Exhibit 10.3
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of December 28, 2001 (the "Escrow Agreement"),
by and among VIZACOM INC., a Delaware corporation ("Vizacom"), THE STOCKHOLDERS
OF SPACELOGIX WHOSE SIGNATURES APPEAR ON THE SIGNATURE PAGE HEREOF (individually
a "Stockholder" and collectively, the "Stockholders"), XXXXXXXX XXXXXXXXX
HOLDING COMPANY, INC., a New York corporation (the "Stockholders'
Representative") and Borstein & Xxxxxxxxx, as escrow agent (the "Escrow Agent").
All capitalized terms used herein without definition shall have the meaning
ascribed to them in the Merger Agreement (as defined below).
W I T N E S S E T H:
--------------------
WHEREAS, Vizacom, SpaceLogix Acquisition Corp., a Delaware Corporation
("Merger Sub") and SpaceLogix, Inc. ("SpaceLogix") have entered into an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of November
19, 2001, providing for the merger of SpaceLogix with and into Merger Sub; and
WHEREAS, this Escrow Agreement is being entered into by the parties
pursuant to Section 1.13, 7.1(f) and 7.2(h) of the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, Vizacom, the Stockholders and the Escrow Agent agree as follows:
ARTICLE I. ESCROWED PROPERTY
1.01 Each of the Stockholders agrees to deliver to Escrow Agent
certificates representing the number of outstanding shares of common stock, par
value $.001 per share (the "Common Stock"), of Vizacom set forth next to such
stockholder's name on the signature page hereof (the "Escrow Certificate"). The
Escrow Certificates delivered to the Escrow Agent are hereinafter referred to
collectively as the "Escrowed Property."
1.02 The Escrow Agent agrees to hold or dispose of the Escrowed Property in
accordance with the terms of this Escrow Agreement.
1.03 All dividends and other distributions (whether of cash, securities or
other property) upon or in respect of any of the Escrowed Property and all
property receivable in substitution or exchange therefor shall be included with
and constitute part of the Escrowed Property.
1.04 All shares of Common Stock included in the Escrowed Property shall be
voted in accordance with the instructions of the Stockholders.
ARTICLE II. APPLICATION OF ESCROWED PROPERTY
2.01 The Escrow Agent will hold the Escrowed Property in its possession
under the provisions of this Escrow Agreement until authorized hereunder to
deliver the Escrowed Property or any specified portion thereof as set forth in
Section 2.02 or Section 2.04. Vizacom shall be entitled to receive from the
Escrowed Property any shares of Buyer Common Stock that may be due and owing to
it pursuant to Article IX of the Merger Agreement.
2.02 The Escrow Agent shall distribute the amounts deposited as Escrowed
Property:
(i) promptly upon delivery of and in accordance with a joint written
notice (a "Joint Notice") of Vizacom and the Stockholders' Representative
providing instructions therein;
(ii) if the Escrow Agent receives a written notice (a "Unilateral Notice")
from Vizacom or the Stockholders' Representative providing instructions to
release Escrowed Property, the Escrow Agent shall promptly after receipt of such
Unilateral Notice deliver a copy of such Unilateral Notice to the other party.
If during the five business day period following delivery to the other party of
such copy of the Unilateral Notice, the Escrow Agent has not received from the
other party a written objection to such release, then the Escrow Agent shall
release such Escrowed Property in accordance with the instructions in the
Unilateral Notice to the extent not objected to by the other party. If and to
the extent an objection to such release of Escrowed Property has been received
by the Escrow Agent from the other party within five business days after
delivery of the Unilateral Notice to such other party, distribution of any of
the disputed Escrowed Property shall be made only in accordance with clause (i)
above or clause (iii) below; or
(iii) promptly upon delivery of and in accordance with written notice of
Vizacom or the Stockholders' Representative providing instructions therein and
certifying that the dispute with respect to any Escrowed Property has been
determined and resolved by entry of a final non- appealable order, decree or
judgment by a court of competent jurisdiction in the State of New York (the time
for appeal therefrom having expired and no appeal having been perfected), or
consent to entry of any judgment concerning a claim, which notice shall be
accompanied by a copy of any such order, decree or judgment certified by the
clerk of such court.
2.03 Vizacom and the Stockholder's Representative hereby agree to deliver
promptly to the Escrow Agent a Joint Notice to release any remaining Escrowed
Property to Vizacom in the event that, within 120 days following the Closing
Date, Vizacom does not receive net proceeds from a private placement through
Xxxxxxxx Xxxxxxxxx & Co., Inc. ("TWC") of at least $1,000,000. Vizacom and the
Stockholder's Representative agree to deliver promptly to the Escrow Agent a
Joint Notice to release a portion of the Escrowed Property to the Stockholders
in the event that, within 120 days following the Closing Date, Vizacom receives
net proceeds from a private placement through TWC of at least $1,000,000,
calculated as follows:
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Number of Shares Released = Number of shares minus 500,000
then held in escrow -------------------
Agreed Value of
Common Stock as
of the release date
2.04 In the event that the Escrow Agent has not received notice pursuant
to the provisions of Section 2.02 on or prior to the date that is one year
after the Closing Date (the "Termination Date"), the Escrow Agent shall
distribute the Escrowed Property to the Stockholders.
ARTICLE III. RELATED PROVISIONS
3.01 Upon the release and delivery of any amount of the Escrowed Property
to any party pursuant to this Escrow Agreement, the Escrow Agent shall also
release and deliver to such party any dividends or distributions held as part of
the Escrowed Property that are attributable to such amount of Escrowed Property
being so released and delivered.
3.02 In connection with the delivery of written notices to the Escrow
Agent by Vizacom, the Stockholders' Representative, or both such parties,
each such written notice shall be signed by an officer of Vizacom or the
Stockholders' Representative, or both, as appropriate, and shall accurately set
forth in each case:
(a) the number of shares of Common Stock that the Escrow Agent is
thereby directed to distribute out of the Escrowed Property;
(b) the party to whom the Escrow Agent is thereby directed to
distribute such amount; and
(c) the date upon which the Escrow Agent is directed to distribute
such amount; and such officer of Vizacom or the Stockholders'
Representative, or both, as the case may be, shall certify as to the
compliance of such notice with the provisions hereof.
The Escrow Agent may rely fully on the provisions set forth in any such
written notice which on its face complies with the provisions of Article II and
this Section 3.02.
ARTICLE IV. SETTLEMENT OF DISPUTES
4.01 Any dispute which may arise between Vizacom and the Stockholders'
Representative under this Escrow Agreement with respect to (a) the delivery,
ownership and/or right to possession of the Escrowed Property or any portion
thereof, (b) the facts upon which the Escrow Agent's determinations hereunder
are based, (c) the duties of the Escrow Agent hereunder or (d) any other
questions arising under this Escrow Agreement, shall be settled either by (i) a
joint written notice of Vizacom and the Stockholders' Representative providing
instructions to the Escrow Agent
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therein or (ii) by entry of a final order, decree or judgment by a court of
competent jurisdiction in the State of New York (the time for appeal therefrom
having expired and no appeal having been perfected).
4.02 The Escrow Agent shall be under no duty to institute or defend any
such proceedings and none of the costs and expenses of any such proceeding shall
be borne by the Escrow Agent. In the event the terms of a settlement of a
dispute hereunder increase the duties or liabilities of the Escrow Agent
hereunder and the Escrow Agent has not participated in such settlement so as to
be bound thereby, then such settlement shall be effective as to the Escrow Agent
in respect of such increase in its duties or liabilities only upon the Escrow
Agent's written assent thereto. Prior to the settlement of any disputes as
provided in this Article IV, the Escrow Agent is authorized and directed to
retain in its possession, without liability to anyone, such portion of the
Escrowed Property which is the subject of or involved in the dispute.
ARTICLE V. CONCERNING THE ESCROW AGENT.
5.01 The Escrow Agent shall be entitled to reasonable compensation for its
services hereunder and shall be reimbursed for all reasonable expenses,
disbursements and advances (including reasonable attorneys' fees and expenses)
incurred or made by it in performance of its duties hereunder. Such reasonable
compensation, disbursement, expenses and advances shall be borne by Vizacom and
shall be paid promptly upon request by the Escrow Agent.
5.02 The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice (a "Resignation Notice") of such
resignation to Vizacom and Stockholders' Representative specifying a date (not
less than 30 days after the giving of such notice) when such resignation shall
take effect. Promptly after such Resignation Notice, Vizacom and Stockholders'
Representative shall appoint a mutually agreeable successor Escrow Agent, such
successor Escrow Agent to become Escrow Agent hereunder upon the resignation
date specified in such notice. If Vizacom and Stockholders' Representative are
unable to agree upon a successor Escrow Agent within 30 days after such notice,
the Escrow Agent shall have the right to petition a court of competent
jurisdiction to appoint a successor, and the Escrow Agent shall continue to
serve until its successor accepts the escrow and receives the Escrowed Property.
5.03 The Escrow Agent undertakes to perform only such duties as are
specifically set forth herein. The Escrow Agent acting or refraining from acting
in good faith shall not be liable for any mistake of fact or error of judgment
by it or for any acts or omissions by it of any kind unless caused by negligence
or willful misconduct, and shall be entitled to rely, and shall be protected in
doing so, upon (a) any written notice, instrument or signature believed by it to
be genuine and to have been signed or presented by the proper party or parties
duly authorized to do so, and (b) the advice of counsel (which may be of the
Escrow Agent's own choosing). The Escrow Agent shall have no responsibility for
the contents of any writing submitted to it hereunder and shall be entitled in
good faith to rely without any liability upon the contents thereof. The Escrow
Agent has no
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responsibilities under, and shall be deemed to have no knowledge of, the
provisions of the Merger Agreement.
5.04 Vizacom and the Stockholders, jointly and severally, agree to
indemnify the Escrow Agent and hold it harmless against any and all liabilities
incurred by it hereunder as a consequence of such indemnifying party's action,
and Vizacom and the Stockholders, jointly and severally, further agree to
indemnify the Escrow Agent and hold it harmless against any and all losses,
costs, fees and expenses incurred by the Escrow Agent except, in either case for
liabilities incurred by the Escrow Agent resulting from its own gross negligence
or willful misconduct. The indemnification provided pursuant to this section
shall survive the resignation of the Escrow Agent or the termination of this
Escrow Agreement.
5.05 In the event the Escrow Agent becomes involved in any litigation or
dispute by reason hereof, it is hereby authorized to deposit with the clerk of a
court of competent jurisdiction the Escrowed Property held by it pursuant hereto
and, thereupon, shall stand fully relieved and discharged of any further duties
hereunder. Also, in the event the Escrow Agent is threatened with litigation by
reason hereof, it is hereby authorized to interplead all interested parties in
any court of competent jurisdiction and to deposit with the clerk of such court
the Escrowed Property held by it pursuant hereto and, thereupon, shall stand
fully relieved and discharged of any further duties hereunder.
ARTICLE VI. STOCKHOLDERS' REPRESENTATIVE
6.01 The Stockholders, and each of them, hereby appoint the Stockholders'
Representative as their agent to (i) represent, act for and on behalf of, and
bind each of the Stockholders in the performance of all of their obligations
arising from or relating to this Escrow Agreement, including, without limitation
(a) the execution and delivery of any document, certificate or agreement
required under this Escrow Agreement to be delivered by the Stockholders; (b)
the negotiation and settlement of claims of Vizacom in respect of the Escrowed
Property and the making of any objection to such claims; and (c) the
representation of the Stockholders at any arbitration or litigation in respect
of the foregoing; (ii) give and receive notices and receive service of process
under or pursuant to this Escrow Agreement; and (iii) to represent, act for, and
bind each of the Stockholders in the performance of all of their obligations
arising from or related to this Escrow Agreement. The Stockholders'
Representative hereby accepts such appointment.
6.02 In the event that the Stockholders' Representative shall resign or
otherwise be unable to fulfill its duties hereunder, a successor Stockholders'
Representative shall be selected by the Stockholders entitled to a majority of
the Escrowed Property as soon as reasonably practicable thereafter. If the
Stockholders desire to remove or replace the Stockholders' Representative for
any reason, any such Stockholders' Representative may be so removed or replaced
by the Stockholders entitled to receive a majority of such Escrowed Property.
Any decision, act, consent or instruction of the Stockholders' Representative
shall constitute a decision of the Stockholders and shall be
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conclusive and binding upon the Stockholders, and Vizacom and the Escrow
Agent may rely upon any such decision, act, consent or instruction of the
Stockholders' Representative as being the decision, act, consent or instruction
of the Stockholders.
ARTICLE VII. STOCKHOLDERS' INDEMNIFICATION
7.01 The Stockholders agree that the Escrowed Property may be used to
satisfy the Stockholders' indemnification obligations under Article IX of the
Merger Agreement. Accordingly, Article IX of the Merger Agreement is
incorporated herein by reference.
ARTICLE VIII. MISCELLANEOUS
8.01 This Escrow Agreement will be binding upon, inure to the benefit of,
and be enforceable by the respective successors and assigns of the parties
hereto, but neither this Escrow Agreement, nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties, except with respect to the Escrow
Agent as provided in Article V hereof.
8.02 This Escrow Agreement contains the entire understanding of the
parties with respect to this subject matter, and may be amended only by a
written instrument duly executed by Vizacom, the Escrow Agent and the
Stockholders' Representative.
8.03 All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be validly given, made or served, if in writing and delivered personally or sent
by registered or certified mail (return receipt requested), postage prepaid,
recognized national or international overnight delivery service or by facsimile
transmission electronically confirmed:
if to Vizacom:
Vizacom Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxxxx, LLC
50 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
0
Xxxxx 000
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
if to the Stockholders'
Representative, to SpaceLogix:
Xxxxxxxx Xxxxxxxxx Holding Company, Inc.
000 Xxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx, X'Xxxxxxx, XxXxxxxx & Lougee
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
if to the Escrow Agent:
Xxxx X. Xxxxxxxx, Esq.
Borstein & Xxxxxxxxx, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
or, in each case, at such other address as may be specified in writing to
the other parties. Each such notice, demand, request or other communication
shall be deemed given (i) on the date of such delivery by hand or facsimile
transmission electronically confirmed, (ii) on the first business day following
the date of such delivery to an overnight delivery service, or (iii) three
business days following certified mailing.
8.04 This Escrow Agreement shall be governed by, and construed and
enforced in accordance with the laws of the State of New York, without
regard to its conflicts of law rules.
8.05 This Escrow Agreement may be executed simultaneously in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
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8.06 This Escrow Agreement shall remain in full force and effect until the
later of the Termination Date or the date the Escrow Agent shall have delivered
all of the Escrowed Property in its possession in accordance with the terms
hereof.
8.07 Article headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Escrow
Agreement.
IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and
delivered by Vizacom, the Stockholders and the Escrow Agent on the date first
above written.
VIZACOM INC.
By: /s/ Xxxxxxx XxXxxxxx
------------------------------------
Name: Xxxxxxx XxXxxxxx
Title: President
Number of Shares of STOCKHOLDERS:
Common Stock
Placed in Escrow XXXXXXXX XXXXXXXXX HOLDING
COMPANY, INC.
216,134 By: /s/ Xxxx Xxxxxxx
------------------------ ------------------------------------
Name: Xxxx Xxxxxxx
Title: CFO
69,376 /s/ Xxxxxxx Xxxxxxxxx
------------------------ ------------------------------------
Xxxxxxx Xxxxxxxxx
120,985 /s/ Xxxxxxx X. Xxxxxxxx
------------------------ ------------------------------------
Xxxxxxx X. Xxxxxxxx
90,784 /s/ Xxxxxx Xxxxxxxxx
------------------------ ------------------------------------
Xxxxxx Xxxxxxxxx
286,909 /s/ Xxxxx Xxxxx
------------------------ ------------------------------------
Xxxxx Xxxxx
------------------------ ------------------------------------
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------------------------ ------------------------------------
STOCKHOLDERS' REPRESENTATIVE:
XXXXXXXX XXXXXXXXX HOLDING
COMPANY, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: CFO
ESCROW AGENT:
BORSTEIN & XXXXXXXXX, LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxx
Partner
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