Exhibit 11
STOCKHOLDERS' ESCROW AGREEMENT
STOCKHOLDERS' ESCROW AGREEMENT (the "Agreement"), dated as of
August 26, 1997, by and among Xxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx");
Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"); and Xxxxxx X. Xxxx ("Buck") (each
a "Stockholder" and collectively, the "Stockholders") and Xxxxxx
Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx (the "Escrow Agent"). Any
reference herein to any Stockholder shall be deemed to also include
a reference to the heirs, estate and personal representatives of
such Stockholder.
W I T N E S S E T H:
WHEREAS, the Stockholders have executed an Agreement dated
August 26, 1997, (the "Stockholders' Agreement") a copy of which is
attached hereto as Exhibit A in connection with the proposed merger
(the "Merger") of International Post Limited, a Delaware
corporation ("IPL") and Video Services Corporation, a New Jersey
corporation ("Video") with IPL to be the surviving corporation of
the Merger (to be known as "Video Services Corporation");
WHEREAS, the Stockholders have agreed pursuant to the
Stockholders' Agreement to grant stock options ("Options") to
employees of or consultants to Video or IPL or their respective
subsidiaries (the "Optionees") to purchase shares of IPL Common
Stock, par value $.01 per share ("IPL Common Stock") and have
caused Exhibit B to be attached hereto, which contains a list and
brief description of all Options granted prior to the date hereof.
The list will be updated from time to time by written notice given
by any Stockholder to the Escrow Agent and all other Stockholders.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Appointment of Escrow Agent
The Stockholders hereby appoint the Escrow Agent as their
agent to hold and disburse all assets from time to time deposited
with the Escrow Agent pursuant hereto on the terms and subject to
the conditions set forth in this Agreement, and the Escrow Agent
hereby accepts such appointment. By their execution of this
Agreement, the Stockholders expressly authorize the Escrow Agent
to, and the Escrow Agent expressly agrees to, take the actions
contemplated by this Agreement in accordance with the provisions of
this Agreement.
Section 2. Escrow Accounts; Deposit of Stock Certificates.
On the date hereof each of the Stockholders is delivering to
the Escrow Agent a stock certificate (duly endorsed in blank or
accompanied by stock powers duly endorsed in blank) representing
the number of shares of IPL Common Stock set forth opposite his
name below:
Name Number of Shares
Siracusano 322,294 (the "Siracusano Deposited Shares")
Xxxxxxxx 322,294 (the "Xxxxxxxx Deposited Shares")
Buck 16,941 (the "Buck Deposited Shares")
The shares represented by the certificates so deposited are
referred to herein collectively as the "Deposited Shares". Each
Stockholder shall retain all voting rights in respect of the
Deposited Shares deposited by such Stockholder, as well as the
right to receive all cash dividends paid on such shares until such
time, if any, as they are transferred to the Optionees. All
securities received in respect of such shares as dividends shall be
distributed to the applicable Stockholder in accordance with the
following percentages: (i) with respect to Xxxxx X. Xxxxxxxxxx,
46.062%; (ii) with respect to Xxxxxx X. Xxxxxxxx, 46.062%; and
(iii) with respect to Xxxxxx X. Xxxx, 7.876%.
Section 3. Procedure for Disbursement.
(a) After any Optionee has exercised its Option pursuant to
the agreement between the Optionee and the Stockholders (the
"Option Agreement") by providing written notice to each Stockholder
and otherwise complying with the terms of such Option Agreement
(including all payment terms), the Optionee or any Stockholder may
provide written notice to the Escrow Agent of such exercise of
the Option specifying the number of shares of IPL Common Stock to
be purchased through such exercise from each Stockholder (the
"Option Exercise Notice"). The Escrow Agent shall notify each
Stockholder of its receipt of the Option Exercise Notice and of
the number of Deposited Shares of each Stockholder to be disbursed
to the Optionee (the "Disbursement Notice") within five (5)
Business Days of its receipt of the Option Exercise Notice. Within
five (5) Business Days of receipt of the Disbursement Notice by a
Stockholder (the "Objection Period"), a Stockholder may object to
the disbursement of the applicable Deposited Shares by sending
written notice of such objection (the "Objection Notice") to the
Escrow Agent and to the other Stockholders. Failure by a
Stockholder to deliver the Objection Notice to the Escrow Agent
prior to the end of the Objection Period shall be deemed an
acceptance of the exercise of the Option in the amount set forth in
the Disbursement Notice and: (i) acknowledgment, as between the
Stockholder and the Escrow Agent, that all terms of the Option
Agreement in connection with such exercise have been complied with;
and (ii) authorization of the Escrow Agent, by and on behalf of and
as attorney-in-fact, for each Stockholder, to take all necessary
action to cause the transfer on the books and records of IPL, of
the number of shares of IPL Common Stock specified in the Option
Exercise Notice, from the Stockholder to the Optionee, out of the
Deposited Shares deposited hereunder by such Stockholder.
(b) In the event that a Stockholder timely delivers an
Objection Notice to the Escrow Agent, the Escrow Agent shall not
complete the disbursement until directed to do so: (i) pursuant to
a written instruction signed by each of the Stockholders and the
Optionee; or (ii) by final, binding order of a court of competent
jurisdiction.
(c) Upon the expiration of five (5) years from the date of
this Agreement, the Escrow Agent shall disburse the Deposited
Shares in accordance with the provisions and percentages set forth
in Section 1 of the Stockholder's Agreement; it being understood
and agreed that this Agreement and the Stockholder's Agreement have
been established on the assumption that shares will be deposited,
transferred to Optionees and returned to the Stockholders in
accordance with the percentages contemplated in such document and
that, in the event of any failure of the same to occur, the
Stockholders agree that the number of Deposited Shares disbursed by
the Escrow Agent to each Stockholder shall be appropriately and
equitably adjusted to achieve the result referenced to above in
this paragraph as closely as possible.
Section 4. Duties and Obligations.
(a) It is agreed that the duties and obligations of the
Escrow Agent are those herein specifically provided and no other.
The Escrow Agent shall not have any liability under, or duty to
inquire into, the terms and provisions of any agreement, other than
this Agreement. The Escrow Agent's duties are ministerial in
nature and the Escrow Agent shall not incur any liability whatso-
ever so long as it has acted in good faith, except for willful
misconduct. In the event that, at any time, the Escrow Agent has
any question as to the interpretation or application of any
provision of this Agreement, or requests written instructions or
confirmation of any action or inaction to be taken or not to be
taken by the Escrow Agent hereunder, the Escrow Agent may, in its
discretion, refrain from taking any action or engaging in any
activity, until it has received such instruction or confirmation as
it may reasonably request and the parties hereto will provide the
same as reasonably requested by the Escrow Agent from time to time.
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted
by it in accordance with the advice of such counsel. The Escrow
Agent shall not be bound by any modification, amendment, termina-
tion, cancellation, rescission or supersession of this Agreement
unless the same shall be in writing and signed by all of the
parties hereto.
(c) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be
entitled to commence an action in interpleader and to deliver the
property then held in the Escrow Accounts into court, whereupon its
sole obligation shall be to take such action as is ordered by a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
(d) The Escrow Agent shall not incur any liability for fol-
lowing the instructions herein contained or expressly provided for.
(e) The Escrow Agent shall not have any responsibility for
the genuineness or validity of any document or other item deposited
with it or any liability for action in accordance with any written
instructions or certificates given to it hereunder and reasonably
believed by it to be signed by the proper parties.
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or
defend any legal proceedings (including interpleader) which may be
instituted against it in respect of the subject matter of this
Agreement. If it does elect to act, it will do so only if it is
indemnified against the reasonable cost and expense of such defense
or initiation.
(g) This Agreement shall terminate when all property on
deposit pursuant hereto has been disbursed as provided in this
Agreement.
Section 5. Resignation. The Escrow Agent may at any time
resign hereunder by giving written notice of its resignation to the
Stockholders, at least thirty days prior to the date specified for
such resignation to take effect, and, upon the effective date of
such resignation, all funds and property then held by the Escrow
Agent hereunder shall be delivered by it to such person as may be
designated in writing by all the Stockholders, whereupon all of the
Escrow Agent's obligations hereunder shall cease and terminate. If
no such person shall have been designated by such date, all obliga-
tions of the Escrow Agent hereunder shall nevertheless cease and
terminate except that the Escrow Agent's sole responsibility
thereafter shall be to continue to hold all the property then held
by it and to deliver the same to a person designated in writing by
all of the Stockholders or in accordance with the directions of a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
Section 6. Indemnification. The Stockholders agree to
indemnify, defend and hold the Escrow Agent harmless from and
against any and all loss, damage, tax, liability and expense,
including, without limitation, reasonable attorneys' fees, that may
be incurred by the Escrow Agent arising out of or in connection
with its acceptance of appointment as Escrow Agent hereunder,
except as caused by its gross negligence or willful misconduct,
including, without limitation, the legal costs and expenses of
defending itself against any claim or liability in connection with
its performance hereunder. Each Stockholder agrees to indemnify,
defend and hold the Escrow Agent harmless from and against any and
all loss, damage, tax, liability and expense, including, without
limitation, reasonable attorneys' fees, that may be incurred by the
Escrow Agent arising out of any wrongful act or omission by such
Stockholder hereunder, except as caused by the Escrow Agent's gross
negligence or willful misconduct, including, without limitation,
the legal costs and expenses of defending itself against any claim
or liability in connection with its performance hereunder.
Section 7. Expenses. The Stockholders shall reimburse the
Escrow Agent for all expenses and disbursements incurred by the
Escrow Agent including, without limitation, fees and expenses, of
counsel of the Escrow Agent incurred in connection with this
Agreement.
Section 8. Notices. All notices, requests, demands, waivers,
consents, approvals or other communications to any party hereunder
shall be in writing and shall be deemed to have been duly given if:
(i) delivered personally to such party; or (ii) sent to such party
by telegram or telecopy, with a copy sent on the same day via
overnight delivery to the following addresses:
If to Siracusano, to:
Xxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
Fax # (000) 000-0000
If to Xxxxxxxx, to:
Xxxxxx X. Xxxxxxxx
c/o Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
(000) 000-0000
Fax # (000) 000-0000
If to Buck, to:
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
(000) 000-0000
Fax # (000) 000-0000
All notices to the Escrow Agent shall be sent to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Fax # (000) 000-0000
or to such other address as the addressee may have specified in
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communications
shall be deemed to have been given and received as of the date so
delivered, telegraphed or telecopied.
Section 9. Assignment. A party hereto may assign its rights
under this Agreement upon notice to all other parties hereto.
Section 10. Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, heirs and personal
representatives.
Section 11. Governing Law. This Agreement shall be governed
by and interpreted under the laws of the State of New York
applicable to contracts made and performed therein without giving
effect to the principles of conflict of laws thereof.
Section 12. Amendment; Waiver. No amendment, modification or
waiver of the provisions of this Agreement shall be effective
unless in a writing executed by the party against whom such
amendment or modification is sought to be enforced (or in the case
of a waiver by the party waiving one or more of its rights
hereunder).
Section 13. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but collectively all of such counterparts shall
constitute one and the same agreement.
Section 14. Adjustments. For purposes of this Agreement all
references to numbers of shares or calculations based thereon or
relating thereto, shall be appropriately adjusted for any stock
dividend, stock split, reverse stock split, combination,
recapitalization or other similar event.
Section 15. Third Party Beneficiaries. This Agreement is
made solely for the benefit of the parties hereto and may be
amended by them in their sole and absolute discretion without
consent of or notice to, any Optionee or any other person or
entity; provided, however, that upon written notice by any two
Stockholders to: (i) the Escrow Agent; and (ii) all of the other
Stockholders, any two Stockholders may, from time to time,
designate one or more Optionees as a third party beneficiary of
this Agreement to the extent expressed in such notice.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
XXXXXX XXXXXX BUTOWSKY
XXXXXXX SHALOV & XXXX
/s/
By:
EXHIBIT B
Holder Issued Date IPL Shares
Adizes Institute, Inc. June 13, 1997 70,000
Xxxxxx Xxxxxxxxx June 13, 1997 35,000
Xxxxxxx Xxxxxxxxx June 13, 1997 50,000
Xxxxx X. Xxxxxxx June 13, 1997 30,000
Xxxx Xxxxxxxxx June 13, 1997 40,000
Xxxxxx Xxxxxxxx June 13, 1997 25,000
