The Escrow Fund. The Escrowed Shares, any cash resulting --------------- from the disposition of the Escrowed Shares pursuant to Section 1.05 herein, any stock dividends paid on any Escrowed Shares, or any rights or securities into which the Escrowed Shares are convertible or have been converted, and all earnings on any of the foregoing (collectively, the "Escrow Fund") shall be ----------- held by the Escrow Agent as a trust fund on the terms set forth in, and subject to the conditions of, this Escrow Agreement. Any of the persons set forth on Schedule I hereto (each a "Digital Member") may elect by written notice to -------------- Digital, Tritel and the Escrow Agent, to require Digital and the Digital Escrow Agent to record beneficial ownership of such the number of Escrowed Shares set forth next to the name of the Digital Member on Schedule I hereto. Such Digital Member shall execute and deliver to the Parties to the Settlement Agreement and to the Escrow Agent an executed counterpart of this Agreement and the Settlement Agreement together with a certificate stating that (i) such Digital Member shall be bound by this Agreement and the Settlement Agreement, (ii) as of the date of such beneficial transfer of record, the representations set forth in Section 3.01 and Section 3.02 of the Settlement Agreement are true and correct, and (iii) such Digital Member shall succeed to the rights and obligations of Digital hereunder with respect to the Allocated Retained Digital Escrowed Shares of such Digital Member. Digital and any Digital Member who so elects to have beneficial ownership of Retained Digital Escrowed Shares recorded in such Digital Member's name are hereinafter each referred to as a "Digital Investor Indemnitor" and --------------------------- collectively as the "Digital Investor Indemnitors." Upon an election pursuant ---------------------------- to this Section 1.03, a separate account shall be established for each Digital Investor Indemnitor and shall contain the number of Escrowed Shares set forth next to the name of the Digital Investor Indemnitor on Schedule I hereto (each an "Account"). The Escrow Agent shall maintain accurate and current balance ------- information with regard to each Account and shall maintain each Account separately. The Escrow Fund shall not be subject to lien or attachment by any creditor of any Party hereto and shall be used solely for the purpose set forth in this Escrow Agreement. Amounts held in the Escrow Fund shall not be available to, and shall not be used by, the Escrow Agent to set off any obligations of any Party hereto owing to the Escrow Agent in any capacity.
Appears in 1 contract
The Escrow Fund. The Escrowed Shares, any cash resulting --------------- from the disposition of the Escrowed Shares pursuant to Section 1.05 herein, any stock dividends paid on any Escrowed Shares, or any rights or securities into which the Escrowed Shares are convertible or have been converted, and all earnings on any of the foregoing (collectively, the "Escrow Fund") shall be ----------- held by the Escrow Agent as a trust fund on the terms set forth in, and subject to the conditions of, this Escrow Agreement. Any of the persons set forth on Schedule I hereto (each a "Digital Member") may elect by written notice to -------------- Digital, Tritel and the Escrow Agent, to require Digital and the Digital Escrow Agent to record beneficial ownership of such the number of Escrowed Shares set forth next to the name of the Digital Member on Schedule I hereto. Such Digital Member shall execute and deliver to the Parties to the Settlement Agreement and to the Escrow Agent an executed counterpart of this Agreement and the Settlement Agreement together with a certificate stating that (i) such Digital Member shall be bound by this Agreement and An escrow fund (the Settlement Agreement, (ii“Escrow Fund”) as in the amount of the date of such beneficial transfer of record, the representations set forth in Section 3.01 and Section 3.02 of the Settlement Agreement are true and correct, and (iii) such Digital Member shall succeed to the rights and obligations of Digital hereunder with respect to the Allocated Retained Digital Escrowed Shares of such Digital Member. Digital and any Digital Member who so elects to have beneficial ownership of Retained Digital Escrowed Shares recorded in such Digital Member's name are hereinafter each referred to as a "Digital Investor Indemnitor" and --------------------------- collectively as the "Digital Investor Indemnitors." Upon an election pursuant ---------------------------- to this Section 1.03, a separate account $6,000,000 shall be established for each Digital Investor Indemnitor in accordance with the terms of the Escrow Agreement and shall contain the number of Escrowed Shares set forth next to the name of the Digital Investor Indemnitor on Schedule I hereto (each an "Account"be funded in accordance with Section 2(c). The Escrow Agent shall maintain accurate and current balance ------- information with regard to each Account and shall maintain each Account separately. The Escrow Fund shall be withheld by Parent and allocated among the Participating Holders and participants in the Santur Corporation 2011 Incentive Plan, on a pro rata basis. The pro rata amount Parent shall withhold from each Participating Holder and participant in the Santur Corporation 2011 Incentive Plan, as applicable, shall be based on the aggregate amount of Merger Consideration that each such Person is entitled to receive at the Closing (disregarding any Merger Consideration payable with respect to any Series C-1 Preferred Stock (which shall not be held in escrow, regardless of whether the holder thereof is a Participating Holder) and without taking into account any deductions from such amount pursuant to this Section 2(j) or Section 8(d)(v)) pursuant to Sections 2(e)(v), 2(e)(vii) and 2(h), as the case may be (such pro rata amount, the “Pro Rata Share”).
(ii) The remaining balance of the Escrow Fund not paid to Parent or subject to lien or attachment by any creditor of any Party hereto and an outstanding Claim Notice shall be used solely for distributed in accordance with this Section 2(j) as soon as practicable but not later than three (3) Business Days after the purpose set forth in this expiration of the Escrow AgreementIndemnity Period. Amounts held in Such remaining balance of the Escrow Fund, less any amounts subject to pending indemnity claims unresolved as of such date, plus any interest on the Escrow Fund shall not be available to, and shall not be used by, distributed by the Escrow Agent to set off any obligations the Exchange Agent or the Surviving Corporation, as then applicable, for payment to the Participating Holders as provided in Section 2(e)(v), Section 2(e)(vii)(A), or Section 2(e)(vii)(B), as the case may be, and participants under the Santur Corporation 2011 Incentive Plan as provided in Section 2(h).
(iii) Parent, the Company, and the Participating Holders agree for all tax purposes that: (i) the right of any Party hereto owing the Participating Holders to the Escrow Agent Fund shall be treated as deferred contingent purchase price eligible for installment sale treatment under Section 453 of the Code and any corresponding provision of foreign, state or local law, as appropriate; (ii) if and to the extent any amount of the Escrow Fund is actually distributed to the Participating Holders, interest may be imputed on such amount, as required by Section 483 or 1274 of the Code; (iii) Parent shall be treated as the owner of the Escrow Fund, and all interest and earnings earned from the investment and reinvestment of the Escrow Fund, or any portion thereof, shall be allocable to Parent pursuant to Section 468B(g) of the Code; (iv) Parent shall receive quarterly tax distributions from the Escrow Fund equal to the product of (A) the amount of taxable income allocated to Parent for the taxable period, multiplied by (B) 40%, and (v) in no event shall the total amount of the Escrow Fund and any capacityinterest and earnings earned thereon paid to the Participating Holders and participants under the Santur Corporation 2011 Incentive Plan under this Agreement exceed an amount to be designated by the Company prior to the Closing. Clause (v) of the preceding sentence is intended to ensure that the right of the Participating Holders to the Escrow Fund and any interest and earnings earned thereon is not treated as a contingent payment without a stated maximum selling price under Section 453 of the Code and the Treasury Regulations promulgated thereunder.
Appears in 1 contract
Samples: Merger Agreement (Neophotonics Corp)
The Escrow Fund. The Escrowed Shares, any cash --------------- resulting --------------- from the disposition of the Escrowed Shares pursuant to Section 1.05 herein, any stock dividends paid on any Escrowed Shares, or any rights or securities into which the Escrowed Shares are convertible or have been converted, and all earnings on any of the foregoing (collectively, the "Escrow ------ Fund") shall be ----------- held by the Escrow Agent as a trust fund on the terms set forth ---- in, and subject to the conditions of, this Escrow Agreement. Any of the persons set forth on Schedule I hereto (each a "Digital Member") may elect by written -------------- notice to -------------- Digital, Tritel and the Escrow Agent, to require Digital and the Digital Escrow Agent to record beneficial ownership of such the number of Escrowed Shares set forth next to the name of the Digital Member on Schedule I hereto. Such Digital Member shall execute and deliver to the Parties to the Settlement Agreement and to the Escrow Agent an executed counterpart of this Agreement and the Settlement Agreement together with a certificate stating that (i) such Digital Member shall be bound by this Agreement and the Settlement Agreement, (ii) as of the date of such beneficial transfer of record, the representations set forth in Section 3.01 and Section 3.02 of the Settlement Agreement are true and correct, and (iii) such Digital Member shall succeed to the rights and obligations of Digital hereunder with respect to the Allocated Retained Digital Escrowed Shares of such Digital Member. Digital and any Digital Member who so elects to have beneficial ownership of Retained Digital Escrowed Shares recorded in such Digital Member's name are hereinafter each referred to as a "Digital Investor Indemnitor" and --------------------------- collectively as the "Digital --------------------------- ------- Investor Indemnitors." Upon an election pursuant ---------------------------- to this Section 1.03, a -------------------- separate account shall be established for each Digital Investor Indemnitor and shall contain the number of Escrowed Shares set forth next to the name of the Digital Investor Indemnitor on Schedule I hereto (each an "Account"). The ------- Escrow Agent shall maintain accurate and current balance ------- information with regard to each Account and shall maintain each Account separately. The Escrow Fund shall not be subject to lien or attachment by any creditor of any Party hereto and shall be used solely for the purpose set forth in this Escrow Agreement. Amounts held in the Escrow Fund shall not be available to, and shall not be used by, the Escrow Agent to set off any obligations of any Party hereto owing to the Escrow Agent in any capacity.
Appears in 1 contract
The Escrow Fund. The Escrowed Shares(i) An escrow fund in the aggregate amount of $4,200,000 in cash, any cash resulting --------------- from shares of Parent Common Stock (valued at the disposition Parent Per Share Value) or a combination of both as determined by the Escrowed Shares pursuant to Section 1.05 herein, any stock dividends paid Company based on any Escrowed Shares, or any rights or securities into which the Escrowed Shares are convertible or have been converted, number of Eligible Holders and all earnings as reflected on any of the foregoing Allocation Certificate (collectively, the "“Escrow Fund"”) shall be ----------- established in accordance with the terms of the Escrow Agreement and shall be funded in accordance with Section 2(c). To the extent any dividends are declared and paid on the Parent Common Stock held pursuant to the Escrow Agreement, such dividends shall be held pursuant to the Escrow Agreement and be considered part of each applicable Parent Common Stock held thereunder. Any cash portion of the Escrow Fund shall be deposited into a non-interest bearing account.
(ii) The Escrow Fund shall be distributed as follows:
(A) unless otherwise agreed upon by the Parent and the Stockholder Representative, each share of Parent Common Stock distributed out of the Escrow Fund shall be valued at the Parent Per Share Value;
(B) each share of Parent Common Stock in the Escrow Fund may be replaced with cash in the amount of the Parent Per Share Value at anytime at the sole election of the Stockholder Representative; provided that in the event Parent has made a claim for indemnification, the Stockholder Representative shall not be permitted to replace Parent Common Stock with cash to the extent of amounts subject to the outstanding indemnity claims unless otherwise consented to in writing by Parent;
(C) distributions shall be made in the same combination of shares of Parent Common Stock and cash as initially deposited into the Escrow Fund (to the extent such shares are not replaced with cash in accordance with the Escrow Agreement during the Escrow Indemnity Period and, to the extent such shares are replaced with cash, as determined by the Stockholder Representative in its sole and absolute discretion);
(D) if the Merger Consideration as finally determined in accordance with Section 2(i) is less than the Adjusted Merger Consideration as determined in accordance with Section 2(h), the amount of such difference shall be distributed by the Escrow Agent to Parent as a trust fund provided in Section 2(i)(v) and
(E) not later than three (3) Business Days after the expiration of the Escrow Indemnity Period, the remaining balance of the Escrow Fund, less any amounts subject to indemnity claims as of such date, plus any interest on the terms set forth in, and subject to amount distributed shall be distributed by the conditions of, this Escrow Agreement. Any of the persons set forth on Schedule I hereto (each a "Digital Member") may elect by written notice to -------------- Digital, Tritel and the Escrow Agent, to require Digital and the Digital Escrow Agent to record beneficial ownership of such the number of Escrowed Shares set forth next Exchange Agent or the Surviving Corporation, as then applicable, for payment to the name of the Digital Member on Schedule I hereto. Such Digital Member shall execute and deliver to the Parties to the Settlement Agreement and to the Escrow Agent an executed counterpart of this Agreement Company Stockholders, as provided in Section 2(e)(vi) and the Settlement Agreement together with a certificate stating that holders of Company Warrants, as provided in Section 2(e)(viii)(B).
(iii) Parent and the Company agree for all tax purposes that: (i) such Digital Member shall be bound by this Agreement and the Settlement Agreement, (ii) as right of the date of such beneficial transfer of record, the representations set forth in Section 3.01 and Section 3.02 of the Settlement Agreement are true and correct, and (iii) such Digital Member shall succeed Company Securityholders to the rights and obligations of Digital hereunder with respect to the Allocated Retained Digital Escrowed Shares of such Digital Member. Digital and any Digital Member who so elects to have beneficial ownership of Retained Digital Escrowed Shares recorded in such Digital Member's name are hereinafter each referred to as a "Digital Investor Indemnitor" and --------------------------- collectively as the "Digital Investor Indemnitors." Upon an election pursuant ---------------------------- to this Section 1.03, a separate account shall be established for each Digital Investor Indemnitor and shall contain the number of Escrowed Shares set forth next to the name of the Digital Investor Indemnitor on Schedule I hereto (each an "Account"). The Escrow Agent shall maintain accurate and current balance ------- information with regard to each Account and shall maintain each Account separately. The Escrow Fund shall not be subject to lien or attachment by any creditor of any Party hereto and shall be used solely for the purpose set forth in this Escrow Agreement. Amounts held in the Escrow Fund shall not be available totreated as deferred contingent purchase price eligible for installment sale treatment under Section 453 of the Code and any corresponding provision of foreign, state or local law, as appropriate; (ii) if and to the extent any amount of the Escrow Fund is actually distributed to the Company Securityholders, interest may be imputed on such amount, as required by Section 483 or 1274 of the Code; (iii) Parent shall be treated as the owner of the Escrow Fund, and shall not be used by, any interest and earnings earned from the investment and reinvestment of the Escrow Agent Fund, or any portion thereof, shall be allocable to set off Parent pursuant to Section 468B(g) of the Code; and (iv) in no event shall the total amount of the Escrow Fund and any obligations interest and earnings earned thereon paid to the Company Securityholders under this Agreement exceed an amount to be designated by the Company prior to the Closing. Clause (iv) of any Party hereto owing the preceding sentence is intended to ensure that the right of the Company Securityholders to the Escrow Agent in Fund and any capacityinterest and earnings earned thereon is not treated as a contingent payment without a stated maximum selling price under Section 453 of the Code and the Treasury Regulations promulgated thereunder.
Appears in 1 contract
Samples: Merger Agreement (Telular Corp)
