ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of July
14, 2000, by and among: SBE, INC., a Delaware corporation ("Parent"); the
parties identified on Exhibit A hereto (the "Shareholders"); XXXXXX X. XXXXX as
agent for the Shareholders ("Shareholders' Agent"); and STATE STREET BANK AND
TRUST COMPANY OF CALIFORNIA, N.A., a national banking association (the "Escrow
Agent").
RECITALS
A. Parent, Merger Sub, Telecom Acquisition Sub, Inc., a Delaware
Corporation (the "Company"), and the Shareholders have entered into an Agreement
and Plan of Merger dated as of the date hereof (the "Merger Agreement"),
pursuant to which Parent will acquire all of the outstanding capital stock of
the Company.
B. The Merger Agreement contemplates the establishment of an
escrow arrangement to secure indemnification obligations of the Shareholders
under the Merger Agreement and to provide Parent with a recourse in the event
that any Shareholder revokes the waiver and release of his rights under the
Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA").
C. Pursuant to Section 5.6 of the Merger Agreement, the
Shareholders have irrevocably appointed Xxxxxx X. Xxxxx to serve as
Shareholders' Agent for, among other things, all matters set forth in Section 4
of the Merger Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Agreement and
not otherwise defined shall have the meanings given to them in the Merger
Agreement, a copy of which is attached hereto as Exhibit D.
2. ESCROW AND INDEMNIFICATION.
(a) SHARES PLACED IN ESCROW. At the Closing Date, the
date of which shall be set forth in a notice to Escrow Agent, Parent shall
deliver to the Escrow Agent certificates for shares of Parent Common Stock
registered in the name of Embassy & Co., as nominee of State Street Bank and
Trust Company of California, N.A., evidencing the shares of Parent Common Stock
to be held in escrow in accordance with Section 1.5(g) of the Merger Agreement
and with this Agreement. The shares of Parent Common Stock from time to time
being held in escrow pursuant to this Agreement (the "Escrow Shares") shall
constitute an escrow fund (the "Escrow Fund") with respect to the obligations of
the Shareholders under Section 4 of the Merger Agreement. The Escrow Fund shall
be held as a trust fund and shall not be subject to any lien, attachment,
trustee process or any other judicial process of any creditor of any Shareholder
or of any party hereto. The Escrow Agent agrees to accept delivery of the Escrow
Fund and to hold the Escrow Fund in an escrow account (the "Escrow Account"),
subject to the terms and conditions of this Agreement.
1.
(b) VOTING OF ESCROW SHARES. The Escrow Agent shall vote
the Escrow Shares in accordance with the written directions of the Shareholders'
Agent. In the absence of written directions from the Shareholders' Agent, the
Escrow Agent need not vote the Escrow Shares. Because each of the Shareholders
is or will be a shareholder of Parent and will be furnished with proxy materials
and other documents distributed by Parent to its shareholders, the Escrow Agent
need not distribute to the Shareholders or to the Shareholders' Agent proxy
materials and other documents relating to the Escrow Shares received by the
Escrow Agent from Parent.
(c) DIVIDENDS, ETC. Parent and each of the Shareholders
agree among themselves, for the benefit of Parent and the Escrow Agent, that any
cash, securities or other property distributable (whether by way of dividend,
stock split or otherwise) in respect of or in exchange for any Escrow Shares
shall not be distributed to the Shareholders upon receipt but rather shall be
distributed to and held by the Escrow Agent in the Escrow Account. Unless and
until the Escrow Agent shall actually receive such cash, securities or other
property, it may assume without inquiry that the Escrow Shares currently being
held by it in the Escrow Account are all that the Escrow Agent is required to
hold. At the time any Escrow Shares are required to be released from the Escrow
Account to any Person pursuant to this Agreement, any cash, securities or other
property previously received by the Escrow Agent in respect of or in exchange
for such Escrow Shares shall be released from the Escrow to such Person.
(d) TRANSFERABILITY. The interests of the Shareholders in
the Escrow Account and in the Escrow Shares shall not be assignable or
transferable, other than by operation of law. No transfer of any of such
interests by operation of law shall be recognized or given effect until Parent
and the Escrow Agent shall have received written notice of such transfer.
(e) FRACTIONAL SHARES. No fractional shares shall be
retained in or released from the Escrow pursuant to this Agreement. In
connection with any release of Escrow Shares from the Escrow Account, Parent and
the Escrow Agent shall "round down" in order to avoid retaining any fractional
share in the Escrow Account and in order to avoid releasing any fractional share
from the Escrow Account. Parent shall provide to the Escrow Agent, and the
Escrow Agent shall distribute to each Person who would otherwise be entitled to
a fractional share, cash-in-lieu of such fractional share, computed in
accordance with the Stipulated Value. Parent shall be deemed to have purchased
the shares for which it has provided cash-in-lieu payments.
3. ADMINISTRATION OF ESCROW ACCOUNT. Except as otherwise provided
herein, the Escrow Agent shall administer the Escrow Account as follows:
(a) If any Indemnitee (acting in good faith) has or
claims to have incurred or suffered Damages or otherwise has a claim for which
it is or may be entitled to indemnification, compensation or reimbursement under
the Merger Agreement, such Indemnitee may deliver to the Escrow Agent and the
Shareholder Agent a written notice (a "Claim Notice") alleging a matter set
forth in the Merger Agreement (a "Claim") and setting forth in reasonable detail
the basis for such Claim. Each Claim pursuant to Section 4.2(a), to the extent
possible, shall contain a non-binding, preliminary estimate of the amount of
Damages such Indemnitee claims
2.
to have so incurred or suffered (the "Claimed Amount"). Any Claimed Amount or
Contested Amount (as defined in Section 3(b) hereof) shall be resolved pursuant
to this Section 3.
(b) Within 20 business days after receipt by the
Shareholders' Agent of a Claim Notice, the Shareholders' Agent may deliver to
the Indemnitee who delivered the Claim Notice and to the Escrow Agent a written
response (the "Response Notice") in which the Shareholders' Agent either (i)
agrees that a whole number of Escrow Shares or cash having a "Stipulated Value"
(as defined below) equal to the full Claimed Amount may be released from the
Escrow Account to the Indemnitee; (ii) agrees that Escrow Shares or cash having
a Stipulated Value equal to part, but not all, of the Claimed Amount (the
"Agreed Amount") may be released from the Escrow Account to the Indemnitee or
(iii) indicates that no part of the Claimed Amount may be released from the
Escrow Account to the Indemnitee. Any part of the Claimed Amount that is not to
be released to the Indemnitee shall be the "Contested Amount." If a Response
Notice is not received by the Escrow Agent within such 20 business-day period,
then the Shareholders' Agent shall be deemed to have agreed that Escrow Shares
or cash having a Stipulated Value equal to the full Claimed Amount may be
released to the Indemnitee from the Escrow Account.
(c) If the Shareholders' Agent delivers a Response Notice
agreeing that Escrow Shares or cash having a Stipulated Value equal to the full
Claimed Amount may be released from the Escrow Account to the Indemnitee, or if
the Shareholders' Agent does not deliver a Response Notice in accordance with
Section 3(b) hereof, the Escrow Agent shall, within five (5) business days
following the receipt of the Response Notice (or, if the Escrow Agent has not
received a Response Notice, promptly following the expiration of the 20
business-day period referred to in Section 3(b) hereof), deliver to the stock
transfer agent for Parent such Escrow Shares for delivery to such Indemnitee.
(d) If the Shareholders' Agent delivers a Response Notice
agreeing that Escrow Shares or cash having a Stipulated Value equal to part, but
not all, of the Claimed Amount may be released from the Escrow Account to the
Indemnitee, the Escrow Agent shall, within five (5) business days following the
receipt of the Response Notice, deliver (i) to the stock transfer agent for
Parent such Escrow Shares for delivery to such Indemnitee or (ii) cash to such
Indemnitee having a Stipulated Value equal to the Agreed Amount.
(e) If the Shareholders' Agent delivers a Response Notice
indicating that there is a Contested Amount, the Shareholders' Agent and the
Indemnitee shall attempt in good faith to resolve the dispute related to the
Contested Amount. If the Indemnitee and the Shareholders' Agent shall resolve
such dispute, such resolution shall be binding on all of the Shareholders and a
settlement agreement shall be signed by the Indemnitee and the Shareholders'
Agent and sent to the Escrow Agent, who shall, upon receipt thereof, release
Escrow Shares or cash from the Escrow Account, if any, in accordance with such
agreement.
(f) If the Shareholders' Agent and the Indemnitee are
unable to resolve the dispute relating to any Contested Amount within 30
business-days after the delivery of the Claim Notice, then the claim described
in the Claim Notice shall be settled by binding arbitration in San Francisco,
California, in accordance with the Commercial Arbitration Rules then in effect
of the American Arbitration Association. Arbitration will be conducted by a
single arbitrator selected
3.
by the Indemnitee and the Shareholders' Agent. If the Shareholders' Agent and
Indemnitee fail to select an arbitrator prior to the expiration of the 30
business-day period referred to in the first sentence of this Section 3(f)
hereof, then the arbitrator shall be selected in accordance with the AAA rules.
The parties agree to use all reasonable efforts to cause the arbitration hearing
to be conducted within 60 calendar days after the appointment of the arbitrator
and to use all reasonable efforts to cause the arbitrator's decision to be
furnished within 95 calendar days after the appointment of the arbitrator. The
parties further agree that discovery shall be completed at least 20
business-days prior to the date of the arbitration hearing. The arbitrator's
decision shall relate solely to whether the Indemnitee is entitled to recover
the Contested Amount (or a portion thereof), and the portion of such Contested
Amount the Indemnitee is entitled to recover. The final decision of the
arbitrator shall be furnished to the Shareholders' Agent, the Indemnitee and the
Escrow Agent in writing and shall constitute a conclusive determination of the
issue in question, binding upon the Shareholders, the Indemnitee and the Escrow
Agent and shall not be contested by any of them. The parties shall bear their
own fees and expenses (including legal fees) associated with arbitration. The
non-prevailing party in any arbitration shall pay the reasonable fees and
expenses (including reasonable legal fees) of Escrow Agent, and the fees and
expenses associated with the arbitration (including the arbitrators' fees and
expenses but excluding the other parties' fees and expenses).
(g) The Escrow Agent shall release Escrow Shares or cash
from the Escrow Account in connection with any Contested Amount within five
business days after the delivery to it of: (i) a copy of a settlement agreement
executed by the Indemnitee and the Shareholders' Agent setting forth
instructions to the Escrow Agent as to the number of Escrow Shares or cash, if
any, to be released from the Escrow Account, with respect to such Contested
Amount or (ii) a copy of the award of the arbitrators referred to and as
provided in Section 3(f) hereof setting forth instructions to the Escrow Agent
as to the number of Escrow Shares or cash, if any, to be released from the
Escrow Account, with respect to such Contested Amount.
(h) Any Escrow Shares or cash released from the Escrow
Account to an Indemnitee shall be deemed to reduce the Escrow Shares or cash
pro-rata with respect to each Shareholder in accordance with each Shareholder's
percentage interest in the Escrow Fund as set forth in Exhibit B.
(i) Notwithstanding anything herein to the contrary, no
distribution shall be made from the Escrow Fund prior to the Closing Date, and
any Claimed Amount that would otherwise be released from the Escrow Fund prior
to that date shall be released at the Closing Date.
(j) The parties acknowledge that each of the Shareholders
executed in Section 4(b) of the Shareholders Representation Letter a release and
waiver of his rights under the ADEA (the "ADEA Waiver and Release"). In the
event that (i) Parent delivers to the Escrow Agent and the Shareholders' Agent a
certificate (the "ADEA Notice") executed by an officer of Parent representing
and warranting that a Shareholder has expressly and unequivocally revoked his
ADEA Waiver and Release within seven days following the date hereof and (ii) the
Escrow Agent confirms (either in writing or orally) with the Shareholder that
the Shareholder has revoked his ADEA Waiver and Release, Parent shall be
entitled to the Escrow Shares in the Escrow Account, and within five business
days following the receipt of the ADEA Notice, the
4.
Escrow Agent will deliver to the stock transfer agent for Parent the Escrow
Shares for delivery to Parent.
4. RELEASE OF ESCROW FUND.
(a) Within five business-days after the Termination Date
(as defined below), the Escrow Agent shall cause the stock transfer agent for
Parent Common Stock to distribute to each of the Shareholders such Shareholder's
pro-rata portion of the Escrow Fund then held in escrow based on percentage
interests in the Escrow Fund set forth in Exhibit B then in effect; PROVIDED,
HOWEVER, that notwithstanding the foregoing, if, prior to the Termination Date,
any Indemnitee has given a Claim Notice containing a claim which has not been
resolved prior to the Termination Date in accordance with Section 3 hereof, the
Escrow Agent shall retain in the Escrow Account after the Termination Date
Escrow Shares or cash having a Stipulated Value equal to 100% of the Claimed
Amount or Contested Amount, as the case may be, with respect to all Claims which
have not then been resolved. Any such unresolved Claims shall be resolved in
accordance with Section 3(f) hereof. The remaining Escrow Account, net of any
Claimed Amount or Contested Amount, shall be distributed by the Escrow Agent
within five business days after the later of July 14, 2001, or the first
business day thereafter (the "Termination Date").
(b) The Escrow Agent is not the stock transfer agent for
Parent Common Stock. Accordingly, whenever a distribution of Escrow Shares is to
be made, the Escrow Agent must requisition the appropriate number of shares from
such stock transfer agent, delivering to it the appropriate stock certificates.
For the purposes of this Agreement, the Escrow Agent shall be deemed to have
delivered Parent Common Stock to the Person entitled to it when the Escrow Agent
has delivered such certificates to such stock transfer agent with instructions
to deliver it to the appropriate Person. Distributions of Parent Common Stock
shall be made to Parent or the Shareholders, as appropriate, at the addresses
described in Section 10 hereof and Exhibit B hereto. Whenever a distribution is
to be made to the Shareholders, pro-rata distributions shall (i) be made to each
of them based on the percentage interests in the Escrow Fund set forth in
Exhibit B then in effect with respect to each Shareholder, and (ii) in the
absence of a specific direction to the contrary, first be made from the amount
of cash then on deposit in the Escrow Fund, if any, and then be made from the
Escrow Shares.
5. VALUATION OF ESCROW SHARES, ETC.
(a) STIPULATED VALUE. For purposes of this Agreement, the
"Stipulated Value" of each share of Parent Common Stock shall be deemed to be
equal to the average closing price of Parent Common Stock for the 20 consecutive
trading days on the NASDAQ National Market ending three days prior to the date
of the Merger Agreement, as set forth in a certificate delivered to the Escrow
Agent.
(b) STOCK SPLITS. All numbers contained in, and all
calculations required to be made pursuant to, this Agreement shall be adjusted
as appropriate to reflect any stock split, reverse stock split, stock dividend
or similar transaction effected by Parent after the date hereof; PROVIDED,
HOWEVER, that the Escrow Agent shall have received notice of such stock split or
other action and shall have received the appropriate number of additional shares
of Parent Common
5.
Stock or other property pursuant to Section 2(c) hereof. On the Closing Date,
and in the event of any such stock split or other similar occurrence, Parent
shall deliver to the Shareholders' Agent and the Escrow Agent a revised version
of Exhibit B setting forth the new number of Escrow Shares or the amount of cash
held in the Escrow Fund. Unless and until the Escrow Agent receives the
certificates representing additional shares of Parent Common Stock or other
property pursuant to Section 2(c) hereof, the Escrow Agent may assume without
inquiry that no such stock or other property has been or is required to be
issued with respect to Escrow Shares.
(c) EXCLUSIVE REMEDY. In accordance with Section 4 of the
Merger Agreement, and except as provided in Section 4.3(c), from and after the
Closing Date, the Escrow Fund (adjusted as appropriate to reflect the Merger and
any stock split, reverse stock split, stock dividend or similar transaction
effected by Company or Parent after the date hereof) shall be the sole and
exclusive remedy of Parent and the other Indemnitees for Damages and other
indemnification rights described in the Merger Agreement, and the maximum
liability of the Shareholders under the Merger Agreement or under common law for
breaches of the representations, warranties and covenants and the failures set
forth in Section 4.2(a) of the Merger Agreement shall be the Escrow Fund.
6. FEES AND EXPENSES. Upon the execution of this Agreement by all
parties hereto and the initial deposit of the Escrow Fund in the Escrow Account,
fees and expenses, in accordance with Exhibit C attached hereto, will be payable
to the Escrow Agent by Parent. This annual Escrow Agent fee will cover the first
twelve months of the escrow. In accordance with Exhibit C attached hereto, the
Escrow Agent will also be entitled to reimbursement for reasonable and
documented out-of-pocket expenses including those of its counsel, incurred by
the Escrow Agent in the performance of its duties hereunder and the execution
and delivery of this Agreement. All such fees and expenses shall be paid by
Parent directly.
7. LIMITATION OF ESCROW AGENT'S LIABILITY.
(a) The Escrow Agent undertakes to perform such duties as
are specifically set forth in this Agreement only and shall have no duty under
any other agreement or document notwithstanding their being referred to herein
or attached hereto as an exhibit. The Escrow Agent shall not be liable except
for the performance of such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Escrow Agent. The Escrow Agent shall incur no liability
with respect to any action taken by it or for any inaction on its part in
reliance upon any notice, direction, instruction, consent, statement or other
document believed by it to be genuine and duly authorized, nor for any other
action or inaction except for its own willful misconduct or negligence. In all
questions arising under this Agreement, the Escrow Agent may rely on the advice
of counsel, and for anything done, omitted or suffered in good faith by the
Escrow Agent based upon such advice the Escrow Agent shall not be liable to
anyone. The Escrow Agent shall not be required to take any action hereunder
involving any expense unless the payment of such expense is made or provided for
in a manner reasonably satisfactory to it. In no event shall the Escrow Agent be
liable for incidental, punitive or consequential damages.
(b) Parent and the Shareholders jointly and severally
hereby agree to indemnify the Escrow Agent for, and hold it harmless against,
any loss, liability or expense
6.
incurred without negligence or willful misconduct on the part of Escrow Agent,
arising out of or in connection with its carrying out of its duties hereunder.
This right of indemnification shall survive the termination of this Agreement,
and the resignation of the Escrow Agent. The costs and expenses of enforcing
this right of indemnification shall be paid from the Escrow Fund; PROVIDED THAT,
if the Escrow Fund is not sufficient, such fees and expenses shall be paid
directly by Parent, who will then be entitled to reimbursement of one half such
fees and expenses from the Shareholders.
8. TERMINATION. This Agreement shall terminate on the Termination
Date or, if earlier, upon the release by the Escrow Agent of the entire Escrow
Fund in accordance with this Agreement; PROVIDED, HOWEVER, that if the Escrow
Agent has received from any Indemnitee a Claim Notice setting forth a claim that
has not been resolved by the Termination Date, then this Agreement shall
continue in full force and effect until the claim has been resolved and the
Escrow Shares released in accordance with this Agreement.
9. SUCCESSOR ESCROW AGENT. In the event the Escrow Agent becomes
unavailable or unwilling to continue as escrow agent under this Agreement, the
Escrow Agent may resign and be discharged from its duties and obligations
hereunder by giving its written resignation to the parties to this Agreement.
Such resignation shall take effect not less than 30 calendar days after it is
given to all parties hereto. Parent may appoint a successor Escrow Agent only
with the consent of the Shareholders' Agent (which consent shall not be
unreasonably withheld or delayed). If Parent does not appoint a successor escrow
agent, the Escrow Agent may apply to a court of competent jurisdiction to do so.
The Escrow Agent shall act in accordance with written instructions from Parent
as to the transfer of the Escrow Fund to a successor escrow agent.
10. MISCELLANEOUS.
(a) NOTICES. Any notice or other communication required
or permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile telephone number set forth below
(or to such other address or facsimile telephone number as such party shall have
specified in a written notice given to the other parties hereto):
State Street Bank and Trust Company of California, N.A.
Corporate Trust Division
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: SBE, Inc./LAN Media 2000 Escrow
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
7.
SBE, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Shareholders' Agent
Xxxxxx X. Xxxxx
c/o LAN Media Corporation
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
The Escrow Agent may assume that any Claim Notice, Response
Notice or other notice of any kind required to be delivered to the Escrow Agent
and any other Person has been received by such other Person if it has been
received by the Escrow Agent, but the Escrow Agent need not inquire into or
verify such receipt.
(b) HEADINGS. The underlined headings contained in this
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
(c) COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement.
8.
(d) GOVERNING LAW; VENUE.
(i) This Agreement shall be construed in
accordance with, and governed in all respects by, the internal laws of the State
of California (without giving effect to principles of conflicts of laws).
(ii) Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
may be brought or otherwise commenced in any state or federal court located in
the County of San Francisco, State of California. Each party to this Agreement:
(1) expressly and irrevocably consents
and submits to the jurisdiction of each state and federal court located in the
County of San Francisco, State of California (and each appellate court located
in the County of San Francisco, State of California) in connection with any such
legal proceeding;
(2) agrees that each state and federal
court located in the County of San Francisco, State of California shall be
deemed to be a convenient forum; and
(3) agrees not to assert (by way of
motion, as a defense or otherwise), in any such legal proceeding commenced in
any state or federal court located in the County of San Francisco, State of
California, any claim that such party is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be enforced in or by
such court.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon each of the parties hereto and each of their respective permitted
successors and assigns, if any. No Shareholder may assign his or her rights
under this Agreement without the express prior written consent of Parent,
provided, however, that upon the death of a Shareholder, such Shareholder's
rights under this Agreement shall be transferred to the person(s) who receive
such Shareholder's Parent Common Stock under the laws of descent and
distribution. Nothing in this Agreement is intended to confer, or shall be
deemed to confer, any rights or remedies upon any person or entity other than
the parties hereto and their permitted successors and assigns. This Agreement
shall inure to the benefit of: the Shareholders; Parent; Escrow Agent and the
respective successors and assigns, if any, of the foregoing.
(f) WAIVER. No failure on the part of any Person to
exercise any power, right, privilege or remedy under this Agreement, and no
delay on the part of any Person in exercising any power, right, privilege or
remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. No Person shall be deemed to have
waived any claim arising out of this Agreement, or any power, right, privilege
or remedy under this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such Person; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.
9.
(g) AMENDMENTS. This Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of all of the parties hereto; provided,
however, that any amendment duly executed and delivered by the Shareholders'
Agent shall be deemed to have been duly executed and delivered by all of the
Shareholders.
(h) SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
(i) PARTIES IN INTEREST. None of the provisions of this
Agreement is intended to provide any rights or remedies to any Person other than
the parties hereto and their respective successors and assigns, if any.
(j) ENTIRE AGREEMENT. This Agreement and the other
agreements referred to herein set forth the entire understanding of the parties
hereto relating to the subject matter hereof and thereof and supersede all prior
agreements and understandings among or between any of the parties relating to
the subject matter hereof and thereof.
(k) TAX REPORTING INFORMATION AND CERTIFICATION OF TAX
IDENTIFICATION NUMBERS.
(i) The parties hereto agree that, for tax
reporting purposes, all interest on or other income, if any, attributable to the
Escrow Funds or any other amount held in escrow by the Escrow Agent pursuant to
this Agreement shall be allocable to the Shareholders in accordance with their
percentage interests in the Escrow Fund set forth on Exhibit B.
(ii) Parent and each of the Shareholders agree to
provide the Escrow Agent with certified tax identification numbers for each of
them by furnishing appropriate Forms W-9 (or Forms W-8, in the case of non-U.S.
persons) and other forms and documents that the Escrow Agent may reasonably
request (collectively, "Tax Reporting Documentation") to the Escrow Agent within
30 days after the date hereof. The parties hereto understand that, if such Tax
Reporting Documentation is not so certified to the Escrow Agent, the Escrow
Agent may be required by the Internal Revenue Code, as it may be amended from
time to time, to withhold a portion of any interest or other income earned on
the investment of monies or other property held by the Escrow Agent pursuant to
this Agreement.
(l) CONSTRUCTION.
(i) For purposes of this Agreement, whenever the
context requires: the singular number shall include the plural, and vice versa;
the masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
10.
(ii) As used in this Agreement, the words
"include" and "including," and variations thereof, shall not be deemed to be
terms of limitation, but rather shall be deemed to be followed by the words
"without limitation."
(iii) Any cash received by the Escrow Agent
pursuant to Section 2(a) hereof, 2(c) hereof or otherwise for inclusion in the
Escrow Account shall be invested by the Escrow Agent (A) in the SSgA U.S.
Treasury Money Market Fund or (B) in another money market mutual fund registered
under the Investment Company Act of 1940, the principal of which is invested in
obligations issued or guaranteed by the United States government, jointly chosen
by Parent and the Shareholders' Agent and reasonably acceptable to the Escrow
Agent.
(m) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement
may be executed in one or more counterparts, each of which shall be deemed to be
an original and all of which, when taken together, will be deemed to constitute
one and the same agreement. This Agreement and any directions given pursuant to
this Agreement may be executed by facsimile, with such facsimile copy to serve
as conclusive evidence of the content and ratification of the matters contained
herein by the parties hereto.
The parties hereto have caused this Agreement to be executed and
delivered as of the date first written above.
[SIGNATURE PAGES TO FOLLOW]
11.
SBE, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
LAN MEDIA CORPORATION,
a California corporation
By: /s/ Xxxxxx X. Xxxxx
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SHAREHOLDER'S AGENT
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
12.
SHAREHOLDERS
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
By: *
-------------------------------------
Xxxxx Xxxxx
By: *
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Xxxxxxx X. Xxxx
By: *
-------------------------------------
Xxxxx X. XxXxx
By: *
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Xxxx Xxxxxx
By: *
-------------------------------------
Xxxx Xxxxxx
*By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
Attorney-in-fact
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx
Vice President
13.
EXHIBIT A
SHAREHOLDERS
NAME TAX I.D. ADDRESS
----------------------------- --------------- -------------------------------
1. Xxxxxx X. Xxxxx
2. Xxxxx Xxxxx
3. Xxxxxxx X. Xxxx
4. Xxxxx X. XxXxx
5. Xxxx Xxxxxx
6. Xxxxxx Xxxxx
EXHIBIT B
NAME AND ADDRESS SHAREHOLDER'S PERCENTAGE INTEREST
OF SHAREHOLDER NUMBER OF SHARES IN THE ESCROW FUND
---------------------------------------------------------- ---------------------- ----------------------------------------------
1. Xxxxxx X. Xxxxx 22,484 71.1%
2. Xxxxx Xxxxx 2,280 7.2%
3. Xxxxxxx X. Xxxx 124 0.4%
4. Xxxxx X. XxXxx 3,767 11.9%
5. Xxxx Xxxxxx 2,077 6.6%
6. Xxxxxx Xxxxx 879 2.8%
TOTAL 31,610 100.00%
EXHIBIT C
ESCROW FEES AND EXPENSES
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
ACCEPTANCE FEE: $750.00
This one-time charge, payable at closing, includes acceptance and
assumption of responsibility and duties as Escrow Agent; review and
comment on the form of agreement; and establishment of account(s) in
accordance with governing document.
LEGAL COUNSEL: AT COST
ESCROW AGENT FEE: $3,500.00
Payable at funding and annually thereafter, if applicable. Compensates
State Street for administrative services in accordance with the Escrow
Agreement.
ADDITIONAL FEES, IF APPLICABLE:
PRO-RATA PERCENTAGE: Should the Escrow Agreement require pro-rata
distribution of principal cash or investment income to the
beneficiaries, STATE STREET WILL ASSESS an additional $100, for each
beneficiary pro-rata distribution, which may be offset at State
Street's discretion against each distribution.
DIRECTED SALE: State Street will charge $500.00, plus broker commission,
for each Directed Sale. The fee will be paid from the proceeds of such sale.
CLAIMS (if applicable):
Uncontested $500.00
Contested BILLED AT COST
WIRE TRANSFER FEE (This fee will be deducted from wire amount, if applicable)
International $40.00
Domestic $20.00
1.
INVESTMENT FEE: $65.00
Per security purchased (i.e. Treasuries, Agencies, etc.)
INVESTMENT IN STATE STREET INVESTMENT VEHICLES: 40 BASIS POINTS (.0040)
(Calculated on THE Average Daily Net Assets)
INVESTMENT VEHICLES:
SSgA Prime Money Market Fund
SSgA US Treasury Money Market Fund
SSgA Tax Free Money Market Fund
OUT-OF-POCKET EXPENSE: AT COST
The transaction underlying this proposal, and all related
documentation, is subject to review and acceptance by State Street in
accordance with its policies and procedures. Should the actual
transaction materially differ from the assumptions used herein, State
Street reserves the right to modify this proposal. In the event that
the subject transaction fails to close for reasons beyond the control
of State Street, the party requesting these services agrees to pay
State Street's acceptance fees, legal fees and out-of-pocket expenses.
This proposal is a confidential document and should not be duplicated
and/or distributed.
2.
