Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties. 2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser. 2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Avatech Solutions Inc), Stock Purchase Agreement (Avatech Solutions Inc)
Escrow. 2.3.1 Purchaser (i) Notwithstanding the provisions of Section 2.6(a), as security for certain of the indemnification obligations of the Executing Stockholders, the Executing Option Holders and Seller agree that $400,000 allocated among Non-Owner Participants set forth in this Agreement and the two LLC Purchase Agreements other Transaction Documents, Parent shall retain from the Merger Consideration otherwise deliverable pursuant to Section 2.6(a), (i) an amount of cash equal to Fifteen Million Dollars ($15,000,000) (the Cash Consideration shall“Indemnification Escrow Amount”), on (ii) an amount of cash equal to One Million Two Hundred Thousand Dollars ($1,200,000) (the “Adjustment Escrow Amount”), and (iii) an amount of cash equal to One Million Dollars ($1,000,000) (the “Identified Matters Escrow Amount”, and collectively with the Indemnification Escrow Amount, the Adjustment Escrow Amount and, if applicable pursuant to Section 7.16, the JV Buyout Escrow Amount, the “Escrow Amount”), and shall deposit such amounts at Closing Date, be deposited in into an interest-bearing escrow account or accounts (the “Escrow Account”) with The Huntington National U.S. Bank, a national banking corporation N.A. (the “Escrow Agent”), pursuant . The Escrow Amount shall be released to the Parties according to the terms and conditions of an escrow agreement reasonably satisfactory to Purchaser dated as of the Closing Date by and Selleramong the Escrow Agent, for the purpose of securing Seller’s Parent and the Company’s representations Stockholder Representative on behalf of the Executing Stockholders, the Executing Option Holders and warranties made to the Purchaser Non-Owner Participants, in Article III hereof. The Escrow Agent shall maintain a reasonable form mutually agreed upon in good faith by the Escrow Account for a period of nine months. During such periodAgent, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Parent and the Stockholder Representative (the “Escrow Agreement”).
(ii) An amount equal to Five Million Dollars ($5,000,000) (the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the “Documentation Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay Amount”) shall be allocated from the Indemnification Escrow Account, Amount to the Purchaser, the amount address Losses of any such damages, awards, or settlements Parent Indemnified Parties that result from a Target Entity’s failure to comply with Legal Requirements regarding patient medical record documentation prior to Closing (“Escrow PaymentDocumentation Matters”). On ; provided, however, that nothing contained herein shall prevent a Parent Indemnified Party’s recovery from the first day Indemnification Escrow Amount in respect of the tenth month indemnification claims made pursuant to Article IX.
(iii) Eighteen (18) months following the Closing Date, the then-remaining balance of the Indemnification Escrow Agent Amount, less the Documentation Escrow Amount, shall pay be released to the Seller Stockholder Representative (or its designee) for the amount then on deposit benefit of the Executing Stockholders, the Executing Option Holders and Non-Owner Participants, subject to the terms and conditions as set forth in the Escrow AccountAgreement.
(iv) Thirty-six (36) months following the Closing Date, including any earnings thereon. Any dispute between the parties regarding then-remaining balance of the validity or amount of any damages, awards, or settlements of claims Documentation Escrow Amount shall be submitted released to a panel the Stockholder Representative (or its designee) for the benefit of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and SellerExecuting Stockholders, the findings Executing Option Holders and Non-Owner Participants, subject to the terms and conditions as set forth in the Escrow Agreement.
(v) Upon the earlier of a majority (A) five (5) years following the Closing Date or (B) the final resolution and settlement of which arbitrators all matters and Actions related to the Identified Matters, the then-remaining balance of the Identified Matters Escrow Amount shall be binding upon released to the partiesStockholder Representative (or its designee) for the benefit of the Executing Stockholders, Executing Option Holders and Non-Owner Participants, subject to the terms and conditions as set forth in the Escrow Agreement.
2.3.2 In order for Purchaser (vi) On the Adjustment Payment Date, the then-remaining balance of the Adjustment Escrow Amount (after deducting the net amount, if any, that is payable to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser Parent pursuant to paragraph 2.2.2. hereof Section 2.7(b)) shall be released to the Stockholder Representative (“Escrow Notice”or its designee) for the benefit of the Executing Stockholders, the Executing Option Holders and Non-Owner Participants, subject to Seller’s right to defend the terms and conditions as set forth in good faith third party claims as hereinafter provided. the Escrow Agreement.
(vii) If after such applicable, the then-remaining balance of the JV Buyout Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and Amount shall be paid by or released in accordance with Section 7.16, subject to the terms and conditions as set forth in the Escrow Agent to PurchaserAgreement.
2.3.3 If (viii) When paid in accordance with Section 2.6(c)(iv), Parent shall be deemed to have contributed on behalf of each Executing Stockholder, each Executing Option Holder and each Non-Owner Participant, each such Person’s Pro Rata Share of the Purchaser notifies Escrow Account. Notwithstanding anything herein to the Seller contrary, any such amounts payable from the Escrow Account and any amounts payable from the Stockholder Representative Reserve to or for the benefit of any claim an Executing Stockholder, Executing Option Holder or demand pursuant Non-Owner Participant who is employed by a Target Entity prior to paragraph 2.3.2 aboveor following the Closing Date shall be paid to the Company, and if such claim the Company shall pay the applicable recipient the amount to which he or demand relates to a claim or demand asserted by a third party against the Purchaser which she is a claim or demand for entitled (less any applicable withholding taxes, which the Seller must indemnify or hold harmless Company shall remit to the Purchaser under this Agreement, applicable Governmental Authority) as soon as practicable (but in no event later than the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the SellerCompany’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days next payroll date after the date of the applicable release from the Escrow Notice of Account or Stockholder Representative Reserve, as applicable) through the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimpayroll.
Appears in 2 contracts
Sources: Agreement and Plan of Merger, Agreement and Plan of Merger (Kindred Healthcare, Inc)
Escrow. 2.3.1 Purchaser (a) Concurrently with the execution and Seller agree that $400,000 allocated among delivery of this Agreement, Parent and the two LLC Purchase Agreements of Company have entered into an escrow agreement, in the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account form attached hereto as Exhibit F (the “Escrow AccountAgreement”) ), with The Huntington Wilmington Trust, National BankAssociation, a national banking corporation as escrow agent (the “Escrow Agent”), pursuant to which, among other things, Parent shall (i) concurrently with the execution and delivery of this Agreement, deposit an amount in cash equal to $10,000,000 into a segregated escrow agreement reasonably satisfactory account established by the Escrow Agent (the “Escrow Account”) and (ii) subsequent to Purchaser the execution and Sellerdelivery of this Agreement, deposit amounts in cash into the Escrow Account such that, on or before 5:00 p.m. Central Time on January 23, 2024, the aggregate funds contained in the Escrow Account as of such time is equal to $20,000,000 (the “Full Escrow Funding”), in each case, for the purpose of securing Sellerfunding Parent’s and the Company’s representations and warranties made to the Purchaser obligations under this Agreement, including Section 8.3(b)(iv).
(b) Distributions of funds contained in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period(the “Escrow Funds”) shall occur as follows:
(i) if the Effective Time occurs and the transactions contemplated hereby are consummated in accordance with the terms hereof, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Parent and the Company shall deliver join written instructions to the Purchaser Escrow Agent instructing the Escrow Agent to distribute from the Escrow Account all of the Escrow Funds, by wire transfer of immediately available funds to the account(s) designated in Article III hereofsuch instructions, Purchaser becomes liable to the Paying Agent for and pays any monetary damagesthe inclusion of such Escrow Funds in the Payment Fund (and, awardsfor the avoidance of doubt, or settlements the Escrow Funds will be deemed to be a part of claimsthe Payment Fund upon receipt by the Paying Agent);
(ii) if this Agreement is terminated in accordance with the terms hereof the Company is entitled to receive the Closing Failure Fee in accordance with Section 8.3(b)(iv), then the Company and Parent shall deliver joint written instructions to the Escrow Agent shall, after satisfaction of instructing the provision of paragraph 2.2.3 hereof, pay Escrow Agent to distribute from the Escrow AccountAccount all of the Escrow Funds, by wire transfer of immediately available funds to the account(s) designated in such instructions, to the Purchaser, Company in satisfaction of Parent’s obligations under Section 8.3(b)(iv); and
(iii) if this Agreement is terminated in accordance with the amount of any such damages, awards, or settlements (“Escrow Payment”). On terms hereof and the first day of the tenth month following Company is not entitled to receive the Closing DateFailure Fee in accordance with Section 8.3(b)(iv), then the Company and Parent shall deliver joint written instructions to the Escrow Agent shall pay instructing the Escrow Agent to distribute from the Escrow Account all of the Escrow Funds, by wire transfer of immediately available funds to the Seller the amount then on deposit account(s) designated in the such instructions, to Parent (or its designee).
(c) The Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Funds shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid held by the Escrow Agent to Purchaser.
2.3.3 If in accordance with the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Escrow Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date Distributions of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend Funds shall be made as provided in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, this Section 8.4 and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Battalion Oil Corp), Merger Agreement (Battalion Oil Corp)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among Notwithstanding anything to the contrary contained in Section 1.2(a) or elsewhere in this and the two LLC Purchase Agreements of the Cash Consideration shallAgreement, on the Closing Date, be deposited in :
(i) an interest-bearing escrow account aggregate of $16,500,000 (the “General Escrow Amount”) shall be:
(A) withheld from: (i) the “Gross Purchase Price” otherwise payable to the Sellers in accordance with the amounts set forth on Schedule 1.2A in the column entitled “Seller General Escrow Amount”; and (ii) the “Gross Purchase Price” otherwise payable to the Cash Cancel Sellers in accordance with Schedule 1.2B in the column entitled “Cash Cancel Seller General Escrow Amount,”; and
(B) paid or caused to be paid by Purchaser, in the amount of $239,549.38, and such General Escrow Amount shall be deposited into an escrow account maintained with a financial institution in the United Kingdom (the “General Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser held and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid distributed by the Escrow Agent to Purchaser.in accordance with the terms of the Escrow Agreement; and
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable an aggregate of the amount set forth on Schedule 1.2(b)(ii) (the “Special Escrow Amount”) shall be withheld from: (A) the “Gross Purchase Price” otherwise payable to Purchaser, at the Seller’s expenseSellers in accordance with the amounts set forth on Schedule 1.2A in the column entitled “Seller Special Escrow Amount” and (B) the “Gross Purchase Price” otherwise payable to the Cash Cancel Sellers in accordance with the amounts set forth on Schedule 1.2B in the column entitled “Cash Cancel Seller Special Escrow Amount,” and such Special Escrow Amount deposited into an escrow account maintained with a financial institution in the United Kingdom (the “Special Escrow Account”), to defend any such claim or demand asserted against be held and distributed by the Purchaser, so long as Escrow Agent in accordance with the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAgreement.
Appears in 2 contracts
Sources: Share Purchase Agreement, Share Purchase Agreement (Riverbed Technology, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, (a) Escrow Fund A will be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty held by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shalluntil no later than five (5) Business Days after the Settlement Date, after satisfaction subject to the terms of the provision Escrow Agreement, and will be disbursed, solely for the purposes and in accordance with the terms of paragraph 2.2.3 hereof, pay from this Agreement and the Escrow AccountAgreement, as follows:
(i) in the event that the Closing Cash Difference is owed by Seller, (i) to Buyer, in an amount equal to the Purchaserlesser of (A) Escrow Fund A and (B) the sum of the Closing Cash Difference plus the Final Retention Incentive Plan Amount, and (ii) to Seller, the balance, if any, of Escrow Fund A not otherwise distributed to Buyer;
(ii) in the event that the Closing Cash Difference is owed by Buyer, (i) to Seller, the amount equal to the lesser of any such damages, awards, or settlements (“A) Escrow Payment”). On Fund A and (B) the first day total of the tenth month following Closing Cash Difference plus Escrow Fund A less the Final Retention Incentive Plan Amount, and (ii) to Buyer, the balance, if any, of Escrow Fund A not otherwise distributed to Seller; or
(iii) in the event that the Closing DateCash Difference is equal to zero, (i) to Buyer, the lesser of (A) Escrow Fund A and (B) the Final Retention Plan Amount, and (ii) to Seller, the balance, if any, of Escrow Fund A not otherwise distributed to Buyer.
(b) The Stay Bonus/CIC Amount will be held by the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within until no later than thirty (30) days thereof resolved after the eighteen (18) month anniversary of the Closing Date, subject to the terms of the Escrow Agreement, and will be disbursed, solely for the purposes and in accordance with the terms of this Agreement and the Escrow Agreement, as follows:
(i) if (A) any Banner Company incurs an obligation to pay a stay bonus pursuant to any Change of Control Agreement Amendment or (B) Seller owes any amount to Buyer in accordance with Section 7.21, Buyer may certify in writing to Seller such claim and payment of amounts owed. Unless Seller objects in writing to such claim is made by Purchasercertification within five (5) Business Days after receipt thereof, such sums paid shall qualify as an Escrow Payment and certification shall be paid by deemed final, and Buyer and Seller shall instruct the Escrow Agent to Purchaser.
2.3.3 disburse to Buyer, the amount so certified. If the Purchaser notifies the Seller so objects to such certified amount, Seller and Buyer shall promptly endeavor in good faith to resolve any such objection for a period of any claim or demand pursuant to paragraph 2.3.2 above, fifteen (15) days and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which no resolution is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreementreached thereafter, the objection shall be resolved by an Independent Accounting Firm in accordance with the dispute resolution procedures set forth in Section 2.3. Upon such resolution, Seller and Buyer shall either (i) promptly pay or settle jointly instruct the Escrow Agent to disburse to Buyer, the portion of the Stay Bonus/CIC Amount to which Buyer is entitled, as determined through such claim or demand or resolution;
(ii) employ counsel acceptable within five (5) Business Days after the eighteen (18) month anniversary of the Closing Date, Buyer shall certify in writing to Purchaser, at Seller the Seller’s expense, aggregate amount of all stay bonuses owing by the Banner Companies pursuant to defend the Change of Control Agreement Amendments which have not been paid as of such date and the aggregate amount of all claims that have been made alleging the Banner Companies’ failure to pay any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.stay bonuses when
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (Patheon Inc)
Escrow. 2.3.1 Purchaser 12.1 The Escrow Amount together with the Additional Escrow Amount, from time to time, together with all interest earned thereon, shall be deposited and Seller agree that $400,000 allocated among held in the Escrow Account and paid out in accordance with the provisions of this Clause 12 and the two LLC Purchase Agreements Escrow Agreement by way of security against any liability of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant Ordinary Shareholder to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made pay any amounts to the Purchaser in Article III hereofrespect of (i) any claims under this Agreement (including any Claims); (ii) any claims made under the Tax Deed; (iii) any claims made by Digital Realty (UK) Limited under the Consultancy Agreement; and/or (iv) any adjustments to be made pursuant to Clause 8 (“Other Claims”). All interest earned on principal in the Escrow Account (less Tax if applicable) shall follow that part of the principal on which it is earned and shall be paid out at the same time.
12.2 The monies in the Escrow Account shall be released by the Escrow Agent as follows:
(a) on the date which is 9 (nine) months following the Completion Date (or if such date is not a Business Day, the next Business Day following such date), there shall maintain be paid to the Ordinary Shareholder out of the Escrow Account, the sum of £20,000 (amount in words) retained with respect to any Income and Outgoings to be prorated in accordance with Clause 8 less the aggregate of: (i) the amount of any adjustments to be made pursuant to Clause 8 due to the Purchaser agreed or determined prior to that date for which the Ordinary Shareholder is liable and not duly paid or credited as having been paid to the Purchaser; and (ii) the amount of any outstanding claims made by the Purchaser under Clause 8 prior to that date but not agreed or determined;
(b) any monies agreed to be paid or released or which have been determined by an Expert to be released pursuant to Clause 8;
(c) if the ▇▇▇▇▇ Guarantees have been released within the period of 36 (thirty six) months following the Completion Date (or if such date is not a Business Day, the next Business Day following such date), there shall be paid to the Ordinary Shareholder out of the Escrow Account, the balance of all monies then to the credit of the Escrow Account less the aggregate of: (i) the amount of any Claims and/or Other Claims by the Purchaser agreed or determined prior to that date for which the Ordinary Shareholder is liable and not duly paid or credited as having been paid to the Purchaser; and (ii) the amount of any outstanding Claims and/or Other Claims made by the Purchaser prior to that date but not agreed or determined or lapsed;
(d) after the period of 36 (thirty six) months following the Completion Date and until the date upon which the ▇▇▇▇▇ Guarantees have been released and/or extinguished there shall be paid to the Ordinary Shareholder out of the Escrow Account, the ▇▇▇▇▇ Rental Surplus less the aggregate of: (i) the amount of any Claims and/or Other Claims by the Purchaser agreed or determined prior to that date for which the Ordinary Shareholder is liable and not duly paid or credited as having been paid to the Purchaser; and (ii) the amount of any outstanding Claims and/or Other Claims made by the Purchaser prior to that date but not agreed or determined or lapsed;
(e) from time to time thereafter, there shall forthwith be paid to the Ordinary Shareholder out of the monies remaining in the Escrow Account, the amount, if any, by which the amount of those monies remaining in the Escrow Account, shall from time to time exceed the aggregate of: (i) the amount of any Claims and/or Other Claims made by the Purchaser agreed or determined prior to that date and not duly paid to the Purchaser; and (ii) the amount of any outstanding Claims and/or Other Claims by the Purchaser made prior to that date but not agreed or determined or lapsed; and
(f) in accordance with Clauses 12.5(a), 12.5(b), 12.5(c) and 12.5(g). All monies paid to the Purchaser out of the Escrow Account shall be deemed to the extent so paid to satisfy the Claim(s) and/or Other Claims in respect of which such monies are paid out.
12.3 References in this Clause 12 to a Claim or Other Claims being agreed or determined or lapsed shall be:
(a) to an agreement evidenced by joint written instructions signed on behalf of both the Ordinary Shareholder and the Purchaser stating: (i) the agreed amount of such Claim and/or Other Claims (if any) either for which the Ordinary Shareholder is liable and/or (if any) the agreed amount of such Claim and/or Other Claims for which the Ordinary Shareholder is not liable and/or (if any) the amount of such Claim and/or Other Claims still in dispute; or (ii) that the relevant Claim and/or Other Claims has lapsed;
(b) to a determination of the Expert in accordance with the provisions of Clause 8 indicating on its face the amount of such Other Claim for which the Ordinary Shareholder is or is not liable; or
(c) to a determination of the courts of England evidenced by an amount indicating on its face: (i) the amount of such Claim and/or Other Claims for which the Ordinary Shareholder is or is not liable; or (ii) that the relevant Claim and/or Other Claims has lapsed.
12.4 Each Claim or Other Claim, in order to be recognised as being validly made, must be made in writing, shall give such reasonable details of the Claim or Other Claim as may be available at that time (to include an estimate of a monetary amount of such Claim or Other Claim which shall be a fair, reasonable and bona fide estimate of the level of such Claim or Other Claim) and shall be delivered to the Ordinary Shareholder in accordance with paragraph 2 of Schedule 5 (Sellers’ Limitations on Liability) and Clause 33.
12.5 The Purchaser and the Ordinary Shareholder shall instruct the Escrow Agent that it is hereby irrevocably instructed by the Ordinary Shareholder and the Purchaser to sign money transfer orders on the Escrow Account for a period the release of nine months. During such periodprincipal monies as follows:
(a) upon the receipt by the Escrow Agent of joint written instructions pursuant to Clause 12.3(a), if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements respect of claims, then the amount (if any) of an agreed Claim and/or Other Claim;
(b) upon the receipt by the Escrow Agent shallof (i) a determination pursuant to Clause 12.3(b); and/or (ii) an award or order pursuant to Clause 12.3(c), after satisfaction to the Purchaser in respect of the provision amount (if any) of paragraph 2.2.3 hereofthe Claim and/or Other Claims for which the Ordinary Shareholder is liable;
(c) on the date which is 9 (nine) months following the Completion Date (or if such date is not a Business Day, pay the next Business Day following such date), to the Ordinary Shareholder in respect of the amount referred to in Clause 12.2(a);
(d) on the date which is 36 (thirty six) months following the Completion Date (or if such date is not a Business Day, the next Business Day following such date), to the Ordinary Shareholder in respect of the amount referred to in Clause 12.2(c);
(e) annually thereafter, to the Ordinary Shareholder in respect of the amounts referred to and on the basis set out in Clause 12.2(d) (or in any such case the amount of the principal remaining in the Escrow Account if a lesser sum);
(f) from time to time thereafter, to the Ordinary Shareholder in respect of the amounts referred to and on the basis set out in Clause 12.2(e) (or in any such case the amount of the principal remaining in the Escrow Account if a lesser sum); and
(g) on the dates referenced in Clauses 12.2 to the Ordinary Shareholder in respect of any interest (less any Tax if applicable) in accordance with Clause 12.6, and in making the payments to be made pursuant to this Clause 12 the Escrow Agent shall rely on (as the case may be): (i) the specified or estimated amounts of Claims and/or Other Claims which the Purchaser notifies to the Escrow Agent have been validly notified to the Ordinary Shareholder pursuant to the provisions of this Agreement; (ii) any joint written instructions referred to in Clause 12.3(a) which are received by the Escrow Agent; (iii) any determination referred to in Clause 12.3(b) which is received by the Escrow Agent; (iv) any order or award referred to in Clause 12.3(c) which is received by the Escrow Agent; and (iv) amounts previously paid from the Escrow Account, but not any other matters.
12.6 All interest earned on principal in the Escrow Account (less Tax if applicable) shall be payable to the Ordinary Shareholder and shall be paid to the Ordinary Shareholder on the dates referred to at Clauses 12.2(a), 12.2(b) and 12.2(d).
12.7 Any payment to be made in accordance with this Clause 12 to the Ordinary Shareholder shall be made by electronic transfer to GM’s Designated Account. Any payment to be made in accordance with this Clause 12 to the Purchaser shall be paid by electronic transfer to an account notified by the Purchaser to the Escrow Agent in writing at least two (2) Business Days before the date of payment.
12.8 The payment by the Escrow Agent of all or any part of the Escrow Amount and/or the Additional Escrow Amount to the Ordinary Shareholder or Purchaser, as appropriate, shall constitute a good discharge by the amount Escrow Agent in respect of any each such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, payment and the Escrow Agent shall pay not be concerned to see to the Seller the amount then on deposit in the Escrow Account, including any earnings thereonapplication of each such payment. Any dispute between the parties regarding the validity or amount The fees and expenses of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If shall be borne equally as between the Purchaser notifies (on the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (ione hand) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, Ordinary Shareholder (on the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimhand).
Appears in 2 contracts
Sources: Share Sale and Purchase Agreement (Digital Realty Trust, L.P.), Share Sale and Purchase Agreement (Digital Realty Trust, L.P.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements Closing, Buyer will deposit the Escrow Amount, without any act of Seller, with the Cash Consideration shallEscrow Agent, on the Closing Date, be deposited in such deposit to constitute an interest-bearing escrow account fund (the “Escrow AccountFund”) with to be governed by the terms set forth herein. The Huntington National Escrow Cash may be invested as jointly directed in writing by Buyer and Seller from time to time. In the absence of joint written instructions, the Escrow Cash shall be invested by the Escrow Agent in a U.S. Bank, a national banking corporation National Association, money market deposit account, as more fully described on Exhibit L hereto. Any interest, earnings and income (including dividends and other distributions in respect of the Escrow Shares) that accrue on the Escrow Amount during the period of time during which the Escrow Amount is held in the Escrow Fund shall be deemed to be part of the Escrow Fund; provided, however, that Buyer shall be required to report and pay the Taxes due on such interest, earnings and income, unless, and until, the Escrow Fund (or any portion thereof) is paid or released to Seller in accordance with the terms of this Agreement. The Escrow Shares shall be appropriately adjusted for stock splits, recapitalizations, combinations and the like consummated by Buyer.
(b) Subject to the following requirements, the Escrow Fund shall remain in existence through and until that date that is 365 days following the Closing Date (the “Escrow AgentPeriod”). Upon the expiration of the Escrow Period, and within ten (10) business days thereafter, any and all Escrow Cash and/or Escrow Shares remaining in the Escrow Fund shall be released from the Escrow Fund to Seller after accounting for (i) all amounts theretofore validly distributed out of the Escrow Fund to the Indemnified Parties pursuant to this Article IX and (ii) the retention of an amount of Escrow Cash and Escrow Shares equal, in the aggregate, to such portion of the remaining Escrow Fund which, subject to the objection of the Indemnifying Parties and the subsequent arbitration of the matter in a manner consistent with this Article IX, is necessary to satisfy any unsatisfied claims specified in any Damages Certificate (as defined in Section 9.4(c)) delivered to the Indemnifying Parties prior to the end of the Escrow Period, which amount shall remain in the Escrow Fund (and the Escrow Fund shall remain in existence) until such claims have been resolved. As soon as such claims have been resolved (such resolution to be evidenced by the written agreement of Buyer and the Indemnifying Parties or the written decision of the arbitrators as described below), and within two (2) business days thereafter, the Escrow Agent shall deliver to Seller the remaining portion of the Escrow Fund not required to satisfy any remaining claims.
(c) In the event that any Indemnified Party has incurred or sustained Damages or reasonably anticipates that it will incur or sustain Damages, the Indemnified Party shall deliver to the Indemnifying Parties a certificate signed by any officer of the Indemnified Party (a “Damages Certificate”) (A) stating that the Indemnified Party has incurred or sustained Damages or reasonably anticipates that it could incur or sustain Damages and (B) specifying in reasonable detail the individual items of Damages included, and a good faith estimate of the amount of such Damages, or the basis for such anticipated liability.
(d) The Indemnifying Parties shall have twenty (20) days following their receipt of a Damages Certificate to object to any claim or claims made in a Damages Certificate. In the event that the Indemnifying Parties have not objected within such twenty (20) day period to a Damages Certificate, then the Escrow Agent shall remit to the Indemnified Party an amount of Escrow Cash and a number of Escrow Shares that in the aggregate are equal to the amount set forth in such Damages Certificate and the Escrow Fund shall be reduced by such amount (it being agreed that (i) such remittance shall first be paid out of available Escrow Cash before Escrow Shares are used and (ii) the Escrow Shares shall be valued at a per share amount equal to the closing price of Parent Common Stock as reported on the New York Stock Exchange on (A) if no Objection Certificate shall be delivered, the last day of the twenty (20) day period referred to in this Section 9.4(d), (B) if an Objection Notice is delivered and the parties resolve such objection pursuant to Section 9.4(e) within the fifteen (15) day period referred to in Section 9.4(e), the last day of such fifteen (15) day period or (C) if an Objection Notice is delivered and the parties submit such objection to arbitration pursuant to Section 9.4(e), the date of the arbitrator’s written decision referred to in Section 9.4(e)) (as appropriately adjusted for Parent stock splits, recapitalizations, combinations and the like). In the event that the Indemnifying Parties so object within such twenty (20) day period, such objection must be in the form of a certificate signed by the Indemnifying Party or its authorized member or manager and delivered to the Indemnified Party (an “Objection Certificate”), pursuant which certificate shall set forth the item or items of Damages in the Damages Certificate to which the Indemnifying Parties are objecting and a reasonable basis for each such objection.
(e) For a period of fifteen (15) days after the delivery of an escrow agreement reasonably satisfactory to Purchaser and SellerObjection Certificate, for the purpose of securing Seller’s Indemnified Party and the Company’s representations and warranties made Indemnifying Parties shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims as are objected to therein. If such an agreement is reached as to all or any portion of the Damages that are subject to the Purchaser in Article III hereofObjection Certificate, then a letter setting forth such agreement shall be prepared and signed by both parties and, where an Indemnified Party is entitled to be compensated from the Escrow Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall maintain the Escrow Account for a period of nine monthsbe entitled to rely on any such letter. During If no such agreement can be reached after good faith negotiation during such 15-day period, ifeither the Indemnifying Parties or the Indemnified Parties may make a written demand for arbitration of the matter no later than 30 days after the expiration of such 15-day period unless the amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to the Indemnifying Parties and the Indemnified Parties. In the event that within 20 days after submission of any dispute to arbitration the Indemnifying Parties and the Indemnified Parties cannot mutually agree on one arbitrator, the Indemnifying Parties and the Indemnified Parties shall each select one arbitrator, and the two arbitrators so selected shall select a third arbitrator. The arbitrator or arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator or a majority of the three arbitrators, as a direct result of a material misrepresentation or breach of warranty by Seller made the case may be, to discover relevant information from the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then opposing parties about the Escrow Agent shall, after satisfaction subject matter of the provision dispute. The arbitrator or a majority of paragraph 2.2.3 hereofthe three arbitrators, pay from as the Escrow Accountcase may be, shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including reasonable legal fees and costs, to the Purchasersame extent as a competent court of law or equity, should the arbitrator or a majority of the three arbitrators, as the case may be, determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator or a majority of the three arbitrators, as the case may be, as to the validity and amount of any claim objected to in such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators Objection Certificate shall be binding and conclusive upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser . Such decision shall have given Seller a be written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the Escrow Agent to Purchaserarbitrator(s).
2.3.3 If (f) Judgment upon any award rendered by the Purchaser notifies arbitrators may be entered in any court having jurisdiction. Any such arbitration shall be held in Austin, Texas, under the Seller rules then in effect of any claim or demand pursuant the American Arbitration Association. The payment of all fees and expenses of the parties to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaserarbitration, so long as well as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date fees of the applicable Escrow Notice arbitrator(s) and the administrative fee of the Seller’s decision to either pay such claim or demand or defend American Arbitration Association, shall be payable in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimaccordance with Section 11.10.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (SolarWinds, Inc.)
Escrow. 2.3.1 Purchaser By virtue of this Agreement and Seller agree that $400,000 allocated among this as security for the indemnity obligations provided for in Section 6.2(a) hereof, at the Closing, Buyer will keep and retain the two LLC Purchase Agreements Escrow Shares without any act of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent Shares shall maintain be available to compensate the Buyer Indemnitees for any claims by such parties for any Losses suffered or incurred by them and for which they are entitled to recover under this Article VI. The Escrow Account Shares shall be the sole source of indemnification from the Seller pursuant to this Agreement. For purposes of calculating the number of Escrow Shares necessary to satisfy a claim for indemnification, each Escrow Share shall be deemed to have a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made value equal to the Purchaser in Article III hereof, Purchaser becomes liable average closing price per share of Buyer Common Stock on the Nasdaq Capital Market for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) trading days thereof resolved immediately preceding the date of payment for such claim indemnification claim. Notwithstanding the foregoing, any claims for indemnification from and payment against any and all Losses incurred by the Buyer Indemnitees, as a result of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment the inaccuracy or breach of the representations and warranties contained in Section 2.2 herein (a “Authorization Claim”) shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchasersatisfied, at the Seller’s expenseoption of the Buyer (in its sole discretion) in either cash or Escrow Shares in an amount up to the Purchase Price. To the extent that Buyer chooses to satisfy such Authorization Claim in Escrow Shares, the amount in cash of the value of those Escrow Shares used to satisfy the Authorization Claim shall remain available to satisfy any additional claims pursuant to Section 6.2 hereof. Notwithstanding the foregoing, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser extent that Buyer is not jeopardized with respect entitled to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it satisfaction for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to under Section 6.2 other than an Authorization Claim, Buyer shall utilize the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out Escrow Shares before requiring satisfaction of such claimclaims in cash.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Icad Inc), Asset Purchase Agreement (Icad Inc)
Escrow. 2.3.1 (a) Notwithstanding the provisions of Section 2.02, Purchaser and Seller agree that $400,000 allocated among this and shall deliver to the two LLC Purchase Agreements Escrow Agent a portion of the Closing Cash Consideration shall, on Payment otherwise deliverable to Sellers pursuant to Section 1.02(a) equal to the Closing Date, be deposited in an interest-bearing escrow account sum of Thirty Five Million Dollars ($35,000,000) (the “Escrow AccountAmount”). Of the Escrow Amount, (i) Ten Million Dollars ($10,000,000) shall secure Sellers’ obligation for the Working Capital adjustment described in Section 2.04 (the “Working Capital Escrow Amount”), and (ii) Twenty Five Million Dollars ($25,000,000) shall secure the indemnification and other obligations of the Seller Parties set forth in this Agreement and the other Transaction Agreements (the “General Escrow Amount”). In addition, at the Closing, Purchaser shall deliver to the Escrow Agent, on behalf of Sellers, the Notes in the original issue amount, to be held in escrow as provided below.
(b) The Escrow Amount shall be held in escrow (the “Escrow”) in accordance with The Huntington National Bankthe terms of an escrow agreement, a national banking corporation substantially in the form attached hereto as Exhibit B (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow PaymentAgreement”). On the first day Any amount remaining of the tenth month following Working Capital Escrow Amount after settlement of the Working Capital adjustment pursuant to Section 2.04 shall be released to the Sellers’ Representative (as nominee for the account of Trust 1 and for the account of Trust 2) upon such settlement as provided therein; and any amount remaining of the General Escrow Amount after settlement of the Seller Parties’ indemnification obligations pursuant to Article 10 shall be released to the Sellers’ Representative (as nominee for the account of Trust 1 and for the account of Trust 2) on the date that is twenty four (24) months after the Closing Date, the Escrow Agent shall pay Date or on such later date as is necessary to the Seller the amount then on deposit in the Escrow Account, including resolve any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized disputes with respect to such defenseamounts, except that any amounts retained after the date that is twenty four (24) months after the Closing Date shall only consist of those amounts which are necessary to satisfy the then pending claims for indemnification payable by the Seller Parties (assuming for these purposes only the validity of each such claim), with the remaining amounts released as aforesaid.
(c) The Notes delivered to the Escrow Agent as provided in Section 2.03(a) shall be held in the Escrow and shall be available for set-off pursuant to Section 10.08(b). The Purchaser Sellers shall have the right to cooperate convert their Notes into Common Stock pursuant to the terms of the Notes, in which case all such Common Stock shall be delivered to and held in the defense Escrow, and further shall have the right to sell any of such Common Stock held in the Escrow, provided, that upon any such sale 50% of the proceeds of such sale shall be delivered to and held in Escrow in lieu of such Common Stock to the extent so converted and 50% of such proceeds shall be released to the applicable Seller; provided, that in no event will the proceeds of any such claim sale held in Escrow pursuant to the foregoing provision exceed $75 million in the aggregate. Any remaining amount of the Notes, Common Stock or demand. The cash after settlement of the Seller Parties’ indemnification obligations pursuant to Article 10 shall notify be released to the Purchaser in writingSellers’ Representative (as nominee for the account of Trust 1 and for the account of Trust 2) on the date that is twenty four (24) months after the Closing Date or on such later date as is necessary to resolve any disputes with respect to such amounts, within twenty (20) days except that any amounts retained after the date that is twenty four (24) months after the Closing Date shall only consist of those amounts which are necessary (taking into consideration any cash amounts retained pursuant to paragraph (b) above) to satisfy the then pending claims for indemnification payable by the Seller Parties (assuming for these purposes only the validity of each such claim), with the remaining amounts released as aforesaid. For purposes of determining the number of shares of Common Stock required to satisfy a claim for indemnification, the value of the applicable Escrow Notice Common Stock into which all or any portion of the Seller’s decision Notes are converted shall be deemed to either pay be the higher of (i) the price at which the Notes were converted into such claim or demand or defend Common Stock and (ii) the market price for such Common Stock prevailing at the time the securities are released to Purchaser in good faith any satisfaction of a claim; provided, that for purposes of the $175 million limit provided in Section 10.07(a) of this Agreement, such third party claim or demand. So long value as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available so determined pursuant to the Seller or its agents all records foregoing provisions will be credited against such $175 million if and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry extent that shares of Common Stock are so used to satisfy a claim for indemnification.
(d) With due regard to the limitations on liability contained in Article 10, nothing in this Agreement shall be construed as limiting any judgment unless such settlementSeller Party’s liability for the Working Capital adjustment to the Working Capital Escrow Amount or for Purchaser Losses to the General Escrow Amount and/or the Notes, compromise nor shall payments from the Escrow Amount be considered as liquidated damages for any breach under this Agreement or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimother Transaction Agreement.
Appears in 2 contracts
Sources: Stock Purchase Agreement (FriendFinder Networks Inc.), Stock Purchase Agreement (FriendFinder Networks Inc.)
Escrow. 2.3.1 Purchaser The parties acknowledge and Seller agree that the Company will need to raise capital in order to move forward with the business plan that the parties have developed, and that in the event the Company is unable to raise the necessary capital, the parties agree that they have the right, but not the obligation, to unwind the transactions described herein. To assure that the transaction can be unwound if necessary, the consideration to be paid to Scion, as described in Section 2.1(b) above, shall be held in escrow subject to the Company raising equity capital of at least One Million Dollars ($400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 1,000,000) (the “Escrow AccountBase Capital”).
(a) with The Huntington National Bank, a national banking corporation If the Base Capital is raised prior to the expiration of 120 days after the Closing (the “Escrow AgentBase Capital Deadline”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for then the purpose of securing Seller’s transactions shall proceed as described herein and the Company’s representations following shall occur:
(1) Fifty percent (50%) (i.e., 10,500 shares) of the Scion Common Shares shall be released from escrow and warranties made delivered to Scion. The remaining fifty percent (50%) (i.e., 10,500 shares) of the Scion Common Shares shall continue to be held in escrow subject to the Purchaser achievement of the performance metrics described in Article III hereofSection 2.3 below.
(2) Fifty percent (50%) of the Scion Redeemable Shares shall be released from escrow and delivered to Scion. The Escrow Agent remaining fifty percent (50%) of the Scion Redeemable Shares shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made continue to be held in escrow subject to the Purchaser achievement of the performance metrics described in Article III hereofSection 2.3 below.
(3) A payment under the Promissory Note equal to twenty-five percent (25%) of the amount received from third parties (including the Base Capital) prior to the Base Capital Deadline shall be paid to Scion.
(b) Unless the parties mutually agree in writing to extend the Base Capital Deadline, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claimsif the Base Capital has not been raised by the Base Capital Deadline, then the Escrow Agent shall, after satisfaction transactions described herein shall be unwound and the following shall occur:
(1) The Scion Common Shares will be cancelled and deemed to be unissued shares of the provision Company;
(2) The Scion Redeemable Shares will be cancelled and deemed to be unissued shares of paragraph 2.2.3 hereofthe Company;
(3) The Promissory Note will be cancelled and of no further force and effect;
(4) All of the Scion Assets will be returned to Scion, pay from the Escrow Account, including but not limited to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay rights to the Seller Skin Disc patent application or the amount then on deposit Skin Disc patent;
(5) The Consulting Agreements will be terminated; provided, however, that any unpaid costs/fees associated with the services completed prior to the Base Capital Deadline (as extended, if applicable) will be paid in the Escrow Account, including any earnings thereon. full; and
(6) Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected funds received by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any Company from third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall investors will be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect returned to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claiminvestors.
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (Biolargo, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and Licensee has deposited with Citibank N.A., New York, New York (the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in "Escrow Agent") into an interest-bearing escrow account (the “"Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”"), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, the Minimum fee for the purpose of securing Seller’s 12-month period commencing on August 16, 2000 and the Company’s representations and warranties made to the Purchaser in Article III hereofending August 15, 2001. The Escrow Agent shall maintain Agreement among the parties and Citibank N.A. by which the Escrow Account for a period of nine months. During such periodwas set up is referred to as the "Escrow Agreement." Commencing on August 16, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to 2000 and the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first 16th day of November, February and May thereafter during the tenth Term, (a) the portion of Minimum fee for the forthcoming three-month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and period shall be paid by to Licensor, without any requirement for notice to Licensee, out of the Escrow Agent to Purchaser.
2.3.3 If Account in accordance with the Purchaser notifies terms of Section 5.2 of this Agreement and the Seller of any claim or demand pursuant to paragraph 2.3.2 aboveEscrow Agreement, and if (b) the Licensee shall deposit into the Escrow Account an amount equal to the portion of Minimum fee for the quarter commencing one year after the date such claim or demand relates deposit into the Escrow Account is to a claim or demand asserted by a third party against be made, such that the Purchaser which is a claim or demand Escrow Account shall always contain the Minimum fee due to Licensor for which the Seller must indemnify or hold harmless ensuing 12-month period. The parties shall cause the Purchaser under this escrow agent to invest the funds held in escrow as mutually agreed. All interest earned on the amount in escrow, after payment of the fees of the escrow agent, shall be paid to Licensee. Licensee shall continue to deposit sums into the Escrow Account in accordance with Section 5.2 and the Escrow Agreement, the Seller shall either unless (i) promptly pay or settle such claim or demand or Licensor is subject to Bankruptcy, (ii) employ counsel acceptable to PurchaserLicensee has been issued an arbitral award stating that Licensor is in Default as provided in Section 7.2, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long (iii) this Agreement has been terminated as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimherein provided.
Appears in 2 contracts
Sources: License Agreement (International Sports Wagering Inc), License Agreement (International Sports Wagering Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on At the Closing Date, two escrow accounts shall be deposited in an interest-bearing escrow account established with the Norwest Bank Minnesota, N.A. (the “"Escrow Account”Agent"). The escrow accounts will consist of the following: (i) with The Huntington National Bank, a national banking corporation an amount equal to $1,000,000 (the “"Working Capital Escrow Agent”)Amount") as security for the purchase price adjustment set forth in Section 3.2 hereof and (ii) an amount equal to $30,611,000, $29,861,000 of which is payable to Sellers in respect of the sale of the Newco Brazil Shares (the "Shares Escrow Amount") and $750,000 of which may be paid to Sellers as Buyer's share of withholding Taxes in Brazil pursuant to an escrow agreement reasonably satisfactory to Purchaser and SellerSection 8.2(a)(v) hereof (the "Tax Escrow Amount" and, for together with the purpose of securing Seller’s Shares Escrow Amount, the "Brazil Escrow Amount"). The Working Capital Escrow Amount and the Company’s representations Shares Escrow Amount are being paid out of the Closing Purchase Price and warranties made are being paid to the Purchaser Escrow Agent in Article III hereoflieu of being paid directly to Sellers. The two escrow accounts shall be established pursuant to agreements among the parties hereto and the Escrow Agent in substantially the forms attached hereto as Exhibit I (the "Escrow Agreements"). The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Amounts so delivered to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of and any such damages, awards, other property or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Sellercash, and a third any income earned with respect thereto, from time to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid time held by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates the terms of the Escrow Agreements are herein referred to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect "Escrow Fund." The Escrow Fund shall be held by the Escrow Agent in escrow subject to such defensethe terms and conditions of the Escrow Agreements. The Purchaser shall have the right Buyer and Sellers agree to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long and to use all commercially reasonable efforts to disburse the Shares Escrow Amount as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimsoon as practicable."
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Bemis Co Inc)
Escrow. 2.3.1 Purchaser and Seller agree that Seller, together with NationsBank, N.A. as ------ escrow agent (the "Escrow Agent"), shall execute and deliver an escrow agreement substantially in the form of Exhibit A attached hereto and made a part hereof --------- (the "Escrow Agreement"), pursuant to the terms of which Purchaser shall deliver to the Escrow Agent, for the account of Seller, Two Million Dollars ($400,000 allocated among this and 2,000,000) in accordance with Paragraph 3.c. hereof (collectively, the two LLC Purchase Agreements of the Cash Consideration shall"Escrow Funds"), on the Closing Date, to be deposited held in an interest-bearing escrow account (in accordance with the “terms and conditions of the Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofAgreement. The Escrow Agent Funds shall maintain secure the indemnification obligations of Seller and the Principals as set forth herein and specifically including, but not limited to, to Paragraph 19 below. The Escrow Agreement will further provide that (i) thirty-three and one-third percent (33- 1/3%) of the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid Funds held by the Escrow Agent at the expiration of twelve (12) months following the Closing Date (the "First Release Date") will be released to Purchaser.
2.3.3 If Seller on the Purchaser notifies First Release Date, to the Seller extent they exceed any outstanding claims (as defined in the Escrow Agreement) as of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or First Release Date; (ii) employ counsel acceptable to Purchaser, fifty percent (50%) of the Escrow Funds held by the Escrow Agent at the Seller’s expenseexpiration of twenty-four (24) months following the Closing Date (the "Second Release Date") will be released to Seller on the Second Release Date, to defend the extent they exceed any such claim or demand asserted against the Purchaser, so long outstanding claims (as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate defined in the defense Escrow Agreement) as of any such claim or demand. The Seller shall notify Second Release Date; (iii) the Purchaser in writing, within twenty (20) days after the date balance of the applicable Escrow Notice Funds held by the Escrow Agent at the expiration of thirty-six (36) months following the Closing Date (the "Third Release Date") will be released to Seller on the Third Release Date, to the extent they exceed any outstanding claims (as defined in the Escrow Agreement) as of such Third Release Date; and (iv) any Escrow Funds not released on the Third Release Date shall be released to Seller as soon thereafter as there are no claims outstanding as more particularly described in the Escrow Agreement. Purchaser and Seller will share all expenses of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Agent equally.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that At the Closing, RCE shall deposit $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 12,000,000 (the “------ "Escrow Account”Amount") with The Huntington National Bank, a national banking corporation (and deliver the “Escrow Agent”), pursuant Amount to an escrow agreement reasonably satisfactory to Purchaser and Seller, for agent (the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The "Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, Agent") as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Accountdescribed herein, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid held by the Escrow Agent to Purchaser.
2.3.3 If secure the Purchaser notifies the Seller rights of RCE and any claim or demand pursuant other RCE Indemnitee to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or indemnity under Article VII and (ii) employ counsel acceptable any Post-Closing Working Capital Adjustment that may be due to PurchaserRCE pursuant to section 2.12 below, at all in accordance with the Seller’s expenseterms of this Agreement and the Escrow Agreement. RCE shall also (x) deposit into the Escrow Account an amount equal to the tax benefit, if any, of the part of the Other HIT Consideration relating to defend any the Participants' Earnout Consideration, if any, promptly following the final determination of the Earnout Payment and the amount of such tax benefit, if any, and (y) deposit into the Escrow Account for distribution to the Escrow and Earnout Participants pursuant to the Escrow Agreement an amount equal to the tax benefit, if any, of the part of the Other HIT Consideration relating to the Escrow Participation Amount, if any, promptly following the end of the Escrow Period and the final determination of the amount of such tax benefit, if any. The Escrow Amount shall be held pursuant to the terms of the Escrow Agreement. The Escrow Amount will be held by the Escrow Agent for a period to end as set forth in the Escrow Agreement (the "Escrow Period"); provided, however, that in the event RCE has made a claim under the Escrow Agreement prior to the end of the Escrow Period, then the Escrow Period shall continue (and the Escrow Agent will continue to hold, in accordance with the Escrow Agreement some or all of the Escrow Amount, as required by the Escrow Agreement), until such claim or demand asserted against is fully and finally resolved, all as provided in the PurchaserEscrow Agreement. In the event that this Agreement is adopted by the holders of the Learning Curve Shares, so long then all such holders shall, without any further act of any holder, be deemed to have consented to and approved (i) the use of the Escrow Amount to secure the rights of RCE and the Learning Curve Surviving Corporation in the manner set forth herein and in the Escrow Agreement, and (ii) the appointment of the Shareholder Representatives as the Purchaser is not jeopardized representatives of the persons receiving Merger Consideration under this Agreement and as the attorney-in-fact and agent for and on behalf of each such person (other than holders of Dissenting Shares). RCE shall promptly deliver a notice to the Escrow Agent pursuant to section 5(h) of the Escrow Agreement, with respect a copy to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writingShareholder Representatives, within twenty (20) days after the date Litigation has resolved by a settlement agreement or a Court Order of a court or other tribunal of competent jurisdiction and time for appeal has expired and no appeal has been perfected as more particularly described in section 5(h) of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAgreement.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this 1. At the Effective Time, Enterprise, the Subs, Sumter One, Sumter Two and the two LLC Purchase Agreements Stockholders shall execute and deliver an escrow agreement substantially in the form of Exhibit A hereto (the "Escrow Agreement") under which a person mutually satisfactory to Enterprise, Sumter One, Sumter Two and the Stockholders shall act as escrow agent (the "Escrow Agent") with respect to the Enterprise Common Stock deposited with the Escrow Agent. Enterprise shall deposit the Escrow Amount with the Escrow Agent, which shall be withheld from the Merger Consideration payable to the Stockholders after the Mergers as provided in Section 1.8.
2. Subject to the provisions of this Section 1.9 and the Escrow Agreement the Escrow Amount shall be paid to the Stockholders or to Enterprise as follows:
(i) As promptly as practicable after the 90th day following the Effective Date hereof (but in no event later than the 120th day following the Effective Date), Enterprise shall deliver to the Stockholders a written statement setting forth the amount of all or any portion of the Cash Consideration shallReceivables, excluding the Receivables described in item 2 of Schedule 3.7, on the Closing Date, be deposited in an interest-bearing escrow account Effective Date (the “Escrow Account”"Effective Date Receivables") with The Huntington National Bankwhich shall not have been collected by Enterprise within 90 days after the Effective Date. In the event the amount of such uncollected Effective Date Receivables exceeds the Effective Date Reserve, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made then Enterprise shall deliver written notice to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for Stockholders and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, specifying the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, excess and the Escrow Agent shall pay promptly and in accordance with the terms of the Escrow Agreement deliver to Enterprise from the Escrow Amount shares of Enterprise Common Stock sufficient to cover such excess. With respect to collection of Effective Date Receivables, remittances to the Seller Surviving Corporations made by any account debtor shall, unless otherwise specified by the account debtor on account of a dispute with respect to an invoice for services rendered prior to the Effective Time, be credited to the invoices bearing the earliest dates. If Enterprise Common Stock is delivered to Enterprise from the Escrow Amount pursuant to this Section 1.9(b)(i), the Surviving Corporations shall assign to the Stockholders all Effective Date Receivables not collected by the Surviving Corporations within 90 days after the Effective Date. Thereafter, the Stockholders shall promptly remit to Enterprise funds in the amount, if any, by which the Stockholders' collections of such assigned Effective Date Receivables exceeds the value of the Enterprise Common Stock delivered to Enterprise from the Escrow Amount pursuant to this Section 1.9(b)(i). In the event that the amount of such uncollected Effective Date Receivables is less than or equal to the Effective Date Reserve, then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Enterprise shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a deliver written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim the Stockholders and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent specifying that the Escrow Agent shall promptly and in accordance with the terms of the Escrow Agreement deliver to Purchaser.the Stockholders from the Escrow Amount an amount of Enterprise Common Stock equal to $2.5 million. In the event that the amount of uncollected Effective Date Receivables exceeds the Effective Date Reserve and such excess is less than $2.5 million, then Enterprise shall deliver written notice to the Escrow Agent specifying that the Escrow Agent shall promptly and in accordance with the terms of the Escrow Agreement deliver to the Stockholders from the Escrow Amount an amount of Enterprise Common Stock equal to the difference between such excess and $2.5 million; and
2.3.3 If (ii) 270 days following the Purchaser notifies Effective Date, the Seller balance of the Escrow Amount, less the sum of (a) any claim or demand amount requested to be disbursed from the Escrow Amount pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either clause (i) promptly pay above which amount has not yet been paid, (b) the amount of all claims for indemnification for Losses asserted in writing within such 270 day period and arising out of or settle resulting from the breach of the representations and warranties set forth in Sections 3.7 and 3.8 (but, with respect to the representation and warranty in Section 3.8, only with respect to (x) Liabilities which, in accordance with U.S. GAAP, should be reflected or reserved for on the Reference Balance Sheet, (y) Liabilities which should be reflected or reserved for on the Interim Balance Sheet, other than the Excluded Adjustments, on a basis consistent with the past practice of Sumter One and Sumter Two and (z) the Agreed Items) that have not been finally resolved, shall be delivered to the Stockholders.
3. For all purposes of this Agreement and the Escrow Agreement, whenever shares of Enterprise Common Stock shall be required to be delivered to satisfy a payment or indemnity obligation of any party hereto, each share of Enterprise Common Stock shall be deemed to be valued at the Fair Market Value, notwithstanding the actual market or other value of the shares of Enterprise Common Stock at the time of the delivery of such claim shares. In the event of any stock split, reverse stock split, stock combination or demand reclassification of the shares of Enterprise Common Stock or any merger, consolidation or combination of Enterprise with any other entity or entities, the deemed value specified above for the shares of Enterprise Common Stock shall be proportionally adjusted so that the deemed value of the shares of Enterprise Common Stock after such event shall be the same as the deemed value of the shares of Enterprise Common Stock prior to such event. All such adjustments shall be made successively.
4. The Stockholders and their representatives shall be entitled to inspect all of the work papers, schedules and other supporting documentation relating to the calculation of the uncollected Effective Date Receivables pursuant to clause (i) of Section 1.9(b) and the calculation of any Losses pursuant to clause (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimSection 1.9(b).
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that At the U.S. Closing, $400,000 allocated among this and the two LLC Purchase Agreements 12,000,000 of the Cash Consideration shall, on Purchase Price otherwise payable by the Closing Date, Buyer to the Sellers shall be deposited in an interest-bearing escrow account (delivered by the “Buyer to the Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, Agent for the purpose of securing Seller’s the obligations of the Sellers under Section 2.6(f) and the Company’s representations and warranties made to the Purchaser in Article III VIII hereof. The Such amount (the "Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Fund") shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid held by the Escrow Agent pursuant to Purchaser.
2.3.3 If the Purchaser notifies terms of the Seller Escrow Agreement. 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 claim or demand pursuant to paragraph 2.3.2 abovecreditor of any party, and if such claim or demand relates shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement. At the U.S. Closing, $5,000,000 of the Purchase Price otherwise payable by the Buyer to a claim or demand asserted the Sellers shall be delivered by a third party against the Purchaser which is a claim or demand Buyer to the Escrow Agent for which the Seller must indemnify or hold harmless purpose of securing the Purchaser under this Agreement, obligation of the Seller shall either (i) promptly Buyer to pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, the Purchase Price for the France Assets at the Seller’s expenseFrance Closing and of the Sellers to proceed with the France Closing under Section 2.3(c) hereof. Of such amount (the "BC France Escrow Fund"), $3,900,000 shall evidence the portion of the Purchase Price attributable to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized France Assets and $1,100,000 shall represent additional Purchase Price payable with respect to such defensethe remaining Acquired Assets which shall be held by the Escrow Agent in order to insure the consummation of the France Closing. The Purchaser BC France Escrow Fund shall have be held by the right Escrow Agent pursuant to cooperate the terms of the BC France Escrow Agreement. The BC France 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 the BC France Escrow Agreement. PAGE Transaction Taxes. Any and all federal, state, county, local or foreign sales, use, value added, excise, stamp, transfer, registration and other Taxes not in the defense nature of income taxes, fees and duties (including any such claim interest, additions to tax and penalties with respect thereto) and any and all transfer, registration, recording or demand. The Seller shall notify similar fees and charges imposed in connection with the Purchaser in writing, within twenty (20) days after the date consummation of the applicable Escrow Notice of transactions contemplated by this Agreement (collectively, "Transfer Taxes") shall be borne equally by the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as Buyer, on the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaserone hand, and the Purchaser is not jeopardized by such defenseSellers, jointly and severally, on the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimhand.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (A) At the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”)Closing, pursuant to an escrow agreement reasonably satisfactory Escrow Agreement to Purchaser and be entered into by the parties substantially in the form of Exhibit 2.3, a portion of the Merger Consideration as shall be equal to FIVE HUNDRED THOUSAND ($500,000) DOLLARS (the "Escrow Deposit"), based upon the valuation described in Section 3.1(a) below, shall be delivered by Buyer, on behalf of the Seller, for to CoreStates Bank, N.A., as escrow agent (the purpose of securing Seller’s "Escrowee"). The Escrow Deposit shall be held to pay post-Closing adjustments and the Company’s representations to indemnify against any claim which may be asserted, pursuant to Sections 12.2 and warranties made to the Purchaser in Article III 12.4 hereof. The Escrow Agent Deposit shall maintain be held and disbursed by the Escrowee in accordance with the following:
(I) In the event that the Seller becomes obligated to remit IHS Stock back to Buyer pursuant to the post-Closing adjustments set forth in Section 2.2(b), the Escrowee shall release to Buyer that portion of the Escrow Account for Deposit as shall have a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made value equal to the Purchaser in Article III hereofamount by which the Merger Consideration is so reduced.
(II) In the event that the Buyer becomes entitled to indemnification pursuant to Section 12.2, Purchaser becomes liable for and pays any monetary damages, awards, or settlements the Escrowee shall release to Buyer that portion of claims, then the Escrow Agent shall, after satisfaction Deposit as shall be equal in value to such indemnification.
(III) If no claim for indemnification on the part of Buyer is outstanding upon the provision expiration of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements one (“Escrow Payment”). On the first day of the tenth month 1) year following the Closing Date, any remaining Escrow Deposit (less any amounts offset for claims pursuant to Section 2.3(a)(i) and (ii)) shall be released to the Seller.
(IV) If any claim(s) for indemnification on the part of Buyer is (are) outstanding upon the expiration of one (1) year following the Closing Date, then any Escrow Agent Deposit (less any amounts offset for claims pursuant to Section 2.3(a)(i) and (ii)) (including all accrued interest thereon) remaining (after resolution of the outstanding claim(s) and payment in respect thereof, if any is owing, shall pay be made), shall be released to the Seller the amount then on deposit in promptly after resolution of such claim(s).
(V) The value of any IHS Stock to be delivered to Buyer from the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Deposit shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding calculated based upon the parties.
2.3.2 In order average closing NYSE price of such stock for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within the thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by business day period immediately preceding the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser date which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either two (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (202) days after before the date of the applicable Escrow Notice such delivery.
(B) The costs, fees and expenses of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as Escrowee shall be borne equally by Buyer, on the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaserone hand, and the Purchaser is not jeopardized by such defenseSeller, on the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimhand.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, (a) The Escrow Amount will be deposited by Purchaser at Closing and held in an interest-bearing escrow account (managed by the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory in the form attached hereto as Exhibit A (the “Escrow Agreement”) to be executed and delivered by Sellers, Purchaser and Seller, for the purpose of securing Seller’s Escrow Agent at Closing. The costs and fees to be charged by the Company’s representations Escrow Agent shall be shared equally between Purchaser and warranties made to the Purchaser in Article III hereofSellers. The Escrow Agent Amount shall maintain the Escrow Account for a period of nine months. During such periodbe available to satisfy any indemnity claims made by, ifand determined in favor of, as a direct result of a material misrepresentation or breach of warranty by Seller made Purchaser pursuant to, and subject to the Purchaser in Article III hereofterms of, Purchaser becomes liable for and pays any monetary damagesSection 5.4 and/or ARTICLE VIII.
(b) On the date that is twelve (12) months after the Closing Date (the “First Anniversary Release Date”), awards, or settlements of claims, then the Escrow Agent shall, after satisfaction shall unconditionally release to Direct Seller (who shall disburse any amounts received for the benefit of the provision Related Subsidiaries in the manner described in Section 1.5(c)(iii)) an amount equal to:
(i) If, prior to the First Anniversary Release Date, there has not been a Claim Final Resolution, (A) fifty percent (50%) of paragraph 2.2.3 hereof, pay from the Escrow Amount deposited by Purchaser at Closing on the Escrow Account, minus (B) any amounts previously released from the Escrow Account to Purchaser, minus (C) an amount (the “Pending Claim Amount”) equal to any then pending and unresolved claims for indemnification under Section 5.4 and ARTICLE VIII for which notice has been provided to Sellers in accordance with Section 5.4 and/or ARTICLE VIII, as applicable; or
(ii) if, prior to the PurchaserFirst Anniversary Release Date, there has been a Claim Final Resolution, (A) the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day remainder of the tenth month following Escrow Amount on the Closing Escrow Account, minus (B) any Pending Claim Amount.
(c) Following a final and non-appealable conclusion, settlement or abandonment of the Identified Claim (a “Claim Final Resolution”) occurring on or after the First Anniversary Release Date, the Escrow Agent shall pay unconditionally release to Sellers an amount equal to (i) the Seller remainder of the amount then Escrow Amount on deposit in the Escrow Account, including minus (ii) any earnings thereon. Any dispute between Pending Claim Amount.
(d) To the parties regarding extent there is a Pending Claim Amount at the validity or amount time of any damagesrelease from the Escrow Account, awards, or settlements of claims such Pending Claim Amount shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid retained by the Escrow Agent to Purchaser.
2.3.3 If in accordance with the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date Escrow Agreement until Final Determination of the applicable Escrow Notice amount of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available Loss relating to the Seller or its agents all records and other materials claims to which such amount relates (at which time such amount shall be disbursed in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any accordance with such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimFinal Determination).
Appears in 1 contract
Sources: Membership Interest and Asset Purchase Agreement (Smith Micro Software, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this 4.1 The Escrow Account shall be operated, and the two LLC Purchase Agreements Escrow Sum and any interest accruing on it (or any part of it) shall be applied, in accordance with this Clause 4.
4.2 If the Buyer makes a claim under this Agreement on or prior to the date which is twelve (12) months after the Completion Date (the Release Date) and such claim has been finally determined in favour of the Cash Consideration shall, on Buyer in accordance with Clause 4.4(b) or 4.4(c):
(a) the Closing Date, Warrantors’ Representative and the Buyer shall instruct the Escrow Agent to transfer a sum equal to the lower of (i) the amount of the claim and (ii) the Escrow Sum or such part of that principal sum plus any accrued interest thereon being available in the Escrow Account (after taking into account payments required to be deposited in an interest-bearing escrow account (made out of the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), Sum pursuant to this Clause 4) to the Buyer’s Bank Account; and
(b) the balance (if any) of the Escrow Sum remaining in the Escrow Account after the transfer referred to in Clause 4.2(a) shall be retained in the Escrow Account in accordance with this Agreement and the terms and conditions of an escrow agreement reasonably satisfactory substantially in the form attached to Purchaser this Agreement in Schedule 8 (subject to finalisation with the Escrow Agent).
4.3 On the Release Date, the Warrantors’ Representative and Sellerthe Buyer shall instruct the Escrow Agent to transfer the Escrow Sum or such part of that principal sum plus any accrued interest thereon being available in the Escrow Account (after taking into account payments required to be made out of the Escrow Sum pursuant to this Clause 4) into such bank account(s) as notified in writing by the Warrantors’ Representative to the Escrow Agent (the Release Bank Accounts), for unless a bona fide claim by the Buyer under this Agreement is outstanding on the Release Date. If such claim is then outstanding:
(a) a sum equal to the lower of (i) the amount of the claim (or all such claims, if more than one), and (ii) the balance remaining on the Escrow Account shall be retained out of the Escrow Sum and in the Escrow Account;
(b) the Warrantors’ Representative and the Buyer shall instruct the Escrow Agent to transfer the balance (if any) on the Escrow Account to the Release Bank Accounts; and
(c) any sum so retained in the Escrow Account after the Release Date in respect of any such claim shall be released to the Buyer’s Bank Account or to the Release Bank Accounts or, in part to the Buyer’s Bank Account with the balance to the Release Bank Accounts, as appropriate, as soon as practicable after that claim is finally determined in accordance with Clause 4.4.
4.4 For the purpose of securing Seller’s this Clause 4, a claim shall be regarded as finally determined if:
(a) the claim is withdrawn by the Buyer in writing;
(b) the Warrantors’ Representative and the Company’s representations and warranties made to Buyer so agree in writing; or
(c) a competent court has awarded judgment in respect of the Purchaser claim and, where relevant, the period for lodging appeal has expired without an appeal having been lodged.
4.5 Any interest which accrues on the Escrow Sum or such part of that principal sum plus any accrued interest thereon being available in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period (after taking into account payments required to be made out of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made the Escrow Sum pursuant to this Clause 4) shall follow the principal amount and shall be paid to the Purchaser Release Bank Accounts or to the Buyer’s Bank Account (as the case may be) at the same time as payment of the corresponding principal amount.
4.6 The Warrantors’ Representative, acting on behalf of himself and all Warrantors, and the Buyer shall:
(a) on or before Completion execute an escrow agreement substantially in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the form attached to this Agreement in Schedule 8 (subject to finalisation with the Escrow Agent shall, Agent) and procure the execution of such escrow agreement by the Escrow Agent; and
(b) after satisfaction Completion promptly give or join in giving all such instructions as are necessary to procure the operation of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day and application of the tenth month following Escrow Sum and any interest accruing on it (or any part of it), in accordance with the Closing Date, provisions of this Clause 4.
4.7 The Buyer shall bear 50% of the fees and expenses of the Escrow Agent and the Warrantors shall pay bear the other 50% of such fees and expenses.
4.8 Each Warrantor shall be entitled to that Warrantor’s Warranty Proportion of each sum released to the Seller the amount then on deposit in Warrantors from the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser Account under this Agreement, the Seller shall either Clause 4 (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available rounded down to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimnearest euro).
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, (a) There shall be deposited in escrow with Union Bank of California, N.A. (the “Escrow Agent”) an interest-bearing escrow amount equal to Two Million One Hundred Thousand Dollars ($2,100,000) (the “Escrow Deposit”) as part of the consideration for the Shares. The Escrow Deposit shall be delivered by the Buyer to the Escrow Agent at the Closing and shall be held and delivered by the Escrow Agent in an account (the “Escrow Account”) in accordance with the terms and provisions of the Escrow Agreement. Any fees and expenses payable to the Escrow Agent pursuant to the Escrow Agreement shall be divided equally between the Buyer, on the one hand, and the Sellers, on the other hand.
(b) The Huntington National BankEscrow Fund shall be released to the Seller Representative, a national banking corporation and Buyer agrees to execute joint instructions, and take all other actions, necessary to cause any such release, as follows:
(i) first, upon determination of the Net Working Capital pursuant to Section 2.5 and payment of any Shortfall or excess amounts payable thereunder (the date of such payment being referred to herein as the “First Release Date”), an amount (the “Escrow AgentFirst Release Amount”), pursuant ) equal to an escrow agreement reasonably satisfactory to Purchaser and Seller, for (x) $500,000 less (y) the purpose sum of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, (A) the amount of any Shortfall paid to the Buyer pursuant to Section 2.5(e)(i)(A); (B) the aggregate dollar amount of any indemnification claims paid out of the Escrow Fund on or prior to the First Release Date; and (C) the aggregate dollar amount of any indemnification claims (as shown in the notices of such damagesclaims provided under the Escrow Agreement) pending as of the First Release Date, awardsby wire transfer of immediately available funds to an account designated by the Seller Representative; provided, however, there shall be no release from the Escrow Fund to the Seller Representative on the First Release Date if (1) the First Release Amount is a negative number, or settlements (2) any Buyer Indemnitee has given notice of a claim under the Escrow Agreement with respect to which it is not reasonably able to specify the amount of Losses and such claim is then pending;
(ii) second, on the first anniversary of the Closing Date (the “Escrow PaymentSecond Release Date”). On , an amount (the first day “Second Release Amount”) equal to (x) $1,125,000 less (y) the sum of (A) the First Release Amount; (B) the aggregate dollar amount of any indemnification claims paid out of the tenth month following Escrow Fund on or prior to the Second Release Date; and (C) the aggregate dollar amount of any indemnification claims (as shown in the notices of such claims provided under the Escrow Agreement) pending as of the Second Release Date, by wire transfer of immediately available funds to an account designated by the Seller Representative; provided, however, there shall be no release from the Escrow Fund to the Seller Representative on the Second Release Date if (1) the Second Release Amount is a negative number, or (2) any Buyer Indemnitee has given notice of a claim under the Escrow Agreement with respect to which it is not reasonably able to specify the amount of Losses and such claim is then pending; and
(iii) third, on the date which is eighteen (18) months after the Closing Date (the “Third Release Date”), an amount (the “Third Release Amount”) equal to (x) the remaining Escrow Fund, if any, less (y) the aggregate dollar amount of any indemnification claims (as shown in the notices of such claims provided under the Escrow Agreement) pending as of the Third Release Date, by wire transfer of immediately available funds to an account designated by the Seller Representative; provided, however, if any Buyer Indemnitee has given notice of a claim under the Escrow Agreement with respect to which it is not reasonably able to specify the amount of Losses and such claim is then pending, the Escrow Agent shall retain the remaining Escrow Fund until it receives joint written instructions of the Buyer and the Seller Representative or a final non-appealable order of a court of competent jurisdiction as provided in the Escrow Agreement, upon which the Escrow Agent shall pay the remaining Escrow Fund, if any, to the Seller the amount then on deposit Representative in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesaccordance with this paragraph.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (i) Simultaneously with the two LLC Purchase Agreements closing of the Cash Consideration shallBusiness Combination, on Merida shall deposit, for good and valuable consideration, the Closing Datereceipt, be deposited in an interestsufficiency and adequacy of which Merida hereby acknowledges, into a non-interest bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation Continental Stock Transfer & Trust Company (the “Escrow Agent”), pursuant subject to an the terms of a written escrow agreement reasonably satisfactory (the “Escrow Agreement”) substantially in the form attached as Exhibit A hereto and to Purchaser be entered into on or prior to the Business Combination Closing Date, an amount equal to the lesser of (x) $12,192,000 and Seller(y) $10.16 multiplied by the number of Shares and Additional Shares held by the Investor as of the closing of the Business Combination (the “Escrowed Funds”). The Escrow Agreement shall irrevocably cause the Escrow Agent to release from the Escrow Account the aggregate Shares Purchase Price in accordance with Section 1 and the aggregate Early Sales Premium in accordance with Section 4(c). The payments to be made by the Escrow Agent to the Investor in accordance with Section 1 or Section 4(c), if applicable, will be made solely with the Escrowed Funds.
(ii) Upon receipt by the Escrow Agent and Company of written notice that any Investor has sold Shares above $10.16 (including any Additional Shares) as provided in Section 4(c), the Escrow Agent may release to the Company for the purpose Company’s use without restriction an aggregate amount equal to the number of securing SellerShares (including any Additional Shares) sold multiplied by $10.11; provided that if the Investor sold any Early Sale Shares, within five (5) Business Days of the Company’s and the CompanyEscrow Agent’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction receipt of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing DateOpen Market Sale Notice, the Escrow Agent shall pay release from the Escrow Account (a) for the Investor’s use without restriction an amount equal to the Seller Early Sale Premium with respect to the Early Sale Shares sold by the Investor, and (b) for the Company’s use without restriction an amount then on deposit equal to the number of Early Sale Shares sold in the Escrow Account, Early Sale multiplied by $10.11.
(iii) In the event that any Investor elects not to sell to the Company any Shares (including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to Additional Shares) held by such Investor by either (A) a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller Investor delivering a written notice to the Company on behalf of itself stating such Investor’s intention not to sell any third party claim Shares (or demand which may result in liability any Additional Shares) to Purchaser the Company, or (B) such Investor failing to timely deliver a Shares Sale Notice to the Company pursuant to paragraph 2.2.2. hereof (“Escrow Notice”Section 1(a) subject for all of its Shares, the Company may promptly issue instructions to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If release from the Purchaser notifies Escrow Account to the Seller Company for the Company’s use without restriction an amount equal to (x) $10.16 multiplied by (y) the number of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized Shares held by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimInvestor.
Appears in 1 contract
Sources: Forward Share Purchase Agreement (Leafly Holdings, Inc. /DE)
Escrow. 2.3.1 Purchaser The Tier I Escrow Agreement shall provide for ------ the distribution of escrow funds in the following amounts and Seller agree that upon the following occurrences:
(i) $400,000 allocated among this and the two LLC Purchase Agreements 800,000 of the Cash Consideration shallescrow funds, together with all interest earned since the Tier I Closing Date on that amount, shall be disbursed to the ▇▇▇▇▇▇▇▇ Payee upon completion and filing with ED of compliance audits for each of the Tier I Schools covering the period July 1, 1995 through June 30, 1996, as required by the provisions of 34 C.F.R. (SEC.) 668.23, which Buyer agrees to seek to file not later than 120 days but shall file no later than 150 days following the Tier I Closing Date; provided, however, if such compliance audits reflect potential liabilities in excess of $10,000 for any Tier I School, Buyer shall provide the Selling Parties with the opportunity to review and comment on a draft of such audits prior to the filing thereof and shall cooperate in good faith with the Selling Parties to incorporate any comments the Selling Parties may have with respect to such audits. In the event that any such compliance audits establish a claim for indemnification under Section 9.12 of this Agreement, the escrow agent will continue to retain an amount sufficient to satisfy such claims up to $800,000 of the escrow funds, which retained amount shall be released to the ▇▇▇▇▇▇▇▇ Payee, together with all interest earned on such funds since the Tier I Closing Date, upon resolution of the compliance audits and payment of any such claim, if any, by Selling Parties once such indemnification claim is Definitively Resolved. At the option of the ▇▇▇▇▇▇▇▇ Payee, the ▇▇▇▇▇▇▇▇ Payee may execute an instruction in accordance with the Tier I Escrow Agreement directing the escrow agent to pay to the applicable creditors that amount of the funds in the escrow account necessary to satisfy the liabilities of the Selling Parties with respect to such compliance audits (together with all interest earned since the Tier I Closing Date on the funds so released) and to release to the ▇▇▇▇▇▇▇▇ Payee the difference between such amount and $800,000 of the funds in the escrow account, together with all interest earned since the Tier I Closing Date on the funds so released to the ▇▇▇▇▇▇▇▇ Payee.
(ii) the difference between $800,000 of the escrow funds less the amount of the Final TFC Payment (as defined below) (the "Reduced Release Amount"), together with all interest earned since the Tier I Closing Date on that amount, shall be deposited released to the ▇▇▇▇▇▇▇▇ Payee on the second (2d) anniversary of the Tier I Closing Date; provided, however, the escrow agent will continue to retain an amount therefrom sufficient to satisfy any indemnification claims under Section 9.12 which have been noticed in accordance with Section 9.14 of this Agreement up to the Reduced Release Amount of the escrow funds, which retained amount shall be released, together with all interest earned on such funds since the Tier I Closing Date, upon resolution of the pending indemnification claims and payment of any liability amounts owed by Selling Parties once such claim is Definitively Resolved. At the option of the ▇▇▇▇▇▇▇▇ Payee, the ▇▇▇▇▇▇▇▇ Payee may execute an instruction in accordance with the Tier I Escrow Agreement directing the escrow agent to pay to the applicable creditor(s), up to the amount of Reduced Release Amount, that amount of the funds in the escrow account necessary to satisfy the resolved indemnification claims and to release to the ▇▇▇▇▇▇▇▇ Payee the difference between such amount and the Reduced Release Amount in the escrow account, in each case, together with all interest earned since the Tier I Closing Date on the funds so released, to such creditor(s) and to the Selling Parties, as applicable.
(iii) $800,000 of the escrow funds, together with all interest earned since the Tier I Closing Date on that amount, shall be released to the ▇▇▇▇▇▇▇▇ Payee on the earlier of the following ("Release Date"): (1) conduct of a program review by ED with respect to at least nine (9) of the Schools pursuant to which ED does not assert Title IV liabilities in an interest-bearing aggregate amount in excess of $800,000, for periods prior to the Tier I Closing Date; or (2) the second (2d) anniversary of the Tier I Closing Date; provided, however, the escrow agent will continue to retain an amount sufficient to satisfy any indemnification claims under Section 9.12 which have been noticed in accordance with Section 9.14 of this Agreement prior to the Release Date up to $800,000 of the escrow funds, which retained amount shall be released to the ▇▇▇▇▇▇▇▇ Payee, together with all interest earned on such funds since the Tier I Closing Date, upon resolution of the pending indemnification claims and payment of any liability amounts owed by Selling Parties in connection therewith once such claims are Definitively Resolved (as defined herein). At the option of the ▇▇▇▇▇▇▇▇ Payee, the ▇▇▇▇▇▇▇▇ Payee may execute an instruction in accordance with the Tier I Escrow Agreement directing the escrow agent to pay to the applicable creditor(s) that amount of the funds in the escrow account necessary to satisfy the resolved indemnification claims and to release to the ▇▇▇▇▇▇▇▇ Payee the difference between such amount and $800,000 of the funds in the escrow account, in each case, together with all interest earned since the Tier I Closing Date on the funds so released to creditors and to the Selling Parties, as applicable.
(iv) Buyer shall receive a reduction to the “Escrow Account”Purchase Price equal to 40% of the Bid Price for any Florida School as listed on EXHIBIT ------- B ("CDR Adjustment Amount") with The Huntington National Bankif any such School's official cohort default rate for FY 1995 and FY 1996 exceeds 25%, a national banking corporation (the “Escrow Agent”), pursuant up to an aggregate maximum CDR Adjustment Amount of $1,000,000 for all such Schools, upon the following conditions: After the Tier I Closing, in the event that Buyer receives notice that the official FY 1995 cohort default rate for any Florida School listed on EXHIBIT B is greater ------- than 25%, (a) if the aggregate CDR Adjustment Amount is greater than $500,000, the escrow agreement reasonably satisfactory agent will retain the CDR Adjustment Amount up to Purchaser an aggregate maximum amount of $1,000,000 for all such Schools, and Seller(b) if the aggregate CDR Adjustment Amount is less than $500,000, for the purpose of securing Seller’s escrow agent will release to the ▇▇▇▇▇▇▇▇ Payee the difference between $500,000 and the Company’s representations and warranties made to CDR Adjustment Amount, if any. In the Purchaser event that any Florida School in Article III hereof. The Escrow Agent shall maintain respect of which the Escrow Account escrow agent is retaining the CDR Adjustment Amount receives notice that the official FY 1996 cohort default rate for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claimsSchool is greater than 25%, then the Escrow Agent shallescrow agent will pay the CDR Adjustment Amount with respect to such School to the Buyer, after satisfaction in accordance with the provisions of the provision of paragraph 2.2.3 hereof, pay from the Tier I Escrow Account, Agreement and will release to the Purchaser▇▇▇▇▇▇▇▇ Payee the difference between the CDR Adjustment Amount retained and the amount so released to Buyer. If, however, any Florida School in respect of which the escrow agent is retaining the CDR Adjustment Amount receives notice that the official FY 1996 cohort default rate for such School is less than 25%, the escrow agent will pay such CDR Adjustment Amount to the ▇▇▇▇▇▇▇▇ Payee; provided, however, that the aggregate amount so paid to the ▇▇▇▇▇▇▇▇ Payee will not exceed $500,000. Notwithstanding the foregoing, in the event that all of the Florida Schools listed on EXHIBIT B have received notice of their pre-publication cohort default rate for ------- FY 1995 and one or more of such Schools' pre-publication cohort default rates for FY 1995 is less than 12%, the escrow agent shall pay the ▇▇▇▇▇▇▇▇ Payee the lesser of (A) $500,000 or (B) the amount equal to the potential CDR Adjustment Amount for such School or Schools with pre-publication cohort default rates less than 12%; provided, however, that the Selling Parties will be required to repay that amount to Buyer in the event that Buyer receives notice that the official cohort default rate for FY 1995 for such School or Schools is greater than 25%. In the event that the official cohort default rate for 1995 for any Florida School listed on EXHIBIT B is greater than 25% and such damagesSchool receives notice ------- that its pre-publication cohort default rate for FY 1996 is less than 12%, awardsan amount equal to the potential CDR Adjustment Amount for that School will be released to the ▇▇▇▇▇▇▇▇ Payee; provided, or settlements however, that the amount so paid to the ▇▇▇▇▇▇▇▇' Payee shall not exceed the amount equal to (“Escrow Payment”). y) $500,000 less (z) the aggregate amount previously released to the ▇▇▇▇▇▇▇▇ Payee under this Section 2.2.3(b)(iv) and, provided, further that the Selling Parties will be required to repay that amount to Buyer in the event that Buyer receives notice that the official cohort default rate for FY 1996 for that School is greater than 25%.
(v) On the first day second (2d) anniversary of the tenth month following the Tier I Closing Date, the Final TFC Payment shall be released to Buyer from the Escrow Agent shall pay to Amount. For purposes of this Section 2.2.3(b)(v) only, if the Seller Final TFC Payment exceeds the amount then on deposit of escrow funds remaining in the Escrow AccountAccount at such second (2d) anniversary, including any earnings thereon. Any dispute between Buyer shall have full recourse to collect from ▇▇▇▇▇▇▇▇ the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defenseexcess. The Purchaser shall have the right term "Final TFC Payment" means an amount equal to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty one-half (201/2) days after the date of the applicable Escrow Notice difference between (y) the TFC Adjustment (as defined in Section 2.8(c) of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimSecondary Agreement) less (z) $800,000.
Appears in 1 contract
Sources: Master Asset Purchase Agreement (Corinthian Colleges Inc)
Escrow. 2.3.1 Prior to the Closing, the Purchaser and the Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shallRepresentative, on behalf of all Escrow Sellers, shall enter into an Escrow Agreement substantially in the Closing Date, be deposited in an interest-bearing escrow account form of Exhibit C attached hereto (the “Escrow AccountAgreement”) with The Huntington National Bank, a national banking corporation the Korea Exchange Bank or such other commercial bank as the Purchaser and the Seller Representative may agree as escrow agent (the “Escrow Agent”). At the Closing, pursuant an amount equivalent to an escrow agreement reasonably satisfactory USD 1,785,360 (One Million Seven Hundred Eighty Five Thousand Three Hundred Sixty Dollars) which equals the total of 21.40% of the aggregate purchase price payable to Purchaser the Seller Representative prior to any withholdings, 20% of the aggregate purchase price payable to Sung-Ho Wang prior to any withholdings and Seller, for 10% of the purpose aggregate purchase price payable to each of securing Seller’s Innovalue and KB prior to any withholdings (the Company’s representations and warranties made to “Escrow Amount”) shall be deposited by the Purchaser in an escrow account established and maintained in accordance with the Escrow Agreement (“Escrow Account”) for satisfaction of any claims arising in relation to the indemnities set forth in Article III hereof9 of this Agreement. The Purchaser shall be entitled to deduct from any payments due to an Escrow Seller at the Closing pursuant to this Agreement the following amounts: 21.40% of the aggregate purchase price payable to the Seller Representative prior to any withholdings, 20% of the aggregate purchase price payable to Sung-Ho Wang prior to any withholdings and 10% of the aggregate purchase price payable to each of Innovalue and KB prior to any withholdings. The Escrow Agent Amount shall maintain be held in the Escrow Account for a the 2-year period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, unless released, in whole or in part, in accordance with the Escrow Agent shall pay to Agreement during such 2-year period. For the Seller avoidance of doubt, the amount then on deposit parties hereto acknowledge that in the Escrow Account, including event of any earnings thereon. Any dispute conflict between the parties regarding the validity or amount terms of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, this Agreement and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAgreement will prevail.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among (a) At the Closing, Acquiror shall pay to the Escrow Agent, to be held as provided in this Agreement, the Litigation Side Letter, the Special Indemnity Side Letter and the two LLC Purchase Agreements escrow agreement among the Acquiror, the Representative and the Escrow Agent in the form of Exhibit E (the Cash Consideration shall“Escrow Agreement”), on the Closing Date, be deposited in to an interest-bearing escrow account (the “Indemnity Escrow AccountFund”) with The Huntington National Bank, a national banking corporation designated by the Escrow Agent an amount equal to $9,375,000.00 (the “Indemnity Escrow AgentAmount”), which will be available solely to pay the valid indemnity claims of the Acquiror Indemnitees pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s Section 11.2 and the Company’s representations Special Indemnity Side Letter and warranties made the Litigation Side Letter and the Adjustment Amount pursuant to Section 2.9(e). The Unclaimed Indemnity Escrow Amount shall be released in full to the Purchaser Representative on the Survival Termination Date, which shall be first used to pay any Representative Expenses in Article III hereofexcess of the Holdback Amount as set forth in Section 2.7 and then paid to the Company Stockholders in proportion to their Pro Rata Shares. The Any remaining Unclaimed Indemnity Escrow Agent shall maintain Amount that the Company Stockholders thereafter become entitled to receive under the terms of this Agreement and the Escrow Account for a period Agreement shall thereafter be first used to pay any Representative Expenses in excess of nine months. During such period, if, the Holdback Amount as a direct result of a material misrepresentation or breach of warranty by Seller made set forth in Section 2.7 and then paid to the Purchaser Company Stockholders in Article III hereofproportion to their Pro Rata Shares. 15 WA 4941984.13 WCSR 32390522v12
(b) At the Closing, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent Acquiror shall pay to the Seller Escrow Agent to be held as provided in this Agreement and the Escrow Agreement to an escrow account (the “Purchase Price Adjustment Escrow Fund”) designated by the Escrow Agent an amount then on deposit equal to $1,000,000.00 (the “Purchase Price Adjustment Escrow Amount”), which will be available solely to pay any amount by which the Adjustment Amount is a negative number.
(c) At the Closing, Acquiror shall pay to the Escrow Agent to be held as provided in this Agreement, the Special Indemnity Side Letter and the Escrow Agreement to an escrow account (the “Special Escrow Fund” and together with the Indemnity Escrow Fund and the Purchase Price Adjustment Escrow Fund, the “Escrow Fund”) designated by the Escrow Agent an amount equal to $3,800,000.00 (the “Special Escrow Amount” and together with the Indemnity Escrow Amount and the Purchase Price Adjustment Escrow Amount, the “Escrow Amount”), which will be available solely to pay such amounts as set forth in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by SellerSpecial Indemnity Side Letter, and a third to will be selected by released on such terms as set forth in the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesSpecial Indemnity Side Letter.
2.3.2 In order for Purchaser (d) Any fees owed to assert its right to an the Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser Agent pursuant to paragraph 2.2.2. hereof (“the Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and Agreement shall be paid by the Escrow Agent to PurchaserAcquiror.
2.3.3 If the Purchaser notifies the Seller (e) The Escrow Fund shall be held as a trust fund and shall not be subject to any Lien of any claim or demand pursuant to paragraph 2.3.2 abovecreditor of any party, and if such claim or demand relates to a claim or demand asserted by a third party against shall be held and disbursed solely for the Purchaser which is a claim or demand for which purposes and in accordance with the Seller must indemnify or hold harmless the Purchaser under terms of this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to PurchaserSpecial Indemnity Side Letter, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, Litigation Side Letter and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Agreement.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that (a) At the Effective Time, Buyer shall pay an amount equal to $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 12,750,000.00 (the “Indemnity Escrow AccountAmount”) with The Huntington National Bank, a national banking corporation to SunTrust Bank (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third ) to be selected by the two arbitrators selected by Purchaser held and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid delivered by the Escrow Agent in accordance with the terms and provisions of a certain escrow agreement that shall be executed and delivered by Buyer, the Holder Representative and the Escrow Agent at the Closing substantially in the form attached hereto as Exhibit C (the “Escrow Agreement”). The Indemnity Escrow Amount shall be placed in a single escrow account (the “Indemnity Escrow Account”) separate from the Adjustment Escrow Account and the Holder Representative Expense Account. The Indemnity Escrow Amount shall be established as security for any indemnification obligations for Buyer Losses pursuant to PurchaserArticle VIII hereof, and for any negative Post- 3063972 5 Closing Adjustment that exceeds the Adjustment Escrow Amount, as set forth in Section 2.8.2(b) hereof.
2.3.3 If (b) At the Purchaser notifies Effective Time, Buyer shall pay an amount equal to $500,000.00 (the Seller “Adjustment Escrow Amount”) to the Escrow Agent to be held and delivered by the Escrow Agent in accordance with the terms and provisions of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Escrow Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser Adjustment Escrow Amount shall have be placed in a single escrow account (the right to cooperate in “Adjustment Escrow Account”) separate from the defense of any such claim or demandIndemnity Escrow Account and the Holder Representative Expense Account. The Seller Adjustment Escrow Amount shall notify be established as security for any negative Post-Closing Adjustment, as set forth in Section 2.8.2(b) hereof.
(c) At the Purchaser Effective Time, Buyer shall pay an amount equal to $1,000,000.00 (the “Holder Representative Expense Amount”) to the Escrow Agent to be held and delivered by the Escrow Agent in writing, within twenty (20) days after accordance with the date terms and provisions of the applicable Escrow Notice of Agreement. The Holder Representative Expense Amount shall be placed in a single escrow account (the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as “Holder Representative Expense Account”) separate from the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, Indemnity Escrow Account and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demandAdjustment Escrow Account. The Purchaser Holder Representative Expense Amount shall be established to pay Holder Representative expenses and Company shall make available to the Seller or its agents all records and certain other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimobligations as set forth herein.
Appears in 1 contract
Sources: Merger Agreement (Costar Group Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among Notwithstanding anything to the contrary contained in this and the two LLC Purchase Agreements of the Cash Consideration shallArticle II, on the Closing Date, the Escrow Amount will be deposited in into an interest-interest bearing escrow account (the “account, to be held by Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), Agent pursuant to an escrow agreement reasonably satisfactory Escrow Agreement to Purchaser and Seller, for be entered into on the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofClosing Date. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Funds will secure (x) any adjustments to the Purchaser Purchase Price as provided for in Section 2.3(f) and (y) Shareholder’s indemnification obligations under Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, IX of this Agreement. The Escrow Funds will be withdrawn or settlements of claims, then released as follows:
(a) upon the Escrow Agent shall, after satisfaction final determination of the provision Purchase Price in accordance with Section 2.3(f), if Buyer is entitled to receive any cash in connection with an adjustment of paragraph 2.2.3 hereofthe Purchase Price, pay such amount shall be withdrawn from the Escrow AccountFunds in accordance with Section 2.3(f) and paid to Buyer within five (5) Business Days after such final determination;
(b) following the withdrawal, if any, of the Escrow Funds as provided in clause (a) above, if less than $2,000,000.00 shall remain after such withdrawal, Shareholder, within five (5) Business Days after such withdrawal, shall deposit such additional cash as needed to cause the PurchaserEscrow Funds to be replenished to an amount equal to $2,000,000.00; provided, however, that Shareholder shall not be required to deposit additional cash pursuant to this Section 2.4(b) if the total amount of Escrow Funds disbursed to Buyer pursuant to Article IX plus the amount remaining Escrow Funds (immediately prior to any requirement to replenish funds pursuant to this Section 2.4(b)) would exceed the Indemnification Cap, immediately following any requirement to replenish funds; and
(c) the remaining Escrow Funds, if any, will be released to Shareholder on the date that is twelve months following the Closing Date; provided, however, that if prior to such date, Buyer gives notice of a claim or claims for indemnification pursuant to Article IX, then: (i) if any such claim is resolved prior to such date, by judicial determination or otherwise, any sums due Buyer shall be withdrawn from the Escrow Funds and paid to Buyer within five (5) Business Days after such resolution or (ii) if any such claim is not resolved prior to such date, the amount of any such damagesclaim, awards, or settlements (“Escrow Payment”). On plus the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or reasonably estimated amount of any damageslegal fees and disbursements to be incurred in connection therewith, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an retained as Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of Funds until such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaserresolved.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser Subject to the terms of Article IV, Article IX and Seller agree that $400,000 allocated among this and Article X, a sum equal to the two LLC Purchase Agreements of Escrow Amount shall be delivered at Closing by Buyers to the Cash Consideration shall, on the Closing Date, Escrow Agent to be deposited held in an interest-interest bearing escrow account (the “Escrow Account”) with The Huntington National Bankpursuant to the terms of this Agreement and the Escrow Agreement. Such Escrow Amount (including any interest accrued thereon, a national banking corporation (the “Escrow AgentFunds”), ) shall be available for payment of any claims made by a Buyer Group Member pursuant to an escrow agreement reasonably satisfactory to Purchaser Article XI and Seller, for the purpose of securing Seller’s in accordance with Section 11.1(c) and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain terms of the Escrow Account for a period of nine monthsAgreement. During such periodOn the date that is twelve months following the Closing Date, if$20,000,000, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, less the amount of any claims paid from the Escrow Account prior to the date of such damagesdistribution, awardsof the Escrow Funds then held in the Escrow Account shall be released to the Sellers’ Representative for distribution to the Sellers, or settlements unless prior to that date Buyers advise the Escrow Agent and the Sellers’ Representative in writing that any claim for indemnification under Article XI (each, a “Pending Claim”) by any Buyer Group Member has been asserted and is then pending. Any such notice shall specify the total amount of the Pending Claim(s). If such notice is timely received by the Escrow Payment”)Agent, the Escrow Agent shall release only that part of the Escrow Funds that is eligible to be released pursuant to the preceding sentence that exceeds the sum of (i) the total amount of any Pending Claim(s) received and (ii) the total amount of any claims paid from the Escrow Account prior to such release, with the remaining funds to be held in the Escrow Account until such Pending Claim(s) are resolved. On the first day of the tenth month date that is eighteen months following the Closing Date, the remainder, if any, of the Escrow Agent Funds shall pay be released to the Seller Sellers’ Representative for distribution to the amount then on deposit in the Escrow AccountSellers, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaserprocedure for Pending Claims set forth above.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Equity Purchase Agreement (Kapstone Paper & Packaging Corp)
Escrow. 2.3.1 The Purchaser and Seller agree that $400,000 allocated among Indemnitees right to indemnification from a Stockholder pursuant to this and the two LLC Purchase Agreements Article 6 shall be satisfied out of such Stockholder’s Pro Rata Portion of the Cash Consideration shallEscrow Amount before the Purchaser Indemnitees may seek, on if permitted to do so under this Agreement, indemnification directly from such Stockholder. Six months after the Closing Date, be deposited in an interest-bearing escrow account Date (the “Initial Release Date”), the Escrow Account”) with The Huntington National Bank, a national banking corporation Agent shall release to each Stockholder his or her Pro Rata Portion of an aggregate amount (the “Escrow AgentInitial Release Amount”)) equal to $650,000 less (i) all amounts utilized to pay any Purchaser Indemnitee for any indemnification claims on or prior to such date, pursuant and (ii) an amount equal to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”)claims for indemnification under this Article 6 asserted prior to Initial Release Date but not yet resolved; provided that in no event shall the Initial Release Amount be less than $0. On the first day anniversary of the tenth month following the Closing Date, the Escrow Agent shall pay release to each Stockholder his or her Pro Rata Portion of the remaining portion of the Escrow Amount (to the Seller extent not utilized to pay any Purchaser Indemnitee for any indemnification claim), except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims for indemnification under this Article 6 asserted prior to such first anniversary but not yet resolved (“Unresolved Claims”). The Escrow Amount retained for Unresolved Claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid released by the Escrow Agent (to Purchaser.
2.3.3 If the extent not utilized to pay any Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand Indemnitees for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate claims resolved in the defense favor of any such claim or demand. The Seller shall notify Purchaser Indemnitees) upon their resolution in accordance with this Article 6 and the Purchaser in writing, within twenty (20) days after the date terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAgreement.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) At the Closing, Parent shall on behalf of the Principal Securityholders, deposit the Cash Escrow Amount and Seller agree that $400,000 allocated among this and shares of Parent Common Stock (the two LLC Purchase Agreements "Escrowed Shares") representing the Stock Escrow Amount in accordance with Section 2.2(b)(iii) (the aggregate amount of the Cash Consideration shallEscrow Amount and Escrowed Shares, on the Closing Date, "Escrowed Property") with the Escrow Agent to be deposited held in an interest-bearing escrow account (the “"Escrow Account”") pursuant to and in accordance with this Agreement and the Escrow Agreement to be executed as of the Closing Date. Any payment the Principal Securityholders are obligated to make to any Parent Indemnified Parties pursuant to this Article IX (other than Sections 9.2(a)(ii) and 9.6) or Article X (at Parent's option) shall be paid (i) if the payment is to be made in cash, by reducing the amount of the cash in the Escrow Account in an amount equal to such payment and releasing such cash to Parent or (ii) if the payment is to be made in Escrowed Shares, by reducing the number of Escrowed Shares in the Escrow Account in an amount equal to (x) the amount of such payment divided by (y) the average closing price of Parent Common Stock on the Nasdaq (as reported by The Huntington National BankWall Street Journal, Eastern Edition, or, if not reported thereby, any other authoritative source) for the ten (10) trading days ending with the second trading day immediately preceding the date such Escrowed Shares are released and returning and releasing such Escrowed Shares to Parent. The first $5,000,000 of Escrowed Property required to be paid by the Principal Securityholders shall be paid out of the Escrowed Shares. The next $5,000,000 of Escrowed Property required to paid the by Principal Securityholders shall be out of the Cash Escrow Amount. Any remaining amounts of Escrowed Property required to be paid by the Principal Securityholders shall be paid out of the remaining Escrowed Property.
(b) To the extent that there is an insufficient amount of remaining Escrowed Property to pay any remaining sums due pursuant to this Article IX (other than Sections 9.2(a) (ii) and 9.6) or Article X, then the Principal Securityholders shall be required to pay all of such additional sums due and owing to the Parent Indemnified Parties by wire transfer of immediately available funds within thirty (30) days after the date of notice any sums then due and owing is given to the Stockholder Representative (with a national banking corporation (copy to the “Escrow Agent”), ) by the applicable Parent Indemnified Party. Any indemnification owed by a Principal Securityholder pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Section 9.2(a)(ii) shall be paid by such Principal Securityholder to the Purchaser in Article III hereof. The Parent Indemnified Parties by wire transfer of immediately available funds within ten (10) Business Days after the date of notice any sums then due and owing is given to such Principal Securityholder (with a copy to the Stockholder Representative) by the applicable Parent Indemnified Party.
(c) On December 31, 2006, the Escrow Agent shall maintain release one-third of the Escrowed Shares (based upon the number of Escrowed Shares originally deposited with Escrow Account for a period Agent or the proceeds thereof pursuant to Section 9.5(d)) less the number of nine months. During such periodEscrowed Shares as may be necessary to satisfy in full all unpaid Escrow Claims and less all Escrowed Shares previously disbursed to Parent; on June 30, if2007, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction shall release two-thirds of the provision Escrowed Shares (based upon the number of paragraph 2.2.3 hereofEscrowed Shares originally deposited with Escrow Agent or the proceeds thereof pursuant to Section 9.5(d)), pay from less the number of such Escrowed Shares as may be necessary to satisfy in full all unpaid Escrow Account, Claims and less the aggregate of all Escrowed Shares previously disbursed to Parent or released; and on the Purchaser, the amount second anniversary of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay release the remaining Escrowed Property and earnings thereon (in each case, to the Seller extent not utilized to pay Parent for any indemnification claim), except that the Escrow Agent shall retain an amount of Escrowed Property equal to the amount then of claims for indemnification under this Article IX or Article X. The Escrowed Property retained for unresolved claims for indemnification shall be released by the Escrow Agent (to the extent not utilized to pay Parent for any such claims resolved in favor of Parent) upon their resolution in accordance with this Article IX, Section 2.5 or Article X. For the avoidance of doubt, the release of the Escrow Property to the Principal Securityholders after the second anniversary of the Closing Date pursuant to this Section 9.5 shall not prejudice any of the rights of the Parent Indemnified Parties to seek indemnification from the Principal Securityholders under this Agreement.
(d) If and to the extent permitted under the Registration Rights Agreement, the Principal Securityholders may, at their option, instruct the Escrow Agent to sell all or any portion of the Escrowed Shares on their behalf and the Escrow Agent shall sell such Escrowed Shares and deposit the proceeds from any such sales in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and An escrow account in the amount of $200,000, funded from the cash proceeds payable to Seller agree that $400,000 allocated among this and hereunder, shall be established at closing with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. as escrow agent. The escrow account shall be maintained until the two LLC Purchase Agreements tenth (10th) day after the delivery of the Cash Consideration shallfinal, audited Closing Balance Sheet provided in Section 2.01(d) hereof. All (i) accounts payable, accrued expenses or other liabilities in the aggregate of Seller in excess of $500,000 evidenced thereon (to the extent not previously credited at Closing pursuant to the Seller's Certificate of Closing Credits); (ii) any other accounts payable or accrued expenses arising after the Closing Date that, in the ordinary course of business, should have arisen prior to the Closing Date; (iii) the amount set forth on the Closing DateBalance Sheet as due from related parties, be deposited in an interest-bearing net of amounts due to related parties; and (iv) the cost of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇' education at Huron University through August 30, 1997, or if any of the foregoing has been paid by Buyer by such date, reimbursed to Buyer from the escrow account. Amounts paid from the escrow account (shall be released by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. to Buyer solely on the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose written instructions of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofBuyer. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit Amounts remaining in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims escrow account after payment provided herein shall be submitted remitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof within ten (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (2010) days after the date delivery of the applicable Escrow Notice Closing Balance Sheet. In the event the escrow account is insufficient to pay the amounts set forth herein, Seller shall promptly pay to Buyer any shortfall necessary to meet Seller's obligations pursuant to this Section within ten (10) days after delivery of the Seller’s decision Closing Balance Sheet. Buyer's rights to either pay such claim or demand or defend reimbursement from the escrow shall be in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaseraddition to, and the Purchaser is not jeopardized by such defensein limitation of, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimrights under Article XI.
Appears in 1 contract
Sources: Asset Purchase Agreement (Whitman Education Group Inc)
Escrow. 2.3.1 Purchaser Effective as of the Closing, Sellers’ Representative and Seller agree that $400,000 allocated among Buyer shall enter into the Escrow Agreement with the Escrow Agent. In accordance with the terms of the Escrow Agreement, Buyer shall deposit, at Closing, the Indemnity Escrow Deposit which shall be held in the Indemnity Escrow Account to secure (a) the payment of any negative Purchase Price Adjustment to Buyer in accordance with Section 2.04(e), (b) any payment of any adjustment to the Final Purchase Price contemplated by Section 2.10 payable to Buyer and (c) the indemnification obligations of the Selling Parties set forth in Section 8.03 and Article XI. The Indemnity Escrow Deposit, plus any interest or earnings thereon, shall each be managed and paid out by the Escrow Agent after the Closing in accordance with the terms of this Agreement and the two LLC Purchase Agreements Escrow Agreement. In the event that any payments are to be made out of the Cash Consideration shallIndemnity Escrow Account pursuant to this Agreement, on each of Buyer and Sellers’ Representative agrees to take all actions reasonably necessary to cause each such payment to be made pursuant to the Escrow Agreement, including by delivering executed joint written instructions to the Escrow Agent and directing the Escrow Agent to make such payment. The funds in the Indemnity Escrow Account shall be distributed by the Escrow Agent, in accordance with Section 2.04, this Section 2.08, Section 2.10, Section 8.03, and Article XI of this Agreement and the Escrow Agreement. Within ten (10) days following (i) the one-year anniversary of the Closing Date, be deposited in an interestamount equal to Fifteen Million Nine Hundred Seventy-bearing escrow account five Thousand Dollars (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”$15,975,000), pursuant to an escrow agreement reasonably satisfactory to Purchaser minus the sum of (A) the amount of all Pending Indemnity Claims as of such date and Seller, for (B) the purpose aggregate amount of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay prior distribution from the Indemnity Escrow Account, shall be released to Seller and (ii) the PurchaserExpiration Date, the amount of the Indemnity Escrow Account then remaining (including, for the avoidance of doubt, all interest and other income earned thereon), minus the amount of all Pending Indemnity Claims, shall be released to Seller. Upon the settlement or final determination of any such damagesPending Indemnity Claim under Section 8.03 or Article XI, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, Sellers’ Representative and Buyer shall jointly instruct the Escrow Agent shall in writing to pay or cause to the Seller the be paid any amount then on deposit remaining in the Indemnity Escrow AccountAccount relating to such previously Pending Indemnity Claim to Seller and/or to Buyer, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller case may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimbe.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) As the sole remedy for the indemnity obligations set forth in Article VII, at the Closing, each Person receiving Merger Shares shall deposit in escrow, to be held for the period ending on the thirtieth day after the date that Parent is required to file its Annual Report on Form 10-K for the year ended December 31, 2007 (the “Indemnity Escrow Period”) and Seller agree that $400,000 for such further period as may be required pursuant to the Escrow Agreement referred to below, ten percent (10%) of the Merger Shares received by such Person (the “Indemnity Escrow Shares”), which shares shall be allocated among this the Persons entitled to receive them in the same proportions as the shares of Parent Common Stock are allocated among them, all in accordance with the terms and the two LLC Purchase Agreements conditions of the Cash Consideration shall, on Escrow Agreement to be entered into at the Closing Datebetween Parent, be deposited the Representatives referred to in an interest-bearing escrow account Section 1.14(b) and Continental, as Escrow Agent, substantially in the form annexed hereto as Exhibit C (the “Escrow AccountAgreement”).
(b) If, at the Effective Time, holders of Company Capital Stock have properly exercised rights under the CGCL with The Huntington National Bankrespect to Dissenting Shares (as defined in Section 1.17(b)), to provide a national banking corporation fund for reimbursement to Parent for payments made by Parent or the Company with respect to Dissenting Shares pursuant to Section 1.17(c), each Person receiving Merger Shares shall deposit in escrow, to be held until all claims by Dissenters with respect to Dissenting Shares are finally resolved, such number of Merger Shares as Parent shall reasonably determine is sufficient to provide for such reimbursement, not to exceed ten percent (10%) of the Merger Shares received by such Person (“Reimbursement Escrow Shares” and, together with the Indemnity Escrow Shares, the “Escrow AgentShares”), pursuant which shares shall be allocated among the Persons entitled to an escrow agreement reasonably satisfactory to Purchaser receive them in the same proportions as the shares of Parent Common Stock are allocated among them, all in accordance with the terms and Seller, for the purpose conditions of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesAgreement.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) The Sellers hereby direct the Buyers to deliver in escrow, at the Closing and Seller agree that $400,000 allocated among this for the benefit of Sellers or the Buyer Indemnitees, as the case may be, to ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, or if ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association is unwilling or unable to serve, to another escrow agent reasonably agreed to by Sellers and Buyer, pursuant to an agreement in the two LLC Purchase Agreements form attached hereto as Exhibit D (the “Escrow Agreement”), the following: (i) an amount of cash equal to the Closing Cash Escrow Amount, (ii) an amount of cash equal to ten percent (10%) of the Additional Closing Cash Consideration shall(if any), and (iii) a number of shares of Buyer Parent Common Stock equal to the Closing Stock Escrow Amount ((i), (ii) and (iii) together, the “Escrow Fund”).
(b) The Escrow Fund, including any earnings, dividends or interest thereon, shall be held and disbursed as provided in the Escrow Agreement, which shall provide, among other things, that (i) any fees or expenses payable to the escrow agent under the Escrow Agreement on account of, in connection with or related to the Escrow Fund (the “Escrow Costs”) shall be paid out of the earnings, dividends and interest on the Escrow Fund, and, to the extent that such earnings, dividends and interest are insufficient to pay the Escrow Costs, paid equally by Sellers, on the one hand, and Buyers, on the other hand; (ii) the Escrow Fund (but not any earnings, dividends or interest thereon) shall be disbursed, as set forth in Section 1.3(c), to the Buyer Indemnitees to satisfy any obligation of any Seller under Section 7.2 when the conditions for indemnification set forth in this Agreement have been satisfied; and (iii) as of the 15-month anniversary of the Closing Date, be deposited any amount of cash and shares of Buyer Parent Common Stock remaining in an interest-bearing escrow the Escrow Fund (other than any amount of cash and shares of Buyer Parent Common Stock required to satisfy the maximum amount of the aggregate of any unresolved claims for indemnification as of such time), including any accrued earnings, dividends or interest thereon but less any Taxes due on account thereof and less any Escrow Costs, less any amounts then due and payable from the Escrow Fund to any Buyer Indemnitee pursuant to Section 7.2 (any such remaining cash, the “Remaining Cash Escrow Account”) with The Huntington National BankAmount” and any such remaining shares of Buyer Parent Common Stock, a national banking corporation (the “Remaining Stock Escrow AgentAmount”), pursuant to an escrow agreement reasonably satisfactory to Purchaser shall be distributed as follows: (v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall receive 10.6113% of the Remaining Cash Escrow Amount and Seller, 44.4444% of the Remaining Stock Escrow Amount; (w) ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall receive 10.6113% of the Remaining Cash Escrow Amount and 44.4444% of the Remaining Stock Escrow Amount; (x) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall receive 1.3264% of the Remaining Cash Escrow Amount and 5.5556% of the Remaining Stock Escrow Amount; (y) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall receive 1.3264% of the Remaining Cash Escrow Amount and 5.5556% of the Remaining Stock Escrow Amount; and (z) Sun Mortgage Partners shall receive 76.1246% of the Remaining Cash Escrow Amount. Sellers shall be treated as the owner of the Escrow Fund for all tax purposes.
(c) If and when the purpose of securing Seller’s and the Company’s representations and warranties made Escrow Fund shall be disbursed to the Purchaser in Article III hereof. The Escrow Agent Buyer Indemnitees, such disbursement shall maintain consist of an aggregate amount of cash and shares of Buyer Parent Common Stock (where such shares of Buyer Parent Common Stock are valued on the Escrow Account for a period basis of nine months. During the Stock Price as of such period, if, as a direct result date of a material misrepresentation or breach of warranty by Seller made disbursement) equal to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction aggregate amount of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesindemnification obligation under Section 7.2.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Securities Purchase Agreement (Friedman Billings Ramsey Group Inc)
Escrow. 2.3.1 Purchaser (a) The Escrow Amount shall be comprised of two separate and Seller agree that distinct amounts: (i) $400,000 allocated among this and the two LLC Purchase Agreements 3,000,000 of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account Escrow Amount (the “Escrow AccountIndemnification Escrow”) shall be used to satisfy Losses, if any, for which the Buyer Indemnitees are entitled to indemnification or reimbursement in accordance with The Huntington National BankArticle XI hereof, a national banking corporation and to satisfy the Working Capital Shortfall, if any, described in Section 2.6(e) hereof to the extent such shortfall exceeds the Working Capital Escrow, and (ii) $500,000 of the Escrow Amount (the “Working Capital Escrow”) shall be used to satisfy the Working Capital Shortfall, if any, described in Section 2.6(e) hereof and for any payment required to be made with respect to unclaimed property under Section 11.2(a)(v).
(b) Promptly following the expiration of the Net Working Capital adjustment period as set forth in Section 2.6 and resolution of all disputes, if any, regarding the Final Working Capital and Final Cash, the Working Capital Escrow Agent”)portion of the Escrow Amount shall be disbursed as follows: (i) if there exists a Working Capital Shortfall or Cash Shortfall, Buyer shall be entitled to an amount equal to the Working Capital Shortfall and/or Cash Shortfall and the remainder of the Working Capital Escrow portion of the Escrow Amount, if any, shall be released to Seller, provided, however, if the Working Capital Shortfall and/or Cash Shortfall exceeds the Working Capital Escrow portion of the Escrow Amount, then Buyer shall be entitled to the entire Working Capital Escrow portion of the Escrow Amount, and if Seller fails to pay such amount, a disbursement from the Indemnification Escrow portion of the Escrow Amount in an amount equal to the sum of the Working Capital Shortfall and Cash Shortfall less the Working Capital Escrow; and (ii) if there exists a Working Capital Surplus and Cash Surplus, the entire Working Capital Escrow portion of the Escrow Amount shall be released (less any Loss paid to Buyer pursuant to an escrow agreement reasonably satisfactory Section 11.2(a)(v) prior to Purchaser such date) to Seller and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Buyer shall pay to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”the Working Capital Surplus and Cash Surplus in accordance with Section 2.6(e). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Stock Purchase Agreement (Palace Entertainment Holdings, Inc.)
Escrow. 2.3.1 At Closing, Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shallshall deliver to ▇▇▇▇▇ Fargo, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation N.A. (the “Escrow Agent”)) an amount equal to Five Million One Hundred Thousand and No/100ths Dollars ($5,100,000) (the “Escrow Amount”, and together with any interest or other earnings thereon, collectively, the “Escrow Funds”) by certified or bank cashier’s check or wire transfer, which Escrow Funds shall be held back from the Purchase Price for a period of two (2) years following the Closing pursuant to an escrow agreement reasonably satisfactory the terms of the Escrow Agreement to be entered into as of the Closing Date (the “Escrow Agreement”) in a form to be agreed upon between Purchaser and Seller. The Escrow Funds shall be governed by and in accordance with the terms of the Escrow Agreement and may be drawn upon by Purchaser in payment of any Losses incurred by Purchaser or the Company arising out of, for the purpose of securing Seller’s and the Company’s representations and warranties made based upon, relating to, or in connection with (i) any Working Capital Adjustment payable to Purchaser pursuant to Section 1.4(f), above (to the Purchaser extent such amounts have not been paid by Seller within the ten-day period set forth in Article III hereofSection 1.4(f)), or (ii) claims for indemnification under Section 9.1, in each case subject to the procedures and limitations set forth herein or in the Escrow Agreement. The Escrow Agent shall maintain deliver to Seller the amount of remaining Escrow Funds held in escrow on the date which is two (2) years from the Closing Date except to the extent, prior to said date, Purchaser provides to Escrow Agent and Seller a written statement executed by Purchaser setting forth any pending or threatened claims or other matters in the categories provided in parts (i)-(ii) of this Section 2.11. Purchaser and Seller shall each be responsible for fifty percent (50%) of all costs and expenses of the Escrow Agent. Seller shall remain in existence and in good standing so long as the Escrow Agreement remains in effect. Notwithstanding the foregoing, within five (5) business days after request by Seller, but in no event before the first anniversary of the Escrow Agreement, Seller may instruct the Escrow Agent to release to Seller an amount (if greater than zero) equal to (i) $2,550,000 minus (ii) the aggregate amount of any outstanding and unresolved claims received by the Escrow Agent on or prior to the first anniversary of Closing minus the aggregate amount released from the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to Purchaser Indemnitees prior to the first anniversary of Closing. All parties hereto agree for all Tax purposes that: (i) Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awardsshall be treated as the owner of the Escrow Funds, or settlements of claimsany portion thereof, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability allocable to Purchaser pursuant to paragraph 2.2.2. hereof Section 468B(g) of the Code and Proposed Treasury Regulation Section 1.468B-8, (“ii) if and to the extent any amount of the Escrow Notice”Funds is actually distributed to Seller, interest may be imputed on such amount, as required by Section 483 or 1274 of the Code, (iii) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such the Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and Funds under this Agreement shall be paid by treated as installment obligations for purposes of Section 453 of the Code, and (iv) in no event shall the aggregate payments under the Escrow Agent Funds to Purchaser.
2.3.3 If Seller exceed $5,800,000. Clause (iv) of the Purchaser notifies preceding sentence is intended to ensure that the right of Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser Escrow Funds is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date treated as a contingent payment without a stated maximum selling price under Section 453 of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, Code and the Purchaser is not jeopardized by such defense, Treasury Regulation promulgated thereunder. No party hereto shall take any action or filing position for Tax purposes inconsistent with the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimforegoing.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) The funds contained in the Escrow Account shall be distributed in accordance with the terms and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements conditions of the Cash Consideration shallEscrow Agreement; provided, on that in the event that Buyer Indemnified Persons are entitled to indemnification pursuant to Section 9.1, the Sellers hereby covenant and agree to execute and deliver joint written instructions with the Buyer to the Escrow Agent, within five (5) Business Days after an applicable Final Determination Date, directing the Escrow Agent to release from the Escrow Account and pay to the Buyer or its designee(s) the amount of Buyer Damages to which the Buyer Indemnified Persons are entitled hereunder as of such Final Determination Date, in each case to the fullest extent of the funds then remaining in the Escrow Account.
(b) On or prior to the fifth Business Day after the first anniversary of the Closing Date, be deposited in an interest-bearing escrow account Date (the “Escrow AccountInitial Release Date”) with The Huntington National Bank), a national banking corporation the Buyer shall quantify and deliver to the Sellers the Buyer’s good faith estimate of the maximum aggregate amount of Buyer Damages that Buyer Indemnified Persons may suffer from Direct Claims or Third Party Claims of which the Buyer notified the Sellers or the Principals on or before the Initial Release Date (the “Initial Damages Amount”). The Buyer hereby covenants and agrees on the written request of the Sellers to execute and deliver joint written instructions with the Sellers to the Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Sellerpromptly after its delivery of the Initial Damages Amount, for directing the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain to release from the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made and pay to the Purchaser in Article III hereofSellers as directed by the Sellers an amount equal to (i) Three Million Dollars ($3,000,000), Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay minus (ii) amounts previously paid from the Escrow Account, Account to Buyer Indemnified Persons (iii) minus the Purchaser, Initial Damages Amount (the amount of any such damages, awards, or settlements (“Escrow PaymentInitial Release Amount”). On or prior to the first day fifth Business Day after eighteen (18) months after the Closing Date (the “Secondary Release Date”), the Buyer shall quantify and deliver to the Sellers the Buyer’s good faith estimate of the tenth month following maximum aggregate amount of Buyer Damages that Buyer Indemnified Persons may suffer from Direct Claims or Third Party Claims of which the Closing DateBuyer notified the Sellers or the Principals on or before the Secondary Release Date (the “Secondary Damages Amount”). The Buyer hereby covenants and agrees on the written request of the Sellers to execute and deliver joint written instructions with the Sellers to the Escrow Agent, promptly after its delivery of the Secondary Damages Amount, directing the Escrow Agent shall to release from the Escrow Account and pay to the Seller Sellers as directed by the Sellers an amount equal to (x) the amount then on deposit held in the Escrow Account, including any earnings thereonminus (y) the Secondary Damages Amount (the “Secondary Release Amount”). Any dispute between The funds remaining in the parties regarding Escrow Account after the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim release from escrow and payment of the Secondary Release Amount are referred to as the “Remaining Balance.” The Escrow Agent shall continue to hold the Remaining Balance pending the final resolution of the Direct Claims or Third Party Claims, whereupon, as and when such claim is made by PurchaserDirect Claims or Third Party Claims are resolved from time to time, such sums paid the Buyer and the Sellers shall qualify as an Escrow Payment and shall be paid by direct the Escrow Agent to Purchaser.
2.3.3 If release and pay appropriate portions of such Remaining Balance to the Purchaser notifies Sellers, as directed by the Seller of any claim Sellers or demand pursuant to paragraph 2.3.2 abovethe Buyer (or its designee(s)), and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller case may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimbe.
Appears in 1 contract
Sources: Asset Purchase Agreement (Mattress Firm Holding Corp.)
Escrow. 2.3.1 The Purchaser and Seller agree that shall deliver to U.S. Bank, N.A. (the “Escrow Agent”) the sum of Six Million Five Hundred Thousand Dollars ($400,000 allocated among this and 6,500,000) (the two LLC Purchase Agreements of the Cash Consideration shall“Escrow Amount”), on the Closing Date, be deposited in for deposit into an interest-bearing escrow account (the “Escrow Account”) ), in accordance with The Huntington National Bank, a national banking corporation the terms of an escrow agreement in the form attached hereto as Exhibit A (the “Escrow AgentAgreement”). One Million Five Hundred Thousand Dollars ($1,500,000) of the Escrow Amount and any interest that may be earned thereon shall constitute the “Indemnity Escrow Amount”, pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for Five Million Dollars ($5,000,000) of the purpose of securing Seller’s Escrow Amount and any interest that may be earned thereon shall constitute the Company’s representations and warranties made to the Purchaser in Article III hereof“Approval Escrow Amount”. The Escrow Amount so deposited shall be applied by the Escrow Agent in accordance with the terms and conditions of this Agreement and the Escrow Agreement. Subject to and in accordance with the terms and conditions of this Agreement and the Escrow Agreement, the Purchaser and the Sellers shall maintain jointly direct the Escrow Agent to release to the Sellers:
(i) the portion of then available Indemnity Escrow Amount in the Escrow Account for a period in excess of nine months. During such period, if, as a direct result One Million Dollars ($1,000,000) on the date of a material misrepresentation or breach payment of warranty by Seller made the Closing Purchase Price Reconciliation (after giving effect to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements payment of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay such Closing Purchase Price Reconciliation from the Escrow AccountEscrow, to the Purchaserif applicable); provided, the amount of any however, if pending claims with respect thereto exceed One Million Dollars ($1,000,000) on such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Datedate, the Escrow Agent shall pay be directed to release only the Seller portion of the amount then on deposit Escrow Amount in excess of the aggregate of such claims; and
(ii) the then-available Indemnity Escrow Amount in the Escrow Account, including less any earnings thereon. Any dispute between pending claims or unpaid claims with respect thereto, to the parties regarding Sellers on the validity date that is twelve (12) months from the Closing Date.
(iii) provided that (x) the FAA Approval is received by GoGo by June 30, 2014 (the “FAA Deadline”) and (y) the GoGo Confirmation is received by Purchaser within sixty (60) days of the date Purchaser requests the GoGo Confirmation from GoGo (the “GoGoDeadline”), the balance of the Approval Escrow Amount, on the date that is no more than five (5) Business Days of the receipt of the GoGo Confirmation.
(iv) If the FAA Approval has not been received by GoGo by the FAA Deadline or amount a GoGo Confirmation is not received by Purchaser by the GoGo Deadline, subject to the requirements of any damagesSection 5.8, awards, or settlements the entire balance of claims the Approval Escrow Account shall be submitted released to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by and Sellers jointly shall direct the Escrow Agent to release such defense, amount to the Purchaser shall within five (5) Business Days after the GoGo Deadline Any amount of the Escrow Amount not settle or compromise such claim or demand. The Purchaser and Company shall make available ultimately paid to the Seller or its agents all records and other materials Sellers but released to Purchaser shall be deemed to be a reduction in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimPurchase Price.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) Each of ▇▇▇▇▇▇ ▇. ▇▇▇, Avi ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ Mania, ▇. ▇. ▇▇▇▇▇▇▇▇▇ and Seller ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (each an "Escrow Executive") hereby agrees as a condition and inducement to Parent's willingness to enter into this Agreement to enter into, prior to the Appointment Time, an Escrow Agreement (the "Escrow Agreement") with Parent substantially in the form of Exhibit C. The amount set forth under the column entitled "Total" next to each Escrow Executive's name on Exhibit F hereto, shall, with respect to each executive be referred to as the "Executive Escrow Total." Each Escrow Executive, the Company and Parent agree that the payments that would otherwise be owed to such executive pursuant to the terms of his employment agreement with Company upon consummation of the Offer shall be reduced by the amount of the Executive Escrow Total and that Parent shall, within two business days of the Appointment Time, deposit cash in such amount with American Stock Transfer and Trust Co. (or another institution selected by Parent with the reasonable consent of the Founders), as escrow agent (the "Escrow Agent"). All such deposits pursuant to this Section 6.18 shall total $400,000 allocated among 5,000,000 and (together with any interest earned thereon) shall constitute the Escrow Fund and be governed by the terms set forth in this Section 6.18 and the two LLC Purchase Agreements of Escrow Agreement (such arrangement, the Cash Consideration shall"Escrow"). Parent shall be solely responsible for all expenses and fees payable to Escrow Agent in connection with the Escrow.
(b) With respect to each date (each, a "Determination Date") set forth on Exhibit D (the "Escrow Threshold Schedule"), Parent shall certify in writing to each Escrow Executive as soon as reasonably practical following such date (and in no event more than 30 days thereafter) whether the applicable threshold test (each, a "Threshold Test") corresponding to such date on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Threshold Schedule has been satisfied. No earlier than such delivery to the Purchaser in Article III hereof. The Escrow Agent Executives, Parent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made deliver to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected certificate signed by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by Parent directing the Escrow Agent to Purchaser.
2.3.3 If deliver the Purchaser notifies applicable threshold amount (each, a "Threshold Amount") corresponding to such date on the Seller of Escrow Threshold Schedule, together with any claim or demand pursuant interest earned thereon, to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle the Escrow Executives (to each Escrow Executive pro rata based on contributions to the Escrow Fund with respect to such claim or demand executive for such Threshold Test as set forth on Exhibit F) if the applicable Threshold Test has been satisfied or (ii) employ counsel acceptable Parent if the applicable Threshold Test has not been satisfied. The Escrow shall terminate when all disputes regarding any distributions from the Escrow Fund have been settled and all distributions under the Escrow have been made.
(c) Each of ▇▇▇▇▇▇ ▇. ▇▇▇, Avi Fox, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ Mania, ▇. ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ agrees, notwithstanding any agreement between such executive and Company (including each agreement set forth on Part 3.04 of the Company Disclosure Letter), that effective as of the Appointment Time, the maximum amount that Company will be obligated to Purchaserpay such executives in order to reimburse such executives for any federal, at the Seller’s expensestate, to defend or local income tax or excise tax (including any such claim interest or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized penalties imposed with respect to such defense. The Purchaser shall have the right to cooperate in the defense taxes) by reason of any payment being made by or on behalf of Company to such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date executives that is subject to a "golden parachute" excise tax under Section 4999 of the applicable Code, shall be a total amount for all such executives collectively of $140,668.00 (the "Aggregate Excise Tax Gross-up Cap"). Notwithstanding the foregoing sentence, each Escrow Notice Executive and Parent agrees that to the extent that Net Cash Available After Termination Related Payments (as defined on Exhibit F) exceeds $750,000 on the Determination Date on which Net Cash Available After Termination Related Payments is calculated, Parent shall pay, on behalf of Company, to the Escrow Executives, collectively, such excess as if the Escrow Executives had not agreed to the Aggregate Excise Tax Gross-up Cap, but only to the extent that the Escrow Executives have been required by a Taxing Authority within six months of the Seller’s decision Appointment Time to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available "golden parachute" excise tax referred to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimabove.
Appears in 1 contract
Sources: Merger Agreement (E Trade Group Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain hold the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser Deposit in Article III hereof, Purchaser becomes liable for escrow and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction shall dispose of the provision of paragraph 2.2.3 hereof, pay from Deposit only in accordance with the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the provisions:
a. Escrow Agent shall pay deliver the Deposit to Seller or Buyer, as the Seller the amount then on deposit in the Escrow Accountcase may be, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted as follows:
(i) to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third upon completion of the Closing; or
(ii) to be selected by the two arbitrators selected by Purchaser and Seller, the findings after receipt of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend demand in good faith third party claims as hereinafter provided. If after such Escrow Notice which Seller certify either that (A) Buyer has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser defaulted under this Agreement, or (B) this Agreement has been otherwise terminated or cancelled, and Seller is thereby entitled to receive the Deposit; but Escrow Agent shall not honor Seller’s demand until more than ten (10) days after Escrow Agent has been given a copy of Seller’s demand to Buyer, nor thereafter if Escrow Agent receives a Notice of Objection (defined below) from Buyer within such ten (10) day period; or
(iii) to Buyer, after receipt of Buyer's demand in which Buyer certifies either that (A) Seller has defaulted under this Agreement, or (B) this Agreement has been otherwise terminated or cancelled, and Buyer is thereby entitled to receive the Deposit; but Escrow Agent shall either not honor Buyer's demand until more than ten (10) days after Escrow Agent has given a copy of Buyer's demand to Seller, nor thereafter if Escrow Agent receives a Notice of Objection (defined below) from Seller within such ten (10) day period.
b. Upon delivery of the Deposit, Escrow Agent shall be relieved of all liability hereunder and with respect to the Deposit. Escrow Agent shall deliver the Deposit, at the election of the party entitled to receive the same, by (i) promptly pay or settle a good, unendorsed certified check of Escrow Agent payable to the order of such claim or demand or party, (ii) employ counsel acceptable an unendorsed official bank or cashier's check payable to Purchaserthe order of such party, at or (iii) a bank wire transfer of immediately available funds to an account designated by such party.
c. Upon receipt of a written demand from Seller or Buyer under Section 16, Escrow Agent shall send a copy of such demand to the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defenseother party. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty Within ten (2010) days after the date of receiving same, but not thereafter, the applicable Escrow Notice other party may object to delivery of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available Deposit to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required party making such demand by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent giving a notice of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.objection (a "
Appears in 1 contract
Sources: Purchase and Sale Agreement
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and On April 24, 2007, the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in Company shall deposit into an interest-bearing escrow account (the “Escrow Account”) with The Huntington Zions First National Bank, a national banking corporation as escrow agent, the sum of $1,630,272 (which is equal to $2,784,410, the “Escrow Agent”)sum of all payments due on the Initial Payment Date, other than $1,100,000 in Incentive Compensation payments and interest thereon, less $1,154,138 in required tax withholdings) pursuant to an escrow agreement reasonably satisfactory in substantially the form of Exhibit B hereto. The withheld amounts shall be promptly, and within the time required by law or regulation, paid over to Purchaser the appropriate taxing authorities after the escrowed funds are released to Executive. The escrowed funds shall be released from escrow on the Initial Payment Date and Seller, for paid over to Executive by the purpose escrow agent in payment in part of securing Seller’s and the Company’s representations and warranties made obligations hereunder on such date, without further instruction to the Purchaser in Article III hereof. The Escrow Agent escrow agent by any person; provided, however, that (A) the escrowed funds shall maintain remain the Escrow Account for a period property of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made the Company and subject to the Purchaser in Article III hereofgeneral claims of creditors until the Initial Payment Date, Purchaser becomes liable for (B) the Company shall bear the costs and pays expenses of the escrow agreement, (C) any monetary damagesinterest on the escrowed funds, awardsremaining after the payment of such costs and expenses, shall be paid over to the Company on the Initial Payment Date, and (D) the escrow agent must pay over the escrowed funds (without interest) to Executive on the Initial Payment Date unless it is ordered or settlements otherwise legally compelled to do otherwise by a court of claimscompetent jurisdiction, arbitrator or governmental or regulatory body or authority. In the event the Company learns of any actual or potential claims made against the escrow, then the Escrow Agent shallCompany shall promptly notify Executive thereof, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to aggressively defend any such claim or demand asserted against the Purchaserclaims at its own cost and expense, so long as the Purchaser is not jeopardized and shall consult with respect to such defense. The Purchaser shall have the right to cooperate in Executive on the defense of strategy. In the event Executive does not timely receive the escrowed funds from the escrow account for any such claim or demand. The Seller reason, then the Company’s obligations hereunder to make payments to Executive shall notify the Purchaser continue in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, full force and effect and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall be obligated to make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising payments out of such claimits own funds.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) Prior to or concurrently with the Effective Time: (i) Parent and Seller agree S&T shall enter into an escrow agreement, in the form attached hereto as EXHIBIT A (the "Escrow Agreement"), with such escrow agent as may be designated by Parent (the "Escrow Agent") and G. Ogde▇ ▇▇▇▇▇▇▇ ▇▇▇ Wilb▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇ representatives of the holders of Shares (the "Representatives"); and (ii) subject to Section 7.4(c)(iv), Parent shall deposit with the Escrow Agent, pursuant to the Escrow Agreement, Three Million Dollars ($3,000,000) in immediately available funds (the "Escrow Funds"). Upon being deposited with the Escrow Agent pursuant to the Escrow Agreement, the Escrow Funds and any and all earnings thereon and proceeds thereof held by the Escrow Agent (collectively, the "Escrowed Property") shall be subject in all respects to the provisions of the Escrow Agreement and shall be held and disbursed by the Escrow Agent in accordance with the provisions of the Escrow Agreement. In accordance with the provisions of the Escrow Agreement, the Escrowed Property shall be held in escrow by the Escrow Agent for a period of eighteen (18) months after which time any remaining Escrowed Property will be disbursed, on a pro rata basis, to the Certificate holders; PROVIDED, HOWEVER, that $400,000 allocated among this such portion of the Escrowed Property sufficient to completely discharge the amount of any claim for indemnification made by written demand before the expiration of such 18-month period (as provided in Section 1.11(b) and the two LLC Purchase Agreements of Escrow Agreement) shall be held in escrow by the Cash Consideration shall, on Escrow Agent beyond the 18-month period until such claim has been fully resolved. On the Closing Date, be deposited to provide a fund to reimburse all out-of-pocket expenses incurred by the Representatives in an interest-bearing escrow account (the “Escrow Account”) connection with The Huntington National Banktheir service as Representatives, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent Parent shall pay to the Seller Representatives the sum of One Hundred Thousand Dollars ($100,000), which amount then on deposit shall be deducted from the aggregate Merger Consideration otherwise to be deposited into the Exchange Fund and any unused portions of such amount shall by distributed by the Representatives to the holders of Shares in proportion to their Proportionate Share (as defined in the Escrow AccountAgreement) at the termination of the Escrow Agreement.
(b) Parent (on behalf of itself or any of its affiliates or any of their respective directors, officers, representatives, employees or agents) will be entitled to recover from time to time in accordance with the provisions of the Escrow Agreement, from the Escrowed Property, such portions of the Escrowed Property as may be necessary to fully indemnify the Parent and its affiliates and their respective directors, officers, representatives, employees and agents and hold each of them harmless from and against any and all claims, actions, suits, demands, assessments, judgments, losses, liabilities, damages, costs and expenses (including interest, penalties, reasonable attorneys' fees, reasonable accounting fees and reasonable investigation costs) (collectively, "Losses") resulting or arising from, relating to or incurred by Parent or any earnings thereon. Any dispute between of its affiliates or any of their respective directors, officers, representatives, employees or agents in connection with the parties regarding the validity Merger, this Agreement or amount any document related hereto (including without limitation, any breach of any damagesrepresentation, awardswarranty, covenant, obligation or settlements agreement of claims S&T contained in this Agreement or any document related hereto) and by whomever asserted (including without limitation, S&T, the Representatives and any former, current or future stockholder of S&T). In accordance with the provisions of the Escrow Agreement, any dispute with respect to a claim for indemnification by the Parent that is not resolved by Parent and S&T within the time periods prescribed in the Escrow Agreement shall be submitted to a panel arbitration for resolution.
(c) Subject to the additional limitations set forth in Section 7.4, S&T shall not be required to indemnify the Parent under Section 1.11(b) and the provisions of arbitrators, one selected by Purchaser, one selected by Sellerthe Escrow Agreement for any Losses unless and until the amount of such Losses equals $25,000 in the aggregate (the "Threshold Amount") in which event S&T shall be obligated to indemnify Parent, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to Parent may assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available indemnification to the Seller or its agents full extent of all records and other materials in Losses, including Losses that are less than the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimThreshold Amount.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At the two LLC Purchase Agreements Second Closing, Buyers shall deposit (or shall cause Vertex to deposit) an aggregate amount equal to 1,000,000 shares of Vertex Common Stock, as adjusted under Section 5.02 (the Cash Consideration shall"Escrow Amount"), on by the Closing Datedelivery of a stock certificate representing in the aggregate the Escrow Amount, be deposited in an interest-bearing escrow account (the “"Escrow Account”") established with The Huntington National Bank, a national banking corporation mutually agreed upon financial institution reasonably approved by the Parties (the “"Escrow Agent”"), to be administered pursuant to the terms and conditions set forth in an escrow agreement in a form reasonably satisfactory agreed upon by the parties (the "Escrow Agreement") to Purchaser and Seller, for be entered into at the purpose of securing Seller’s Second Closing by the Parties and the Company’s representations and warranties made to the Purchaser in Article III hereofEscrow Agent. The Escrow Agent Agreement shall, among other things, provide that (1) it shall maintain be available to cover all Claims by Buyers for indemnification under this Agreement or any downward adjustment (without duplication) in the Closing Stock Consideration contemplated by Section 5.02 above, (2) 500,000 shares of the Closing Consideration, less the sum of [a] the number of shares surrendered or returned to Buyers (or Vertex) related to any paid indemnification Claims, plus [b] the number of shares covering any then outstanding indemnification Claims (including those which are final and liquidated and those which are not final and liquidated) and plus [c] the number of shares of the Vertex Common Stock used to cover any downward adjustment in the Closing Stock Consideration contemplated by Section 5.02 above, shall be released from the Escrow Account for a period and issued in the name of nine months. During such period, ifSellers (or their Affiliates, as a direct result is designated by Sellers to Buyers and as is allowable under applicable Law) on September 15, 2015 and (3) any remaining Escrow Amount (including any interest or dividends thereon), less any amount related to any then outstanding indemnification Claims (including those which are final and liquidated and those which are not final and liquidated), shall be issued in the name of a material misrepresentation Sellers (or breach of warranty its Affiliates, as is designated by Seller made Sellers to Buyers and as is allowable under applicable Law) on the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction eighteen (18) month anniversary of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Second Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements Subject to adjustment under Section 1.9, ninety percent (90%) of the Cash Consideration shallBioTime Shares and LifeMap Shares issuable to the Xennex Stockholders shall be delivered to the Xennex Stockholders as partial payment of the Merger Consideration, and ten percent (10%) of the BioTime Shares and LifeMap Shares issuable in the Merger shall be issued and held in escrow (the Escrow Shares) by ▇▇▇▇▇ Fargo Bank, National Association (Escrow Agent) until the later of (i) the expiration of 180 days following the Closing Date (the Escrow Termination Date); and (ii) the date on which all claims under Section 1.9 in respect of which a claim notice has been issued before the Escrow Termination Date (the Escrow Claim) has been resolved. An Escrow Claim shall not be deemed to have been resolved until (a) Xennex and LifeMap have notified the Escrow Agent in writing that the Escrow Claim has been resolved, or (b) the Escrow Claim has been resolved by a final court judgment or arbitration award. On or before the Closing Date, be deposited in an interest-bearing escrow account (LifeMap and Xennex, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as Representative of the “Escrow Account”) with The Huntington National BankXennex Stockholders, a national banking corporation (the “Escrow Agent”), pursuant to shall enter into an escrow agreement reasonably satisfactory to Purchaser with Escrow Agent, in substantially the form attached as Exhibit D (the Escrow Agreement). LifeMap and Seller, Xennex agree that the Escrow Agreement shall provide for the purpose delivery of securing Seller’s Escrow Shares out of escrow in the manner provided in this Section and the Company’s representations and warranties made to the Purchaser in Article III hereofSection 1.9. The Escrow Agent Agreement shall maintain the Escrow Account for contain a period of nine months. During such periodprovision under which LifeMap and Xennex agree that, if, as where a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount resolution of any such damages, awards, dispute between the Parties results in an award or settlements (“Escrow Payment”). On judgment from arbitration or any other legal proceeding in accordance with the first day provisions of the tenth month following the Closing DateSection 1.9, the Escrow Agent shall pay to the Seller the amount then on deposit in release the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by SellerShares pursuant to, and a third following the receipt of, distribution instructions that are consistent with the award or judgment, delivered to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent by the prevailing Party or Parties. The Escrow Shares to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand be placed in escrow pursuant to paragraph 2.3.2 above, this Section 1.7 and if such claim the Escrow Agreement will initially be withheld (and subsequently dispersed to the extent provided or demand relates allowed under the terms hereof and the Escrow Agreement) from the payment to a claim or demand asserted by a third party against be made to the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized Xennex Stockholders pro rata in accordance with respect to such defense. The Purchaser shall have the right to cooperate their respective individual interests in the defense of any such claim Merger Consideration. All costs and expenses incurred for the Escrow Agent or demand. The Seller otherwise in connection with the Escrow shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted be borne by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimLifeMap.
Appears in 1 contract
Sources: Merger Agreement (Biotime Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At Closing, Buyer shall deposit an aggregate amount equal to 150,000 shares of Vertex Common Stock (the two LLC Purchase Agreements "Escrow Amount"), by delivery of three (3) separate stock certificates each representing 50,000 shares of the Cash Consideration shall, on Vertex Common Stock and comprising in total the Closing Date, Escrow Amount due hereunder to be deposited in into an interest-bearing escrow account (the “"Escrow Account”") established with The Huntington U.S. Bank National Bank, a national banking corporation Association (the “"Escrow Agent”"), pursuant to an the terms and conditions set forth in the escrow agreement reasonably satisfactory substantially in the form attached hereto as Exhibit B (the "Escrow Agreement") to Purchaser and Sellerbe entered into at the Closing by Buyer, for the purpose of securing Seller’s Seller and the Company’s representations Escrow Agent. The shares of Vertex Common Stock deposited into the Escrow Account shall be registered in the name of Seller (and warranties made Seller shall provide the Parent, its legal counsel and transfer agent such information as is reasonably requested by such parties to facilitate the Purchaser issuance of the shares evidencing such Escrow Amount), and shall bear the legends and restrictions, as applicable, set forth in Article III hereofSection 9.18 below. The Escrow Agreement shall, among other things, provide that (1) the Escrow Amount shall be available to indemnify the Buyer Indemnified Parties for such Losses set forth in Section 11.02 of this Agreement or any downward adjustment in the Purchase Price as result of the Inventory adjustments contemplated by Section 5.02 above, and (2) any remaining Escrow Amount (including any interest and other earnings thereon), less any amount related to any then outstanding claims for Losses set forth Section 11.02 of this Agreement (including those that are final and liquidated and those that are not final and liquidated), shall be paid to Seller on the twenty four (24) month anniversary of the Closing Date (such period of time from the Closing until the twenty four (24) month anniversary of the Closing Date is referred to herein as the "Escrow Period"). For all purposes of this Section 5.03(b) and for Section 11 (including in connection with the payment or satisfaction of any indemnification of the Buyer Indemnified Parties for such Losses set forth in Section 11.02 of this Agreement), to the extent such shares of Vertex Common Stock and not cash are used by Seller to satisfy any indemnity claims for Losses under Section 11.02 of this Agreement of the Buyer Indemnified Parties hereunder, the per share value of the Vertex Common Stock in the Escrow Account shall be equal to the Escrow Reference Price so that each share of Vertex Common Stock used to satisfy any indemnity Claims of the Buyer Indemnified Parties shall represent a dollar value equal to the Escrow Reference Price. During the Escrow Period, but subject to the transfer restrictions contemplated by Section 9.18(b) below, Seller, in its sole discretion and irrespective of the then current market price of the Vertex Common Stock, shall be entitled to receive a single stock certificate representing 50,000 shares of Vertex Common Stock, up to a total of 150,000 shares of Vertex Common Stock (or three separate stock certificates in total), upon each deposit into the Escrow Account (by wire transfer of immediately available funds) of cash totaling $333,333 and Parent and Buyer shall cooperate in all reasonable respects with Seller in connection therewith, including complying with any reasonable requests of the Escrow Agent and Parent's transfer agent in connection therewith. Further, Seller shall maintain be entitled (and Parent and Buyer shall cooperate in all reasonable respects with Seller with respect thereto) to request a distribution from the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation any cash or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit cash equivalent amounts in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesAccount that exceed $1,000,000.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements Closing, Buyer will deposit the Escrow Amount, without any act of the Cash Consideration shallCompany or the Shareholders, on the Closing Datewith U.S. Bank, be deposited in National Association, as Escrow Agent, such deposit to constitute an interest-bearing escrow account fund (the “Escrow AccountFund”) with to be governed by the terms set forth herein. The Huntington National BankEscrow Amount may be invested as jointly directed in writing by Buyer and the Representative from time to time. In the absence of joint written instructions, the Escrow Amount shall be invested by the Escrow Agent in a national banking corporation U.S. Bank Money Market Account, which is FDIC insured. Any interest, earnings and income that accrue upon the Escrow Amount during the period of time during which the Escrow Amount is held in the Escrow Fund shall be taxable as income to the Shareholders representing interest earned as a result of deferred receipt of a portion of the Purchase Price, and shall be deemed to be part of the Escrow Fund.
(b) Subject to the following requirements, the Escrow Fund shall remain in existence during the period following the Closing for one (1) year (the “Escrow Period”). Upon the expiration of the Escrow Period, and within two (2) business days thereafter, any and all amounts remaining in the Escrow Fund shall be released from the Escrow Fund to the Shareholders in accordance with Schedule 3.2 after accounting for (i) all amounts theretofore validly distributed out of the Escrow Fund to the Indemnified Parties pursuant to this Article IX and (ii) the retention of an amount equal to such portion of the remaining Escrow Fund which, subject to the objection of the Representative and the subsequent arbitration of the matter in a manner consistent with this Article IX, is necessary to satisfy any unsatisfied claims specified in any Damages Certificate (as defined in Section 9.3(d)) delivered to the Representative prior to the end of the Escrow Period, which amount shall remain in the Escrow Fund (and the Escrow Fund shall remain in existence) until such claims have been resolved. As soon as such claims have been resolved (such resolution to be evidenced by the written agreement of the Buyer and the Representative or the written decision of the arbitrators as described below), and within two (2) business days after delivery of the written agreement of the Buyer and the Representative or the written decision of the arbitrators evidencing such resolution to the Escrow Agent, the Escrow Agent shall deliver the remaining portion of the Escrow Fund not required to satisfy any remaining claims to the Shareholders in accordance with Schedule 3.2.
(c) Notwithstanding anything to the contrary contained herein, the extent of the aggregate indemnification liability of an Indemnifying Party for Damages under this Article IX shall never exceed the Escrow Amount; provided, however, that the Indemnifying Parties’ liability shall be without limit for Damages resulting from (i) any fraud, willful misrepresentation or willful misconduct of the Company or any Shareholder, (ii) breaches of the Surviving Representations, (iii) breaches of Section 8.3, (iv) Title Claims or (v) Securityholder Claims.
(d) In the event that any Indemnified Party has incurred or sustained Damages or reasonably anticipates that it will incur or sustain Damages, the Indemnified Party shall deliver to the Representative, with a copy to the Escrow Agent, a certificate signed by any officer of the Indemnified Party (a “Damages Certificate”) (A) stating that the Indemnified Party has incurred or sustained Damages or reasonably anticipates that it could incur or sustain Damages and (B) specifying in reasonable detail the individual items of Damages included or the basis for such anticipated liability.
(e) The Representative shall have twenty (20) days following its receipt of a Damages Certificate to object to any claim or claims made in a Damages Certificate. In the event that the Representative has not objected within such twenty (20) day period to a Damages Certificate, then the Escrow Agent shall remit to the Indemnified Party the amount set forth in such Damages Certificate and the Escrow Fund shall be reduced by such amount. In the event that the Representative so objects within such twenty (20) day period, such objection must be in the form of a certificate signed by the Representative or its authorized member or manager and delivered to the Indemnified Party, with a copy to the Escrow Agent (an “Objection Certificate”), pursuant which certificate shall set forth the item or items of Damages in the Damages Certificate to which the Indemnifying Parties are objecting and a reasonable basis for each such objection.
(f) For a period of fifteen (15) days after the delivery of an escrow agreement reasonably satisfactory to Purchaser and SellerObjection Certificate, for the purpose of securing Seller’s Indemnified Party and the Company’s representations and warranties made Representative shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If such an agreement is reached as to all or any portion of the Damages that are subject to the Purchaser in Article III hereofObjection Certificate, then a memorandum setting forth such agreement shall be prepared and signed by both parties and, where an Indemnified Party is entitled to be compensated from the Escrow Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall maintain be entitled to rely on any such memorandum. If no such agreement can be reached after good faith negotiation, either the Escrow Account Representative or the Indemnified Parties may demand arbitration of the matter unless the amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to the Representative and the Indemnified Parties. In the event that within 45 days after submission of any dispute to arbitrators the Representative and the Indemnified Parties cannot mutually agree on one arbitrator, the Representative and the Indemnified Parties shall each select one arbitrator, and the two arbitrators so selected shall select a third arbitrator. The arbitrator or arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator or a period majority of nine months. During such period, ifthe three arbitrators, as a direct result of a material misrepresentation or breach of warranty by Seller made the case may be, to discover relevant information from the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then opposing parties about the Escrow Agent shall, after satisfaction subject matter of the provision dispute. The arbitrator or a majority of paragraph 2.2.3 hereofthe three arbitrators, pay from as the Escrow Accountcase may be, shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including reasonable legal fees and costs, to the Purchasersame extent as a court of competent law or equity, should the arbitrator or a majority of the three arbitrators, as the case may be, determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator or a majority of the three arbitrators, as the case may be, as to the validity and amount of any claim objected to in such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators Objection Certificate shall be binding and conclusive upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser . Such decision shall have given Seller a be written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the Escrow Agent to Purchaserarbitrator(s).
2.3.3 If (g) Judgment upon any award rendered by the Purchaser notifies arbitrators may be entered in any court having jurisdiction. Any such arbitration shall be held in Austin, Texas, under the Seller rules then in effect of any claim or demand pursuant the American Arbitration Association. The payment of all fees and expenses of the parties to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaserarbitration, so long as well as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date fees of the applicable Escrow Notice arbitrator(s) and the administrative fee of the Seller’s decision to either pay such claim or demand or defend American Arbitration Association, shall be payable in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimaccordance with Section 10.10.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements Closing, Buyer will deposit the Escrow Amount, without any act of the Cash Consideration shallSeller, on the Closing Datewith Gowling ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, be deposited in as Escrow Agent, such deposit to constitute an interest-bearing escrow account fund (the “Escrow AccountFund”) with to be governed by the terms set forth herein. The Huntington National BankEscrow Amount may be invested as jointly directed in writing by Buyer and Seller from time to time. In the absence of joint written instructions, a national banking corporation the Escrow Amount shall be invested by the Escrow Agent in United States or Canadian government-backed, interest-bearing securities. Any interest, earnings and income that accrue upon the Escrow Amount during the period of time during which the Escrow Amount is held in the Escrow Fund shall be deemed to be part of the Escrow Fund.
(b) Subject to the following requirements, the Escrow Fund shall remain in existence during the period following the Closing for one (1) year (the “Escrow AgentPeriod”). Upon the expiration of the Escrow Period, and within two (2) business days thereafter, any and all amounts remaining in the Escrow Fund shall be released from the Escrow Fund to Seller after accounting for (i) all amounts theretofore validly distributed out of the Escrow Fund to the Indemnified Parties pursuant to this Article IX and (ii) the retention of an amount equal to such portion of the remaining Escrow Fund which, subject to the objection of the Indemnifying Parties and the subsequent arbitration of the matter in a manner consistent with this Article IX, is necessary to satisfy any unsatisfied claims specified in any Damages Certificate (as defined in Section 9.4(c)) delivered to the Indemnifying Parties prior to the end of the Escrow Period, which amount shall remain in the Escrow Fund (and the Escrow Fund shall remain in existence) until such claims have been resolved. As soon as such claims have been resolved (such resolution to be evidenced by the written agreement of the Buyer and the Indemnifying Parties or the written decision of the arbitrators as described below), and within two (2) business days thereafter, the Escrow Agent shall deliver to Seller the remaining portion of the Escrow Fund not required to satisfy any remaining claims.
(c) In the event that any Indemnified Party has incurred or sustained Damages or reasonably anticipates that it will incur or sustain Damages, the Indemnified Party shall deliver to the Indemnifying Parties a certificate signed by any officer of the Indemnified Party (a “Damages Certificate”) (A) stating that the Indemnified Party has incurred or sustained Damages or reasonably anticipates that it could incur or sustain Damages and (B) specifying in reasonable detail the individual items of Damages included or the basis for such anticipated liability.
(d) The Indemnifying Parties shall have twenty (20) days following their receipt of a Damages Certificate to object to any claim or claims made in a Damages Certificate. In the event that the Indemnifying Parties have not objected within such twenty (20) day period to a Damages Certificate, then the Escrow Agent shall remit to the Indemnified Party the amount set forth in such Damages Certificate and the Escrow Fund shall be reduced by such amount. In the event that the Indemnifying Parties so object within such twenty (20) day period, such objection must be in the form of a certificate signed by the Indemnifying Party or its authorized member or manager and delivered to the Indemnified Party (an “Objection Certificate”), pursuant which certificate shall set forth the item or items of Damages in the Damages Certificate to which the Indemnifying Parties are objecting and a reasonable basis for each such objection.
(e) For a period of fifteen (15) days after the delivery of an escrow agreement reasonably satisfactory to Purchaser and SellerObjection Certificate, for the purpose of securing Seller’s Indemnified Party and the Company’s representations and warranties made Indemnifying Parties shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims as are objected to therein. If such an agreement is reached as to all or any portion of the Damages that are subject to the Purchaser in Article III hereofObjection Certificate, then a memorandum setting forth such agreement shall be prepared and signed by both parties and, where an Indemnified Party is entitled to be compensated from the Escrow Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall maintain be entitled to rely on any such memorandum. If no such agreement can be reached after good faith negotiation, either the Escrow Account Indemnifying Parties or the Indemnified Parties may demand arbitration of the matter unless the amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to the Indemnifying Parties and the Indemnified Parties. In the event that within 45 days after submission of any dispute to arbitrators the Indemnifying Parties and the Indemnified Parties cannot mutually agree on one arbitrator, the Indemnifying Parties and the Indemnified Parties shall each select one arbitrator, and the two arbitrators so selected shall select a third arbitrator. The arbitrator or arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator or a period majority of nine months. During such period, ifthe three arbitrators, as a direct result of a material misrepresentation or breach of warranty by Seller made the case may be, to discover relevant information from the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then opposing parties about the Escrow Agent shall, after satisfaction subject matter of the provision dispute. The arbitrator or a majority of paragraph 2.2.3 hereofthe three arbitrators, pay from as the Escrow Accountcase may be, shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including reasonable legal fees and costs, to the Purchasersame extent as a competent court of law or equity, should the arbitrator or a majority of the three arbitrators, as the case may be, determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator or a majority of the three arbitrators, as the case may be, as to the validity and amount of any claim objected to in such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators Objection Certificate shall be binding and conclusive upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser . Such decision shall have given Seller a be written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the Escrow Agent to Purchaserarbitrator(s).
2.3.3 If (f) Judgment upon any award rendered by the Purchaser notifies arbitrators may be entered in any court having jurisdiction. Any such arbitration shall be held in Wilmington, Delaware, under the Seller rules then in effect of any claim or demand pursuant the American Arbitration Association. The payment of all fees and expenses of the parties to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaserarbitration, so long as well as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date fees of the applicable Escrow Notice arbitrator(s) and the administrative fee of the Seller’s decision to either pay such claim or demand or defend American Arbitration Association, shall be payable in good faith any such third party claim or demandaccordance with Section 10.10. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.-28-
Appears in 1 contract
Sources: Asset Purchase Agreement
Escrow. 2.3.1 Purchaser The Buyer shall deposit with the State Street Bank and Seller agree that $400,000 allocated among this and Trust Company, a Massachusetts trust company (the two LLC Purchase Agreements "Escrow Agent") an amount in cash equal to 15.75% of the Cash Consideration shall, on aggregate cash consideration payable by the Closing Date, be deposited in an interest-bearing escrow account Buyer to the holders of record (as of the “Escrow Account”Effective Time) with The Huntington National Bank, a national banking corporation of Common Stock (including the “Escrow Agent”Converted Preferred Shares), Company Stock Options and Executive Stock Options (collectively, the "Stockholders") pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofthis Section 2.09. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then All amounts deposited with the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, pursuant to the Purchaserpreceding sentence (in the aggregate, together with any interest, investment income or other proceeds applicable thereto, the amount of any such damages, awards, or settlements (“"Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Amount") shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid held by the Escrow Agent (as held by the Escrow Agent, the "Escrow Account") subject to Purchaser.
2.3.3 If the Purchaser notifies terms and conditions of the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Escrow Agreement, in substantially the Seller shall either form attached hereto as Exhibit C, dated as of the date hereof (i) promptly pay or settle such claim or demand or the "Escrow Agreement"), by and among the Buyer, the Company, the Stockholder Representative and the Escrow Agent, until the first anniversary of the Closing (ii) employ counsel acceptable the "Early Escrow Release Date"), at
01. Notwithstanding anything to Purchaserthe contrary contained herein, at the Seller’s expenseClosing, the Buyer shall only be committed to defend pay an amount in cash (the "Cash Payment") equal to 84.25% of the consideration to which each Stockholder is entitled pursuant to Section 2.09 hereof, minus any such claim required Tax deductions or demand asserted against the Purchaserwithholdings, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate upon satisfactory completion and return of a Letter of Transmittal in the defense form attached hereto as Exhibit D (the "Letter of Transmittal") and surrender of such Certificates and/or option agreements evidencing Company Stock Options (including any such claim or demand. The Seller shall notify documents providing for the Purchaser in writing, within twenty (20TARSAP options listed on Schedule 2.09(e) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defensehereto, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to "Option Agreements"), as applicable (the Seller or its agents all records and other materials "Stock Documents"), in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimaccordance with Section 2.10.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and 15.1 At Completion, the Purchaser, the Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements Escrow Account Holding Bank shall enter into the Escrow Agreement and, in accordance with the provisions of clause 14.2(B), the Purchaser shall pay, or procure the payment of, an amount equal to ten per cent (10%) of the Cash Consideration shall, on the Closing Date, be deposited (excluding any amount in an interest-bearing escrow account (the “Escrow Account”respect of VAT) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from cleared funds into the Escrow Account, to be held in accordance with the Purchaserterms of this clause 15 and the Escrow Agreement.
15.2 Without prejudice to the terms of any Instruction Letter, the parties agree that:
(A) any interest earned on the balance of the Escrow Account shall be credited to the balance of the Escrow Account;
(B) without prejudice to the terms of the Charge over the Escrow Account, the Seller is entitled at all times to the full beneficial interest in the credit balance (including such part of the credit balance as represents interest) of the Escrow Account; and
(C) the Escrow Account Holding Bank shall charge any fees, charges, costs and expenses in connection with the arrangements under this clause 15 against any interest earned on the balance of the Escrow Account.
15.3 The Seller shall, and shall procure that the Escrow Account Holding Bank shall (save to the extent created pursuant to the Charge over Escrow Account):
(A) not create or have outstanding any security interest over all or any part of the Seller’s interest in the Escrow Account;
(B) not transfer, assign or otherwise dispose of all or any part of the Seller’s interest in the Escrow Account; and
(C) ensure that the Seller’s interest is and remains free from any other Encumbrance, right of set-off or counterclaim.
15.4 No payment shall be made out of the Escrow Account other than in accordance with the provisions of this clause 15. All payments out of the Escrow Account shall be made without deduction or withholding unless such deduction or withholding is required by Law.
15.5 Each of the parties agrees to deliver such Instruction Letters to the Escrow Account Holding Bank, and to take such other actions, as may be necessary to enable and instruct the Escrow Account Holding Bank to deal with the Escrow Account in accordance with the provisions of this clause 15.
15.6 Within five (5) Business Days after the date of agreement or, as applicable, determination of any Settled Indemnity Claim or Determined Indemnity Claim, or five (5) Business Days before amounts become due and payable in accordance with clause 10 of the Tax Covenant, the Seller and the Purchaser shall execute and issue an Instruction Letter to the Escrow Account Holding Bank instructing it to remit to the Purchaser (to such bank account or accounts as the Purchaser may nominate from time to time in writing to the Escrow Account Holding Bank) an amount equal to the Amount Payable with respect to such Settled Indemnity Claim or Determined Indemnity Claim or the amounts due and payable in accordance with clause 10 of the Tax Covenant (or, if the amount standing to the credit of the Escrow Account is insufficient to satisfy the Amount Payable or the amount due and payable in accordance with clause 10 of the Tax Covenant in full, the amount standing to the credit of the Escrow Account). [***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.
15.7 Subject to sub-clauses 15.8 and 15.9, if there is any amount remaining in the Escrow Account following the date which is thirty six (36) months after the Completion Date after retaining an amount equal to the Escrow Indemnity Claim Value (as defined in sub-clause 15.8), the Seller and the Purchaser shall issue an Instruction Letter to the Escrow Account Holding Bank instructing it to remit such damagesremaining amount to the Seller’s Bank Account (or to such other bank account or accounts as the Seller may nominate from time to time in writing to the Escrow Account Holding Bank).
15.8 Subject to sub-clause 15.9, awardsif, on the date which is thirty six (36) months after the Completion Date, there are any Indemnity Claims or settlements claims under the Tax Covenant which have been notified to the Seller but which have not become Settled Indemnity Claims or Determined Indemnity Claims or due and payable under clause 10 of the Tax Covenant (such Indemnity Claims and claims under the Tax Covenant being “Escrow PaymentIndemnity Claims”). On the first day of the tenth month following the Closing Date, the Escrow Agent Account shall pay remain open and a sum equal to the aggregate value of such Escrow Indemnity Claims in the amount notified in writing to the Seller by the Purchaser (the “Escrow Indemnity Claim Value”) or, if the balance of the Escrow Account is less than such aggregate value of such Escrow Indemnity Claims, the whole of the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between shall remain in the parties regarding Escrow Account and be dealt with in accordance with this clause 15 (the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties“Extended Retention”).
2.3.2 In order for Purchaser to assert its right to an 15.9 Upon any Escrow Payment, Purchaser shall have given Seller Indemnity Claim becoming a written notice Determined Indemnity Claim or a Settled Indemnity Claim or due and payable under clause 10 of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If the Tax Covenant after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser date which is a claim or demand for which thirty six (36) months after the Seller must indemnify or hold harmless the Purchaser under this AgreementCompletion Date, the Seller and the Purchaser shall either execute and issue an Instruction Letter to the Escrow Account Holding Bank as soon as reasonably practicable instructing it to remit:
(iA) promptly pay or settle such an amount equal to the Amount Payable in respect of that claim or demand the amount due and payable under clause 10 of the Tax Covenant (or, if the amount standing to the credit of the Escrow Account is insufficient to satisfy the Amount Payable or the amount due and payable under clause 10 of the Tax Covenant in full, the amount standing to the credit of the Escrow Account) to the Purchaser (iito such bank account or accounts as the Purchaser may nominate from time to time in writing to the Escrow Account Holding Bank); and
(B) employ counsel acceptable the balance standing to Purchaserthe credit of the Escrow Account (if any), at after taking full account of any other Escrow Indemnity Claims in respect of which the Extended Retention is still to apply (if any), to the Seller’s expense, Bank Account (or to defend any such claim other bank account or demand asserted against the Purchaser, so long accounts as the Purchaser is not jeopardized with respect Seller may nominate from time to such defense. The Purchaser shall have time in writing to the right to cooperate Escrow Account Holding Bank), in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, each case within twenty five (205) days Business Days after the date of the applicable Escrow Notice agreement or, as applicable, determination of any Settled Indemnity Claim or Determined Indemnity Claim or five (5) Business Days before amounts become due and payable in accordance with clause 10 of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimTax Covenant.
Appears in 1 contract
Sources: Asset and Share Transfer and Technology License Agreement (CSR PLC)
Escrow. 2.3.1 Purchaser To secure the indemnification obligations of Sellers under this Agreement, Buyer, Sellers and Seller agree that $400,000 allocated among this ▇▇ ▇▇▇▇▇▇ Chase Bank, National Association, as Escrow Agent, or any other Person willing to act as escrow agent mutually agreeable to the Sellers’ Representative and Buyer (the two LLC Purchase Agreements of “Escrow Agent”), at Closing shall enter into an Escrow Agreement substantially in the Cash Consideration shallform attached hereto as Exhibit A (the “Escrow Agreement”). At the Closing, on Buyer shall deposit the Closing Date, Escrow Shares with the Escrow Agent to be deposited held in an interest-bearing escrow account (the “Escrow Account”) pursuant to the terms of the Escrow Agreement. Except with The Huntington National Bankrespect to amounts that have been previously paid from the Escrow Account to Buyer pursuant to the joint written instruction of Sellers and Buyer, a national banking corporation and except with respect to indemnity claims duly made in accordance with ARTICLE 11 on or before March 31, 2010 (the “Escrow AgentPeriod”), all Escrow Shares shall be distributed to Sellers in accordance with the Escrow Agreement within ten (10) Business Days after the expiration of the Escrow Period. If any indemnification claim pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay ARTICLE 11 is satisfied from the Escrow Account, the Escrow Shares shall be valued at the average closing price of such shares on the New York Stock Exchange for the ten trading days immediately prior to the Purchaser, the amount disbursal of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid Shares by the Escrow Agent to Purchaserany Buyer Indemnified Person.”
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i7. Section 2.5(b)(iii) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice Agreement is deleted in its entirety and replaced with the following: “(iii) (1) the Estimated Excess Indebtedness minus (2) the Actual Excess Indebtedness; plus”
8. Immediately following Section 2.8 of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as Agreement the Seller following Section 2.9 is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.added:
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At the two LLC Purchase Agreements of the Cash Consideration shallClosing, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Buyer shall deliver to W▇▇▇▇ Fargo Bank, a national banking corporation National Association, as escrow agent (the “Escrow Agent”), pursuant the Escrow Amount by wire transfer of immediately available funds to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation account or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid accounts designated by the Escrow Agent for this purpose (the “Escrow Account”). The Escrow Amount will be held in escrow in the Escrow Account and distributed in accordance with the terms and conditions of the Escrow Agreement (the “Escrow Agreement”), which shall provide, among other things, that (i) the Escrow Amount will be available to Purchaser.
2.3.3 If the Purchaser notifies satisfy any amounts owed by the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser Buyer under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty twelve (2012) business days after the Final Closing Statement becomes final and binding on the parties, any amounts remaining in the Escrow Account not subject to a claim pursuant to the Escrow Agreement in excess of Two Million Two Hundred Thousand Dollars ($2,200,000) (plus the associated interest accrued thereon) after giving effect to any payments made or to be made from the Escrow Account prior to such date shall be distributed to the Seller, and (iii) any amounts remaining in the Escrow Account and not subject to a claim pursuant to the Escrow Agreement after eighteen (18) months from the Closing Date shall be distributed to the Seller. All disbursements from the Escrow Account shall be made in accordance with the terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAgreement.
Appears in 1 contract
Sources: Stock Purchase Agreement (Intelligent Systems Corp)
Escrow. 2.3.1 Purchaser (a) Upon the Closing, Parent shall withhold 10% of the shares of Parent Common Stock (the "Escrow Shares") and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements 10% of the Cash Consideration shallConsideration, if applicable (the "Escrow Cash") payable by Parent hereunder in respect of Company Capital Stock outstanding on the Closing Datedate hereof, be deposited in an interest-bearing and deliver such shares and cash to Chase Manhattan Trust Company, National Association as escrow account agent (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “"Escrow Agent”"), pursuant to an escrow agreement reasonably satisfactory be held by the Escrow Agent as collateral to Purchaser and Seller, for secure the purpose rights of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III Parent Indemnitees under Section 9 hereof. The Escrow Agent Shares and Escrow Cash shall maintain be held pursuant to the provisions of an escrow agreement substantially in the form of Exhibit D (the "Escrow Agreement"). The Escrow Shares will be represented by a certificate or certificates issued in the name of the Escrow Account Agent, and the Escrow Shares and Escrow Cash will be held by the Escrow Agent for a period of nine months. During such periodto end 90 days from the Closing Date (the "Escrow Period"); provided, ifhowever, as that in the event any Parent Indemnitee has made a direct result of a material misrepresentation or breach of warranty by Seller made claim under Section 9 prior to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements end of claimsthe Escrow Period, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements Period shall continue (“Escrow Payment”). On the first day of the tenth month following the Closing Date, and the Escrow Agent shall pay will continue to hold, in accordance with the Seller Escrow Agreement, a certain portion of the amount Escrow Shares and Escrow Cash) until such claim is fully and finally resolved. In the event that this Agreement is adopted by the Company's stockholders, then on deposit all such stockholders shall, without any further act of any Company stockholder, be deemed to have consented to and approved (i) the use of the Escrow Shares and Escrow Cash as collateral to secure the rights of the Parent Indemnitees under Section 9 in the manner set forth herein and in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by SellerAgreement, and a third to be selected by (ii) the two arbitrators selected by Purchaser appointment of the Company Stockholders' Representatives (as defined in Section 10.1) as the representatives under the Escrow Agreement of the stockholders receiving shares of Parent Common Stock under this Agreement (and SellerCash Consideration, if applicable) and as the findings attorneys-in-fact and agents for and on behalf of a majority each of which arbitrators shall be binding upon the partiessuch stockholders (other than holders of Appraisal Shares).
2.3.2 In order for Purchaser to assert its right to an (b) The Escrow Payment, Purchaser Agreement shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof require that:
(“i) all dividends paid on the Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall Shares be paid distributed promptly by the Escrow Agent to Purchaser.the Company stockholders who contributed the Escrow Shares or on whose behalf the Escrow Shares were contributed under the Escrow Agreement; and
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date all voting rights of the applicable Escrow Notice Shares be exercisable on behalf of the Seller’s decision to either pay such claim Company stockholders who contributed the Escrow Shares or demand on whose behalf the Escrow Shares were contributed under the Escrow Agreement or defend their authorized agent disclosed in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available writing to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Agent.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Pharmacopeia Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (i) Simultaneously with the two LLC Purchase Agreements closing of the Cash Consideration shallBusiness Combination, on GigCapital4 shall deposit, for good and valuable consideration, the Closing Datereceipt, be deposited in sufficiency and adequacy of which GigCapital4 hereby acknowledges, into an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation Continental Stock Transfer & Trust Company (the “Escrow Agent”), pursuant subject to an the terms of a written escrow agreement reasonably satisfactory (the “Escrow Agreement”) substantially in the form attached as Exhibit A hereto and to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made be entered into prior to the Purchaser in Article III hereofRedemption Date, an amount equal to the lesser of (x) $25,375,000 and (y) $10.15 multiplied by the number of Shares and Additional Shares held by the Investors as of the closing of the Business Combination. The Concurrently with the execution of the Escrow Agreement, the Company shall provide irrevocable written instructions to the Escrow Agent shall maintain to release from the Escrow Account for a period of nine monthsthe aggregate Shares Purchase Price in accordance with Section 1 and the aggregate Early Sales Premium in accordance Section 4(d). During such periodThe payments to be made by the Company to each Investor in accordance with Section 1 or Section 4(d), ifif applicable, as a direct result of a material misrepresentation or breach of warranty by Seller will be made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay solely with funds from the Escrow Account.
(ii) In the event that any Investor sells any Shares (including any Additional Shares) as provided in Section 4(d), to upon receipt by the Purchaser, Company and the amount Escrow Agent of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Datean Open Market Sale Notice, the Escrow Agent shall pay release from the Escrow Account to the Seller Company for the Company’s use without restriction an aggregate amount then on deposit equal to the number of Shares (including any Additional Shares) sold multiplied by $10.15; provided that if an Investor sold any Early Sale Shares, within five (5) Business Days of the Company’s and the Escrow Agent’s receipt of the applicable Open Market Sale Notice, the Escrow Agent shall release from the Escrow Account (a) for the selling Investor’s use without restriction an amount equal to the Early Sale Premium with respect to the Early Sale Shares sold by such Investor, and (b) for the Company’s use without restriction an amount equal to the number of Early Sale Shares sold in the Escrow Account, Early Sale multiplied by $10.10.
(iii) In the event that any Investor elects not to sell to the Company any Shares (including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected Additional Shares) held by Purchaser, one selected such Investor by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller either (A) delivering a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent stating such Investor’s intention not to Purchaser.
2.3.3 If sell any Shares (or any Additional Shares) to the Purchaser notifies Escrow Agent, or (B) such Investor failing to timely deliver a Shares Sale Notice to the Seller of any claim or demand Company pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand Section 1(a) for which the Seller must indemnify or hold harmless the Purchaser under this Agreementall of its Shares, the Seller Escrow Agent shall either release from the Escrow Account to the Company for the Company’s use without restriction an amount equal to (ix) promptly pay or settle such claim or demand or $10.15 multiplied by (iiy) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense number of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized Shares held by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimInvestor.
Appears in 1 contract
Sources: Forward Share Purchase Agreement (GigCapital4, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on (a) On the Closing Date, be deposited the Buyer shall deliver to the Escrow Agent a certificate (issued in an interest-bearing escrow account (the “name of the Escrow Account”Agent or its nominee) with The Huntington National Bankrepresenting the Escrow Shares, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Selleras described in Section 1.5, for the purpose of securing Seller’s and the Company’s representations and warranties made to indemnification obligations of the Purchaser Indemnifying Stockholders (as defined in Article III hereofSection 6.1) set forth in this Agreement. The Escrow Agent Shares shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty be held by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shallunder, after satisfaction and disbursed in accordance with, the Escrow Agreement pursuant to the terms thereof. The Escrow Agreement shall provide that one-third of the provision of paragraph 2.2.3 hereof, pay Escrow Shares shall be released from escrow six months after the Closing Date and the remaining Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On Shares will be released from escrow on the first day anniversary of the tenth month following the Closing Date, subject in each case to the delivery of notice of a Dispute pursuant to Article VI below and the terms of the Escrow Agent Agreement; provided, however, that (i) Escrow Shares with a Value (as defined -------- ------- below) of UK(Pounds)200,000 shall pay be held in escrow until the date that is ten business days after the eighteen month anniversary of the consummation of the Company's disposition of Interglobe Telecommunications (International) plc, pursuant to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute an Agreement between the parties regarding Company and Redstone Telecom plc dated February 24, 2000 (the validity "Interglobe Agreement") for the purpose of securing the indemnification obligations of the Indemnifying Stockholders with respect to Section 6.1(e) and (ii) Escrow Shares with a Value of $1,000,000 shall be held in escrow until two years after the Closing Date for the purpose of securing the indemnification obligations of the Indemnifying Stockholders with respect to Section 6.1(e) and breaches of the representations and warranties of the Company set forth in Section 2.9 (and the portion of the Company Certificate pertaining thereto). The Escrow Shares shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or amount any other judicial process of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice creditor of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaserparty, such sums paid shall qualify as an Escrow Payment and shall be paid held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement.
(b) The adoption of this Agreement and the approval of the Merger by the Escrow Agent Company Stockholders shall constitute approval by the Company Stockholders voting to Purchaser.
2.3.3 If approve the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date Merger of the applicable Escrow Notice Agreement and of all of the Seller’s decision to either pay such claim or demand or defend arrangements relating thereto, including without limitation the placement of the Escrow Shares in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, escrow and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent appointment of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimIndemnification Representatives.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and (a) Seller agree that shall deposit into escrow (a) two hundred seventy-five thousand dollars ($400,000 allocated among this and the two LLC Purchase Agreements 275,000.00) of the Cash Consideration shall, on the Closing Date, be deposited in each Installment up to an interest-bearing escrow account aggregate total of $2,750,000.00 (the “Reserve Payment”); less (b) the Installment Interest (together (a) and (b), are referred to as the “Escrow AccountAmount”) with The Huntington National Bank, a national banking corporation to be held in an escrow account held by Compass Bank (BBVA) N.A. (the “Escrow Agent”), pursuant to ) on behalf of Buyer and Seller in accordance with an escrow agreement reasonably satisfactory in substantially the form attached hereto as Exhibit F (the “Escrow Agreement”). In the event that any Installment is insufficient to Purchaser make the Reserve Payment as a result of the working capital set-off in Section 2.4(e) or a set-off of an indemnification claim permitted under Section 10.3(i), Buyer shall be entitled to increase the amount of subsequent Reserve Payments so that the Escrow Amount reflects the total Reserve Payments required to be made to date hereunder. Notwithstanding anything elsewhere set forth herein, nothing herein shall be deemed to prevent the Seller from pursuing the Freedom Logistics Litigation appeal in accordance with the Joint Defense Agreement at its sole cost and Sellerexpense. No payment shall be made to Freedom Logistics, for LLC from the purpose Escrow Amount until the earlier of securing (i) Seller appeals have been exhausted, or the applicable appeal period has expired; or (ii) payment is ordered to be made by the presiding court. None of Buyer or Provider Companies shall be obligated to take any action or make any agreement in its name or otherwise in pursuit of Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofappeal. The Escrow Agent Amount shall maintain serve as security for the Escrow Account payment of any claims for a period indemnification by Buyer under Article X. Any payments owed by the Seller to any Buyer Indemnified Parties pursuant to Article X shall be paid first from any set-off of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for Installment Payments under Section 10.3(i) and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”)Funds at Buyer’s discretion. On the first day second anniversary of the tenth month following the Closing Date, the Escrow Agent shall pay release in accordance with the terms of the Escrow Agreement an amount of the Escrow Funds equal to the Seller excess, if any, of (i) any remaining Escrow Funds over (ii) the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or aggregate amount of any damages, awards, or settlements claims asserted by Buyer pursuant to Article X prior to the second anniversary of claims the Closing Date that are not yet resolved (“Unresolved Escrow Claims”). The Escrow Funds retained for an Unresolved Escrow Claim shall be submitted released by the Escrow Agent (to the extent not utilized to pay a panel Buyer Indemnified Party for any such claims resolved in favor of arbitratorsa buyer Indemnified Party) to Seller upon the resolution of such Unresolved Escrow Claim in accordance with this Agreement and the Escrow Agreement.
(b) In addition to the Escrow Amount set forth in (a) above, one selected Seller shall also escrow an amount equal to the lesser of $250,000 or the amount recommended by Purchaserthe Experis consultant pursuant to written recommendation, one selected by Seller, and a third said amount to be selected deposited with Escrow Agent pursuant to the Escrow Agreement (the “Tax Escrow”) to serve as security for the potential state tax claims set forth on Schedule 5.5 (the “State Tax Claim”). The Tax Escrow shall be funded through a deduction of twenty-five thousand dollars ($25,000.00) from each installment of the Installment Consideration. The Tax Escrow shall remain in escrow pending resolution of the State Tax Claim; provided that, as long as no audit by taxing authorities is pending or noticed by the two arbitrators selected by Purchaser and Sellersecond anniversary of the Closing Date, then one half of the findings of a majority of which arbitrators remaining Tax Escrow shall be binding upon released to Seller. Upon final resolution or settlement of the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand State Tax Claim with the applicable taxing authority which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) is not subject to Seller’s right to defend in good faith third party claims further appeal, Seller shall indemnify Buyer for taxes, penalties and interest and attorneys’ fees payable for the actual State Tax Claim from the Tax Escrow. In the event the actual amount of the State Tax Claim as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved determined at final resolution of such claim and payment exceeds the Tax Escrow, Buyer shall be entitled to recover any difference from the Escrow Amount. In the event the actual amount of the State Tax Claim as determined at final resolution of such claim is made by Purchaserless than the Tax Escrow, such sums paid shall qualify as an Escrow Payment and Seller shall be paid by entitled to receive the Escrow Agent to Purchaserremaining amount from the Tax Escrow.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Spark Energy, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and The purchase price for the two LLC Purchase Agreements sale of the Cash Consideration shall, on notes will be placed in escrow pending completion of the Closing Date, be deposited in an interest-bearing escrow account acquisition of oil and gas properties from Plains Exploration & Production Company (the “Escrow AccountAcquisition”) with The Huntington National Bank, a national banking corporation and MMR’s raising additional capital in an amount of $500 million from Freeport-McMoRan Copper & Gold Inc. (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow PaymentAdditional Financing”). On the first day Any amounts held in escrow may be invested in certain specific investments as directed by MMR. The release of the tenth month following purchase price for the Closing Date, sale of the Escrow Agent shall pay notes from the escrow account to MMR as payment for the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Sellernotes, and a third to be selected by the two arbitrators selected by Purchaser and Sellerissuance thereof, the findings of a majority of which arbitrators shall be binding is conditioned upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice concurrent completion of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter providedthe Acquisition and the Additional Financing. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay the Acquisition and Additional Financing are not consummated on or settle such claim or demand prior to March 31, 2011, or (ii) employ counsel acceptable MMR provides notice that the Acquisition or Additional Financing will not be consummated, then, in any such case, the escrow agent will promptly return holders’ funds to Purchaserthem, with a commitment fee in an amount equal to 4% per annum in respect of the time period during which holders’ funds were held in escrow, which will be funded by a combination of MMR’s separate payment and interest earned on the funds while held and invested in escrow, and MMR will not issue the notes. If the conditions to closing specified above are satisfied, then (x) the escrow agent will release holders’ funds to MMR concurrently upon MMR’s issuance of the notes to the holders that placed funds in escrow, (y) MMR will pay to the holders a commitment fee in an amount equal to 2% per annum in respect of the time period during which holders’ funds were held in escrow, which will be funded by a combination of MMR’s separate payment and interest earned on the funds while held and invested in escrow, and (z) interest on the notes will accrue at the Seller’s expenserate specified opposite “Interest” above from the date on which the notes were originally issued. Registration Rights: MMR will enter into a registration rights agreement for the benefit of the holders of the notes, pursuant to defend any which it will agree to file a shelf registration statement under the Securities Act of 1933, as amended (the “Securities Act”), relating to the resale of the notes and the shares of common stock issuable upon conversion thereof. MMR will use its commercially reasonable efforts (i) to cause such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect shelf registration statement to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) become effective no later than 30 days after the date of the applicable Escrow Notice original issuance of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchasernotes, and (ii) to keep it effective until such date that all of the Purchaser notes and the MMR common stock issuable upon conversion thereof cease to be outstanding or have either been (x) sold or otherwise transferred pursuant to an effective registration statement or (y) sold pursuant to Rule 144 under circumstances in which any legend borne by the notes or common stock relating to restrictions on transferability thereof is not jeopardized removed or such notes or common stock are eligible to be sold by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available holders thereof (other than MMR’s affiliates) without restriction pursuant to the Seller volume limitations of Rule 144 under the Securities Act or its agents all records and other materials in the Purchaser’s any successor rules thereto or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimotherwise.
Appears in 1 contract
Sources: Securities Purchase Agreement (McMoran Exploration Co /De/)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on On the Closing Date, be deposited HBC, the Company and the Stockholders’ Representative, on behalf of the Stockholders, shall enter into an escrow agreement in an interest-bearing escrow account the form attached hereto as Exhibit A (the “Escrow AccountAgreement”) with The Huntington National Bank, a national banking corporation bank or a licensed escrow agent (the “Escrow Agent”), pursuant and HBC, on behalf of the Stockholders, shall deposit into an interest bearing account in escrow (“Escrow Account”), the Escrow Amount in such amounts attributed to an escrow agreement reasonably satisfactory to Purchaser and Seller, for each Stockholder as set out on the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofSpreadsheet. The Escrow Agent Account shall maintain be available for the payment of claims by the HBC Indemnified Parties for indemnification pursuant to Article VIII. The Escrow Account shall also be available to HBC (at its sole option) for any of the Settlement Amount due HBC as set forth in Section 1.05. The Escrow Agreement shall provide for the release to each Stockholder any undisputed amounts remaining in the Escrow Account for a period on the fifteenth (15th) day following the eighteen (18) month anniversary of nine monthsthe Closing Date. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser Each Stockholder’s respective interest in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction Account shall equal the amount of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of plus any such damages, awards, or settlements (“Escrow Payment”). On the first day interest that accrues in respect of the tenth month following Escrow Amount, multiplied by the Closing Date, Pro Rata Percentage Interest. All obligations to reimburse the Escrow Agent shall pay to the Seller the amount then on deposit as set forth in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Agreement shall be submitted to a panel of arbitrators, one selected payable 50% by Purchaser, one selected by Seller, HBC and a third to be selected 50% by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding Stockholders (in accordance with their Pro Rata Percentage Interest) upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to PurchaserAgent.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 At the Closing, Purchaser shall withhold from the Purchase Price payable to Seller pursuant to Section 2.1 an amount of cash equal to the sum of (A) the First Escrow Amount, plus (B) the Second Escrow Amount, plus (C) the Third Escrow Amount, plus (D) the Fourth Escrow Amount, plus (E) the Purchase Price Escrow Amount, and Seller agree that $400,000 allocated among this shall promptly deposit the First Escrow Amount, Second Escrow Amount, Third Escrow Amount, Fourth Escrow Amount and the two LLC Purchase Agreements of the Cash Consideration shallPrice Escrow Amount into five (5) separate escrow accounts with U.S. Bank N.A., on the Closing Date, be deposited in an interest-bearing as escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation agent (the “Escrow Agent”), and such deposit, together with any interest that may be earned thereon, shall constitute four (4) escrow funds (the “First Escrow Fund,” “Second Escrow Fund,” “Third Escrow Fund,” “Fourth Escrow Fund,” and the “Purchase Price Escrow Fund,” respectively) to secure the indemnification obligations of Seller pursuant to Section 12.2(d) below. The First Escrow Fund, Second Escrow Fund, Third Escrow Fund, Fourth Escrow Fund and the Purchase Price Escrow Fund shall be maintained, administered and distributed pursuant to the terms of an escrow agreement reasonably satisfactory substantially in the form attached hereto as Exhibit C (the “Escrow Agreement”). The First Escrow Fund shall be available solely to compensate the Purchaser and SellerIndemnified Parties for Losses pursuant the indemnification obligations of Seller under Section 12.2(d) in respect of the matters described in item 1 of Schedule 12.2(d) until 11:59 p.m. Pacific Standard Time on February 15, for 2011 (such date, the purpose of securing Seller’s and the Company’s representations and warranties made “Escrow Release Date”), subject to the Purchaser in Article III hereofterms of the Escrow Agreement (including, without limitation, with respect to Unresolved Claims (as defined therein)). The Second Escrow Agent Fund shall maintain be available solely to compensate the Purchaser Indemnified Parties for Losses pursuant to the indemnification obligations of Seller under Section 12.2(d) in respect of the matters described in item 2 of Schedule 12.2(d) until 11:59 p.m. Pacific Standard Time on the Escrow Account for a period of nine months. During such periodRelease Date, if, as a direct result of a material misrepresentation or breach of warranty by Seller made subject to the terms of the Escrow Agreement (including, without limitation, with respect to Unresolved Claims (as defined therein)). The Third Escrow Fund shall be available solely to compensate the Purchaser Indemnified Parties for Losses pursuant to the indemnification obligations of Seller under Section 12.2(d) in Article III hereofrespect of the matters described in item 3 of Schedule 12.2(d) until 11:59 p.m. Pacific Standard Time on the Escrow Release Date, subject to the terms of the Escrow Agreement (including, without limitation, with respect to Unresolved Claims (as defined therein)). The Fourth Escrow Fund shall be available solely to compensate the Purchaser becomes liable Indemnified Parties for and pays Losses pursuant to the indemnification obligations of Seller under Section 12.2(d) in respect of the matters described in item 4 of Schedule 12.2(d) until 11:59 p.m. Pacific Standard Time on the Escrow Release Date, subject to the terms of the Escrow Agreement (including, without limitation, with respect to Unresolved Claims (as defined therein)). The Purchase Price Escrow Fund shall be available solely to pay Purchaser any monetary damagesNet Working Capital Negative Adjustment, awardsExcess Net Debt Negative Adjustment and/or Seller Transaction Expenses Negative Adjustment (each as defined in Section 2.3), or settlements plus, if applicable, one-half (1/2) of claims, then the Reviewing Accountant Fees until the Escrow Agent shall, after satisfaction distributes the Purchase Price Escrow Fund following its receipt of the provision Purchase Price Escrow Release Notice (such date, the “Purchase Price Escrow Release Date”), subject to the terms of paragraph 2.2.3 hereofthe Escrow Agreement (including, pay without limitation, with respect to Unresolved Claims (as defined therein)). All earnings, distributions, interest or other income earned from the investment of the First Escrow AccountAmount, Second Escrow Amount, Third Escrow Amount, Fourth Escrow Amount and the Purchase Price Escrow Amount or any portion thereof shall be added to and become part of the First Escrow Fund, Second Escrow Fund, Third Escrow Fund, Fourth Escrow Fund and the Purchase Price Escrow Fund, respectively, and shall be distributed pursuant to the PurchaserEscrow Agreement. A portion of the payments from the First Escrow Fund, Second Escrow Fund, Third Escrow Fund, Fourth Escrow Fund and the amount Purchase Price Escrow Fund shall be treated as imputed interest to the extent required under the Code. Notwithstanding anything herein to the contrary, in the event the matters described in either item 1, item 2, item 3 or item 4 of Schedule 12.2(d) are Table of Contents settled, compromised or resolved in a manner that Purchaser reasonably and in good faith concludes could not reasonably be expected to result in any such damagesAssumed Liability (or otherwise create or result in any Liability to Purchaser or its Affiliates, awardsincluding any Seller Subsidiary), or settlements (“Escrow Payment”). On the first day of the tenth month following otherwise to Purchaser’s reasonable satisfaction, in each case, prior to the Closing Date, the First Escrow Agent Fund, Second Escrow Fund, Third Escrow Fund or Fourth Escrow Fund, as applicable, shall pay not be withheld from the Purchase Price pursuant to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by SellerSection 2.1, and a third shall instead be paid to be selected by Seller at Closing. For the two arbitrators selected by Purchaser and Selleravoidance of doubt, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to SellerPurchaser’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand indemnification pursuant to paragraph 2.3.2 above, this Section 2.2 and if such claim or demand relates Section 12.2(d) will not be subject to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend limitations set forth in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimSection 12.4.
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Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on (a) On the Closing Date, be deposited in an interest-bearing escrow account (i) the Buyer will deposit a portion of the Purchase Price equal to $1,750,000 (the “Escrow AccountAmount”) with The Huntington National BankW▇▇▇▇ Fargo Bank N.A., a national banking corporation (or another bank mutually acceptable to Buyer and Seller the “Escrow Agent”), pursuant by wire transfer of immediately available funds, to secure any obligation of the Seller, and TW International to make a payment under Section 2.5 above or Section 9.1 below or as provided in Section 5.3(h) below (ii) the Buyer, the Seller and TW International shall enter into an escrow agreement reasonably satisfactory to Purchaser and Sellersubstantially in the form of Exhibit 2.6 with the Escrow Agent (the “Escrow Agreement”), which shall provide, among other things, for the purpose release of securing Seller’s and $875,000 to Seller (less the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain sum of any unresolved claims against the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller Amount and payments made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow AccountAmount to Buyer) on the first anniversary of the Closing Date and the release of the balance of the Escrow Amount to Seller (including any accrued interest on the Escrow Amount, to the Purchaser, less the amount of any such damages, awards, or settlements (“unresolved claims made against the Escrow Payment”). On Amount) on the first day of the tenth month following date which is 18 months after the Closing Date, ; provided that any Escrow Amount that is not released in accordance with this Section 2.6 due the presence of one or more unresolved claims shall be promptly released to Seller upon the resolution of such claims to the extent that such claims have been resolved in favor of Seller in accordance with the provisions of the Escrow Agent shall pay to the Agreement.
(b) Seller the amount then on deposit grants Buyer a continuing security interest in all of Seller’s right, title and interest in the Escrow AccountAmount and the Escrow Agreement to secure the payment of amounts owing or which may become owing to Buyer under this Agreement or the Escrow Agreement; provided that, including upon release of all or any earnings thereon. Any dispute between part of the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted Escrow Amount to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and SellerSeller in accordance with Section 2.6(a), the findings of a majority of which arbitrators shall security interest granted by this Section 2.6(b) with respect to the amount so released will be binding upon the partiesimmediately terminated without any further action by either party.
2.3.2 In order (c) Buyer will not enforce any of its rights against the Escrow Amount as collateral for Purchaser to assert its the obligations secured and has no right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim payment or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by distribution from the Escrow Agent to PurchaserAccount except as set forth in this Agreement.
2.3.3 If (d) Seller authorizes Buyer to file one or more UCC financing statements describing the Purchaser notifies Escrow Amount. Seller also will execute such other documents as are necessary to perfect the Seller security interest in favor of Buyer granted herein. Notwithstanding the foregoing, upon termination of Buyer’s security interest in all or any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against part of the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expenseEscrow Amount, to defend any the extent necessary to terminate Buyer’s security interest in the portion of the Escrow Amount released, Buyer shall immediately file UCC termination statements with respect to that part of the Escrow Amount and execute such claim or demand asserted against other documents as are necessary to terminate all of its security interest that part of the Purchaser, Escrow Amount.
(e) For so long as a part of the Purchaser is not jeopardized with respect Escrow Amount remains subject to such defense. The Purchaser shall have the right Buyer’s security interest granted pursuant to cooperate in the defense of any such claim or demand. The this Section 2.6, Seller shall notify the Purchaser not grant any other security interest in writing, within twenty (20) days after the date or lien on that part of the applicable Escrow Notice of the Seller’s decision Amount to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimPerson.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that On or before February 22, 2005, NSS shall place Thirty Million Dollars ($400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 30,000,000)) (the “Escrow AccountAmount”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), into escrow in NSS’ name pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such periodAgreement attached hereto as Exhibit E, if, as a direct result of a material misrepresentation or breach of warranty by Seller made and shall provide documentation to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then Contractor demonstrating that the Escrow Agent shall, after satisfaction of Amount has been deposited into the provision of paragraph 2.2.3 hereof, pay from Escrow Account. If NSS fails to deposit the Escrow Amount into the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller Contractor shall either (as instructed by NSS) (i) promptly pay or settle such claim or demand refund to NSS One Hundred Thirty-Eight Million Dollars pursuant to Paragraph 5.A ($138,000,000) and deposit the remaining Thirty Million Dollars ($30,000,000) into the Escrow Account or (ii) employ counsel acceptable refund to PurchaserNSS One Hundred Thirty-Eight Million Dollars ($138,000,000) pursuant to Paragraph 5.A and refund the remaining Thirty Million Dollars ($30,000,000) to NSS as soon as NSS has provided documentation to Contractor demonstrating that the Escrow Amount has been deposited into the Escrow Account. In accordance with the Escrow Agreement, at interest accruing on the Seller’s expense, Escrow Amount until the XXX shall be paid to defend any such claim or demand asserted against NSS and interest accruing thereafter shall be paid to Contractor. Contractor may notify the Purchaser, so long Escrow Agent that Delivery has occurred pursuant to Section 2.3 of the Escrow Agreement only when Delivery has actually occurred pursuant to and in accordance with this Agreement. NSS shall pay the Acceptance Fee and the Annual Administration Fee (each as defined in the Purchaser is not jeopardized with respect to such defenseEscrow Agreement) for the first year of the Escrow Agreement. Contractor shall pay the Annual Administration Fee for the second year of the Escrow Agreement. The Purchaser Parties shall have pay an equal portion of all other fees relating to the right to cooperate in the defense of Escrow Account (including any such claim or demandAnnual Administration Fees for any subsequent period). The Seller Escrow Amount shall notify be paid to Contractor, or refunded to NSS, as applicable, in accordance with the Purchaser in writingEscrow Agreement, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.follows:
Appears in 1 contract
Sources: NSS 8 Spacecraft and Associated Equipment and Services Contract (New Skies Satellites Holdings Ltd.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements Closing, Buyer shall deliver a portion of the Cash Consideration shall, on Initial Purchase Price in the Closing Date, be deposited in an interest-bearing escrow account amount of Six Million Five Hundred Thousand Dollars ($6,500,000) (the “"Escrow Account”Deposit") with The Huntington National to Commerce Bank, a national banking corporation N.A. (the “"Escrow Agent”"), to be held in escrow pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for Escrow Agreement substantially in the purpose form of securing Seller’s and Exhibit B hereto (the Company’s representations and warranties made "Escrow Agreement"). Subject to the Purchaser in Article III hereof. The Escrow Agent shall maintain terms of the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing DateAgreement, the Escrow Agent shall pay to Deposit, together with all income earned thereon (collectively, the Seller the amount then on deposit in the "Escrow AccountFund"), including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted available to a panel satisfy any claims of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser Buyer under this Agreement, including the Seller shall either indemnity obligations of Sellers pursuant to Article IX, to the extent that such claims are not otherwise satisfied by Sellers by payment of cash to Buyer.
(b) As soon as practicable following (i) promptly pay or settle the date which is 12 months from Closing, if the aggregate amount of the Escrow Funds remaining in escrow exceeds $3,250,000, such claim or demand or excess amount, less any outstanding claims of Buyer under this Agreement which claims have not yet been rejected pursuant to final, binding determination, shall be distributed to the Employee Sellers in the percentages set for in Exhibit A under the column "Amount of Escrow Deposit Allocated to Employee Sellers" (the "First Escrow Return"); and (ii) employ counsel acceptable the date which is 24 months from Closing, the Escrow Funds then remaining in escrow, less any outstanding claims of Buyer under this Agreement which claims have not yet been rejected pursuant to Purchaserfinal, binding determination (the "Remaining Amount"), shall be distributed to the Employee Sellers in the percentages set for in Exhibit A under the column "Amount of Escrow Deposit Allocated to Employee Sellers". As provided in the foregoing sentence, if at any time a distribution is to be made from the Seller’s expenseEscrow Funds and there are any outstanding claims under this Agreement which claims have not yet been rejected pursuant to final, binding determination, the amount to defend any be paid to the Employee Sellers shall be reduced by the amount necessary to satisfy such outstanding claims, pending final determination of the claims. For purposes of this Agreement, a claim shall be "rejected pursuant to final, binding determination" only if a court of competent jurisdiction has finally adjudicated the claim or demand asserted against if the Purchaser, so long as Buyer has executed a settlement agreement or other writing expressly releasing the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser Employee Sellers from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Subject to adjustment under Section 1.7, 90% of the BioTime Shares issuable to the Principal Vendors as set out in column (3) of Schedule 1 shall be issued and delivered to them on the Closing Date as partial payment of the Purchase Price payable with respect to their Principal ESI Shares and Notes, as the case may be, and 10% of the BioTime Shares issuable to them as set out in column (4) of Schedule 1 (the "Escrow Shares") shall be issued and held in escrow by ▇▇▇▇▇ Fargo Bank, National Association ("Escrow Holder") until the later of (i) the expiration of 180 days following the Closing Date (the “Escrow Termination Date”); and (ii) the date on which all claims for setoff under Section 1.7 made before the Escrow Termination Date (the “Escrow Claim”) have been resolved or terminated in accordance with the provisions of this Section 1.5. An Escrow Claim shall not be deemed to have been resolved until (A) the Purchaser and Seller agree Principal Vendors have both notified the Escrow Holder in writing that $400,000 allocated among this the Escrow Claim has been resolved, or (B) the Escrow Claim has been resolved by a final court judgment or arbitration award Provided always that an Escrow Claim that is not the subject of pending litigation or arbitration, or that does not pertain to an unresolved claim by a third party, shall lapse unless the Purchaser commences arbitration or other legal proceedings in accordance with Section 7.4 (and in the two LLC Purchase Agreements case of an Escrow Claim against either or both of the Cash Consideration shallBioOne Principal Vendors, on by arbitration or legal proceedings being both issued and served) in respect of such Escrow Claim within three months after the Escrow Termination Date failing which such Escrow Claim shall be deemed to have terminated at the expiration of such three month period. No notice requirement under this Section 1.5 shall be deemed to affect the Purchaser's right to indemnification by the Principal Vendors under this Agreement. On or before the Closing Date, be deposited in an interest-bearing escrow account (Purchaser and the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to Principal Vendors shall enter into an escrow agreement reasonably satisfactory to Purchaser and Sellerwith Escrow Holder, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the form attached as Exhibit B (the "Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand"). The Purchaser and Company the Principal Vendors agree that the Escrow Agreement shall make available provide for the delivery of Escrow Shares out of escrow in the manner provided in this Section and in Sections 1.7 and 7.4 of this Agreement. The Parties agree and acknowledge that (i) 100% of the BioTime Shares issuable to the Seller or its agents all records Other Shareholders pursuant to the Transfer Agreement shall be issued and other materials delivered to the Other Shareholders on the Closing Date as full payment of the Purchase Price payable with respect to their ESI Ordinary Shares set out against their names in Schedule 2; and (ii) 100% of the Purchaser’s or Company’s possession reasonably required by it for its use BioTime Shares issuable to the Option Holders pursuant to this Agreement shall be issued and delivered to the Option Holders on the Closing Date in contesting any third party claim or demandconnection with the termination of the Option Holders’ respective Options. Whether or not the Seller elects to defend any such claim or demand, The Escrow Agreement shall contain a provision under which the Purchaser and Company the Principal Vendors agree that, where a resolution of any dispute between the Parties results in an award or judgment from arbitration or any other legal proceeding in accordance with the provisions of Section 7.4, the Escrow Holder shall have no obligation to do so. The Seller may notrelease the Escrow Shares pursuant to, without and following the prior written consent of receipt of, distribution instructions that are consistent with the Purchaseraward or judgment, settle or compromise any claim or consent delivered to the entry of any judgment unless such settlementEscrow Holder by the prevailing Party or Parties. If this Agreement terminates without Closing, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Shares shall be returned to Purchaser.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the No later than two LLC Purchase Agreements of the Cash Consideration shall, on Business Days after the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National BankParent, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction on behalf of the provision of paragraph 2.2.3 hereofSurviving Corporation, pay from the Escrow Accountwill transfer to, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Dateand deposit with, the Escrow Agent shall pay an amount equal to the Seller Escrow Amount plus the Reserve Amount. Such Escrow Amount shall become part of the Escrow Fund established pursuant to Article 7 and such Reserve Amount shall become part of the Reserve Fund established pursuant to Article 7. The portion of the Escrow Amount and the portion of the Reserve Amount withheld with respect to each Escrow Holder will be in proportion to the amount then of the Base Cash Amount payable to such Escrow Holder pursuant to Section 1.8(a) and/or Section 1.11(a) compared to the amount of the Base Cash Amount payable to all Escrow Holders. Such amount and such Escrow Holder’s allocated percentage of the Escrow Fund and the Reserve Fund (such percentage, an Escrow Holder’s “Recovery Percentage”) will be set forth on deposit the Closing Consideration Spreadsheet. For the sake of clarity, the amount actually deposited into the Reserve Fund in respect of each Escrow Holder shall be determined without regard to withholding Taxes applicable to such amounts, and any such withholding Taxes applicable to amounts deposited into the Reserve Fund shall reduce other amounts payable to such Escrow Holder. Thus, for example, if $100 would be deposited into the Reserve Fund on behalf of an Escrow Holder (prior to any withholding Tax) and Taxes in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third $25 are required to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized withheld with respect to such defense. The Purchaser $100 deposit, $100 shall have be deposited into the right Reserve Fund with respect to cooperate such Escrow Holder and other payments to such Escrow Holder in connection with the defense of any such claim or demand. The Seller Closing (determined after all required Tax withholding) shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized be reduced by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim$25.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among 6.14.1 All Losses payable by Eton to any D▇. ▇▇▇▇▇’▇ Indemnitees under this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which Agreement may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent from the Escrow Amount. Subject to Purchaser.
2.3.3 the limitations set forth in Section 8.4, any Losses that are in excess of the Escrow Amount shall be paid by Eton; provided that, D▇. ▇▇▇▇▇’▇ may, in its sole discretion, elect to offset such Losses against any Milestone Payments due and owing but not yet paid. Promptly following the date that is [*] (the “Escrow Release Date”), D▇. ▇▇▇▇▇’▇ and Eton shall execute and deliver a joint written instruction to the Escrow Agent directing the Escrow Agent to release to Eton any remaining portion of the Escrow Amount, less any pending amounts that are subject to pending Claims made by any D▇. ▇▇▇▇▇’▇ Indemnitees under this Agreement prior to 11:59 p.m. Eastern Time on the Escrow Release Date. If any Claim made by any D▇. ▇▇▇▇▇’▇ Indemnitees under this Agreement is still pending as of the Purchaser notifies Escrow Release Date, the Seller of any claim or demand Escrow Agent, pursuant to paragraph 2.3.2 abovethe terms of the Escrow Agreement, will retain a portion of the Indemnity Escrow Amount in an amount equal to such Losses identified in any unresolved notice delivered pursuant to the Escrow Agreement until such Claim has been satisfied or otherwise resolved, at which point D▇. ▇▇▇▇▇’▇ and if Eton shall execute and deliver a joint written instruction to the Escrow Agent directing the Escrow Agent to release to Eton any remaining balance of the Escrow Amount not used to satisfy such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser indemnification rights of D▇. ▇▇▇▇▇’▇ Indemnitees under this Agreement.
6.14.2 The parties shall split equally any costs and expenses incurred in connection with the Escrow Agreement, subject to the terms and conditions thereof. If one party pays any portion of the other party’s costs and expense, the Seller other party shall either reimburse the paying party on demand.
6.14.3 In the event that (i) promptly pay or settle such claim or demand or D▇. ▇▇▇▇▇’▇ provides written notice (a “Request Notice”) to Eton requesting Eton to issue (along with D▇. ▇▇▇▇▇’▇) a joint written instruction to release any portion of the Escrow Amount with respect to any uncontested amounts that D▇. ▇▇▇▇▇’▇ asserts are payable to D▇. ▇▇▇▇▇’▇, and (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writingEton does not, within twenty (20) days after the date of the applicable Escrow receipt Request Notice, either (A) join D▇. ▇▇▇▇▇’▇ in issuing such instructions or (B) object to D▇. ▇▇▇▇▇’▇ Request Notice of the Seller’s decision in writing by providing notice to either pay such claim or demand or defend in good faith any such third party claim or demandD▇. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser▇▇▇▇▇’▇ hereunder, and the Purchaser is not jeopardized by such defense, the Purchaser then D▇. ▇▇▇▇▇’▇ shall not settle or compromise such claim or demand. The Purchaser and Company shall make available be permitted to issue unilateral written instruction to the Seller or its agents all records and other materials Escrow Agent to disperse the Escrow Amounts in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demandaccordance with D▇. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim▇▇▇▇▇’▇ instructions.
Appears in 1 contract
Sources: Asset Purchase Agreement (Eton Pharmaceuticals, Inc.)
Escrow. 2.3.1 Purchaser As security for the obligations of Sellers under this Article VII, and Seller agree that $400,000 allocated among this to provide a source of reimbursement and indemnification to the two LLC Purchase Agreements of the Cash Consideration shallBuyer Parties, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington Buyers shall deliver to ▇▇▇▇▇ Fargo Bank, National BankAssociation, a national banking corporation association, as agent to Buyers and Sellers (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Sellerin immediately available funds, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty account(s) designated by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall(the “Escrow Account”), after satisfaction an amount or amounts in cash equal in the aggregate to the Escrow Amount, in accordance with the terms of this Agreement and the Escrow Agreement, which will be executed at the Closing, by and among Parent, the Representative and the Escrow Agent substantially in the form attached hereto as Exhibit F (the “Escrow Agreement”). Any payment Sellers are obligated to make to any of the provision of paragraph 2.2.3 hereofBuyer Parties pursuant to this Article VII shall be paid first, pay from to the extent there are sufficient funds in the Escrow Account, by release of funds to the PurchaserBuyer Parties from the Escrow Account by the Escrow Agent in accordance with the terms of the Escrow Agreement and shall accordingly reduce the Escrow Amount and, second, to the amount extent the Escrow Amount is insufficient to pay any remaining sums due, then Sellers shall be required, on a joint and several basis, to pay all of any such damages, awards, or settlements (additional sums due and owing to the Buyer Parties by wire transfer of immediately available funds within five Business Days after a “Escrow Payment”)final determination” of a Loss and the Sellers’ liability therefor. On the first day eighteen month anniversary of the tenth month following the Closing Date, the Escrow Agent shall pay release the Escrow Amount to Sellers, except that the Escrow Agent shall retain an amount (up to the Seller lesser of (x) the Escrow Amount and (y) the total amount then on deposit in held by the Escrow Account, including any earnings thereon. Any dispute between Agent) equal to the parties regarding aggregate of the validity or amount Claim Amounts in respect of any damages, awards, or settlements claims for indemnification under this Article VII asserted prior to the eighteen month anniversary of claims the Closing Date but not yet resolved (“Unresolved Claims”). The portion of the Escrow Amount retained for Unresolved Claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid released by the Escrow Agent (to Purchaser.
2.3.3 If the Purchaser notifies extent not utilized to pay the Seller Buyer Parties for any such claims resolved in favor of any claim or demand pursuant the Buyer Parties) upon their resolution in accordance with this Agreement and the Escrow Agreement. All fees and expenses owed to paragraph 2.3.2 abovethe Escrow Agent in connection with the Escrow Agreement shall be paid on the Closing Date by Buyers. For purposes of this Section 7.7, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller “final determination” shall either exist when (i) promptly pay or settle such claim or demand or Parent and the Representative have reached an agreement in writing, (ii) employ counsel acceptable to Purchasera court of competent jurisdiction shall have entered a final and non-appealable order or judgment, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized (iii) an arbitration or like panel shall have rendered a final non-appealable determination with respect to such defense. The Purchaser shall disputes the parties have the right agreed to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimsubmit thereto.
Appears in 1 contract
Sources: Purchase Agreement (Fossil Inc)
Escrow. 2.3.1 Purchaser (a) The Escrow Amount shall be comprised of two separate and Seller agree that distinct amounts: (i) a number of Parent Shares equal to $400,000 allocated among this and 250,000 divided by the two LLC Purchase Agreements of Signing Date Reference Price shall be used to satisfy the Cash Consideration shallFinal Working Capital Deficiency, on the Closing Dateif any, be deposited described in an interest-bearing escrow account Section 2.3(e) hereof (the “Working Capital Escrow”), and (ii) the remainder of the Escrow Account”) with The Huntington National Bank, a national banking corporation Amount (the “Escrow AgentIndemnification Escrow”)) shall be used to satisfy Damages, pursuant to an escrow agreement reasonably satisfactory to Purchaser and Sellerif any, for which Buyer Indemnified Parties are entitled to indemnification or reimbursement in accordance with Article VII hereof, and to satisfy the purpose of securing Seller’s and the Company’s representations and warranties made Final Working Capital Deficiency, if any, described in Section 2.3(e) hereof to the Purchaser extent such shortfall exceeds the Working Capital Escrow. For purposes of satisfying any claim under this Agreement, the value of each Parent Share included in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Amount shall be equal to the Purchaser in Article III hereofSigning Date Reference Price, Purchaser becomes liable unless the Stockholders elect to pay cash for and pays any monetary damages, awards, or settlements of claims, then such claim by giving written notice to both the Escrow Agent shall, after satisfaction and Buyer within two (2) business days following the date that notice is duly given pursuant to Section 12.1 that the Parent Shares will be released to Buyer (or Parent) pursuant to the Escrow Agreement.
(b) Promptly following the expiration of the provision Net Working Capital adjustment period as set forth in Section 2.3 and resolution of paragraph 2.2.3 hereofall disputes, if any, regarding the Final Working Capital, if there exists a Final Working Capital Deficiency, then in the event that the Stockholders fail to pay the Buyer such amounts within two business days following determination of the Final Working Capital, Buyer shall be entitled to an amount from the Working Capital Escrow Accountto satisfy the Final Working Capital Deficiency, and the remainder of the Working Capital Escrow shall be released to the PurchaserStockholders, provided, however, if the amount of any such damages, awards, or settlements (“Final Working Capital Deficiency exceeds the Working Capital Escrow Payment”). On the first day portion of the tenth month Escrow Amount, then Buyer shall be entitled to the entire Working Capital Escrow portion of the Escrow Amount, and if the Stockholder fails to pay such amount, a disbursement from the Indemnification Escrow portion of the Escrow Amount in an amount equal to the sum of the Final Working Capital Deficiency less the Working Capital Escrow.
(c) Subject to the following the Closing Datesentence, the Escrow Agent shall pay release the balance of the Indemnification Escrow less the Plan Escrow Shares (as defined below) and less the Special Purpose Escrow Shares (as defined below) to the Seller Stockholders on the amount then date which is 12 months and one day after the Closing Date (or, if such date is not a business day, the immediately following business day) (the “Escrow Release Date”), provided that if on deposit in the Escrow AccountRelease Date any claim by a Buyer Indemnified Party has been made that could result in Damages and Buyer has notified the Escrow Agent and the Stockholders of such in writing, including any earnings thereon. Any dispute between then either (i) there shall be withheld from the parties regarding distribution to the validity or Stockholders such amount of any damagesthe Indemnification Escrow necessary to cover all Damages potentially resulting from all such pending claims in accordance with the terms of the Escrow Agreement (and the Escrow Fund shall continue with respect to such withheld amount) and such withheld amount (or the applicable portion thereof) shall either be (A) paid to Buyer or (B) paid to the Stockholders, awardsas determined upon final resolution of each such claim in accordance with the terms of the Escrow Agreement and Article VII hereof or (ii) the Stockholders shall post a bond in an amount reasonably acceptable to Buyer for such amount necessary to cover all Damages potentially resulting from all such pending claims in accordance with the terms of the Escrow Agreement, or settlements and upon posting of claims such bond all of the remaining balance of the Indemnification Escrow shall be submitted released to the Stockholders in accordance with the terms of the Escrow Agreement and Article VII hereof. Notwithstanding the foregoing (and without limiting the rights of a panel Buyer Indemnified Party to make claims against additional amounts available under the Indemnification Escrow), (x) a number of arbitrators, one selected by Purchaser, one selected by Seller, and a third Parent Shares equal to be selected $500,000 divided by the two arbitrators selected by Purchaser and Seller, Signing Date Reference Price (the findings of a majority of which arbitrators “Plan Escrow Shares”) shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid retained by the Escrow Agent until the Release Date to Purchaser.
2.3.3 If the Purchaser notifies the Seller of satisfy any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted Damages incurred by a third party against Buyer Indemnified Party from any Multiemployer Plan, unless at any time prior to the Purchaser which is Release Date the Stockholders shall post a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreementbond in an amount equal to $500,000 to be held by Buyer to satisfy any such Damages; provided that if, the Seller Plan Escrow Shares (or a bond in lieu of such escrow) continue to be held on the 18-month anniversary of Closing and on such date the Couture has not ceased operations, then a number of Parent Shares equal to $250,000 divided by the Signing Date Reference Price shall either be released to the Stockholders, unless the Stockholders shall post a bond in an amount equal to $250,000 to be held by Buyer and (iy) promptly pay or settle a number of Parent Shares equal to $350,000 divided by the Signing Date Reference Price (the “Special Purpose Escrow Shares”) shall be retained by the Escrow Agent until March 26, 2012 to satisfy any Damages incurred by a Buyer Indemnified Party under Section 7.1(b)(vi), unless at any time prior to such claim or demand or (ii) employ counsel acceptable date the Stockholders shall post a bond in an amount equal to Purchaser, at the Seller’s expense, $350,000 to defend be held by Buyer to satisfy any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimDamages.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on (a) On the Closing Date, the following will be placed or deposited in an interest-bearing escrow with Robert L. Blessey, Esq. (the "Escrow Agent"):
(i) ▇▇▇ ▇▇ ▇▇▇ ▇ocuments to be delivered by Sagemark at the Closing pursuant to Paragraph 8 of the Agreement;
(ii) all of the documents to be delivered by Trident Advisors at the Closing pursuant to Paragraph 9 of the Agreement; and
(iii) the $625,000 cash portion of the Purchase Price payable by Trident Advisors on the Closing Date (the "Escrow Funds").
(b) The Escrow Agent will, without any further notice or action of any kind whatsoever, release to Sagemark and Trident Advisors, as applicable, all of the documents delivered to it pursuant to Sections 6(a)(i) and 6(a)(ii) hereof and will release to Sagemark the Escrow Funds on July 31, 2006 unless, prior to such date, Trident Advisors delivers to the Escrow Agent (or causes to be delivered), the sum of $2,570,000 (the "Cash Purchase Price") from a replacement purchaser of the Limited Partnership Interest selected by Trident Advisors (the "Substitute Purchaser"), by wire transfer to the Escrow Agent's special attorneys escrow account as hereinafter provided, together with the Regulatory Approval with respect to such purchaser and all of the documents required to be delivered at Closing under Paragraph 9 of the Agreement executed by the Substitute Purchaser. If the Escrow Agent receives the aforementioned documents and the Cash Purchase Price from the Substitute Purchaser prior to July 31, 2006, the Escrow Agent will (i) return Trident Advisors' Closing documents and the “Escrow Account”Funds to it, (ii) with release the Cash Purchase Price and the Substitute Purchaser's Closing documents to Sagemark and return to Sagemark all of the Closing documents referred to in Section 6(a)(i) hereof, and (iii) deliver to the Substitute Purchaser, within three (3) business days thereafter, the documents to be delivered by Sagemark at the Closing as set forth in Paragraph 8 of the Agreement issued to the Substitute Purchaser in lieu of such documents previously issued to Trident Advisors.
(c) The Huntington National Bank, a national banking corporation (the “Escrow Agent will serve in such capacity without compensation therefor. The Escrow Agent”)'s duties and obligations under this Amendment shall be determined solely by the express provisions of this Amendment and it shall have no other duties and no other duties shall be implied. For greater certainty, pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Escrow Agent is not charged with any duties or responsibilities with respect to the Purchaser in Article III hereofAgreement. The Escrow Agent shall maintain not be required to notify or obtain the Escrow Account for a period of nine months. During such periodconsent, ifapproval, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awardsauthorization, or settlements of claimsorder of, then any court or governmental body to perform its obligations under this Amendment nor shall it be held liable to any party hereto in any manner whatsoever for having carried out instructions it has received in accordance with this Amendment or complying with its obligations hereunder.
(d) In the event the Escrow Agent shall, after satisfaction shall be uncertain as to any of its duties or rights hereunder or in the event of any disagreement among the parties hereto or the presentation to the Escrow Agent of any adverse claim or demand by Trident Advisors or Sagemark in connection with the disbursement of the provision Escrow Funds, the Escrow Agent may, at its option after providing written notice to Trident Advisors and Sagemark of paragraph 2.2.3 hereofsuch disagreement or adverse claim or demand, pay refuse to comply with any such claim or demand during the continuance of such disagreement or adverse claim or demand and may refrain from disbursing any amount from the Escrow AccountFunds, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Dateand in so doing, the Escrow Agent shall pay not become liable to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity Trident Advisors or amount of any damages, awards, or settlements of claims shall be submitted Sagemark due to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third its failure to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after comply with such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such adverse claim or demand. The Seller shall notify In the Purchaser in writing, within twenty (20) days after the date event of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim disagreement or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such adverse claim or demand, the Purchaser Escrow Agent shall be entitled, at its option and Company without liability, to file a lawsuit in interpleader and obtain a court order requiring the parties to interplead and litigate a resolution of any such disagreement or adverse claim or demand. In the event such interpleader lawsuit is commenced, the Escrow Agent shall have be fully released and discharged from all obligations to further perform any and all duties or obligations imposed upon it in relation to the disputed amount except as may be required by a court order in such lawsuit. Trident Advisors and Sagemark each jointly and severally agree to reimburse the Escrow Agent for all costs, expenses, and reasonable attorney's fees expended or incurred by the Escrow Agent in connection with any such lawsuit.
(e) If Trident Advisors or Sagemark or any other person obtains a judgment of a court of competent jurisdiction directing the Escrow Agent to release the Escrow Funds, or any part thereof, in respect of which no obligation right of appeal lies or in respect of which the time for appeal therefrom has expired, and delivers a copy of such judgment or order to the Escrow Agent, the Escrow Agent shall promptly thereafter release the Escrow Funds in accordance with the terms of such judgment or order and is hereby irrevocably authorized to do soso by Trident Advisors and Sagemark. Trident Advisors or Sagemark, as applicable, agree to provide a copy of any such judgment to the other provided that the failure to provide such copy will not affect any of the rights or obligations of the Escrow Agent under this Agreement.
(f) The Seller Escrow Agent shall not be liable to Trident Advisors or Sagemark by reason of an error of judgment or for any act done or step taken or omitted by it in good faith or for any mistake of fact or law or for anything which it may notdo or refrain from doing in connection with this Amendment, except for any liability to Trident Advisors or Sagemark caused by or arising out of the Escrow Agent's judicially determined gross negligence or willful misconduct. In no event, however, will the Escrow Agent be liable to Trident Advisors or Sagemark for any indirect, special, consequential or punitive damages.
(g) The Escrow Agent shall be entitled to rely on, without any independent inquiry, and shall be protected in acting in reliance upon, any instructions or directions furnished to it in writing by Trident Advisors or Sagemark pursuant to any provisions of this Amendment and shall be entitled to treat as genuine, any letter, paper, or other document furnished to it and believed by it to be genuine and to have been signed and presented by the prior written consent of proper party or parties without any independent inquiry.
(h) Trident Advisors and Sagemark each hereby release and forever discharge the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser Escrow Agent from any and all liability arising claims, demands, costs (including legal fees and disbursements), damages, liabilities, obligations, actions or causes of action incurred, sustained or made by or against any party hereto and hereby jointly and severally agree to indemnify, defend, and hold the Escrow Agent harmless from and against all losses, damages, costs, charges, liabilities, and expenses, including all costs of litigation, investigation and legal fees incurred by the Escrow Agent which arise directly or indirectly out of its entering into this Amendment or its conduct as Escrow Agent pursuant to this Amendment (the "Losses"), except with respect to any Losses which are caused by the Escrow Agent's judicially determined willful misconduct or gross negligence. The Escrow Agent may consult with counsel of its choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such claimcounsel.
(i) The Escrow Agent reserves the right to resign as the Escrow Agent at any time upon five (5) business days notice thereof to Trident Advisors and Sagemark. Upon any such notice of resignation by the Escrow Agent, Trident Advisors and Sagemark shall appoint a replacement escrow agent within such five (5) day period commencing on the date of any such notice of resignation. The Escrow Agent will deliver the Escrow Funds to such replacement escrow agent upon its receipt of notice from Trident Advisors and Sagemark of the appointment of such replacement escrow agent. If no such replacement escrow agent has been appointed within such five (5) day period, the Escrow Agent may, at the expense of Trident Advisors and Sagemark, petition any court of competent jurisdiction for the appointment of a successor escrow agent. Upon any such appointment of a successor escrow agent, the escrow agent shall forward the Escrow Funds and all documents held by it in escrow pursuant to the terms of this Amendment to such successor escrow agent.
(j) Wire transfers of payments to the Escrow Agent under this Amendment shall be made to:
(k) The provisions of subparagraphs (c) through (h) of this Section 6 will survive the expiration or termination of the Agreement or this Amendment.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) Subject to the terms and Seller agree that $400,000 allocated among this conditions hereof and in reliance upon the representations, warranties, and covenants contained herein, at the Closing Parent shall deposit the General Escrow Amount and the two LLC Purchase Agreements Working Capital Escrow Amount on behalf of the Cash Consideration shall, on Holders with the Closing Date, be deposited in an interest-bearing escrow account Escrow Agent.
(b) Such General Escrow Amount (plus all income accrued thereon and less any distributions therefrom) (the “General Escrow AccountFunds”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid maintained by the Escrow Agent to Purchasersecure the obligations under Article 10 of this Agreement. On or before the date which is two (2) Business Days after the first (1st) anniversary of the Closing Date (the “First Release Date”), the Parent and the Representative shall execute and deliver joint written instructions authorizing and directing the Escrow Agent to release to the Disbursement Agent the amount of the General Escrow Funds, if any, that exceeds the sum of (1) one-half of the General Escrow Amount and (2) the aggregate amount of all pending, unresolved or unpaid claims against the General Escrow Funds on the First Release Date. On or before the date which is two (2) Business Days after the second (2nd) anniversary of the Closing Date (the “Second Release Date”), the Parent and the Representative shall execute and deliver joint written instructions authorizing and directing the Escrow Agent to release to the Disbursement Agent the balance of the General Escrow Funds, if any, that exceeds the aggregate amount of all pending. unresolved or unpaid claims against the General Escrow Funds on the Second Release Date. The Parent and the Representative shall execute and deliver joint written instructions authorizing and directing the Escrow Agent to release to the Disbursement Agent the General Escrow Funds remaining unpaid after the Second Release Date, if any, after all claims against the General Escrow Funds are resolved with no right of appeal. Such joint written instructions shall be executed by the Parent and the Representative within five (5) Business Days after the Second Release Date. In the event of a dispute regarding the distribution of the Escrow Funds, such dispute shall be resolved in accordance with Section 12.10, and the Escrow Agent shall make (or withhold) distributions pursuant to the arbitration award in settlement of such dispute.
2.3.3 If (c) Such Working Capital Escrow Amount (plus all income accrued thereon and less any distributions therefrom) (the Purchaser notifies “Working Capital Escrow Funds”) shall be maintained by the Seller Escrow Agent to secure the obligations under Section 3.6 of any claim or demand pursuant to paragraph 2.3.2 above, this Agreement. Promptly (and if such claim or demand relates to a claim or demand asserted by a third party against no later than three (3) Business Days) after the Purchaser which Closing Balance Sheet is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under finalized in accordance with Section 3.6 of this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, Parent and the Purchaser is not jeopardized by such defense, Representative shall execute and deliver joint written instructions authorizing and directing the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available Escrow Agent to release to the Seller or its agents all records and other materials Disbursement Agent the Working Capital Escrow Funds in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent accordance with Section 3.6 of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimthis Agreement.
Appears in 1 contract
Escrow. 2.3.1 (a) At the Closing, Purchaser and Seller agree that $400,000 allocated among shall deposit the Escrow Amount with the Escrow Agent to be held in accordance with the terms of this Agreement and the two LLC Purchase Agreements Escrow Agreement. The Escrow Amount shall be available to satisfy H▇▇▇▇▇ FRC’s indemnification obligations pursuant to and in accordance with the provisions of the Cash Consideration shall, Article IX and this Section 3.3.
(b) The interest and proceeds earned on the Closing Date, be deposited in an interest-bearing escrow account (Escrow Amount are called the “Escrow Account”) with The Huntington National Bank, a national banking corporation (Income,” and shall accrue to and become part of the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereofAmount. The Escrow Agent shall maintain pay the Escrow Account for a period of nine months. During such periodAmount as follows:
(i) from time to time, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in upon joint instructions of the Purchaser and H▇▇▇▇▇ FRC, for indemnification under Article III hereofIX (each claim by a Purchaser Indemnified Person for indemnification, Purchaser becomes liable for and pays any monetary damagesan “Indemnification Claim”);
(ii) annually, awardswithin 60 days after the end of each calendar year, or settlements to H▇▇▇▇▇ FRC, an amount equal to 40% of claims, then the Escrow Agent shallIncome that constitutes taxable income for United States Federal income Tax purposes for that calendar year;
(iii) on the date that is 12 months after the Closing Date (the “Release Date”), after satisfaction to H▇▇▇▇▇ FRC, an amount, if greater than zero, equal to any remaining balance of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, Amount minus the amount of any such damagesIndemnification Claim that has been asserted by the Purchaser but not satisfied; and [*] = Certain confidential information contained in this document, awardsmarked by brackets, or settlements (“Escrow Payment”). On has been omitted and filed separately with the first day Securities and Exchange Commission pursuant to Rule 24b-2 of the tenth month following Securities Exchange Act of 1934, as amended.
(iv) from time to time after the Closing Release Date, to the Purchaser or H▇▇▇▇▇ FRC as any Indemnification Claims that were unsatisfied on the Release Date are resolved.
(c) The Escrow Income that constitutes taxable income for United States federal income and applicable state, local and non-U.S. income Tax purposes and any losses on the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Amount shall be submitted allocated to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesH▇▇▇▇▇ FRC.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, (d) H▇▇▇▇▇ FRC and the Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability provide instructions to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaserimplement the provisions of this Section 3.3, including instructions (i) to pay to a Purchaser Indemnified Person the amount of any Indemnification Claim within 5 days after the claim is accepted, no longer disputed, settled or resolved and (ii) to pay to H▇▇▇▇▇ FRC within 5 days after the Release Date the remaining balance of the Escrow Amount minus the amount of any Indemnification Claim that has been asserted by the Purchaser but not satisfied.
2.3.3 If (e) Any payments from the Purchaser notifies the Seller of any claim or demand pursuant Escrow Amount to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, Section 3.3 shall be treated by the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long Parties and their respective Affiliates as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available an adjustment to the Seller or its agents Purchase Price for all records and other materials in the Purchaser’s or Company’s possession reasonably applicable income Tax purposes, unless otherwise required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimapplicable Law.
Appears in 1 contract
Sources: Asset Purchase Agreement (Healthcare Royalty, Inc.)
Escrow. 2.3.1 Purchaser To secure the working capital, indemnification, environmental and Seller agree that tax obligations under Section 2.7 and Articles 7 and 8, Buyer will withhold from the Estimated Purchase Price and will deliver to the Escrow Agent in accordance with the Escrow Agreement, (i) the sum of Three Million One Hundred Twenty Five Thousand Dollars ($400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 3,125,000) (the “Working Capital Escrow AccountDeposit”), (ii) the sum of Two Million Five Hundred Thousand Dollars ($2,500,000) or such lesser amount as may be determined in accordance with The Huntington National Bank, a national banking corporation Section 2.10(b) below (the “Environmental Remediation Escrow AgentDeposit”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for (iii) the purpose sum of securing Seller’s and Nine Million Three Hundred Seventy Five Thousand Dollars ($9,375,000) (the Company’s representations and warranties made to the Purchaser in Article III hereof“Indemnity Escrow Deposit”). The Escrow Agent shall maintain hold and distribute the Working Capital Escrow Amount, the Environmental Remediation Escrow Amount, and the Indemnity Escrow Amount in accordance with the terms of the Escrow Account for a period of nine months. During such periodAgreement, if, as a direct result of a material misrepresentation or breach of warranty by Seller made which shall incorporate the following provisions:
(a) Buyer shall instruct the Escrow Agent to disburse to the Purchaser Stockholders’ Representative the entire Working Capital Escrow Amount in Article III hereofaccordance with Section 2.7 and the Escrow Agreement (after giving effect to the payment to the Buyer of all amounts thereof to which Buyer is then entitled) immediately upon determination of the Final Purchase Price in accordance with Section 2.7(a) or, Purchaser becomes liable for if later, on the 180th day following the Closing Date.
(b) If the Phase II Report shall have been received prior to Closing and pays the Phase II Report shall not recommend any monetary damagesRemedial Action, awards, or settlements of claimsthen there shall be no Environmental Remediation Escrow Deposit. If the Phase II Report shall have been received prior to Closing and it recommends Remedial Action, then the Escrow Agent shall, after satisfaction amount of the provision Environmental Remediation Escrow Deposit shall be 150% of paragraph 2.2.3 hereofthe amount of Environmental Losses reasonably estimated by Buyer (but not more than Two Million Five Hundred Thousand Dollars ($2,500,000)). If the Phase II Report is not received prior to Closing, pay from then the Environmental Remediation Escrow Account, Deposit shall be Two Million Five Hundred Thousand Dollars ($2,500,000). Upon receipt of the Phase II Report subsequent to the PurchaserClosing, the amount of any such damages, awards, or settlements (“the Environmental Remediation Escrow Payment”). On the first day Deposit shall be reduced if appropriate to 150% of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Environmental Losses reasonably estimated by Buyer and Buyer shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by promptly instruct the Escrow Agent to Purchaserdisburse to the Stockholders’ Representative any excess of Two Million Five Hundred Thousand Dollars ($2,500,000) over the adjusted amount. If during the course of the Remedial Actions it becomes manifest to Buyer that the amount of the Environmental Remediation Escrow Deposit exceeds 150% of the remaining Environmental Losses reasonably estimated by Buyer, Buyer shall promptly instruct the Escrow Agent to disburse to the Stockholders’ Representative any excess of the amount of the Environmental Remediation Escrow Deposit over 150% of the remaining Environmental Losses reasonably estimated by Buyer. Upon completion of all Remedial Action, Buyer shall promptly instruct the Escrow Agent to disburse to the Stockholders’ Representative the entire remaining Environmental Remediation Escrow Amount in accordance with Section 7.8 (after giving effect to the payment to Buyer of all amounts thereof to which Buyer is then entitled).
2.3.3 If (c) On the Purchaser notifies first anniversary of the Seller Closing Date (the “Indemnity Escrow Release Date”), Buyer shall instruct the Escrow Agent to disburse to the Stockholders’ Representative the entire Indemnity Escrow Amount in accordance with the Escrow Agreement (after giving effect to the payment to the Buyer of all amounts thereof to which Buyer is then entitled); provided, however, that if there are any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted but unresolved claims for indemnity by a third party against Buyer as of the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this AgreementIndemnity Escrow Release Date, the Seller full amount of such claims shall either (i) promptly pay or settle be retained and held in the Indemnity Escrow in accordance with the Escrow Agreement until such claim or demand or (ii) employ counsel acceptable to Purchaserclaims are finally resolved, at which time such amounts will be disbursed to Buyer and the Seller’s expense, to defend any such claim or demand asserted against Stockholders’ Representative (for the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date ratable benefit of the applicable Stockholders in accordance with their Proportionate Escrow Notice of the Seller’s decision to either pay Share) in such claim or demand or defend in good faith any such third party claim or demand. So long relative amounts as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available will give effect to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out final resolution of such claimclaims.
Appears in 1 contract
Sources: Merger Agreement (SAVVIS, Inc.)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The 19.1 Escrow Agent shall maintain hold the Downpayment and all interest accrued thereon, if any (collectively, the "Fund") in escrow and shall dispose of the Fund only in accordance with the provisions of this Section 19.
19.2 Escrow Account for a period of nine months. During such period, ifAgent shall deliver the Fund to Seller or Purchaser, as the case may be, as follows:
(a) to Seller, upon completion of the Closing; or
(b) to Seller, after receipt of Seller's demand in which Seller certifies that Purchaser has defaulted under this Agreement, but Escrow Agent shall not honor Seller's demand until more than ten (10) days after Escrow Agent has given a direct result copy of Seller's demand to Purchaser in accordance with Section 19.3(a), nor thereafter if Escrow Agent receives a material misrepresentation Notice of Objection from Purchaser within such ten (10) day period; or
(c) to Purchaser, after receipt of Purchaser's demand in which Purchaser certifies either that (i) Seller has defaulted under this Agreement, or breach (ii) this Agreement has been otherwise terminated or canceled, and Purchaser is thereby entitled to receive the Fund; but Escrow Agent shall not honor Purchaser's demand until more than ten (10) days after Escrow Agent has given a copy of warranty by Purchaser's demand to Seller made in accordance with Section 19.3(a), nor thereafter if Escrow Agent receives a Notice of Objection from Seller within such ten (10) day period. Notwithstanding the foregoing, if Purchaser terminates this Agreement prior to the Purchaser in Article III hereofexpiration of the Inspection Period, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction immediately upon receipt of Purchaser's demand, deliver the Fund to Purchaser. Upon delivery of the provision of paragraph 2.2.3 hereofFund, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay be relieved of all liability hereunder and with respect to the Seller the amount then on deposit in the Escrow Account, including any earnings thereonFund. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If shall deliver the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to PurchaserFund, at the Seller’s expenseelection of the party entitled to receive the same, by a bank wire transfer of immediately available funds to defend any an account designated by such claim party.
(a) Upon receipt of a written demand from Seller or demand asserted against the PurchaserPurchaser under Section 19.2(b) or (c), so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate except in the defense event of any a demand which states that Purchaser has terminated the Agreement prior to the expiration of the Inspection Period, Escrow Agent shall send a copy of such claim or demanddemand to the other party. The Seller shall notify the Purchaser in writing, within twenty Within ten (2010) days after the date of receiving same, but not thereafter, the applicable Escrow other party may object to delivery of the Fund to the party making such demand by giving a notice of objection (a "Notice of Objection") to Escrow Agent. After receiving a Notice of Objection, Escrow Agent shall send a copy of such Notice of Objection to the Seller’s party who made the demand; and thereafter, in its sole and absolute discretion, Escrow Agent may elect either (i) to continue to hold the Fund until Escrow Agent receives a written agreement of Purchaser and Seller directing the disbursement of the Fund, in which event Escrow Agent shall disburse the Fund in accordance with such agreement; and/or (ii) to take any and all actions as Escrow Agent deems necessary or desirable, in its sole and absolute discretion, to discharge and terminate its duties under this Agreement (other than paying the Fund to one of the parties), including, without limitation, depositing the Fund into any court of competent jurisdiction and bringing any action of interpleader or any other proceeding; and/or (iii) in the event of any litigation between Seller and Purchaser, to deposit the Fund with the clerk of the court in which such litigation is pending.
(b) If Escrow Agent is uncertain for any reason whatsoever as to its duties or rights hereunder (and whether or not Escrow Agent has received any written demand under Section 19.2(b) or (c), or Notice of Objection under Section 19.3(a)), notwithstanding anything to the contrary herein, Escrow Agent may hold and apply the Fund pursuant to Section 19.3(a)(i), (ii) or (iii) and may decline to take any other action whatsoever. In the event the Fund is deposited in a court by Escrow Agent pursuant to Section 19.3(a)(ii) or (iii), Escrow Agent shall be entitled to rely upon the decision of such court. In the event of any dispute whatsoever among the parties with respect to either disposition of the Fund, Purchaser and Seller shall pay the reasonable attorney's fees and costs incurred by Escrow Agent (which said parties shall share equally, but for which said parties shall be jointly and severally liable) for any litigation in which Escrow Agent is named as, or becomes, a party.
19.4 Notwithstanding anything to the contrary in this Agreement, within one (1) business day after the date of this Agreement, Escrow Agent shall place the Downpayment in an Approved Investment. The interest, if any, which accrues on such claim Approved Investment shall be deemed part of the Fund; and Escrow Agent shall dispose of such interest as and with the Fund pursuant to this Agreement. Escrow Agent may not commingle the Fund with any other funds held by Escrow Agent. Escrow Agent may convert the Fund from the Approved Investment into a non-interest-bearing demand account at an Approved Institution as follows:
(a) at any time within three (3) days prior to the Closing Date; or
(b) if the Closing Date is accelerated or demand extended, at any time within three (3) days prior to the accelerated or defend in good faith extended Closing Date; provided, however, that Seller and Purchaser shall give Escrow Agent timely notice of any such third party claim acceleration or demand. So long as extension and that Escrow Agent may hold the Fund in a non-interest-bearing deposit account if Seller is defending in good faith and Purchaser do not give Escrow Agent timely notice of any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defenseadjournment.
19.5 As used herein, the term "Approved Investment" means (a) any interest-bearing demand account or money market fund in [Citibank, N.A.] located in the City of New York or in any other institution otherwise approved by both Seller and Purchaser shall not settle (collectively, an "Approved Institution"), or compromise such claim or demand(b) any other investment approved by both Seller and Purchaser. The Purchaser rate of interest or yield need not be the maximum available and Company deposits, withdrawals, purchases, reinvestment of any matured investment and sales shall make available to the Seller or its agents all records and other materials be made in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demandsole discretion of Escrow Agent, the Purchaser and Company which shall have no obligation liability whatsoever therefor. Discounts earned shall be deemed interest for the purpose hereof.
19.6 Escrow Agent shall have no duties or responsibilities except those set forth herein, which the parties hereto agree are ministerial in nature. Seller and Purchaser acknowledge that Escrow Agent is serving without compensation, solely as an accommodation to the parties hereto, and except for Escrow Agent's own willful default, misconduct or gross negligence, Escrow Agent shall have no liability of any kind whatsoever arising out of or in connection with its activity as Escrow Agent. Seller and Purchaser jointly and severally agree to and do sohereby indemnify and hold harmless Escrow Agent from all loss, cost, claim, damage, liability, and expense (including reasonable attorney's fees and disbursements whether paid to retained attorneys or representing the fair value of legal services rendered to itself) which may be incurred by reason of its acting as Escrow Agent provided the same is not the result of Escrow Agent's willful default, misconduct or gross negligence. Escrow Agent may charge against the Fund any amounts owed to it under the foregoing indemnity or may withhold the delivery of the Fund as security for any unliquidated claim, or both.
19.7 Any Notice of Objection, demand or other notice or communication which may or must be sent, given or made under this Agreement to or by Escrow Agent shall be sent in accordance with the provisions of Section 22.
19.8 Simultaneously with their execution and delivery of this Agreement, Purchaser and Seller shall furnish Escrow Agent with their true Federal Taxpayer Identification Numbers so that Escrow Agent may file appropriate income tax information returns with respect to any interest in the Fund or other income from the Approved Investment. The party ultimately entitled to any accrued interest in the Fund shall be the party responsible for the payment of any tax due thereon.
19.9 Seller may not, without the prior written consent of the Purchaser, settle or compromise and Purchaser waive any claim or consent to of conflict of interest by reason of Escrow Agent's actions in that capacity under this Agreement. Purchaser hereby acknowledges that Escrow Agent is the entry of any judgment unless such settlementattorney for the Seller, compromise or consent includes an unconditional release of the Purchaser from and agrees that Escrow Agent may represent Seller in connection with any and all liability matters, including without limitation, the transaction contemplated by this Agreement and any litigation, including any action arising out of this Agreement; provided that in no event shall Purchaser be responsible for payment of any fees incidental to any such claimrepresentation.
19.10 Any amendment of this Agreement which could alter or otherwise affect Escrow Agent's obligations hereunder will not be effective against or binding upon Escrow Agent without Escrow Agent's prior consent, which consent may be withheld in Escrow Agent's sole and absolute discretion.
19.11 The provisions of this Section 19 shall survive the termination of this Agreement and the Closing.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Philips International Realty Corp)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements Five (5%) percent of the Cash Consideration shallTotal Transaction Shares in the form of Fourth Gated Shares (the"Escrowed Fourth Gated Shares"), on the Closing Date, shall be deposited placed in an interest-bearing escrow account (the “Escrow Account”"Escrow") with The Huntington National Bank, a national banking corporation at Closing (the “Escrow Agent”), pursuant to "Escrowed Shares") in accordance with the term of an escrow agreement reasonably satisfactory to Purchaser and Sellerrelated stock pledge agreement (collectively, for the purpose of securing Seller’s and "Escrow Agreement") substantially in the Company’s representations and warranties made to the Purchaser in Article III hereof. form attached hereto as Exhibit "A." The Escrow Agent Agreement shall maintain the Escrow Account for a period provide that Escrowed Shares shall be released and returned to Parent (on behalf of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay Buyer) from the Escrow Account, in payment or partial payment of the Indemnity Amount (as defined in Paragraph 9.4) due from Seller to Buyer under the indemnities provided in Paragraph 9.1 of this Agreement. Each of the Escrowed Shares released to Parent shall be deemed to have a value equal to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day average of the tenth month closing sale price of the Parent Common Stock as reported in The Wall Street Journal or other financial publication for the last five (5) trading days immediately preceding the date that the Escrowed Shares are released to the Parent in payment of the Indemnity Amount. The term of the Escrow shall be the longer of the two years immediately following the Closing DateDate or the time required to finally determine, by final, non-appealable court order or agreement of the Escrow Agent shall pay to parties, all indemnity claims timely asserted by Buyer. Upon the Seller expiration of the amount then on deposit in the Escrow AccountEscrow, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims all Shares remaining therein shall be submitted delivered by escrow agent to a panel Seller free and clear of arbitratorsall liens, one selected by Purchaser, one selected by Seller, claims and a third to be selected by encumbrances. In the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to event Buyer makes an Escrow Payment, Purchaser shall have given indemnity claim against Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable Buyer agrees to Purchaser, at the Seller’s expense, first seek to defend satisfy any such claim or demand asserted from the Escrowed Shares prior to seeking collection against any other assets of the Sellers. However, notwithstanding anything contained herein to the contrary, nothing shall prevent Buyer from seeking indemnification against the Purchaser, so long as Sellers to the Purchaser is not jeopardized with respect full extent provided in Section 9.4 herein in an amount exceeding the value of the Escrowed Shares to such defense. The Purchaser shall have the right to cooperate in the defense of any extent that such claim or demand. The Seller shall notify exceeds the Purchaser in writing, within twenty (20) days after the date value of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrowed Shares.
Appears in 1 contract
Escrow. 2.3.1 (a) At the Closing, (i) the Purchaser and Seller agree that shall deposit an amount in cash equal to $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account 2,718,750 (the “Indemnity Escrow AccountAmount”) with The Huntington National Bank, a national banking corporation the Escrow Agent in accordance with Section 2.7 (the “Escrow Agent”), pursuant Transactions to Be Effected at Closing) to be held in an escrow agreement reasonably satisfactory to Purchaser and Seller, account by the Escrow Agent for the purpose of securing Seller’s indemnification obligations of the Seller set forth in Article IX (the “Indemnity Escrow Account”) and the Company’s representations and warranties made to (ii) the Purchaser shall deposit an amount in Article III hereof. The cash equal to $8,000,000 (the “Adjustment Escrow Agent shall maintain Amount” and, together with the Indemnity Escrow Account for a period of nine months. During such periodAmount, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then “Escrow Amounts”) with the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, in accordance with Section 2.7 (Transactions to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third Be Effected at Closing) to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to held in an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid escrow account by the Escrow Agent for the purpose of securing payment obligations of the Seller (if any) with respect to Purchaserpost-closing adjustments as set forth in Section 2.8 (the “Adjustment Escrow Account” and, together with the Indemnity Escrow Account, the “Escrow Accounts”). The Escrowed Cash shall be held by the Escrow Agent pursuant to the terms of the Escrow Agreement. The Escrowed Cash 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 Agreement and the Escrow Agreement.
2.3.3 If (b) Except as otherwise provided in this Agreement and the Escrow Agreement, (i) on the date that is twelve (12) months after the Closing Date (the “Release Date”), all of the Escrowed Cash with respect to the Indemnity Escrow Account (other than any amounts in respect of the Indemnity Escrow Account to be distributed to the Purchaser notifies pursuant to Section 2.4(c)) shall be released to the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted joint written instructions delivered by a third party against the Purchaser which is a claim or demand for which and the Seller must indemnify or hold harmless to the Escrow Agent and (ii) all of the Escrowed Cash with respect to the Adjustment Escrow Account (other than any amounts in respect of the Adjustment Escrow Account to be distributed to the Purchaser under this Agreementpursuant to Section 2.8(j)) shall be released to the Seller in accordance with Section 2.8(h).
(c) The parties hereto agree that, for Tax reporting purposes, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long be treated as the Purchaser owner of the Escrowed Cash, and that all interest on or other taxable income, if any, earned from the investment of the Escrowed Cash pursuant to this Agreement shall be treated for Tax purposes as earned by the Seller until the Escrowed Cash is not jeopardized distributed in accordance with respect to such defensethis Agreement and the Escrow Agreement. The Purchaser parties hereto agree that any and all interest, gains and other distributions and income earned on the Escrow Accounts shall have be solely for the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date account of the applicable Escrow Notice of the Seller’s decision to either pay Seller (and all such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser amounts shall not settle or compromise such claim or demand. The Purchaser and Company shall make available be distributed to the Seller or its agents all records and other materials from the Escrow Accounts in accordance with the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimEscrow Agreement).
Appears in 1 contract
Escrow. 2.3.1 Purchaser To provide for an escrow account or accounts to secure and Seller agree that $400,000 allocated among to serve as a fund in respect of the indemnification obligations of the Sellers and Owners under this Agreement, Buyer, the Sellers’ Representatives and the two LLC Purchase Agreements Escrow Agent at Closing shall enter into an Escrow Agreement substantially in the form of Exhibit B (the Cash Consideration shall“Escrow Agreement”). At Closing, on the Closing Date, Buyer shall deposit the Escrow Shares with the Escrow Agent to be deposited held in an interest-bearing escrow account or accounts (the “Escrow Account”) pursuant to the terms of the Escrow Agreement. All Rebranding Escrow Shares remaining in the Escrow Account after the Rebranding Cost Reimbursement shall be distributed to the Owners in accordance with The Huntington National Bank, a national banking corporation the Escrow Agreement on the third Business Day after the Rebranding Cost Reimbursement. Except with respect to Special Escrow Shares retained to fund Buyer Indemnified Persons’ indemnity claims made in accordance with Article 7 on or before the twenty-seventh (27th) month anniversary following the Closing Date (the “Escrow AgentPeriod”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser all Special Escrow Shares then remaining in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made shall be distributed to the Purchaser Owners in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then accordance with the Escrow Agent shallAgreement on the third Business Day after the earlier of (a) the final resolution, after satisfaction by settlement, litigation or otherwise, of the provision dispute between International Vapor and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ regarding the ▇▇▇▇▇▇▇▇▇ Agreement (the “▇▇▇▇▇▇▇▇▇ Resolution”) and (b) the expiration of paragraph 2.2.3 hereof, pay from the Escrow Account, to the PurchaserPeriod; provided that, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day portion of the tenth month following the Closing Date, the Special Escrow Agent shall pay to the Seller the amount then on deposit Shares deposited in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Account pursuant to Section 1.7.7 shall be submitted distributed to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, Owners in accordance with the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result proportions set forth in liability to Purchaser pursuant to paragraph 2.2.2Section 1.7.7. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized Except with respect to such defense. The Purchaser shall have General Escrow Shares retained to fund Buyer Indemnified Persons’ indemnity claims made in accordance with Article 7 prior to the right to cooperate expiration of the Escrow Period, all General Escrow Shares in the defense of any such claim or demand. The Seller Escrow Account shall notify be distributed to the Purchaser Owners in writing, within twenty (20) days accordance with the Escrow Agreement on the third Business Day after the date expiration of the Escrow Period. With respect to any pending claim, promptly following resolution of such pending claim, the Special Escrow Shares or the General Escrow Shares, as applicable Escrow Notice of the Seller’s decision and if any, retained to either pay fund such pending claim or demand or defend which have not been paid, which are not payable to any Buyer Indemnified Person pursuant to Article 7 in good faith any connection with such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaserresolution, and which are not required to remain in the Purchaser is not jeopardized by such defenseEscrow Account to satisfy other pending claims, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available be distributed to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimOwners.”
Appears in 1 contract
Escrow. 2.3.1 At Closing, Purchaser shall deposit US$ 2,225,065 (such amount comprised of US$ 675,000 (15% of Purchase Price), US$ 565,789 (amount payable to Bank), US$ 488,700 (amount payable to OCS), US$ 84,211 (amount payable to the landlord in connection with the Hod Hasharon Office Lease) and Seller agree that $400,000 allocated among this and 411,365 (amount payable to those licensors with regard to the two LLC Purchase Agreements of Intellectual Property Licenses, as such parties are identified on Exhibit D to the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account Disclosure Schedules)) (the “Escrow AccountAmount”) (such amount to be paid by the HK Purchaser and then proportionately allocated between Pakshi Purchaser and HK Purchaser based on their portion of the overall Purchase Price, as determined by Purchaser) with The Huntington National Bank, a national banking corporation an escrow agent jointly selected by Purchaser and the Company (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser which amount shall be withheld from the Purchase Price. The Parties acknowledge and Selleragree that the Escrow Amount shall be used (a) for securing the payment of certain Liabilities by the Company, as set forth in the Escrow Agreement, and (b) for the purpose of securing Seller’s and the Company’s representations and warranties made indemnification obligations pursuant to the Purchaser in Article III hereofVI. The Escrow Agent Amount shall maintain be administered in accordance substantially with the provisions of an Escrow Agreement in the form attached hereto as Exhibit C (the “Escrow Agreement”), subject to negotiating terms acceptable to the Escrow Account for a period of nine monthsAgent. During such period, if, The Escrow Amount shall be held as a direct result of a material misrepresentation trust fund and shall not be subject to any lien, attachment, trustee process or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount other judicial process of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount creditor of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment Party and shall be paid by held and disbursed solely for the purposes and in accordance with the respective terms of the Escrow Agent to PurchaserAgreement.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Asset Purchase Agreement (Clearone Communications Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements Closing, as provided in Section 2.3(c) hereof, Buyer shall deliver, by wire transfer of immediately available funds, (i) an aggregate amount equal to the Cash Consideration shall, on Adjustment Escrow Deposit Amount to the Closing Date, be deposited in an interest-bearing Escrow Agent for deposit into a separate escrow account (the “Adjustment Escrow Account”) with The Huntington National Bank, and (ii) an aggregate amount equal to the Indemnity Escrow Deposit Amount to the Escrow Agent for deposit into a national banking corporation separate escrow account (the “Indemnity Escrow AgentAccount”), in each case, established pursuant to an escrow agreement reasonably satisfactory the terms of the Escrow Agreement. The Adjustment Escrow Funds shall be maintained separately in the Adjustment Escrow Account. The Indemnity Escrow Funds shall be maintained separately in the Indemnity Escrow Account. Buyer and the Seller shall each be responsible for one half (1/2) of the fees and expenses of the Escrow Agent. Subject to Purchaser and the limitations set forth in this Agreement, nothing in this Section 2.6 shall be construed as limiting claims by a Buyer Indemnified Person for satisfaction of any indemnification or other claims pursuant to Section 8.2 or otherwise, to the amount then held in escrow.
(b) Seller, the Company, and Buyer agree for all Tax purposes that: (i) the purpose right of securing Seller’s Seller to the Adjustment Escrow Amount and the Company’s representations Indemnity Escrow Amount shall be treated as deferred contingent purchase price eligible for installment sale treatment under Section 453 of the Code and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period any corresponding provisions of nine months. During such periodstate, iflocal or non-U.S. Law, as a direct result appropriate; (ii) interest may be imputed on such amount, as required by Section 483 or 1274 of a material misrepresentation or breach the Code; (iii) Buyer shall be treated as the owner of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for Adjustment Escrow Amount and pays any monetary damages, awardsthe Indemnity Escrow Amount and all interest and earnings earned from the investment and reinvestment of the Adjustment Escrow Amount and the Indemnity Escrow Amount, or settlements portion thereof, shall be allocable to Buyer pursuant to Section 468B(g) of claimsthe Code and Proposed Treasury Regulation 1.468B-8; and (iv) in no event shall the total amount of the Adjustment Escrow Amount or the Indemnity Escrow Amount paid to Seller under this Agreement exceed an amount designated by the Parties prior to Closing.
(c) On the third (3rd) Business Day after the twelve (12)-month anniversary of the Closing Date, then Buyer and Seller shall cause the Escrow Agent shall, after satisfaction (in accordance with the terms of the provision Escrow Agreement) to pay (by wire transfer of paragraph 2.2.3 hereof, pay from the Escrow Account, immediately available funds) to the Purchasersuch account(s) designated by Seller, the amount of any such damagesremaining Indemnity Escrow Funds that are not claimed by Buyer, awards, on or settlements prior to the twelve (“Escrow Payment”). On the first day 12)-month anniversary of the tenth month following the Closing Date, to be owed to a Buyer Indemnified Person, together with any interest earned on any such amount, for distribution to Seller, all as may be provided in and pursuant to the terms of the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesAgreement.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 On the date hereof, and in exchange for Seller’s covenant to cooperate in all material respects with Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, to permit Purchaser to conduct those activities listed on Schedule 2.1(b) prior to the Closing Date, be deposited in an interest-bearing escrow account the Purchaser shall deposit One Million Dollars ($1,000,000.00) (the “Escrow AccountAmount”) into an escrow account with The Huntington National Truist Bank, a national banking corporation as escrow agent (the “Escrow Agent”), in accordance with the terms and conditions of the escrow agreement entered into as of the date hereof by and among Purchaser, the Seller, the Majority Shareholders and Escrow Agent, attached hereto as Exhibit 2.1(b) (the “Escrow Agreement”). If the Seller terminates this Agreement pursuant to an escrow agreement reasonably satisfactory Section 9.3(c) below, or if the conditions set forth in Section 9.1 hereof have been satisfied or validly waived but the Closing has not occurred pursuant to Section 2.3 hereof Purchaser and Sellerthe Seller shall cause the Escrow Agent to release the Escrow Amount to the Seller within five (5) Business Days following the date of such termination or event, for as the purpose case may be. If the Closing occurs, the Escrow Amount shall be utilized as a source of securing funds to satisfy the Seller’s obligations under Section 3.10 and the Company’s representations and warranties made to the Purchaser any indemnification obligations set forth in Article III 6 of this Agreement as more fully described in Section 6.5 hereof. The Escrow Agent Agreement shall maintain the Escrow Account for a period of nine months. During such periodprovide that, if, as a direct result of a material misrepresentation on or breach of warranty by Seller made prior to the Purchaser in Article III hereofdate that is five (5) Business Days following the one (1) year anniversary of the Closing Date (the “Escrow Release Date”), Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by cause the Escrow Agent to Purchaser.
2.3.3 If release any then remaining portion of the Purchaser notifies Escrow Amount to the Seller Seller, less a portion of the Escrow Amount equal to the estimated Losses arising out of any claim or demand pursuant then pending indemnification claims by Purchaser that are subject to paragraph 2.3.2 above, and if such claim or demand relates Notices of Claim. Any portion of the Escrow Amount due to a claim or demand asserted by a third party against be released on the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable Escrow Release Date that continues to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized be held in escrow with respect to such defense. The Purchaser any unresolved Notice of Claim shall have be delivered to the right to cooperate in the defense of any such claim Seller, or demand. The Seller shall notify the Purchaser in writingPurchaser, as applicable, within twenty five (205) days after the date Business Days following a Final Determination of the applicable Escrow such Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demandClaim. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.(c)
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that There shall be placed in escrow with NationsBank Dallas ("Escrow Agent") $400,000 allocated among this and the two LLC Purchase Agreements 800,000.00 of the Cash Consideration shall, on Purchase Price. Such $800,000.00 shall be delivered by Sellers to the Escrow Agent at Closing Date, and shall be deposited held and delivered by the Escrow Agent in an interest-bearing escrow account (accordance with the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to terms and provisions of an escrow agreement reasonably satisfactory substantially in form to Purchaser Exhibit 2, which Buyer, Sellers and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay will execute and deliver at Closing. Buyer shall be entitled to recover from such funds held by the Escrow AccountAgent for any liabilities or claims arising (i) under the indemnification provisions of this Agreement, including, but not limited to, provisions relating to misrepresentations and nonfulfillment of this Agreement and (ii) for any period prior to the PurchaserClosing including, but not limited to, matters such as environmental, legal and taxes except to the extent such matters are specifically listed and quantified in the Schedules to this Agreement; provided that Buyer's aggregate claims must exceed $5,000.00 before a claim may be filed. Interest on the funds in the Escrow account shall accrue to the benefit of Sellers and shall be distributed in accordance with the Escrow Agreement. On the date occurring one year after Closing, the entire amount of $800,000.00 (less the amount of (i) any escrow related expenses which are to be paid solely by Sellers from such damagesEscrow account and (ii) any claims filed) shall be released from such Escrow account to Seller, awardsprovided, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Datehowever, if Buyer has filed a claim, the Escrow Agent agent will not distribute the disputed amount to either party but shall pay continue to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between hold such funds until the parties regarding resolve the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provideddispute. If after such Escrow Notice Seller has not the parties are unable to resolve the dispute within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out filing of such claim, the parties shall seek resolution in accordance with the provisions set forth in Section 14.
Appears in 1 contract
Escrow. 2.3.1 (a) At the Closing, the Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in will deposit into an interest-bearing escrow account (the “Escrow Account”) established for such purpose with The Huntington National BankComputershare Trust Company, a national banking corporation N.A. (the “Escrow Agent”), ) pursuant to an escrow agreement reasonably satisfactory by and among the Purchaser, the Shareholder Representative and the Escrow Agent, in substantially the form attached hereto as Exhibit 2.8(a) (the “Escrow Agreement”), (i) $15.0 million, consisting of the Stock Merger Consideration valued at the Purchaser Stock Value (the “Escrowed Shares”), by delivery of shares into a book position in the name of the Escrow Agent, and (ii) $1.0 million in cash by wire transfer to Purchaser an account designated by the Escrow Agent (the “Escrowed Cash”). The Escrowed Shares will be held in the Escrow Account to act as a source of payment of the indemnification obligations of the Company Shareholders under Article VIII and Sellerthe Escrowed Cash will be held in the Escrow Account as a source of payment for any Downward Post-Closing NWC Adjustment pursuant to Section 2.11(c).
(b) The Escrowed Shares shall be released from the Escrow Account to the Paying Agent, for further distribution by the purpose Paying Agent to the Company Shareholders ratably based on their respective Pro Rata Shares in accordance with this Agreement. For all purposes under the Escrow Account, the Escrowed Shares shall be valued at the Purchaser Stock Value. Notwithstanding anything to the contrary herein, no fraction of securing Seller’s an Escrowed Share shall be released from the Escrow Account and all releases of Escrowed Shares shall be rounded to the nearest whole Escrowed Share.
(c) Following the determination of the Final NWC pursuant to Section 2.11(a) and, if payable, the payment of the Downward Post-Closing NWC Adjustment pursuant to Section 2.11(c), the Escrow Agent shall release from the Escrow Account to the Paying Agent (for further distribution by the Paying Agent to the Company Shareholders, the holders of Company Options and the Company’s representations and warranties made holders of Performance Units pursuant to Section 2.10(b)) any remaining portion of the Escrowed Cash. On the 15-month anniversary of the Closing Date (the “Escrow Period Expiration Date”), the Escrow Agent shall release from the Escrow Account to the Paying Agent (for further distribution by the Paying Agent to the Company Shareholders pursuant to Section 2.10(b)(iv)) any remaining portion of the Escrowed Shares minus Escrowed Shares equal in value to the sum of the aggregate amount of unsatisfied or disputed claims for Losses specified in Indemnity Claim Notices delivered by the Purchaser in Article III hereofto the Shareholder Representative on or prior to the Escrow Period Expiration Date (such aggregate amount of unsatisfied or disputed claims for Losses, the “Pending Claims Amount”). The Escrow Agent shall maintain continue to hold the Escrow Account Pending Claims Amount corresponding to each claim for a period Losses until the final resolution of nine months. During such periodclaim, ifat which point, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereofand when such claim is resolved, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction shall release shares of Purchaser Stock equal in value to the appropriate portion of the provision Pending Claims Amount to the Paying Agent (for further distribution by the Paying Agent to the Company Shareholders pursuant to Section 2.10(b)(iv)) and/or to the Purchaser, as the case may be, depending upon resolution of paragraph 2.2.3 hereofsuch claim.
(d) The Purchaser, pay the Company and the Shareholder Representative each agree to promptly take commercially reasonable actions (including executing and delivering joint written instructions to the Escrow Agent) requested by the other to effect releases of Escrowed Cash and Escrowed Shares from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, in each case in accordance with this Agreement and the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partiesAgreement.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Merger Agreement (On Assignment Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this In order to secure Buyer with respect to: (i) any reduction in the Net Working Capital of the ▇.▇. ▇▇▇▇▇ Division of the Company between September 30, 1998 and the two LLC Purchase Agreements Closing Date and (ii) the accuracy of the Cash Consideration shallrepresentations, warranties, and the prompt performance and payment of the covenants, agreements and indemnifications, of Sellers provided for in this Agreement and all other documents and instruments executed by Sellers in connection herewith, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to Date Sellers and Buyer shall enter into an escrow agreement reasonably satisfactory to Purchaser (the "Escrow Agreement") substantially in the form of Exhibit A hereto with U.S. Trust Company (provided that if the fees of U.S. Trust Company are not reasonable and Sellercompetitive with other similar institutions, for the purpose of securing Seller’s and the Company’s representations and warranties made parties will mutually agree on another escrow agent) as escrow agent (with such changes therein relative to the Purchaser in Article III hereof. The Escrow Agent rights and duties of the escrow agent as may be required by said escrow agent.) Buyer shall maintain deposit $3,400,000 (the "Escrow") pursuant to the Escrow Account for a period Agreement. Upon the later of nine months. During such period(i) 120 days after the Closing Date, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to (ii) the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction final determination of the provision Purchase Price, and (iii) the final determination of paragraph 2.2.3 hereofany indemnification claims made by Buyer against Sellers pursuant to Section 8 hereof on or before 120 days after the Closing Date, pay Buyer shall be entitled to receive from the Escrow Account, an amount equal to the Purchasersum of (A) any reduction in the Purchase Price as finally determined, and (b) the amount of any such damagesindemnification to which Buyer is entitled under Section 8 hereof as determined by agreement between Buyer and Sellers or, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Accountabsence of agreement, including any earnings thereon. Any dispute between by the parties regarding the validity or amount final judgment of any damages, awards, or settlements court of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchasercompetent jurisdiction, and the Purchaser is not jeopardized by remaining balance of such defenseEscrow, if any, shall be distributed to Sellers. One-third of the Purchaser Escrow shall not settle or compromise such claim or demandbe distributed each six months after the Closing, subject to retention at all times of funds reasonably required in Buyer's good faith judgment to cover any pending and bona fide claims of Buyer for indemnification. The Purchaser and Company Interest earned on the Escrow shall make available be distributed to the Seller or its agents Sellers monthly Pro-Rata and the Sellers shall be responsible for reporting all records taxable interest and other materials in dividends distributed from the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demandEscrow. Whether or not Buyer shall pay the Seller elects to defend any such claim or demand, the Purchaser fees and Company shall have no obligation to do so. The Seller may not, without the prior written consent costs of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimescrow agent.
Appears in 1 contract
Sources: Stock Purchase Agreement (Penn Engineering & Manufacturing Corp)
Escrow. 2.3.1 Purchaser and Seller agree that At the Closing, Shares with a value of $400,000 allocated among this 1 million (valued using a five day trailing average ending on the second trading day prior to the Closing) ("Escrow Shares") will be held by TMCS in trust until such time as TMCS and the two LLC Purchase Agreements Shareholders have mutually agreed upon the identify of an escrow agent ("Escrow Agent") and the terms of an escrow agreement ("Escrow Agreement"). Upon agreement of the Cash Consideration shallparties as to the identity of the Escrow Agent and the terms of the Escrow Agreement (which shall not be unreasonably withheld by either party), on TMCS shall immediately transfer the Closing Date, Escrow Shares to escrow accounts administered by the Escrow Agent. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ will be deposited in an interest-bearing the beneficiary of the first escrow account (the “Escrow Account”"First Escrow") with The Huntington National Bank, a national banking corporation and ▇▇▇▇ ▇. ▇▇▇▇▇▇ will be the beneficiary of the second escrow account (the “"Second Escrow"). The First and Second Escrows are sometimes referred to individually as an Escrow Agent”and together as the Escrows. Immediately prior to depositing the Escrow Shares in Escrow, the parties to the Escrows will enter into the Escrow Agreements with the respective Escrow administrators. The Escrow Shares to be deposited into the Escrows will be divided between the First Escrow and Second Escrow as follows: Seventy Six Percent (76%) of the Escrow Shares shall be placed in the First Escrow and Twenty Four Percent (24%) of the Escrow Shares shall be placed in the Second Escrow. Each Escrow will serve as a non-exclusive fund against which post-closing claims by TMCS based on breaches of representations, warranties or covenants in the Original Agreement can be paid (subject to the several liability limitation and other indemnification limitations of the Original Agreement). The Escrow Agreement will provide that the Shareholder who is the beneficiaries of the respective Escrow has exclusive rights to direct the retention or sale of the Shares held subject to the applicable Escrow Agreement and, pursuant if such Shares are sold, to reinvest the proceeds, subject to (a) the limitation that any proceeds be invested only in money market funds, United States or United States agency debt with a duration of one year or less, corporate bonds with an escrow agreement reasonably satisfactory "A" or better rating with a duration of one year or less, or Standard & Poors 500 index funds which contain $1 billion or more in invested assets and (b) applicable federal and state securities laws; provided, however, that no more than one half (1/2 ) of the proceeds of the sale of Shares in Escrow may be invested in Standard & Poors Index funds. Each Escrow will terminate on the 18-month anniversary of the closing of the Original Agreement unless TMCS has given a valid Claim Notice (as defined in the Original Agreement) under the indemnification provisions of the Original Agreement prior to Purchaser such time. Upon termination of the Escrow, Shares or other permitted investments subject to each Escrow will be paid over to the Shareholder(s) who are beneficiaries of such accounts to the extent such assets have not been paid over to TMCS under the terms of the Escrow Agreement. TMCS represents and Sellerwarrants that, for to the purpose actual knowledge of securing Seller’s its Chief Financial Officer, General Counsel and President, without any investigation thereof, none of the Company’s representations and warranties made to of the Purchaser Company and the Shareholders in Article III hereofSection 4 of the Original Agreement are inaccurate or have been breached. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such periodShareholders represent and warrant that, ifto their actual knowledge, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereofwithout any investigation thereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction none of the provision representations and warranties of paragraph 2.2.3 hereof, pay from TMCS and the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day Merger Sub in Section 5 of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity Original Agreement are inaccurate or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the partieshave been breached.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Work Out Agreement (Ticketmaster Online Citysearch Inc)
Escrow. 2.3.1 Purchaser (a) As set forth in Section 2.3(b)(iv), at or prior to the Closing, the Buyer shall deposit the Escrow Funds with the Escrow Agent. The Escrow Funds shall be held by the Escrow Agent pursuant to the terms of the Escrow Agreement. The Escrow Funds shall be held as a trust fund and Seller agree that $400,000 allocated among 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 of and in accordance with the terms of this Agreement and the two LLC Purchase Agreements Escrow Agreement.
(b) Promptly following the first Business Day that is at least fifteen (15) months after the Closing Date (the “Escrow Release Date”), but in no event more than five (5) Business Days following such date, the remaining portion of the Cash Consideration shallEscrow Funds not then subject to retention pursuant to the Escrow Agreement shall be released from escrow, and thereafter as further amounts of the Escrow Funds become no longer subject to retention pursuant to the Escrow Agreement, such amounts shall be released from escrow, in each case upon demand by the Seller Representative made pursuant to the Escrow Agreement. Notwithstanding the foregoing, the following amounts (collectively the “Supplemental Escrow Retention”) shall be retained in escrow after the Escrow Release Date, in addition to any other portion of the Escrow Funds then subject to retention pursuant to the Escrow Agreement: (i) if any litigation set forth on Schedule 6.2(f) has not been completely resolved by the Escrow Release Date, $9,305,885 and 151,871 shares of Buyer Common Stock (collectively, the “Special Litigation Retention”), in respect of such litigation, and (ii) 151,871 shares of Buyer Common Stock (the “Surviving Representation Retention”), in respect of the Seller Surviving Representations. If the amounts of cash and Buyer Common Stock then comprising the Escrow Funds are insufficient to fully fund the Supplemental Escrow Retention, then the remaining amounts of cash and Buyer Common Stock comprising the Escrow Funds shall be retained, and if additional amounts thereafter become no longer subject to retention under the Escrow Agreement, such amounts shall be added to the amounts actually retained up to the full amounts contemplated for the Supplemental Escrow Retention. Promptly following the end of the survival period specified in Section 6.4(g), but in no event more than five (5) Business Days following the end of such survival period, any then-remaining portion of the Special Litigation Retention shall be released from escrow, except to the extent that doing so would reduce the remainder of the Supplemental Escrow Retention to an amount less than the amount of the Surviving Representation Retention, net of any prior claims paid therefrom. Promptly following the first Business Day that is at least thirty (30) months after the Closing Date, but in no event more than five (5) Business Days following such date, any then-remaining portion of the Surviving Representation Retention not then subject to retention pursuant to the Escrow Agreement shall be deposited in an interest-bearing escrow account released from escrow.
(the “Escrow Account”c) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”For purposes of Section 2.5(b), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made subject to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such periodAgreement, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays (i) any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay amounts released from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims escrow shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid distributed by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant Representative for further distribution to paragraph 2.3.2 abovethe Sellers in accordance with the Escrow Agreement and the allocations set forth on Schedule 2.3(b), and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable the value of each share of Buyer Common Stock released from escrow to Purchaserany Buyer Indemnified Person pursuant to Article VI shall be deemed to equal the Reference Share Price, at (iii) except in the Seller’s expensecase of releases from the Supplemental Escrow Retention in respect of Seller Surviving Representations, any cash and Buyer Common Stock released from escrow shall, to defend any such claim or demand asserted against the Purchaserextent possible, so long be released in the same proportions as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate Closing Consideration was comprised of cash and Buyer Common Stock, respectively, and (iv) in the defense case of any such claim or demand. The releases from the Supplemental Escrow Retention in respect of Seller Surviving Representations, only Buyer Common Stock shall notify the Purchaser in writingbe released, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimcash.
Appears in 1 contract
Sources: Stock Purchase Agreement (Cree Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) Escrow Agent will hold the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited ▇▇▇▇▇▇▇ Money Deposit in escrow in an interest-bearing account of the type generally used by Escrow Agent for the holding of escrow account funds until the earlier of (i) the “Escrow Account”Closing, or (ii) the termination of this Agreement in accordance with any right hereunder. The Huntington National Bank▇▇▇▇▇▇▇ Money Deposit shall be non-refundable to Purchaser, a national banking corporation (except as otherwise set forth herein, and shall be credited against the “Escrow Agent”)Purchase Price at the Closing. All interest earned on the ▇▇▇▇▇▇▇ Money Deposit shall be paid to the party entitled to the ▇▇▇▇▇▇▇ Money Deposit. In the event the Closing occurs, pursuant the ▇▇▇▇▇▇▇ Money Deposit will be released to an escrow agreement reasonably satisfactory to Purchaser and Seller, for and Purchaser shall receive a credit against the purpose Purchase Price in the amount of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof▇▇▇▇▇▇▇ Money Deposit. The In all other instances, Escrow Agent shall maintain not release the ▇▇▇▇▇▇▇ Money Deposit to either party until Escrow Account for a period Agent has been requested by Seller or Purchaser to release the ▇▇▇▇▇▇▇ Money Deposit as follows: (i) if requested by Seller, then upon Seller’s written demand therefore stating that Purchaser defaulted in the performance of nine months. During Purchaser’s obligations to close under this Agreement and the facts and circumstances forming the basis of such default and (ii) if requested by Purchaser, then upon Purchaser’s written demand therefore, stating that Seller defaulted in the performance of Seller’s obligations to close under this Agreement and the facts and circumstances forming the basis of such default; provided, that, in neither case shall Escrow Agent release the ▇▇▇▇▇▇▇ Money Deposit until five (5) Business Days following Escrow Agent’s delivery of such written demand to the non-requesting party; provided, further, that if during such five (5) Business Days period, if, as the non-requesting party shall have delivered to Escrow Agent a direct result of a material misrepresentation or breach of warranty by Seller made written dispute to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction release of the provision of paragraph 2.2.3 hereof▇▇▇▇▇▇▇ Money Deposit, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay not release the ▇▇▇▇▇▇▇ Money Deposit unless it receives further written direction signed by Seller and Purchaser. If no written dispute is so delivered, Escrow Agent shall disburse the ▇▇▇▇▇▇▇ Money Deposit as directed. Purchaser represents that its tax identification number, for purposes of reporting the interest earnings, is ▇▇-▇▇▇▇▇▇▇. Harsimus represents that its tax identification number, for purposes of reporting the interest earnings, is ▇▇-▇▇▇▇▇▇▇, and Columbia represents that its tax identification number, for purposes of reporting interest earnings, is ▇▇-▇▇▇▇▇▇▇.
(b) Escrow Agent shall not be liable to any party for any act or omission, except for bad faith, gross negligence or willful misconduct, and the Seller parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any and all claims, damages, losses or expenses arising in connection herewith. The parties acknowledge that Escrow Agent is acting solely as stakeholder for their mutual convenience. In the amount then on deposit in the event Escrow Account, including any earnings thereon. Any Agent receives written notice of a dispute between the parties regarding with respect to the validity or amount of any damages▇▇▇▇▇▇▇ Money Deposit (the “Escrowed Funds”), awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent shall not be bound to Purchaser.
2.3.3 If release and deliver the Purchaser notifies the Seller of any claim or demand pursuant Escrowed Funds to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third either party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall but may either (i) promptly pay or settle such claim or demand continue to hold the Escrowed Funds until otherwise directed in a writing signed by all parties hereto or (ii) employ counsel acceptable to Purchaserdeposit the Escrowed Funds with the clerk of any court of competent jurisdiction. Upon such deposit, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defenseEscrow Agent will be released from all duties and responsibilities hereunder. The Purchaser Escrow Agent shall have the right to cooperate in the defense consult with separate counsel of any its own choosing (if it deems such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20consultation advisable) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle be liable for any action taken, suffered or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required omitted by it for its use in contesting any third party claim or demand. Whether or not accordance with the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out advice of such claimcounsel.
Appears in 1 contract
Sources: Agreement of Sale and Purchase (Mack Cali Realty L P)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) At the two LLC Purchase Agreements of Closing, Buyer shall deposit the Cash Consideration shall, on the Closing Date, be deposited Escrow Amount in an interest-bearing escrow account (the “Escrow Account”) with The Huntington U.S. Bank National BankAssociation (together with its successors and permitted assigns, a national banking corporation (the “Escrow Agent”)) to be held, invested and distributed by the Escrow Agent pursuant to an escrow agreement reasonably satisfactory to Purchaser the terms and Seller, conditions of this Agreement and the Escrow Agreement. The Indemnity Escrow Fund shall be used for the sole purpose of securing Seller’s the Founders’ obligations under Section 9.2(a), subject to the limitations set forth in Section 9.1, and the Company’s representations Adjustment Escrow Fund shall be used for the sole purpose of securing the Shareholders’ obligations pursuant to Section 3.3.
(b) The Escrow Account shall be held as trust funds and warranties made shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any Person, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement and this Agreement.
(c) Fifty percent (50%) of any amounts held in the Indemnity Escrow Fund that are not subject to then outstanding indemnification claims shall be released to the Purchaser Paying Agent (or, if the Paying Agent is unable or unwilling to act as paying agent following the Closing, to an alternative paying agent designated by the Shareholder Representative), for further distribution to the Founders, pro rata, based on the percentages set forth in Article III hereofthe Funds Flow, within five (5) Business Days following the date that is nine (9) months after the Closing Date. The Any remaining amounts held in the Indemnity Escrow Fund that are not subject to then outstanding indemnification claims shall be released to the Paying Agent shall maintain (or, if the Paying Agent is unable or unwilling to act as paying agent following the Closing, to an alternative paying agent designated by the Shareholder Representative), for further distribution to the Founders, pro rata, based on the percentages set forth in the Funds Flow, within five (5) Business Days following the date that is eighteen (18) months after the Closing Date.
(d) Any income, gains and losses of the Escrow Account for a period shall be included by Buyer as taxable income or loss of nine months. During such periodBuyer, if, as a direct result and any income and gains of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction Account shall be available to Buyer as part of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either but (i) promptly pay or settle such any amount of the Indemnity Escrow Fund not paid to Buyer in connection with an indemnification claim or demand or in accordance with Section 9.2(a) and (ii) employ counsel acceptable any amount of the Adjustment Escrow Fund not paid to Purchaserthe Buyer in connection with a true-up under Section 3.3(f), at shall ultimately be distributable to the Seller’s expenseFounders or the Shareholders, to defend any such claim or demand asserted against respectively, in accordance with this Agreement and the Purchaser, so long as the Purchaser is not jeopardized with respect to such defenseEscrow Agreement. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date cost and expense of the applicable Escrow Notice of Account shall be borne as follows: 50% by Buyer and 50% by the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimShareholders.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that (a) $400,000 allocated among this and the two LLC Purchase Agreements 1,000,000 of the Cash Merger Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow AccountAmount”) shall be deposited with The Huntington Deutsche Bank National BankTrust Company, a national banking corporation as escrow agent (the “Escrow Agent”“), to constitute a collateral fund (the “Escrow Fund“) for purposes of securing the indemnification obligations of the former holders of the Target Series C Preference Shares (the “Escrow Shareholders”) under Article VIII of this Agreement. Notwithstanding anything to the contrary in this Agreement, recourse against the Working Capital Escrow Fund (solely in relation to Section 1.7 hereof) and the Escrow Fund (solely in relation to Section 1.7 hereof to the extent the Acquiror Excess Payment, if any, exceeds $100,000 and Article VIII hereof, subject to the limitations set forth in Section 8.4 hereof) shall constitute the sole and exclusive remedy of any Acquiror Indemnified Party (as defined in Article VIII) under this Agreement, except as otherwise set forth in Section 9.6(a) hereof. The Escrow Amount shall be held in escrow pursuant to an escrow agreement reasonably satisfactory in substantially the form attached hereto as Exhibit D or in such form as otherwise mutually agreed upon by the parties (the “Escrow Agreement”) to Purchaser be executed by Acquiror, Target, the Shareholders Representative and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, at or prior to Closing.
(b) Subject to the Purchaser, the amount last sentence of any such damages, awards, or settlements (“Escrow Payment”this Section 1.12(b). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to Amount plus the Seller the amount then interest and any earnings accrued on deposit in the Escrow Account, including Amount less any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser amounts released earlier pursuant to paragraph 2.2.2. hereof (“this Agreement or the Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by PurchaserAgreement, such sums paid shall qualify as an Escrow Payment and shall will be paid released by the Escrow Agent on the date that is 24 months after the Closing Date (the “Escrow Termination Date”) to Purchaserthe Escrow Shareholders. Notwithstanding the foregoing, to the extent that any then pending and unresolved claims for indemnification under Section 8.2 exist, that portion of the Escrow Amount necessary to satisfy such claims shall be retained by the Escrow Agent until such claims are finally resolved.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party (c) Claims against the Purchaser which is a claim or demand for which Escrow Fund shall be resolved between the Seller must indemnify or hold harmless Indemnified Parties and the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate Shareholders Representative in the defense of any such claim or demand. The Seller shall notify the Purchaser manner provided in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimArticle VIII hereof.
Appears in 1 contract
Sources: Merger Agreement (Microtune Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and (a) Escrow Agent will hold the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited ▇▇▇▇▇▇▇ Money Deposit in escrow in an interest-bearing account of the type generally used by Escrow Agent for the holding of escrow account funds until the earlier of (i) the “Escrow Account”Closing, or (ii) the termination of this Agreement in accordance with any right hereunder. The Huntington National Bank▇▇▇▇▇▇▇ Money Deposit shall be non-refundable to Purchaser, a national banking corporation (except as otherwise set forth herein, and shall be credited against the “Escrow Agent”)Purchase Price at the Closing. All interest earned on the ▇▇▇▇▇▇▇ Money Deposit shall be paid to the party entitled to the ▇▇▇▇▇▇▇ Money Deposit. In the event the Closing occurs, pursuant the ▇▇▇▇▇▇▇ Money Deposit will be released to an escrow agreement reasonably satisfactory to Purchaser and Seller, for and Purchaser shall receive a credit against the purpose Purchase Price in the amount of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof▇▇▇▇▇▇▇ Money Deposit. The In all other instances, Escrow Agent shall maintain not release the ▇▇▇▇▇▇▇ Money Deposit to either party until Escrow Account for a period Agent has been requested by Seller or Purchaser to release the ▇▇▇▇▇▇▇ Money Deposit as follows: (i) if requested by Seller, then upon Seller’s written demand therefore stating that Purchaser defaulted in the performance of nine months. During Purchaser’s obligations to close under this Agreement and the facts and circumstances forming the basis of such default and (ii) if requested by Purchaser, then upon Purchaser’s written demand therefore, stating that Seller defaulted in the performance of Seller’s obligations to close under this Agreement and the facts and circumstances forming the basis of such default; provided, that, in neither case shall Escrow Agent release the ▇▇▇▇▇▇▇ Money Deposit until five (5) Business Days following Escrow Agent’s delivery of such written demand to the non-requesting party; provided, further, that if during such five (5) Business Days period, if, as the non-requesting party shall have delivered to Escrow Agent a direct result of a material misrepresentation or breach of warranty by Seller made written dispute to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction release of the provision of paragraph 2.2.3 hereof▇▇▇▇▇▇▇ Money Deposit, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay not release the ▇▇▇▇▇▇▇ Money Deposit unless it receives further written direction signed by Seller and Purchaser. If no written dispute is so delivered, Escrow Agent shall disburse the ▇▇▇▇▇▇▇ Money Deposit as directed. Purchaser represents that its tax identification number, for purposes of reporting the interest earnings, is ▇▇-▇▇▇▇▇▇▇. Harsimus represents that its tax identification number, for purposes of reporting the interest earnings, is ▇▇-▇▇▇▇▇▇▇, and Columbia represents that its tax identification number, for purposes of reporting interest earnings, is ▇▇-▇▇▇▇▇▇▇.
(b) Escrow Agent shall not be liable to any party for any act or omission, except for bad faith, gross negligence or willful misconduct, and the Seller parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any and all claims, damages, losses or expenses arising in connection herewith. The parties acknowledge that Escrow Agent is acting solely as stakeholder for their mutual convenience. In the amount then on deposit in the event Escrow Account, including any earnings thereon. Any Agent receives written notice of a dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty ▇▇▇▇▇▇▇ Money Deposit (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.the
Appears in 1 contract
Sources: Agreement of Sale and Purchase (Mack Cali Realty Corp)
Escrow. 2.3.1 Purchaser (a) In connection with the Closing, for and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements on behalf of the Cash Consideration shallholders of Company Capital Stock, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Parent shall deliver to SunTrust Bank, a national banking corporation N.A., as escrow agent (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Sellersubstantially in the form of Exhibit B (the “Escrow Agreement”) among Parent, for the purpose of securing Seller’s Holder Representative and the Company’s representations and warranties made Escrow Agent, an amount of the Base Purchase Price equal to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow AccountAmount, to the Purchaserbe held in a fund (together with interest and other investment proceeds thereon, the amount of any such damages, awards, or settlements (“Escrow PaymentFund”). ) in accordance with the terms thereof.
(b) On the first day anniversary of the tenth month following the Closing Date, the Escrow Agent shall pay to those Stockholders who were entitled to receive a Closing Payment, in each case less any amounts required by Law to be withheld or deducted, an aggregate of 50% of the Seller Escrow Fund, less the sum of (i) any amounts paid out of the Escrow Fund pursuant to Sections 2.08(f) or Article VII and (ii) the aggregate dollar amount of any Unresolved Claims, in accordance with the procedures set forth in Section 2.10(e); provided that, if the aggregate dollar amount of any Unresolved Claims plus any amounts previously paid out of the Escrow Fund pursuant to Section 2.08(f) and Article VII would exceed 50% of the Escrow Fund and Earnout Holdback Amount then on deposit held by Parent, the aggregate amount of the then remaining Escrow Amount shall be retained in the Escrow AccountFund.
(c) On the date that is two years after the Closing Date, including the Escrow Agent shall pay to those Stockholders who were entitled to receive a Closing Payment, in each case less any earnings thereon. Any dispute between amounts required by Law to be withheld or deducted, the parties regarding remainder of the validity or Escrow Fund, less the aggregate dollar amount of any damagesRetained Amounts, awardsif any, in accordance with the procedures set forth in Section 2,10(e).
(d) The aggregate dollar amount of funds retained under Section 2.10(b) or settlements Section 2.10(c) related to a properly asserted Unresolved Claim shall remain in the Escrow Fund until Final Resolution of claims such Unresolved Claim, and upon such Final Resolution any remaining balance of the Retained Amount for such Unresolved Claim, after application of such Retained Amount to pay to Parent any amounts required to be paid pursuant to Final Resolution of such Unresolved Claim, shall be submitted promptly paid to a panel the former holders of arbitratorsCompany Capital Stock in accordance with their Applicable Percentages, one selected in each case less any amounts required by Purchaser, one selected by Seller, and a third Law to be selected by the two arbitrators selected by Purchaser withheld or deducted.
(e) Payments pursuant to Section 2.10(b) and Seller, the findings of a majority of which arbitrators 2.10(c) shall be binding upon made in the parties.following manner:
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay To the extent the amounts to be distributed pursuant to Section 2.10(b) or settle 2.10(c) represent the Escrow Deposit, 32% of such claim or demand or amounts shall be distributed to holders of Company Common Stock, pro rata, in accordance with their Applicable Percentages, and 68% of such amounts shall be distributed to the holders of Company Series A Preferred, pro rata, in accordance with their Applicable Percentages; and
(ii) employ counsel acceptable To the extent there are any other amounts to Purchaserbe distributed pursuant to 2.10(c), at the Seller’s expenseother than as set forth above, such amounts shall be distributed 32% to defend any such claim or demand asserted against the Purchaserholders of Company Common Stock, so long as the Purchaser is not jeopardized pro rata, in accordance with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchasertheir Applicable Percentages, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available 68% to the Seller or its agents all records and other materials holders of Company Series A Preferred, pro rata, in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimaccordance with their Applicable Percentages.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At the two LLC Purchase Agreements Effective Time, in accordance with the terms of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account agreement (the “Escrow AccountAgreement”), substantially in the form of Exhibit D annexed hereto, Parent shall deliver (i) with The Huntington National Bankto the Escrow Agent, a national banking corporation Merger Consideration consisting of fifteen percent (15%) of the total number of shares of capital stock of the Company constituting the Company Stockholder Consideration, which shall be deposited into escrow from the Company Stockholder Consideration issuable to the Stockholder in shares of Parent Series C Preferred Stock (the “Escrow AgentShares”), pursuant ; and (ii) to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose stockholders of securing Seller’s and the Company’s representations and warranties made to , the Purchaser in Article III hereofremaining Merger Consideration (the “Non-Escrow Shares”). The Escrow Agent Shares shall maintain be available to secure any claims that may arise with respect to the representations, warranties, covenants or indemnification obligations of the Stockholder and the Company pursuant to this Agreement during the escrow period (“Escrow Period”) of twelve (12) months following the Closing Date. In addition, to the extent the Parent or the Company obtains a new preliminary economic report of the Copper King Project (the “New Report”) during the Escrow Account Period, and the New Report shows a lower economic value for a period of nine months. During such periodthe Copper King Project then that economic value shown in that certain preliminary economic report on the Copper King Project dated August 24, if, as a direct result of a material misrepresentation or breach of warranty 2012 and undertaken by Seller made to Mine Development Associates (the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims“MDA Report”), then the Escrow Agent shallShares shall serve to reimburse the Parent for such decline in value, after satisfaction by the forfeiture of such shares, in accordance with the provision valuation of paragraph 2.2.3 hereof, pay from the such Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit Shares set forth in the Escrow AccountAgreement. In no event shall the indemnification obligations of the Stockholder under this Agreement exceed the Escrow Shares. The Escrow Shares shall not be available for sale, including any earnings thereon. Any dispute between the parties regarding the validity transfer or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected other disposition by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by Stockholder during the Escrow Agent to PurchaserPeriod.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Sources: Merger Agreement (Dataram Corp)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain hold the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser Deposit in Article III hereof, Purchaser becomes liable for escrow and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction shall dispose of the provision of paragraph 2.2.3 hereof, pay from Deposit only in accordance with the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the provisions:
a. Escrow Agent shall pay deliver the Deposit to Sellers or Buyer, as the Seller case may be, as follows:
(i) to Sellers, upon completion of the amount then on deposit Closing; or
(ii) to Sellers, after receipt of Sellers’ demand in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof Sellers certify either that (“Escrow Notice”A) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller Buyer has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser defaulted under this Agreement, or (B) this Agreement has been otherwise terminated or cancelled, and Sellers are thereby entitled to receive the Seller Deposit; but Escrow Agent shall not honor Sellers’ demand until more than ten (10) days after Escrow Agent has been given a copy of Sellers’ demand to Buyer, nor thereafter if Escrow Agent receives a Notice of Objection (defined below) from Buyer within such ten (10) day period; or
(iii) to Buyer, after receipt of Buyer's demand in which Buyer certifies either that (A) Sellers have defaulted under this Agreement, or (B) this Agreement has been otherwise terminated or cancelled, and Buyer is thereby entitled to receive the Deposit; but Escrow Agent shall not honor Buyer's demand until more than ten (10) days after Escrow Agent has given a copy of Buyer's demand to Sellers, nor thereafter if Escrow Agent receives a Notice of Objection (defined below) from Sellers within such ten (10) day period.
b. Upon delivery of the Deposit, Escrow Agent shall be relieved of all liability hereunder and with respect to the Deposit. Escrow Agent shall deliver the Deposit, at the election of the party entitled to receive the same, by (i) promptly pay or settle a good, unendorsed certified check of Escrow Agent payable to the order of such claim or demand or party, (ii) employ counsel acceptable an unendorsed official bank or cashier's check payable to Purchaserthe order of such party, at or (iii) a bank wire transfer of immediately available funds to an account designated by such party.
c. Upon receipt of a written demand from Sellers or Buyer under Section 16, Escrow Agent shall send a copy of such demand to the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defenseother party. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty Within ten (2010) days after the date of receiving same, but not thereafter, the applicable Escrow Notice other party may object to delivery of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available Deposit to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required party making such demand by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent giving a notice of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.objection (a "
Appears in 1 contract
Sources: Purchase and Sale Agreement
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on On the Closing Date, Buyer shall deposit in escrow with the Escrow Agent the Escrow Amount, solely for the purpose, and to the extent required, to satisfy Seller’s indemnification and payment obligations with respect to Taxes set forth in the first and second sentences of Section 2.5 and payable by Seller in connection with sale of the Acquired Shares, provided that if such Seller’s obligations exceed at any time the Escrow Amount, Seller will be deposited liable for any difference. The Escrow Amount shall be held by the Escrow Agent in an interest-bearing escrow account (the “Escrow Account”) in accordance with The Huntington National Bankthe terms and provisions of the Escrow Agreement. Buyer and Seller shall each pay 50% (fifty percent) of any fees and expenses payable to the Escrow Agent pursuant to the Escrow Agreement. Within 15 (fifteen) Business Days after Closing, a national banking corporation upon determination by Seller, as set forth in Section 2.5, of the amount due in accordance with the Mexican Income Tax Law (Ley del Impuesto Sobre la Renta) (the “Escrow AgentRequired Tax Payment”), which determination will be promptly communicated by Seller to Buyer, each of Buyer and Seller agrees, and assumes the obligation, to issue a joint written notice to the Escrow Agent pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and Escrow Agreement instructing the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain to pay no later than the 15th (fifteenth) Business Day after the Closing Date (i) the Required Tax Payment from the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for Mexican Internal Revenue Service (Servicio de Administración Tributaria) and pays any monetary damages, awards, or settlements of claims, then (ii) the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit remaining funds in the Escrow Account, including any earnings thereonif any, to Seller. Any dispute between For the parties regarding the validity or amount avoidance of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Sellerdoubt, the findings of a majority of which arbitrators Escrow Account shall not be binding upon the parties.
2.3.2 In order for Purchaser used to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of satisfy any third party claim liability or demand which may result obligation under Article VIII or elsewhere in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At the two LLC Purchase Agreements Effective Time, ten percent (10%) of the Cash Consideration shallsum of the Merger Shares and Stock Options (collectively, the "Escrow Deposit") shall be delivered to the Escrow Agent, to be held for a period ending on the Closing Escrow Release Date, except the Escrow Deposit may be deposited in an interest-bearing escrow account (withheld after the “Escrow Account”) with The Huntington National Bank, Release Date to satisfy claims for indemnification which are the subject to a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Claims Notice delivered prior to the Purchaser in Article III hereofEscrow Release Date. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims Deposit shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, held and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid disbursed by the Escrow Agent to Purchaser.
2.3.3 If in accordance with an Escrow Agreement in the Purchaser notifies form attached hereto as Exhibit C. For the Seller purpose of any claim against the Escrow Deposit hereunder, the value per share of the Escrow Deposit shall be deemed to be the Closing Market Price (less the exercise price therefore with respect to the Stock Options). Except with respect to claims based on fraud committed by the Company or demand the Equityholders, which are not limited, if the Closing occurs, Parent agrees that Parent's sole and exclusive remedy and recourse against the Equityholders under this Agreement for Losses attributable to any inaccuracy or breach of any representation or warranty of the Company or the Equityholders which is contained in this Agreement or the Letter of Transmittal or any Schedule or certificate delivered pursuant hereto or thereto other than Losses arising under Section 13.5 and from breaches of the representations and warranties set forth in Sections 3.4, 3.9 and 3.11 (the "Covered Representations") shall be against the Escrow Deposit held in escrow pursuant to paragraph 2.3.2 abovethe Escrow Agreement. Notwithstanding anything herein to the contrary, except as provided under Section 13.5 and if such claim or demand relates to a claim or demand asserted by a third party against in the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreementnext sentences, the Seller shall either (i) promptly pay or settle such claim or demand or the Equityholders shall have no liability for indemnification pursuant to this Article XII until the aggregate Losses to the Parent and the Company exceed $25,000 (the "Basket"), at which point the Equityholders shall be liable for the full amount of all Losses, and (ii) employ counsel acceptable the maximum aggregate liability of the Equityholders hereunder shall not exceed the value (determined by reference to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against Closing Market Price) of the Purchaser, so long as Escrow Deposit (the Purchaser is not jeopardized with "Maximum Indemnification"). With respect to such defense. The Purchaser shall have the right to cooperate indemnification claims arising under Section 12.1(i) from any inaccuracy in the defense or breach of any such claim Covered Representations, or demand. The Seller for Sections 12.1(ii), (iii) or (iv) of this Article XII, neither the Basket nor the Maximum Indemnification limitation shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimapply.
Appears in 1 contract
Sources: Merger Agreement (Go2net Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited The funds held in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account shall serve as security for a period Sellers’ indemnification obligations hereunder and shall be released upon the Escrow Agent’s receipt of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by joint written instructions from the Buyer and the Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awardsRepresentative, or settlements as otherwise provided under the terms of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”)Agreement. On the first day one-year anniversary of the tenth month following the Closing Date, the Seller Representative and the Buyer shall issue joint written instructions to the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by instructing the Escrow Agent to Purchaser.
2.3.3 If release all funds in the Purchaser notifies Escrow Account in excess of the sum of the amount of actual Losses alleged in good faith in any unresolved claim for indemnification, to the Company, as disbursing agent for the Optionholders, the Warrantholder, and the Seller of any claim or demand pursuant Representative as disbursing agent for the Sellers, in proportion to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for amounts in which the Seller must indemnify or hold harmless Sellers, the Purchaser under this AgreementCompany on behalf of the Optionholders and the Warrantholder received funds on the Closing Date. If there are any remaining claims for indemnification, the Seller Representative and the Buyer shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable issue joint written instructions to Purchaser, at the Seller’s expense, Escrow Agent to defend release any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate remaining funds in the defense of any Escrow Account when such claim or demand. The Seller claims are resolved, which funds shall notify be released to the Purchaser in writingCompany, within twenty (20) days after as disbursing agent for the date of Optionholders, the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the PurchaserWarrantholder, and the Purchaser is not jeopardized by such defenseSeller Representative as disbursing agent for the Sellers, in proportion to the amounts in which the Sellers, the Purchaser shall not settle or compromise such claim or demandCompany on behalf of the Optionholders and the Warrantholder received funds on the Closing Date. The Purchaser and Company shall make available disburse any amounts it receives from the Escrow Agent in its capacity as disbursing agent for the Optionholders, including earnings on the escrowed funds, to the Seller or its agents all records and other materials such Optionholders in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any percentages set forth on Schedule 1.3(c)(as such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller schedule may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimbe updated at Closing).
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and At the two LLC Purchase Agreements of the Cash Consideration shallClosing, on the Closing Date, Buyer will deposit or cause to be deposited in an interest-bearing escrow account (the “Escrow Account”) Amounts by wire transfer of immediately available funds with The Huntington National Bank, a national banking corporation Wilmington Trust (the “Escrow Agent”), pursuant with such funds to an escrow agreement reasonably satisfactory be held by the Escrow Agent in two (2) segregated, non-interest bearing accounts. The Adjustment Escrow Amount will be held in a separate account (the “Adjustment Escrow Account”) to Purchaser and Seller, for secure the purpose obligations of securing Seller’s and Seller under Section 2.3. The Indemnity Escrow Amount shall be held in a separate account (the Company’s representations and warranties made “Indemnity Escrow Account”) to secure the Purchaser in Article III hereofindemnification obligations of Seller under ARTICLE VIII. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, ifAmounts, as a direct result of a material misrepresentation or breach of warranty by Seller made adjusted pursuant to the Purchaser in Article III terms hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then shall only be released by the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from pursuant to joint written instructions executed by Buyer and Seller pursuant to this Agreement and the Escrow AccountAgreement or by a final, to the Purchaser, the amount non-appealable order of any such damages, awards, or settlements (“a court of competent jurisdiction. The Adjustment Escrow Payment”Amount shall be distributed in accordance with Section 2.3(g). On the first day date that is eighteen (18) months after the Closing Date (the “Indemnity Escrow Termination Date”), Buyer and Seller shall execute and deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse to an account or accounts designated by Seller, an amount equal to (a) all amounts then remaining in the Indemnity Escrow Account, minus (b) the aggregate amount of any claims for indemnifiable Losses properly and timely made by Buyer pursuant to ARTICLE VIII prior to such date that have yet to be paid, are in dispute or as to which any Third-Party Claims are pending (in each case, “Pending Claims”). The applicable amount of any Pending Claims as of the tenth month following Indemnity Escrow Termination Date shall continue to be held by the Closing DateEscrow Agent in the Indemnity Escrow Account until such time as each such Pending Claim is resolved, at which time the amount of such Pending Claim shall be disbursed to Seller and/or Buyer from the Indemnity Escrow Account in accordance with the resolution of such Pending Claim. Within five (5) days after the resolution of each Pending Claim, Buyer and Seller shall deliver joint written instructions to the Escrow Agent to disburse the amount remaining in the Indemnity Escrow Account with respect to such Pending Claim in accordance with the resolutions of such Pending Claim. The parties hereto agree that any fees of the Escrow Agent shall pay to be borne equally by Buyer and Seller. Such fees that are payable by Seller on the Seller Closing Date shall be deducted from the amount then on deposit in the Escrow Account, including any earnings thereonpayable by Buyer pursuant to Section 3.2. Any dispute As between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser Buyer and Seller, in the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice event of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim discrepancy between this Section 2.4 and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller this Section 2.4 shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimcontrol.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (i) $75,000,000 (the “Escrow Amount”, and Seller agree that $400,000 allocated among this together with all accrued interest thereon and any proceeds thereof less the fees and expenses of the Escrow and Payments Agent in its capacity as escrow agent, the “Escrow Fund”) shall be deposited by Parent at the Closing, by wire transfer of immediately available funds, into escrow pursuant to the terms of the applicable Escrow and Payments Agreement.
(ii) The Escrow Fund shall be held for the period commencing on the Closing Date and ending on February 28, 2022 (the “Escrow Period”) (subject to extension under the applicable Escrow and Payments Agreement for pending claims) and used exclusively for the purpose of satisfying indemnification claims pursuant to ARTICLE XII, the obligations set forth in Section 3.07, and the two LLC Purchase Agreements amount of any Company Transaction Expenses that are not reflected in the Estimated Statement or otherwise paid at the Closing, and shall be held and released pursuant to the terms of the Cash Consideration shallapplicable Escrow and Payments Agreement, Section 3.07 and ARTICLE XII.
(iii) Within three (3) Business Days after the date on which the payment contemplated by Section 3.07(f) is required to be made, Parent and the Stockholders’ Representative shall issue joint written instructions to the Escrow and Payments Agent to distribute to the Key Stockholders in accordance with the terms of this Agreement an amount equal to the excess of the then remaining balance of the Escrow Fund over $50,000,000.
(iv) Within three (3) Business Days after the first anniversary of the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s Parent and the Company’s representations and warranties made Stockholders’ Representative shall issue joint written instructions to the Purchaser Escrow and Payments Agent to distribute to the Key Stockholders in Article III hereof. The Escrow Agent shall maintain accordance with the terms of this Agreement an amount equal to the excess of the then remaining balance of the Escrow Account for a period Fund over $25,000,000 plus the amount of nine months. During such periodPending Indemnity Escrow Claims.
(v) Within three (3) Business Days after the completion of the Escrow Period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made Parent and the Stockholders’ Representative shall issue joint written instructions to the Purchaser Escrow and Payments Agent to distribute to the Key Stockholders in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements accordance with the terms of claims, this Agreement an amount equal to (A) the then remaining balance of the Escrow Agent shall, after satisfaction Fund less (B) the amount of the provision of paragraph 2.2.3 hereof, pay all Losses for which Parent has delivered a Claim Notice for indemnification to be satisfied from the Escrow Account, Fund in accordance with Section 12.02(b) prior to the Purchaserend of the Escrow Period, and which claims have not been finally determined pursuant to the terms of this Agreement and the applicable Escrow and Payments Agreement as of such date (“Pending Indemnity Escrow Claims”). Promptly following the final determination of each Pending Indemnity Escrow Claim, until there is no remaining balance of the Escrow Fund, Parent and the Stockholders’ Representative shall issue joint written instructions to the Escrow and Payments Agent to distribute to the Key Stockholders in accordance with the terms of this Agreement an amount equal to the excess (if any) of (x) the amount of any such damages, awards, or settlements (“Escrow Payment”). On Losses for which Parent had delivered the first day of the tenth month following the Closing Date, applicable Claim Notice for indemnification to be satisfied from the Escrow Agent shall pay to the Seller Fund in accordance with ARTICLE XII and (y) the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted (if any) finally awarded to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized Parent with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such underlying claim.
Appears in 1 contract
Escrow. 2.3.1 Purchaser (a) Escrow Amount shall be held by the Escrow Agent in the Escrow Account until paid in accordance with Section 2.5 and Seller agree that $400,000 allocated among this Section 9 and the two LLC Purchase Agreements of Escrow Agreement. From and after the Cash Consideration shallClosing, on the Closing Date, Escrow Amount will be deposited available to compensate the Buyer Indemnified Parties for Losses in an interest-bearing escrow account (the “Escrow Account”) accordance with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s this Section 9 and the Company’s representations and warranties made to the Purchaser in Article III hereofEscrow Agreement. The Escrow Agent Agreement shall maintain provide that following the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Termination Date, the Escrow Agent shall pay to the Seller Sellers, in accordance with the amount then on deposit in Allocation Schedule, the remainder of the Escrow AccountFunds no later than five (5) Business Days after the expiration of the Escrow Termination Date, including other than such portion of the Escrow Funds that is subject to pending but unresolved or unsatisfied Liability Claims specified in any earnings thereonClaim Notice (the “Retained Amounts”). Any dispute between the parties regarding the validity or amount of The Escrow Agreement shall provide that any damages, awards, or settlements of claims Retained Amounts shall be submitted released to a panel the Sellers, in accordance with the Allocation Schedule, no later than five (5) Business Days after the date of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim final resolution and payment of such the outstanding claim is made by Purchaserfor indemnification. In the event of a conflict between the Escrow Agreement and this Agreement, such sums paid the terms of this Agreement shall qualify as an govern. The fees, costs and expenses of the Escrow Payment and Agent shall be paid 50% by the Buyer and 50% by the Sellers.
(b) Any portion of the Escrow Funds disbursed by the Escrow Agent to Purchaser.
2.3.3 If compensate the Purchaser notifies Buyer Indemnified Parties for Losses in accordance with Section 9 or to be paid to the Seller Sellers following the Escrow Termination Date in accordance with Section 9.9(a) shall be made in a ratio of Parent Stock to cash equal to the ratio of the Escrow Stock Amount to the Escrow Cash Amount deposited with the Escrow Agent at Closing. For purposes of determining the value of any claim or demand distributions made pursuant to paragraph 2.3.2 abovethis Section 9.9(b), and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date shares of the applicable Escrow Notice Parent Stock will be valued on the basis of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimClosing Stock Value.
Appears in 1 contract
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among (a) Notwithstanding anything to the contrary contained in this and the two LLC Purchase Agreements of the Cash Consideration shallArticle II, on the Closing Date, there shall be deducted from the Merger Consideration payable pursuant to Sections 2.01(b)(iii) and (iv), on a pro rata basis, the sum of Twenty Million Dollars ($20,000,000) (the "Escrowed Funds"), -------------- which sum will be deposited in into an interest-interest bearing escrow account account, to be held by The Chase Manhattan Bank (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “"Escrow Agent”), ") pursuant to an escrow agreement reasonably satisfactory ------------ to Purchaser be entered into on the Closing Date among Parent, the Surviving Corporation, the Holders, the Holder Representatives and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent in substantially the form annexed hereto as Exhibit 2.05(a) (the "Escrow Agreement"). The ---------------- ----------------- Escrowed Funds will be deposited in accordance with the Cash/Stock Ratio (i.e., 55% of the Escrowed Funds will be cash and 45% of the Escrowed Funds will be shares of Parent Common Stock or Parent Preferred Stock, as the case may be, together with duly endorsed blank stock powers) valued based on the Common Stock Stated Value or the Preferred Stock Stated Value, respectively, as indicated in Section 2.01(a)(ii). In addition, any shares of Parent Common Stock or Parent Preferred Stock, as the case may be, issued from time to time after the Closing Date in respect of the shares of Parent Common Stock or Parent Preferred Stock included in the Escrowed Funds by virtue of any stock split, stock combination, stock dividend or reclassification of shares, reorganization, recapitalization or similar change shall be immediately deposited into the escrow account, together with duly endorsed blank stock powers, and shall, after satisfaction upon deposit, be deemed to be part of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, Escrowed Funds for all purposes hereunder. The Escrowed Funds will secure (x) any adjustments to the PurchaserMerger Consideration as provided for in Section 2.04, and (y) the Holders' indemnification obligations under Articles IX and XI of this Agreement. The Escrowed Funds will be withdrawn or released as follows:
(i) upon the final determination of the Shareholder Equity in accordance with Section 2.04, (A) if Parent is entitled to receive any adjustment of the Merger Consideration, the amount of such adjustment shall be withdrawn from the Escrowed Funds in accordance with Section 2.04, and paid to Parent, within five (5) days after such final determination, and (B) there shall be withdrawn from the Escrowed Funds the amounts necessary to pay any fees payable by the Holders to E&Y and the Independent Firm, as applicable, pursuant to Section 2.04(a)(v), such amounts to be paid directly to E&Y and the Independent Firm, as applicable;
(ii) following the final determination of the Shareholder Equity in accordance with Section 2.04 and the withdrawal, if any, of Escrowed Funds as provided in clause (i) above, a portion of the Escrowed Funds will be released to the Holders (in accordance with the Cash/Stock Ratio) such that the sum of $15,000,000 (with the value of the Parent Common Stock or the Parent Preferred Stock, as the case may be, to be based on the Common Stock Stated Value or the Preferred Stock Stated Value, respectively) will remain as Escrowed Funds; provided, however, that if less than $15,000,000 (valued in the manner provided above) shall remain after the withdrawal as provided in clause (i) above, each Holder, within five (5) days after such withdrawal, shall deposit such additional cash and, at each Holder's option, shares of Parent Common Stock or Parent Preferred Stock, as the case may be (valued in the manner provided above, but not to exceed forty-five percent (45%) of the amount required to be deposited) as needed to cause the Escrowed Funds to be $15,000,000 (such deposit to be made by the Holders, pro rata, based on the respective portion of the Merger Consideration that each Holder is entitled to receive under Sections 2.01(b)(iii) and (iv)); and
(iii) the remaining Escrowed Funds (including any undistributed interest earned thereon), if any, will be released to the Holders on the first (1st) anniversary of the Closing Date; provided, however, that if prior to such first (1st) -------- ------- anniversary Parent or the Surviving Corporation shall give notice of a claim or claims for indemnification pursuant to Articles IX or XI of this Agreement, then: (A) if any such damagesclaim is resolved prior to such first (1st) anniversary, awardsby judicial determination or otherwise, any sums due Parent or settlements the Surviving Corporation shall be withdrawn from the Escrowed Funds and paid to Parent or the Surviving Corporation, within five (“Escrow Payment”5) days after such resolution; or (B) if any such claim is not resolved prior to such first (1st) anniversary, the amount of such claim, plus the reasonably estimated amount of legal fees and disbursements to be incurred in connection therewith, shall be retained as Escrowed Funds until such claim is resolved. Any amounts to be withdrawn or to be retained pursuant to clause (A) or (B) above shall be withdrawn or retained, respectively, as follows: (x) if such claim is a Third Party Claim (as defined in Section 9.06(b). On ), first from Escrowed Funds consisting of cash, and thereafter from shares of Parent Common Stock or Parent Preferred Stock, as the first day case may be, and (y) if such claim is not a Third Party Claim, in accordance with the Cash/Stock Ratio or, at the option of the tenth month following Holder Representatives, in cash. For purposes of determining the number of shares of Parent Common Stock (if applicable) to be withdrawn or to be retained as Escrowed Funds under this clause (iii), the Parent Common Stock shall be deemed to have a value equal to the Common Stock Stated Value. For purposes of determining the number of shares of Parent Preferred Stock (if applicable) to be withdrawn or to be retained as Escrowed Funds under this clause (iii), the Parent Preferred Stock shall be deemed to have a value equal to the Preferred Stock Stated Value. Any Escrowed Funds released to the Holders shall be paid to the Holders, pro rata, based on the respective portion of the Merger Consideration that each Holder is entitled to receive pursuant to Section 2.01(b)(iii) and (iv), it being agreed that no Escrowed Funds shall be released to any Holder in respect of the Company Redeemable Preferred Stock.
(b) In addition, notwithstanding anything to the contrary contained in this Article II, on the Closing Date, there shall be deducted from the Escrow Agent shall pay Merger Consideration payable pursuant to the Seller Sections 2.01(b)(iii) and (iv), on a pro rata --- ---- basis, an additional sum, in cash, in the amount then on deposit (the "Additional Escrowed ---------- -------- Funds") specified in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third letter agreement to be selected by entered into on the two arbitrators selected by Purchaser and SellerClosing Date ----- among Parent, the findings of a majority of which arbitrators shall Surviving Corporation, the Holders and the Holder Representatives in substantially the form annexed hereto as Exhibit 2.05(b)(i) ------------------- (the "Letter Agreement"). The Additional Escrowed Funds will be binding upon the parties.
2.3.2 In order for Purchaser deposited into ----------------- an interest bearing escrow account to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid held by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 abovean escrow agreement to be entered into on the Closing Date among Parent, the Surviving Corporation, the Holders, the Holder Representatives and the Escrow Agent in substantially the form annexed hereto as Exhibit 2.05(b)(ii) (the ------------------- "Additional Escrow Agreement", and, together with the Escrow Agreement, ----------------------------- collectively, the "Escrow Agreements"), and if such claim will be withdrawn or demand relates to a claim or demand asserted by a third party against released in ------------------ accordance with the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, Letter Agreement and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimAdditional Escrow Agreement.
Appears in 1 contract
Escrow. 2.3.1 (a) Prior to the Closing, the Seller and the Purchaser shall enter into an escrow agreement with a bank or trust company selected by the Purchaser and reasonably acceptable to the Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”) in a form reasonably acceptable to the Purchaser and the Seller (the “Escrow Agreement”). At the Closing, pursuant (i) the Purchaser shall deposit an amount in cash equal to $10,000,000 (ten million dollars) (the “Indemnity Escrow Amount”) with the Escrow Agent in accordance with Section 2.7 to be held in an escrow agreement reasonably satisfactory to Purchaser and Seller, account by the Escrow Agent for the purpose of securing Seller’s indemnification obligations of the Seller set forth in Article IX (the “Indemnity Escrow Account”) and the Company’s representations and warranties made to (ii) the Purchaser shall deposit an amount in Article III hereof. The cash equal to $25,000,000 (twenty five million dollars) (the “Adjustment Escrow Agent shall maintain Amount” and, together with the Indemnity Escrow Account for a period of nine months. During such periodAmount, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then “Escrow Amounts”) with the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third accordance with Section 2.7 to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to held in an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid escrow account by the Escrow Agent to Purchaser.
2.3.3 If for the Purchaser notifies purpose of securing payment obligations of the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and (if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (iany) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defensepost-closing adjustments as set forth in Section 2.8 (the “Adjustment Escrow Account” and, together with the Indemnity Escrow Account, the “Escrow Accounts”). The Purchaser Escrowed Cash shall have be held by the right Escrow Agent pursuant to cooperate in the defense terms of the Escrow Agreement. The Escrowed Cash 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 such claim or demand. The Seller creditor of any Party, and shall notify be held and disbursed solely for the Purchaser purposes and in writing, within twenty accordance with the terms of this Agreement and the Escrow Agreement.
(20b) days Within ten (10) Business Days following the date that is fifteen (15) months after the date Closing Date (the “Release Date”), and subject to and in accordance with the terms of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demandAgreement, the Purchaser and Company the Seller shall have no obligation deliver a joint written instruction to do sothe Escrow Agent instructing the Escrow Agent to release to the Seller all remaining funds in the Indemnity Escrow Account that are not subject to a pending Third Party Claim Notice, Claim Notice or Tax Proceeding described in Section 10.2(b) or Section 10.2(c) (with respect to a Straddle Period) and available to be distributed pursuant to the Escrow Agreement. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent Escrowed Cash with respect to the entry of any judgment unless such settlementAdjustment Escrow Account shall be released as specified in Section 2.8(d), compromise Section 2.8(e) or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimSection 2.8(g).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Motorola Solutions, Inc.)
Escrow. 2.3.1 Purchaser At the Closing, the Company shall cause to be deposited, cash and Seller agree that $400,000 allocated among this and shares of BE Stock valued at the two LLC Purchase Agreements of the Cash Consideration shall, on the BE Closing Date, be deposited Price in an interest-bearing aggregate amount equal to One Hundred and Twenty (120%) percent multiplied by the Reference Price, less Fourteen Million Six Hundred Thousand Dollars ($14,600,000) ("the Escrowed Shares"), into an escrow account (the “Escrow Account”"Escrow") to be established with The Huntington National Bank, a national banking corporation an escrow agent (the “"Escrow Agent”)") selected by the Company, reasonably acceptable to the Shareholders, pursuant to an escrow agreement reasonably satisfactory to Purchaser agreement, dated the Effective Date, substantially in the form of Exhibit C-1 (the "Escrow Agreement"). The Escrow Agent will hold the cash and Seller, Escrowed Shares as provided by the Escrow Agreement as security for the purpose obligations of securing Seller’s the Shareholders under Sections 2.2 and the Company’s representations and warranties made to the Purchaser in Article III 11.2 hereof. The Escrow Agent Agreement shall maintain provide for the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction distribution of the provision of paragraph 2.2.3 hereof, pay cash and Escrowed Shares (or proceeds from the sale thereof) from the Escrow Accountpursuant to Sections 2.2(a), (b), (c) and (d), subject to claims of the Purchaser, Company under Section 11.2. Following the amount initial distribution from Escrow of any such damages, awardscash and Escrowed Shares, or settlements (“Escrow Payment”proceeds from the sale thereof, pursuant to Section 2.2(a). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to hold the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awardsremaining Escrowed Shares, or settlements proceeds therefrom, equal to ten (10%) of claims shall be submitted to a panel of arbitratorsthe Net Consideration, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend further distribution in good faith third party claims as hereinafter providedaccordance with Sections 2.2(b), (c) and (d). If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by PurchaserAll interest, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim dividends or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized other amounts earned with respect to such defensethe proceeds from the Escrowed Shares (excluding the Escrowed Shares that are to be distributed to the Company under Section 2.2(a)(ii)) shall accrue to the benefit of the Shareholders. The Purchaser Shareholder Representative shall have the right to cooperate direct the Escrow Agent with respect to the investment of all cash proceeds in the defense Escrow as and to the extent permitted in the Escrow Agreement. Any fees from and after the Effective Date for maintaining the Escrow shall be paid from earnings on all amounts in the Escrow, and if either is not practical or if necessary, paid directly by the Shareholders. After payment or provision for all Escrow expenses, the investment earnings may be, from time to time, withdrawn from the Escrow by the Shareholder's Representative for the benefit of any such claim or demandthe Shareholders. The Seller Shareholder's Representative shall notify give prompt notice to the Purchaser Company of its intent to make any withdrawal from the Escrow Account and the Company agrees that it shall issue any joint instruction that may be necessary to authorize the Escrow Agent to release such amounts to the Shareholders. No Escrowed Shares, or proceeds from the sale thereof, shall be distributed to Shareholders' Representative or any Shareholder except pursuant to the Escrow Agreement in writing, within twenty (20) days after compliance with the date terms and conditions of this Agreement. With respect to any Escrowed Shares released from the applicable Escrow Notice of the Seller’s decision to either pay the Shareholders, Shareholders' Representative or the Company, such claim or demand or defend in good faith any such third party claim or demandshares shall be valued at the BE Closing Price without reference to the stock's then actual market price. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the PurchaserThe Shareholders shall be responsible for, and without using any assets in the Purchaser is not jeopardized by such defenseEscrow (other than interest, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records dividends and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demandearnings) shall pay when due, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability Taxes imposed upon or arising out from the Escrowed Shares. The Shareholders and Company agree that all Escrowed Shares shall be sold by the Escrow Agent at the earliest opportunity and the proceeds from the sale thereof shall be substituted in place of the Escrowed Shares. Accordingly, the Shareholders hereby irrevocably authorize and direct the Escrow Agent and any agents or representatives of the Company to take any and all actions necessary or appropriate, in such claimPerson's sole and absolute discretion, to effect sales of Escrowed Shares on such terms and conditions (and only on such terms and conditions), and at such times and utilizing such underwriters and brokers, as shall be directed and approved by the Company in a written notice (a "Sale Notice") to be delivered to the Escrow Agent.
Appears in 1 contract
Sources: Share Purchase and Sale Agreement (Be Aerospace Inc)
Escrow. 2.3.1 Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements of the Cash Consideration shall, on the Closing Date, be deposited in an interest-bearing escrow account (the “Escrow Account”) with The Huntington National Bank, a national banking corporation (the “Escrow Agent”), pursuant to an escrow agreement reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made Pursuant to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing DateAgreement, the Escrow Agent shall pay to the Seller the amount then on deposit in Buyer from the Escrow Account, including Amount (i) any earnings thereon. Any dispute between amount to be paid to Buyer pursuant to Section 1.3 arising from the parties regarding determination of the validity or definitive Closing Working Capital; and (ii) the amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected indemnification obligation due and payable by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2this Agreement. hereof (“Escrow Notice”) subject The parties hereby covenant to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by direct the Escrow Agent to Purchaser.distribute the Escrow Amount under the Escrow Agreement as follows:
2.3.3 If (i) An amount equal to the Purchaser notifies amount, if any, determined to be due to Buyer upon determination of the Seller of any claim or demand definitive Closing Working Capital pursuant to paragraph 2.3.2 aboveSection 1.3 (plus interest earned on said funds from the Escrow), and shall be distributed to Buyer within three (3) business days subsequent to the date that the definitive Closing Working Capital is determined pursuant to Section 1.3;
(ii) An amount equal to one-half (1/2) of the Escrow Amount less the amount, if such claim or demand relates any, determined to a claim or demand asserted by a third party against be due to Buyer upon determination of the Purchaser which definitive Closing Working Capital pursuant to Section 1.3 (plus interest earned on said funds from the Escrow), shall be distributed to Seller within three (3) business days subsequent to the date that the definitive Closing Working Capital is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser determined pursuant to Section 1.3;
(iii) An amount necessary to satisfy Seller’s indemnification claims under this Agreement, if any, shall be distributed to Buyer as said claims are finally resolved and are due and payable by Seller according to the indemnification terms of this Agreement;
(iv) All remaining funds in the Escrow on December 24, 2007 (plus interest earned on said funds from the Escrow), less the amount of pending indemnification claims made by Buyer against said funds on or before December 24, 2007 in accordance with the provisions of this Agreement, shall be distributed to Seller within three (3) business days subsequent to December 24, 2007; and
(v) Any funds remaining in the Escrow resulting from any pending indemnification claims made by Buyer on or prior to December 24, 2007 shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable be distributed to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect party entitled to such defense. The Purchaser shall have funds (plus interest earned on said funds from the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20Escrow) days after the date upon final resolution of the applicable Escrow Notice indemnification claim within three (3) business days of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent final resolution of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimin accordance with this Agreement.
Appears in 1 contract
Escrow. 2.3.1 10.1 The Purchaser shall on the Closing Date pay the Deposits into specified accounts, one for the General Deposits (the “General Escrow Account”) and one for the Swedish Special Deposit, (the “Special Escrow Account”) in the name of the Seller with SEB (the “Bank”). Withdrawals from the Escrow Accounts shall only be possible after a joint written instruction to the Bank signed by the Seller and the Purchaser. All interest on balances on the Swedish Deposits in the Escrow Account shall belong to the Seller.
10.2 Eighteen (18) months after Closing Date, twenty five (25) per cent of the General Deposits, less the aggregate of (x) the amount of any General Deposit paid and transferred out of the General Escrow Account to the Purchaser or the Liko North American Purchaser prior thereto and (y) the amount of any claim(s) against the Seller or the Liko North American Seller that are then in dispute or pending, shall be released to the Seller through joint written instructions by the Purchaser and Seller agree that $400,000 allocated among this and the two LLC Purchase Agreements Seller. The remaining amount of the Cash Consideration shallGeneral Deposits, less the amount of any claim(s) against the Seller or the Liko North American Seller that are then in dispute or pending, shall be released on the twenty fourth (24th) month anniversary of the Closing Date, to the Seller through joint written instructions by the Purchaser and the Seller. Notwithstanding the foregoing, an amount of SEK 6,628,000 shall be deposited withheld from such release if the Dismissal Claim is still pending at such time and such withheld amount shall be retained in the General Escrow Account until such claim shall have time-barred pursuant to Section 8.3.2 hereof.
10.3 The Swedish Special Deposit shall be released to the Seller through joint written instructions by the Purchaser and the Seller on the date when claims for Special Indemnity II have been time-barred pursuant to Section 8.3.2 hereof, provided that the Purchaser has not made any then pending claim under this Agreement against such deposit, in which case only the claimed amount shall be withheld. If the Parties are in dispute involving the Swedish Special Deposit at the time of such deposit’s release pursuant this Section 10.3, the Parties shall be considered to have settled the claim for purposes of the Special Escrow Account if arbitral proceedings to address such claim have not been initiated within four (4) months of the date of release for such deposit.
10.4 After twenty four (24) months from the Closing Date if the Parties (or the parties to the Liko North American Transaction Agreement) are in dispute involving the General Deposits they shall be considered to have settled the claim for purposes of the General Escrow Account if arbitral proceedings to address such claim have not been initiated within twenty eight (28) months of the Closing Date.
10.5 In case an interest-bearing escrow account (arbitral tribunal has made a final award regarding a claim for which an amount corresponding thereto is kept in the “Escrow Account”) with The Huntington National relevant Deposit but the Parties cannot agree jointly to instruct the Bank to release such deposit or parts thereof, either Party may forward the arbitration award to the Bank, a national banking corporation (which shall release such deposit or parts thereof, as the “case may be, to the party so entitled according to the arbitration award. Any remaining parts of the Deposit shall thereafter be released to the Seller upon expiry of the respective times set out in Section 8.3, provided that neither the Purchaser nor the Liko North American Purchaser has notified the Seller of any pending claim relating to the relevant Deposit.
10.6 The Seller shall pledge the General Deposits and the General Escrow Agent”), pursuant Account to an escrow agreement reasonably satisfactory to the Purchaser and Seller, the Liko North American Purchaser as a security for the purpose performance of securing the Seller’s, the Liko North American Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period Founders’ obligations under Section 7 of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, to the Purchaser, the amount of any such damages, awards, or settlements (“Escrow Payment”). On the first day of the tenth month following the Closing Date, the Escrow Agent shall pay to the Seller the amount then on deposit in the Escrow Account, including any earnings thereon. Any dispute between the parties regarding the validity or amount of any damages, awards, or settlements of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (iLiko North American Transaction Agreement and the Escrow Agreement and under the Non-Compete, Non-solicitation and Confidentiality Agreements executed and delivered by the Founders contemporaneously with Closing pursuant to Sections 5.1(ix) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at and the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demandFounder Undertaking. The Seller shall notify pledge the Special Swedish Deposit and the Special Escrow Account to the Purchaser in writing, within twenty (20) days after as a security for the date of the applicable Escrow Notice performance of the Seller’s decision obligation under Section 8.1.2.
10.7 The Seller covenants and agrees to either pay such claim or demand or defend be responsible for the Founders’ obligations in their respective Consulting Agreements to use best efforts in good faith any to strive to achieve the objectives identified in Section 1 of each such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demandConsulting Agreement (“Founders’ Covenant”). The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s sole and exclusive remedy against any breach by any of the Founders of the Founders’ Covenant shall be to recover and retain as liquidated damages the sum of SEK 6,628,000 from the Escrow Account if any of the Founders should breach the Founders’ Covenant. No Founder shall be in breach of its Founder Covenant if he or Company’s possession reasonably required she shall be incapable of performing the consulting services under the Consulting Agreement by it for its use in contesting any third party claim reason of ill health or demand. Whether other incapacity or not the Seller elects to defend any such claim or demandby reason of death.
10.8 The Seller, the Purchaser and Company the Bank shall have no obligation to do so. The Seller may not, without enter into an escrow agreement regarding the prior written consent of Escrow Accounts substantially in the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claimform set forth in Schedule 10.8.
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Sources: Share Sale and Purchase Agreement (Hill-Rom Holdings, Inc.)
Escrow. 2.3.1 (a) At the Closing, the Purchaser and Seller agree that will deposit ten million dollars ($400,000 allocated among this and the two LLC Purchase Agreements 10,000,000) of the Cash Consideration shallPurchase Price (the “Escrow Deposit”), on the Closing Date, be deposited in cash by wire transfer of immediately available funds into an interest-bearing escrow account (the “Escrow Account”) established by the Purchaser and the Seller with The Huntington National Bank, a national banking corporation nationally-recognized bank mutually agreeable to the parties (the “Escrow Agent”), ) pursuant to an escrow agreement in a form reasonably satisfactory to Purchaser and Seller, for the purpose of securing Seller’s and the Company’s representations and warranties made to the Purchaser in Article III hereof. The Escrow Agent shall maintain the Escrow Account for a period of nine months. During such period, if, as a direct result of a material misrepresentation or breach of warranty by Seller made to the Purchaser in Article III hereof, Purchaser becomes liable for and pays any monetary damages, awards, or settlements of claims, then the Escrow Agent shall, after satisfaction of the provision of paragraph 2.2.3 hereof, pay from the Escrow Account, agreeable to the Purchaser, the Seller and the Escrow Agent (the “Escrow Agreement”). The Escrow Deposit, together with any interest and other earnings thereon (collectively, the “Escrow Funds”), will be held during the Escrow Period (as defined below), to serve as a source of recovery for: (i) any Downward Post Closing NWC Adjustment pursuant to Section 2.5(c); and (ii) any indemnifiable Losses determined pursuant to Article X to be owed by the Seller to Purchaser Indemnified Parties under Section 7.2 or Article X. The time period in which Escrow Funds are held in the Escrow Account in accordance with this Section 2.4 and the Escrow Agreement is referred to herein as the “Escrow Period”.
(b) On December 31, 2010, the Escrow Agent shall release to the Seller three million dollars ($3,000,000) of the Escrow Funds, less the amount (if any) by which the aggregate amount of any claims of Purchaser Indemnified Parties under Section 7.2 or Article X that are pending or have been previously paid as of such damages, awards, or settlements date exceed seven million dollars ($7,000,000) (the “Initial Escrow PaymentRelease”). On the first day Upon resolution of any such claim(s) in favor of the tenth month following Seller in accordance with Article X, the Escrow Funds (if any) that were not released in the Initial Escrow Release due to such claim(s) being pending shall be released by the Escrow Agent to the Seller pursuant to the terms and conditions of the Escrow Agreement.
(c) As soon as reasonably practicable after the one (1) year anniversary of the Closing Date, the Escrow Agent shall pay release to the Seller the amount any Escrow Funds then on deposit remaining in the Escrow Account, including any earnings thereon. Any dispute between less the parties regarding the validity or amount of any damages, awards, or settlements claims of claims shall be submitted to a panel of arbitrators, one selected by Purchaser, one selected by Seller, and a third to be selected by the two arbitrators selected by Purchaser and Seller, the findings of a majority of which arbitrators shall be binding upon the parties.
2.3.2 In order for Purchaser to assert its right to an Escrow Payment, Purchaser shall have given Seller a written notice of any third party claim or demand which may result in liability to Purchaser pursuant to paragraph 2.2.2. hereof (“Escrow Notice”) subject to Seller’s right to defend in good faith third party claims as hereinafter provided. If after such Escrow Notice Seller has not within thirty (30) days thereof resolved such claim and payment of such claim is made by Purchaser, such sums paid shall qualify as an Escrow Payment and shall be paid by the Escrow Agent to Purchaser.
2.3.3 If the Purchaser notifies the Seller of any claim or demand pursuant to paragraph 2.3.2 above, and if such claim or demand relates to a claim or demand asserted by a third party against the Purchaser which is a claim or demand for which the Seller must indemnify or hold harmless the Purchaser under this Agreement, the Seller shall either (i) promptly pay or settle such claim or demand or (ii) employ counsel acceptable to Purchaser, at the Seller’s expense, to defend any such claim or demand asserted against the Purchaser, so long as the Purchaser is not jeopardized with respect to such defense. The Purchaser shall have the right to cooperate in the defense of any such claim or demand. The Seller shall notify the Purchaser in writing, within twenty (20) days after the date of the applicable Escrow Notice of the Seller’s decision to either pay such claim or demand or defend in good faith any such third party claim or demand. So long as the Seller is defending in good faith any such claim or demand asserted by a third party against the Purchaser, and the Purchaser is not jeopardized by such defense, the Purchaser shall not settle or compromise such claim or demand. The Purchaser and Company shall make available to the Seller or its agents all records and other materials in the Purchaser’s or Company’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Seller elects to defend any such claim or demand, the Purchaser and Company shall have no obligation to do so. The Seller may not, without the prior written consent of the Purchaser, settle or compromise any claim or consent to the entry of any judgment unless such settlement, compromise or consent includes an unconditional release of the Purchaser from any and all liability arising out of such claim.Indemnified Parties under
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