Escrow Fund and Indemnification. At the Closing, the Company will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms set forth herein and at Healtheon's cost and expense. The Escrow Fund shall be available to compensate Healtheon, Acquisition Sub and their affiliates for any claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Healtheon, Acquisition Sub, their officers, directors, or affiliates directly or indirectly as a result of (a) any inaccuracy or breach of a representation or warranty of the Company contained in Article II herein (as modified by the Company Schedules), or any failure by the Company to perform or comply with any covenant contained herein and (b) any Loss arising out of a claim by Netsource or any trustee in bankruptcy or creditor relating the Asset Purchase Agreement dated March 20, 1997 (the "Netsource Agreement"). Healtheon and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closing, which if resolved at the Closing would have led to a reduction in the aggregate consideration. Nothing herein shall limit the liability of the Company for any breach of any representation, warranty or covenant if the Asset Purchase does not close. Healtheon may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in paragraph (d) below) identifying Losses, the aggregate amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include the value of any Healtheon shares transferred to Netsource, have been delivered to the Escrow Agent as provided in paragraph (e); in such case, Healtheon may recover from the Escrow Fund the total of its Losses, including the first $50,000; provided, however, in the event that such Losses arise from, or relate to, Retained Liabilities of the Company, Healtheon shall be entitled to immediate indemnification from the Company without regard to such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy and recourse of Healtheon against the Company or any of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraud.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Healtheon Corp), Asset Purchase Agreement (Healtheon Corp)
Escrow Fund and Indemnification. At Subject to the Closinglimitations set ------------------------------- forth herein, by approval and adoption of this Agreement, each of the Company will be deemed Securityholders agrees to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), indemnify Incyte for such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms set forth herein and at HealtheonSecurityholder's cost and expense. The Escrow Fund shall be available to compensate Healtheon, Acquisition Sub and their affiliates for any pro rata portion of claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES"calculated after deduction for insurance proceeds recovered or recoverable) incurred by Healtheon, Acquisition Sub, their officers, directors, Incyte or affiliates directly or indirectly the Surviving Corporation as a result of (a) any inaccuracy or breach of a representation or warranty of the Company Synteni contained herein or in Article II herein (as modified by the Company Schedules), any instrument delivered pursuant to this Agreement or any failure by the Company Synteni to perform or comply with any covenant contained herein (hereinafter individually a "Loss" and (b) any Loss arising out of a claim by Netsource or any trustee in bankruptcy or creditor relating the Asset Purchase Agreement dated March 20, 1997 (the collectively "Netsource AgreementLosses"). Healtheon Incyte and the Company Synteni each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closingdate hereof, which if resolved at the Closing date hereof would have led to a reduction in the aggregate considerationMerger Consideration. Nothing herein The adoption and approval of this Agreement by the Securityholders shall limit the liability constitute approval of the Company Escrow Agreement and of all of the arrangements relating thereto, including without limitation the placement of the Escrow Shares in escrow and the appointment of the Securityholder Agent (as defined in paragraph (c) below). At the Effective Time, Securityholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Shares (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Incyte after the Effective Time), without any act of any Securityholder. As soon as practicable after the Effective Time, the Escrow Shares will be deposited with First Trust of California, National Association (or other institution acceptable to Incyte and the Securityholder Agent), as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and in the Escrow Agreement. The portion of the Escrow Shares contributed on behalf of each Securityholder shall be in proportion to the aggregate shares of Incyte Common which such holder would otherwise be entitled under Section 2.1(c) rounded down to the nearest whole share, with the remaining number of shares that are distributed to such holder being rounded up to the nearest whole share. The Escrow Fund shall be available to compensate Incyte and the Surviving Corporation for any Losses. The right of Incyte and the Surviving Corporation after the Effective Time to assert indemnification claims and receive indemnification payments from the Escrow Fund pursuant to this Article IX shall be the sole and exclusive right and remedy exercisable by such parties with respect to any inaccuracy or breach of in any representation, warranty warranty, or covenant if contained in this Agreement or in any instrument delivered pursuant to this Agreement or in connection with the Asset Purchase does transactions contemplated hereby. Notwithstanding the foregoing, these limitations contained in this Section 9.2(a) shall not closeapply to fraud or willful misconduct. Healtheon Incyte may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in paragraph (de) below) identifying Losses, the aggregate cumulative amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include the value of any Healtheon shares transferred to Netsource100,000, have been delivered to the Escrow Agent as provided in paragraph (e); in such case, Healtheon Incyte may recover from the Escrow Fund the total of its Losses, including the first $50,000; provided, however, in the event that such Losses arise from, or relate to, Retained Liabilities entire amount of the Companycumulative Losses. Except for fraud or willful misconduct by such Securityholder, Healtheon no Securityholder shall be entitled liable to immediate indemnification from the Company without regard to such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy and recourse of Healtheon against the Company Incyte or any of its respective directors, officers, representatives, agents or Members Merger Subsidiary for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraudamount other than its proportionate share of the Escrow.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Incyte Pharmaceuticals Inc)
Escrow Fund and Indemnification. At Subject to the Closinglimitations set ------------------------------- forth herein, by approval and adoption of this Agreement, each of the Company will be deemed Shareholders agrees to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), indemnify Purchaser for such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms set forth herein and at HealtheonShareholder's cost and expense. The Escrow Fund shall be available to compensate Healtheon, Acquisition Sub and their affiliates for any pro rata portion of claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES"calculated after deduction for insurance proceeds recovered or recoverable) incurred by Healtheon, Acquisition Sub, their officers, directors, or affiliates Purchaser directly or indirectly (including, after the Closing, by the Company or the Subsidiary) as a result of (a) any inaccuracy or breach of a representation or warranty of the Shareholders or the Company contained herein or in Article II herein (as modified by the Company Schedules)any Schedules or Exhibits delivered pursuant to this Agreement, or any failure by the Shareholders or the Company to perform or comply with any covenant contained herein herein, or in the Master Agreement (hereinafter individually a "Loss" and (b) any Loss arising out of a claim by Netsource or any trustee in bankruptcy or creditor relating the Asset Purchase Agreement dated March 20, 1997 (the collectively "Netsource AgreementLosses"). Healtheon For purposes of this Article VIII and the determination of whether a Loss has occurred in accordance with the preceding sentence, the representations and warranties of the Company each contained herein shall be deemed to have been made as of the Announcement Date rather than as of the date of this Agreement (other than those made as of a specified date, which shall be made as of such specified dates) and all of such representations and warranties may be deemed to be modified by the Original Disclosure Schedule, as such Original Disclosure Schedule may be updated to reflect events that occurred following the Announcement Date and that were permitted or contemplated by Section 2 of the Master Agreement (and, except for such updates, shall not otherwise be deemed to be modified by the Disclosure Schedule). The Shareholders acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closing, which if resolved at the Closing would have led to a reduction in the aggregate considerationConsideration. Nothing At the Closing, the Shareholders will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Shares (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Purchaser after the Closing), without any act of any Shareholder. As soon as practicable after the Closing, the Escrow Shares will be deposited with First Trust of California, National Association (or other institution acceptable to Purchaser and the Shareholders' Representative), as Escrow Agent (the "Escrow Agent"), such deposit to constitute an escrow fund (the "Escrow Fund") to be governed by the terms set forth herein and in the Escrow Agreement. The Escrow Fund shall limit the liability of the Company be available to compensate Purchaser for any Losses. The Escrow Fund shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes and in accordance with the terms of this Article VIII and the Escrow Agreement. The right of Purchaser after the Closing to assert indemnification claims and receive indemnification payments from the Escrow Fund pursuant to this Article VIII shall be the sole and exclusive right and remedy exercisable by Purchaser with respect to any inaccuracy or breach of in any representation, warranty warranty, or covenant if contained in this Agreement or in any instrument delivered pursuant to this Agreement or in connection with the Asset Purchase does transactions contemplated hereby; provided, however, that this limitation shall not closeapply to any misrepresentation or breach of warranty constituting fraud, as to which fraudulent acts the Shareholders shall be liable for all Losses with respect thereto (subject in all cases to the provisions of Section 8.2(i)). Healtheon Purchaser may not receive any shares from the Escrow Fund unless and until Officer's Certificates (as defined in paragraph (dSection 8.2(d) below) identifying Losses, the aggregate cumulative amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include the value of any Healtheon shares transferred to Netsource(pound)62,500, have been delivered to the Escrow Agent as provided in paragraph (eSection 8.2(d); in such case, Healtheon Purchaser may recover from the Escrow Fund the total entire amount of its the cumulative Losses. For the avoidance of doubt, including the first $50,000; providedCompany shall not be liable in respect of any inaccuracy or breach in any representation, howeverwarranty or covenant contained in this Agreement, in the event that such Losses arise fromhowsoever caused, or relate to, Retained Liabilities of in any instrument delivered pursuant to this Agreement or in connection with the Company, Healtheon shall be entitled to immediate indemnification from the Company without regard to such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy and recourse of Healtheon against the Company or any of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraudtransactions contemplated hereby.
Appears in 1 contract
Samples: Share Purchase Agreement (Incyte Pharmaceuticals Inc)
Escrow Fund and Indemnification. At Subject to the Closing, the Company will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms limitations set forth herein herein, by approval and at Healtheonadoption of this Agreement, each of the Securityholders agrees to indemnify Parent for such Securityholder's cost and expense. The Escrow Fund shall be available to compensate Healtheon, Acquisition Sub and their affiliates for any pro rata portion of claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES"calculated after deduction for insurance proceeds recovered or recoverable) incurred by Healtheon, Acquisition Sub, their officers, directors, Parent or affiliates directly or indirectly the Surviving Corporation as a result of (a) any inaccuracy or breach of a representation or warranty of the Company contained herein or in Article II herein (as modified by the Company Schedules), any instrument delivered pursuant to this Agreement or any failure by the Company to perform or comply with any covenant contained herein (hereinafter individually a "LOSS" and (b) any Loss arising out of a claim by Netsource or any trustee in bankruptcy or creditor relating the Asset Purchase Agreement dated March 20, 1997 (the collectively "Netsource AgreementLOSSES"). Healtheon Parent and the Company each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closingdate hereof, which if resolved at the Closing date hereof would have led to a reduction in the aggregate considerationMerger Consideration. Nothing herein The adoption and approval of this Agreement by the Securityholders shall limit the liability constitute approval of the Company for any breach Escrow Agreement and of any representationall of the arrangements relating thereto, warranty or covenant if including without limitation the Asset Purchase does not close. Healtheon may not receive any shares from placement of the Escrow Fund unless Consideration in escrow and until Officer's Certificates the appointment of the Securityholder Agent (as defined in paragraph (dc) below) identifying Losses). At the Effective Time, the aggregate amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include the value of any Healtheon shares transferred Securityholders will be deemed to Netsource, have been delivered to received and deposited with the Escrow Agent as provided in paragraph (e); in such case, Healtheon may recover from the Escrow Fund Consideration, without any act of any Securityholder. As soon as practicable after the total of its LossesEffective Time, including the first $50,000; provided, however, in the event that such Losses arise from, or relate to, Retained Liabilities of the Escrow Consideration will be deposited with Chase Manhattan Bank and Trust Company, Healtheon shall be entitled to immediate indemnification from the Company without regard to N.A. (or such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy and recourse of Healtheon against the Company or any of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraud.other institution
Appears in 1 contract
Escrow Fund and Indemnification. At (i) Subject to the Closing, the Company will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms limitations set forth herein herein, by approval and at Healtheon's cost and expense. The Escrow Fund shall be available adoption of this Agreement, each of the Securityholders agrees to compensate Healtheon, Acquisition Sub and their affiliates indemnify Parent for any such Securityholder’s pro rata portion of claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' ’ fees and expenses, and expenses of investigation and defense actually incurred and paid (hereinafter individually a "LOSS" “Loss” and collectively "LOSSES"“Losses”) incurred by Healtheon, Acquisition Sub, their Parent and its officers, directorsdirectors and affiliates, or affiliates including the Surviving Corporation (the “Indemnified Parties”) directly or indirectly as a result of (aA) any inaccuracy or breach of a representation or warranty of the Company contained herein or in Article II herein any instrument delivered pursuant to this Agreement or any ancillary document contemplated herein; (as modified by the Company Schedules), or B) any failure by the Company to perform or comply with any covenant contained herein or any ancillary document contemplated herein; (C) any third party claims (including a Third Party Claim (as defined in Section 9.2(i)) or demands arising in connection with any product or service, including any claim that the conduct, practices or products made, used or sold, by the Company at any time prior to the Closing Date misappropriates or infringes any Intellectual Property of any Person, or otherwise arising in connection with the conduct of the Company’s business, prior to the Closing that are asserted after the Closing; (D) any cash paid by Parent to holders of Company Shares as to which appraisal rights have been properly exercised under Chapter 13 of the California Law, and any Losses of Parent in connection with handling such claims; and (bE) any Loss arising out of a claim Third Party Expenses incurred by Netsource or any trustee the Company and not paid as provided in bankruptcy or creditor relating Section 7.5. Parent, the Asset Purchase Agreement dated March 20, 1997 (the "Netsource Agreement"). Healtheon Company and the Company Securityholders each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closingdate hereof, which if resolved at the Closing date hereof would have led to a reduction in the aggregate considerationMerger Consideration. Nothing herein The adoption and approval of this Agreement by the Securityholders shall limit the liability constitute approval of the Company placement of the Escrow Shares in escrow and the appointment of the Securityholder Agent and the terms of this Article IX. At the Effective Time, the Securityholders will be deemed to have received and deposited with the Escrow Agent the Escrow Shares, without any act of any Securityholder. As soon as practicable after the Effective Time, the Escrow Shares will be deposited with the Escrow Agent (or such other institution acceptable to Parent and the Securityholder Agent), as an escrow agent, such deposit to constitute an escrow fund (the “Escrow Fund”) to be governed by the terms set forth herein. Parent shall bear the fees and expenses of the Escrow Agent in accordance with the terms hereof. The portion of the Escrow Shares contributed on behalf of each Securityholder shall be in proportion to the aggregate Merger Consideration such holder would otherwise be entitled under Section 2.1. The Escrow Fund shall be available to compensate the Indemnifying Parties for any breach of any representation, warranty or covenant if the Asset Purchase does not closeLosses. Healtheon Parent may not receive any shares Escrow Shares from the Escrow Fund unless and until Officer's ’s Certificates (as defined in paragraph (d) belowSection 9.2(e)) identifying LossesLosses for which Parent is seeking indemnification under Section 9.2(i) and (iii), the aggregate cumulative amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include 50,000 (the value of any Healtheon shares transferred to Netsource“Threshold”), have been delivered to the Escrow Agent as provided in paragraph (eSection 9.2(e); in such case, Healtheon the Indemnifying Parties may recover from the Escrow Fund the total entire amount of its Losses, including the first $50,000cumulative Losses subject to the remainder of this Section 9.2; provided, however, that claims for Losses pursuant to Section 9.2(a)(i)(A) and (C) resulting from a breach of the representations and warranties made in the event that such Specified Representations and claims for Losses arise frompursuant to Section 9.2(a)(i)(D) and (E) shall not be subject to the Threshold, or relate to, Retained Liabilities of the Company, Healtheon but shall be entitled to immediate indemnification recoverable from the Company without regard to first dollar of such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy and recourse of Healtheon against the Company or any of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraudLosses.
Appears in 1 contract
Escrow Fund and Indemnification. At Subject to the Closinglimitations set forth herein, by approval and adoption of this Agreement, each of the Company’s stockholders (collectively, the Company will be deemed “Securityholders”) agrees severally, and not jointly, to have received indemnify Parent, its officers, directors, employees, affiliates, attorneys and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon agents for such Securityholder’s pro rata interest from and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms set forth herein and at Healtheon's cost and expense. The Escrow Fund shall be available to compensate Healtheon, Acquisition Sub and their affiliates for against any claims, including, but not limited to, third party claims or suits, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' ’ fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES"calculated after deduction for insurance proceeds actually recovered) incurred by Healtheon, Acquisition Sub, their officers, directors, Parent or affiliates the Surviving Corporation directly or indirectly as a result of (ai) any inaccuracy or breach of a representation or warranty of regarding the Company contained herein or in Article II herein any instrument delivered pursuant to this Agreement; (as modified by the Company Schedules), or ii) any failure by the Company to perform or comply with any covenant contained herein; (iii) any existing or future government or other third party claims or demands arising in connection with the matters set forth in Schedule 9.2 (the “Disclosed Matters”); or (iv) any costs or expenses incurred by Parent in connection with dealing with holders of Company Shares that have asserted their appraisal rights under Section 262 of the DGCL (but excluding any cash paid to such holders); (hereinafter individually a “Loss” and collectively “Losses”). For the purposes hereof, “pro rata interest” of a Securityholder means the ratio that the sum of the amount of the Merger consideration received by a Securityholder on or before the date of the calculation bears to the sum of the amount of Merger consideration received by all Securityholders on or before the date of the calculation. For the purposes of valuing any Parent Common received, such Parent Common (on a per share basis) shall be valued at the Average Closing Price. The adoption and approval of this Agreement by the Securityholders will constitute approval of the Escrow Agreement and the placement of the Escrow Cash in escrow and the appointment of the Securityholder Agent. On the Closing Date, the Securityholders will be deemed to have received and deposited with the Escrow Agent the Escrow Cash, without any act of any Securityholder. As soon as practicable after Closing, the Escrow Cash will be deposited by Parent with the Escrow Agent (or such other institution acceptable to Parent and the Securityholder Agent), as an escrow agent, such deposit to constitute an escrow fund (the “Escrow Fund”) to be governed by the terms set forth herein and (b) any Loss arising out in the Escrow Agreement. Parent will bear the fees and expenses of a claim by Netsource or any trustee the Escrow Agent in bankruptcy or creditor relating accordance with the Asset Purchase Agreement dated March 20Escrow Agreement. For the terms of the Escrow, 1997 (the "Netsource Agreement"). Healtheon Escrow Fund will be available to compensate Parent and the Company each acknowledge Surviving Corporation for any Losses. The right of Parent and the Surviving Corporation after the Effective Time to assert indemnification claims and receive indemnification payments from the Escrow Fund pursuant to this ARTICLE IX will not be the sole and exclusive right and remedy exercisable by such parties; and provided further that such Losses, if any, would relate to unresolved contingencies existing at any limitations on liability set forth in this Section 9.2(a) will not apply for the Closing, which if resolved at the Closing would have led to a reduction benefit of any Stockholder who has made representations and warranties under Article IV in the aggregate considerationevent of fraud or willful misconduct or willful misrepresentation by any such Stockholder. Nothing herein shall limit The methods by which funds will be released from the liability of Escrow are set forth in the Company for any breach of any representation, warranty or covenant if the Asset Purchase does not closeEscrow Agreement. Healtheon Parent may not receive any shares cash from the Escrow Fund unless and until Officer's ’s Certificates (as defined in paragraph (d) belowhereinafter defined) identifying LossesLosses for which Parent is seeking indemnification under this Section 9.2(a), the aggregate cumulative amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include 100,000 (the value of any Healtheon shares transferred to Netsource“Threshold”), have been delivered to the Escrow Agent as provided in paragraph (e)Section 9.2(f) hereof; in such case, Healtheon Parent may thereafter recover from the Escrow Fund the total entire amount of its Lossesall Losses subject to the remainder of this Section 9.2. Notwithstanding the foregoing, including the first $50,000; providedThreshold will not apply to Losses which result from the dispute related to (i) the Disclosed Matters, however, in (ii) any Tax Liabilities (as hereinafter defined) or (iii) any accounts receivable owed to the event that such Losses arise from, or relate to, Retained Liabilities Company and/or TTC as of the Company, Healtheon shall Closing that are not collected within one hundred eighty days of becoming due and payable (the “AR Shortfall”). Parent will be entitled able to immediate indemnification make claims for the entire amount of any Losses from the Company without regard to such $50,000 threshold. The indemnification provisions in this Section 7.2 shall be the sole remedy Disclosed Matters, any tax related matters and recourse of Healtheon against the Company or any of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraudAR Shortfall.
Appears in 1 contract
Escrow Fund and Indemnification. At Subject to the Closing, the Company will be deemed to have received and deposited with the Escrow Agent (as defined below) the Escrow Amount (plus any additional shares as may be issued upon any stock split, stock dividend or recapitalization effected by Healtheon after the Closing). As soon as practicable after the Closing, the Escrow Amount will be deposited with U.S. Bank Trust National Association, (or other institution acceptable to Healtheon and the Securityholder Agent (as defined in Section 7.2(g) below)) as Escrow Agent (the "ESCROW AGENT"), such deposit to constitute an escrow fund (the "ESCROW FUND") to be governed by the terms limitations set forth herein herein, by approval and at Healtheon's cost adoption of this Agreement, each of the Securityholders, severally and expense. The Escrow Fund shall be available not jointly, agrees to compensate Healtheon, Acquisition Sub and their affiliates indemnify Parent for any such Securityholder’s pro rata portion of claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' ’ fees and expenses, and expenses of investigation and defense (hereinafter individually a "LOSS" and collectively "LOSSES") incurred by Healtheon, Acquisition Sub, their officers, directors, Parent or affiliates the Surviving Corporation directly or indirectly as a result of (ai) any inaccuracy or breach of a representation or warranty of the Company contained herein or in Article II herein any instrument delivered pursuant to this Agreement; (as modified by the Company Schedules), or ii) any failure by the Company to perform or comply with any covenant contained herein herein; and (biii) any Loss arising out of Excess Company Transaction Expenses pursuant to Section 8.3(e) (hereinafter individually a claim by Netsource or any trustee in bankruptcy or creditor relating the Asset Purchase Agreement dated March 20, 1997 (the "Netsource Agreement"“Loss” and collectively “Losses”). Healtheon Parent, the Company and the Company Securityholders each acknowledge that such Losses, if any, would relate to unresolved contingencies existing at the Closingdate hereof, which if resolved at the Closing date hereof would have led to a reduction in the aggregate considerationMerger Consideration. Nothing herein The adoption and approval of this Agreement by the Securityholders shall limit the liability constitute approval of the Company Escrow Agreement and of all of the arrangements relating thereto, including without limitation the placement of the Escrow Consideration in escrow and the appointment of the Securityholder Agent (as defined in paragraph (c) below). On the Closing Date, the Securityholders will be deemed to have received and deposited with the Escrow Agent the Escrow Consideration, without any act of any Securityholder. As soon as practicable after the Closing, the Escrow Consideration will be deposited by Parent with such institution as shall be acceptable to Parent and the Securityholder Agent, as Escrow Agent (the “Escrow Agent”), such deposit to constitute an escrow fund (the “Escrow Fund”) to be governed by the terms set forth herein and in the Escrow Agreement. The Escrow Fund shall be available to compensate Parent and the Surviving Corporation for any breach Losses. The right of Parent and the Surviving Corporation after the Effective Time to assert indemnification claims and receive indemnification payments from the Escrow Fund (including any representationReserve Amount that is deducted from the Additional Cash Consideration in accordance with the procedures set forth in Section 9.2(b) which shall be deposited in and become part of the Escrow Fund) pursuant to this ARTICLE IX shall be the sole and exclusive right and remedy exercisable by such parties with respect to any of the matters set forth in clauses (i) through (ii) of the first sentence of this Section 9.2(a), warranty provided, however, that any limitations set forth in this Section 9.2(a) shall not apply to fraud or covenant if the Asset Purchase does not closewillful misconduct or willful misrepresentation. Healtheon Parent may not receive any shares Escrow Consideration from the Escrow Fund unless and until Officer's ’s Certificates (as defined in paragraph (de) below) identifying LossesLosses for which Parent is seeking indemnification under Section 9.2(a), the aggregate cumulative amount of which exceed $50,000, which, for purposes of aggregating such amount, shall not include 25,000 (the value of any Healtheon shares transferred to Netsource“Threshold”), have been delivered to the Escrow Agent as provided in paragraph (eSection 9.2(e); in such case, Healtheon Parent may recover from the Escrow Fund the total entire amount of its the cumulative Losses, including subject to the first $50,000; providedremainder of this Section 9.2. In accordance with Section 8.3(e), however, in the event that such Losses arise from, or relate to, Retained Liabilities of the Company, Healtheon any Excess Company Transaction Expenses shall be entitled deemed to immediate indemnification from the Company be a Loss, without regard to the Threshold, such $50,000 thresholdthat Parent may immediately recover from the Escrow Fund on a dollar-for-dollar basis the amount of such Excess Company Transaction Expenses. The indemnification provisions in this Section 7.2 Parent shall be the sole remedy and recourse have no right of Healtheon set-off against the Company or any Closing Merger Consideration without the written consent of its respective directors, officers, representatives, agents or Members for any Losses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for fraudthe Securityholder Agent.
Appears in 1 contract
