EXHIBIT 10.3
EXHIBIT B
TO AGREEMENT AND PLAN OF MERGER AND SHARE EXCHANGE
FORM OF INDEMNITY ESCROW AGREEMENT
This is an Indemnity Escrow Agreement (this "Agreement") entered into
as of ___________, 2004 by and among Xxxxxx Holdings, Inc., a Delaware
corporation ("Parent"), Xxxxxxx Capital II, L.P., a Delaware limited partnership
("Xxxxxxx"), Strategic Entrepreneur Fund II, L.P., a Delaware limited
partnership ("SEF"), ________________ and ________________ as the stockholders'
representative appointed pursuant to Section 9.05 of the Merger Agreement (as
defined below) (jointly, the "Stockholders' Representative"), and SunTrust Bank,
as escrow agent (the "Escrow Agent"). Certain terms used in this Agreement
without definition in context or in Section 13 of this Agreement have the
meanings given to them in that Agreement and Plan of Merger and Share Exchange
dated as of May 7, 2004 (the "Merger Agreement"), by and among Parent, Parallel
Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of Parent
("Acquisition Sub"), Xxxxxx Technologies, Inc., a Delaware corporation (the
"Company"), Xxxxxxx and SEF.
The Merger Agreement provides for the exchange by Xxxxxxx and SEF of
their existing holdings of capital stock of the Company for a combination of
shares of Parent PIK Preferred and Parent Common Stock (the "Share Exchange").
Upon consummation of the Share Exchange, Acquisition Sub will merge with and
into the Company (the "Merger"), and shares of the capital stock of the Company
held by the Series F Holders will be converted into the right to receive the
respective Merger Consideration. Certain of the cash and shares of Parent PIK
Preferred and Parent Common Stock to be issued in the Share Exchange and Merger
are to be placed into escrow in order to secure certain indemnification
obligations set forth in Section 9.01 of the Merger Agreement. It is a condition
to the obligations of the parties to consummate the Share Exchange and Merger
that they enter into this Agreement.
The Merger, and the appointment of the Stockholders Representative,
have been approved by the holders of a majority of all votes represented by
outstanding shares of the capital stock of the Company, as well as a majority of
all votes entitled to be cast by holders of Xxxxxx Series F Preferred Stock.
In consideration of the foregoing and the mutual promises of the
parties herein contained, and other good and valuable consideration, receipt and
sufficiency of which hereby are acknowledged conclusively, the parties to this
Agreement hereby agree as follows:
1. Escrow Accounts and Escrow Deposits.
(a) General Escrow Deposit. Pursuant to the Merger Agreement, Parent
shall deposit in one escrow account with the Escrow Agent, as escrow agent, such
amount in cash and shares of Parent Common Stock (collectively, the "General
Escrow Shares" and together with the cash deposit and additions to or earnings
or distributions on the Escrow Shares or the cash deposit, the "General Escrow
Deposit"), as is set forth on Schedule A in respect of each Holder named
thereon. The Escrow Shares shall be registered in the name of the respective
Holder, with certificates in respect thereof delivered to the Escrow Agent
together with appropriate stock powers in respect thereof. Schedule A also sets
forth next to the name of each Holder their respective Holder's General Cash
Percentage and Holder's General Parent Common Percentage. Parent and the
Stockholders' Representative confirm by execution and delivery of this Agreement
that the allotment of cash and shares of Parent Common Stock in the General
Escrow Deposit amongst the Holders is in accord with the terms of the Merger
Agreement.
(b) Special Escrow Deposit. Pursuant to the Merger Agreement, if, but
only if, any Specified Litigation is outstanding as of the Closing, Parent shall
deposit in escrow with the Escrow Agent, as escrow agent, such amount in cash
and shares of Parent Common Stock (collectively, the "Special Escrow Shares" and
together with the cash deposit and additions to or earnings or distributions on
the Escrow Shares or the cash deposit, the "Special Escrow Deposit"), as is set
forth on Schedule B in respect of each Holder named thereon. The Escrow Shares
shall be registered in the name of the respective Holder, with certificates in
respect thereof delivered to the Escrow Agent together with appropriate stock
powers in respect thereof. Schedule B also sets forth next to the name of each
Holder their respective Holder's Special Cash Percentage and Holder's Special
Parent Common Percentage. Parent and the Stockholders' Representative confirm by
execution and delivery of this Agreement that the allotment of cash and shares
of Parent Common Stock in the Special Escrow Deposit amongst the Holders is in
accord with the terms of the Merger Agreement. [IF NO SPECIFIED LITIGATION IS
OUTSTANDING AS OF THE CLOSING, THIS SECTION MAY BE OMITTED FROM THE EXECUTION
COPY OF THE ESCROW AGREEMENT AND ALL OTHER PROVISIONS IN RESPECT OF THE SPECIAL
ESCROW DELETED.]
(c) Xxxxxxx Deposit. Pursuant to the Merger Agreement, Parent shall
deposit in escrow with the Escrow Agent, as escrow agent, such amount in cash
(together with additions to or earnings thereon, the "Xxxxxxx Deposit" and
together with the General Escrow Deposit and the Special Escrow Deposit, the
"Escrow Deposits"), as is set forth on Schedule C in respect of each Holder
named thereon. Schedule C also sets forth next to the names of Xxxxxxx and SEF
their respective Holder's Xxxxxxx Percentage. Parent and the Stockholders'
Representative confirm by execution and delivery of this Agreement that the
allotment of cash in the Xxxxxxx Deposit amongst the Holders is in accord with
the terms of the Merger Agreement.
2. Investment of Escrow. Any cash that may from time to time be part of the
Escrow Deposits, and all interest earned thereon shall be invested by the Escrow
Agent at the written direction of the Stockholders' Representative; provided,
however, that no investment or reinvestment may be made except in the following:
(a) direct general obligations of, or obligations, the payment of
principal of and interest on which are unconditionally guaranteed by, the United
States of America or any agency thereof, maturing within the earlier of six
months from the date of purchase or December 31, 2004;
(b) certificates of deposit or other evidences of indebtedness issued
by any bank or savings institution which is insured by the Federal Deposit
Insurance Corporation, maturing within the earlier of six months from the date
of purchase or December 31, 2004, provided that such certificates of deposit or
evidences of indebtedness, to the extent they exceed the amounts covered by such
insurance, are fully
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secured by obligations described in clause (a) above;
(c) prime commercial paper of companies whose commercial paper is rated
A-1 or P-1 by Xxxxx'x or Standard & Poor's;
(d) any money market fund substantially all of which is invested in the
foregoing investment categories (such as the STI Classic U.S. Treasury
Securities Money Market Fund); or
(e) an interest bearing trust account of the Escrow Agent insured by
the Federal Deposit Insurance Corporation.
If the Escrow Agent has not received written direction at any time with
respect to the investment of cash, the cash or such portion thereof as to which
no written direction has been received, shall be invested in investments
described in (d) above. If the amount of cash is insufficient to invest, the
cash will be deposited into an interest bearing trust account of the Escrow
Agent.
3. Rights and Obligations of the Parties. The Escrow Agent shall be entitled to
such rights and shall perform such duties of the escrow agent as set forth
herein (collectively, the "Duties"), in accordance with the terms and conditions
of this Agreement. Parent, Xxxxxxx, SEF, the Series F Holders, and Stockholders'
Representative shall be entitled to their respective rights and shall perform
their respective duties and obligations as set forth herein, in accordance with
the terms hereof.
4. Disposition. The Escrow Agent shall deliver the Escrow Deposits upon, and
pursuant to, joint written instructions of the Parent and the Stockholders'
Representative. Without limitation of the provisions of Section 5 below, the
Escrow Agent shall be entitled to rely conclusively upon any joint written
instructions delivered on behalf of Parent and the Stockholders' Representative
without inquiry into the accuracy or authorization thereof.
5. Limited Duties. The Escrow Agent undertakes to perform only those duties as
are expressly set forth in this Agreement.
6. Amounts Earned on Escrow Deposit: Tax Matters. All amounts earned, paid or
distributed with respect to the Escrow Deposits, if any (whether interest,
dividends, distributions from Parent with respect to the Escrow Shares or
otherwise), shall become a part of the Escrow Deposits, shall be held hereunder
upon the same terms as the original Escrow Deposits and shall be distributed
together with the underlying portion of the original Escrow Deposits pursuant to
the terms of this Agreement. The parties agree that Xxxxxxx, SEF, and each other
Holder will include all amounts attributable to Xxxxxxx, SEF, and each other
Holder earned on the Escrow Deposits (or allocated or distributed with respect
thereto) in its gross income for federal, state and local income tax purposes
and pay any such income tax resulting therefrom. Each Holder shall provide to
the Escrow Agent a completed Form W-9. The Escrow Agent shall have no duty to
prepare of file any tax report or return with respect to the Escrow Deposits or
any earnings thereon.
7. Claims Against Escrow Deposits.
(a) At any time or from time to time from the date hereof through and
including the first date on which no assets remain in any Escrow Deposit (the
"Escrow Period"), Parent or any successor of Parent may make claims against the
respective Escrow Deposits for indemnification subject to and in accordance with
the provisions of the Merger Agreement (including Sections 2.05 and 10.01 and
Article IX thereof). The Escrow Agent shall have no duty to ensure the
sufficiency of any claim or the conformity of any claim with the requirements of
the Merger Agreement. The Escrow Agent shall deliver
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payment to Parent for a claim upon, and pursuant to, joint written instructions
of Parent and the Stockholders' Representative, or in the case of a disputed
claim under Section 8 below, upon the final and binding adjudication of the
dispute in accordance with Section 8 below.
(b) The Escrow Agent shall follow the joint written instructions of the
Parent and the Stockholders' Representative in making any payment in
satisfaction of a claim against the Escrow Deposits and in making any release of
assets to a Holder. The joint written instruction shall set forth the exact
number of Escrow Shares and cash amount to be released from the respective
Escrow Deposits. It is agreed by Parent and the Stockholders' Representative
that such calculations shall be made as follows:
(i) Payments shall be made in satisfaction of a claim
against the General Escrow Deposit from each Holder
other than Xxxxxxx and SEF as follows: There shall be
released to Parent from the cash held in the General
Escrow Deposit in respect of such Holder an amount
equal to the result obtained by multiplying (a) the
amount of such claim times (b) the General Cash
Percentage times (c) such Holder's General Cash
Percentage. There shall be released to Parent from
the shares of Parent Common Stock held in the General
Escrow Deposit in respect of such Holder a number of
shares of Parent Common Stock equal in value (rounded
down to the nearest whole share) to the result
obtained by multiplying (a) the amount of such claim
times (b) the General Common Percentage times (c)
such Holder's General Common Percentage. If all
shares of Parent Common Stock in the General Escrow
Deposit shall have been delivered in accordance with
the preceding but the amount of such claim remains
unsatisfied, any cash remaining in the General Escrow
Account after the above described deliveries, up the
amount of such shortfall, will be delivered in
payment on such claim, and allocated against Holders
in accordance with their Holder's General Cash
Percentages.
(ii) Payments shall be made in satisfaction of a claim
against the Special Escrow Deposit from each Holder
other than Xxxxxxx and SEF as follows: There shall be
released to Parent from the cash held in the Special
Escrow Deposit in respect of such Holder an amount
equal to the result obtained by multiplying (a) the
amount of such claim times (b) the Special Cash
Percentage times (c) such Holder's Special Cash
Percentage. There shall be released to Parent from
the shares of Parent Common Stock held in the Special
Escrow Deposit in respect of such Holder a number of
shares of Parent Common Stock equal in value (rounded
down to the nearest whole share) to the result
obtained by multiplying (a) the amount of such claim
times (b) the Special Common Percentage times (c)
such Holder's Special Common Percentage. If all
shares of Parent Common Stock in the Special Escrow
Deposit shall have been delivered in accordance with
the preceding but the amount of such claim remains
unsatisfied, any cash remaining in the Special Escrow
Account after the above described deliveries, up the
amount of such shortfall, will be delivered in
payment on such claim, and allocated against Holders
in accordance with their Holder's Special Cash
Percentages.
(iii) Whereever an Escrow Share is required to be valued
for purposes of this Agreement, the value of each
such Escrow Share shall be deemed to be $25. The
number of Escrow Shares required to satisfy a payment
requirement shall be the number of Escrow Shares
(rounding down to the nearest whole unit) having a
value equal to the payment requirement.
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(iv) Payments shall be made in satisfaction of claims
under either Section 9.01(a) or 9.01(d) of the Merger
Agreement from Xxxxxxx and SEF as follows: There
shall be released to Parent from the cash held in the
Xxxxxxx Deposit in respect of such Holder an amount
equal to the result obtained by multiplying (a) the
amount of such claim times (b) the Xxxxxxx
Indemnification Percentage times (c) such Holder's
Xxxxxxx Percentage.
The Escrow Agent shall be entitled to rely conclusively on the joint written
instruction of the Parent and the Stockholders' Representative without any
requirement of review of or inquiry into the accuracy of or conformity of such
instructions and calculations to the procedures set forth above.
In the event that the Escrow Agent must make payment with a number of
Escrow Shares less than or different from the number of Escrow Shares
represented by a certificate(s) in the Escrow Deposits, the Escrow Agent shall
surrender such certificate(s) to Parent and Parent shall issue to the Escrow
Agent certificate(s) of Parent identical in form but for the number of Escrow
Shares as necessary to allow for proper payment of the claim, so long as the
number of Escrow Shares represented by the new certificate(s) plus the amount of
Escrow Shares used to satisfy such claim shall be equivalent to the total number
of Escrow Shares covered by the surrendered certificate(s). 8. Disputed Claims.
(a) Should any dispute or controversy arise between or among the
parties or any other person, firm or entity, with respect to this Agreement, the
Escrow Deposits (or any part thereof), a dispute by the Stockholders'
Representative of an indemnification claim by Parent, or the right of Parent to
receive the Escrow Deposits, or should the parties fail to designate another
Escrow Agent as provided in Section 10 hereof, or if the Escrow Agent should be
in doubt as to what action to take, the Escrow Agent shall have the right (but
not the obligation) to (i) withhold delivery of the Escrow Deposits until the
controversy is resolved to the Escrow Agent's satisfaction or (ii) deposit the
Escrow Deposits into any court of competent jurisdiction, with notice to Parent
and the Stockholders' Representative, and Escrow Agent shall thereupon be
discharged from all further duties as Escrow Agent. If any dispute should arise
with respect to the payment or ownership or right of possession of the Escrow
Deposits, or the duties of the Escrow Agent hereunder, the Escrow Agent is
authorized and directed to retain in its possession, without liability to
anyone, all or any part of the Escrow Deposits until such dispute shall have
been settled either by mutual agreement of parties in dispute or by the final
order, decree or judgment of a court of competent jurisdiction in the United
States of America (the time for appeal having expired with no appeal having been
taken) in a proceeding to which the parties and such other parties in dispute
are parties, but the Escrow Agent shall be under no duty whatsoever to institute
or defend any such proceedings. Parent and the Stockholders' Representative
shall each promptly inform the Escrow Agent of the existence of any such
dispute.
(b) Other than as otherwise provided for in Article IX of the Merger
Agreement, the Escrow Deposits shall constitute the sole recourse of Parent to
satisfy its claims pursuant to such Article IX of the Merger Agreement.
(c) Upon resolution of all outstanding claims, Parent and the
Stockholders' Representative jointly shall execute a written notice to such
effect and deliver such notice to the Escrow Agent.
9. Termination. This Agreement shall terminate on the date that all Escrow
Deposits are reduced to zero as the result of payments by the Escrow Agent to
Parent in accordance with the provisions of Section 7 or Section 8, or as a
result of payments by the Escrow Agent to the Holders in accordance with the
provisions of Section 4. After such payment, this Agreement shall terminate. At
such time as all
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remaining indemnification claims hereunder have been resolved and the Escrow
Agent has received a written notice executed by Parent and the Stockholders'
Representative pursuant to Section 8, and any amounts to be distributed to
Parent in connection therewith have been so distributed, the Escrow Agent shall
distribute the remaining Escrow Deposits, if any, to the Holders.
10. The Escrow Agent.
(a) Direction from Parent and the Stockholders' Representative.
Notwithstanding anything herein to the contrary, the Escrow Agent shall promptly
dispose of all or any part of the Escrow Deposits as directed by a writing
signed jointly by Parent and the Stockholders' Representative.
(b) Reliance by Escrow Agent; Liability of Escrow Agent. Except with
respect to capitalized terms used herein and defined in the Merger Agreement,
the Escrow Agent will not be subject to, or be obliged to recognize, any other
agreement between the parties hereto (including, but not limited to, the Merger
Agreement) or directions or instructions not specifically set forth herein. The
Escrow Agent will not make any payment or disbursement from or out of the Escrow
Deposits that is not expressly authorized pursuant to this Agreement. The Escrow
Agent undertakes to perform only such duties as are expressly set forth herein.
The Escrow Agent may rely and shall be protected in acting or refraining from
acting upon any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall be under no duty to inquire into
or investigate the validity, accuracy or content of any such document. The
Escrow Agent shall have no duty to solicit any payment that may be due
hereunder. The Escrow Agent shall not be liable for any action taken or omitted
by it in good faith, unless a court of competent jurisdiction determines that
the Escrow Agent's gross negligence or wilful misconduct was the primary cause
of any loss to Parent, the Stockholders' Representative or any Holder. In the
administration of the Escrow Deposits hereunder, the Escrow Agent may execute
any of its powers and perform its duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons to
be selected and retained by it. The Escrow Agent shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
advice or opinion of any such counsel, accountants or other skilled persons.
Parent and the Holders, jointly and severally, hereby agree to indemnify and
hold the Escrow Agent and each of its directors, officers, agents and employees
(collectively, the "Indemnitees") harmless from and against any and all claims,
liabilities, losses, damages, fines, penalties, and expenses, including
out-of-pocket and incidental expenses and attorneys' fees and expenses
("Losses") that may be imposed on, incurred by, or asserted against the
Indemnitees or any of them, directly or indirectly, for following any
instructions or other directions upon which the Escrow Agent is authorized to
rely pursuant to the terms of this Agreement. In addition to and not in
limitation of the immediately preceding sentence, Parent and the Holders also
agree, jointly and severally, to indemnify and hold the Indemnitees and each of
them harmless from and against any and all Losses that may be imposed on,
incurred by, or asserted against the Indemnitees or any of them, directly or
indirectly, in connection with or arising out of the Indemnitees' conduct as
Escrow Agent under this Agreement, provided that the Indemnitees have not acted
with gross negligence or engaged in wilful misconduct. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be
liable for special, indirect or consequential losses or damages of any kind
whatsoever. As between Parent, on the one hand, and the Holders, on the other
hand, each shall bear equally the indemnification obligations set forth in this
Section 10(b). The provisions of this Section 10(b) shall survive the
termination of this Agreement and the resignation or removal of the Escrow Agent
for any reason.
(c) Fees and Expenses of the Escrow Agent. All fees of the Escrow Agent
for its services hereunder, together with any expenses reasonably incurred by
the Escrow Agent in connection with this Agreement, shall be paid by Parent. All
fees of the Escrow Agent in connection herewith shall be due
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upon receipt of an invoice from the Escrow Agent delivered to Parent. Such fees
and expenses are set forth on Schedule __ hereto.
(d) Resignation and Removal of Escrow Agent; Successor Escrow Agent.
(i) The Escrow Agent may resign from its duties
hereunder by giving each of the parties hereto not
less than thirty (30) days prior written notice of
the effective date of such resignation (which
effective date shall be at least thirty (30) days
after the date such notice is given). In addition,
the Escrow Agent may be removed and replaced on a
date designated in a written instrument (which
effective date shall be at least thirty (30) days
after the date such notice is given) signed by Parent
and the Stockholders' Representative and delivered to
the Escrow Agent. The parties hereto intend that a
successor escrow agent mutually acceptable to
Stockholders' Representative and Parent will be
appointed to fulfill the duties of the Escrow Agent
hereunder for the remaining term of this Agreement in
the event of the Escrow Agent's resignation or
removal. Upon the effective date of such resignation
or removal, the Escrow Agent shall deliver the
property comprising the Escrow Deposits to such
successor escrow agent, together with an accounting
of the investments held by it and all transactions
related to this Agreement, including any
distributions made and such records maintained by the
Escrow Agent in connection with its duties hereunder
and other information with respect to the Escrow
Deposits as such successor may reasonably request. If
on or before the effective date of such resignation
or removal, a successor escrow agent has not been
appointed, the Escrow Agent shall cease its functions
at the expiry of the notice period and may retain any
and all property in its possession hereunder on a
merely safe keeping basis, at a fee to be determined
by the Escrow Agent, acting reasonably (or, at the
election of the Escrow Agent, tender the property
held hereunder into the registry of any court of
competent jurisdiction and thereupon shall be
discharged from all further duties as escrow agent).
(ii) Upon written acknowledgement by a successor escrow
agent appointed in accordance with this Agreement to
serve as escrow agent hereunder and the receipt of
the property then comprising the Escrow Deposits, or
upon deposit of all property held hereunder into the
registry of a court of competent jurisdiction, the
Escrow Agent shall be fully released and relieved of
all duties, responsibilities and obligations under
this Agreement, and such successor escrow agent shall
for all purposes hereof be the Escrow Agent.
(iii) Any corporation, association or other entity into
which the Escrow Agent may be converted or merged, or
with which it may be consolidated, or to which it may
sell or otherwise transfer all or substantially all
of its corporate trust business, or any corporation,
association or other entity resulting from any such
merger, conversion, consolidation, sale or other
transfer, shall, ipso facto, be and become successor
Escrow Agent hereunder, vested with all of the
powers, discretions, immunities, privileges and all
other matters as was its predecessor, without the
execution or filing of any instrument or any further
act on the part or any of the parties hereto,
anything herein to the contrary notwithstanding.
(e) The Escrow Agent shall have the right to consult with and obtain
advice from legal counsel employed or appointed by it in the event of any
questions as to any of the provisions hereof or its
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duties hereunder, and shall have no liability and be fully protected with regard
to any actions taken or omitted to be taken pursuant to such advice. The cost of
such services shall be reasonable expenses pursuant to Section 10(c) hereof.
(f) The Escrow Agent shall disburse monies hereunder only to the extent
that monies have been deposited with it.
(g) The Escrow Agent shall retain the right not to act and shall not be
held liable for refusing to act unless it has received clear documentation that
complies with the terms of this Agreement. Such documentation must not require
the exercise of any discretion or independent judgment.
(h) The Escrow Agent shall incur no liability with respect to the
delivery or non-delivery of any certificate or certificates whether delivered by
hand, mail or any other means.
(i) The forwarding of a stock certificate or check, as the case may be,
by the Escrow Agent will satisfy and discharge the liability of the Escrow Agent
for any shares or amounts due to the extent of the shares, sum or sums
represented thereby. In the event of the non-receipt of such check by the payee,
or the loss or destruction thereof, the Escrow Agent, upon being furnished with
reasonable evidence of such non-receipt, loss or destruction and indemnity
reasonably satisfactory to it, will issue to such payee a replacement check for
the amount of such check.
(j) None of the provisions contained in this Agreement require the
Escrow Agent to expend or to risk its own funds or otherwise to incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.
11. Voting of Escrow Shares. So long as any Escrow Shares are retained by the
Escrow Agent, each Holder shall be entitled to exercise the voting power, if
any, with respect to such Holder's Escrow Shares. The Escrow Agent shall have no
rights or duties whatsoever in respect of the exercise of such voting rights nor
in respect of proxy and other materials to be distributed to the Holders in
connection therewith.
12. Stockholders' Representative. Xxxxxxx, SEF, and the other Holders shall be
represented hereunder by the Stockholders' Representative appointed in
accordance with the terms of the Merger Agreement. The Escrow Agent shall be
entitled to deal exclusively with the Stockholders' Representative as agent of
the Holders on all matters relating to the Merger Agreement and this Agreement,
and shall be entitled to rely exclusively (without further evidencing of any
kind whatsoever) on any document executed or purported to be executed on behalf
of any Holder by the Stockholders' Representative, and on any other action taken
or purported to be taken on behalf of any Series F Holders by the Stockholders'
Representative, as fully binding upon the Holders. The Escrow Agent is hereby
relieved of any liability to any person for any acts done by them in accordance
with any act, decision, consent or instruction of the Stockholders'
Representative.
13. Certain Definitions.
"General Cash Percentage" means the result obtained by multiplying (a)
the Series F Indemnification Percentage by (b) a fraction, the numerator of
which is the aggregate cash deposited into the General Escrow Deposit as of the
Effective Time and the denominator of which is the total aggregate value of all
cash and Parent Common Stock deposited into the General Escrow Deposit as of the
Effective Time.
"General Common Percentage" means the result obtained by multiplying
(a) the Series F Indemnification Percentage by (b) a fraction, the numerator of
which is the aggregate value of all shares
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of Parent Common Stock deposited into the General Escrow Deposit as of the
Effective Time and the denominator of which is the total aggregate value of all
cash and Parent Common Stock deposited into the General Escrow Deposit as of the
Effective Time.
"Holders" means Xxxxxxx, SEF, and the Series F Holders."Holder's
Berhman Percentage" means in respect of Xxxxxxx or SEF a fraction, the numerator
of which is the cash amount deposited into the Xxxxxxx Deposit as of the
Effective Time and allocated to such Holder, and the denominator of which is the
aggregate value of all cash deposited into the Xxxxxxx Deposit at
Closing."Holder's General Cash Percentage" means in respect of a given Holder a
fraction, the numerator of which is the cash amount deposited into the General
Escrow Deposit as of the Effective Time and allocated to such Holder, and the
denominator of which is the aggregate value of all cash deposited into the
General Escrow Deposit at Closing.
"Holder's General Common Percentage" means in respect of a given Holder
a fraction, the numerator of which is the value of the shares of Parent Common
Stock deposited into the General Escrow Deposit as of the Effective Time and
allocated to such Holder, and the denominator of which is the aggregate value of
all shares of Parent Common Stock deposited into the General Escrow Deposit at
Closing."Holder's Special Cash Percentage" means in respect of a given Holder a
fraction, the numerator of which is the cash amount deposited into the Special
Escrow Deposit as of the Effective Time and allocated to such Holder, and the
denominator of which is the aggregate value of all cash deposited into the
Special Escrow Deposit at Closing.
"Holder's Special Common Percentage" means in respect of a given Holder
a fraction, the numerator of which is the value of the shares of Parent Common
Stock deposited into the Special Escrow Deposit as of the Effective Time and
allocated to such Holder, and the denominator of which is the aggregate value of
all shares of Parent Common Stock deposited into the Special Escrow Deposit at
Closing."Special Cash Percentage" means the result obtained by multiplying (a)
the Series F Indemnification Percentage by (b) a fraction, the numerator of
which is the aggregate cash deposited into the Special Escrow Deposit as of the
Effective Time and the denominator of which is the total aggregate value of all
cash and Parent Common Stock deposited into the Special Escrow Deposit as of the
Effective Time.
"Special Common Percentage" means the result obtained by multiplying
(a) the Series F Indemnification Percentage by (b) a fraction, the numerator of
which is the aggregate value of all shares of Parent Common Stock deposited into
the Special Escrow Deposit as of the Effective Time and the denominator of which
is the total aggregate value of all cash and Parent Common Stock deposited into
the Special Escrow Deposit as of the Effective Time.
14. Governing Law. IT IS THE PARTIES' INTENT THAT THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES.
15. Counterparts. This Escrow Agreement may be executed in one or more
counterparts, all of which together shall be considered one and the same
document.
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16. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed to have been given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid), (b) sent by facsimile with
confirmation of transmission by the transmitting equipment, or (c) received or
rejected by the addressee, if sent by certificate mail, return receipt
requested, in each case to the following addresses or facsimile numbers and
marked to the attention of the person (by name or title) designated below:
To Parent: Xxxxxx Technologies, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Executive
Officer
Facsimile No: (000) 000-0000
Phone No:
Tax ID No:
With a copy to: Xxxxxxxxxxx & Xxxxxxxx, LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
Phone No: (000) 000-0000
To the Stockholders' Representative:
With a copy to:
To Escrow Agent: SunTrust Bank
Corporate Trust Department
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx-Xxxx
Fax: (000) 000-0000
Phone No: (000) 000-0000
Addresses may be changed by written notice given pursuant to this
Section 16. Any notice given hereunder may be given on behalf of any party by
his counsel or other authorized representatives.
17. Force Majeure. None of Parent, the Holders, the Stockholders' Representative
and the Escrow Agent shall be responsible for delays or failures in performance
under this Agreement resulting from acts beyond its control. Such acts shall
include, but not be limited to, acts of God, strikes, lockouts, riots, acts of
war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
18. Modifications. This Agreement may not be altered or modified, nor may any
condition or covenant set forth herein be waived without the express written
consent of each of the parties hereto (provided, however, that the consent of
Xxxxxxx and SEF shall not be required from and after the date that no further
assets remain in the Xxxxxxx Deposit, unless such alteration, modification or
waiver could reasonably be expected to adversely affect Xxxxxxx and SEF in their
capacities as potential indemnifying
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parties under the Merger Agreement (but excluding any adverse effect on them in
their capacities as equityholders of Parent)). No course of conduct shall
constitute a waiver of any of the terms and conditions of this Escrow Agreement,
unless such waiver is specified in writing, and then only to the extent so
specified. A waiver of any of the terms and conditions of this Escrow Agreement
on one occasion shall not constitute a waiver of the other terms of this Escrow
Agreement, or of such terms and conditions on any other occasion.
19. Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, and (b) certificates and other information
previously or hereafter furnished, may be reproduced by a photographic,
photostatic, microfilm, optical disk, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed as of the date first written above.
XXXXXX HOLDINGS, INC.:
By:
-----------------------------------
Name:
Title:
XXXXXXX CAPITAL II, L.P.:
By:
-----------------------------------
Name:
Title:
STRATEGIC ENTREPRENEUR FUND II, L.P.:
By:
-----------------------------------
Name:
Title:
STOCKHOLDERS' REPRESENTATIVE:
By:
-----------------------------------
Name:
Title:
SUNTRUST BANK, AS ESCROW AGENT:
By:
-----------------------------------
Name:
Title:
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