Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.2, after the Closing, except as set forth in the following sentence, Acquiror's rights to indemnification shall be subject to the following limitations: (i) Acquiror shall be entitled to recover its Loss and Expense in respect of any Claim only if the Loss and Expense for all Claims exceeds, in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) and (ii) in no event shall the aggregate amount to be paid to Acquiror exceed the lesser of (x) the Escrow Indemnity Funds and (y) shares of Acquiror Stock having an aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose of the distribution from the Escrow Indemnity Funds) of Two Million Five Hundred Thousand Dollars ($2,500,000). The limitations in clause (i) of the first sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e) of this Agreement. (b) Anything in this Agreement, including without limitation the provisions of Sections 8.2 or 8.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement shall be the Escrow Indemnity Funds. On or before the Closing Date, Acquiror, the Company and the Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 (the "Escrow Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of the Escrow Indemnity Funds shall be made in accordance with the terms of the Escrow Agreement (it being hereby understood that for purposes of determining the number of shares of Acquiror Stock necessary to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx X. Xxxxxx, as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down to the nearest whole number. (c) In the event there are no Unresolved Claims (as defined in the Escrow Agreement), as soon as reasonably practicable and in any event not later than the fifth day after the expiration of the Escrow Indemnity Period, or the next business day thereafter if such fifth day is not a business day, the Escrow Indemnity Funds then remaining shall be distributed to the Stockholders (or their nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Merger Consideration) entitled thereto in accordance with their Proportionate Share (provided that cash in lieu of fractional shares will be distributed in accordance with Section 2.1(d) hereof). In the event one or more Unresolved Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, shares of Acquiror Stock, rounded to the nearest whole share, having a Market Price equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii) the amount reasonably estimated by Acquiror to cover the fees, expense and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Persons entitled thereto. Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror Stock, if any, shall be distributed to the Persons entitled thereto. Acquiror agrees to pursue with reasonable diligence the resolution of any Unresolved Claims existing after the expiration of the Escrow Indemnity Period (but the failure to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from the Escrow Indemnity Funds, except to the extent such failure prejudices the Agent's ability to defend against such Unresolved Claims).
Appears in 2 contracts
Samples: Merger Agreement (Iron Mountain Inc /De), Merger Agreement (Dauten Kent P)
Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.2, after the Closing, except as set forth in the following sentence, Acquiror's rights to indemnification shall be subject to the following limitations: (i) Acquiror shall be entitled to recover its Loss and Expense in respect of any Claim only if the Loss and Expense for all Claims exceeds, in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) and (ii) in no event shall the aggregate amount to be paid to Acquiror exceed the lesser of (xi) the Escrow Indemnity Funds and (yii) shares of Acquiror Stock having an aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose of the distribution from the Escrow Indemnity Funds) of Two Three Million Five Hundred Thousand Dollars ($2,500,0003,000,000). The limitations in clause (i) of the first sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e) of this Agreement.
(b) Anything in this Agreement, including without limitation the provisions of Sections 8.2 or 8.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement shall be the Escrow Indemnity Funds. On or before the Closing Date, Acquiror, the Company and the Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 (the "Escrow Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of the Escrow Indemnity Funds Fund shall be made in accordance with the terms of the Escrow Agreement (it being hereby understood that for purposes of determining the number of shares of Acquiror Stock necessary to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx Jaxxx X. Xxxxxx, Xx., as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down to the nearest whole number.
(c) In the event there are no Unresolved Claims (as defined in the Escrow Agreement), as soon as reasonably practicable and in any event not later than on the fifth day date which is ten (10) days after the expiration of the Escrow Indemnity Period, or the next business day thereafter if such fifth day date is not a business day, the Escrow Indemnity Funds then remaining shall be distributed to the Stockholders (or their nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Merger Consideration) entitled thereto in accordance with the proportions with their Proportionate Share ownership of Shares immediately prior to the Effective Time (provided that cash in lieu of fractional shares will be distributed in accordance with Section 2.1(d) hereof). In the event one or more Unresolved Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, shares of Acquiror Stock, rounded to the nearest whole shareshares, having a Market Price equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii) the amount reasonably estimated by Acquiror to cover the fees, expense and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Persons entitled thereto. Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror Stock, if any, shall be distributed to the Persons entitled thereto."
18. Acquiror agrees to pursue with reasonable diligence The Merger Agreement is hereby further amended by deleting Exhibit 8.3 thereto in its entirety and inserting in lieu thereof a new Exhibit 8.3 thereto substantially in the resolution form of any Unresolved Claims existing after the expiration Exhibit 8.3 hereto.
19. Article 10 of the Escrow Indemnity Period (but Merger Agreement is hereby amended by adding the failure following new definitions to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from appear in the Escrow Indemnity Funds, except to Merger Agreement in alphabetical order with the extent such failure prejudices the Agent's ability to defend against such Unresolved Claims).other definitions:
Appears in 1 contract
Samples: Agreement and Plan of Merger (Iron Mountain Inc /De)
Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.2, after the Closing, except as set forth in the following sentence, Acquiror's rights to indemnification shall be subject to the following limitations: (i) Acquiror shall be entitled to recover its Loss and Expense in respect of any Claim only if the Loss and Expense for all Claims exceeds, in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) and (ii) in no event shall the aggregate amount to be paid to Acquiror exceed the lesser of (x) the Escrow Indemnity Funds and (y) shares of Acquiror Stock having an aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose of the distribution from the Escrow Indemnity Funds) of Two Million Five Hundred Thousand Dollars ($2,500,000). The limitations in clause (i) of the first sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e) of this Agreement.
(b) Anything in this Agreement, including without limitation the provisions of Sections 8.2 or 8.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement shall be the Escrow Indemnity Funds. On or before the Closing Date, Acquiror, the Company and the Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 (the "Escrow Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of the Escrow Indemnity Funds shall be made in accordance with the terms of the Escrow Agreement (it being hereby understood that for purposes of determining the number of shares of Acquiror Stock necessary to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx X. Xxxxxx, as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down to the nearest whole number.
(c) In the event there are no Unresolved Claims (as defined in the Escrow Agreement), as soon as reasonably practicable and in any event not later than on the fifth day date which is ten (10) days after the expiration of the Escrow Indemnity Period, or the next business day thereafter if such fifth day date is not a business day, the Escrow Indemnity Funds then remaining shall be distributed to the Stockholders (or their nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Merger Consideration) entitled thereto in accordance with the proportions with their Proportionate Share (provided that cash in lieu ownership of fractional shares will be distributed in accordance with Section 2.1(d) hereof)Shares immediately prior to the Effective Time. In the event one or more Unresolved Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, shares of Acquiror Stock, rounded to cash in the nearest whole share, having a Market Price amount equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii) the amount reasonably estimated by Acquiror to cover the fees, expense and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Persons entitled thereto. Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror Stockcash, if any, shall be distributed to the Persons entitled thereto. Acquiror agrees to pursue with reasonable diligence the resolution of any Unresolved Claims existing after the expiration of the Escrow Indemnity Period (but the failure to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from the Escrow Indemnity Funds, except to the extent such failure prejudices the Agent's ability to defend against such Unresolved Claims).
Appears in 1 contract
Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.2Sections 8.2(a) and 8.3 above, after the Closing, except as set forth in the following sentence, Acquiroreach Party's rights to indemnification shall be subject to the following limitations: (i) Acquiror an indemnified party shall be entitled to recover its Loss and Expense in respect of any Claim only if the Loss and Expense for all Claims exceeds, exceeds $100,000 in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) and (ii) in no event shall the aggregate amount required to be paid by any Stockholder pursuant to Acquiror the provisions of this Article 8 exceed the lesser amount of (x) Cash Consideration received by such Stockholder or, in the Escrow Indemnity Funds case of the All Cash Shares, a portion of the aggregate All Cash Consideration equal to the ratio that the aggregate Cash Consideration bears to the aggregate Cash Consideration and Stock Consideration, and (yiii) shares in no event shall the aggregate amount required to be paid by Acquiror pursuant to the provisions of Acquiror Stock having an this Article 8 exceed the aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose amount of the distribution from the Escrow Indemnity Funds) of Two Million Five Hundred Thousand Dollars ($2,500,000). The limitations in clause (i) of the first sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e) of this AgreementStock Consideration.
(b) Anything in this Agreement, including without limitation the provisions of Sections 8.2 or 8.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement shall be the Escrow Indemnity Funds. On or before the Closing Date, Acquiror, the Company and the Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 8.4 (the "Escrow Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of the Escrow Indemnity Funds shall be made in accordance with the terms of the Escrow Agreement (it being hereby understood that for purposes of determining the number of shares of Acquiror Stock necessary to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx X. Xxxxxx, as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down to the nearest whole number.
(c) In the event there are shall be no Unresolved Claims (as defined in the Escrow Agreement)) pursuant to the provisions of this Agreement with respect to the Escrow Indemnity Funds, as soon as reasonably practicable and in any event not later than the fifth day after if any, existing at the expiration of the Escrow Indemnity Period, or the next business day thereafter if such fifth day is not a business day, the Escrow Indemnity Funds then remaining (together with any then existing interest or earnings) shall be distributed to the Stockholders (or their nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Merger Consideration) entitled thereto in accordance with their Proportionate Share (provided that cash proportionate ownership in lieu of fractional shares will be distributed in accordance with Section 2.1(d) hereof)the Company at the Effective Time. In the event one or more Unresolved such Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, shares of Acquiror Stock, rounded to the nearest whole share, having a Market Price equal to the sum of (i) the aggregate an amount of such Unresolved Claims and (ii) the amount Escrow Indemnity Funds reasonably estimated by Acquiror to cover the fees, expense and other costs (including reasonable counsel fees and expenses) which that will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Persons entitled thereto. Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror StockEscrow Indemnity Funds, if any, shall be distributed to the Persons entitled thereto. Acquiror agrees to pursue with reasonable diligence the resolution of any Unresolved Claims existing after the expiration of the Escrow Indemnity Period (but the failure to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from the Escrow Indemnity Funds, except to the extent such failure prejudices the Agent's ability to defend against such Unresolved Claims).
Appears in 1 contract
Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.2, after the Closing, except as set forth in the following sentence, Acquiror's rights to indemnification shall be subject to the following limitations: (i) Acquiror shall be entitled to recover its Loss and Expense in respect of any Claim only if to the extent the Loss and Expense for all Claims exceeds, in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) 200,000 and (ii) in no event shall the aggregate amount to be paid to Acquiror exceed the lesser of (x) the Escrow Indemnity Funds and (y) shares of Acquiror Stock having an aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose of the distribution from the Escrow Indemnity Funds) of Two Million Five Hundred Thousand Dollars ($2,500,000). The limitations in clause (i) of the first immediately preceding sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims claim pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e8.2(a)(iii) of this Agreement.
(b) Anything in this Agreement, including without limitation the provisions of Sections 8.2 or and 8.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement (other than under the Stockholders' Agreement and the Non-Competition Agreements) shall be to the Escrow Indemnity Funds. On or before the Closing Date, Acquiror, the Company Arcus Parties, the Stockholder Representative and the Escrow Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 8.3(b) (the "Escrow Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of the Escrow Indemnity Funds shall be made in accordance with the terms of the Escrow Agreement (it being hereby understood that for purposes of determining the number of shares of Acquiror Stock necessary to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx X. Xxxxxx, as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down to the nearest whole number.
(c) In the event there are no Unresolved Claims (as defined in the Escrow Agreement), as soon as reasonably practicable and in any event not later than on the fifth day after the expiration nine month anniversary of the Escrow Indemnity PeriodClosing Date, or the next business day thereafter if such fifth day date is not a business dayday (the "Initial Distribution Date"), an aggregate of $3,000,000 of the Escrow Indemnity Funds then remaining shall be distributed to the Stockholders Stockholder Representative for the benefit of each former holder of a Share Certificate and each former holder of a Warrant as follows: (i) to each former holder of a Share Certificate (or their his, her or its nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Cash Merger Consideration) entitled thereto an amount equal to $3,000,000 times a fraction, the numerator of which shall equal the value (calculated based on the Determination Price) of such former holder's Exchange Common Consideration and the denominator of which shall equal the Total Primary Equity Base, and (ii) to each former holder of a Warrant sold pursuant to a Warrant Purchase Agreement an amount equal to $3,000,000 times a fraction, the numerator of which shall equal the sum of the Warrant Purchase Price paid to such holder pursuant to a Warrant Purchase Agreement and the value (calculated based on the Determination Price) of such holder's Exchange Preferred Consideration and the denominator of which shall equal the Total Primary Equity Base, as more specifically set forth in accordance with their Proportionate Share (provided that cash in lieu of fractional shares will be distributed in accordance with Section 2.1(d) hereof)the Warrant Purchase Agreement. In the event one or more Unresolved Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon on the expiration of Initial Distribution Date, cash in the Escrow Indemnity Period, shares of Acquiror Stock, rounded to the nearest whole share, having a Market Price amount equal to the sum of (i) $5,000,000, (ii) the aggregate amount of such Unresolved Claims and (iiiii) the amount reasonably estimated by Acquiror to cover the fees, expense expenses and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Stockholder Representative for the benefit of the Persons entitled theretothereto in accordance with their proportionate interests, calculated in accordance with the first sentence of this Section 8.3(c). Upon the resolution of all such Unresolved Claims made prior to the Initial Distribution Date and the payment of all such fees, expenses and costs with respect thereto out of the Escrow Indemnity Funds, the balance of the cash, if any, so retained on the Initial Distribution Date shall be distributed to the Stockholder Representative for the benefit of the Persons entitled thereto in accordance with their proportionate interests, calculated in accordance with the first sentence of this Section 8.3(c). In the event there are no Unresolved Claims on the date which is one day after the expiration of the Escrow Indemnity Period, or the next business day if such date is not a business day, the Escrow Indemnity Funds then remaining shall be distributed to the Stockholder Representative for the benefit of each former holder of a Share Certificate (or his, her or its nominee or transferee, as set forth in the Transmittal Documents in respect of the Cash Merger Consideration) and each former holder of a Warrant sold pursuant to a Warrant Purchase Agreement in accordance with their proportionate interests, calculated in accordance with the first sentence of this Section 8.3(c). In the event one or more Unresolved Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, cash in the amount equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii) the amount reasonably estimated by Acquiror to cover the fees, expenses and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Stockholder Representative for the benefit of the Persons entitled thereto in accordance with their proportionate interests, calculated in accordance with the first sentence of this Section 8.3(c). Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror Stockcash, if any, shall be distributed to the Stockholder Representative for the benefit of the Persons entitled thereto. Acquiror agrees to pursue thereto in accordance with reasonable diligence their proportionate interests, calculated in accordance with the resolution first sentence of any Unresolved Claims existing after the expiration of the Escrow Indemnity Period (but the failure to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from the Escrow Indemnity Funds, except to the extent such failure prejudices the Agent's ability to defend against such Unresolved Claimsthis Section 8.3(c).
Appears in 1 contract
Limitation of Liability; Disposition of Escrow Indemnity Funds. (a) Notwithstanding the provisions of Section 8.29.2, after the Closing, except as set forth in the following sentence, Acquiror's rights to indemnification shall be subject to the following limitations: (i) Acquiror American shall be entitled to recover its Loss and Expense in respect of any Claim only if to the extent that the aggregate Loss and Expense for all Claims exceeds, in the aggregate, $150,000 (and then only to the extent in excess of such $150,000) and (ii) in no event shall the aggregate amount to be paid to Acquiror exceed the lesser of (x) the Escrow Indemnity Funds and (y) shares of Acquiror Stock having an aggregate Market Value (valued for such purpose at the Market Price at which such shares are valued for purpose of the distribution from the Escrow Indemnity Funds) of Two Million Five Hundred Thousand Dollars ($2,500,000). The limitations in clause (i) of the first sentence of this Section 8.3(a) shall not apply to Claims in respect of a breach by the Company of its representations and warranties in Section 3.12 of this Agreement or its obligations under Section 5.9(b) or 7.5 of this Agreement or to Claims pursuant to Section 8.2(c) or (d) or clause (ii) of Section 8.2(e) of this Agreement25,000.
(b) At the Effective Time, one or more certificates representing American Shares with an aggregate Current Market Price of $500,000 shall be withheld pro rata from the Company Stockholders from the Common Stock Consideration hereunder and shall be deposited (the "Escrow Indemnity Funds") with an escrow agent, reasonably satisfactory to the Company Stockholders and American, together with duly executed stock powers from the Company Stockholders, all pursuant to an escrow agreement satisfactory in form and substance to American and the Company Stockholders. Anything in this Agreement, including without limitation the provisions of Sections 8.2 9.2 or 8.3(a9.3(a), to the contrary notwithstanding, the exclusive recourse of Acquiror American with respect to Claims brought after the Effective Time arising out of the transactions contemplated by this Agreement shall be the Escrow Indemnity FundsFunds (including interest or other earnings thereon). On or before the Closing Date, Acquiror, the Company and the Agent shall execute and deliver an escrow agreement substantially in the form attached hereto as Exhibit 8.3 The Escrow Indemnity Funds may also be applied by American to reimburse American (the "Escrow AgreementAccounts Receivable Reimbursement")) for an amount equal to the excess, if any, of 98.5% of the aggregate face value of the Company's accounts receivable as of the Effective Date over the aggregate amount collected by American with respect to such accounts receivable within one hundred eighty (180) days after Closing. Any Claims American shall use the same procedures as it uses to collect is own accounts receivable to collect accounts receivable of Acquiror the Company; provided, however, that in no event shall American be obligated to use any extraordinary efforts to collect any of the accounts receivable of the Company or to refer any of such accounts receivable to a collection agency or to any attorney for indemnification to be satisfied out collection. In the event that American shall apply any portion of the Escrow Indemnity Funds to any Accounts Receivable Reimbursement and American shall be made in accordance thereafter collect any amounts with respect to the terms of the Escrow Agreement (it being hereby understood that Company accounts receivable for purposes of determining the number of shares of Acquiror Stock necessary which reimbursement was previously made, American shall add to satisfy such Claim, the Market Price of the Acquiror Stock calculated in accordance with the terms of the Escrow Agreement shall be used). At the Effective Time, a certificate registered in the name of Xxxx X. Xxxxxx, as Agent, representing the Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder and shall be deposited with the Escrow Agent. In accordance with the terms of the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary a cash dividends paid in respect of his or her Proportionate Share of Acquiror Stock that would otherwise be registered in his or her name but for such shares being a part of the Escrow Indemnity Funds and to vote and to give consents, waivers and ratifications in respect of his or her Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall cause to be delivered to such Stockholder such information (including, without limitation, any proxy statement and cards). The Agent shall vote the shares of Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the directions of the Stockholders. In order to take such vote, the Agent shall tabulate the votes it receives from the Stockholders and inform Acquiror in writing of the aggregate percent of all votes received for, against and in abstention with respect to each matter voted upon. Acquiror shall then convert such percent to number based on the then-existing Escrow Indemnity Funds, rounded in each case down amount equal to the nearest whole numberamount so collected.
(c) In the event there are shall be no Unresolved Claims (as defined in pursuant to the provisions of this Agreement with respect to the Escrow Agreement)Indemnity Funds, as soon as reasonably practicable and in any event not later than the fifth day after if any, existing at the expiration of the Escrow Indemnity Period, or the next business day thereafter if such fifth day is not a business day, the Escrow Indemnity Funds then remaining (together with any then existing interest or earnings) shall be distributed to the Stockholders (or their nominee or transferee, as set forth in the Transmittal Documents in respect of the Exchange Merger Consideration) Persons entitled thereto in accordance with their Proportionate Share (provided that cash in lieu of fractional shares will be distributed in accordance with Section 2.1(d) hereof)thereto. In the event one or more Unresolved such Claims with respect to the Escrow Indemnity Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period, shares American Shares with a Fair Market Value measured as of Acquiror Stock, rounded to the nearest whole share, having a Market Price date of such expiration equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii) the amount reasonably estimated by Acquiror American to cover the fees, expense and other costs (including reasonable counsel fees and expenses) which will be required to resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity Funds and the balance thereof, if any, shall be distributed to the Persons entitled thereto. Upon the resolution of all such Claims and the payment of all such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of the shares of Acquiror StockAmerican Shares, if any, shall be distributed to the Persons entitled thereto. Acquiror agrees to pursue with reasonable diligence the resolution of any Unresolved Claims existing after the expiration of the Escrow Indemnity Period (but the failure to so pursue such resolution shall not affect Acquiror's ability to recover its Losses and Expenses from the Escrow Indemnity Funds, except to the extent such failure prejudices the Agent's ability to defend against such Unresolved Claims).
Appears in 1 contract
Samples: Merger Agreement (American Radio Systems Corp /Ma/)
