representation of Seller, Seller Fraud, or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”pursuant to Section 10.2(a)(ii), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”Section 10.2(a)(iii), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if anySection 10.2(a)(iv) to the Class B Sellers; and (Cor Section 10.2(a)(v) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (Amount is insufficient to pay such claim, then Seller shall pay directly the remaining sums due in connection with respect to such claim following the payments made from the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations Account in connection therewith; provided, further, however, that, other than in cases of Seller Fraud, the maximum aggregate Liability of Seller under this Agreement, including this Article X, shall in no event exceed the Final Purchase Price. On the earlier of (a) the date that is fifteen (15) Business Days following the General Survival Date and (b) the Business Day immediately following the date on which Purchaser delivers the Attrition Rate Statement, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in release the Indemnity Escrow Account Amount (to the Class B Sellers with each extent not utilized to pay Purchaser Indemnified Parties for any indemnification claim) to Seller, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the sum of (a) the amount of claims for indemnification under this Article X asserted prior to the General Survival Date but not yet resolved and (b) Purchaser’s Attrition Claim to the extent not resolved at such Seller receiving time in writing or pursuant to Section 3.5 (such Seller’s relative Pro Rata Share claims, the “Unresolved Claims”). The Indemnity Escrow Amount retained for Unresolved Claims shall be released by the Escrow Agent (as between themselvesto the extent not utilized to pay Purchaser Indemnified Parties for any such claims resolved in favor of Purchaser Indemnified Parties) upon the resolution of such Indemnity Unresolved Claims in accordance with this Article X, Section 3.5 and the Escrow PropertyAgreement.

Appears in 2 contracts

Samples: Asset Purchase Agreement (Interface Security Systems, L.L.C.), Asset Purchase Agreement (Interface Security Systems Holdings Inc)

Indemnity Escrow. Within thirty (i30) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as days of the Effective TimeDate or if earlier, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in date that the Indemnity Escrow AccountAgreement is executed and effective, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on Borrower shall deposit into the escrow account held under the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account Agreement (the “Indemnity Escrow AccountEscrow”) and disbursed in accordance with the terms an amount equal to two percent (2%) of all Term Loans under this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in amounts held under the Indemnity Escrow AccountAgreement shall at all times be under the exclusive dominion and control of the Escrow Agent and neither the Borrower nor the Agents shall have any access thereto or right to make any withdrawal therefrom, and any disbursement from except that the Indemnity Escrow Account to Pubco, Agents shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant permitted to Article IX (other than with respect have funds distributed to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) them out of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of extent that any dividendsIndemnitee is entitled to any indemnification under Section 12.15 hereof from the Borrower which is not timely paid, in which case the Agents shall cause such distributions to be paid to such Indemnitees. In connection with any Term Loans made prior to the execution and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) effectiveness of the Indemnity Escrow Shares Agreement, the Agent may withhold two percent (together with 2%) of any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in Term Loans until the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after Agreement is executed and effective, at which time the twelve (12) month anniversary of the Closing Date (Agents shall deposit such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, withheld funds with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to be held under such agreement (with such deposit credited against the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to Borrower’s obligations under the Escrow Agent directing such releasefirst sentence of this Section 2.10). When all outstanding Obligations under this Agreement have been fully satisfied, with respect to each release of any remaining funds held under the Indemnity Escrow Property Agreement shall be distributed to the Class B SellersBorrower, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyfor its own account.

Appears in 2 contracts

Samples: Financing Agreement (Imperial Holdings, LLC), Financing Agreement (Imperial Holdings, LLC)

Indemnity Escrow. (i) At In order to provide security for Sellers’ indemnification obligations under this Agreement, the Indemnity Escrow shall be held by Escrow Agent, and disbursed by Escrow Agent after the Closing in accordance with this Section 10.08 and the Escrow Agreement. With respect to each claim for indemnification asserted by Buyer against Sellers pursuant to Section 12.03 or prior special warranty claim pursuant to the Closing, Pubco, Assignment during the Seller Representative period from and American Stock Transfer & Trust Company after the Closing Date up to the date that is nine (or such other escrow agent mutually acceptable to Purchaser and 9) months following the Company), as escrow agent Closing Date (the “Escrow AgentTermination Date”), upon final resolution or determination of such an indemnity or warranty claim by the Parties or in accordance with Section 12.11, as applicable, Buyer and Seller Representative shall enter into an jointly instruct Escrow AgreementAgent to disburse to Buyer the amount set forth in such joint instruction, effective as which will be that portion of the Effective Time, Indemnity Escrow being held in form and substance reasonably satisfactory to Purchaser and the Company (the “Indemnity Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (account as would satisfy such Class B Exchange Sharesfinally resolved or determined indemnity or warranty claim, together with a pro rata portion of the then-accrued interest on the Indemnity Escrow. On the Escrow Termination Date, Sellers shall, subject to the remainder of this sentence, be entitled to receive the Indemnity Escrow balance as of such time and such amount shall be automatically distributed to Sellers in the proportions requested by Seller Representative pursuant to the terms of the Escrow Agreement (and Buyer and the Seller Representative shall jointly instruct Escrow Agent to take any equity securities paid as dividends or distributions necessary actions in order to accomplish the foregoing); provided, however, that Sellers at such time shall not be entitled to, and Escrow Agent shall retain, any amounts necessary to satisfy any unresolved Claim Notices that have been timely delivered by Buyer in accordance with respect to such shares or into Section 12.11 (which such shares are exchanged or converted, in each case, as long as they amounts shall remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) until such Claim Notices are finally resolved). If there are remaining amounts due by any Seller to be held, along with any other dividends, distributions or other income on Buyer pursuant to its indemnity obligations under Section 12.03 after the Indemnity Escrow Sharesbalance is exhausted, in each case, as long then such amounts shall be promptly paid to Buyer by such Seller as they remain in are agreed by the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Parties or finally determined in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit If there are any funds remaining in the Indemnity Escrow Accountaccount after the resolution of all previously outstanding Claim Notices, then the Seller Representative and any disbursement from Buyer shall promptly jointly instruct Escrow Agent to release the Indemnity Escrow Account remaining account balance to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B proportions requested by Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) its receipt of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyjoint instruction.

Appears in 2 contracts

Samples: Purchase and Sale Agreement (Athlon Energy Inc.), Purchase and Sale Agreement (Athlon Energy Inc.)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, cash constituting a portion of the Seller Representative and American Stock Transfer & Trust Company Purchase Price in the amount of Three Million Dollars (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent $3,000,000) (the “Escrow AgentIndemnity Escrow), ) shall enter into be placed in an Escrow interest-bearing escrow account as security for Sellers’ indemnity obligations set forth in this Agreement, effective as . The terms and conditions for the release or forfeiture of the Effective TimeIndemnity Escrow are more particularly set forth in that certain Indemnity Escrow Agreement which shall be executed and delivered by Purchaser, in form and substance reasonably satisfactory to Purchaser Sellers and the Company escrow agent at Closing substantially in the form attached hereto as Exhibit 3.1(b) (the “Indemnity Escrow Agreement”); provided that within one (1) Business Day following the eighteen (18) month anniversary of the Closing Date, pursuant the Escrow Agent shall deliver to which Pubco shall cause to be Sellers any amounts remaining in the Indemnity Escrow account, less any amounts that are the subject of a Claim Notice (as defined in the Escrow Agreement) delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal prior to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based 5:00 p.m. Eastern Time on the Estimated Closing Statement eighteen (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (1218) month anniversary of the Closing Date which has not been resolved (such anniversary, the First Escrow Release DateDisputed Amounts), the Purchaser Representative and Seller Representatives shall give joint written instruction ) pursuant to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims terms set forth in the Claim Notice provided Escrow Agreement, such resolution to be evidenced by a written instrument signed by Sellers and Purchaser and delivered to the Purchaser Representative in accordance with Section 9.4 Escrow Agent. Within one (1) Business Day after the resolution of a dispute as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid to any Disputed Amounts pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value terms of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewithAgreement, the Escrow Agent shall transfer any Indemnity Escrow Property release (A) to Purchaser the amount, if any, payable to the Purchaser in connection with such resolved Disputed Amounts and (B) to Sellers, the remaining in balance of the Indemnity Escrow Account plus all accrued interest thereon, minus any remaining Disputed Amounts. (a) In addition to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (payment of the Purchase Price, as between themselves) consideration for the sale, conveyance, assignment, delivery and transfer of such Indemnity Escrow Propertythe Purchased Assets, Purchaser shall assume the Assumed Liabilities.

Appears in 2 contracts

Samples: Asset Purchase Agreement, Asset Purchase Agreement (Rollins Inc)

Indemnity Escrow. (i) At or prior to As a remedy for the indemnity set forth in Article VII, at the Closing, Pubco, Parent shall deposit with the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and Escrow Agent 7.5% of the Company), as escrow agent Transaction Shares (the “Escrow AgentEscrowed Indemnity Shares”), shall enter into an comprised of Escrowed Earnout Shares (including First Target Shares, Second Target Shares and Third Target Shares) and Transaction Shares that are not Escrowed Earnout Shares to be held in a separate escrow account and released therefrom (if applicable) from time to time to Parent in satisfaction of such indemnity, all in accordance with Article VII hereof and the terms and conditions of the Escrow Agreement, effective as of . On the Effective Time, in form and substance reasonably satisfactory to Purchaser and fifth Business Day following the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account date (the “Indemnity Escrow AccountTermination Date”) that is fifteen (15) months from the Closing Date, the Escrow Agent shall release the Escrowed Indemnity Shares, less any of such shares applied in satisfaction of a claim for indemnification and disbursed any of such shares related to a claim for indemnification that is then unresolved. Upon such release, Escrowed Indemnity Shares that constitute Transaction Shares shall be delivered to the Company Stockholders in accordance with Section 2.6(c) of the terms of this Agreement Company Disclosure Statement and the Escrow Agreement; and the Escrowed Indemnity Shares that constitute Escrowed Earnout Shares shall be retained in escrow in accordance with Section 2.8 hereof and the Escrow Agreement. The portion of the Class B Exchange Any Escrowed Indemnity Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than held with respect to (A) Fraud Claims or (B) any unresolved claim for indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller not applied as indemnification with respect to such claim upon its resolution shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom delivered in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Sharespreceding sentence. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 2 contracts

Samples: Agreement and Plan of Merger (Polaris Acquisition Corp.), Merger Agreement (Polaris Acquisition Corp.)

Indemnity Escrow. (i) At or prior to On the Closing, Pubcodate hereof, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable Purchaser shall, on behalf of the Sellers, pay to Purchaser and the Company)Wxxxx Fargo N.A., as escrow agent for the Purchaser and the Sellers (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) Agent, an amount equal to $6,250,000 (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, interest earned thereon the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow PropertyAmount”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion , which will be executed at the Closing, by and among the Purchaser, the Sellers and the Escrow Agent (the “Escrow Agreement”) in the form attached hereto as EXHIBIT A. Any payment any Seller is obligated to make to any Purchaser Indemnified Parties after the rendering of a final decision, judgment or award of a Governmental Body of competent jurisdiction pursuant to this Article IX or Article X or under the Class B Exchange Shares that Tax Deed shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow AccountAmount, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account Amount by the Escrow Agent in accordance with the terms of the Escrow Agreement, and shall accordingly reduce the Indemnity Escrow Amount and, second, to Pubcothe extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Sellers or Seller (as applicable) shall be allocated between required to pay all of such additional sums due and owing to the Class B Purchaser Indemnified Parties by wire transfer of immediately available funds within 5 Business Days after the date of such notice. On the 12 month anniversary of the Closing Date, the Escrow Agent shall release $3,125,000 to the Sellers based (by wire transfer of immediately available funds into the account of the Sellers’ representative set forth on each Schedule 2.1 (or as otherwise designated in writing by the Sellers)) less: (i) any amount previously utilized to pay any Purchaser Indemnified Party; and (ii) the amount of any claims for indemnification by any Purchaser Indemnified Party asserted prior to such Sellerdate but not yet resolved. The wire transfer to such account shall satisfy in full the Escrow Agent’s relative Pro Rata Share obligation (if any) to release to the Sellers such amount. On the Release Date, the Escrow Agent shall release the remainder of the Indemnity Escrow Amount (to the extent not utilized to pay any Purchaser Indemnified Parties for any indemnification claims) to the Sellers (by wire transfer of immediately available funds into the account of the Sellers’ representative set forth on Schedule 2.1 (or as between themselvesotherwise designated in writing by the Sellers), which wire transfer to such account shall satisfy in full the Escrow Agent’s obligation (if any) to release to the Sellers such amount), except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article IX or Article X or claims under the Tax Deed asserted prior to such date but not yet resolved (“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated released by the Parties as an adjustment Escrow Agent (to the Exchange Consideration received by the Sellers pursuant extent not utilized to Article II hereof. Each Class B Seller shall be deemed to be the owner pay any Purchaser Indemnified Parties for any such claims resolved in favor of such Seller’s relative Pro Rata Share (as between themselvesPurchaser Indemnified Parties) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom upon their resolution in accordance with this Article IX or Article X or the terms and conditions of this Agreement Tax Deed and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Share Purchase Agreement (Archipelago Learning, Inc.)

Indemnity Escrow. (i) At or prior to the ClosingExcept as set forth herein, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, Consideration shall be held in escrow until the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account Expiration Date (the “Indemnity Escrow AccountPeriod”) and disbursed as collateral for the indemnification obligations of the Company’s stockholders as set forth below (the “Indemnity Escrow”). Notwithstanding the foregoing, a portion of the Indemnity Escrow Consideration shall be required to remain in escrow after the Indemnity Escrow Period in an amount sufficient to satisfy any unsatisfied claims specified in a written notice tendered to the escrow agent in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from Agreement prior to the expiration of the Indemnity Escrow Account Period (in which case any representation or warranty to Pubco, which such claim applies which would naturally terminate at the end of the Indemnity Escrow Period shall be allocated between continue to survive until such time as the Class B Sellers based on each claim is settled or a final award or judgment has been issued with respect thereto; provided that any such Seller’s relative Pro Rata Share (representation or warranty shall survive solely as between themselvesit relates to that particular claim and shall not survive for any separate or additional claim that may arise after the last day of the Indemnity Escrow Period). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required governed by Law, all distributions made from the terms hereof and the Indemnity Escrow Account shall be treated by Agreement among Quantum, the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of Company, the Indemnity Escrow Shares during Stockholder Representative (as defined below), the time such Indemnity Escrow Shares are held in Company’s stockholders and the escrow agent. During the Indemnity Escrow AccountPeriod, subject to each of the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller Company’s stockholders shall have the right to vote direct the voting of the shares of Quantum Common Stock represented by such Sellerstockholder’s relative Pro Rata Share (as between themselves) pro rata portion of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect Consideration that remains from time to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after account. The Company’s stockholders shall be entitled to receive, upon the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount termination of the Indemnity Escrow Property Period on a pro rata basis, any Indemnity Escrow Consideration not applied by Quantum to the payment of a claim in a manner consistent with a value (with respect to this Article VI and the Indemnity Escrow Shares, calculated based on Agreement. Payment to Indemnified Parties from the Pubco Share Price as of the Expiration Date) equal Indemnity Escrow to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative satisfy claims for indemnification shall be paid in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the provisions hereof and the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Merger Agreement (Quantum Corp /De/)

Indemnity Escrow. (a) Subject to the limitations set forth in this Article X, within three Business Days after a Buyer Indemnitee becomes entitled to payment of indemnification for a Direct Claim or Third-party Claim under Section 10.1(a)(i): (i) At or prior to If there are funds remaining in the ClosingIndemnity Escrow, Pubco, the Seller Representative Buyer and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser Shareholder shall execute and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered deliver a joint written instruction to the Escrow Agent a number of Class B Exchange Shares (each valued at to make such payment to the Redemption Price) equal to (x) fifteen percent (15%) Buyer Indemnitee out of the estimated Exchange Consideration, divided by Indemnity Escrow; and (yii) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in If the Indemnity Escrow Accounthas been fully reserved in respect of pending claims, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions exhausted or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed otherwise released in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that , any Losses not otherwise satisfied pursuant to Section 10.5(a)(i), shall be withheld at satisfied by payment of all sums due and owing from Shareholder to the Closing Buyer Indemnitee by wire transfer of immediately available funds to an account or accounts designated in writing by the Buyer Indemnitee. (b) Subject to the limitations set forth in this Article X, within three Business Days after a Buyer Indemnitee becomes entitled to payment of indemnification for deposit a Direct Claim or Third-party Claim under any of Sections 10.1(a)(ii)-(vii): (i) If there are funds remaining in the Indemnity Escrow AccountEscrow, and any disbursement the Buyer Indemnitee elects for such Losses to be satisfied from the Indemnity Escrow Account to PubcoEscrow, then Buyer and Shareholder shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole execute and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment deliver a joint written instruction to the Exchange Consideration received by Escrow Agent to make such payment to the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) Buyer Indemnitee out of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares.Escrow; and (ii) If the Buyer Indemnitee elects for such Losses to be satisfied by Shareholder directly, then such Losses shall be satisfied by payment of all sums due and owing from Shareholder to the Buyer Indemnitee by wire transfer of immediately available funds to an account or accounts designated in writing by the Buyer Indemnitee. (Ac) Within three Except as otherwise provided in this Article X, payment for any Losses suffered by any Indemnitee pursuant to this Article X shall be made (3i) Business Days after when the twelve Buyer Indemnitee and Shareholder (12if the Indemnitee is a Buyer Indemnitee), or Buyer and Shareholder (if the Indemnitee is Shareholder) agree on the amount of such Losses, or (ii) when the amount of Losses is finally adjudicated. (d) If, on the nine-month anniversary of the Closing Date (such anniversary, the “First Escrow Initial Release Date”), the Purchaser Representative no Third-party Claim Notice of Direct Claim Notice has been provided by a Buyer Indemnitee to Shareholder hereunder, then within three Business Days thereafter, Buyer and Seller Representatives shall give Shareholder shall, by joint written instruction to instruction, direct the Escrow Agent directing to release to Shareholder from the release Indemnity Escrow an amount equal to $1,586,000 (it being understood, for the avoidance of doubt, that if, as of the First Released Initial Release Date, a Buyer Indemnitee has provided a Third-party Claim Notice or Direct Claim Notice to Shareholder, then no release from the Indemnity Escrow Property (if any) shall occur pursuant to this sentence). On the Class B Sellers; (B) within three (3) date that is 3 Business Days after the twenty18-four (24) month anniversary of the Closing Date (such anniversary, the “Expiration Second Release Date”), the Purchaser Representative Buyer and Seller Representatives shall give Shareholder shall, by joint written instruction to instruction, direct the Escrow Agent directing to release to Shareholder the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) amounts in the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to minus the aggregate amount of Losses reserved in respect of pending claims made by Buyer Indemnitees pursuant to this Article X. To the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in extent that any amount has been reserved and withheld from distribution from the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant on the Second Release Date on account of an unresolved claim for indemnification and, subsequent to the provisions of Article IX. After the Expiration Second Release Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Sharessuch claim is resolved, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee Buyer and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration DateShareholder shall, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shareswithin three Business Days thereafter, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by joint written instruction, direct the Escrow Agent to the Class B Sellers release (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions i) to the Escrow Agent directing Buyer Indemnitee(s) the amount of Losses, if any, due in respect of such release)claim as finally resolved, with and (ii) to Shareholder an amount equal to the excess, if any, of the amount theretofore reserved and withheld from distribution in respect to each release of such claim over the Indemnity Escrow Property payment, if any, made pursuant to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share foregoing clause (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyi).

Appears in 1 contract

Samples: Stock Purchase Agreement (BlueLinx Holdings Inc.)

Indemnity Escrow. (ia) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company Buyer shall issue (or such other escrow shall instruct the Buyer’s transfer agent mutually acceptable to Purchaser and issue) the Company)Indemnity Escrow Shares in the name of the Escrow Agent or its nominee. As promptly as practicable following the Closing, as escrow agent (in accordance with the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco Buyer shall cause to be delivered deliver to the Escrow Agent and the Seller written evidence (in the form of a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) direct registration statement or other customary written evidence of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on registration of the Indemnity Escrow Shares, in each case, as long as they remain in ) of the issuance of the Indemnity Escrow Account (together with Shares and registration of the Indemnity Escrow SharesShares in book-entry in the name of the Escrow Agent or its nominee, to be held by the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Agent in accordance with the terms of this Agreement and the Escrow Agreement. The portion of In accordance with the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow AccountAgreement, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and or other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof income earned on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow SharesShares shall be deposited in the Indemnity Escrow Account. Such deposited dividends, calculated based on the Pubco Share Price as of the Expiration Date) equal distributions or other income earned with respect to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) Indemnity Escrow Shares shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant be distributed according to the provisions of Article IXherein and the Escrow Agreement. After the Expiration Date, to the extent During such time that the value of the remaining Indemnity Escrow Property (with respect Shares are held by the Escrow Agent, the Seller shall retain the right to vote the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and . (b) Within two Business Days following the Pending Claims set forth in final determination of the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect any Damages due to any Buyer Indemnified Person pursuant to Section 8.1(a) for which the Buyer is entitled to recover from the Indemnity Escrow SharesAccount, calculated based on the Pubco Share Price) equal to such excess Seller and the Buyer shall be promptly (and no later than three (3) Business Days) disbursed by direct the Escrow Agent to release to the Class B Sellers Buyer a number of shares of Buyer Common Stock having a value equal to the amount of such Damages (based on the Buyer Applicable Stock Price with respect to such date of determination, and Purchaser Representative with such number of shares rounded up to the nearest whole share), and Seller Representatives the Buyer shall promptly give joint written instructions cause any such shares to be cancelled. (c) Within two Business Days following the Survival Date, the Buyer and the Seller shall direct the Escrow Agent directing such release), with respect to each release of to the Seller from the Indemnity Escrow Property to Account the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property Buyer Common Stock remaining in the Indemnity Escrow Account Account, minus a number of shares of Buyer Common Stock having a value (based on the Buyer Applicable Stock Price with respect to the Class B Sellers Survival Date, with each such number of shares rounded up to the nearest whole share) equal to the amount of Damages in respect of any claim for indemnification timely made by the Buyer under Section 8.1(a) that has not yet been finally determined in accordance with this Article VIII. (d) In the event any shares of Buyer Common Stock are not released from the Indemnity Escrow Account as a result of a holdback pursuant to Section 8.5(c), then following the final determination of any such outstanding claims, the Buyer and the Seller receiving will cause the Escrow Agent to release, within two Business Days, to the Buyer a number of shares of Buyer Common Stock having a value (based on the Buyer Applicable Stock Price with respect to such Seller’s relative Pro Rata Share (as between themselvesdate of determination, with such number of shares rounded up to the nearest whole share) equal to the amount of Damages, if any, finally determined to be owed to the Buyer Indemnified Persons in respect of such claim, and the Buyer shall promptly cause any such shares to be cancelled. (e) Promptly following the final determination of all pending claims pursuant to Section 8.5(c) and the releases, if any, contemplated by Section 8.5(d), the Seller and the Buyer shall cause the Escrow Agent to release to the Seller any Buyer Common Stock remaining in the Indemnity Escrow PropertyAccount. (f) The Buyer and the Seller agree to the matters set forth on Schedule 8.5.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Marketaxess Holdings Inc)

Indemnity Escrow. (ia) At or prior to On the ClosingClosing Date, Pubco, Escrow Agent shall retain the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, Deposit in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement Account (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Accountamount, the “Indemnity Escrow SharesAmount”) to be held, along with any other dividends, distributions or other income on for the purpose of securing the satisfaction and discharge of indemnity claims of Buyer against Seller under this Agreement. The Indemnity Escrow Shares, in each case, as long as they remain in Amount shall be governed by the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms provisions of this Agreement Section 12.7 and the Escrow Agreement. The joint, written authorization of representatives of Buyer and Sellers pursuant to the Escrow Agreement shall be required for the disbursement of any portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves)Amount. The Indemnity Escrow Shares Amount shall serve as the sole and exclusive not limit Buyer’s right to recover any amount otherwise due from Sellers hereunder but is intended only to provide a secure source of payment of the obligations of the Sellers under Section 2.5(dfunding for such recovery. (b) and the obligations of the Indemnitors With respect to each claim for indemnification asserted in writing by Buyer against Seller pursuant to Article IX (other than with respect to (A) Fraud Claims XII during the Survival Period, upon final resolution or (B) any indemnification claims for breach determination of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated such an indemnity or warranty claim by the Parties as an adjustment or in accordance with this Article XII, resolving the claim in favor of Buyer, Buyer and Sellers shall jointly instruct the Escrow Agent to disburse to Buyer the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall amount set forth in such joint written instruction, which will be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) that portion of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are Amount being held in the Indemnity Escrow AccountAccount as would satisfy such finally resolved or determined indemnity or warranty claim. (c) On the nine-month anniversary of the Closing Date, subject Buyer and Sellers shall jointly instruct the Escrow Agent to release to Sellers an amount equal to fifty percent (50%) of the retention total of any dividendsamounts then-remaining in the Escrow Account less the aggregate amount of all outstanding claims for indemnification or warranty asserted in good faith by Buyer, distributions which Buyer has provided to Sellers in writing in accordance with Article XII that have not been previously satisfied (which monies shall remain part of the Escrow Account until final resolution of such outstanding indemnity and/or warranty claims). For the avoidance of doubt, an amount equal to 50% of the Deposit plus all interest earned thereon plus the aggregate amount of all such outstanding claims shall remain part of the Escrow Account for the remaining Survival Period. (d) Buyer and other earnings thereon Sellers shall jointly instruct the Escrow Agent to release to Sellers any amounts then remaining in the Escrow Account on the first Business Day after the expiration of the Survival Period, except for the aggregate amount of all outstanding claims for indemnification or warranty which Buyer has provided in writing and in good faith to Sellers in accordance with Article XII that have not been previously satisfied (which monies shall remain part of the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyoutstanding indemnity and/or warranty claims).

Appears in 1 contract

Samples: Purchase and Sale Agreement (Resolute Energy Corp)

Indemnity Escrow. (i) At or prior On the Closing Date, Buyer shall, on behalf of Sellers, pay to the Closing, Pubco, the Seller Representative and First American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company)Title Insurance Corporation, as escrow agent to Buyer and Sellers (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of to the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed ), an amount equal to $3,000,000 (the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement and the Escrow Agreement, substantially in the form attached hereto as Exhibit B, which will be executed at the Closing, by and among Buyer, Seller and the Escrow Agent (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment any Seller is obligated to make to any Buyer Indemnified Parties pursuant to this Article IX shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Buyer Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent within five Business Days after the date notice of any sums due and owing is given to Pubcothe Seller (with a copy to the Escrow Agent pursuant to the Escrow Agreement) by the applicable Buyer Indemnified Party and shall accordingly reduce the Indemnity Escrow Amount and, second, to the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Sellers shall be allocated between required to pay all of such additional sums due and owing to the Class B Sellers based on each Buyer Indemnified Parties by wire transfer of immediately available funds within five Business Days after the date of such Seller’s relative Pro Rata Share notice. On July 1, 2008, the Escrow Agent shall release the Indemnity Escrow Amount (as between themselvesto the extent not utilized to pay Buyer for any indemnification claim) to Sellers, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article IX asserted prior to June 30, 2008 but not yet resolved (“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated released by the Parties as an adjustment Escrow Agent (to the Exchange Consideration received by the Sellers pursuant extent not utilized to Article II hereof. Each Class B Seller shall be deemed to be the owner pay Buyer for any such claims resolved in favor of such Seller’s relative Pro Rata Share (as between themselvesBuyer) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom upon their resolution in accordance with the terms and conditions of this Agreement Article IX and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Purchase Agreement (American Skiing Co /Me)

Indemnity Escrow. (i) At or prior The Escrow Amount shall be deposited in escrow with the Escrow Agent pursuant to the Closing, Pubco, terms of that certain escrow agreement in the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as form of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company Exhibit A attached hereto (the “Escrow Agreement”). At Closing, pursuant Buyer and Sellers shall execute and deliver the Escrow Agreement and use commercially reasonable efforts to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at named therein to execute and deliver the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with Escrow Agreement. The Escrow Amount plus any equity securities paid as dividends interest or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account earnings thereon (the “Indemnity Escrow AccountEscrow”) will be available to satisfy any amounts owed by Sellers to Buyer or the Buyer Indemnitees pursuant to Section 9.2 and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share Fifty percent (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves50%) of the Indemnity Unclaimed Escrow Shares during Amount shall be released by the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject Agent to the retention Sellers on the six (6) month anniversary of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow AgreementClosing Date. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share Fifty percent (as between themselves50%) of the Indemnity Unclaimed Escrow Shares (together with any equity securities paid as dividends or distributions with respect Amount remaining after the distribution on the sixth month anniversary of the Closing Date shall be released by the Escrow Agent to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after Sellers on the twelve (12) month anniversary of the Closing Date and the remaining Unclaimed Escrow Amount shall be released in full on the eighteen (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (2418) month anniversary (such anniversary, of the “Expiration Closing Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all . Any remaining Indemnity Escrow Property (if any) that the Sellers thereafter becomes entitled to receive under the Class B Sellers; terms of this Agreement and (C) the Indemnity Escrow Property Agreement shall not thereafter be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made released in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Shenandoah Telecommunications Co/Va/)

Indemnity Escrow. The Seller agrees that the sum of $4,000,000 (ithe "Indemnity Escrow Funds") At or prior otherwise payable to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as part of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco Interests Purchase Price at Closing shall cause to be delivered by the Purchaser to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal pursuant to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) Agreement to be held, along with any other dividends, distributions or other income on held by the Indemnity Escrow Shares, Agent in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow an interest bearing account (the "Indemnity Escrow Account") and disbursed in accordance with pursuant to the terms of this Agreement and the Indemnity Escrow Agreement. The portion Indemnity Escrow Funds shall be available for payment of any claims made by a Purchaser Indemnified Party pursuant to Article VI below and in accordance with the terms of the Class B Exchange Shares that Indemnity Escrow Agreement. The Purchaser Indemnified Parties shall be withheld at first seek reimbursement for any Losses for which they are entitled to receive indemnification under this Agreement out of the Closing for deposit funds deposited in the Indemnity Escrow Account, and any disbursement pursuant to the terms of the Indemnity Escrow Agreement, until such funds are exhausted or released from the Indemnity Escrow Account to PubcoAccount. On the first anniversary of the Closing, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from Funds held in the Indemnity Escrow Account shall be treated by the Parties as an adjustment released to the Exchange Consideration Seller, unless prior to that date the Purchaser advises the Escrow Agent, the Seller and the Principal Shareholders in writing that any claim for indemnification under Article VI below (each, a "Claim") by any Purchaser Indemnified Party has been asserted and is then pending. Any such notice shall specify the total amount of the pending Claim(s). If such notice is timely received by the Sellers pursuant to Article II hereof. Each Class B Seller Escrow Agent, the Escrow Agent shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) release only that part of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject Account that is eligible to be released pursuant to the retention preceding sentence that exceeds the total amount of any dividendsClaim(s) received, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right remaining funds to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time be held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant Claim(s) are resolved. Prior to the provisions receipt of Article IX. After the Expiration Datea Claim, to the extent that the value of the remaining Indemnity Escrow Property (with respect to interest on the Indemnity Escrow SharesAgreement shall be for the account of the Seller. Following receipt of a Claim, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth interest shall be paid in the Claim Notice (same proportion as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of principal Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyFunds are disbursed.

Appears in 1 contract

Samples: Membership Interests Purchase Agreement (Orion Marine Group Inc)

Indemnity Escrow. (ia) At or prior Any payment the Sellers are obligated to make to any BOCO Indemnified Parties pursuant to this ARTICLE VIII shall be paid, first, to the Closingextent there are sufficient funds in the Escrow Account, Pubco, by release of funds to the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and BOCO Indemnified Parties from the Company), as escrow agent (Escrow Account by the Escrow Agent”), shall enter into an Agent in accordance with the provisions of the Escrow Agreement, effective as within five Business Days after the date notice of any sums due and owing is given to the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company Sellers (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered with a copy to the Escrow Agent a number pursuant to the Escrow Agreement), by the applicable BOCO Indemnified Party and shall accordingly reduce the Escrow Account and, second, to the extent the Escrow Account is insufficient to pay any remaining sums due, then Sellers shall be required to pay all such additional sums due and owing to the BOCO Indemnified Parties by wire transfer of Class B Exchange Shares immediately available funds within five Business Days after the date of such notice. (each valued at b) On the Redemption Price) equal to (x) fifteen percent (15%) expiration of the estimated Exchange ConsiderationSurvival Period, divided by (y) the Redemption Price otherwise issuable to Escrow Agent shall release the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain funds in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with to the Indemnity Escrow Shares, the “Indemnity Escrow Property”extent not utilized to pay for any indemnification claim), in a segregated escrow account (85% of such funds to STEMCELLS Parent and 15% of such funds to the “Indemnity Escrow Account”) and disbursed Consultants, in accordance with the terms of the Escrow Agreement, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Agreement ARTICLE VIII asserted prior to such expiration of the Survival Period but not yet resolved (“Unresolved Claims”). The Escrow Account retained for Unresolved Claims shall be released by the Escrow Agent (to the extent not utilized to pay BOCO US for any such claims resolved in favor of BOCO US) upon their resolution in accordance with this ARTICLE VIII and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Asset Purchase Agreement (Microbot Medical Inc.)

Indemnity Escrow. (ia) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller Amount shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated held by the Parties as an adjustment to Title Company until twelve (12) months after the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom Closing Date in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during Agreement, and on the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within date that is three (3) Business Days after the twelve (12) month anniversary of period commencing on the Closing Date (such anniversaryDate, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount unreleased portion of the Indemnity Escrow Property Amount shall be released to Seller pursuant to joint written instructions signed by an authorized Representative of Seller and Buyer in accordance with the Indemnity Escrow Agreement, except to the extent an indemnifiable claim has been timely submitted to Seller in accordance with this Agreement, in which case the Title Company shall continue to hold the Indemnity Escrow Amount to the extent necessary to satisfy such claim in accordance with this Agreement and the Indemnity Escrow Agreement. (b) The Indemnity Escrow Amount shall be available for (i) the satisfaction of all Losses suffered or incurred by any Buyer Indemnified Party as contemplated by Section 6.2(a), subject to the limitations on Seller’s liability, if any, set forth in Section 6.4, (ii) any Third-Party Claims asserted against any Buyer Indemnified Party as long as a value Claim Notice is provided to the Seller prior to the expiration of the applicable survival periods set forth in Section 6.3, subject to the limitations on Seller’s liability, if any, set forth in Section 6.4, (with respect iii) the Closing Statement reconciliations contemplated by Section 2.6 (iv) the Cost-to-Complete Purchase Price Adjustment contemplated by Section 2.7, and (v) any amounts payable by Seller pursuant to Section 5.10. Any amounts paid to Buyer pursuant to Section 6.8(b)(iii), (iv) or (v) above shall not reduce the Indemnity Escrow Amount, and Seller shall repay such amounts to the Indemnity Escrow Shares, calculated based promptly upon demand by Buyer. (c) All interest earned on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time Amount will be reported as such Pending Claim income of Seller for income tax purposes. Seller shall have been finally resolved provide the Title Company with a taxpayer identification number and paid pursuant to the provisions shall pay all income Taxes due by reason of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to interest accrued on the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAmount.

Appears in 1 contract

Samples: Asset Purchase Agreement (Safeway Inc)

Indemnity Escrow. (i) At or prior The “Holdback” shall consist of $10,700,000 of the Aggregate Merger Consideration to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other be deposited in escrow at Closing with an escrow agent mutually reasonably acceptable to Purchaser SBI and the Company)Parent, as and pursuant to an escrow agent agreement that is reasonably acceptable to SBI and Parent (the “Escrow AgentIndemnity Escrow”). The Parent Indemnified Parties shall be paid, compensated or otherwise reimbursed solely through and from the Indemnity Escrow. Notwithstanding the foregoing, nothing contained in this Agreement, including this Section 8.5, shall enter into an Escrow Agreement, effective as be construed to limit any rights of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price Parent Indemnified Parties for full indemnification or otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with against any equity securities paid as dividends or distributions SBI Stockholder severally with respect to the failure of such shares SBI Stockholder to have good, valid and marketable title to any SBI Shares held by such SBI Stockholder as represented herein, free and clear of all Liens or into which to have the full right, capacity and authority to vote all of such shares are exchanged or convertedSBI Shares in favor of the Merger and any other transaction contemplated by this Agreement; provided that in no event shall any SBI Stockholder have liability to the Parent Indemnified Parties for Losses in excess of the Merger Consideration payable to such SBI Stockholder. On expiration of the Survival Period, in each case, as long as they remain all amounts in the Indemnity Escrow Accountthat have not been used to compensate a Parent Indemnified Party as provided in this Article VIII or which do not constitute a Reserve Amount under the provisions of Section 8.5.2.2, shall be distributed to the “Indemnity Escrow Shares”) SBI Stockholders, pro rata in proportion to the amount each was entitled to receive of the Merger Consideration payable to the SBI Stockholders. On resolution of the claim underlying any Reserve Amount or on expiration of three years from the expiration of the Survival Period without a formal proceeding having been filed against the Parent Indemnified Parties with respect to the underlying claim, such Reserve Amount shall be held, along with any other dividends, distributions or other income on distributed to the Indemnity Escrow Shares, in each case, as long as they remain SBI Shareholders in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreementsame proportion as set forth above. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and On any disbursement distribution from the Indemnity Escrow Account to PubcoEscrow, interest accrued on the Convertible Notes shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) Parent and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated SBI Stockholders based on the Pubco Share Price as respective portions of the Expiration Date) equal to the aggregate Holdback amount of the Pending Claims set forth in the Claim Notice provided otherwise received by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid them pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with this Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property8.5.

Appears in 1 contract

Samples: Merger Agreement (Aquantive Inc)

Indemnity Escrow. (i) At or prior to As security for the Closing, PubcoVendor's indemnification obligations under this Agreement, the Seller Representative Purchaser shall withhold from the Purchase Price and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in pay the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together Amount with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves)Agent. The Indemnity Escrow Shares Amount shall serve as be held by the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors Escrow Agent pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the indemnity escrow agreement in the form attached hereto as Schedule 3.2 (the "INDEMNITY ESCROW AGREEMENT"), in a separate interest bearing escrow account. On the first anniversary of the Closing Date, the Escrow Agreement. Each Class B Seller Agent shall have the right release to vote such Seller’s relative Pro Rata Share (as between themselves) of Vendor the Indemnity Escrow Shares Amount less (together with i) any equity securities amount paid as dividends or distributions prior to the first anniversary of the Closing Date by the Escrow Agent with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. Claims of indemnity pursuant to Article 12 of this Agreement, and (ii) (A) Within three (3) Business Days after any amount claimed in any notice delivered pursuant to Section 12.3 of this Agreement with respect to Claims of indemnity that have not been resolved or satisfied as of the twelve (12) month first anniversary of the Closing Date (such anniversarythe "UNRESOLVED CLAIMS"). As soon as all Unresolved Claims, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewithresolved, the Escrow Agent shall transfer any Indemnity Escrow Property release to the Vendor the remaining in portion of the Indemnity Escrow Account Amount not required to satisfy such Unresolved Claims. All interest accrued on the Indemnity Escrow Amount shall be paid to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) Vendor pursuant to the terms of such the Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Amis Holdings Inc)

Indemnity Escrow. At the Closing, without the act of any Securityholder, the Indemnity Escrowed Shares shall be deposited by Parent (on behalf of the Securityholders referred to in clauses (i) At or prior to and (ii) of the Closingdefinition of “Securityholders” in Section 10.1(ll) (the “Indemnity Fund Securityholders”) with Mellon Investor Services, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser bank or trust company designated by Parent and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and approved by the Company (the “Indemnity Escrow Agent”). The Indemnity Escrowed Shares, together with any non-cash dividends or other non-cash distributions paid with respect to the Indemnity Escrowed Shares, are collectively referred to as the “Indemnity Escrow Fund.” Parent shall show the Parent Common Stock contributed to the Indemnity Escrow Fund as issued and outstanding on its balance sheet. Any dividends or distributions paid in cash with respect to the Indemnity Escrowed Shares shall not be deposited into the Indemnity Escrow Fund but instead shall be paid to the Indemnity Fund Securityholders in accordance with their respective Pro Rata Portions (determined based solely with respect to the Indemnity Fund Securityholders). The Indemnity Escrow Fund shall be governed by the terms of an Indemnity Escrow Agreement substantially in the form attached as Exhibit E, with such changes as shall be mutually agreed to by the Company and Parent (the “Indemnity Escrow Agreement”), and shall be (i) available to compensate the Parent Indemnified Parties for Damages claims made pursuant to which Pubco shall cause Article VIII and (ii) held to be delivered secure the Company’s obligations to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each casemeet certain business development milestones, as long as they remain set forth in the Indemnity Escrow Account, Agreement. Each Indemnity Fund Securityholder’s proportionate interest in the Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on Escrowed Shares deposited into the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that Fund shall be withheld at the Closing for deposit in the based upon such Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such SellerFund Securityholder’s relative Pro Rata Share Portion (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be determined based solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow SharesFund Securityholders). As more fully provided in the Canadian Exchange Agreement, calculated based on the Pubco Share Price as a portion of the Expiration Date) equal Company Common Stock issuable to the aggregate amount of the Pending Claims set forth participants in the Claim Notice provided by the Purchaser Representative Canadian Transaction in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) exchange for their shares of Company Common Stock shall remain be deposited in the Indemnity Escrow Account until such time as such Pending Claim Fund and shall have been finally resolved and paid pursuant to the provisions of Article IXconstitute Indemnity Escrowed Shares. After the Expiration Date, to the extent that the value of the remaining The Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth Escrowed Shares shall be registered in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release name of the Indemnity Escrow Property Agent for so long as they constitute part of the Indemnity Escrow Fund and, upon distribution to any Indemnity Fund Securityholder, shall be registered in the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) name of such Indemnity Escrow PropertyFund Securityholder. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any The Indemnity Escrow Property remaining Fund shall be distributed at the times and in the manner as shall be specified in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Merger Agreement (Ivanhoe Energy Inc)

Indemnity Escrow. To secure PSD's indemnification obligations under this Article Twelve from and after the Closing, Manager (as agent for the Greenspun Shareholders and the Minority Shareholders unless prior to the Closing the Manager notifies the parties to this Agreement that it will not act as agent on behalf of the Greenspun Shareholders and the Minority Shareholders hereunder in which event the Greenspun Shareholders and holders of a majority of the Minority Common Stock will name another party to act on behalf of the Greenspun Shareholders and the Minority Shareholders hereunder), CCI and Escrow Agent shall at the Closing enter into an indemnity escrow agreement (the "Indemnity Escrow Agreement") in the form of Exhibit Q to this Agreement. Anything in this Article Twelve to the contrary notwithstanding, the CCI Indemnitees' right to indemnification under this Article Twelve from and after the Closing shall be to and against (i) At the principal portion of the Minority Escrow Amount (but not the interest and earnings thereon which shall remain the property of the Minority Shareholders) only, and (ii) the shares of CCI Common Stock deposited by the Greenspun Shareholders pursuant to Section 2.7 (but not the cash dividends declared on such CCI Common Stock, if any), and the CCI Indemnitees shall neither have recourse to nor be entitled to recover as against PSD, the Greenspun Shareholders or prior to the Minority Shareholders or their respective properties or assets for any claims of indemnification under this Agreement from and after the Closing, Pubco. For purposes of any and all claims by the CCI Indemnitees pursuant to this Article 12 against the Greenspun Escrow Amount, the Seller Representative and American shares of CCI Common Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as deposited on behalf of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to Greenspun Shareholders with the Escrow Agent a at Closing shall, for purposes of determining the number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and released from the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit Agreement in the Indemnity Escrow Accountorder to satisfy such claims, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be have the owner value equal to the Average Closing Price, regardless of the actual market price of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (date of any such claim, a “Pending Claim”claim(s), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Merger Agreement (Cox Communications Inc /De/)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchasers shall pay to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent a financial institution to be mutually acceptable to Purchaser and the Company)agreed upon, as escrow agent to Purchasers and Seller (the “Escrow Agent”), shall enter into an in immediately available funds, to the account designated by the Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company Agent (the “Escrow AgreementAccount”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) an amount equal to $30,000,000 (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow PropertyAmount”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and an Escrow Agreement, which will be executed at the Closing, by and among Baseball Express, Seller and the Escrow Agent (the “Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of Any payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article IX X (other than except amounts setoff under the Contingent Note pursuant to its terms with respect to (A) Fraud Claims or (Ba) any indemnification claims for obligations under Sections 10.2(a)(ii) or (iii), or (b) any indemnification obligations under Section 10.2(a)(i) if the relevant breach of any Company and Seller Fundamental Representations, for which representation or warranty arose from intentional fraud committed with the Main Seller Knowledge of Seller) shall be paid solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held funds in the Indemnity Escrow Account, subject by release of funds to the retention of any dividends, distributions and other earnings thereon in Purchaser Indemnified Parties from the Indemnity Escrow Account until disbursed therefrom in accordance with by the Escrow Agent pursuant to the terms and conditions of this the Escrow Agreement and shall accordingly reduce the amount in the Escrow Account; provided that, in no event, including if the amount in the Escrow Account is insufficient to pay any remaining sums due, will Seller be required to pay any amounts (other than amounts paid to Purchaser Indemnified Parties out of the Escrow Account or amounts setoff under the Contingent Note pursuant to its terms) to Purchasers for indemnification obligations under this Article X. As will be more fully set forth in the Escrow Agreement. Each Class B Seller shall have , on the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month first anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining release the amount then in the Indemnity Escrow Account (to the Class B Sellers extent not utilized to pay Purchasers for any indemnification claim) to TRBP, which shall be paid by wire transfer of immediately available funds into an account designated by TRBP, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article X asserted prior to such first anniversary but not yet resolved (“Unresolved Claims”). The amount in the Escrow Account retained for Unresolved Claims shall be released by the Escrow Agent (to the extent not utilized to pay Purchasers for any such claims resolved in favor of Purchasers) upon their resolution in accordance with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) this Article X and the Escrow Agreement to TRBP, which shall be paid by wire transfer of such Indemnity Escrow Propertyimmediately available funds into an account designated by TRBP.

Appears in 1 contract

Samples: Asset Purchase Agreement

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), Buyer shall enter into deposit an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) amount equal to Three Million, Five Hundred Thousand Dollars (x$3,500,000.00) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow AccountAmount”) and disbursed in accordance with the terms of this Agreement and Escrow Agent, pursuant to the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit Indemnity Escrow Amount, together with income earned thereon as provided in the Escrow Agreement (the “Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to PubcoEscrowed Funds”), shall be allocated between held by the Class B Sellers based on each such Seller’s relative Pro Rata Share (Escrow Agent pursuant to the Escrow Agreement as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive a source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors funds for paying any amount owed by Seller to Buyer pursuant to Article IX (other than with respect 9 and will be released to (A) Fraud Claims Buyer or (B) any indemnification claims for breach of any Company Seller when and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held provided in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) All costs and expenses, and any indemnities in favor, of the Indemnity Escrow Shares (together with any equity securities Agent shall be paid as dividends or distributions with respect provided in Section 2.2(b). Notwithstanding anything contained in this Agreement to such shares or into which such shares are exchanged or convertedthe contrary, on the one (1) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month year anniversary of the Closing Date (such anniversaryDate, the balance of the Indemnity Escrowed Funds shall be released to Seller, unless Buyer has notified Seller, prior to the expiration of the one (1) year anniversary of the Closing Date, of any claim for which indemnification is, or is reasonably expected to be sought, in which case, such Indemnity Escrowed Funds shall not be released to Seller, but shall continue to be held pursuant to the terms of the Escrow Agreement. At the Closing, the Principal Sellers shall execute and deliver to Buyer a guaranty agreement in the amount of Three Million, Five Hundred Thousand Dollars ($3,500,00.00) in the form attached hereto as Exhibit I (the First Escrow Release DateGuaranty Agreement”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess which executed Guaranty Agreement shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent a condition to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such SellerBuyer’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyhereunder.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Full House Resorts Inc)

Indemnity Escrow. (i) At or prior to As a remedy for the indemnity set forth in Article VII, at the Closing, Pubco, Parent shall deposit with the Seller Representative and American Stock Transfer & Trust Company (or Escrow Agent such other escrow agent mutually acceptable to Purchaser and number of the Company), Common Transaction Shares as escrow agent shall equal 7.5% of the Transaction Shares (the “Escrow AgentEscrowed Indemnity Shares”), shall enter into an comprised of Common Escrowed Earnout Shares (including that portion of the First Target Shares, Second Target Shares and Third Target Shares consisting of Common Escrowed Earnout Shares) and Common Transaction Shares that are not Escrowed Earnout Shares to be held in a separate escrow account and released therefrom (if applicable) from time to time to Parent in satisfaction of such indemnity, all in accordance with Article VII hereof and the terms and conditions of the Escrow Agreement, effective as of . On the Effective Time, in form and substance reasonably satisfactory to Purchaser and fifth Business Day following the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account date (the “Indemnity Escrow AccountTermination Date”) that is fifteen (15) months from the Closing Date, the Escrow Agent shall release the Escrowed Indemnity Shares, less any of such shares applied in satisfaction of a claim for indemnification and disbursed any of such shares related to a claim for indemnification that is then unresolved. Upon such release, Escrowed Indemnity Shares that constitute Common Transaction Shares shall be delivered to the Company Stockholders in accordance with Section 2.6(d) of the terms of this Agreement Company Disclosure Statement and the Escrow Agreement; and the Escrowed Indemnity Shares that constitute Escrowed Earnout Shares shall be retained in escrow in accordance with Section 2.8 hereof and the Escrow Agreement. The portion of the Class B Exchange Any Escrowed Indemnity Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than held with respect to (A) Fraud Claims or (B) any unresolved claim for indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller not applied as indemnification with respect to such claim upon its resolution shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom delivered in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Sharespreceding sentence. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Agreement and Plan of Merger (Polaris Acquisition Corp.)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, Purchaser Representative, Seller, the Seller Representative and American Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen ten percent (1510%) of the estimated Base Exchange Consideration, divided by (y) the Redemption Price Shares otherwise issuable to the Sellers Seller or the Designated Share Recipients at the Closing based on the Estimated Closing Statement (such Class B Base Exchange Shares, together with including any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, held along with any other dividends, distributions or and other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account earnings thereon (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), to be held by the Escrow Agent in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have , served as a source of security for the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares.indemnification obligations under ARTICLE IX; (ii) (A) Within three (3) Business Days after the twelve July 1, 2022 (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Expiration Date”), the Purchaser Representative and Seller Representatives Representative shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B SellersDesignated Share Recipients; and (C) the Indemnity Escrow Property shall not no longer be subject to any indemnification claim to the extent such claim is made after the Expiration Date; , provided, however, with respect to any indemnification claim claims made in accordance with Article ARTICLE IX hereof on or prior to the Expiration Date that remains remain unresolved at the time and are still contested by an Indemnitee in good faith as of the end of the Expiration Date (( any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 9.4(b) (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article ARTICLE IX. . (iii) After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers Designated Share Recipients (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Designated Share (as between themselves) of such Recipients. The Indemnity Escrow PropertyProperty upon its release from Indemnity Escrow Account shall not be required to be distributed pro rata among all the Designated Share Recipients. Promptly after the final resolution of all Pending Claims and the payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer disburse any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers Designated Share Recipients, with each such instruction given by the Seller receiving such Seller’s relative Pro Rata Share (as between themselves) Representative setting forth the allocation of such Indemnity Escrow PropertyProperty among the Designated Share Recipients. Each Designated Share Recipient shall have the right to vote such Designated Share Recipient’s relative holding shares of the Indemnity Escrow Property (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account.

Appears in 1 contract

Samples: Business Combination Agreement (East Stone Acquisition Corp)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), Buyer shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to deposit with the Escrow Agent a number the sum of Class B Exchange Shares Four Million Nine Hundred Fifty Thousand Dollars (each valued at the Redemption Price) equal to (x) fifteen percent (15%$4,950,000) of the estimated Exchange Consideration, divided by Purchase Price (ythe "Indemnity Fund") the Redemption Price otherwise issuable pursuant to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in Escrow Agreement. One-half of the Indemnity Escrow AccountFund, less the “Indemnity Escrow Shares”) amount of all claims made by Buyer for indemnification pursuant to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account Section 15.1 (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”portion of accrued interest attributable to such claims), in a segregated escrow account (provided that the “Indemnity Escrow Account”) aggregate amount of such claims that are based upon breaches of Seller's representations and disbursed in accordance with warranties contained herein shall exceed the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to PubcoBasket, shall be allocated between paid to the Class B Sellers based Paying Agent under the Closing Escrow Agreement at the close of business on each such Seller’s relative Pro Rata Share the first business day after six (as between themselves)6) months from the Closing Date. The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) remainder of the Indemnity Escrow Shares during Fund, less the time amount of all claims made by Buyer for indemnification pursuant to Section 15.1 (together with the portion of accrued interest attributable to such Indemnity Escrow Shares claims), provided that the aggregate amount of such claims that are held in based upon breaches of Seller's representations and warranties contained herein shall exceed the Indemnity Escrow AccountBasket, subject shall be paid to Paying Agent at the close of business on the first business day after the first anniversary date of the Closing Date. Seller expressly agrees that any post-Closing Date adjustments required to be made to the retention of any dividendsPurchase Price pursuant to Sections 3.4(a), distributions (c) and other earnings thereon (e) and payable to Buyer shall be paid directly by Seller to Buyer in immediately available funds and shall not reduce the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) amount of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in Fund; provided that Buyer may, at its option, make a claim against the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (Fund for such anniversaryPurchase Price adjustment amounts, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property which claim shall not be subject to either the Basket or any indemnification claim other limitation as to the extent such claim is made after the Expiration Date; provided, however, with respect maximum amount thereof which Buyer may seek or be entitled to indemnification under Section 15 or any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as other provision of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertythis Agreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Scott Cable Communications Inc)

Indemnity Escrow. At the Closing, Buyer shall deposit with the Escrow Agent (i) At or prior the pro rata portion of the RAP Indemnity Fund reflecting the pro rata portion of the interest in RAP owned indirectly by the Company pursuant to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow RAP Indemnity Agreement, effective as of and (ii) the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), InterLink Indemnity Fund pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion All amounts in the InterLink Indemnity Fund in excess of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount sum of (a) resolved but unpaid claims in favor of an Indemnitee $10,000,000, and (b) the Pending Claims amount of all pending claims made by Buyer for indemnification pursuant to Section 12.1, shall be paid to Disbursement Agent (for the benefit of Sellers) at the close of business on the first business day after the date which is six months after the Closing Date. The remainder of the InterLink Indemnity Fund, if any, less the amount of all pending claims made by Buyer for indemnification pursuant to Section 12.1 (the "Year Disbursement Amount"), shall be paid to Disbursement Agent (for the benefit of Sellers) at the close of business on the first business day after the date which is one year after the Closing Date. The Disbursement Agent shall disburse to Sellers, in accordance with the percentages set forth on the Purchase Price Allocation Schedule, any amount of the InterLink Indemnity Fund released pursuant to this Section 2.5. Except as to claims arising from breaches of Sections 5.4, 5.8 and (to the extent set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b12.1(b)) submitted prior 5.22, release of any amounts from the InterLink Indemnity Fund shall relieve Sellers of obligations under Section 12.1 to the Expiration Date, an amount extent of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess amounts so released. Sellers expressly agree that any post-Closing Date adjustments under Section 2.4 shall be promptly paid in the manner provided in Section 2.4(g) and, unless Buyer so elects (in its sole and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such releaseabsolute discretion), with respect to each release of any amounts owed by Sellers under such sections shall not be paid from the InterLink Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyFund.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Charter Communications Holdings Capital Corp)

Indemnity Escrow. (a) In the event any Buyer Indemnitee shall have, prior to the first anniversary of the Closing Date, delivered a Claims Notice in respect of indemnification under this Agreement, such Buyer Indemnitee and the Seller shall negotiate in good faith to reach an agreement upon (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser Buyer Indemnitee’s right for indemnification under this Agreement and the Company), as escrow agent amount of such Buyer Indemnitee’s Losses and (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (yii) the Redemption Price otherwise issuable to the Sellers at the Closing based amount on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain deposit in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to account that should be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account reserved (the “Indemnity Escrow AccountReserved Amount”) and disbursed in accordance with respect of such Claims Notice. Pending or absent a mutual agreement of the terms Reserved Amount in respect of this Agreement any Claims Notice, the Reserved Amount therefor shall be the amount in good faith estimate by the Buyer Indemnitee based on back-up documentation containing such detail as is reasonable under the circumstances. (b) Upon the agreement by the Seller and the Buyer Indemnitee or as finally determined by a court of competent jurisdiction in respect of any Claims Notice, the Seller and the Buyer shall jointly instruct the Escrow Agreement. The portion Agent under the Escrow Agreement to pay to the Buyer Indemnitee the lesser of (i) the amount of the Class B Exchange Shares that shall be withheld at Losses in respect of such Claims Notice and (ii) the Closing for balance then on deposit in the Indemnity Escrow Account. (c) On the first anniversary of the Closing Date, the Seller and any disbursement from the Buyer shall jointly instruct the Escrow Agent under the Escrow Agreement to pay to Seller the excess of the balance then on deposit in the Indemnity Escrow Account over the aggregate Reserved Amounts in respect of all unresolved claims for indemnification made by the Buyer Indemnitees prior to Pubcosuch date, shall be allocated between in each case, if any. (d) Following the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment first anniversary of the obligations Closing Date, from time to time, upon resolution of any Claims Notice in respect of any individual claim for indemnification made by the Sellers under Section 2.5(d) Buyer Indemnitees and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made appropriate amount from the Indemnity Escrow Account shall be treated by the Parties as an adjustment have been paid to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner Buyer Indemnitees in respect of such Seller’s relative Pro Rata Share (as between themselves) Claims Notice, the Seller and the Buyer shall jointly instruct the Escrow Agent to release to Seller the excess of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon balance then on deposit in the Indemnity Escrow Account until disbursed therefrom over the aggregate Reserved Amounts in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (unresolved claims for indemnification made by the Buyer Indemnitees prior to such date, in each case, if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Stock Purchase Agreement (Domtar CORP)

Indemnity Escrow. (a) If any Buyer Indemnitee shall have, prior to the Release Date, delivered a Claims Notice to the Sellers’ Representative in respect of indemnification under this Agreement, such Buyer Indemnitee and the Sellers’ Representative shall negotiate in good faith to reach an agreement upon (i) At the Buyer Indemnitee’s right for indemnification under this Agreement and the amount of such Buyer Indemnitee’s Losses and (ii) the amount on deposit in the Indemnity Escrow Account that should be reserved (the “Reserved Amount”) in respect of such Claims Notice. (b) If the Sellers’ Representative or Buyer, as the case may be, in good faith objects to any claim made in a Claim Notices, then the Sellers’ Representative or Buyer, as the case may be, shall deliver a written notice (a “Claim Dispute Notice”) to the other applicable Party during the thirty (30) day period commencing upon receipt by such Party of the Claims Notice. The Claim Dispute Notice shall set forth in reasonable detail the principal basis for the dispute of any claim made in the relevant Claims Notice, including, to the extent reasonably determinable at such time, the amount of Losses in connection with such claim determined by the party delivering such Claims Dispute Notice. If no Claims Dispute Notice is delivered prior to the Closingexpiration of such thirty (30) day period, Pubco, the Seller Representative and American Stock Transfer & Trust Company then (or i) each claim for indemnification set forth in such other escrow agent mutually acceptable Claim Notice shall be deemed to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as have been conclusively determined in favor of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number Indemnitee for purposes of Class B Exchange Shares (each valued at the Redemption Pricethis Section 12.8(b) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement terms set forth in the Claims Notice and (such Class B Exchange Sharesii) as applicable, together with if any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they funds remain in the Indemnity Escrow Account, then Buyer may, in its sole and absolute discretion, direct the “Indemnity Escrow Shares”) Agent to be held, along with any other dividends, distributions or other income on deliver cash from the Indemnity Escrow SharesAccount to the Buyer Indemnitees in accordance with such Claims Notice or as otherwise required pursuant to this Article XII or the Escrow Agreement. (c) Following delivery of a Claims Dispute Notice, Sellers’ Representative and Buyer shall attempt in each casegood faith for the 45-day period commencing upon the receipt by the applicable Party of such Claims Dispute Notice (or such longer period as may be mutually agreed between Buyer and the Sellers’ Representative) to resolve any such objections raised in such Claims Dispute Notice. If the Sellers’ Representative or Buyer agree to a resolution of such objection during such period, then (i) a memorandum setting forth the matters conclusively determined by the Sellers’ Representative or Buyer shall be prepared and signed by both parties, and (ii) as long as they applicable, if such memorandum calls for a payment to the Buyer Indemnitees and any funds remain in the Indemnity Escrow Account (together Account, Buyer may, in its sole and absolute discretion, direct the Escrow Agent to act in accordance with such memorandum and distribute cash from the Indemnity Escrow SharesAccount in accordance therewith, or as otherwise required pursuant to this Section 12.8 or the “Indemnity Escrow Property”)Agreement. (d) If no such resolution can be reached during such 45-day period, then upon the expiration of such period, either the Sellers’ Representative or Buyer may bring suit to resolve the objection by litigation in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed an appropriate court of competent jurisdiction in accordance with Article XIV. Pending a resolution of the terms Reserved Amount in respect of this Agreement any Claims Notice, the Reserved Amount therefor shall be the amount estimated in good faith by the Buyer Indemnitee based on back-up documentation containing such detail as is reasonable under the circumstances. (e) Upon the agreement by the Sellers’ Representative and the Buyer Indemnitee or as finally determined by a court of competent jurisdiction in respect of any Claims Notice, the Sellers’ Representative and the Buyer shall jointly instruct the Escrow Agreement. The portion Agent under the Escrow Agreement to pay to the Buyer Indemnitee the lesser of (i) the amount of the Class B Exchange Shares that shall be withheld at Losses in respect of such Claims Notice and (ii) the Closing for balance then on deposit in the Indemnity Escrow Account. (f) On the Release Date, the Sellers’ Representative and the Buyer shall jointly instruct the Escrow Agent under the Escrow Agreement to pay to (x) NewCo (for further distribution to the Sellers in accordance with their respective Transaction Percentages) (y) the Company (for further distribution to the holders of Option and Transaction Bonus Recipients who are current or former employees of the Company, through the Company’s normal payroll procedures, in accordance with their respective Transaction Percentages), and (z) the holders of Option and Transaction Bonus Recipients who are not current or former employees of the Company, in accordance with their respective Transaction Percentages, an amount equal to the excess (if any) of the balance then on deposit in the Indemnity Escrow Account over the aggregate Reserved Amount in respect of all unresolved claims for indemnification properly made by the Buyer Indemnitees prior to the Release Date, if any. (g) Following the Release Date, from time to time, upon resolution of any disbursement Claims Notice in respect of any individual claim for indemnification made by the Buyer Indemnitees and the appropriate amount, if any, from the Indemnity Escrow Account having been paid to Pubcothe Buyer Indemnitees in respect of such Claims Notice, the Sellers’ Representative and the Buyer shall be allocated between jointly instruct the Class B Escrow Agent to release to (x) NewCo (for further distribution to the Sellers based on each such Seller’s relative Pro Rata Share in accordance with their respective Transaction Percentages) (as between themselves). The Indemnity Escrow Shares shall serve as y) the sole Company (for further distribution to the holders of Option and exclusive source of payment Transaction Bonus Recipients who are current or former employees of the obligations Company, through the Company’s normal payroll procedures, in accordance with their respective Transaction Percentages), and (z) the holders of Option and Transaction Bonus Recipients who are not current or former employees of the Sellers under Section 2.5(d) and Company, in accordance with their respective Transaction Percentages, the obligations excess of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon balance then on deposit in the Indemnity Escrow Account until disbursed therefrom over the aggregate Reserved Amount in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to unresolved claims for indemnification properly made by the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or Buyer Indemnitees prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Release Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Sharesin each case, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyif any.

Appears in 1 contract

Samples: Securities Purchase Agreement (Movado Group Inc)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after following the twelve (12) month anniversary of the Closing Survival Date (such anniversarypayment date, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property Surviving Entity and the Stockholders shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give deliver joint written instructions to the Escrow Agent directing such release), the Escrow Agent to disburse to the Stockholders in accordance with respect to each release the Escrow agreement that portion of the Indemnity Escrow Property Amount, if any, equal to (x) the aggregate remaining amount of the Indemnity Escrow Amount, less (y) the sum of the aggregate amount of Losses specified in any then unresolved indemnification Claims made by the Surviving Entity pursuant to Section 7.10 on or prior to the Class B SellersSurvival Date for such Claims (such Claim amounts under clause (y), each “Pending Claims,” and such Seller shall receive such Seller’s relative Pro Rata Share amount that is retained in the Escrow Amount in respect of the Pending Claims, the “Reserve Amount”). Within three (as between themselves3) of such Indemnity Escrow Property. Promptly Business Days after the final resolution of all any Pending Claims Claim, the Surviving Entity and payment of all indemnification obligations in connection therewith, the Stockholders shall deliver joint written instructions to the Escrow Agent shall transfer any Indemnity directing the remaining portion of the Reserve Amount (if any) related to such Pending Claim be released pursuant to such joint written instructions and the terms of the Escrow Property remaining in Agreement. If the Indemnity Escrow Account Amount is not sufficient to pay the Class B Sellers with each entire amount of any Claim under Section 7.10, the Surviving Entity Indemnified Parties shall have all other rights and remedies available to them under this Section 7.10 as applicable to such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyClaim.

Appears in 1 contract

Samples: Merger Agreement (Castellum, Inc.)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other Indemnity Escrow Amount shall be retained in escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to with the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable pursuant to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain terms of that certain escrow agreement in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account form of Exhibit H attached hereto (the “Indemnity Escrow AccountAgreement”). At Closing, Buyer and Granite shall execute and deliver the Indemnity Escrow Agreement and use commercially reasonable efforts to cause the Escrow Agent to execute and deliver the Indemnity Escrow Agreement. The Indemnity Escrow Amount plus any interest or earnings thereon (the “Indemnity Escrow”) shall be the sole and disbursed exclusive source of funds or other remedy used to satisfy any amounts owed by Seller to Buyer or the Buyer Indemnified Parties pursuant to Section 1.7, Section 5.10(b) (subject to the last sentence hereof), or Section 9.2 in accordance with the terms of this Agreement and the Indemnity Escrow Agreement. The portion of On the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share six (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (126) month anniversary of the Closing Date Date, a portion of the Unclaimed Escrow Amount shall be released such that the Unclaimed Escrow Amount is equal to one-half the Indemnity Escrow Amount; provided, that if the Unclaimed Escrow Amount is less than one-half the Indemnity Escrow Amount on the six (such anniversary6) month anniversary of the Closing Date, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives there shall give joint written instruction to the Escrow Agent directing the be no early release of the First Released Unclaimed Escrow Property (Amount. By way of example, if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release there are $2 million of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any unresolved indemnification claim to the extent such claim is claims made after the Expiration Date; provided, however, with respect to any indemnification claim made by Buyer in accordance with Article IX hereof good faith on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as six (6) month anniversary of the Expiration Date (Closing Date, $3.5 million would be released to Seller on such anniversary date. The remaining Unclaimed Escrow Amount shall be released in full on the fifteen-month anniversary of the Closing Date. Any amount remaining as Indemnity Escrow shall thereafter be released in accordance with the Indemnity Escrow Agreement. At any such claim, time when a “Pending Claim”), an amount party shall be entitled to release of all or any portion of the Indemnity Escrow Property with a value (with respect to under the terms of this Agreement and the Indemnity Escrow SharesAgreement, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) Granite and Buyer shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by jointly instruct the Escrow Agent to make such payment. For the Class B Sellers (and Purchaser Representative and avoidance of doubt, no remediation costs paid or payable pursuant to Section 5.10(a) or reduction in the Purchase Price payable to Seller Representatives shall promptly give joint written instructions at Closing pursuant to the Escrow Agent directing such release), with respect to each release first sentence of Section 5.10(b) or clause (A) of Section 5.10(b) shall reduce the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyor constitute a Closing Date Adjustment under Section 1.7.

Appears in 1 contract

Samples: Asset Purchase Agreement (Scripps E W Co /De)

Indemnity Escrow. (ia) At or prior On the Closing Date, Purchaser shall, on behalf of Seller, pay to the ClosingLaSalle Bank National Association, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow as agent mutually acceptable to for Purchaser and the Company), as escrow agent Seller (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed designated by the Escrow Agent, the amount of $3,000,000 from the Purchase Price under this Agreement (the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement, the Real Estate Purchase Agreement and the Escrow Agreement, which will be executed at the Closing, by and among Purchaser, Seller, the Seller Representative, and the Escrow Agent (the “Escrow Agreement”). The portion Indemnity Escrow Account shall be subject to a first perfected security interest in favor of Purchaser and Parent, and so long as the Indemnity Escrow Account is in effect and until the Available Amount (as defined in the Guaranty) has been reduced to zero, any payment that Seller or any of the Class B Exchange Shares that Seller Partners is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X or the Guaranty (other than claims arising under Section 10.2(a)(vii)) shall be withheld at the Closing for deposit paid first from funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent within thirty (30) calendar days after the date notice of any sums due and owing is given to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share Seller Representative (as between themselves)defined in Section 10.6) (with a copy to the Escrow Agent pursuant to the Escrow Agreement) by the applicable Purchaser Indemnified Party. The Any such payment shall accordingly reduce the Indemnity Escrow Shares shall serve as Amount, subject to the sole and exclusive source of payment right of the obligations Seller Representative to object as provided in this Section 10.5. (b) If the Seller Representative wishes to object to the allowance of the Sellers under Section 2.5(d) claim made against the Indemnity Escrow Amount, the Seller Representative on behalf of Seller and the obligations Seller Partners must deliver a written objection (“Objection”) to Purchaser in accordance with the notice provisions set forth in Section 12.6 within thirty (30) calendar days after receipt of such claim by the Seller Representative, expressing such Objection and explaining in reasonable detail the basis therefor. Following receipt by Purchaser of the Indemnitors pursuant Objection, if any, Purchaser and the Seller Representative shall promptly meet to Article IX (other than agree on the rights of the respective parties with respect to (A) Fraud Claims or (B) any indemnification claims for breach each of any Company such claims. If the Seller Representative and Seller Fundamental RepresentationsPurchaser should so agree, for which the Main Seller a memorandum setting forth such agreement shall be solely responsible). Unless otherwise required prepared and signed by Lawboth parties, all distributions made and the amounts agreed in such written memorandum shall be immediately paid to Purchaser from the Indemnity Escrow Account shall be treated by Account. If Purchaser and the Parties as an adjustment to Seller Representative cannot agree on the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner resolution of such Seller’s relative Pro Rata Share (as between themselves) any Objection with five Business Days after delivery of any Objection, Purchaser may enforce its claim against the Indemnity Escrow Shares during Account by any legal process available to it. (c) If the time such Seller Representative fails to respond to a claim against the Indemnity Escrow Shares are held in Account within the thirty (30) calendar day period described above, then that failure shall conclusively be deemed agreement with the claim and the amount of such claim shall be immediately paid to Purchaser from the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (iid) The Escrow Agent shall release to Seller from the remaining Indemnity Escrow Amount (Ato the extent not utilized to pay any Purchaser Indemnified Party for any indemnification claim) Within three at the following dates: (3i) Business Days after on the twelve (12) six month anniversary of the Closing Date (such anniversaryDate, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release amount in excess of the First Released Escrow Property sum of (if anyx) to $2,000,000 plus (y) the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release amount of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall claims for indemnification under this Article X asserted but not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally yet resolved and paid pursuant (“Unresolved Claims”) prior to such date, (ii) on the provisions 12 month anniversary of Article IX. After the Expiration Closing Date, the amount in excess of the sum of (x) $1,000,000 plus (y) the amount of all Unresolved Claims asserted prior to such 12 month anniversary date but unresolved or unpaid as of such date and (iii) on the extent that 18 month anniversary of the value Closing Date, all of the remaining Indemnity Escrow Property (with respect Amount except for an amount equal to the Unresolved Claims asserted prior to such 18 month anniversary date but unresolved as of such date. The Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Amount retained for Unresolved Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent (to the Class B Sellers extent not utilized to pay any Purchaser Indemnified Party for any such claims resolved in favor of a Purchaser Indemnified Party) upon their resolution. (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselvese) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in After the Indemnity Escrow Account has been released as provided above, or the Available Amount has been reduced to zero, Purchaser or any Purchaser Indemnified Party may proceed directly against the Seller Partners under the Guaranty (subject to the Class B Sellers limitations contained in the Guaranty) with each such respect to any claim for which indemnity may be sought under this Agreement. Notwithstanding anything to the contrary in this Agreement, Purchaser and any Purchaser Indemnified Party may proceed directly against the Seller receiving such Seller’s relative Pro Rata Share (as between themselvesPartners under the Guaranty at any time, for any claims arising under Section 10.2(a)(vii) of such Indemnity Escrow Propertythis Agreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Core-Mark Holding Company, Inc.)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), Buyer shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to deposit with the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable Indemnity Fund pursuant to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain Escrow Agreement. All amounts in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, Fund in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion excess of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount sum of (a) resolved but unpaid claims in favor of an Indemnitee $10,000,000, and (b) the Pending Claims amount of all pending claims made by Buyer for indemnification pursuant to Section 2.1 of the RAP Indemnity Agreement, shall be paid to Disbursement Agent (for the benefit of the Sellers and the InterLink Sellers) at the close of business on the first business day after the date which is six months after the Closing Date. The remainder of the Indemnity Fund, if any, less the amount of all pending claims made by Buyer for indemnification pursuant to Section 2.1 of the RAP Indemnity Agreement (the "Year Disbursement Amount"), shall be paid to Disbursement Agent (for the benefit of the Sellers and the InterLink Sellers) at the close of business on the first business day after the date which is one year after the Closing Date. The Disbursement Agent shall disburse to Sellers and the InterLink Sellers, in accordance with the percentages set forth on the Purchase Price Allocation Schedule, any amount of the Indemnity Fund released pursuant to this Section 2.5. Except as to claims arising from breaches of Sections 5.4, 5.8 and (to the extent set forth in Section 2.1(b) of the Claim Notice (as adjusted in accordance with RAP Indemnity Agreement) 5.22, release of any amounts from the Indemnity Fund shall relieve Sellers and the InterLink Sellers of obligations under Section 9.4(b)) submitted prior 2.1 of the RAP Indemnity Agreement to the Expiration Dateextent of the amounts so released. Sellers expressly agree that any post-Closing Date adjustments under Section 2.4 shall be paid in the manner provided in Section 2.4(g) and, an amount of Indemnity Escrow Property having a value unless Buyer so elects (with respect to in its sole and absolute discretion), any amounts owed by Sellers and the InterLink Sellers under such sections shall not be paid from the Indemnity Escrow SharesFund. Any one or more Sellers may elect to deliver at the Closing the Letter(s) of Credit, calculated in which case (1) such Sellers' allocable share of the Indemnity Fund shall be released to them at Closing, and (2) any amount to be paid from the Indemnity Fund pursuant to Article XII shall be paid proportionately (based on the Pubco Share Pricerelative aggregate percentage interests of the Sellers delivering the Letter(s) equal to such excess shall be promptly (and no later than three (3of Credit) Business Days) disbursed by from the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release cash portion of the Indemnity Escrow Property to Fund and from draws upon the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselvesLetter(s) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyCredit.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Charter Communications Holdings Capital Corp)

Indemnity Escrow. (i) At or prior On the Closing Date, Buyer shall, on behalf of Sellers, pay from the Initial Purchase Price to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Title Company), as escrow agent to Buyer and Sellers (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of to the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed ), an amount equal to $2,000,000 (the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement and the Escrow Agreement, substantially in the form attached hereto as Exhibit D, which will be executed at the Closing, by and among Buyer, Sellers and the Escrow Agent (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment any Seller is obligated to make to any Buyer Indemnitees pursuant to this Article X shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Buyer Indemnitees from the Indemnity Escrow Account by the Escrow Agent within five Business Days after the date notice of any sums due and owing is given to Pubcothe Sellers (with a copy to the Escrow Agent pursuant to the Escrow Agreement) by the applicable Buyer Indemnitee and shall accordingly reduce the Indemnity Escrow Amount and, second, to the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Sellers shall be allocated between required to pay all of such additional sums due and owing to the Class B Sellers based on each Buyer Indemnitees by wire transfer of immediately available funds within five Business Days after the date of such Seller’s relative Pro Rata Share notice. On the first anniversary of the Closing Date, the Escrow Agent shall release the Indemnity Escrow Amount (as between themselvesto the extent not utilized to pay Buyer for any indemnification claim) to Sellers, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article X asserted prior to the first anniversary of the Closing Date but not yet resolved (“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated released by the Parties as an adjustment Escrow Agent (to the Exchange Consideration received by the Sellers pursuant extent not utilized to Article II hereof. Each Class B Seller shall be deemed to be the owner pay Buyer for any such claims resolved in favor of such Seller’s relative Pro Rata Share (as between themselvesBuyer) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom upon their resolution in accordance with the terms and conditions of this Agreement Article X and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Purchase Agreement (American Skiing Co /Me)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchaser shall, on behalf of the Sellers, pay to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other an escrow agent mutually acceptable to appointed by the Purchaser and the CompanySellers (the "Indemnity Escrow Agent"), as escrow agent (the “Escrow Agent”)in immediately available funds, shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided account designated by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow AccountAgent, an amount of $10,500,000 (the "Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”Amount"), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Indemnity Escrow Agreement. The portion , dated as of the Class B Exchange Shares that shall be withheld at Closing Date, by and among Purchaser, the Closing for deposit in Sellers Representatives and the Indemnity Escrow AccountAgent (the "Indemnity Escrow Agreement"). Other than as specifically stated elsewhere in this Agreement, and any disbursement payment the Sellers are obligated to make to any Purchaser Indemnified Parties pursuant to Article IX shall be paid exclusively from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom Amount in accordance with the terms of Article IX and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration DateAgreement; provided, however, with respect to any indemnification claim made that in accordance with Article IX hereof on or prior to the Expiration Date case such payment exceeds the Indemnity Escrow Amount and Section 9.12(c) explicitly provides that remains unresolved at in such case the time and are still contested by an Indemnitee maximum amount for which such Seller is liable is in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount excess of the Indemnity Escrow Property with a value (with respect to Amount, such payment shall be paid first from the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative Amount in accordance with Section 9.4 the terms of Article IX and the Indemnity Escrow Agreement. Upon the completion of eighteen months following the Closing Date, the Indemnity Escrow Agent shall release $5.5 million of the Indemnity Escrow Amount (as adjusted to the extent not utilized to pay Purchaser for any Indemnification Claim subject to and in accordance with Section 9.4(bthe terms of Article IX and the Indemnity Escrow Agreement) to the Sellers and the Optionholders (or to the Trustee on behalf of the Optionholders)) shall , unless an Indemnification Claim has been received by the Sellers Representatives from a Purchaser Indemnitee prior to such time in accordance with the terms of Article IX (which Indemnification Claim claims Losses in excess of the amount to remain in the Indemnity Escrow Account until Agreement following such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions distribution of Article IX. After the Expiration Date, to the extent that the value $5.5 million of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow SharesAmount), calculated based on in which case an amount equal to the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims Losses claimed in favor of an Indemnitee and (b) the Pending Claims set forth in the such Claim Notice (as adjusted shall be held until the resolution of any and all such Indemnification Claims in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to terms hereof and the Indemnity Escrow SharesAgreement ("Unresolved Claims"). Upon the completion of twenty four months following the Closing Date, calculated based the Indemnity Escrow Agent shall release the remainder balance of the Indemnity Escrow Amount to the Sellers and the Optionholders (or to the Trustee on behalf of the Pubco Share Price) Optionholders), unless an Unresolved Claim is outstanding, in which case an amount equal to the Losses claimed in such excess Claim Notice shall be promptly (held until the resolution of any and no later than three (3) Business Days) disbursed all such Indemnification Claims in accordance with the terms hereof and the Indemnity Escrow Agreement. The Indemnity Escrow Amount retained for Unresolved Claims shall be released by the Indemnity Escrow Agent to the Class B Sellers and the Optionholders (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions or the Trustee on behalf of the Optionholders) (to the Escrow Agent directing extent not utilized to pay Purchaser for any such release), claims resolved in favor of Purchaser subject to and in accordance with respect to each release the terms of Article IX and the Indemnity Escrow Property to the Class B SellersAgreement), each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final promptly upon their resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers accordance with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyArticle IX.

Appears in 1 contract

Samples: Share Purchase Agreement (Comverse Technology Inc/Ny/)

Indemnity Escrow. (ia) At or prior The amounts of any Damages payable to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or convertedParent Indemnified Parties under Section 8.2 shall, in each case, as long as they remain be paid by release out of cash held in the Indemnity Escrow Account, Account (the “Indemnity Indemnification Escrow SharesProperty ”) to be held, along with any other dividends, distributions or other income on the Indemnity applicable Parent Indemnified Party from the Escrow Shares, in each case, as long as they remain in Account. (b) On the Indemnity Escrow Account (together with the Indemnity Escrow SharesSurvival Termination Date, the “Indemnity Escrow Property”), in Agent shall release all or a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Indemnification Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction Property to the Escrow Agent directing Participating Holders such that, following such release, the release of amounts remaining in the First Released Escrow Property (Account equals only the amount, if any) , of claims for indemnification under Section 8.2 properly asserted prior to such date by the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made Parent Indemnified Parties in writing in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith VIII but not yet resolved as of the Expiration Survival Termination Date (any such claim, a the Pending ClaimUnresolved Claims ”), an amount of the Indemnity Escrow Property with a value (with respect . Such amounts shall be released to the Indemnity Escrow SharesParticipating Holders, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative pro rata in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain their respective Escrow Percentages. The amounts retained in the Indemnity Escrow Account until such time as such Pending in respect of any Unresolved Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent upon final resolution of any Unresolved Claim in respect of which such amounts had been retained (to the Class B Sellers extent not utilized to satisfy valid claims for indemnification pursuant to Section 8.2) in accordance with this Section 8.7 and the terms of the Escrow Agreement. (c) Promptly (and Purchaser in any event within five (5) business days) upon any person becoming entitled to release of amounts from the Escrow Account pursuant to this Article VIII or the Escrow Agreement, Parent and the Holder Representative and Seller Representatives shall promptly give execute joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, instructing the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each so release such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyamounts.

Appears in 1 contract

Samples: Merger Agreement (Vought Aircraft Industries Inc)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchasers shall, on behalf of Sellers, pay to the Closing, Pubco, the Seller Representative and American Stock Transfer & TSX Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent to Purchasers and Sellers (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) Agent, an amount equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account $1,000,000 (the “Indemnity Escrow AccountAmount) and disbursed ), in accordance with the terms of this Agreement and the Escrow Agreement, which will be executed at the Closing, by and among Purchasers, Sealweld Canada and the Escrow Agent (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment Shareholder or Sellers are obligated to make to any Purchaser Indemnified Parties pursuant to this Article IX shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent in accordance with the terms of the Escrow Agreement. The Escrow Agent shall not be obligated to Pubcorelease any money to Sealweld Canada or the Purchasers without the prior written consent of both Sealweld Canada and the Purchasers. On the expiration of the General Survival Period, the Escrow Agent shall be allocated between release the Class B Sellers based on each such Seller’s relative Pro Rata Share Indemnity Escrow Amount (as between themselvesto the extent not utilized to pay Purchasers for any indemnification claim) to Sealweld Canada, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article IX asserted prior to the expiration of the General Survival Period but not yet resolved (“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated released by the Parties as an adjustment Escrow Agent (to the Exchange Consideration received by the Sellers pursuant extent not utilized to Article II hereof. Each Class B Seller shall be deemed to be the owner pay Purchasers for any such claims resolved in favor of such Seller’s relative Pro Rata Share (as between themselvesPurchasers) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom upon their resolution in accordance with the terms and conditions of this Agreement Article IX and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Asset Purchase Agreement (KMG Chemicals Inc)

Indemnity Escrow. As soon as practicable after the Effective Time, Xxxxxxx shall deposit into an escrow account (ithe "Indemnity Escrow") At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer with IBJ Xxxxxxxx Bank & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the "Indemnity Escrow Agent"), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Pricei) equal to (x) fifteen ten percent (1510%) of the estimated Exchange ConsiderationXxxxxxx Shares, divided by (yii) the Redemption Price otherwise issuable to Revenue Contingent Share Pool and (iii) the Sellers at Additional Share Pool (collectively, the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the "Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselvesHoldback"). The Indemnity Escrow Shares Holdback shall serve as be withheld on a pro rata basis from the sole and exclusive source of payment Concept Shareholders who otherwise are entitled to such amounts at the Effective Time or at the end of the obligations Measurement Period and shall be governed by the terms set forth herein and in an escrow agreement (the "Indemnity Escrow Agreement") in substantially the form attached hereto as EXHIBIT F. The Indemnity Escrow (but only up to a maximum of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) total aggregate value of the Indemnity Escrow Shares during Holdback) shall be available to compensate the time such Indemnity Escrow Shares are held in the Indemnity Escrow AccountIndemnitees for any loss, subject to the retention extent of the amount of Damages that such Indemnitee has incurred by reason of the breach by Concept of any dividendsrepresentation, distributions and other earnings thereon warranty, covenant or agreement of Concept contained herein, or by reason of any misrepresentation by Concept made in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions or pursuant to Section 3 of this Agreement and the Escrow or in any certificate delivered by Concept pursuant to this Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to that any indemnification claim made or Legal Proceeding for which indemnity is sought shall be satisfied from the Indemnity Escrow Holdback in accordance with Article IX hereof on or the following priority: (i) from the ten percent (10%) of the Xxxxxxx Shares deposited in escrow, (ii) from the Revenue Contingent Share Pool (so long as indemnity is sought prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as end of the Expiration Date Indemnification Period) and (any such claim, a “Pending Claim”), an amount iii) from the Additional Share Pool (so long as indemnity is sought prior to the end of the Indemnity Escrow Property with a value (with respect Indemnification Period). No shareholder of Concept shall have any personal obligation to the Indemnity Escrow Sharesindemnify Indemnitee hereunder, calculated based on the Pubco Share Price as of the Expiration Date) equal such obligation shall extend only to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain such shareholders interest in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyHoldback.

Appears in 1 contract

Samples: Merger Agreement (Mattson Technology Inc)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchaser shall, on behalf of Seller, pay to the ClosingWxxxx Fargo Bank, PubcoN.A., the Seller Representative and American Stock Transfer & Trust Company (or such other escrow as agent mutually acceptable to Purchaser and the Company), as escrow agent Seller (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) Agent, an amount equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account $2,800,000 (the “Indemnity Escrow AccountAmount) and disbursed ), in accordance with the terms of this Agreement and the Escrow Agreement, which will be executed at the Closing, by and among Purchaser, Seller and the Escrow Agent, a copy of which is attached hereto as Exhibit H (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share Escrow Agent within five (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (35) Business Days after the twelve date notice of any sums due and owing is given to the Seller (12with a copy to the Escrow Agent pursuant to the Escrow Agreement) month by the applicable Purchaser Indemnified Party and shall accordingly reduce the Indemnity Escrow Amount and, second, to the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Controlling Shareholders shall be required to pay all of such additional sums due and owing to the Purchaser Indemnified Parties by wire transfer of immediately available funds within five (5) Business Days after the date of such notice. Following the tenth Business Day after the first anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Escrow Agent shall release the Indemnity Escrow Amount (to the extent not utilized to pay Purchaser Representative and Seller Representatives shall give joint written instruction for any indemnification claim) to Seller, except that the Escrow Agent directing the release of the First Released Escrow Property shall retain an amount (if any) up to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to total amount then held by the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration DateAgent) equal to the aggregate amount of claims for indemnification under this Article X asserted on or before the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 Release Date but not yet resolved (as adjusted in accordance with Section 9.4(b“Unresolved Claims”)) shall remain in the . The Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Amount retained for Unresolved Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent (to the Class B Sellers (extent not utilized to pay Purchaser for any such claims resolved in favor of Purchaser) upon their resolution in accordance with this Article X and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (DXP Enterprises Inc)

Indemnity Escrow. (ia) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as As of the Effective Time, in form the Indemnification and substance reasonably satisfactory Adjustment Escrow Shares shall be deposited by Holdings with the Escrow Agent to Purchaser and hold pursuant to the Company (the “Escrow Agreement”), to be held in escrow to satisfy (i) payment of a negative Post-Closing Adjustment, if any, pursuant to which Pubco Section 2.16, (ii) any claims by Holdings Indemnified Persons for satisfaction of any indemnification claim of any Holdings Indemnified Persons pursuant to Article VIII, or (iii) any and all other claims made by Holdings or any Holdings Indemnified Person pursuant to this Agreement or in connection with the transactions contemplated hereby. The Escrow Agent shall cause to be delivered to hold the Indemnification and Adjustment Escrow Shares in accordance with the terms of the Escrow Agent a number Agreement until the later of Class B Exchange Shares (each valued at the Redemption Pricei) equal to (x) fifteen percent (15%) final resolution of the estimated Exchange Consideration, divided any claims made by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends Holdings or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Holdings Indemnified Persons in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date Date. (such anniversaryb) If Company Parent becomes obligated (whether through mutual agreement between Holdings and Company Parent, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release as a result of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twentya final non-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made appealable judicial determination or otherwise finally determined in accordance with Article IX the terms hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as terms of the Expiration Date (any such claimEscrow Agreement) to provide indemnification or another payment pursuant to or in accordance with the terms of this Agreement, a “Pending Claim”)Holdings and Company Parent shall, an amount if necessary for release of the Indemnity Escrow Property with a value (with respect to the Indemnity Indemnification and Adjustment Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give execute joint written instructions to the Escrow Agent directing such release)to disburse the appropriate number of Indemnification and Adjustment Escrow Shares, based on the Deemed Holdings Common Stock Share Value, in accordance with respect to each release the terms of this Agreement and the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share Agreement. (as between themselvesc) Any costs and expenses of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent in connection with the Escrow Agreement shall transfer any Indemnity Escrow Property remaining in be split evenly between Holdings, on the Indemnity Escrow Account to one hand, and Company Parent, on the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyother hand.

Appears in 1 contract

Samples: Merger Agreement (GigCapital2, Inc.)

Indemnity Escrow. As soon as practicable after the Effective Time, GoodNoise shall deposit into an escrow account (ithe "Indemnity Escrow") At with a national bank or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually financial institution reasonably acceptable to Purchaser and the Company)Emusic, as escrow agent (the "Indemnity Escrow Agent"), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen twenty percent (1520%) of the estimated Exchange Consideration, divided by GoodNoise Shares (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the "Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselvesHoldback"). The Indemnity Escrow Shares Holdback shall serve be withheld on a pro rata basis from the Emusic Shareholders who otherwise are entitled to such amounts at the Effective Time and shall be governed by the terms set forth herein and in an escrow agreement (the "Indemnity Escrow Agreement") in substantially the form attached hereto as the sole and exclusive source of payment Exhibit E. The Indemnity Escrow (but only up to a maximum of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) total ---------- aggregate value of the Indemnity Escrow Shares during Holdback) shall be available to compensate the time Indemnitees for any loss, to the extent of the amount of Damages that such Indemnity Escrow Shares Indemnitee has incurred and which are held in the Indemnity Escrow Account, subject to indemnification hereunder. So long as the retention of any dividendsGoodNoise shares remain subject to escrow, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller Shareholders shall have the right to vote such Seller’s relative Pro Rata Share said shares or give a proxy for the same. Furthermore, any distribution of money or property (as between themselvesincluding additional shares of GoodNoise equity) of paid by GoodNoise on the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives Holdback shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect added to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved Holdback and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect become subject to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior Escrow. Said additions shall thereafter be distributed to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release Shareholders upon expiration of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyEscrow.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Goodnoise Corp)

Indemnity Escrow. Subject to the other provisions of this Article 12, (i) At or prior the Buyer may give notice of a claim for indemnification under this Article 12 pursuant to the ClosingIndemnity Escrow Agreement and (ii) neither the exercise of such right by the Buyer nor the failure to give a notice of a claim under the Indemnity Escrow Agreement will constitute an election of remedies or limit the Buyer in any manner in the enforcement of any other remedies hereunder that may be available to it. (i) If Designated Employee ceases to be employed by the Buyer during the first one hundred eighty (180) days following the Closing Date, Pubcobut is not entitled to receive the Severance Obligation, a portion of the Indemnity Escrow Amount equal to One Hundred Seventy-Five Thousand Dollars ($175,000) shall be paid to the (ii) If Designated Employee continues to be employed by the Buyer on the date which is one hundred eighty (180) days following the Closing Date, a portion of the Indemnity Escrow Amount equal to One Hundred Seventy-Five Thousand Dollars ($175,000) shall be paid to the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and under the Company), as escrow agent (terms of the “Escrow Agent”), shall enter into an Indemnity Escrow Agreement. (iii) If Designated Employee ceased to be employed by the Buyer during the one hundred eighty (180) days following the Closing Date, effective as and Designated Employee claims that she is entitled to payments of the Effective TimeSeverance Obligation upon the final resolution of any such claim, in form and substance reasonably satisfactory to Purchaser and payment of any amounts expended by the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions Buyer with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”resolution up to One Hundred Seventy-Five Thousand Dollars ($175,000) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement paid from the Indemnity Escrow Account to Pubco, the Buyer under the terms of the Indemnity Escrow Agreement and the difference between any such amount paid to the Buyer and One Hundred Seventy-Five Thousand Dollars ($175,000) shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made paid from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share . (as between themselvesb) On December 1, 2007, a portion of the Indemnity Escrow Shares during Amount equal to Four Hundred Fifty Thousand Dollars ($450,000) less the time such Indemnity Escrow Shares are held in sum of (i) the aggregate amount of any claims paid to the Buyer under the Indemnity Escrow AccountAgreement and (ii) the aggregate amount of any claims for indemnification hereunder for which notice has been given under Section 12.3, subject shall be paid to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with Seller under the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares Agreement. (together with c) On the date which is fifteen months after the Closing Date any equity securities paid as dividends or distributions with respect funds which continue to such shares or into which such shares are exchanged or converted) during the time be held in under the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after Agreement less the twelve (12) month anniversary aggregate amount of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives any claims for indemnification hereunder for which notice has been given under Section 12.3 shall give joint written instruction be paid to the Escrow Agent directing Seller under the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount terms of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Global Employment Holdings, Inc.)

Indemnity Escrow. (ia) At or prior to On the Closing, PubcoClosing Date, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in deposit the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together Amount with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves)Agent. The Indemnity Escrow Shares shall serve as Amount will be reduced (but not below zero) by the sole and exclusive source amount of payment of the any indemnification obligations of the Sellers Seller or the Partners under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX 9.2 (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividendsprovisions herein limiting such indemnification obligations, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Sharesincluding, without limitation, Section 9.4). (iib) Promptly following the first (A1st) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and the Seller Representatives shall give deliver a joint written instruction to the Escrow Agent directing to effectuate disbursement to an account designated by the release of the First Released Escrow Property Seller an amount (if any) equal to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (Ci) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an then remaining amount of the Indemnity Escrow Property with a value Amount, minus (with respect to ii) Pending Claim Amounts (if any). (c) Any portion of the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved Amount otherwise payable but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed retained by the Escrow Agent with respect to a Pending Claim shall be disbursed to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give pursuant to a joint written instructions instruction delivered from the Purchaser and the Seller to the Escrow Agent directing promptly following the final disposition of such release)Pending Claim. (d) Subject to the limitations set forth in this Agreement, with respect including without limitation, the provisions of Section 6.10, the Indemnity Escrow Amount will be the first source of funds for the indemnification obligations of the Seller and the Partners under Article IX, but the Purchaser Indemnified Parties will remain entitled to each release the full amounts owed to them under this Agreement (if any) should the Indemnity Escrow Amount be insufficient or unavailable to cover any amount so owed, in all cases subject to any provisions herein limiting such indemnification obligations, including, without limitation, Section 9.1 and Section 9.4. (e) The Seller will be treated as the owner of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselvesAmount for purposes of Section 468B(g) of such Indemnity Escrow Propertythe Code in accordance with Proposed Treasury Regulations 1.468B-8(c). Promptly after In the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in event that the Indemnity Escrow Account Amount earns interest or other income, and such interest or other income is in excess of imputed interest under the Code, the Parties agree that such excess will hereby be treated as additional stated interest or other income (and not purchase price) for U.S. federal income tax purposes. The purpose of the preceding sentence is to establish that the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAmount does not represent a contingent payment without a stated maximum contribution to overall selling price as determined for U.S. federal income tax purposes and Treasury Regulations 15a.453-1(c)(2).

Appears in 1 contract

Samples: Asset Purchase Agreement (Smith Douglas Homes Corp.)

Indemnity Escrow. The Escrow Agent shall make disbursements as provided in this Section 2.1 from the Indemnity Escrow Account to satisfy the Seller Parties’ indemnification obligations pursuant to Article 6 of the Purchase Agreement. a. At any time prior to the Indemnity Escrow Distribution Date (as defined below), as promptly as practicable, but in any event within five (5) Business Days after receiving (i) At joint written instructions from Buyer and Representative (“Joint Instructions”) or prior (ii) written instruction from Buyer attaching a final non-appealable court order from a court of competent jurisdiction (a “Court Order”) setting forth the amount of the Adverse Consequences and relating to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (release of any cash or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Indemnity Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in from the Indemnity Escrow Account, the Escrow Agent shall release or cause to be released any such cash or Indemnity Escrow Shares”) to be held, along with Shares and any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in amounts from the Indemnity Escrow Account (together with in the Indemnity Escrow Sharesamounts, to the “Indemnity Escrow Property”)Persons, and in a segregated escrow account the manner set forth in such Joint Instructions or Court Order. b. On October 14, 2016 (the “Indemnity Escrow AccountDistribution Date) and disbursed in accordance with the terms of this Agreement and ), the Escrow Agreement. The portion Agent shall, upon receipt of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow AccountJoint Instructions, and any disbursement release from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The cash and Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property then remaining in the Indemnity Escrow Account to the Class B Sellers with each such Exchange Agent for further distribution to the Seller receiving such Seller’s relative Pro Rata Share Parties, less the amount in cash and number of Indemnity Escrow Shares equal to the Pending Claims (as between themselvesdefined below). A “Pending Claim” means any (A) claim asserted in good faith by any Buyer Indemnitee for Adverse Consequences of such the kind recognized under Article 6 of the Purchase Agreement that is pending before a court of competent jurisdiction or otherwise remains unresolved or (B) any portion of the Escrow Fund due and owing to Buyer or the other Buyer Indemnitees pursuant to Article 6 of the Purchase Agreement, but not yet paid. Following the Indemnity Escrow PropertyDistribution Date, upon resolution of a Pending Claim, the Escrow Agent shall, within two (2) Business Days after receiving Joint Instructions or a Court Order release to the Exchange Agent for further distribution to the Seller Parties from the Escrow Account such cash and number of Indemnity Escrow Shares equal to the portion of the Pending Claim resolved that is not required to pay the Adverse Consequences or that is not otherwise due and owing to any Buyer Indemnitees pursuant to Article 6 of the Purchase Agreement.

Appears in 1 contract

Samples: Stock Purchase and Merger Agreement (Imation Corp)

Indemnity Escrow. (i) At In order to provide security for Sellers’ indemnification obligations under this Agreement, the Indemnity Escrow shall be held by Escrow Agent, and disbursed by Escrow Agent after the Closing in accordance with this Section 8.12 and the Escrow Agreement. With respect to each claim for indemnification asserted in good faith by Buyer against Sellers pursuant to Section 8.2 or prior special warranty claim pursuant to the Closing, Pubco, Assignment during the Seller Representative period from and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable after the Closing Date up to Purchaser and the Company), as escrow agent date that is two years following the Closing Date (the “Escrow AgentTermination Date”), upon final resolution or determination of such an indemnity or warranty claim by the applicable Parties or in accordance with Section 8.7, as applicable, Buyer and Seller’s Representative shall enter into an jointly instruct Escrow AgreementAgent to disburse to Buyer the amount set forth in such joint instruction, effective as which will be that portion of the Effective TimeIndemnity Escrow being held in the Indemnity Escrow account as would satisfy such finally resolved or determined indemnity or warranty claim. On the date that is six months following the Closing Date, in form Buyer and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco Seller’s Representative shall cause to be delivered to jointly instruct the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) to disburse to Seller’s Representative an amount equal to the positive difference, if any, between (xa) fifteen percent Fifteen Million Dollars (15%$15,000,000), and (b) an amount equal to the sum of (i) all amounts disbursed to Buyer as of such date, and (ii) any amounts necessary to satisfy any unresolved Claim Notices made in good faith as of such time in the proportions requested by Seller’s Representative within three Business Days of its receipt of such joint instruction. On the date that is 12 months following the Closing Date, Buyer and Seller’s Representative shall jointly instruct the Escrow Agent to disburse to Seller’s Representative an amount equal to the positive difference, if any, between (A) Twenty-Five Million Dollars ($25,000,000), and (B) an amount equal to the sum of (i) all amounts disbursed to Buyer as of such date, and (ii) any amounts necessary to satisfy any unresolved Claim Notices made in good faith as of such time in the proportions requested by Seller’s Representative within three Business Days of its receipt of such joint instruction. On the Escrow Termination Date, Seller’s Representative shall, subject to the remainder of this sentence, be entitled to receive the Indemnity Escrow balance as of such time and such amount shall be automatically distributed to Seller’s Representative in the proportions requested by Seller’s Representative pursuant to the terms of the estimated Exchange ConsiderationEscrow Agreement (and Buyer and Seller’s Representative shall jointly instruct Escrow Agent to take any necessary actions in order to accomplish the foregoing); provided, divided however, that Sellers shall not be entitled to a distribution of, and Escrow Agent shall retain, any amounts necessary to satisfy any unresolved Claim Notices that have been timely delivered by Buyer in good faith in accordance with Section 8.7 (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they amounts shall remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) until such Claim Notices are finally resolved). If there are remaining amounts due by any Seller to be held, along with any other dividends, distributions or other income on Buyer pursuant to its indemnity obligations under Section 8.2 after the Indemnity Escrow Sharesbalance is exhausted, in each case, as long then such amounts shall be promptly paid to Buyer by such Seller as they remain in are agreed by the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed applicable Parties or finally determined in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and If there are any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property funds remaining in the Indemnity Escrow Account to account after the Class B Sellers with each such Seller receiving such resolution of all previously outstanding Claim Notices, then Seller’s relative Pro Rata Share (as between themselves) Representative and Buyer shall promptly jointly instruct Escrow Agent to release the remaining account balance to Seller’s Representative in the proportions requested by Seller’s Representative within three Business Days of its receipt of such Indemnity Escrow Propertyjoint instruction.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Qep Resources, Inc.)

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Indemnity Escrow. (i) At or prior to the Closing, Pubcopursuant to and in accordance with Section 1.8(c)(i), the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in will deposit the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated Deposit into an escrow account (the “Indemnity Escrow Account”) established by the Purchaser and disbursed in accordance the Company with Capital One Bank, N.A. (the terms of this Agreement “Escrow Agent”) pursuant to an escrow agreement by and among the Purchaser, the Company and the Escrow Agent, in the form attached hereto as Exhibit G (the “Escrow Agreement”). The portion of Indemnity Escrow Deposit, together with any interest and other earnings thereon (collectively, the Class B Exchange Shares that shall “Indemnity Escrow Funds”), will be withheld at held from and after the Closing until the date that is fifteen (15) months after the Closing Date (subject to extension for deposit any then-pending claims of Purchaser Indemnified Parties under Article VII) (as so extended, the “Indemnity Escrow Period”), to serve as a source of recovery for: (i) any indemnifiable Losses owed by the Stockholders to Purchaser Indemnified Parties pursuant to Article VII; and (ii) if the Purchaser elects such method of satisfaction, any A/R Settlement Amount owed by the Company and the Stockholders to the Purchaser pursuant to Section 5.9. As soon as reasonably practicable after the date that is fifteen (15) months after the Closing Date (the “Initial Indemnity Escrow Period End Date”), the Escrow Agent shall release to the Company any Indemnity Escrow Funds remaining in the Indemnity Escrow Account, and Account as of the Initial Indemnity Escrow Period End Date that are not then subject to any disbursement then-pending claims of Purchaser Indemnified Parties under Article VII. Any Indemnity Escrow Funds held in the Indemnity Escrow Account after the Initial Indemnity Escrow Period End Date because of the existence of then-pending claim(s) of Purchaser Indemnified Parties under Article VII shall be released from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share Purchaser or the Company (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment applicable) upon resolution of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors applicable claim(s), pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversaryThe Purchaser, the “First Escrow Release Date”), Company and the Purchaser Representative Stockholders each agree to promptly take all actions (including executing and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give delivering joint written instructions to the Escrow Agent directing such releaseAgent) requested by any of the other parties to effect releases of Indemnity Escrow Funds in accordance with this Section 1.9(a), with respect to each release of the Indemnity Escrow Property to the Class B SellersSection 5.9, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims Article VII and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (Greenville Tube CO)

Indemnity Escrow. (ia) At On or prior to before the Closing, Pubco, the Seller Representative and American Stock Transfer & parties shall open an escrow for the purpose of ensuring the availability of cash to satisfy any Claim by Purchaser pursuant to Article VII of this Agreement (the "Indemnity Escrow"). The Indemnity Escrow shall be opened at Wells Fargo Corporate Trust Company (or such other institutional escrow agent holder xx Xxn Francisco, California as is mutually acceptable to Purchaser and the Company), as escrow agent parties (the "Indemnity Escrow Agent”Holder"), . (b) The parties shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in open the Indemnity Escrow Accountby executing and delivering, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow SharesHolder, the Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion terms and conditions of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow AccountAgreement shall be consistent with this Agreement unless the parties otherwise agree. (c) On or before the Closing, and any disbursement from Purchaser shall pay to Seller, by way of deposit into the Indemnity Escrow, in cash, an amount equal to ten percent (10%) of the Purchase Price (inclusive of interest accruing thereon, the "Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselvesAmount"). The Indemnity Escrow Shares shall serve Amount may be invested by the Indemnity Escrow Holder in certificates of deposit, U.S. governmental obligations, or interest-bearing accounts as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representationsreasonably requested by Seller. For applicable income tax purposes, for which the Main Seller shall be solely responsible)treated as the owner of the funds in the Indemnity Escrow, and all earnings on such amounts shall be treated as earnings of Seller. Unless otherwise required by Law, all distributions made from Seller shall provide to the Indemnity Escrow Account Holder, immediately upon request, a completed and executed Form W-9 and such other forms as may be requested by the Indemnity Escrow Holder in connection with its tax reporting and withholding obligations. (d) The Indemnity Escrow Amount, and any interest thereon, shall be treated by retained in the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) Indemnity Escrow until termination of the Indemnity Escrow Shares during or the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention earlier disbursement of all or any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) portion of the Indemnity Escrow Shares (together with Amount in satisfaction of any equity securities paid as dividends or distributions with respect Claim by Purchaser pursuant to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow SharesArticle VII. (iie) (A) Within three (3) Business Days after Promptly following the twelve (12) month anniversary determination of the Closing Date (such anniversaryamount of any Claim for which Purchaser is entitled to indemnity pursuant to Article VII, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative execute and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give deliver joint written instructions to the Indemnity Escrow Agent directing such release), with respect to each release Holder regarding the disbursement of the Indemnity Escrow Property Amount in accordance with such Article (the "Indemnity Escrow Payment Instructions"). Upon delivery of the Indemnity Escrow Payment Instructions to the Class B SellersIndemnity Escrow Holder, each such Seller the Indemnity Escrow Holder shall receive such Seller’s relative Pro Rata Share (as between themselves) of promptly disburse the amounts to the Persons specified in such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Payment Instructions. (f) The Indemnity Escrow Property remaining in shall remain open until the earlier of (a) the date on which all of the Indemnity Escrow Account Amount has been disbursed pursuant to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyPayment Instructions, (b) the last day of the sixth calendar month following the calendar month in which the Closing Date takes place, unless the Indemnity Escrow Holder has theretofore received written notice from Purchaser to the effect that there is a Claim of indemnity to which Purchaser believes it is entitled under Article VII, which is unpaid, and which is the subject of pending litigation, arbitration or other dispute resolution proceeding not anticipated to be completed on or before such sixth-month expiration, or (c) the date of termination set forth in any joint written instructions from Purchaser and Seller or any judgment or order of the court delivered to the Indemnity Escrow Holder, in either case to the effect that the Indemnity Escrow has been or shall be terminated (any such date, a "Indemnity Escrow Termination Date"). (g) As soon as practicable following the Indemnity Escrow Termination Date, the Indemnity Escrow Holder shall do the following: (i) close the Indemnity Escrow; (ii) pay all Indemnity Escrow fees and costs; (iii) disburse to Purchaser, out of the Indemnity Escrow Amount, any amounts to which Purchaser shall be entitled pursuant to Section 2.06(e) above but that remain undisbursed as of the Termination Date; (iv) unless otherwise instructed by Seller, distribute to Seller all of the Indemnity Escrow Amount remaining after any required disbursement; and (v) deliver to Purchaser and Seller an accounting of the receipt, investment, and all disbursements of the Indemnity Escrow Amount and all Indemnity Escrow fees and costs.

Appears in 1 contract

Samples: Asset Purchase Agreement (Calico Commerce Inc/)

Indemnity Escrow. (a) In the event any Parent Indemnitee shall have, prior to December 31, 2012, delivered a Claims Notice in respect of indemnification under this Agreement, such Parent Indemnitee and the Stockholder Representative shall negotiate in good faith to reach an agreement upon (i) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser Parent Indemnitee’s right for indemnification under this Agreement and the Company), as escrow agent amount of such Parent Indemnitee’s Losses and (ii) the amounts then available in the Escrow Fund that should be reserved (the “Escrow AgentReserved Amount”) in respect of such Claims Notice. Pending or absent a mutual agreement of the Reserved Amount in respect of any Claims Notice, the Reserved Amount therefor shall be the amount in good faith estimated by Parent based on back-up documentation containing such detail as is reasonable under the circumstances. (b) If, after a period of thirty (30) days following receipt by the Stockholder Representative of a Claims Notice, the Parent Indemnitee and the Stockholder Representative have not succeeded in reaching an agreement upon the Reserved Amount or, in the case of a Non-Third Party Claim only, the liability of the Parent Indemnitee or the resolution of such Non-Third Party Claim, each of Parent and the Stockholder Representative shall have the right to submit the dispute at the earliest possible date to mediation conducted in accordance with the Mediation Procedure of the International Institute for Conflict Prevention and Resolution (“CPR”), ; provided that nothing in this Section 8.9(b) shall enter into affect or curtail Parent’s unilateral right to make an Escrow Agreement, effective as indemnity claim under this Article VIII or give any right to the mediator to decide the validity of a Third Party Claim. The costs of such mediation shall be borne by the Parent Indemnitee and the Stockholder Representative (on behalf of the Effective Time, Stockholders) in form inverse proportion to the amount with respect to which each party prevails in the dispute (calculated in accordance with Section 2.8(d)). The parties agree to participate in good faith in the mediation and substance reasonably satisfactory to Purchaser and negotiations related thereto for a period of thirty (30) days or such longer period as they may mutually agree following the Company initial mediation session (the “Escrow AgreementMediation Period”). If the dispute has not been resolved for any reason after the Mediation Period, pursuant the Stockholder Representative shall have the right to which Pubco bring suit in the applicable forum in accordance with this Agreement or to submit the dispute over the Reserved Amount and, in the case of any Non-Third Party Claim, the pending claim to arbitration conducted in New York City, before and in accordance with the then-existing Rules for Non-Administered Arbitration of the CPR (the “Rules”). The arbitrator shall determine only those items in dispute. In resolving any dispute, the Parties intend that the arbitrator shall apply the substantive Laws of the State of Delaware, without regard to any choice of law principles thereof that would mandate the application of the laws of another jurisdiction. The Parties intend that the provisions to arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the arbitrator shall be final and binding on the Parties. The Parties agree to comply and cause the applicable Indemnitees to be delivered comply with any award made in any such arbitration proceedings and agree to enforcement of or entry of judgment upon such award, in any court of competent jurisdiction, including (a) the Supreme Court of the State of New York, New York County, or (b) the United States District Court for the Southern District of New York. (c) Upon the agreement by the Stockholder Representative and the Parent Indemnitee or as finally determined in accordance with the procedures set forth in Section 8.9(b), the Stockholder Representative and Parent shall jointly instruct the Escrow Agent a number under the Escrow Agreement to pay to the Parent Indemnitee the lesser of Class B Exchange Shares (each valued at i) the Redemption Price) equal to (x) fifteen percent (15%) amount of the estimated Exchange Consideration, divided by Losses in respect of such Claims Notice and (yii) the Redemption Price otherwise issuable amounts then available in the Escrow Fund. (d) On December 31, 2012, the Stockholder Representative and Parent shall jointly instruct the Escrow Agent under the Escrow Agreement to pay to the Sellers at Stockholder Representative, acting in the Closing based name and on behalf of all of the Estimated Closing Statement (such Class B Exchange SharesStockholders, together with any equity securities paid as dividends or distributions with the excess of the amounts then available in the Escrow Fund over the aggregate Reserved Amounts in respect of all unresolved claims for indemnification made by the Parent Indemnitees prior to such shares or into which such shares are exchanged or converteddate, in each case, as long as they remain if any. (e) From and after December 31, 2012, from time to time, upon (i) resolution of any Claims Notice in respect of any individual claim for indemnification made by the Parent Indemnitees and (ii) payment to the Parent Indemnitee of the amount of such claim from the aggregate Reserved Amounts then available in the Indemnity Escrow AccountFund, the “Indemnity Stockholder Representative and Parent shall jointly instruct the Escrow Shares”) Agent to be heldrelease to the Stockholder Representative, along with any other dividendsin the name and on behalf of all of the Stockholders, distributions or other income on the Indemnity excess of the amounts then available in the Escrow SharesFund over the aggregate Reserved Amounts in respect of all remaining unresolved claims for indemnification made by the Parent Indemnitees prior to such date, in each case, as long as they remain if any. (f) All income earned in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion respect of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by for the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) benefit of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow SharesStockholders. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Merger Agreement (Agco Corp /De)

Indemnity Escrow. (a) Any undisputed payment Sellers are obligated to make to any Purchaser Indemnified Parties pursuant to this Article IX (an “Indemnification Claim”) shall be paid (i) At or prior by release of funds to the Closing, Pubco, Purchaser Indemnified Parties from the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to Account by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within within three (3) Business Days after the twelve date notice of any sums due and owing is given to Parent (12with a copy to the Escrow Agent pursuant to the Escrow Agreement) month anniversary by the applicable Purchaser Indemnified Party and shall, upon release of such funds, accordingly reduce the Indemnity Escrow Amount, and (ii) to the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then Parent shall be required to pay all of such additional sums due and owing to the Purchaser Indemnified Parties by wire transfer of immediately available funds within five (5) Business Days after the date of such notice. (b) On the date that is nine (9) months after the Closing Date (such anniversary, the “First Escrow Release Date”), the Escrow Agent shall release to Global Wire USA an amount, if positive, equal to (i) $750,000, minus (ii) the dollar amount of any claims for Losses made by the Purchaser Representative Indemnified Parties and Seller Representatives shall give joint written instruction released from the Indemnity Escrow Amount prior to the First Escrow Release Date, minus (iii) an amount equal to the aggregate dollar amount of claims for Losses made by the Purchaser Indemnified Parties through the First Escrow Release Date pursuant to this Article IX (the “First Aggregate Outstanding Claims”) which are then outstanding and unresolved (the “First Distribution Amount”). In the event and to the extent that, after the First Escrow Release Date and before the Final Escrow Release Date, any outstanding claim made by any Purchaser Indemnified Party for a Loss is resolved against such Purchaser Indemnified Party, the Escrow Agent directing shall distribute to Global Wire USA the release amount of the First Released Escrow Property (if any) outstanding claim resolved against such Purchaser Indemnified Party; provided, however, that such distribution shall only be made to the Class B Sellers; extent that the remaining Indemnity Escrow Amount after such distribution would be equal to or greater than the sum of (Bi) within three the First Aggregate Outstanding Claims that remain outstanding and unresolved as of such date, plus (3ii) Business Days $750,000. In the event and to the extent that, after the twenty-four First Escrow Release Date and before the Final Escrow Release Date, any outstanding claim made by any Purchaser Indemnified Party 68 for a Loss is resolved in favor of such Purchaser Indemnified Party, such Purchaser Indemnified Party shall be entitled to recover an amount equal to the amount of the outstanding claim resolved in favor of such Purchaser Indemnified Party. (24c) month anniversary Promptly following the date that is eighteen (such anniversary, 18) months from the Closing Date (the “Expiration Final Escrow Release Date”), the Escrow Agent shall distribute to Global Wire USA an amount, if positive, equal to (i) the funds remaining in the escrow account minus (ii) an amount equal to the aggregate dollar amount of claims for Losses made by the Purchaser Representative Indemnified Parties including any then unresolved First Aggregate Outstanding Claims (the “Final Aggregate Outstanding Claims”) which are then outstanding and Seller Representatives shall give joint written instruction unresolved (the “Final Retained Escrow Amount”). In the event and to the extent that, after the Final Escrow Release Date, any outstanding claim made by any Purchaser Indemnified Party for a Loss is resolved against such Purchaser Indemnified Party, the Escrow Agent directing shall distribute to Global Wire USA an aggregate amount of the release of all remaining Indemnity Final Retained Escrow Property (if any) Amount equal to the Class B Sellers; and (C) amount of the Indemnity Escrow Property shall not be subject to any indemnification outstanding claim to the extent resolved against such claim is made after the Expiration DatePurchaser Indemnified Party; provided, however, with respect to any indemnification claim that such distribution shall only be made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value Final Retained Escrow Amount remaining after such distribution would be sufficient to cover the amount of the remaining Indemnity Escrow Property (with respect Final Aggregate Outstanding Claims that are still unresolved at such time. In the event and to the Indemnity extent that after the Final Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) Release Date any outstanding claim made by any Purchaser Indemnified Party for a Loss is resolved but unpaid claims in favor of such Purchaser Indemnified Party, such Purchaser Indemnified Party shall be entitled to recover an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior amount equal to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) outstanding claim resolved in favor of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyPurchaser Indemnified Party.

Appears in 1 contract

Samples: Asset Purchase Agreement (International Wire Group Inc)

Indemnity Escrow. (ia) At or prior Subject to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have , the right to vote such Seller’s relative Pro Rata Share (as between themselves) sole source of any indemnification of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect Parent Indemnitees pursuant to such shares or into which such shares are exchanged or converted) during this Agreement shall be the time held amounts in the Indemnity Escrow Account as Indemnity Escrow SharesHoldback Fund. (iib) (A) Within three (3) Business Days after Any cash remaining in the twelve (12) month Holdback Fund on the first anniversary of the Closing Date (such anniversary, minus the maximum aggregate amount of any claims asserted in accordance with this Article IX by the Parent Indemnitees against the Holdback Fund pursuant to Section 9.02(a) that are not fully resolved as of the first anniversary of the Closing Date (First Escrow Release DatePending Claims”), ) shall be released to the Purchaser Stockholders’ Representative on the first Business Day following the first anniversary of the Closing Date and Seller Representatives Parent and the Stockholders’ Representative shall give joint written instruction to deliver a Joint Direction instructing the Escrow Agent directing to make a payment in such amount to the release Stockholders’ Representative out of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversaryHoldback Fund, the “Expiration Date”)on behalf of, the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made for distribution in accordance with Article IX hereof on or prior to Section 9.04(c) to, the Expiration Date that remains unresolved at Security Holders. Upon the time and are still contested by an Indemnitee in good faith as resolution of the Expiration Date (any such claimPending Claims, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and which is not paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess Parent Indemnitees shall be promptly released to the Stockholders’ Representative for further distribution to the Security Holders and to pay the Stockholders’ Representative Expenses. (and no later than three (3c) Business Days) disbursed Promptly following receipt by the Escrow Agent Stockholders’ Representative of one or more payments from the Holdback Fund pursuant to Section 9.04(b), the Class B Sellers Stockholders’ Representative shall pay: (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions i) to the Escrow Agent directing such release)each Stockholder, with respect to each share of Company Common Stock outstanding immediately prior to the Effective Time for which a Stock Certificate (and the related Letter of Transmittal) has been properly surrendered, an amount equal (A) the amount released from the Holdback Fund minus all unreimbursed Stockholders’ Representative Expenses which have been incurred prior to the release of funds from the Indemnity Escrow Property Holdback Fund, divided by (B) the Fully Diluted Number. (ii) to each Optionholder, with respect to each share of Company Common Stock underlying each of such Optionholder’s Company Stock Options immediately prior to the Class B SellersEffective Time (and for which a Letter of Transmittal has been delivered), each such Seller shall receive such Seller’s relative Pro Rata Share an amount equal (as between themselvesA) of such Indemnity Escrow Property. Promptly after the final resolution of amount released from the Holdback Fund minus all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account unreimbursed Stockholders’ Representative Expenses which have been incurred prior to the Class B Sellers release of funds from the Holdback Fund, divided by (B) the Fully Diluted Number. (iii) to each Warrantholder with respect to each share of Common Stock underlying such Seller receiving such SellerWarrantholder’s relative Pro Rata Share Company Warrants immediately prior to the Effective Time (as between themselvesand for which a Letter of Transmittal has been delivered), an amount equal (A) the amount released from the Holdback Fund minus all unreimbursed Stockholders’ Representative Expenses which have been incurred prior to the release of such Indemnity Escrow Propertyfunds from the Holdback Fund, divided by (B) the Fully Diluted Number.

Appears in 1 contract

Samples: Merger Agreement (Geo Group Inc)

Indemnity Escrow. (i) At or prior to To secure the performance by the Company Stockholders of their indemnity obligations under this Section 6, upon the Closing, PubcoPurchaser shall deposit the aggregate Escrow Amount Per Share into an escrow account (the “Escrow Fund”) established with X.X. Xxxxxx Trust Company, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent National Association (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller The fees and expenses of the Escrow Agent under the Escrow Agreement shall have be borne by Purchaser. To the right extent that a Purchaser Indemnified Person makes any claim for indemnification pursuant to vote Section 6(a), it shall make a claim against the Escrow Fund in accordance with the terms and conditions of the Escrow Agreement, which shall provide, among other things, that the portion of the Escrow Fund consisting of shares of Purchaser Common Stock shall be valued at an amount equal to $21.79 per share for purposes of any such Sellerclaim (unless there is a Change of Control (as defined below) of Purchaser in which event such shares of Purchaser Common Stock shall be valued at the amount payable for such shares pursuant to such Change of Control). In the event that any Purchaser Indemnified Person sustains or incurs Losses for which it is entitled to indemnification under Section 6(a), such Losses shall be recovered or paid from the Escrow Fund for the amount of such claim in accordance with the terms of the Escrow Agreement until such Losses are paid or until no portion of the Escrow Fund remains. In such event, such indemnified Loss shall be recovered by Purchaser from the aggregate Escrow Amount Per Share of each Company Stockholder, on a several basis in accordance with each Company Stockholder’s relative Pro Rata Share (as between themselves) of the Indemnity amount of such Loss, and consisting of cash and shares of Purchaser Common Stock (if any) in accordance with the same ratio as that applicable to the aggregate Escrow Shares Amount Per Share deposited with the Escrow Agent on behalf of such Company Stockholder at the Closing. The period during which claims for Losses may be made (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or convertedthe “Claims Period”) during against the time held in Escrow Fund shall commence at the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after Closing and terminate on the date that is twelve (12) month anniversary months after the date of this Agreement (the “Escrow Period”). Notwithstanding anything contained herein to the contrary, such portion of the Closing Date (Escrow Fund at the conclusion of the Escrow Period as shall be necessary to satisfy any unresolved or unsatisfied claims for Losses hereunder shall remain in escrow until such anniversaryclaims for Losses have been resolved or satisfied. The remainder of the Escrow Fund, the “First Escrow Release Date”)if any, the Purchaser Representative and Seller Representatives shall give joint written instruction be delivered to the Escrow Agent directing Company Stockholders promptly (and in any event within five (5) business days) after the release expiration of the First Released Escrow Property Period in accordance with each such Company Stockholder’s Pro Rata Share and based on the same ratio of cash and shares of Purchaser Common Stock (if any) as that applicable to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to aggregate Escrow Amount Per Share deposited with the Escrow Agent directing the release on behalf of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved Company Stockholder at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyClosing.

Appears in 1 contract

Samples: Merger Agreement (Groupon, Inc.)

Indemnity Escrow. (i) At or prior On the Closing Date, Purchaser shall, on behalf of the Selling Stockholders, pay to the ClosingMellon Trust of New England, PubcoN.A., the Seller Representative and American Stock Transfer & Trust Company (or such other escrow as agent mutually acceptable to Purchaser and the Company), as escrow agent Selling Stockholders (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with an amount of the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account Cash Price equal to $2,200,000 (the “Indemnity Escrow AccountAmount) and disbursed ), in accordance with the terms of this Agreement and the Escrow Agreement. The portion , which will be executed at the Closing, by and among Purchaser, the Stockholder Representative (on behalf of the Class B Exchange Shares that shall be withheld at Selling Stockholders) and the Closing for deposit in Escrow Agent (the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselvesAgreement”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from funds in the Indemnity Escrow Account shall be treated as being owned by the Selling Stockholders for Tax purposes and all parties hereto will file all Tax Returns consistent with such treatment. Any payment the Selling Stockholders are obligated to make to any Purchaser Indemnified Parties as an adjustment pursuant to this Article VIII shall be paid first, to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares extent there are held sufficient funds in the Indemnity Escrow Account, subject by release of funds to the retention of any dividends, distributions and other earnings thereon in Purchaser Indemnified Parties from the Indemnity Escrow Account until disbursed therefrom by the Escrow Agent in accordance with the terms and conditions provisions of this the Escrow Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of accordingly reduce the Indemnity Escrow Shares (together with Amount and, second, to the extent the Indemnity Escrow Amount is insufficient to pay any equity securities paid as dividends or distributions with respect remaining sums due, then the Selling Stockholders shall be required to pay all of such shares or into which additional sums due and owing to the applicable Purchaser Indemnified Party by wire transfer of immediately available funds on the date that such shares are exchanged or converted) during the time held in funds would have been released from the Indemnity Escrow Account as Indemnity Escrow Shares. if sufficient funds were in such account. On the Business Day immediately following the first (ii1st) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining release a portion of the funds held in the Indemnity Escrow Account to the Class B Sellers Stockholder Representative (for distribution to the Selling Stockholders in accordance with each such Seller receiving such Seller’s relative Pro Rata Share (their respective aggregate percentage ownership of the Shares as between themselvesset forth on Exhibit A) in accordance with the provisions of such the Escrow Agreement. The remaining balance of funds held in the Indemnity Escrow PropertyAccount shall thereafter be distributed and released in accordance with the provisions of the Escrow Agreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Deep Down, Inc.)

Indemnity Escrow. (i) At or prior Subject to the Closing, Pubcofollowing requirements, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and Indemnity Escrow Fund shall be in existence during the Company), as escrow agent period (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to "INDEMNITY ESCROW PERIOD") commencing upon receipt by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during Fund and shall terminate upon the earlier to occur of (A) 5:00 p.m., local time at Buyer's headquarters, on the date thirty (30) days after the Survival Date (as such Indemnity Escrow Shares are held date is certified in writing by the Indemnity Escrow Account, subject Buyer to the retention of any dividendsEscrow Agent), distributions and other earnings thereon in (B) the Indemnity Escrow Account until disbursed therefrom in accordance with date when the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) last portion of the Indemnity Escrow Shares Fund then held by the Escrow Agent is distributed in accordance with this Section 8.3 (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during date, the time held in "INDEMNITY ESCROW TERMINATION DATE"). Upon the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Termination Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) shall immediately distribute to the Class B Sellers; (B) within three (3) Business Days after Indemnifying Stockholders the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all full remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value Fund, less (with respect i) any Disputed Amounts, (ii) any amounts necessary to satisfy claims for Losses that have been previously resolved pursuant to Section 8.3(f), and (iii) the amount of all other Losses for which Buyer has delivered an Officer's Certificate prior to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal Termination Date with respect to facts and circumstances existing prior to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative Indemnity Escrow Termination Date but which are not yet resolved pursuant to Section 8.3. As soon as all such pending claims have been resolved in accordance with this Section 9.4 (as adjusted in accordance with Section 9.4(b)) 8.3, the Escrow Agent shall remain in promptly deliver the remaining portion of the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration DateFund, if any, to the extent that Indemnifying Stockholders. Deliveries of amounts out of the value Indemnity Escrow Fund to the Indemnifying Stockholders pursuant to this Section 8.3(b)(i) shall be made in proportion to their respective Indemnity Pro Rata Portion of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyFund.

Appears in 1 contract

Samples: Stock Purchase Agreement (Amkor Technology Inc)

Indemnity Escrow. (i) At or prior to the Closing, Pubco, cash constituting a portion of the Seller Representative and American Stock Transfer & Trust Company Purchase Price in the amount of Three Million Dollars (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent $3,000,000) (the “Escrow AgentIndemnity Escrow), ) shall enter into be placed in an Escrow interest-bearing escrow account as security for Sellers’ indemnity obligations set forth in this Agreement, effective as . The terms and conditions for the release or forfeiture of the Effective TimeIndemnity Escrow are more particularly set forth in that certain Indemnity Escrow Agreement which shall be executed and delivered by Purchaser, in form and substance reasonably satisfactory to Purchaser Sellers and the Company escrow agent at Closing substantially in the form attached hereto as Exhibit 3.1(b) (the “Indemnity Escrow Agreement”); provided that within one (1) Business Day following the eighteen (18) month anniversary of the Closing Date, pursuant the Escrow Agent shall deliver to which Pubco shall cause to be Sellers any amounts remaining in the Indemnity Escrow account, less any amounts that are the subject of a Claim Notice (as defined in the Escrow Agreement) delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal prior to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based 5:00 p.m. Eastern Time on the Estimated Closing Statement eighteen (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (1218) month anniversary of the Closing Date which has not been resolved (such anniversary, the First Escrow Release DateDisputed Amounts), the Purchaser Representative and Seller Representatives shall give joint written instruction ) pursuant to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims terms set forth in the Claim Notice provided Escrow Agreement, such resolution to be evidenced by a written instrument signed by Sellers and Purchaser and delivered to the Purchaser Representative in accordance with Section 9.4 Escrow Agent. Within one (1) Business Day after the resolution of a dispute as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid to any Disputed Amounts pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value terms of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewithAgreement, the Escrow Agent shall transfer any Indemnity Escrow Property release (A) to Purchaser the amount, if any, payable to the Purchaser in connection with such resolved Disputed Amounts and (B) to Sellers, the remaining in balance of the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.plus all accrued interest thereon, minus any remaining Disputed Amounts. 17

Appears in 1 contract

Samples: Asset Purchase Agreement

Indemnity Escrow. (ia) At or prior The amounts of any Damages payable to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or convertedParent Indemnified Parties under Section 8.2 shall, in each case, as long as they remain be paid by release out of cash held in the Indemnity Escrow Account, Account (the “Indemnity Indemnification Escrow SharesProperty”) to be held, along with any other dividends, distributions or other income on the Indemnity applicable Parent Indemnified Party from the Escrow Shares, in each case, as long as they remain in Account. (b) On the Indemnity Escrow Account (together with the Indemnity Escrow SharesSurvival Termination Date, the “Indemnity Escrow Property”), in Agent shall release all or a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Indemnification Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction Property to the Escrow Agent directing Participating Holders such that, following such release, the release of amounts remaining in the First Released Escrow Property (Account equals only the amount, if any) , of claims for indemnification under Section 8.2 properly asserted prior to such date by the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made Parent Indemnified Parties in writing in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith VIII but not yet resolved as of the Expiration Survival Termination Date (any such claim, a the Pending ClaimUnresolved Claims”), an amount of the Indemnity Escrow Property with a value (with respect . Such amounts shall be released to the Indemnity Escrow SharesParticipating Holders, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative pro rata in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain their respective Escrow Percentages. The amounts retained in the Indemnity Escrow Account until such time as such Pending in respect of any Unresolved Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent upon final resolution of any Unresolved Claim in respect of which such amounts had been retained (to the Class B Sellers extent not utilized to satisfy valid claims for indemnification pursuant to Section 8.2) in accordance with this Section 8.7 and the terms of the Escrow Agreement. (c) Promptly (and Purchaser in any event within five (5) business days) upon any person becoming entitled to release of amounts from the Escrow Account pursuant to this Article VIII or the Escrow Agreement, Parent and the Holder Representative and Seller Representatives shall promptly give execute joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, instructing the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each so release such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertyamounts.

Appears in 1 contract

Samples: Merger Agreement (Triumph Group Inc)

Indemnity Escrow. (i) At or prior Subject to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to continued retention by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) portion of the Indemnity Escrow Shares during that is the time such Indemnity Escrow Shares are held in the Indemnity Escrow Accountsubject of a pending indemnification claim until resolution thereof, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days promptly after the twelve date that is the eighteen (1218) month anniversary of the Closing Date (such anniversaryDate, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release unless earlier released as a result of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release satisfaction of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any an indemnification claim to the extent such claim is made after the Expiration Date; providedby Cash Satisfaction, however, with respect to any payment of an indemnification claim made in accordance with Article IX hereof on hereunder or prior to the Expiration Date that remains unresolved at the time and are still contested upon forfeiture by an Indemnitee in good faith as a Stockholder of the Expiration Date (any such claim, a “Pending Claim”), an amount portion of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price otherwise constituting Restricted Stock as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth contemplated in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith2.11, the Escrow Agent shall transfer any release to the Stockholders to the Indemnity Escrow Property that does not constitute Restricted Stock based upon the Stockholder’s Proportionate Share (other than for Dissenting Shares, satisfaction of any indemnification claim in cash pursuant to Section 8.5(c) and subject to adjustment for any amounts payable by any Stockholder for breaches of its individual representations and warranties or covenants in Article I of the Stockholder Agreement, any forfeited stock, and any Cash Satisfaction), the Stock Consideration remaining in the Indemnity Escrow Account after satisfaction of any indemnifiable claims for Losses and not subject to a pending claim as provided in the Escrow Agreement as adjusted for any Cash Satisfaction. The remaining Acquiror Common Stock that remains Restricted Stock shall be delivered to, and retained by Acquiror’s transfer agent, as Restricted Stock for release as such stock is no longer subject to risk of forfeiture, subject to this Article VIII. In the event of the termination of the Indemnity Escrow after resolution of any pending claims following the earlier of (i) the anniversary date on which such shares in the Indemnity Escrow are no longer subject to the Class B Sellers with each risk of forfeiture and (ii) an Acceleration Event, Acquiror shall promptly distribute any remaining Indemnity Escrow to the Stockholders based upon such Seller receiving such SellerStockholder’s relative Pro Rata Proportionate Share (as between themselves) other than for Dissenting Shares and subject to adjustment of such Indemnity Escrow Propertyany amounts payable by any Stockholder for breaches of its representations and warranties or covenants in Article I of the Stockholder Agreement).

Appears in 1 contract

Samples: Merger Agreement (Adept Technology Inc)

Indemnity Escrow. (i) At or prior On the Closing Date, the Owners shall, on behalf of the Selling Stockholders, pay to Escrow Agent in immediately available funds, to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to account designated by the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed ), the Escrow Amount, in accordance with the terms of this Agreement and the Escrow Agreement, and the Selling Stockholders will be deemed to have consented to the deposit with the Escrow Agent of the Escrow Amount without any act required on the part of any such stockholder. The portion of the Class B Exchange Shares that Escrow Amount contributed on behalf of each holder of Company Common Stock shall be withheld at determined with reference to each such stockholder’s Pro Rata Escrow Basis. As used herein, “Pro Rata Escrow Basis” shall mean, as to any particular holder of Company Capital Stock, the Closing for deposit quotient determined by dividing (A) the amount of cash consideration such stockholder is entitled to receive with respect to its Company Capital Stock pursuant to Section 3.1(c) by (B) the Merger Consideration. Any indemnification the Owners Indemnified Parties are entitled to pursuant to this Article IX shall be paid first, to the extent there are sufficient funds in the Indemnity Escrow AccountAccount (but subject to and in accordance with the terms of the Escrow Agreement), and any disbursement by release of funds to the Owners Indemnified Parties from the Indemnity Escrow Account to Pubco, by the Escrow Agent and shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from accordingly reduce the Indemnity Escrow Account shall be treated by the Parties as an adjustment Amount and, second, to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of extent the Indemnity Escrow Shares during Amount is insufficient or unavailable to pay any remaining sums due, then the time Signing Stockholders shall be required to pay all of such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject additional sums due and owing to the retention Owners Indemnified Parties by wire transfer of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) immediately available funds within five Business Days after the twelve (12) month anniversary date of such notice. Any such payments by the Closing Date (such anniversary, Signing Stockholders shall be on a pro rata basis with any Signing Stockholder’s pro rata portion being determined by the “First Escrow Release Date”), fraction where the Purchaser Representative numerator is the number of shares of Company Common Stock owned by that Signing Stockholder for which they are receiving the Per Share Price and Seller Representatives shall give joint written instruction to the Escrow Agent directing denominator is the release total number of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release shares of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to Company Common Stock for which any indemnification claim to the extent such claim is made after Selling Stockholder received Per Share Price. On the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in release the Indemnity Escrow Account Amount (to the Class B Sellers with each extent not utilized to pay the Owners for any indemnification claim) to the Stockholder Representative, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the sum of (i) the amount of claims for indemnification under this Article IX asserted prior to such Seller receiving such Seller’s relative Pro Rata Share date but not yet resolved (as between themselves“Unresolved Claims”) of such and (ii) the Debenture Cap in effect on the Expiration Date. The Indemnity Escrow PropertyAmount retained for Unresolved Claims shall be released to the Stockholder Representative by the Escrow Agent (to the extent not utilized to pay the Owners for any such claims resolved in favor of the Owners) upon their resolution in accordance with this Article IX and the terms of the Escrow Agreement. The Indemnity Escrow Amount retained with respect to Losses specified in Section 9.7 shall be released to the Stockholder Representative by the Escrow Agent (to the extent not utilized to pay the Owners for any such Losses) upon their resolution in accordance with this Article IX and the terms of the Escrow Agreement.

Appears in 1 contract

Samples: Merger Agreement (Fortegra Financial Corp)

Indemnity Escrow. (a) At the Closing, Corporation shall issue to Contributor and deliver to the Transfer Agent the Indemnity Securities. All Indemnity Securities (i) At shall be credited to Contributor in book-entry form on the books and records of the Transfer Agent in the Indemnity Escrow and (ii) shall be held in custody by the Transfer Agent and disbursed in accordance with the provisions of Section 11.13(b), and, while so held by the Transfer Agent, Contributor shall have sole and exclusive voting power over (and all other rights with respect to) the Indemnity Securities unless and until delivered to Corporation in accordance with this Agreement. For the avoidance of doubt, Contributor, or prior its designee(s), will be entitled to immediate receipt of any dividend, or other amount, paid with respect to any Indemnity Securities while such Indemnity Securities are held in the Indemnity Escrow. Notwithstanding anything herein to the Closingcontrary, Pubcono fractional Indemnity Securities shall be disbursed from the Indemnity Escrow, and, to the Seller Representative and American Stock Transfer & Trust Company extent that any such fractional Indemnity Securities would be required to be so disbursed but for this sentence, such fractional Indemnity Securities shall be rounded up to the nearest whole number of Indemnity Securities. (or such other escrow agent mutually acceptable to Purchaser and b) If, during the Company), as escrow agent period from the Closing until the date that is 12 months after the Closing Date (the “Indemnity Escrow AgentSecond Release Date”), shall enter into any Corporation Indemnified Party makes a claim under this Section 11 and becomes entitled to an amount for such claim under this Section 11, then, to the extent there are sufficient Indemnity Securities in the Indemnity Escrow Agreement, effective as of such time, Corporation shall first satisfy such amount from the Effective Time, in form Indemnity Escrow and substance reasonably satisfactory to Purchaser Corporation and the Company (the “Escrow Agreement”), pursuant to which Pubco Contributor shall cause to be delivered deliver joint written instructions to the Transfer Agent to release to Corporation from the Indemnity Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) Partnership Common Units equal to (x) fifteen percent (15%) the amount to which the applicable Corporation Indemnified Party is entitled hereunder in respect of the estimated Exchange Consideration, such claim divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid Per Share Value as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares date that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within is three (3) Business Days prior to the date that such Indemnity Securities are so disbursed (together with a corresponding number of shares of Corporation Series A Preferred Stock in accordance with Section 2.2(b)). (c) On the date that is 180 days after the twelve (12) month anniversary of the Closing Date (such anniversarydate, the “Indemnity Escrow First Escrow Release Date”), a number of Partnership Common Units equal to (x) 50% of the Purchaser Representative and Seller Representatives shall give joint written instruction Indemnity Escrow Balance as of such time, minus (y) the aggregate amount, if any, which any Corporation Indemnified Party has claimed in good faith under this Section 11, to the Escrow Agent directing the release extent such amount exceeds that amount of the First Released Indemnity Escrow Property Balance to be released pursuant to this Section 11.13(c) (to the extent such claims, if any) , remain unresolved and valuing the Partnership Common Units included in the Indemnity Escrow Balance at the Per Share Value as of the Indemnity Escrow First Release Date), together with a corresponding number of shares of Corporation Series A Preferred Stock in accordance with Section 2.2(b), shall be released to the Class B Sellers; Contributor. Corporation and Contributor shall promptly (B) but in any event within three five (35) Business Days after of the twenty-four (24Indemnity Escrow First Release Date) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative execute and Seller Representatives shall give deliver joint written instruction instructions to the Escrow Transfer Agent directing to release to Contributor such amount of Indemnity Securities to be released under this Section 11.13(c). (d) On the release of all remaining Indemnity Escrow Property Second Release Date, a number of Partnership Common Units equal to (if any) to the Class B Sellers; and (Cx) the Indemnity Escrow Property shall not be subject to Balance as of such time, minus (y) the aggregate amount, if any, which any indemnification claim Corporation Indemnified Party has claimed in good faith under this Section 11 (to the extent such claims, if any, remain unresolved and valuing the Partnership Common Units included in Indemnity Escrow Balance at the Per Share Value as of the Indemnity Escrow Second Release Date), together with a corresponding number of shares of Corporation Series A Preferred Stock in accordance with Section 2.2(b), shall be released to Contributor. Corporation and Contributor shall promptly (but in any event within five (5) Business Days of the Indemnity Escrow Second Release Date) execute and deliver joint written instructions to the Transfer Agent to release to Contributor such amount of Indemnity Securities to be released under this Section 11.13(d). (e) Upon the resolution of all such outstanding claims described in the first sentence of Section 11.13(d), Corporation and Contributor shall promptly (but in any event within five (5) Business Days of such resolution) execute and deliver joint written instructions to the Transfer Agent to release to the applicable Party the applicable amount of Indemnity Securities then contained in the Indemnity Escrow. (f) Releases of any portion of the Indemnity Escrow Balance shall (i) specify the amount of the Indemnity Escrow Balance to be released from the Indemnity Escrow, (ii) specify such account and the Person or Persons to whom such amount shall be released and (iii) be made only in accordance with written instructions that are jointly signed by Corporation and Contributor, which instructions shall be in a form acceptable to the Transfer Agent and shall be accompanied by any other documentation that may be requested by the Transfer Agent. (g) Corporation and Contributor agree to deliver to the Transfer Agent all powers of attorney, endorsements, affidavits, letters, notices, instructions, directions, consents, certificates, statements, or other papers or documents requested by the Transfer Agent to effectuate the provisions of this Section 11.13. Any Indemnity Securities that are transferred to Corporation shall be surrendered or cancelled, as applicable, in accordance with the Certificate of Designation and the A&R LP Agreement. (h) In the event that there are not sufficient Indemnity Securities in the Indemnity Escrow to satisfy any amounts due to Corporation for any claim under this Section 11 or such claim is made after the Expiration Indemnity Escrow Second Release Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to Contributor shall pay the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as balance of the Expiration Date (any such claim, a “Pending Claim”), an claim to Corporation no later than five Business Days following the date such amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative becomes due and owing in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property14.13.

Appears in 1 contract

Samples: Contribution Agreement (Penn Virginia Corp)

Indemnity Escrow. (ia) At or prior Indemnity Escrow Account shall be available to compensate the Buyer Indemnitees for Losses pursuant to the Closingindemnification obligations set forth in this Article IX, Pubcoprovided, that except as otherwise provided herein the Seller Representative and American Stock Transfer & Trust Company Special Escrow Account shall only be available to compensate the Buyer Indemnitees for Losses pursuant to the indemnification obligations set forth in Section 9.02(a)(iii). (or such other escrow agent mutually acceptable to Purchaser and b) In accordance with the Company), as escrow agent (terms of the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of on the Effective Timenext Business Day following fifteen (15) months following the Closing Date, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number shall pay and distribute out of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with and Buyer and Sellers’ Representative shall deliver a joint written instruction to the Escrow Agent providing for such distribution), by wire transfer to the Paying Agent (and the Paying Agent shall deliver any such amounts within five Business Days following receipt to or as directed by the Sellers in their respective properly completed and executed Letters of Transmittal ratably (based on each Seller’s Allocation Percentage thereof as set forth on the Allocation Schedule)), an aggregate amount equal to the balance of the Indemnity Escrow SharesAmount (together with any interest that may be earned thereon), less (x) any amounts which have been distributed from the Indemnity Escrow Account prior to such date and (y) any amounts for which Buyer Indemnitees shall have made a claim pursuant to the procedures set forth in this Article IX and for which recovery shall not have been satisfied from the Indemnity Escrow Account (the “Outstanding Indemnity Escrow PropertyClaims”), ; any amounts due to Sellers that have not delivered a properly completed and executed Letter of Transmittal and joinder to the Sellers’ Agreement shall instead be retained by the Paying Agent in a segregated escrow account and paid upon such delivery. The Sellers’ Representative shall provide a schedule of any payments to be made to the Sellers under this Section 9.03 (based on each Seller’s Allocation Percentage thereof as set forth on the “Indemnity Allocation Schedule) to the Surviving Company and the Paying Agent at least two Business Days prior to such distribution. (c) On the next Business Day following eighteen (18) months following the Closing Date, the Escrow Agent shall pay and distribute out of the Special Escrow Account (and Buyer and Sellers’ Representative shall deliver a joint written instruction to the Escrow Agent providing for such distribution), by wire transfer to the Paying Agent (and the Paying Agent shall deliver any such amounts within five Business Days following receipt to or as directed by the Sellers in their respective properly completed and executed Letters of Transmittal ratably (based on each Seller’s Allocation Percentage thereof as set forth on the Allocation Schedule)), an aggregate amount equal to $750,000 of the then-current balance of the Special Escrow Account (or, if lower, the then-current balance of the Special Escrow Account), less any amounts that Sellers’ Representative shall, in its sole discretion, determine to be advisable to reserve for potential future claims against the Special Escrow Account; provided, that any amounts due to Sellers that have not delivered a properly completed and executed Letter of Transmittal and joinder to the Sellers’ Agreement shall instead be retained by the Paying Agent in a segregated account and paid upon such delivery. The Sellers’ Representative shall provide a schedule of any payments to be made to the Sellers under this Section 9.03 (based on each Seller’s Allocation Percentage thereof as set forth on the Allocation Schedule) to the Surviving Company and disbursed in the Paying Agent at least two Business Days prior to such distribution. In accordance with the terms of this Agreement and the Escrow Agreement. The portion , on the next Business Day following thirty-six (36) months following the Closing Date, the Escrow Agent shall pay and distribute out of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Special Escrow Account (and Buyer and Sellers’ Representative shall deliver a joint written instruction to Pubcothe Escrow Agent providing for such distribution), by wire transfer to the Paying Agent (and the Paying Agent shall be allocated between deliver any such amounts within five Business Days following receipt to or as directed by the Class B Sellers in their respective properly completed and executed Letters of Transmittal ratably (based on each such Seller’s relative Pro Rata Share Allocation Percentage thereof as set forth on the Allocation Schedule)), an aggregate amount equal to the balance of the Special Escrow Account (as between themselvestogether with any interest that may be earned thereon), less (x) any amounts which have been distributed from the Special Escrow Account prior to such date and (y) any amounts for which the Buyer Indemnitees shall have made a claim pursuant to the procedures set forth in this Article IX and for which recovery shall not have been satisfied from the Special Escrow Account (the “Outstanding Special Escrow Claims”, and together with the Outstanding Indemnity Escrow Claims, the “Outstanding Escrow Claims”); provided, that and any amounts due to Sellers that have not delivered a properly completed and executed Letter of Transmittal and joinder to the Sellers’ Agreement shall instead be retained by the Paying Agent in a segregated account and paid upon such delivery. The Indemnity Escrow Shares Sellers’ Representative shall serve as the sole and exclusive source provide a schedule of payment of the obligations of any payments to be made to the Sellers under this Section 2.5(d9.03 (based on each Seller’s Allocation Percentage thereof as set forth on the Allocation Schedule) to the Surviving Company and the obligations Paying Agent at least two Business Days prior to such distribution. (d) As between the parties to this Agreement, if any term or provision of the Indemnitors pursuant to Article IX (other than Escrow Agreement conflicts with respect to (A) Fraud Claims any term or (B) any indemnification claims provision of this Agreement, then the term or provision of this Agreement will control. Buyer and the Company will each pay for breach 50% of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible)administrative fees of the Escrow Agent at the Closing. Unless otherwise required by Law, all distributions All payments made from the Indemnity Escrow Account shall be treated by the Parties parties as an adjustment to the Exchange Consideration proceeds received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Merger Agreement (Arcbest Corp /De/)

Indemnity Escrow. (i) At or prior the Closing Time, Purchaser shall, on behalf of Seller, pay to the ClosingXxxxx Fargo Bank, PubcoNational Association, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow a national banking association, as agent mutually acceptable to Purchaser and the Company), as escrow agent Seller (the “Escrow Agent”), shall enter into an Escrow Agreementin immediately available funds, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) designated by the Escrow Agent, an amount equal to $1,800,000 (plus interest and disbursed investment income, the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement and the Escrow Agreement, in the form of Exhibit F hereto, which will be executed at the Closing, by and among Purchaser, Seller and the Escrow Agent (the “Escrow Agreement”). The portion of the Class B Exchange Shares that Any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article IX shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent pursuant to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment terms of the obligations of the Sellers under Section 2.5(d) Escrow Agreement and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from accordingly reduce the Indemnity Escrow Account shall be treated by the Parties as an adjustment Amount and, second, to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of extent the Indemnity Escrow Shares during Amount is insufficient to pay any remaining sums due, then Seller, the time Voting Trustees and the Voting Shareholders shall be required to pay all of such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject additional sums due and owing to the retention Purchaser Indemnified Parties by wire transfer of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share immediately available funds within five (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (35) Business Days after the twelve (12) month anniversary date of such notice, and in the Closing Date (such anniversaryevent Seller, the “First Escrow Release Date”), Voting Trustees and the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (Voting Shareholders do not make such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid payment pursuant to the provisions of Article IX. After the Expiration Datethis Section 9.5, Purchaser may deduct such amount from any Earn-Out Payments due pursuant to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property3.4.

Appears in 1 contract

Samples: Asset Purchase Agreement (Goodman Networks Inc)

Indemnity Escrow. (ia) At or prior If any Buyer Indemnified Party becomes entitled to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), any payments hereunder for any claim for indemnification pursuant to which Pubco this Article VIII, such Buyer Indemnified Party shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in claim against the Indemnity Escrow AccountFund in an amount equal to the amount of the related Loss or Tax, with the “Indemnity Escrow Shares”) claim to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom carried out in accordance with the terms and conditions provisions of this Agreement and the Escrow Agreement. Each Class B Within five days after the final determination of the amount of any payment, Seller and Buyer shall have instruct the right Escrow Agent under the Escrow Agreement to vote deliver to the pertinent Buyer Indemnified Party the lesser of (i) the amount of such Seller’s relative Pro Rata Share Losses or Taxes and (as between themselvesii) the amount remaining in the applicable Indemnity Escrow Fund. (b) Subject to clause (ii) in the proviso in the first sentence of Section 8.9(c), after the Indemnity Escrow Shares (together with Fund is exhausted and notwithstanding anything to the contrary in this Agreement, no Buyer Indemnified Party shall have any equity securities paid as dividends rights or distributions remedies against Seller or any of its Affiliates or any of their respective directors, officers, employees and agents under this Agreement or otherwise with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Sharestransactions contemplated by this Agreement for monetary relief (other than causes of action arising from actual fraud). (iic) (A) Within three (3) On the first Business Days Day after the twelve (12) 15 month anniversary of the Closing Date (such anniversaryDate, the “First Escrow Release Date”), the Purchaser Representative Buyer and Seller Representatives shall give joint written instruction to cause the Escrow Agent directing the to release of the First Released Escrow Property (to Seller from escrow an amount, if any) to , by which the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release amount of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall Fund at such time exceeds the sum of all unresolved claims (it being understood that, in the event that any of the Schedule 8.2(a)(v) Matters has not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof been resolved on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as 15 month anniversary of the Expiration Date Closing Date, such Schedule 8.2(a)(v) Matter shall be deemed to be an unresolved claim in an amount equal to the greater of (x) the last amount claimed by plaintiffs in the related proceedings or settlement negotiations and (y) the amount then reserved for such claim in the accounts of the Company or the applicable Subsidiary) against the Indemnity Escrow Fund made pursuant to this Agreement; provided, that if the Schedule 8.2(a)(vi) Matter has not been resolved on or prior to the 15 month anniversary of the Closing Date, then (i) Buyer and Seller shall instruct the Escrow Agent to retain in the Indemnity Escrow Fund an amount equal to the lesser of (x) $15,000,000 less the amount of any amounts theretofore paid with respect to such claim, a “Pending Claim”), an Schedule 8.2(a)(vi) Matter and (y) the then remaining amount of the Indemnity Escrow Property with a value Fund (with respect the “Retained Indemnity Escrow”) in order to satisfy claims pursuant to Section 8.2(a)(vi) and (ii) Seller shall cause the Indemnity Escrow Shares, calculated based limited guaranty described on the Pubco Share Price as Schedule 8.9(c) of the Expiration Date) equal Seller’s Disclosure Letter to the aggregate amount be executed and delivered to Buyer. Upon final resolution of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)Schedule 8.2(a)(vi) Matter, Buyer and Seller shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by cause the Escrow Agent to the Class B Sellers (and Purchaser Representative and release to Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release from escrow any remaining amount of the Retained Indemnity Escrow Property not applied to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account pursuant to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertySection 8.2(a)(vi).

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Bank Jos a Clothiers Inc /De/)

Indemnity Escrow. (i) At In order to provide security for Sellers’ indemnification obligations under this Agreement, the Indemnity Escrow shall be held by Escrow Agent, and disbursed by Escrow Agent after the Closing in accordance with this Section 8.12 and the Escrow Agreement. With respect to each claim for indemnification asserted in good faith by Buyer against Sellers pursuant to Section 8.2 or prior special warranty claim pursuant to the Closing, Pubco, Assignment during the Seller Representative period from and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable after the Closing Date up to Purchaser and the Company), as escrow agent date that is two years following the Closing Date (the “Escrow AgentTermination Date”), upon final resolution or determination of such an indemnity or warranty claim by the applicable Parties or in accordance with Section 8.7, as applicable, Buyer and Seller’s Representatives shall enter into an jointly instruct Escrow AgreementAgent to disburse to Buyer the amount set forth in such joint instruction, effective as which will be that portion of the Effective TimeIndemnity Escrow being held in the Indemnity Escrow account as would satisfy such finally resolved or determined indemnity or warranty claim. On the date that is six months following the Closing Date, in form Buyer and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco Seller’s Representatives shall cause to be delivered to jointly instruct the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) to disburse to Seller’s Representatives an amount equal to the positive difference, if any, between (xa) fifteen percent Fifteen Million Dollars (15%$15,000,000), and (b) an amount equal to the sum of (i) all amounts disbursed to Buyer as of such date, and (ii) any amounts necessary to satisfy any unresolved Claim Notices made in good faith as of such time in the proportions requested by Seller’s Representatives within three Business Days of its receipt of such joint instruction. On the date that is 12 months following the Closing Date, Buyer and each Seller’s Representative shall jointly instruct the Escrow Agent to disburse to Seller’s Representatives an amount equal to the positive difference, if any, between (A) Twenty-Five Million Dollars ($25,000,000), and (B) an amount equal to the sum of (1) all amounts disbursed to Seller’s Representatives as of such date, (2) all amounts disbursed to Buyer as of such date, and (3) any amounts necessary to satisfy any unresolved Claim Notices made in good faith as of such time in the proportions requested by Seller’s Representatives within three Business Days of its receipt of such joint instruction. On the Escrow Termination Date, Seller’s Representatives shall, subject to the remainder of this sentence, be entitled to receive the Indemnity Escrow balance as of such time and such amount shall be automatically distributed to Seller’s Representatives in the proportions requested by Seller’s Representatives pursuant to the terms of the estimated Exchange ConsiderationEscrow Agreement (and Buyer and Seller’s Representatives shall jointly instruct Escrow Agent to take any necessary actions in order to accomplish the foregoing); provided, divided however, that Sellers shall not be entitled to a distribution of, and Escrow Agent shall retain, any amounts necessary to satisfy any unresolved Claim Notices that have been timely delivered by Buyer in good faith in accordance with Section 8.7 (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they amounts shall remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) until such Claim Notices are finally resolved). If there are remaining amounts due by any Seller to be held, along with any other dividends, distributions or other income on Buyer pursuant to its indemnity obligations under Section 8.2 after the Indemnity Escrow Sharesbalance is exhausted, in each case, as long then such amounts HN\1533753.22 shall be promptly paid to Buyer by such Seller as they remain in are agreed by the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed applicable Parties or finally determined in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and If there are any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property funds remaining in the Indemnity Escrow Account to account after the Class B Sellers with each such Seller receiving such resolution of all previously outstanding Claim Notices, then Seller’s relative Pro Rata Share (as between themselves) Representatives and Buyer shall promptly jointly instruct Escrow Agent to release the remaining account balance to Seller’s Representatives in the proportions requested by Seller’s Representatives within three Business Days of its receipt of such Indemnity Escrow Propertyjoint instruction.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Qep Resources, Inc.)

Indemnity Escrow. (i) At or prior On the Closing Date, Buyer shall, pursuant to the ClosingIndemnity Escrow Agreement, Pubcodeposit with Xxxxx Fargo, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent National Association (the “Escrow Agent”), shall enter into an Escrow Agreement, effective ) as a holdback of a portion of the Effective TimePurchase Price, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) an amount equal to Seven Million Dollars (x$7,000,000) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow AccountAmount) and disbursed in accordance with ). Any payment that Seller is obligated to make to the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that Buyer Indemnified Group pursuant to Article IX shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement paid first from the Indemnity Escrow Account to PubcoAmount, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company Buyer and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written deliver instructions to the Escrow Agent pursuant to the Escrow Agreement directing that any such release)payment be so made. If the Indemnity Escrow Amount is insufficient to pay any such amounts, with respect Seller shall be obligated to each release make such payments to the Buyer Indemnified Group pursuant to, and subject to the limitations in, Article IX. On the date that is twelve (12) months from the Closing Date, Buyer shall instruct the Escrow Agent to distribute to Seller an amount (which shall not be less than zero) equal to (1) the remaining balance of the Indemnity Escrow Property Amount less (2) the amount of any claims for indemnification under Article IX asserted by Buyer prior to such date but not yet resolved (“Unresolved Claims”) less (3) an amount equal to Four Million Dollars ($4,000,000) (the Class B Sellers“Adjusted Escrow Amount”). On the date that is twenty four (24) months from the Closing Date, each such Seller Buyer shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, instruct the Escrow Agent to distribute to Seller an amount (which shall transfer not be less than zero) equal to (A) the remaining balance of the Adjusted Escrow Amount less (B) the amount of any Indemnity Unresolved Claims. The Adjusted Escrow Property remaining in Amount retained for Unresolved Claims shall be released by the Indemnity Escrow Account Agent (to the Class B Sellers with each extent not utilized to pay the Buyer Indemnified Group for any such Seller receiving such Seller’s relative Pro Rata Share (as between themselvesclaims resolved in favor of the Buyer Indemnified Group) upon resolution of such Indemnity claims in accordance with Article IX, and Buyer and Seller shall deliver instructions to the Escrow PropertyAgent pursuant to the Escrow Agreement directing that any such payment be so made.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Atmos Energy Corp)

Indemnity Escrow. (i) At In order to provide security for Seller’s indemnification obligations under this Article 11 and Seller’s special warranty granted in the Assignment and Xxxx of Sale, the Indemnity Escrow shall be held by Escrow Agent, and disbursed by Escrow Agent after the Closing in accordance with this Section 11.7 and the Escrow Agreement. With respect to each claim for indemnification asserted by Purchaser against Seller pursuant to this Article 11 or prior special warranty claim asserted by Purchaser pursuant to the Closing, Pubco, Assignment and Xxxx of Sale and Section 3.1(c) during the Seller Representative period from and American Stock Transfer & Trust Company after the Closing Date up to the date that is twelve (or such other escrow agent mutually acceptable to Purchaser and 12) months following the Company), as escrow agent Closing Date (the “Escrow AgentTermination Date”), upon final resolution or determination of such an indemnity or special warranty claim by the Parties or in accordance with Section 11.4, as applicable, Purchaser and Seller shall enter into an jointly instruct Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory Agent to disburse to Purchaser and the Company (the “Escrow Agreement”)amount set forth in such joint instruction, pursuant to which Pubco shall cause to will be delivered to the Escrow Agent a number that portion of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Accountbeing held in the Escrow Account as would satisfy such finally resolved or determined indemnity or special warranty claim. On the Escrow Termination Date, the “Indemnity Escrow Shares”) Seller shall be entitled to be held, along with any other dividends, distributions or other income on receive the Indemnity Escrow Shares, balance as of such time and such amount shall be automatically distributed to Seller pursuant to the terms of the Escrow Agreement (and Purchaser and Seller shall jointly instruct Escrow Agent to take any necessary actions in each case, as long as they remain in order to accomplish the foregoing). If there are remaining amounts due by Seller to Purchaser pursuant to the indemnity obligations under this Article 11 after the Indemnity Escrow Account (together with balance is exhausted, then such amounts shall be promptly paid to Purchaser by Seller as they are agreed by the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Parties or finally determined in accordance with the terms of this Agreement and the Escrow Agreement. The portion To the extent that Purchaser asserts any Damages for which it believes it is entitled to indemnification pursuant to this Article 11 or any special warranty claims pursuant to the Assignment and Xxxx of the Class B Exchange Shares that Sale and Section 3.1(c), Purchaser shall be withheld at the Closing for deposit in pursue such claims against the Indemnity Escrow Accountfirst, and Seller shall not have any disbursement from personal liability for such claims unless and until the Indemnity Escrow Account to Pubcois exhausted, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (and then only as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom further limited in accordance with the terms and conditions of this Agreement Agreement. On the date that is six (6) months following the Closing Date, Seller and Purchaser shall jointly instruct the Escrow Agreement. Each Class B Agent to disburse to Seller shall have the right to vote such Seller’s relative Pro Rata Share fifty percent (as between themselves50%) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price balance as of the Expiration Date) equal such time, excluding those amounts attributable to the aggregate amount any claim for indemnification asserted as of the Pending Claims set forth in the Claim Notice provided such date by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid against Seller pursuant to this Article 11 or special warranty claim asserted by Purchaser pursuant to the provisions Assignment and Xxxx of Article IX. After the Expiration Date, to the extent Sale and Section 3.1(c) that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (has not been previously satisfied as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertydate.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Callon Petroleum Co)

Indemnity Escrow. (ia) At or In the event the Newco Indemnitees shall have, prior to the Closingexpiration of the applicable survival period under Section 8.4(h), Pubcodelivered a notice of a claim (a “Pending Claim”) in respect of indemnification under this Agreement (including for the avoidance of doubt, a claim arising under Section 8.6), and any payment pursuant to Section 2.7 to the Seller Representative and American Stock Transfer & Trust Company (or Stockholder Representative, such other escrow agent mutually acceptable to Purchaser Newco Indemnitees and the Company), as escrow agent (the “Escrow Agent”), Stockholder Representative shall enter into an Escrow Agreement, effective as of the Effective Time, negotiate in form and substance reasonably satisfactory good faith to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to reach agreement upon (x) fifteen percent (15%) the Newco Indemnitees’ right to indemnification hereunder and the amount of the estimated Exchange Consideration, divided by such Newco Indemnitees’ Damages and (y) the Redemption Price otherwise issuable amount on deposit in the Indemnity Escrow Account that should be reserved (the “Reserve Amount”) in respect of such Pending Claim prior to resolution of the matters in respect thereof described in clause (x). If such Persons are unable so to reach agreement, then any such dispute shall, subject to the Sellers at terms of this Agreement, be resolved by litigation in an appropriate court of competent jurisdiction. Pending a resolution of the Reserve Amount in respect of any claim, the Reserve Amount therefor shall be the amount in good faith estimated by the Newco Indemnitees based on back-up documentation containing such detail as is reasonable under the circumstances. (b) Upon the agreement by the Stockholder Representative and the Newco Indemnitees or as finally determined by a court of competent jurisdiction in respect of any Pending Claim, the Stockholder Representative and the Surviving Corporation shall jointly instruct the Escrow Agent under the Indemnity Escrow Agreement to pay to the Surviving Corporation the lesser of (x) the amount of such Damages and (y) the balance then on deposit in the Indemnity Escrow Account. (c) On the eighteen (18) month anniversary of the Closing based Date, and upon request by the Stockholder Representative from time to time thereafter until the thirty-six (36th) month anniversary of the Closing or until such earlier time as there are no funds remaining on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain deposit in the Indemnity Escrow Account, the “Indemnity Stockholder Representative and the Surviving Corporation shall instruct the Escrow Shares”) to be held, along with any other dividends, distributions or other income on Agent under the Indemnity Escrow Shares, in each caseAgreement to pay to the holders of Company Preferred Stock, as long as they remain Additional Preferred Stock Consideration, the amount by which (x) the funds remaining on deposit in the Indemnity Escrow Account exceed (together with y) the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account sum of $7,500,000 (the “Indemnity Escrow AccountInitial Survival Amount”) and disbursed in accordance with the terms aggregate amount of this Agreement and all unpaid Reserve Amounts at such time. (d) On the Escrow Agreement. The portion thirty-six (36) month anniversary of the Class B Exchange Shares that shall be withheld at Closing Date, and upon request by the Stockholder Representative from time to time thereafter until the forty-second (42nd) month anniversary of the Closing for Date or until such earlier time as there are no funds remaining on deposit in the Indemnity Escrow Account, the Stockholder Representative and any disbursement from the Surviving Corporation shall instruct the Escrow Agent under the Indemnity Escrow Agreement to pay to the holders of Company Preferred Stock, as Additional Preferred Stock Consideration, the amount by which (x) the funds remaining on deposit in the Indemnity Escrow Account to Pubco, shall be allocated between exceed (y) the Class B Sellers based on each such Seller’s relative Pro Rata Share sum of $4,000,000 (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d“Late Survival Amount”) and the obligations aggregate amount of all unpaid Reserve Amounts at such time. (e) On the forty-second (42) month anniversary of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company Closing Date, and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated upon request by the Parties as an adjustment Stockholder Representative from time to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares thereafter until there are held no funds remaining on deposit in the Indemnity Escrow Account, subject the Stockholder Representative and the Surviving Corporation shall instruct the Escrow Agent under the Indemnity Escrow Agreement to pay to the retention holders of any dividendsCompany Preferred Stock, distributions and other earnings thereon as Additional Preferred Stock Consideration, the amount by which (x) the funds remaining on deposit in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share exceed (as between themselvesy) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until all unpaid Reserve Amounts at such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertytime.

Appears in 1 contract

Samples: Merger Agreement (Blue Ridge Paper Products Inc)

Indemnity Escrow. (i) At or prior to On the ClosingClosing Date, PubcoPurchaser, on behalf of the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”)Selling Subsidiaries, shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered pay to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”)immediately available funds, in a segregated escrow separately identified account (apart from the TSA Escrow Amount) designated by the Escrow Agent, an amount equal to $2,000,000 (the “Indemnity Escrow AccountAmount) and disbursed ), in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that Any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement paid first from the Indemnity Escrow Account Amount. On each of the first and second anniversaries of the Closing Date, the Indemnity Escrow Agent shall release $500,000 of the Indemnity Escrow Amount to PubcoSeller, provided that, if one or more claims for indemnification are then pending or have been asserted, the amount of the escrow that shall be allocated between the Class B Sellers based on released to Seller at each such time shall be an amount equal to the difference between $500,000 and the amount of all such claims then pending or asserted which have not been reserved against by retaining prior escrow amounts. On the third anniversary of the Closing Date, the Escrow Agent shall release the remainder (if any) of the Indemnity Escrow Amount to Seller’s relative Pro Rata Share , except that the Escrow Agent shall retain an amount equal to the amount of claims for indemnification under this Article X asserted prior to such 3 year anniversary but not yet resolved (as between themselves“Unresolved Claims”). The Indemnity Escrow Shares Amount retained for Unresolved Claims shall serve as be released by the sole and exclusive source Indemnity Escrow Agent (to the extent not utilized to pay Purchaser for any such claims resolved in favor of payment of Purchaser) upon their resolution in accordance with this Article X. The Indemnity Escrow Amount shall constitute collateral security for the obligations of the Sellers Seller under Section 2.5(d) and the obligations of the Indemnitors pursuant to this Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement X; and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversaryAgent shall, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction pursuant to the Escrow Agent directing the release of the First Released Escrow Property (if any) Agreement, agree to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith act as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Propertycollateral agent for Purchaser.

Appears in 1 contract

Samples: Asset Purchase Agreement (Global Crossing LTD)

Indemnity Escrow. (i) At or prior to To secure the ClosingStockholders’ performance of their indemnity obligations under this Article VII, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other Parent shall deposit with an independent escrow agent mutually acceptable to Purchaser and be agreed to by the Company), as escrow agent parties (the “Escrow Agent”), shall enter (i) the Escrow Shares, and (ii) the Escrow Cash Amount (collectively with the Escrow Shares, the “Escrow”), pursuant to the terms and conditions of a customary escrow agreement to be agreed upon by the parties prior to the Closing and to be entered into an Escrow Agreement, effective as of the Effective TimeClosing Date by and among Parent, in form and substance reasonably satisfactory to Purchaser Company, the Stockholders and the Company Escrow Agent (the “Escrow Agreement”), pursuant to which Pubco . Parent shall cause to be delivered to the Escrow Agent a number to deliver to the Stockholders any portion of Class B Exchange Shares the Escrow (each valued at i) remaining after the Redemption Priceapplication of any setoff pursuant to Section 7.4(e) equal and (ii) not then subject to any Payable Claim or Unresolved Claim, as follows (x) fifteen after final resolution of the working capital adjustment pursuant to Section 1.7(e), the Escrow Cash Amount, (ii) on the first anniversary of the Closing Date, fifty percent (1550%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in and (iii) on the Indemnity Escrow Account eighteen (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (1218) month anniversary of the Closing Date (Date, any remaining portion of the Escrow Shares, if any. Any portion withheld at such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives time in respect of an Unresolved Claim shall give joint written instruction be promptly delivered to the Stockholders after such claim for indemnification of Losses has ceased to be an Unresolved Claim and has not matured into a Payable Claim. The Escrow Agent directing Shares will be issued in the release name of the First Released Escrow Property (if any) Stockholders upon issuance in connection with a Subsequent Payment, and unless and until released to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made Parent in accordance with this Article IX hereof on or prior VII, the Stockholders shall have the sole and exclusive right to exercise any and all voting and consensual rights and powers from and after such date, and shall be entitled to receive and retain any and all cash dividends. For income tax purposes, the Expiration Date that remains unresolved at Stockholders shall be deemed the time and are still contested by an Indemnitee in good faith as owner of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based and the Stockholders will be responsible for paying all Taxes on any earnings associated with such issuance and ownership. The parties hereto acknowledge and agree that they will not treat any portion of a payment to the Pubco Share Price as Stockholders from the Escrow upon release (if ever) of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid amounts held pursuant to the provisions terms of Article IX. After the Expiration Date, this Section 7.4(f) as a payment of interest to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow SharesStockholders by Parent, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (except as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having otherwise required by a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyTaxing Authority.

Appears in 1 contract

Samples: Merger Agreement (Revolution Lighting Technologies, Inc.)

Indemnity Escrow. (i) At or prior Notwithstanding anything to the contrary contained in this Agreement, at the Closing, PubcoSeller shall be deemed to have received, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable is hereby deemed to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory have authorized Buyer to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to deposit with the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) an amount equal to (x) fifteen percent (15%) 50% of the estimated Exchange ConsiderationRetention Amount, divided by not to exceed $725,000.00 (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow SharesAmount”, and together with the Working Capital Escrow Amount, the “Escrow Amount”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, held in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated an escrow account (the “Indemnity Escrow Account”) to satisfy any indemnity claims against Seller pursuant to Section 6.2 (the “Indemnity Escrow Amount”). Twelve (12) months following the Closing Date, Buyer and disbursed Seller shall each instruct the Escrow Agent in writing, in accordance with the terms of this Agreement and the Escrow Agreement. The portion of , to release to Seller the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) balance of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property Amount remaining in the Indemnity Escrow Account (after giving effect to any previous deductions and/or payments to Buyer pursuant to the Class B Sellers with each Escrow Agreement and giving effect to any retention of the Indemnity Escrow Amount to satisfy any outstanding or unresolved claim as of such date, pursuant to the Escrow Agreement). Upon resolution of any claim for indemnification that shall have been asserted against Seller receiving and not resolved as of the date that is twelve (12) months following the Closing Date pursuant to Article VI and the Escrow Agreement, Buyer and Seller shall promptly (but in no event later than five (5) Business Days) following the date of such Seller’s relative Pro Rata Share resolution instruct the Escrow Agent to release the Indemnity Escrow Amount that was the subject of such claim to Buyer and/or Seller (as between themselvesapplicable, in accordance with such resolution) of such Indemnity pursuant to the Escrow PropertyAgreement.

Appears in 1 contract

Samples: Asset Purchase Agreement (BigCommerce Holdings, Inc.)

Indemnity Escrow. (ia) At or prior to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at On the Closing based Date, Purchaser shall, on the Estimated Closing Statement (such Class B Exchange Sharesbehalf of Seller, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in pay the Indemnity Escrow Account, the “Indemnity Amount to Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Agent in accordance with the terms of this Agreement and the escrow agreement, which will be executed at the Closing, by and among Purchaser, Seller and the Escrow Agent, in substantially the form attached hereto as Exhibit B, together with such changes as the Escrow Agent may reasonably request (the “Escrow Agreement”). (b) Subject to Section 10.5(c), any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X shall be paid, so long as the Indemnity Escrow Account is in effect, solely from the Indemnity Escrow Account, by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent within five (5) Business Days after the date notice of any sums due and owing is given to Seller (with a copy to the Escrow Agent) by the applicable Purchaser Indemnified Party and shall accordingly reduce the Indemnity Escrow Amount. On the first anniversary of the Closing Date, the Escrow Agent shall release up to 50% of the Indemnity Escrow Amount (as actually adjusted following the final determination of the Closing Working Capital pursuant to Section 3.3 and to the extent not utilized to pay Purchaser for any indemnification claim). On the second anniversary of the Closing Date, the Escrow Agent shall release up to the remaining balance of the Indemnity Escrow Amount (to the extent not (i) utilized to pay Purchaser for any indemnification claim or (ii) subject to Unresolved Claims (as defined below)) to Seller, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article X asserted prior to, as applicable, such first anniversary or second anniversary but not yet resolved (“Unresolved Claims”). The portion of the Class B Exchange Shares that Indemnity Escrow Amount retained for Unresolved Claims shall be withheld at released by the Closing Escrow Agent (to the extent not utilized to pay Purchaser for deposit any such claims resolved in favor of Purchaser) upon their resolution in accordance with this Article X and the Escrow Agreement. (c) Notwithstanding Section 10.5(a) above, (i) any payment Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article X with respect to any Losses that are not subject to the Cap, shall be paid first, to the extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account as provided above, and, second, to Pubcothe extent the Indemnity Escrow Amount has been released to Seller or is insufficient to pay any remaining sums due, then Seller shall be allocated between required to pay all of such additional sums due and owing to the Class B Sellers based on each Purchaser Indemnified Parties by wire transfer of immediately available funds within five (5) Business Days after the date of such Seller’s relative Pro Rata Share notice, and (as between themselves). The Indemnity Escrow Shares shall serve as ii) in the sole and exclusive source case of any payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors Seller is obligated to make to any Purchaser Indemnified Parties pursuant to this Article IX (other than X with respect to (A) Fraud Claims or (B) any indemnification claims for breach Losses that are subject to the Cap but are properly claimed after the remaining balance of any Company and Seller Fundamental Representationsthe Indemnity Escrow Account has been released to Seller, for which the Main Seller shall be solely responsiblerequired to pay all of such additional sums due and owing to the Purchaser Indemnified Parties by wire transfer of immediately available funds within five (5) Business Days after the date of such notice (provided, that the aggregate amount of all payments by Seller described in this clause (ii). Unless otherwise required by Law, plus all distributions payments made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment with respect to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares Losses that are held in the Indemnity Escrow Account, subject to the retention of any dividendsCap, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to exceed the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”Cap), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: LLC Membership Interest Purchase Agreement (Fushi International Inc)

Indemnity Escrow. (ia) At or prior to the Upon Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), Buyer shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered deliver to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) an amount equal to Three Million Dollars (x$3,000,000.00) fifteen percent (15%pursuant to Section 8.3(d) of to be held in the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement Escrow Account (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Accountamount, the “Indemnity Escrow SharesAmount) to be held). Without limiting Sellers’ indemnity obligations under Section 12.2, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in Amount will provide a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. The portion of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and non-exclusive source of payment of the funds to satisfy any Liabilities incurred or sustained by Buyer or its Affiliates arising from any Third Party Claims that Sellers have obligations of the Sellers to indemnify under Section 2.5(d) and 12.2. To the obligations of the Indemnitors pursuant extent that Buyer desires to Article IX (other than with respect to (A) Fraud Claims or (B) apply any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) portion of the Indemnity Escrow Shares during Amount to satisfy any such Liabilities, Buyer shall promptly notify Sellers of the time same and within three Business Days of its receipt of Buyer’s notice, Sellers will notify Buyer of their election to either (i) satisfy such Indemnity Escrow Shares are held in Liabilities out of the Indemnity Escrow Account, subject to in which case the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller Parties shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give provide joint written instructions to the Escrow Agent directing to remit an amount necessary to satisfy such release)Liabilities from the Escrow Account to the Person(s) claiming the same or (ii) pay to a court of competent jurisdiction an amount equal to the amount of such Liabilities, with respect in which case the Parties shall provide joint written instructions to each the Escrow Agent to remit such amount to such court from the Escrow Account and Sellers shall thereafter be responsible for prosecuting any and all claims relating thereto at their sole cost and expense. (b) On the date that is ninety (90) days following the Closing Date, the Parties shall instruct the Escrow Agent to release to Sellers the positive difference between the existing amount of the Indemnity Escrow Property Amount and the sum of (i) the aggregate amount of all unsatisfied claims for indemnification that Buyer has made on or before such date pursuant to this Article XII and which are to be satisfied (in whole or in part) from the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAmount and (ii) 50% of the Indemnity Escrow Amount. Promptly after Notwithstanding the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewithforegoing, on the date that is one hundred eighty (180) days following the Closing Date, the Parties shall instruct the Escrow Agent shall transfer any to release to Sellers the balance of the Indemnity Escrow Property Amount remaining in the Indemnity Escrow Account less the aggregate amount of all unsatisfied claims for indemnification that Buyer has made on or before such date pursuant to this Article XII to Sellers. Notwithstanding anything herein to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (contrary, the Defect Escrow Amount shall remain in escrow until released pursuant to Section 3.5(a) or Section 3.6, as between themselves) of such Indemnity Escrow Propertyapplicable.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Rosehill Resources Inc.)

Indemnity Escrow. (i) At or prior Any payment the Selling Stockholders are obligated to make to any Purchaser Indemnified Parties pursuant to this Article VIII shall be paid first, to the Closing, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares extent there are exchanged or converted, in each case, as long as they remain sufficient funds in the Indemnity Escrow Account, by release of funds to the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in Purchaser Indemnified Parties from the Indemnity Escrow Account (together with by the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed Agent in accordance with the terms of this Agreement and the Escrow Agreement. The To the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Selling Stockholders shall be required to jointly and severally pay all of such additional sums due and owing to the applicable Purchaser Indemnified Party by wire transfer of immediately available funds within five (5) Business Days after the date of such notice. Eighteen (18) months following the Closing Date, the Escrow Agent shall release the Indemnity Escrow Amount (to the extent not utilized to pay any Purchaser Indemnified Parties for any indemnification claim) to the Stockholder Representative (for distribution to the Selling Stockholders in accordance with their respective pro rata portion of the Class B Exchange Shares Purchase Price), except that the Escrow Agent shall be withheld at retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article VIII asserted within eighteen (18) months following the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share Date but not yet resolved (as between themselves“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent (to the Class B Sellers (extent no utilized to pay Purchaser Indemnified Parties for any such claims resolved in favor thereof) upon their resolution in accordance with this Article VIII and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the terms of the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Deep Down, Inc.)

Indemnity Escrow. On the Closing Date, Parent shall, on behalf of Seller, deliver to U.S. Bank, National Association, as agent to Parent and Seller (ithe "Escrow Agent"), to an account designated by the Escrow Agent, an amount in immediately available funds equal to $3.5 million (the "Cash Escrow Amount") At or prior and that number of shares of Parent Common Stock equal to the Closing, Pubco, quotient of $6.5 million divided by the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent Closing Share Price (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form "Escrowed Shares" and substance reasonably satisfactory to Purchaser and the Company (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Cash Escrow Amount, the "Indemnity Escrow Shares, the “Indemnity Escrow Property”Amount"), in a segregated escrow account (the “Indemnity Escrow Account”) and disbursed in accordance with the terms of this Agreement and the Escrow Agreement in substantially the form attached hereto as Exhibit A, which will be executed at the Closing, by and among Parent, Seller and the Escrow Agent (the "Escrow Agreement"). The portion of the Class B Exchange Shares that Any payment Seller is obligated to make to any Parent Indemnified Parties pursuant to Article X shall be withheld at paid, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Parent Indemnified Parties from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom Agent in accordance with the terms and conditions set forth in the Escrow Agreement. The Escrow Agent shall release the Indemnity Escrow Amount (to the extent not utilized to pay Purchaser for any indemnification claim) to Seller in accordance with the terms set forth in the Escrow Agreement. The Indemnity Escrow Amount retained by the Escrow Agent for any claims for indemnification under Article X asserted but not settled before the applicable release date under the Escrow Agreement ("Unresolved Claims") shall be released by the Escrow Agent (to the extent not utilized to pay Purchaser for any such claims resolved in favor of this Agreement Purchaser) upon their resolution in accordance with Article X and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property.

Appears in 1 contract

Samples: Asset Purchase Agreement (Darling International Inc)

Indemnity Escrow. (i) At or prior to On the ClosingClosing Date, Pubco, the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent shall deposit with First National Bank of Omaha (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as of the Effective Time, in form and substance reasonably satisfactory agent to Purchaser and the Company Stockholder Representation (the “Escrow Agreement”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) on behalf of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”Selling Stockholders), in a segregated escrow immediately available funds, to the account designated by the Escrow Agent, and amount equal to $5,000,000.00 (the “Indemnity Escrow AccountAmount) and disbursed ), in accordance with the terms of this Agreement and the Escrow Agreement, which will be executed at the Closing, by and among Purchaser, the Stockholder Representative and the Escrow Agent (the “Escrow Agreement”). The portion of Any payment the Class B Exchange Shares that Selling Stockholders are obligated to make to any Purchaser Indemnified Parties pursuant to this Article VIII shall be withheld at paid first, to the Closing for deposit extent there are sufficient funds in the Indemnity Escrow Account, and any disbursement by release of funds to the Purchaser Indemnified Parties from the Indemnity Escrow Account by the Escrow Agent in accordance with the terms of the Escrow Agreement and shall accordingly reduce the Indemnity Escrow Amount and, second, to Pubcothe extent the Indemnity Escrow Amount is insufficient (and such claims are not subject to the Cap limitation under Section 8.4(c)) to pay any remaining sums due, then the Selling Stockholders shall be allocated between required to pay all of such additional sums due and owing to the Class B Sellers based on each applicable Purchaser Indemnified Party by wire transfer of immediately available funds within five (5) Business Days after the date of such Seller’s relative Pro Rata Share notice. On the first (as between themselves1st) anniversary of the Closing Date, the Escrow Agent shall release the Indemnity Escrow Amount (to the extent not utilized to pay any Purchaser Indemnified Parties for any indemnification claim) to the Stockholder Representative (for distribution to the Selling Stockholders in accordance with their respective pro rata portion of the Purchase Price), except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article VIII asserted prior to such first (1st) anniversary but not yet resolved (“Unresolved Claims”). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Amount retained for Unresolved Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed released by the Escrow Agent (to the Class B Sellers (extent not utilized to pay Purchaser Indemnified Parties for any such claims resolved in favor thereof) upon their resolution in accordance with this Article VIII and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the terms of the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyAgreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (DXP Enterprises Inc)

Indemnity Escrow. (ia) At or prior Notwithstanding anything in this Section 2 to the Closingcontrary, Pubco, Parent shall withhold fifteen percent (15%) of the Seller Representative and American Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent total Merger Consideration (the “Indemnity Escrow AgentAmount”), shall enter into an Escrow Agreement, effective as of . At the Effective Time, in form and substance reasonably satisfactory full payment of the applicable portion of the Merger Consideration otherwise payable to Purchaser and Indemnity Escrow Participants, Parent shall deliver the Company Indemnity Escrow Amount to the Escrow Agent, who shall place the Indemnity Escrow Amount into an account (the “Escrow Account”) pursuant to an escrow agreement dated the Closing Date (the “Escrow Agreement”), pursuant among Parent, the escrow agent (selected by Parent and, acceptable to which Pubco shall cause to be delivered to Company (the Escrow Agent a number Agent”)), and Company Stockholders’ Representatives substantially in the form of Class B Exchange Shares Exhibit H hereto (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange SharesIndemnity Escrow Amount, together with any equity securities paid the January 19 Option Escrow Amount and the Holdback Option Cash Payment, being referred to as dividends or distributions with respect the “Escrow Amount”). The funds in the Escrow Account shall thereafter be released to such shares or into which such shares are exchanged or convertedIndemnity Escrow Participants, in each caseJanuary 19 Option Holders and Executives, as long the case may be only as they remain provided in the Indemnity Escrow Account, the “Indemnity Escrow Shares”Sections 2.1.4.5(b) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account and (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”c), in a segregated escrow account (the “Indemnity Escrow Account”Section 2.1.4.7(b) and disbursed in accordance with the terms of this Agreement Section 7 hereof and the Escrow Agreement. The portion . (b) Notwithstanding the foregoing, subject to the terms and conditions of the Class B Exchange Shares that shall be withheld at Escrow Agreement (including the Closing for deposit in retention of funds related to unresolved claims) on the Indemnity Escrow AccountAnniversary Date, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect an amount equal to (Ai) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselvesone-half ( 1/2) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are held in the Indemnity Escrow Account, subject to the retention of Amount minus (ii) any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) portion of the Indemnity Escrow Shares (together with any equity securities paid Amount already released to the Parent Parties as dividends or distributions with respect of such date, shall be released from the Escrow Account to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after Participants pro rata based on the twelve (12) month anniversary amount of the Closing Date (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction Merger Consideration that otherwise would have been payable to the Escrow Agent directing the release of the First Released Escrow Property (if any) to the Class B Sellers; (B) within three (3) Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to Participants at Closing but was deposited into the extent such claim is made after the Expiration Date; provided, however, with Escrow Account in respect to any indemnification claim made in accordance with Article IX hereof on or prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect Amount. None of Parent, Merger Sub, Company, or Surviving Corporation shall be responsible to the Indemnity Escrow Sharesformer Company Stockholders, calculated based on the Pubco Share Price Warrant Holders, or Option Holders for any loss, damage, or expense such holders may suffer as a result of any action of the Expiration Date) equal to the aggregate amount of the Pending Claims set forth in the Claim Notice provided by the Purchaser Representative in accordance with Section 9.4 (as adjusted in accordance with Section 9.4(b)) shall remain in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims and payment of all indemnification obligations in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow PropertyCompany Stockholders’ Representatives.

Appears in 1 contract

Samples: Merger Agreement (Wellpoint Inc)

Indemnity Escrow. (i) At or prior to As a remedy for the indemnity set forth in Article VII, at the Closing, Pubco, the Seller Representative and American Parent shall deposit with Continental Stock Transfer & Trust Company (or such other escrow agent mutually acceptable to Purchaser and the Company), as escrow agent (the “Escrow Agent”), shall enter into an Escrow Agreement, effective as ) (or another escrow agent mutually agreed to by Parent and the Company) a number of the Effective Time, in form and substance reasonably satisfactory Initial Parent Shares having a value of $12,500,000 (using a value per share equal to Purchaser and the Company Trust Value Per Share) (the “Escrow AgreementEscrowed Indemnity Shares”), pursuant to which Pubco shall cause to be delivered to the Escrow Agent a number of Class B Exchange Shares (each valued at the Redemption Price) equal to (x) fifteen percent (15%) of the estimated Exchange Consideration, divided by (y) the Redemption Price otherwise issuable to the Sellers at the Closing based on the Estimated Closing Statement (such Class B Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, held in each case, as long as they remain in the Indemnity Escrow Account, the “Indemnity Escrow Shares”) to be held, along with any other dividends, distributions or other income on the Indemnity Escrow Shares, in each case, as long as they remain in the Indemnity Escrow Account (together with the Indemnity Escrow Shares, the “Indemnity Escrow Property”), in a segregated an escrow account (the “Indemnity Escrow Account”) and disbursed released therefrom (if applicable) from time to time to Parent in satisfaction of such indemnity, all in accordance with Article VII hereof and the terms and conditions of the Escrow Agreement. On or prior to the second (2nd) Business Day following the Indemnity Escrow Release Date, the Escrow Agent shall release to the Company Stockholders from the Escrow Account, in accordance with the terms of this Agreement and the Escrow Agreement. The portion , a number of Escrowed Indemnity Shares equal to the excess of the Class B Exchange Shares that shall be withheld at the Closing for deposit in the Indemnity Escrow Account, and any disbursement from the Indemnity Escrow Account to Pubco, shall be allocated between the Class B Sellers based on each such Seller’s relative Pro Rata Share (as between themselves). The Indemnity Escrow Shares shall serve as the sole and exclusive source of payment number of the obligations of the Sellers under Section 2.5(d) and the obligations of the Indemnitors pursuant to Article IX (other than with respect to (A) Fraud Claims or (B) any indemnification claims for breach of any Company and Seller Fundamental Representations, for which the Main Seller shall be solely responsible). Unless otherwise required by Law, all distributions made from the Escrowed Indemnity Escrow Account shall be treated by the Parties as an adjustment to the Exchange Consideration received by the Sellers pursuant to Article II hereof. Each Class B Seller shall be deemed to be the owner of such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares during the time such Indemnity Escrow Shares are then held in the Indemnity Escrow Account, subject to the retention of any dividends, distributions and other earnings thereon in the Indemnity Escrow Account until disbursed therefrom in accordance with over Escrowed Shares having a value (based on the terms and conditions of this Agreement and the Escrow Agreement. Each Class B Seller shall have the right to vote such Seller’s relative Pro Rata Share (as between themselves) of the Indemnity Escrow Shares (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted) during the time held in the Indemnity Escrow Account as Indemnity Escrow Shares. (ii) (A) Within three (3) Business Days after the twelve (12) month anniversary average of the Closing Date Price of Parent Common Stock for the ten (such anniversary, the “First Escrow Release Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of the First Released Escrow Property (if any10) to the Class B Sellers; (B) within three (3) consecutive Business Days after the twenty-four (24) month anniversary (such anniversary, the “Expiration Date”), the Purchaser Representative and Seller Representatives shall give joint written instruction to the Escrow Agent directing the release of all remaining Indemnity Escrow Property (if any) to the Class B Sellers; and (C) the Indemnity Escrow Property shall not be subject to any indemnification claim to the extent such claim is made after the Expiration Date; provided, however, with respect to any indemnification claim made in accordance with Article IX hereof on or immediately prior to the Expiration Date that remains unresolved at the time and are still contested by an Indemnitee in good faith as of the Expiration Date (any such claim, a “Pending Claim”), an amount of the Indemnity Escrow Property with a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price as of the Expiration Release Date) equal to the aggregate amount of the Pending Claims set forth unsatisfied or disputed claims for Losses specified in the Claim Notice provided by the Purchaser Representative claims notices properly delivered in accordance with Section 9.4 (as adjusted 7.3 on or prior to the Indemnity Escrow Release Date. Upon such release, the released Escrowed Indemnity Shares shall be issued to the Company Stockholders in accordance with Section 9.4(b)2.7(c) of the Company Disclosure Statement and the Escrow Agreement. Any Escrowed Indemnity Shares held with respect to any unresolved claims for indemnification shall remain continue to be held in the Indemnity Escrow Account until such time as such Pending Claim shall have been finally resolved and paid pursuant to the provisions of Article IX. After the Expiration Date, to the extent that the value of the remaining Indemnity Escrow Property (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) exceeds the aggregate amount of (a) resolved but unpaid claims in favor of an Indemnitee and (b) the Pending Claims set forth in the Claim Notice (as adjusted in accordance with Section 9.4(b)) submitted prior to the Expiration Date, an amount of Indemnity Escrow Property having a value (with respect to the Indemnity Escrow Shares, calculated based on the Pubco Share Price) equal to such excess shall be promptly (and no later than three (3) Business Days) disbursed by the Escrow Agent to the Class B Sellers (and Purchaser Representative and Seller Representatives shall promptly give joint written instructions to the Escrow Agent directing such release), with respect to each release of the Indemnity Escrow Property to the Class B Sellers, each such Seller shall receive such Seller’s relative Pro Rata Share (as between themselves) of such Indemnity Escrow Property. Promptly after the final resolution of all Pending Claims such claims, and payment of all indemnification obligations upon such final resolution, shall be applied in connection therewith, the Escrow Agent shall transfer any Indemnity Escrow Property remaining in the Indemnity Escrow Account to the Class B Sellers with each such Seller receiving such Seller’s relative Pro Rata Share (as between themselves) satisfaction of such Indemnity Escrow Propertyclaim for indemnification and any amounts in excess of the amounts needed to satisfy such claims for indemnification shall be delivered in accordance with the preceding sentence.

Appears in 1 contract

Samples: Merger Agreement (Columbus Acquisition Corp)

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