ESCROW AGREEMENT
dated as of [●], 2025
by and among
ARDENT APEX HOLDINGS INC.
JONATHAN ASHFORD, CLAIRE FUJIMOTO, AND DR. STEFAN KESSLER, as Stockholder Representatives
and
CONTINENTAL FIDUCIARY TRUST COMPANY, as Escrow Agent
Escrow Account Reference: CFT-ESC-2025-7894
Relating to the Agreement and Plan of Merger dated March 24, 2025 among Ardent Apex Holdings Inc., Ardent Apex Merger Sub Inc., and Luminex Systems Holdings Inc.
Right-click to update Table of Contents
This ESCROW AGREEMENT (this "Agreement") is dated as of [●], 2025 (the "Closing Date"), by and among:
(1) Ardent Apex Holdings Inc., a Delaware corporation ("Parent");
(2) Jonathan Ashford, in his capacity as the representative of Ridgeline Growth Equity Fund II LP, Claire Fujimoto, in her capacity as the representative of Meridian Venture Partners IV LP, and Dr. Stefan Kessler, in his capacity as the representative of the Management Rollover Participants (each, a "Stockholder Representative" and collectively, the "Stockholder Representatives"); and
(3) Continental Fiduciary Trust Company, a New York trust company ("Escrow Agent").
Parent, the Stockholder Representatives, and the Escrow Agent are each sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Parent, Ardent Apex Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Luminex Systems Holdings Inc., a Delaware corporation (the "Company" or "Target"), have entered into that certain Agreement and Plan of Merger, dated as of March 24, 2025 (as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company in a reverse triangular merger under the Delaware General Corporation Law (the "DGCL"), with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"), on the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, the Merger Agreement provides that the aggregate equity value of the Company is Two Billion Eight Hundred Million Dollars ($2,800,000,000), and that each share of common stock, par value $0.001 per share, of the Company issued and outstanding immediately prior to the effective time of the Merger (other than shares held in the treasury of the Company, shares owned by Parent or Merger Sub, and dissenting shares) shall be converted into the right to receive Twenty Dollars ($20.00) in cash per share (the "Per Share Merger Consideration"), based on 140,000,000 fully diluted shares of the Company outstanding at the effective time (the "Merger Consideration");
WHEREAS, the Merger Agreement requires that, at the closing of the Merger (the "Closing"), Parent shall cause to be deposited with the Escrow Agent an amount equal to One Hundred Forty Million Dollars ($140,000,000) (the "Escrow Amount"), representing five percent (5%) of the aggregate equity value, which amount shall be deducted from the Merger Consideration otherwise payable to the holders of the Company's common stock (the "Stockholders") and held in escrow to secure the indemnification obligations of the Stockholders under Article IX of the Merger Agreement;
WHEREAS, the Escrow Amount shall be deducted pro rata from the Merger Consideration otherwise payable to the Stockholders as follows:
(i) Ridgeline Growth Equity Fund II LP ("Ridgeline"), as the holder of approximately 52% of the outstanding equity of the Company, shall bear a pro rata escrow share of Seventy-Two Million Eight Hundred Thousand Dollars ($72,800,000);
(ii) Meridian Venture Partners IV LP ("Meridian"), as the holder of approximately 20% of the outstanding equity of the Company, shall bear a pro rata escrow share of Twenty-Eight Million Dollars ($28,000,000); and
(iii) the management and employee stockholders of the Company (the "Management and Employee Stockholders"), as the holders of approximately 28% of the outstanding equity of the Company, shall bear an aggregate escrow share of Thirty-Nine Million Two Hundred Thousand Dollars ($39,200,000), which amount shall be allocated among the Management and Employee Stockholders solely with respect to the cash-out portion of their Merger Consideration (net of any rollover equity contributed to the surviving entity), adjusted among the cashing-out holders proportionally in accordance with their respective pro rata shares of the aggregate cash-out consideration;
WHEREAS, the Stockholder Representatives have been duly and irrevocably appointed pursuant to Section 11.12 of the Merger Agreement to act on behalf of the Stockholders with respect to this Agreement and all matters relating to the Escrow Amount, and each Stockholder Representative has accepted such appointment;
WHEREAS, Continental Fiduciary Trust Company has agreed to serve as Escrow Agent on the terms and conditions set forth herein, under the supervision of Laura Svensson, Vice President, Escrow Services; and
WHEREAS, capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Business Day" means any day other than a Saturday, a Sunday, or any other day on which banking institutions in New York, New York are authorized or required by law, regulation, or executive order to close.
"Claim" means any claim for indemnification asserted by Parent under Article IX of the Merger Agreement for which Parent seeks disbursement from the Escrow Amount pursuant to this Agreement.
"Claim Notice" means a written notice from Parent to the Escrow Agent and the Stockholder Representatives specifying a Claim, including the amount thereof, the basis therefor, and reasonable supporting detail, substantially in the form attached hereto as Exhibit A.
"Closing" has the meaning set forth in the Merger Agreement and means the closing of the transactions contemplated by the Merger Agreement.
"Closing Date" means the date on which the Closing occurs.
"Company" means Luminex Systems Holdings Inc., a Delaware corporation, which, following the Merger, will be the surviving entity and a wholly owned subsidiary of Parent.
"Contested Claim" means a Claim (or any portion thereof) that is disputed by the Stockholder Representatives in a timely written response delivered within the Response Period in accordance with Section 4.2 of this Agreement.
"Disputed Amount" means the dollar amount of a Claim (or portion thereof) that is the subject of a Contested Claim.
"Escrow Account" means the segregated, interest-bearing account established and maintained by the Escrow Agent at Continental Fiduciary Trust Company, 60 Wall Street, 24th Floor, New York, NY 10005, bearing the reference number CFT-ESC-2025-7894, in the name of "Continental Fiduciary Trust Company, as Escrow Agent — Ardent Apex / Luminex Escrow."
"Escrow Amount" means One Hundred Forty Million Dollars ($140,000,000), plus any Escrow Earnings that have accrued and been added thereto from time to time, less any amounts previously disbursed from the Escrow Account in accordance with the terms of this Agreement.
"Escrow Earnings" means all interest, dividends, and other income earned on the Escrow Amount (including income earned on reinvested Escrow Earnings) during the Escrow Period.
"Escrow Funds" means, at any time, the aggregate amount on deposit in the Escrow Account, including the Escrow Amount and all Escrow Earnings thereon.
"Escrow Period" means the period commencing on the Closing Date and ending on the date that is eighteen (18) months after the Closing Date; provided that with respect to any Pending Claims, the Escrow Period shall be automatically extended until the final resolution of all such Pending Claims in accordance with this Agreement.
"Final Distribution Date" means the date on which the Escrow Agent distributes the remaining Escrow Funds following the expiration of the Escrow Period and the final resolution of all Pending Claims.
"Joint Written Instruction" means a written instruction, substantially in the form attached hereto as Exhibit B, signed by both Parent and the Stockholder Representatives (acting by a majority of the then-serving Stockholder Representatives), directing the Escrow Agent to disburse Escrow Funds in a specified manner.
"Merger" has the meaning set forth in the Recitals.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of March 24, 2025, among Parent, Merger Sub, and the Company, as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Merger Sub" means Ardent Apex Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent.
"Parent" means Ardent Apex Holdings Inc., a Delaware corporation.
"Pending Claims" means Claims that have been properly asserted by Parent via delivery of a Claim Notice prior to the expiration of the Escrow Period but that have not been finally resolved (whether by Joint Written Instruction, expiration of the Response Period without a timely response, final and non-appealable order of a court of competent jurisdiction, or binding determination of an independent accounting firm) as of the date in question.
"Permitted Investments" has the meaning set forth in Section 3.3 of this Agreement.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated association, governmental authority, or other entity of any kind.
"Response Period" means the period of thirty (30) calendar days commencing on the date of delivery (determined in accordance with Article VIII) of a Claim Notice to the Stockholder Representatives.
"Resolved Amount" means, with respect to any Claim, the dollar amount thereof that has been finally determined to be payable (i) to Parent, or (ii) to the Stockholder Representatives for the account of the Stockholders, in each case pursuant to the dispute resolution procedures set forth in this Agreement.
"Stockholder Representatives" means Jonathan Ashford, Claire Fujimoto, and Dr. Stefan Kessler, collectively, in their respective capacities as Stockholder Representatives, and any successors appointed in accordance with Section 9.3.
"Stockholders" means the former holders of common stock of the Company who received (or were entitled to receive) Merger Consideration at the Closing, together with their respective successors and assigns.
"Undisputed Amount" means, with respect to any Claim, the dollar amount thereof (or portion thereof) that the Stockholder Representatives have expressly accepted (or that is deemed accepted by reason of the Stockholder Representatives' failure to deliver a timely written response within the Response Period) in accordance with Section 4.2 of this Agreement.
Section 1.2 — Rules of Construction
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement, (iv) the terms "Article," "Section," "Schedule," and "Exhibit" refer to the specified Article, Section, Schedule, or Exhibit of or to this Agreement unless otherwise specified, and (v) the word "including" shall mean "including, without limitation."
(b) Unless otherwise specified, all references to days shall mean calendar days. All references to dollar amounts shall mean United States dollars.
(c) All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement. In the event of any conflict between a definition in this Agreement and a definition in the Merger Agreement, the definition in this Agreement shall control for purposes of this Agreement.
(d) The Schedules and Exhibits attached hereto are incorporated herein and shall be deemed part of this Agreement for all purposes.
(e) No provision of this Agreement shall be interpreted for or against any Party because that Party or its legal representative drafted such provision.
ARTICLE II — ESTABLISHMENT AND FUNDING OF ESCROW ACCOUNT
Section 2.1 — Establishment of Escrow Account
(a) The Escrow Agent hereby confirms that it has established the Escrow Account (Reference: CFT-ESC-2025-7894) at Continental Fiduciary Trust Company upon execution of this Agreement. The Escrow Account shall be maintained as a segregated, interest-bearing account in the name of "Continental Fiduciary Trust Company, as Escrow Agent — Ardent Apex / Luminex Escrow." The Escrow Account shall be maintained at the principal office of the Escrow Agent located at 60 Wall Street, 24th Floor, New York, NY 10005.
(b) The Escrow Account shall be opened and maintained for the sole purpose of holding, investing, and disbursing the Escrow Amount in accordance with the terms and conditions of this Agreement. The Escrow Agent shall have no authority to use, transfer, or otherwise deal with the Escrow Funds except as expressly authorized by this Agreement.
Section 2.2 — Deposit of Escrow Amount
(a) On the Closing Date, Parent shall cause to be deposited into the Escrow Account by wire transfer of immediately available funds the aggregate sum of One Hundred Forty Million Dollars ($140,000,000). Such deposit shall be made in accordance with the wire transfer instructions for the Escrow Account set forth below:
Account Name: Continental Fiduciary Trust Company, as Escrow Agent — Ardent Apex / Luminex Escrow
Bank: Continental Fiduciary Trust Company
Address: 60 Wall Street, 24th Floor, New York, NY 10005
ABA/Routing Number: 021-000-547
Account Number: 7894-2025-ESC
Reference: CFT-ESC-2025-7894 / Ardent Apex-Luminex Merger Escrow
(b) The Escrow Amount constitutes a portion of the Merger Consideration otherwise payable to the Stockholders and is not additional consideration paid by Parent or any of its affiliates. The Escrow Amount shall be withheld from the aggregate Merger Consideration and funded from the closing funds flow in accordance with the funds flow memorandum prepared in connection with the Closing. The deduction of the Escrow Amount from the Per Share Merger Consideration shall be effected by the paying agent, Atlas Shareholder Services Inc. (contact: Dennis Carmichael; address: 6201 15th Avenue, Brooklyn, NY 11219), in accordance with the paying agent agreement entered into in connection with the Merger Agreement.
(c) For the avoidance of doubt, the obligation to fund the Escrow Account is a condition to the Closing under the Merger Agreement, and the failure of Parent to deposit the full Escrow Amount on the Closing Date shall not relieve Parent of any obligation under the Merger Agreement or this Agreement.
Section 2.3 — Confirmation of Deposit
(a) The Escrow Agent shall confirm receipt of the Escrow Amount in writing (which may be by email) to Parent (at the notice address set forth in Section 8.2) and to the Stockholder Representatives (at the notice addresses set forth in Section 8.2) within one (1) Business Day following the Escrow Agent's receipt of such funds. Such confirmation shall specify the amount received, the date of receipt, and the account in which such funds have been deposited.
(b) If the Escrow Agent does not receive the full amount of One Hundred Forty Million Dollars ($140,000,000) on the Closing Date, the Escrow Agent shall promptly (and in any event within one (1) Business Day) notify Parent and the Stockholder Representatives in writing of such shortfall, specifying the amount received and the amount of the deficiency. Parent shall cause the deficiency to be funded within two (2) Business Days following receipt of such notice. The Escrow Agent shall have no liability for any delay or failure by Parent to fund the Escrow Account.
ARTICLE III — MANAGEMENT AND INVESTMENT OF ESCROW FUNDS
Section 3.1 — Duties of the Escrow Agent
The Escrow Agent shall hold, safeguard, and disburse the Escrow Amount and all Escrow Earnings thereon solely in accordance with the terms and conditions of this Agreement. The Escrow Agent shall not disburse, release, distribute, transfer, or permit any withdrawal of any portion of the Escrow Amount except as expressly provided in this Agreement. The Escrow Agent's duties with respect to the Escrow Funds are limited to those expressly set forth herein, and the Escrow Agent shall not be subject to, or obligated to comply with, any other agreement, instrument, or document to which it is not a party, including the Merger Agreement, even if reference thereto is made in this Agreement, except to the extent that specific provisions of the Merger Agreement are expressly incorporated herein by reference.
Section 3.2 — Segregation
(a) The Escrow Amount shall be held by the Escrow Agent in the Escrow Account, which shall be a segregated account, separate and apart from the Escrow Agent's own funds, assets, and accounts, and separate and apart from funds, assets, and accounts held by the Escrow Agent for other clients or in any other capacity.
(b) The Escrow Amount shall not be subject to any lien, attachment, trustee process, garnishment, execution, encumbrance, or similar claim by any creditor of Parent, the Stockholder Representatives, any individual Stockholder, or the Escrow Agent. Neither Parent nor the Stockholder Representatives shall grant or purport to grant any security interest, pledge, hypothecation, or other encumbrance on, over, or with respect to the Escrow Amount or any portion thereof. The Escrow Agent shall not recognize any purported lien, security interest, or encumbrance on the Escrow Account unless directed to do so by a final, non-appealable order of a court of competent jurisdiction.
(c) For the avoidance of doubt, the Escrow Amount shall not constitute collateral for, and shall not be subject to the claims of any lender under, the Senior Secured Credit Facility entered into in connection with the Merger by Stonebridge Credit Partners LLC, Birchwood Capital Finance LLC, and Ironvale Credit Fund III LP (or any of their respective successors or assigns).
Section 3.3 — Permitted Investments
(a) The Escrow Agent shall invest and reinvest the Escrow Amount and all Escrow Earnings thereon in Permitted Investments at the joint written direction of Parent and the Stockholder Representatives. As used herein, "Permitted Investments" means any of the following:
(i) Direct obligations of, or obligations the timely payment of principal and interest on which are fully and unconditionally guaranteed by, the United States of America, in each case having a remaining maturity of ninety (90) days or less from the date of acquisition;
(ii) Certificates of deposit, time deposits, or bankers' acceptances issued by any commercial bank organized under the laws of the United States of America or any state thereof, having combined capital and surplus of not less than One Billion Dollars ($1,000,000,000) and a short-term debt rating of at least A-1 by Standard & Poor's Global Ratings (or the equivalent by Moody's Investors Service, Inc.), in each case having a remaining maturity of ninety (90) days or less from the date of acquisition;
(iii) Money market funds that invest solely in obligations described in clause (i) above and that are rated in the highest rating category by Standard & Poor's Global Ratings or Moody's Investors Service, Inc.; and
(iv) Such other investments as Parent and the Stockholder Representatives may jointly direct in writing from time to time, provided that the Escrow Agent shall not be required to invest in any investment that the Escrow Agent reasonably determines to be inconsistent with its internal policies or applicable law.
(b) In the absence of joint written direction from Parent and the Stockholder Representatives with respect to the investment of the Escrow Amount (or any portion thereof), the Escrow Agent shall invest and reinvest the Escrow Amount in money market funds described in clause (iii) above (the "Default Investment"). The Escrow Agent shall have no obligation to seek investment instructions from the Parties and shall not be liable for any loss of principal or income arising from investment in the Default Investment.
(c) The Escrow Agent shall liquidate any Permitted Investments as necessary to make disbursements required under this Agreement, and the Escrow Agent shall not be liable for any loss, penalty, or charge incurred in connection with such liquidation.
Section 3.4 — Escrow Earnings
(a) All Escrow Earnings shall be added to and become part of the Escrow Amount held in the Escrow Account. The Escrow Agent shall reinvest all Escrow Earnings in Permitted Investments in accordance with Section 3.3.
(b) Escrow Earnings shall be distributed together with the principal portion of the Escrow Amount as provided in Article IV (with respect to disbursements to Parent in satisfaction of Claims) and Article V (with respect to releases and distributions to the Stockholder Representatives for the account of the Stockholders). The allocation of Escrow Earnings between amounts distributed to Parent and amounts distributed to the Stockholder Representatives shall be pro rata based on the relative amounts of principal so distributed unless otherwise specified in a Joint Written Instruction.
Section 3.5 — Tax Reporting
(a) For United States federal and applicable state and local income tax purposes, the Stockholders (allocated pro rata in accordance with their respective shares of the Escrow Amount as set forth on Schedule C) shall be treated as the owners of the Escrow Amount and all Escrow Earnings thereon. The Parties agree not to take any position inconsistent with such treatment on any tax return, in any tax proceeding, or otherwise, unless required by a final determination (within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended) or by applicable law.
(b) The Escrow Agent shall report all Escrow Earnings as income of the Stockholders on Internal Revenue Service ("IRS") Forms 1099 (or any applicable successor forms) in accordance with applicable law, based on the pro rata allocation schedule provided by the Stockholder Representatives. The Escrow Agent shall be entitled to request and receive from the Stockholder Representatives such information as is reasonably necessary to comply with its tax reporting obligations, and the Stockholder Representatives shall use commercially reasonable efforts to provide such information promptly upon request.
(c) The Stockholder Representatives shall provide or cause to be provided to the Escrow Agent properly completed and duly executed IRS Forms W-9 (or, in the case of any non-U.S. person, the appropriate IRS Forms W-8BEN or W-8BEN-E, as applicable) for each Stockholder prior to or promptly following the Closing Date, and shall provide updated forms as necessary. The Escrow Agent shall be entitled to request such forms at any time and shall not be obligated to make any distribution to any Stockholder that has not provided a properly completed and executed form.
(d) The Escrow Agent shall withhold any amounts required to be withheld under applicable federal, state, local, or foreign tax law, including backup withholding under Section 3406 of the Internal Revenue Code in the event that a Stockholder has failed to provide a timely and properly completed IRS Form W-9 (or applicable W-8 form). Any amounts so withheld shall be treated as having been distributed to the applicable Stockholder for purposes of this Agreement.
(e) For informational purposes, the tax identification numbers of the principal parties are as follows:
Parent (Ardent Apex Holdings Inc.): EIN 93-2178435
Company (Luminex Systems Holdings Inc.): EIN 86-2547193
The Stockholder Representatives shall provide the Escrow Agent with the tax identification numbers for each Stockholder as part of the IRS Form W-9 / W-8 collection process described in Section 3.5(c) above.
ARTICLE IV — CLAIMS AND DISBURSEMENT PROCEDURES
Section 4.1 — Claim Notice
(a) At any time during the Escrow Period, Parent may deliver a Claim Notice to the Escrow Agent and the Stockholder Representatives asserting a Claim for indemnification under Article IX of the Merger Agreement and requesting disbursement of a specified amount from the Escrow Account. Each Claim Notice shall be in writing, shall be substantially in the form attached hereto as Exhibit A, and shall be delivered in accordance with Article VIII of this Agreement.
(b) Each Claim Notice shall specify with reasonable particularity:
(i) the nature of the Claim and a description of the specific representations, warranties, covenants, or agreements under the Merger Agreement alleged to have been breached or that give rise to the indemnification obligation;
(ii) the dollar amount of the Claim (or, if the exact dollar amount is not yet determinable at the time of delivery of the Claim Notice, a good-faith estimate of the maximum amount of the Claim, together with a statement that the amount is an estimate and will be supplemented when determinable); and
(iii) reasonable supporting documentation and a description of the factual basis for the Claim, including, where applicable, copies of relevant third-party claims, demand letters, complaints, or other communications relating to the Claim.
(c) For the avoidance of doubt, the aggregate amount of all Claims may not exceed Four Hundred Twenty Million Dollars ($420,000,000), which amount represents fifteen percent (15%) of the aggregate equity value of the Company (i.e., 15% × $2,800,000,000), as provided in the Merger Agreement. The Escrow Amount serves as the first source of recovery for Claims, but nothing in this Agreement shall limit Parent's right to seek recovery under the representation and warranty insurance policy issued by Grandview Specialty Insurance Company (Policy No. GSI-RWI-2025-04821, with a policy limit of $420,000,000) obtained in connection with the Merger, subject to the terms and conditions of such policy.
(d) The retention structure under the representation and warranty insurance policy provides that the first Fourteen Million Dollars ($14,000,000) of indemnification losses shall be borne as follows: (i) fifty percent (50%) by the Stockholders (i.e., Seven Million Dollars ($7,000,000)), and (ii) fifty percent (50%) by Parent (i.e., Seven Million Dollars ($7,000,000)), as the retention under the representation and warranty insurance policy, before such policy responds to any Claim. The Escrow Amount secures, among other things, the Stockholders' share of the retention and any losses that may exceed the limits of the representation and warranty insurance policy, in each case subject to and in accordance with the indemnification provisions of the Merger Agreement.
Section 4.2 — Response by Stockholder Representatives
(a) The Stockholder Representatives shall have thirty (30) calendar days from the date of delivery of a Claim Notice (the "Response Period") to deliver a written response to the Escrow Agent and Parent. Such response shall state either:
(i) that the Stockholder Representatives accept the Claim in whole, in which case the full amount of the Claim set forth in the Claim Notice shall constitute an Undisputed Amount; or
(ii) that the Stockholder Representatives accept the Claim in part, specifying the dollar amount accepted (which shall constitute an Undisputed Amount) and the dollar amount disputed (which shall constitute a Disputed Amount), together with a reasonably detailed description of the basis for the dispute; or
(iii) that the Stockholder Representatives dispute the Claim in its entirety, specifying the Disputed Amount (equal to the full amount of the Claim) and a reasonably detailed description of the basis for the dispute, in which case the entire Claim shall constitute a Contested Claim.
(b) If the Stockholder Representatives fail to deliver a written response to the Escrow Agent and Parent within the Response Period, the Claim set forth in the Claim Notice shall be deemed accepted in full by the Stockholder Representatives, and the full amount of the Claim shall constitute an Undisputed Amount for all purposes of this Agreement.
(c) The Escrow Agent shall have no obligation to evaluate the merits of any Claim or any response thereto, and shall not be deemed to have knowledge of, or responsibility for, any failure by the Stockholder Representatives to deliver a timely response.
Section 4.3 — Payment of Undisputed Amounts
(a) Upon the earlier of:
(i) receipt by the Escrow Agent of a written response from the Stockholder Representatives accepting a Claim (or any portion thereof) as an Undisputed Amount; or
(ii) expiration of the Response Period without delivery of a timely written response by the Stockholder Representatives (in which case the full amount of the Claim shall be deemed an Undisputed Amount),
the Escrow Agent shall, within five (5) Business Days following such event, disburse from the Escrow Account to Parent (or to such other designee as Parent may specify in writing) an amount equal to the Undisputed Amount (or the full Claim amount, as applicable), by wire transfer of immediately available funds to the account designated by Parent in Schedule A hereto (or to such other account as Parent may direct in writing).
(b) The Escrow Agent shall deliver written confirmation of each disbursement to Parent and the Stockholder Representatives within one (1) Business Day following such disbursement.
(c) The mailing address for Parent for purposes of disbursement is: Ardent Apex Holdings Inc., 399 Park Avenue, 42nd Floor, New York, NY 10022, Attention: David Ng, Chief Financial Officer, or to such other address or account as Parent may designate by written notice to the Escrow Agent and the Stockholder Representatives.
Section 4.4 — Resolution of Contested Claims
(a) Any Contested Claim (including any Disputed Amount) shall be resolved in accordance with the dispute resolution provisions set forth in Article VI of this Agreement.
(b) Pending the resolution of any Contested Claim, the Escrow Agent shall continue to hold the Disputed Amount in the Escrow Account, invested in Permitted Investments in accordance with Section 3.3, and shall not disburse, release, or transfer any portion of the Disputed Amount except as provided in this Section 4.4 or pursuant to a Joint Written Instruction or a final, non-appealable order of a court of competent jurisdiction.
(c) Upon final resolution of a Contested Claim, whether by:
(i) mutual agreement of Parent and the Stockholder Representatives, as reflected in a Joint Written Instruction delivered to the Escrow Agent;
(ii) a final, non-appealable order, judgment, or decree of a court of competent jurisdiction, a certified copy of which shall be delivered to the Escrow Agent; or
(iii) a binding determination of an independent accounting firm in accordance with Section 4.5 below,
the Escrow Agent shall, within five (5) Business Days following receipt of the applicable Joint Written Instruction, court order, or accounting firm determination, disburse the Resolved Amount from the Escrow Account (A) to Parent (or its designee), to the extent the Contested Claim is resolved in favor of Parent, or (B) to the Stockholder Representatives for distribution to the Stockholders, to the extent the Contested Claim is resolved in favor of the Stockholders.
(d) In the event that a Contested Claim is resolved partially in favor of Parent and partially in favor of the Stockholders, the Escrow Agent shall disburse the applicable portions of the Resolved Amount to each such party in accordance with the terms of the applicable Joint Written Instruction, court order, or accounting firm determination.
Section 4.5 — Independent Accounting Firm Disputes
(a) If a Contested Claim relates to financial or accounting matters (including, without limitation, any dispute regarding working capital adjustments under the Merger Agreement, where the Target Net Working Capital is Forty-Eight Million Five Hundred Thousand Dollars ($48,500,000), subject to a collar of plus or minus Two Million Five Hundred Thousand Dollars ($2,500,000)), Parent and the Stockholder Representatives may jointly engage Pendleton & Associates LLP as the independent accounting firm to resolve such dispute. Pendleton & Associates LLP shall be contacted through Richard Chow, Partner, at its offices located at 30 Rockefeller Plaza, Suite 2600, New York, NY 10112.
(b) The determination of Pendleton & Associates LLP (or such other independent accounting firm as the Parties may jointly select) shall be rendered in writing within forty-five (45) calendar days following its engagement (or such longer period as Parent and the Stockholder Representatives may agree) and shall be final and binding on the Parties, absent manifest error or fraud. The Escrow Agent shall be entitled to rely conclusively on any such determination without independent investigation or review.
(c) The costs and expenses of the independent accounting firm shall be allocated between Parent, on the one hand, and the Stockholders (through the Stockholder Representatives), on the other hand, as provided in the Merger Agreement (i.e., in proportion to the extent each party's position is not sustained, such that the party whose position is further from the final determination bears a greater share of such costs). Such costs may be paid from the Escrow Account to the extent applicable to the Stockholders' share, if so directed by the Stockholder Representatives.
Section 4.6 — Joint Written Instructions
(a) The Escrow Agent shall disburse funds from the Escrow Account upon receipt of a Joint Written Instruction, substantially in the form attached hereto as Exhibit B, signed by both Parent and the Stockholder Representatives (acting by a majority of the then-serving Stockholder Representatives), without any obligation to make independent inquiry into the underlying basis for, or the propriety of, such instruction.
(b) Each Joint Written Instruction shall specify the amount to be disbursed, the payee(s), and the wire transfer instructions for such disbursement, and shall be delivered in accordance with the notice provisions set forth in Article VIII of this Agreement.
(c) The Escrow Agent shall be fully protected in relying upon and complying with any Joint Written Instruction that the Escrow Agent in good faith believes to be genuine and to have been duly signed by the authorized representatives of both Parent and the Stockholder Representatives.
ARTICLE V — RELEASE AND DISTRIBUTION OF ESCROW AMOUNT
Section 5.1 — Scheduled Release at End of Escrow Period
(a) On the first (1st) Business Day following the expiration of the eighteen (18)-month Escrow Period (calculated from the Closing Date), the Escrow Agent shall release and distribute to the Stockholder Representatives (for distribution to the Stockholders pro rata in accordance with Schedule C) the balance of the Escrow Funds remaining in the Escrow Account, less:
(i) the aggregate amount of all Pending Claims as of such date (including good-faith estimates set forth in the applicable Claim Notices to the extent the exact amount of any Pending Claim has not been finally determined), which amounts shall be reserved in the Escrow Account; and
(ii) any amounts previously disbursed to Parent from the Escrow Account in respect of resolved Claims or Undisputed Amounts.
(b) The distributable amount determined in accordance with Section 5.1(a) shall be paid by wire transfer of immediately available funds to the account(s) designated by the Stockholder Representatives in Schedule B hereto (or to such other accounts as the Stockholder Representatives may direct by written notice to the Escrow Agent delivered at least five (5) Business Days prior to the scheduled release date).
(c) The Escrow Agent shall provide Parent and the Stockholder Representatives with a written accounting of the Escrow Account balance, including principal and accrued Escrow Earnings, not later than ten (10) Business Days prior to the scheduled release date, to facilitate the determination of the distributable amount.
Section 5.2 — Holdback for Pending Claims
(a) If any Claims constitute Pending Claims as of the expiration of the Escrow Period, the Escrow Agent shall retain in the Escrow Account an amount equal to the aggregate dollar amount of all Pending Claims (based on the amounts set forth in the applicable Claim Notices, or good-faith estimates thereof to the extent exact amounts have not been determined). Such retained amount shall continue to be held, invested, and maintained in Permitted Investments in accordance with Section 3.3 of this Agreement.
(b) Upon the final resolution of each Pending Claim (whether by Joint Written Instruction, court order, accounting firm determination, or deemed acceptance), the Escrow Agent shall, within five (5) Business Days following receipt of the applicable documentation:
(i) disburse the Resolved Amount to Parent (or its designee), to the extent the Pending Claim is resolved in favor of Parent; and
(ii) release any excess of the retained amount over the Resolved Amount (i.e., the difference between the amount originally reserved for such Pending Claim and the amount actually payable to Parent, if any) to the Stockholder Representatives for distribution to the Stockholders pro rata in accordance with Schedule C.
(c) If a Pending Claim is resolved entirely in favor of the Stockholders (i.e., no amount is payable to Parent), the Escrow Agent shall release the entire retained amount attributable to such Pending Claim to the Stockholder Representatives.
Section 5.3 — Final Distribution
(a) Upon the final resolution of all Pending Claims and the disbursement of all Resolved Amounts in accordance with this Agreement, the Escrow Agent shall distribute any remaining balance of the Escrow Account (including all remaining Escrow Earnings) to the Stockholder Representatives for the account of the Stockholders, by wire transfer of immediately available funds to the accounts designated in Schedule B (or as otherwise directed by the Stockholder Representatives in writing).
(b) The date on which such final distribution is made shall be the Final Distribution Date. Upon completion of the final distribution and written confirmation thereof by the Escrow Agent, this Agreement shall terminate and be of no further force or effect, except that the provisions specified in Section 10.8 shall survive such termination.
(c) The Escrow Agent shall deliver a final accounting to Parent and the Stockholder Representatives within ten (10) Business Days following the Final Distribution Date, setting forth all deposits, investments, earnings, disbursements, fees, expenses, and distributions made with respect to the Escrow Account during the term of this Agreement.
Section 5.4 — Pro Rata Allocation Among Stockholders
(a) All distributions to the Stockholder Representatives for the account of the Stockholders shall be allocated pro rata based on each Stockholder's (or Stockholder group's) respective share of the Escrow Amount, as set forth on Schedule C attached hereto.
(b) Schedule C sets forth the name, pro rata percentage, escrow allocation dollar amount, and contact information for each Stockholder group, as follows:
(i) Ridgeline Growth Equity Fund II LP: 52.00% pro rata share of the Escrow Amount (Seventy-Two Million Eight Hundred Thousand Dollars ($72,800,000)); expected aggregate Merger Consideration: One Billion Four Hundred Fifty-Six Million Dollars ($1,456,000,000); address: 200 Clarendon Street, 52nd Floor, Boston, MA 02116; contact: Jonathan Ashford.
(ii) Meridian Venture Partners IV LP: 20.00% pro rata share of the Escrow Amount (Twenty-Eight Million Dollars ($28,000,000)); expected aggregate Merger Consideration: Five Hundred Sixty Million Dollars ($560,000,000); address: 600 Montgomery Street, Suite 2800, San Francisco, CA 94111; contact: Claire Fujimoto.
(iii) Management and Employee Cash-Out Participants: aggregate equity interest of approximately 28.00%, with an escrow allocation based on each Management and Employee Stockholder's proportionate share of the aggregate cash-out consideration; aggregate escrow share of Thirty-Nine Million Two Hundred Thousand Dollars ($39,200,000); contact: Dr. Stefan Kessler, c/o Luminex Systems Holdings Inc., 2100 Reston Gateway Drive, Suite 800, Reston, VA 20191. The individual allocation among Management and Employee Cash-Out Participants shall be determined in accordance with the detailed allocation set forth on Schedule C.
(c) The Stockholder Representatives shall be responsible for distributing all amounts received from the Escrow Agent to the individual Stockholders in accordance with each such Stockholder's pro rata share. The Escrow Agent shall have no responsibility or liability for the distribution of funds by the Stockholder Representatives to the individual Stockholders.
ARTICLE VI — DISPUTE RESOLUTION
Section 6.1 — Negotiation
In the event of any dispute, controversy, or claim between Parent and the Stockholder Representatives regarding a Claim, a Claim Notice, the amount or validity of any Claim, or any other matter arising under or in connection with this Agreement, Parent and the Stockholder Representatives shall first attempt to resolve such dispute through good-faith negotiation. Such negotiation period shall commence upon delivery by either Parent or the Stockholder Representatives of a written notice describing the nature of the dispute and shall continue for a period of fifteen (15) Business Days following delivery of such notice (the "Negotiation Period"). During the Negotiation Period, each of Parent and the Stockholder Representatives shall make available appropriate senior representatives with authority to settle the dispute for direct discussion and negotiation. The Escrow Agent shall not be required to participate in any such negotiation.
Section 6.2 — Litigation
(a) If any dispute, controversy, or claim arising under or in connection with this Agreement cannot be resolved through good-faith negotiation within the Negotiation Period, either Parent or the Stockholder Representatives may submit such dispute to a court of competent jurisdiction in the State of Delaware in accordance with Section 10.2 of this Agreement.
(b) The Escrow Agent shall not be required to take any action with respect to a Contested Claim (including the disbursement or release of any Disputed Amount) until the Escrow Agent has received either (i) a Joint Written Instruction signed by both Parent and the Stockholder Representatives directing the Escrow Agent with respect to such Contested Claim, or (ii) a final, non-appealable order, judgment, or decree of a court of competent jurisdiction directing the disbursement or release of the applicable portion of the Escrow Amount, accompanied by a certified copy of such order, judgment, or decree.
(c) Nothing in this Section 6.2 shall preclude the Parties from seeking interim or provisional relief, including temporary restraining orders or preliminary injunctions, from a court of competent jurisdiction to preserve the status quo pending final resolution of a dispute.
Section 6.3 — Escrow Agent's Role in Disputes
(a) The Escrow Agent shall have no obligation to resolve, mediate, arbitrate, or adjudicate any dispute between Parent and the Stockholder Representatives, and the Escrow Agent shall not be deemed a necessary or proper party to any litigation or proceeding between Parent and the Stockholder Representatives with respect to any Claim or Contested Claim, except as may be required in connection with an interpleader action pursuant to Section 7.7.
(b) During any dispute, the Escrow Agent shall continue to hold the Disputed Amount (and all Escrow Earnings attributable thereto) in the Escrow Account, invested in Permitted Investments in accordance with Section 3.3, until such time as the Escrow Agent receives a Joint Written Instruction or a final, non-appealable court order directing the disbursement or release thereof. The Escrow Agent shall incur no liability to any Party for continuing to hold such amounts pending resolution of the dispute.
ARTICLE VII — ESCROW AGENT PROVISIONS
Section 7.1 — Duties and Obligations
(a) The Escrow Agent's duties under this Agreement are purely ministerial in nature and shall be limited to those duties expressly set forth in this Agreement. The Escrow Agent shall not be deemed a fiduciary, trustee, partner, or agent of any Party, except to the extent expressly set forth herein, and shall not be deemed to have any implied duties, obligations, or responsibilities beyond those expressly set forth herein.
(b) The Escrow Agent shall act only upon written instructions that comply with the terms and conditions of this Agreement. The Escrow Agent shall have no duty to solicit instructions from any Party, to investigate the merits of any Claim, to inquire into the background of any Joint Written Instruction, or to take any affirmative action except as expressly required by this Agreement.
(c) The Escrow Agent shall not be bound by any modification, amendment, termination, cancellation, rescission, or supersession of this Agreement unless the same is made in writing and signed by all Parties, including the Escrow Agent, in accordance with Section 10.4.
Section 7.2 — Liability and Standard of Care
(a) The Escrow Agent shall not be liable for any loss, damage, liability, cost, or expense arising from its performance or non-performance under this Agreement, except to the extent such loss, damage, liability, cost, or expense results directly from the Escrow Agent's gross negligence, willful misconduct, or bad faith, as finally determined by a court of competent jurisdiction.
(b) Without limiting the generality of the foregoing, the Escrow Agent shall not be liable for:
(i) any loss arising from the investment or reinvestment of the Escrow Amount in Permitted Investments, including any loss of principal, interest, or anticipated income resulting from market fluctuations, changes in interest rates, credit deterioration of any issuer, or default by any issuer or depository institution;
(ii) any delay or failure in performance caused by events beyond the Escrow Agent's reasonable control, including acts of God, flood, fire, earthquake, epidemic, pandemic, war, terrorism, civil unrest, strikes, lockouts, labor disputes, governmental actions, disruptions in communications or utility services, or failures of computer or electronic systems;
(iii) any loss arising from the Escrow Agent's compliance in good faith with any court order, governmental order, or regulatory directive; or
(iv) any losses arising from the acts or omissions of any predecessor escrow agent.
(c) In no event shall the Escrow Agent be liable for any indirect, incidental, special, consequential, or punitive damages, regardless of the form of action and whether or not any such damages were foreseeable.
Section 7.3 — Reliance on Documents
(a) The Escrow Agent may rely, and shall be fully protected in relying, upon any written notice, instruction, certificate, statement, request, waiver, consent, receipt, direction, or other document or instrument (including any Joint Written Instruction or Claim Notice) that the Escrow Agent in good faith believes to be genuine and to have been signed, sent, or presented by the proper party or parties.
(b) The Escrow Agent may consult with and rely on the advice of legal counsel (which may be its own internal counsel or external counsel of its selection) in the event of any question regarding its duties, obligations, or rights under this Agreement, and the Escrow Agent shall not be liable for any action taken, suffered, or omitted in good faith in accordance with such advice.
(c) The Escrow Agent shall not be obligated to take any legal action or institute any proceedings in connection with this Agreement or in connection with any dispute between Parent and the Stockholder Representatives, and shall not be required to defend any legal proceeding that may be instituted against it with respect to the Escrow Amount unless the Escrow Agent is indemnified to its reasonable satisfaction pursuant to Section 7.4.
Section 7.4 — Indemnification of Escrow Agent
(a) Parent, on the one hand, and the Stockholders (acting through the Stockholder Representatives), on the other hand, shall jointly and severally indemnify, defend, and hold harmless the Escrow Agent, together with its officers, directors, employees, agents, successors, and assigns (each, an "Escrow Agent Indemnified Party"), from and against any and all claims, actions, suits, proceedings, demands, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees and disbursements) arising out of or in connection with this Agreement or the Escrow Agent's performance of, or failure to perform, its duties hereunder, except to the extent such claims, losses, damages, liabilities, costs, or expenses are finally determined by a court of competent jurisdiction to have been caused by the Escrow Agent's gross negligence, willful misconduct, or bad faith.