Common use of Payment of Amount or Expense Clause in Contracts

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) is obligated to pay another Party (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 Amount”), the Fee Payor shall pay to the Fee Payee from the Section 9.3 Amount deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii), an amount equal to the Section 9.3 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount pursuant to this Section 9.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 2 contracts

Samples: Merger Agreement (Farmland Partners Inc.), Merger Agreement (American Farmland Co)

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Payment of Amount or Expense. (a) In the event that one Party (Eagles or the “Fee Payor”) Company is obligated to pay another Party the other the Break-up Fee pursuant to Section 8.2(b) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 Termination Amount”), Eagles or the Fee Payor Company (the “Payor”) shall pay to the Fee Payee other party (the “Payee”) from the Section 9.3 applicable Termination Amount deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Termination Amount and (ii) the sum of (1A) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Code Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Code Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(ACode 856(c)(3)(I) through (I) of the Code (“Qualifying Income”), as determined by the CompanyPayee’s independent certified public accountants, plus (2B) in the event the Fee Payee receives either (X1) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii8.4(b)(ii) or (B2) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii8.4(b)(ii), an amount equal to the Section 9.3 Termination Amount less the amount payable under clause (1A) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Termination Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.3(b)) as shall be mutually agreed upon by Eagles, the Company, Parent Company and the escrow agent. The payment or deposit into escrow of the Section 9.3 Termination Amount pursuant to this Section 9.4(a8.3(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee the such amount pursuant to Section 9.2(b), Section 9.2(c) 8.3 or Section 9.38.2(b), as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 Termination Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Code Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 Termination Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Code Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Termination Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Code Sections 856(c)(2) and (3) of the Code)), in which case the escrow agent shall release the remainder of the Section 9.3 Termination Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 8.4 at the request of the Fee Payee in order to (xA) maximize the portion of the Section 9.3 Termination Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Code Sections 856(c)(2) and (3) of the Code), (yB) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) 8.3(b), or (zC) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b8.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Termination Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement. (c) For the avoidance of doubt, the escrow provisions of clauses (a) and (b) of this Section 8.4 shall only apply at the election of the relevant Payee, such election to be made in its absolute discretion.

Appears in 2 contracts

Samples: Merger Agreement (Sunset Financial Resources Inc), Agreement and Plan of Merger (Sunset Financial Resources Inc)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party (the “Fee Payee”) Company the expenses Parent Termination Fee, plus the Parent Expenses and the Recovery Costs set forth in Section 9.3 (collectively7.3, the “Section 9.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (B) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs with an escrow agent selected by the Fee Payor Parent and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, 7.3 by wire transfer or bank checktransfer. (b) The escrow agreement shall provide that the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company’s outside counsel has rendered a legal opinion to the effect that the release of the remainder of the Parent Termination Fee, plus the Parent Expenses and the Recovery Costs (or portion thereof) from the escrow should not cause the Company to fail to qualify as a REIT, in which case the escrow agent shall release the remainder of the Parent Termination Fee, plus the Parent Expenses and the Recovery Costs (or portion thereof) to the Company, or (iii) a letter from the Company’s counsel indicating that the Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 Amount would Parent Termination Fee, plus the Parent Expenses and the Recovery Costs should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Recovery Costs that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The escrow agreement shall also provide that any portion of the Parent Termination Fee, plus the Parent Expenses and the Recovery Costs that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 9.3 Amount held in escrow for 7.4; provided, any portion of the Parent Termination Fee, plus the Parent Expenses and the Recovery Costs that remains unpaid as of December 31 following the date which is five years from the date of this Agreement shall be released by the escrow agent to the Fee PayorParent. The Fee Payor Parent shall not be a party to such escrow agreement and shall not bear any cost of or have liability Liability resulting from the escrow agreement. The Company shall fully indemnify Parent and hold Parent harmless from and against any such cost or Liability.

Appears in 1 contract

Samples: Merger Agreement (LaSalle Hotel Properties)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party (the Company the Parent Termination Fee Payee”) the expenses set forth in Section 9.3 (collectively7.3, the “Section 9.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the Section 9.3 Amount deposited into escrow in accordance with the next sentence, Parent Termination Fee an amount equal to the lesser of (i) the Section 9.3 Amount Parent Termination Fee and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (XA) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii) or 7.4(b), (B) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b) or (C) a letter from the Company’s independent certified public accountants indicating that the entire Parent Termination Fee is included in the Company’s income regardless of this Section 7.4(a), an amount equal to the Section 9.3 Amount Parent Termination Fee less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 Amount Parent Termination Fee with an escrow agent selected by the Fee Payor Parent and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount Parent Termination Fee pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, 7.3 by wire transfer or bank checktransfer. (b) The escrow agreement shall provide that the Section 9.3 Amount Parent Termination Fee in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i%4) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii%4) a letter from the Fee PayeeCompany’s counsel indicating that the Company’s outside counsel has rendered a legal opinion to the effect that the release of the remainder of the Parent Termination Fee Payee (or portion thereof) from the escrow should not cause the Company to fail to qualify as a REIT, in which case the escrow agent shall release the remainder of the Parent Termination Fee (or portion thereof) to the Company, or (%4) a letter from the Company’s counsel indicating that the Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 Amount Parent Termination Fee should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 Amount would Parent Termination Fee should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount Parent Termination Fee to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 Amount Parent Termination Fee that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The escrow agreement shall also provide that any portion of the Parent Termination Fee that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 9.3 Amount held in escrow for 7.4; provided, any portion of the Parent Termination Fee that remains unpaid as of December 31 following the date which is five years from the date of this Agreement shall be released by the escrow agent to the Fee PayorParent. The Fee Payor Parent shall not be a party to such escrow agreement and shall not bear any cost of or have liability Liability resulting from the escrow agreement. The Company shall fully indemnify Parent and hold Parent harmless from and against any such cost or Liability. (c) In the event that the Company is obligated to pay Parent the Company Termination Fee set forth in Section 7.3, the Company shall pay to Parent from the Company Termination Fee an amount equal to the lesser of (i) the Company Termination Fee and (ii) the sum of (1) the maximum amount that can be paid to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income, as determined by Parent’s independent certified public accountants, plus (2) in the event Parent receives either (A) a letter from Parent’s counsel indicating that Parent has received a ruling from the IRS described in Section 7.4(d), (B) an opinion from the Parent’s outside counsel as described in Section 7.4(d) or (C) a letter from Parent’s independent certified public accountants indicating that the entire Company Termination Fee is included in Parent’s income regardless of this Section 7.4(c), an amount equal to the Company Termination Fee less the amount payable under clause (1) above. To secure the Company’s obligation to pay these amounts, the Company shall deposit into escrow an amount in cash equal to the Company Termination Fee with an escrow agent selected by the Company and on such terms (subject to Section 7.4(d)) as shall be mutually agreed upon by Parent, the Company and the escrow agent. The payment or deposit into escrow of the Company Termination Fee pursuant to this Section 7.4(c) shall be made at the time the Company is obligated to pay Parent such amount pursuant to Section 7.3 by wire transfer. (d) The escrow agreement shall provide that the Company Termination Fee in escrow or any portion thereof shall not be released to Parent unless the escrow agent receives any one or combination of the following: (i) a letter from Parent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from Parent’s accountants revising that amount, in which case the escrow agent shall release such amount to Parent, (ii) a letter from Parent’s counsel indicating that the Parent’s outside counsel has rendered a legal opinion to the effect that the release of the remainder of the Company Termination Fee (or portion thereof) from the escrow more likely than not would cause Parent to fail to qualify as a REIT, in which case the escrow agent shall release the remainder of the Company Termination Fee (or portion thereof) to Parent, or (iii) a letter from Parent’s counsel indicating that Parent received a ruling from the IRS holding that the receipt by Parent of the Company Termination Fee more likely than not would either constitute Qualifying Income or be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that Parent’s outside counsel has rendered a legal opinion to the effect that the receipt by Parent of the Company Termination Fee should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Company Termination Fee to Parent. The Company agrees to amend this Section 7.4 at the request of Parent in order to (x) maximize the portion of the Company Termination Fee that may be distributed to Parent hereunder without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve Parent’s chances of securing a favorable ruling described in this Section 7.4(d) or (z) assist Parent in obtaining a favorable legal opinion from its outside counsel as described in this Section 7.4(d). The escrow agreement shall also provide that any portion of the Company Termination Fee that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 7.4; provided, any portion of the Company Termination Fee that remains unpaid as of December 31 following the date which is five years from the date of this Agreement shall be released by the escrow agent to the Company. The Company shall not be a party to such escrow agreement and shall not bear any cost of or have Liability resulting from the escrow agreement. Parent shall fully indemnify the Company and hold the Company harmless from and against any such cost or Liability.

Appears in 1 contract

Samples: Merger Agreement (Pebblebrook Hotel Trust)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party (the “Fee Payee”) Company the expenses Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs set forth in Section 9.3 (collectively7.3, the “Section 9.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (XA) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (B) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 Amount Parent Termination Fee, plus any Parent Expenses and the Parent Recovery Costs with an escrow agent selected by the Fee Payor Parent and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, 7.3 by wire transfer or bank checktransfer. (b) The escrow agreement shall provide that the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 Amount would Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount Parent Termination Fee, plus the Parent Expenses and the Parent Recovery Costs held in escrow for five years shall be released by the escrow agent to the Fee PayorParent. The Fee Payor shall not be a party to such escrow agreement and Parent shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 1 contract

Samples: Merger Agreement (Monogram Residential Trust, Inc.)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) is Parent Entities are obligated to pay another Party (the Parent Termination Fee Payee”) the expenses set forth in pursuant to Section 9.3 (collectively, the “Section 9.3 Amount”7.3(d), the Fee Payor Parent Entities shall pay to the Fee Payee Company from the Section 9.3 Amount applicable Parent Termination Fee deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (iA) the Section 9.3 Amount applicable Parent Termination Fee and (iiB) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2) or 856(c)(3)(A) through (I856(c)(3) of the Code ("Qualifying Income"), as determined by the Company’s 's independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee Payee’s Company's counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (BY) an opinion from the Fee Payee’s Company's outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 Amount applicable Parent Termination Fee less the amount payable under clause (1) above. To secure the Fee Payor’s Parent Entities' obligation to pay these amounts, the Fee Payor Parent Entities shall deposit into escrow an amount in cash equal to the Section 9.3 Amount applicable Parent Termination Fee with an escrow agent selected by the Fee Payor Company and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, the Parent Entities and the escrow agentagent as reflected in an escrow agreement among such parties, provided that the payment or deposit into escrow shall be at the Company's option. The payment or deposit into escrow of the Section 9.3 Amount applicable Parent Termination Fee pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor is Parent Entities are obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c7.3(d) or Section 9.3, as applicable, by wire transfer or bank checkof same day funds. (b) The escrow agreement shall provide that the Section 9.3 Amount applicable Parent Termination Fee in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s Company's independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code in such year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s Company's accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee Payee’s Company's counsel indicating that the Fee Payee Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 Amount should applicable Parent Termination Fee would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s Company's outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 Amount applicable Parent Termination Fee would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount applicable Parent Termination Fee to the Fee PayeeCompany. The Fee Payor agrees Parent Entities agree to amend this Section 9.4(b) 7.4 at the reasonable request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 Amount applicable Parent Termination Fee that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s Company's chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The Parent Entities shall be deemed to have satisfied its obligations pursuant to this Section 7.4 so long as it deposits into escrow agreement the applicable Parent Termination Fee , notwithstanding any delay or reduction in payment to the Company, and shall also provide that any have no further liability with respect to payment of the applicable Parent Termination Fee . The portion of applicable Parent Termination Fee that remains unpaid as of the Section 9.3 Amount held in escrow for five years end of a taxable year shall be released by paid as soon as possible during the escrow agent following taxable year, subject to the Fee Payorforegoing limitations of this Section 7.4. The Fee Payor Company shall not be a party to such escrow agreement fully indemnify the Parent Entities and shall not bear hold the Parent Entities harmless from and against any cost of liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or have liability incurred by it resulting directly or indirectly from the escrow agreement, including in connection with the Parent Entities' compliance with clauses (x), (y) and (z) of this Section 7.4(b).

Appears in 1 contract

Samples: Merger Agreement (Watermark Lodging Trust, Inc.)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party Parent the Company Termination Fee, plus any costs and expenses (including reasonable attorney’s fees and disbursements) that shall be paid by the Company to Parent in connection with a lawsuit commenced by Parent which results in a final, non-appealable judgment against the Company for the Company Termination Fee or any portion thereof, then the Company shall pay Parent its costs and expenses (in connection with such suit, together with interest on the Company Termination Fee at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of 365 days and the actual number of days elapsed, without compounding) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 AmountRecovery Costs”), the Fee Payor . The Company shall pay to the Fee Payee Parent from the Section 9.3 Amount Company Termination Fee, plus the Recovery Costs deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Amount Company Termination Fee, plus the Company Recovery Costs and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Parent without causing Parent to fail to meet the Fee Payee requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Disqualifying Income, as determined by Parent’s independent certified public accountants, plus (2) in the event Parent receives either (X) a letter from Parent’s counsel indicating that Parent has received a ruling from the IRS described in Section 8.4(b)(ii) or (B) an opinion from Parent’s outside counsel as described in Section 8.4(b)(ii), an amount equal to the Company Termination Fee, plus the Recovery Costs less the amount payable under clause (1) above. To secure the Company’s obligation to pay these amounts, the Company shall deposit into escrow an amount in cash equal to the Company Termination Fee, plus the Recovery Costs with an escrow agent selected by the Company and on such terms (subject to Section 8.4(d)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Company Termination Fee, plus the Recovery Costs pursuant to this Section 8.4(c) shall be made at the time the Company is obligated to pay Parent such amount pursuant to Section 8.3 by wire transfer. (b) The escrow agreement shall provide that the Company Termination Fee, plus the Recovery Costs in escrow or any portion thereof shall not be released to Parent unless the escrow agent receives any one or combination of the following: (i) a letter from the Parent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii), an amount equal to the Section 9.3 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount pursuant to this Section 9.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeParent’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeParent, or (ii) a letter from the Fee PayeeParent’s counsel indicating that the Fee Payee Parent received a ruling from the IRS holding that the receipt by the Fee Payee Parent of the Section 9.3 Amount Company Termination Fee plus the Recovery Costs should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.and

Appears in 1 contract

Samples: Merger Agreement (Cedar Realty Trust, Inc.)

Payment of Amount or Expense. (a) In the event that one Party AMLI (and AMLI LP if applicable) are obligated to pay to Purchaser the Break-Up Fee Payor”or the Purchaser Break-Up Expenses pursuant to Section 7.2(b) or Purchaser is obligated to pay another Party (to AMLI and AMLI LP the “Fee Payee”AMLI Break-Up Expenses pursuant to Section 7.2(c) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 "Break-Up Amount"), AMLI (and AMLI LP if applicable) or Purchaser, as applicable (the Fee Payor "Payor"), shall pay to the Fee Payee other party (the "Payee") from the Section 9.3 applicable Break-Up Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Break-Up Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A) through (I856(c)(3)(I) of the Code ("Qualifying Income"), as determined by the Company’s Payee's independent certified public accountants, plus (2) in the event the Fee Payee receives either (XA) a letter from the Fee Payee’s 's counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii7.6(b)(ii) or (B) an opinion from the Fee Payee’s 's outside counsel as described in Section 9.4(b)(ii7.6(b)(ii), an amount equal to the Section 9.3 Break-Up Amount less the amount payable under clause (1) above. To secure the Fee Payor’s 's obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Break-Up Amount with an escrow agent selected by the Fee Payor and on such customary terms (subject to Section 9.4(b7.6(b)) as shall be mutually agreed upon by the Companyreasonably acceptable to each of AMLI, Parent Purchaser and the escrow agent, provided that in the case where the Payor is AMLI and the Payee is Purchaser, the payment or deposit into escrow shall be at Purchaser's option. The payment or deposit into escrow of the Section 9.3 Break-Up Amount pursuant to this Section 9.4(a7.6(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c7.2(b) or Section 9.37.2(c), as applicable, by wire transfer or bank checkof immediately available funds. (b) The escrow agreement shall provide that the Section 9.3 Break-Up Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s 's independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s 's accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s 's counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 Break-Up Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s 's outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Break-Up Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Break-Up Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 7.6 at the reasonable request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Break-Up Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s 's chances of securing a favorable ruling described in this Section 9.4(b7.6(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.6(b). The escrow agreement shall also provide that any portion of the Section 9.3 Break-Up Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 1 contract

Samples: Merger Agreement (Amli Residential Properties Trust)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party (Parent the Break-up Fee Payee”pursuant to Section 8.2(b) or the Company or Parent is obligated to pay the other the expenses set forth in Section 9.3 (collectively6.4(c)(collectively, the “Section 9.3 8.2 Amount”), the Fee Payor Company or Parent (the “Payor”) shall pay to the Fee Payee other party (the “Payee”) from the applicable Section 9.3 8.2 Amount deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 8.2 Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the CompanyPayee’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii8.3(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii8.3(b)(ii), an amount equal to the Section 9.3 8.2 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 8.2 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.3(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 8.2 Amount pursuant to this Section 9.4(a8.3(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee the such amount pursuant to Section 9.2(b), Section 9.2(c6.4(c) or Section 9.38.2(b), as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 8.2 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.’s

Appears in 1 contract

Samples: Merger Agreement (Summit Properties Inc)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party the Parent Termination Fee pursuant to Section 7.3(c) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 7.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the applicable Section 9.3 7.3 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (iA) the Section 9.3 7.3 Amount and (iiB) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2) or 856(c)(3)(A) through (I856(c)(3) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (BY) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 7.3 Amount less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 7.3 Amount with an escrow agent selected by the Fee Payor Company and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agentagent as reflected in an escrow agreement among such parties, provided that the payment or deposit into escrow shall be at the Company’s option. The payment or deposit into escrow of the Section 9.3 7.3 Amount pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c7.3(c) or Section 9.3, as applicable, by wire transfer or bank checkof same day funds. (b) The escrow agreement shall provide that the Section 9.3 7.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code in such year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 7.3 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 7.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 7.3 Amount to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the reasonable request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 7.3 Amount that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.assist

Appears in 1 contract

Samples: Merger Agreement (BioMed Realty L P)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party the Parent Termination Amount pursuant to Section 7.3(c) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 7.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the applicable Section 9.3 7.3 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (iA) the Section 9.3 7.3 Amount and (iiB) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2) or 856(c)(3)(A) through (I856(c)(3) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (BY) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 7.3 Amount less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 7.3 Amount with an escrow agent selected by the Fee Payor Company and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agentagent as reflected in an escrow agreement among such parties, provided that the payment or deposit into escrow shall be at the Company’s option. The payment or deposit into escrow of the Section 9.3 7.3 Amount pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c7.3(c) or Section 9.3, as applicable, by wire transfer or bank checkof same day funds. (b) The escrow agreement shall provide that the Section 9.3 7.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code in such year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 7.3 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 7.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 7.3 Amount to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the reasonable request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 7.3 Amount that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The Parent shall be deemed to have satisfied its obligations pursuant to this Section 7.4 so long as it deposits into escrow agreement the Section 7.3 Amount, notwithstanding any delay or reduction in payment to the Company, and shall also provide that any portion have no further liability with respect to payment of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.7.3

Appears in 1 contract

Samples: Merger Agreement (QTS Realty Trust, Inc.)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party (Parent the Break-Up Fee Payee”pursuant to Section 8.2(b) or the Company or Parent is obligated to pay the other the expenses set forth in Section 9.3 8.3 (collectively, the “Section 9.3 8.2 Amount”), the Fee Payor Company or Parent (the “Payor”) shall pay to the Fee Payee other party (the “Payee”) from the applicable Section 9.3 8.2 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 8.2 Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A) through (I856(c)(3)(I) of the Code (“Qualifying Income”), as determined by the CompanyPayee’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (Xx) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii8.4(b)(ii) or (By) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii8.4(b)(ii), an amount equal to the Section 9.3 8.2 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 8.2 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 8.2 Amount pursuant to this Section 9.4(a8.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c) 8.3 or Section 9.38.2(b), as applicable, by wire transfer or bank check. In the case of a payment otherwise required to be made to Parent, the term “Payee” as used in clause (ii) of the first sentence of this Section 8.4(a) or Section 8.4(b) shall include (where appropriate) any direct or indirect equity owner in Parent. (b) The escrow agreement shall provide that the Section 9.3 8.2 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 8.2 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 8.2 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 8.2 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 8.4 at the reasonable request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 8.2 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b8.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b8.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 8.2 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 1 contract

Samples: Merger Agreement (Centerpoint Properties Trust)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party (Parent the Break-Up Fee Payee”pursuant to Section 8.2(b) or the Company or Parent is obligated to pay the other the expenses set forth in Section 9.3 8.3 (collectively, the "Section 9.3 8.2 Amount"), the Fee Payor Company or Parent (the "Payor") shall pay to the Fee Payee other party (the "Payee") from the applicable Section 9.3 8.2 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 8.2 Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A) through (I856(c)(3)(I) of the Code ("Qualifying Income"), as determined by the Company’s Payee's independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s 's counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii8.4(b)(ii) or (B) an opinion from the Fee Payee’s 's outside counsel as described in Section 9.4(b)(ii8.4(b)(ii), an amount equal to the Section 9.3 8.2 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s 's obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 8.2 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent, provided that in the case where the Payor is the Company and the Payee is Parent, the payment or deposit into escrow shall be at Parent's option. The payment or deposit into escrow of the Section 9.3 8.2 Amount pursuant to this Section 9.4(a8.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c) 8.3 or Section 9.38.2(b), as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 8.2 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s 's independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s 's accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s 's counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 8.2 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s 's outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 8.2 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.8.2

Appears in 1 contract

Samples: Merger Agreement (Capital Automotive Reit)

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Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party (Parent the Break-up Fee Payee”pursuant to Section 8.2(b) or the Company or Parent is obligated to pay the other the expenses set forth in Section 9.3 8.3 (collectively, the “Section 9.3 8.2 Amount”), the Fee Payor Company or Parent (the “Payor”) shall pay to the Fee Payee other party (the “Payee”) from the applicable Section 9.3 8.2 Amount deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 8.2 Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A) through (I856(c)(3)(I) of the Code (“Qualifying Income”), as determined by the CompanyPayee’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii8.4(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii8.4(b)(ii), an amount equal to the Section 9.3 8.2 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 8.2 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.3(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 8.2 Amount pursuant to this Section 9.4(a8.3(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee the such amount pursuant to Section 9.2(b), Section 9.2(c) 8.3 or Section 9.38.2(b), as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 8.2 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 8.2 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 8.2 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 8.2 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 8.4 at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 8.2 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b8.3(b) or (z) assist the Fee Payee Parent in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b8.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 8.2 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement. (c) For the avoidance of doubt, the escrow provisions of clauses (a) and (b) of this Section 8.4 shall only apply at the election of the relevant Payee, such election to be made in its absolute discretion.

Appears in 1 contract

Samples: Merger Agreement (CRT Properties Inc)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party (the Company the Parent Termination Fee Payee”) the expenses set forth in Section 9.3 (collectively7.3, the “Section 9.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the Section 9.3 Amount deposited into escrow in accordance with the next sentence, Parent Termination Fee an amount equal to the lesser of (i) the Section 9.3 Amount Parent Termination Fee and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (XA) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii) or 7.4(b), (B) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b) or (C) a letter from the Company’s independent certified public accountants indicating that the entire Parent Termination Fee is included in the Company’s income regardless of this Section 7.4(a), an amount equal to the Section 9.3 Amount Parent Termination Fee less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 Amount Parent Termination Fee with an escrow agent selected by the Fee Payor Parent and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount Parent Termination Fee pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, 7.3 by wire transfer or bank checktransfer. (b) The escrow agreement shall provide that the Section 9.3 Amount Parent Termination Fee in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeCompany’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeCompany, or (ii) a letter from the Fee PayeeCompany’s counsel indicating that the Company’s outside counsel has rendered a legal opinion to the effect that the release of the remainder of the Parent Termination Fee Payee (or portion thereof) from the escrow should not cause the Company to fail to qualify as a REIT, in which case the escrow agent shall release the remainder of the Parent Termination Fee (or portion thereof) to the Company, or (iii) a letter from the Company’s counsel indicating that the Company received a ruling from the IRS holding that the receipt by the Fee Payee Company of the Section 9.3 Amount Parent Termination Fee should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeCompany’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Company of the Section 9.3 Amount would Parent Termination Fee should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount Parent Termination Fee to the Fee PayeeCompany. The Fee Payor Parent agrees to amend this Section 9.4(b) 7.4 at the request of the Fee Payee Company in order to (x) maximize the portion of the Section 9.3 Amount Parent Termination Fee that may be distributed to the Fee Payee Company hereunder without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeCompany’s chances of securing a favorable ruling described in this Section 9.4(b7.4(b) or (z) assist the Fee Payee Company in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.4(b). The escrow agreement shall also provide that any portion of the Parent Termination Fee that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 9.3 Amount held in escrow for 7.4; provided, any portion of the Parent Termination Fee that remains unpaid as of December 31 following the date which is five years from the date of this Agreement shall be released by the escrow agent to the Fee PayorParent. The Fee Payor Parent shall not be a party to such escrow agreement and shall not bear any cost of or have liability Liability resulting from the escrow agreement. The Company shall fully indemnify Parent and hold Parent harmless from and against any such cost or Liability. (c) In the event that the Company is obligated to pay Parent the Company Termination Fee set forth in Section 7.3, the Company shall pay to Parent from the Company Termination Fee an amount equal to the lesser of (i) the Company Termination Fee and (ii) the sum of (1) the maximum amount that can be paid to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income, as determined by Parent’s independent certified public accountants, plus (2) in the event Parent receives either (A) a letter from Parent’s counsel indicating that Parent has received a ruling from the IRS described in Section 7.4(d), (B) an opinion from the Parent’s outside counsel as described in Section 7.4(d) or (C) a letter from Parent’s independent certified public accountants indicating that the entire Company Termination Fee is included in Parent’s income regardless of this Section 7.4(c), an amount equal to the Company Termination Fee less the amount payable under clause (1) above. To secure the Company’s obligation to pay these amounts, the Company shall deposit into escrow an amount in cash equal to the Company Termination Fee with an escrow agent selected by the Company and on such terms (subject to Section 7.4(d)) as shall be mutually agreed upon by Parent, the Company and the escrow agent. The payment or deposit into escrow of the Company Termination Fee pursuant to this Section 7.4(c) shall be made at the time the Company is obligated to pay Parent such amount pursuant to Section 7.3 by wire transfer. (d) The escrow agreement shall provide that the Company Termination Fee in escrow or any portion thereof shall not be released to Parent unless the escrow agent receives any one or combination of the following: (i) a letter from Parent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code for the relevant tax year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from Parent’s accountants revising that amount, in which case the escrow agent shall release such amount to Parent, (ii) a letter from Parent’s counsel indicating that the Parent’s outside counsel has rendered a legal opinion to the effect that the release of the remainder of the Company Termination Fee (or portion thereof) from the escrow more likely than not would cause Parent to fail to qualify as a REIT, in which case the escrow agent shall release the remainder of the Company Termination Fee (or portion thereof) to Parent, or (iii) a letter from Parent’s counsel indicating that Parent received a ruling from the IRS holding that the receipt by Parent of the Company Termination Fee more likely than not would either constitute Qualifying Income or be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that Parent’s outside counsel has rendered a legal opinion to the effect that the receipt by Parent of the Company Termination Fee should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Company Termination Fee to Parent. The Company agrees to amend this Section 7.4 at the request of Parent in order to (x) maximize the portion of the Company Termination Fee that may be distributed to Parent hereunder without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve Parent’s chances of securing a favorable ruling described in this Section 7.4(d) or (z) assist Parent in obtaining a favorable legal opinion from its outside counsel as described in this Section 7.4(d). The escrow agreement shall also provide that any portion of the Company Termination Fee that remains unpaid as of the end of a tax year shall be paid as soon as possible during the following tax year, subject to the foregoing limitations of this Section 7.4; provided, any portion of the Company Termination Fee that remains unpaid as of December 31 following the date which is five years from the date of this Agreement shall be released by the escrow agent to the Company. The Company shall not be a party to such escrow agreement and shall not bear any cost of or have Liability resulting from the escrow agreement. Parent shall fully indemnify the Company and hold the Company harmless from and against any such cost or Liability.

Appears in 1 contract

Samples: Merger Agreement (LaSalle Hotel Properties)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Company is obligated to pay another Party Parent the Company Termination Fee, plus any costs and expenses (including reasonable attorney’s fees and disbursements) that shall be paid by the Company to Parent in connection with a lawsuit commenced by Parent which results in a final, non-appealable judgment against the Company for the Company Termination Fee or any portion thereof, then the Company shall pay Parent its costs and expenses (in connection with such suit, together with interest on the Company Termination Fee at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of 365 days and the actual number of days elapsed, without compounding) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 AmountRecovery Costs”), the Fee Payor . The Company shall pay to the Fee Payee Parent from the Section 9.3 Amount Company Termination Fee, plus the Recovery Costs deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Amount Company Termination Fee, plus the Company Recovery Costs and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Parent without causing Parent to fail to meet the Fee Payee requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Disqualifying Income, as determined by Parent’s independent certified public accountants, plus (2) in the event Parent receives either (X) a letter from Parent’s counsel indicating that Parent has received a ruling from the IRS described in Section 8.4(b)(ii) or (B) an opinion from Parent’s outside counsel as described in Section 8.4(b)(ii), an amount equal to the Company Termination Fee, plus the Recovery Costs less the amount payable under clause (1) above. To secure the Company’s obligation to pay these amounts, the Company shall deposit into escrow an amount in cash equal to the Company Termination Fee, plus the Recovery Costs with an escrow agent selected by the Company and on such terms (subject to Section 8.4(d)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Company Termination Fee, plus the Recovery Costs pursuant to this Section 8.4(c) shall be made at the time the Company is obligated to pay Parent such amount pursuant to Section 8.3 by wire transfer. (b) The escrow agreement shall provide that the Company Termination Fee, plus the Recovery Costs in escrow or any portion thereof shall not be released to Parent unless the escrow agent receives any one or combination of the following: (i) a letter from the Parent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to Parent without causing Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii), an amount equal to the Section 9.3 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent. The payment or deposit into escrow of the Section 9.3 Amount pursuant to this Section 9.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee PayeeParent’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee PayeeParent, or (ii) a letter from the Fee PayeeParent’s counsel indicating that the Fee Payee Parent received a ruling from the IRS holding that the receipt by the Fee Payee Parent of the Section 9.3 Amount Company Termination Fee plus the Recovery Costs should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeParent’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Parent of the Section 9.3 Amount would Company Termination Fee, plus the Recovery Costs should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount Company Termination Fee, plus the Recovery Costs to the Fee PayeeParent. The Fee Payor Company agrees to amend this Section 9.4(b) 8.4 at the request of the Fee Payee Parent in order to (x) maximize the portion of the Section 9.3 Amount Company Termination Fee, plus the Recovery Costs that may be distributed to the Fee Payee Parent hereunder without causing the Fee Payee Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee PayeeParent’s chances of securing a favorable ruling described in this Section 9.4(b8.4(b) or (z) assist the Fee Payee Parent in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b8.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount Company Termination Fee, plus the Recovery Costs held in escrow for five years shall be released by the escrow agent to the Fee PayorCompany. The Fee Payor Company shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 1 contract

Samples: Merger Agreement (Wheeler Real Estate Investment Trust, Inc.)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party the Parent Termination Amount pursuant to Section 7.3(c) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 7.3 Amount”), the Fee Payor Parent shall pay to the Fee Payee Company from the applicable Section 9.3 7.3 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (iA) the Section 9.3 7.3 Amount and (iiB) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2) or 856(c)(3)(A) through (I856(c)(3) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii7.4(b)(ii) or (BY) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii7.4(b)(ii), an amount equal to the Section 9.3 7.3 Amount less the amount payable under clause (1) above. To secure the Fee PayorParent’s obligation to pay these amounts, the Fee Payor Parent shall deposit into escrow an amount in cash equal to the Section 9.3 7.3 Amount with an escrow agent selected by the Fee Payor Company and on such terms (subject to Section 9.4(b7.4(b)) as shall be mutually agreed (acting reasonably) upon by the Company, Parent and the escrow agentagent as reflected in an escrow agreement among such parties, provided that the payment or deposit into escrow shall be at the Company’s option. The payment or deposit into escrow of the Section 9.3 7.3 Amount pursuant to this Section 9.4(a7.4(a) shall be made at the time the Fee Payor Parent is obligated to pay the Fee Payee Company such amount pursuant to Section 9.2(b), Section 9.2(c7.3(c) or Section 9.3, as applicable, by wire transfer or bank checkof same day funds. (b) The escrow agreement shall provide that the Section 9.3 7.3 Amount in escrow or any portion thereof shall not be released to the Fee Payee Company unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee PayeeCompany’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code in such year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement shall also provide that any portion of the Section 9.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.not

Appears in 1 contract

Samples: Merger Agreement (Ps Business Parks, Inc./Md)

Payment of Amount or Expense. (a) In the event that one Party AMLI (and AMLI LP if applicable) are obligated to pay to Purchaser the Break-Up Fee Payor”or the Purchaser Break-Up Expenses pursuant to Section 7.2(b) or Purchaser is obligated to pay another Party (to AMLI and AMLI LP the “Fee Payee”AMLI Break-Up Expenses pursuant to Section 7.2(c) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 Break-Up Amount”), AMLI (and AMLI LP if applicable) or Purchaser, as applicable (the Fee Payor “Payor”), shall pay to the Fee Payee other party (the “Payee”) from the Section 9.3 applicable Break-Up Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (i) the Section 9.3 Break-Up Amount and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A) through (I856(c)(3)(I) of the Code (“Qualifying Income”), as determined by the CompanyPayee’s independent certified public accountants, plus (2) in the event the Fee Payee receives either (XA) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii7.6(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii7.6(b)(ii), an amount equal to the Section 9.3 Break-Up Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 Break-Up Amount with an escrow agent selected by the Fee Payor and on such customary terms (subject to Section 9.4(b7.6(b)) as shall be mutually agreed upon by the Companyreasonably acceptable to each of AMLI, Parent Purchaser and the escrow agent, provided that in the case where the Payor is AMLI and the Payee is Purchaser, the payment or deposit into escrow shall be at Purchaser’s option. The payment or deposit into escrow of the Section 9.3 Break-Up Amount pursuant to this Section 9.4(a7.6(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c7.2(b) or Section 9.37.2(c), as applicable, by wire transfer or bank checkof immediately available funds. (b) The escrow agreement shall provide that the Section 9.3 Break-Up Amount in escrow or any portion thereof shall not be released to the Fee Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 BreakUp Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 Break-Up Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 Break-Up Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 7.6 at the reasonable request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Break-Up Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b7.6(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b7.6(b). The escrow agreement shall also provide that any portion of the Section 9.3 Break-Up Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement.

Appears in 1 contract

Samples: Merger Agreement (Morgan Stanley)

Payment of Amount or Expense. (a) In the event that one Party (the “Fee Payor”) Parent is obligated to pay another Party the Company the Parent Termination Fee pursuant to Section 8.3(c) (the “Fee Payee”) the expenses set forth in Section 9.3 (collectively, the “Section 9.3 8.3 Amount”), the Fee Payor Parent (“Payor”) shall pay to the Fee Payee Company (“Payee”) from the applicable Section 9.3 8.3 Amount deposited into escrow escrow, if any, in accordance with the next sentence, an amount equal to the lesser of (iA) the Section 9.3 8.3 Amount and (iiB) the sum of (1) the maximum amount that can be paid to the Fee Payee Company without causing the Fee Payee Company to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H856(c)(2)(H) or 856(c)(3)(A856(c)(3)(H) through or (I) of the Code (“Qualifying Income”), as determined by the Company’s independent certified public accountants, plus (2) in the event the Fee Payee Company receives either (X) a letter from the Fee PayeeCompany’s counsel indicating that the Fee Payee Company has received a ruling from the IRS described in Section 9.4(b)(ii8.4(b)(ii) or (BY) an opinion from the Fee PayeeCompany’s outside counsel as described in Section 9.4(b)(ii8.4(b)(ii), an amount equal to the Section 9.3 8.3 Amount less the amount payable under clause (1) above. To secure the Fee Payor’s obligation to pay these amounts, the Fee Payor shall deposit into escrow an amount in cash equal to the Section 9.3 8.3 Amount with an escrow agent selected by the Fee Payor and on such terms (subject to Section 9.4(b8.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agent, provided that the payment or deposit into escrow shall be at the Payee’s option. The payment or deposit into escrow of the Section 9.3 8.3 Amount pursuant to this Section 9.4(a8.4(a) shall be made at the time the Fee Payor is obligated to pay the Fee Payee such amount pursuant to Section 9.2(b), Section 9.2(c8.3(c) or Section 9.3, as applicable, by wire transfer or bank check. (b) The escrow agreement shall provide that the Section 9.3 8.3 Amount in escrow or any portion thereof shall not be released to the Fee any Payee that is a REIT unless the escrow agent receives any one or combination of the following: (i) a letter from the Fee Payee’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to the Fee Payee without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code in such year determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from the Fee Payee’s accountants revising that amount, in which case the escrow agent shall release such amount to the Fee Payee, or (ii) a letter from the Fee Payee’s counsel indicating that the Fee Payee received a ruling from the IRS holding that the receipt by the Fee Payee of the Section 9.3 8.3 Amount should would either constitute Qualifying Income or should would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee Payee’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee of the Section 9.3 8.3 Amount would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release the remainder of the Section 9.3 8.3 Amount to the Fee Payee. The Fee Payor agrees to amend this Section 9.4(b) 8.4 at the reasonable request of the Fee any Payee that is a REIT in order to (x) maximize the portion of the Section 9.3 8.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b8.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b8.4(b). Any portion of Section 8.3 Amount that remains unpaid as of the end of a taxable year shall be paid as soon as possible during the following taxable year, subject to the foregoing limitations of this Section 8.3. The escrow agreement shall also provide that any portion of the Section 9.3 8.3 Amount held in escrow for five years shall be released by the escrow agent to the Fee Payor. The Fee Payor shall not be a party to such escrow agreement and shall not bear any cost of or have liability resulting from the escrow agreement. The Payor shall be deemed to have satisfied its obligations pursuant to this Section 8.4 so long as it deposits into escrow the Section 8.3 Amount, notwithstanding any delay or reduction in payment to any Payee that is a REIT, and shall have no further liability with respect to payment of the Section 8.3 Amount.

Appears in 1 contract

Samples: Merger Agreement (Excel Trust, L.P.)

Payment of Amount or Expense. (a) In Upon determination that the event that one Party (the “Fee Payor”) Company is obligated to pay another Party (Parent the Termination Fee Payee”) the expenses set forth in Section 9.3 (collectivelyor Expense Reimbursement, the “Section 9.3 Amount”), the Fee Payor Company shall pay Parent directly in cash by wire transfer of immediately available funds (to the Fee Payee from the Section 9.3 Amount deposited into escrow in accordance with the next sentence, an account designated by Parent) an amount equal to the lesser of (i) the Section 9.3 Amount Termination Fee or Expense Reimbursement and (ii) the sum of (1) the maximum amount that can be paid to the Fee Payee Parent without causing the Fee Payee Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A) through (H) or 856(c)(3)(A) through (I) of the Code (the “Qualifying Income”), as determined by the CompanyParent’s independent certified public accountants, plus (2) in . In the event that any portion of the Termination Fee Payee receives either (X) a letter from the Fee Payee’s counsel indicating that the Fee Payee has received a ruling from the IRS described in Section 9.4(b)(ii) or (B) an opinion from the Fee Payee’s outside counsel as described in Section 9.4(b)(ii), an amount equal Expense Reimbursement cannot be paid directly to the Section 9.3 Amount less the amount payable under Parent pursuant to clause (1i) above. To secure of the Fee Payor’s obligation to pay these amountspreceding sentence, the Fee Payor Company shall deposit into escrow an amount in cash equal to the Section 9.3 Amount with an escrow agent selected by the Fee Payor Company (the “Escrow Agent”) and on such terms (subject to Section 9.4(b8.4(b)) as shall be mutually agreed upon by the Company, Parent and the escrow agentEscrow Agent (the agreement effecting such deposit, the “Escrow Agreement”) an amount in cash equal to the Termination Fee or Expense Reimbursement, less any amounts paid directly to Parent pursuant to clause (ii) of the preceding sentence (the amount of such deficit, the “Deficit Amount”). The payment or deposit into escrow of the Section 9.3 Deficit Amount pursuant to this Section 9.4(a8.4(a) shall be made at the time the Fee Payor Company is obligated to pay the Fee Payee Parent such amount pursuant to Section 9.2(b), Section 9.2(c) or Section 9.3, as applicable, 8.3 by wire transfer or bank checktransfer. (b) The escrow agreement Escrow Agreement shall provide that the Section 9.3 Deficit Amount in escrow or any portion thereof shall not be released to the Fee Payee Parent unless the escrow agent Escrow Agent receives any one or combination of the following: (i) a letter from the Fee PayeeParent’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent Escrow Agent to the Fee Payee Parent without causing the Fee Payee Parent to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income Income, or a subsequent letter from the Fee PayeeParent’s accountants revising that amount, in which case the escrow agent Escrow Agent shall release such amount to the Fee PayeeParent, or (ii) a letter from the Fee PayeeParent’s counsel indicating that the Fee Payee Parent received a ruling from the IRS holding that the receipt by the Fee Payee Parent of the Section 9.3 Deficit Amount should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, indicating that the Fee PayeeParent’s outside counsel has rendered a legal opinion to the effect that the receipt by the Fee Payee Parent of the Section 9.3 Amount would Termination Fee or Expense Reimbursement should either constitute Qualifying Income or would should be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code), in which case the escrow agent Escrow Agent shall release the remainder of the Section 9.3 Deficit Amount to the Fee PayeeParent. The Fee Payor agrees to amend this Section 9.4(b) at the request of the Fee Payee in order to (x) maximize the portion of the Section 9.3 Amount that may be distributed to the Fee Payee hereunder without causing the Fee Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve the Fee Payee’s chances of securing a favorable ruling described in this Section 9.4(b) or (z) assist the Fee Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 9.4(b). The escrow agreement Escrow Agreement shall also provide that any portion of the Section 9.3 Deficit Amount held in escrow for five (5) years shall be released by the escrow agent Escrow Agent to the Fee PayorCompany, and the Company shall have no obligation to make any further payments to Parent, notwithstanding that such Deficit Amount has not been paid as of such date nor any other provision of this Agreement. The Fee Payor shall not be a party to such escrow agreement and Company shall not bear any cost of or have bear any liability resulting from the escrow agreementEscrow Agreement, and Parent shall indemnify the Company for any such costs or liabilities assessed on the Company.

Appears in 1 contract

Samples: Merger Agreement (Ready Capital Corp)

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