Exhibit 2.2
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ESCROW AGREEMENT
This Escrow Agreement (this "Escrow Agreement") is made and entered into as
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of September 21, 2001 (the "Effective Time") by and among Topaz Corporation, a
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Delaware corporation ("Parent"); the undersigned security holders (collectively
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the "Holders") of Opal Communications, Inc., a Delaware corporation ("Opal");
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Venrock Associates, as the representative of the Holders (the "Indemnification
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Representative"); and State Street Bank and Trust Company, a Massachusetts trust
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company, as escrow agent of the Escrow Shares (as defined below) (the "Escrow
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Agent"). Parent, Holders, Opal and Venrock are sometimes referred to herein as
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the "Interested Parties".
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A. Opal Acquisition Corporation, a Delaware corporation and wholly owned
subsidiary of Parent ("Merger Sub"), Parent, Opal and certain of the
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stockholders of Opal have entered into an Agreement and Plan of Reorganization
dated as of August 16, 2001 (the "Merger Agreement") setting forth certain terms
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and conditions pursuant to which Opal is being merged into Merger Sub (the
"Merger") and Merger Sub shall be the surviving corporation.
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B. Pursuant to Section 2.1 of the Merger Agreement, the Total Topaz
Merger Shares (as defined therein) are to be issued to the Holders.
C. The Merger Agreement provides that the number of shares which is equal
to (i) ten percent (10%) of the Total Topaz Merger Shares to be issued at the
Closing (as defined in the Merger Agreement) plus (ii) such number of Total
Topaz Merger Shares that shall equal ten percent (10%) of $20,000,000 divided by
the Topaz Average Closing Price (as defined in the Merger Agreement, the "Escrow
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Amount") will be placed in an escrow account to secure certain indemnification
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obligations of the Holders to Parent under Article X of the Merger Agreement on
the terms and conditions set forth therein and herein.
NOW THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained in the Merger Agreement and in this Escrow
Agreement, the parties agree as follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT
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1.1 Deposit of Shares. Parent shall deposit as soon as practicable
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after the Effective Time on the Holders' behalf with the Escrow Agent (with the
same effect as if transferred to the Holder and then transferred by the Holder
to the Escrow Agent) a certificate representing the number of Escrow Shares
issued pursuant to the Merger Agreement registered in the name of Embassy & Co.
as nominee for the Escrow Agent (the "Initial Escrow Shares"). Any shares of
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Parent capital stock that result from any share dividend, reclassification,
stock split, subdivision or combination of shares, recapitalization, merger or
other events made with respect to any Escrow Shares held in escrow under this
Escrow Agreement ("Additional Shares") shall be issued in the name of the Escrow
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Agent or its nominee (with the same effect as if transferred to the holders and
then transferred by the Holders to the
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Escrow Agent or its nominee) and shall be held by the Escrow Agent in accordance
with this Escrow Agreement. Unless otherwise indicated, as used in this Escrow
Agreement, the term "Escrow Shares" includes the Initial Escrow Shares and any
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Additional Shares. The Escrow Agent agrees to accept delivery of the Escrow
Shares and to hold such Escrow Shares in escrow in accordance with this Escrow
Agreement and to release the Escrow Shares out of escrow as provided in this
Escrow Agreement. The name, address and percentage interest of the Escrow Shares
of each Holder are set forth in Exhibit A attached hereto.
1.2 Dividends; Voting and Rights of Ownership. Any cash dividends,
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dividends payable in property or other distributions of any kind (except for
Additional Shares) made in respect of the Escrow Shares shall be distributed
currently by Parent to the Holders in accordance with the percentage interests
set forth in Exhibit A hereto. The Holders, through the Indemnification
Representative, shall have the right to direct the Escrow Agent upon the receipt
by the Escrow Agent of at least three days notice in writing as to the exercise
of any voting rights pertaining to the Escrow Shares, and the Escrow Agent shall
comply with any such written instructions. In the absence of such instructions,
the Escrow Agent shall not vote any of the Escrow Shares. Except as otherwise
provided herein, the Escrow Agent shall be under no obligation to preserve,
protect or exercise voting or other rights in the Escrow Shares, and shall be
responsible only for reasonable and customary measures to maintain the physical
safekeeping thereof, and otherwise to perform and observe such duties on its
part as are expressly set forth in this Agreement, except that it shall, at the
written request of the Indemnification Representative given to the Escrow Agent
at least three business days prior to the date on which the Escrow Agent is
requested therein to take any action, deliver to the Indemnification
Representative a proxy or other instrument in the form supplied to it by the
Indemnification Representative for voting or otherwise exercising any right of
consent with respect to any of the Escrow Shares held by it hereunder, to
authorize therein the Indemnification Representatives on behalf of the Holders
to exercise such voting or consent authority in respect of the Escrow Shares.
The Escrow Agent shall not be responsible for forwarding to any party other than
the Indemnification Representative upon proper notice as described above,
notifying any party with respect to, or taking any action with respect to, any
notice, solicitation or other document or information, written or otherwise,
received from Parent or other person with respect to the Escrow Shares,
including but not limited to, proxy material, tenders, options, the pendency of
calls and maturities and expiration of rights. While the Escrow Shares remain
in the Escrow Agent's possession pursuant to this Escrow Agreement, the Holders
shall retain and shall be able to exercise all other incidents of ownership of
the Escrow Shares that are not inconsistent with the terms and conditions
hereof.
1.3 Acquisition of Parent. In the event that while the Escrow Shares
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remain in the possession of the Escrow Agent, Parent shall enter into any
agreement with respect to any acquisition of, or consolidation by, Parent,
whether by means of a merger, sale of assets, tender offer, or otherwise (each,
an "Acquisition Proposal"), in which the stockholders of Parent shall have the
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right to approve such Acquisition Proposal, the Indemnification Representative
acting on behalf of the Holders or upon written notice from the Indemnification
Representative that the Holders may direct the Escrow Agent, the Holders shall
have the right to direct the Escrow Agent in writing whether or not to vote the
Escrow Shares in favor of, or to accept, such Acquisition Proposal and the
Escrow Agent upon such written instruction, shall vote such Escrow Shares in
accordance with such directions. Notwithstanding any provision to the contrary
in this Agreement or the Merger Agreement, upon the completion of such
Acquisition Proposal, and the payment of the consideration in respect of the
Escrow Shares paid in connection with such Acquisition Proposal, the escrow
shall terminate and the Escrow Agent shall,
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upon written direction from the Indemnification Representative distribute the
consideration received in exchange for the Escrow Shares in connection with such
Acquisition Proposal to the Holders in accordance with their percentage
interests as set forth in Exhibit A.
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In connection with any Acquisition Proposal, the Escrow Agent shall be
entitled to receive and rely upon, prior to taking action in that regard, the
written direction from the Indemnification Representative as to the manner and
method to be undertaken in carrying out such Acquisition Proposal. Such written
direction from the Indemnification Representative shall include information
sufficient for the Escrow Agent to direct the Transfer Agent (as named in
Section 12.4 of this Escrow Agreement) to release the Escrow Shares to the
proper party. The Interested Parties shall execute and deliver any instruments
reasonably required by the Escrow Agent to carry out such Acquisition Proposal.
The Escrow Agent shall have no responsibility in connection with such
Acquisition Proposal, and to arrange, through the Transfer Agent, delivery of
the Escrow Shares to the appropriate party as directed. The Escrow Agent shall
have no liability for any actions or omissions of the Transfer Agent in
connection with such Acquisition Proposal. The Escrow Agent shall have no duty
or obligation to determine or accomplish compliance with any applicable transfer
restrictions; and it shall be the sole obligation of the party directing such
Acquisition Proposal to take any remaining actions, and to provide or deliver
any necessary instruments or opinions (at its expense) necessary to comply with
applicable transfer restrictions or applicable securities laws.
1.4 No Encumbrance. None of the Escrow Shares or any beneficial
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interest therein may be pledged, sold, assigned or transferred, other than by
operation of law. Written notice of any assignment or transfer shall be given by
the Indemnification Representative to the Escrow Agent and Parent in writing,
and no such assignment or transfer shall be valid until such notice is received.
2. RESOLUTION OF CLAIMS
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2.1 Indemnification Obligations. As between the Interested Parties,
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the Escrow Shares shall serve as the sole source of payment for the indemnity
obligations of the Holders under Article X of the Merger Agreement including
without limitation any indemnity obligation of Management (as defined in the
Merger Agreement). Payment for any amount determined as provided below to be
owing to Parent under such indemnity obligations under the Merger Agreement
"Damages") and any award of attorneys' fees and charges owing to Parent
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pursuant to Section 2.3(c)(iv) or 12.2 of this Agreement (a "Prevailing Party
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Award") shall be made by the release of Escrow Shares to Parent (each such
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payment, an "Escrow Adjustment"), by the Escrow Agent. By the execution of this
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Escrow Agreement, each of the Holders agrees to be bound by the indemnification
provisions set forth in Article X of the Merger Agreement and confirms that the
issuance of the Escrow Amount of the Total Topaz Merger Shares pursuant to the
Merger Agreement is subject to this Escrow Agreement. Notwithstanding anything
to the contrary herein, Parent shall not be entitled to receive payment of any
portion of a Prevailing Party Award which is already a part of Damages (i.e.,
there shall be no double payment of legal fees). Joint written instructions from
the Parent and Indemnification Representative shall be given to the Escrow Agent
to make any Escrow Adjustment pursuant to Sections 2.3(a),(b),(c)(iv), 3.3 or
12.2 herein and said instructions shall contain a determination and certify to
the Escrow Agent the amount of any Escrow Adjustment, and identify that portion
of the Escrow Adjustment which constitutes Damages and that portion of the
Escrow Adjustment which constitutes a Prevailing Party Award, to the extent
applicable. Any Escrow Adjustments and corresponding release to Parent of
Escrow Shares shall be made in proportion to each
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of the Holders' interest in the Escrow Shares as of the date or dates specified
and the manner provided for in this Escrow Agreement, which percentage interests
shall be certified in writing by the Indemnification Representative and Parent
to the Escrow Agent and as set forth in Exhibit A hereto. Each Escrow Adjustment
to the Escrow Shares shall be made by the release by the Escrow Agent to Parent
of Escrow Shares having an aggregate value equal to the Damages and any
Prevailing Party Award, with the per share value of such shares being equal to,
for all purposes under this Escrow Agreement, the 5-day trailing average closing
price of the Topaz Common Stock (the "Topaz Average Current Price") (adjusted
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for any share dividend, reclassification, stock split, subdivision or
combination of shares, recapitalization, merger or other events) for the period
ending on the trading day immediately prior to the date of such joint written
instructions notwithstanding any changes in market value of Total Topaz Merger
Shares after the Closing Date, as certified to the Escrow Agent by Parent. In
any circumstance in which the Escrow Agent is required to make a distribution of
the Escrow Shares in order to perform under or administer this Agreement, Parent
shall determine and certify to the Escrow Agent the per share value of any such
Escrow Shares, and Parent shall promptly provide such written certification to
the Escrow Agent, with a copy to the Indemnification Representative. The Escrow
Agent shall be entitled to rely conclusively upon any such certification of per
share value without any duty to verify or recalculate the same, and the Escrow
Agent shall not be liable for any action or omission of, or delay on the part
of, Parent in such connection. Notwithstanding any term hereof to the contrary,
in any such instance, the Escrow Agent shall be entitled to refrain from taking
any action otherwise required hereunder (and which requires a determination of
per share value), without liability on its part, until it is provided with
notice in accordance with this Agreement. In lieu of releasing any fractional
Escrow Shares, any fraction of a released Escrow Share that would otherwise be
released shall be rounded down to the nearest whole Escrow Share.
2.2 Notice of Claims. Promptly after the receipt by Parent of notice
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or discovery of any claim, damage, or legal action or proceeding giving rise to
indemnification rights under the Merger Agreement, after giving effect to the
limitations set forth in Article X of the Merger Agreement (a "Claim"), Parent
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shall give the Indemnification Representative written notice of such Claim and
shall provide a copy of such notice to the Escrow Agent. Each notice of a Claim
by Parent (a "Notice of Claim") shall be in writing, shall set out in reasonable
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detail the nature of the Claim, the basis under the Merger Agreement on which
indemnification is claimed, the amount of Damages and all other relevant
available facts related to such Claim, and shall be delivered no later than 5:00
p.m. Eastern Time on the Release Date (as defined in Section 3.1 below) ("Final
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Notice Date"). In no event can Parent make a valid Notice of Claim after the
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Release Date.
2.3 Resolution of Claims. Any Notice of Claim received by the
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Indemnification Representative and the Escrow Agent on or prior to the Release
Date pursuant to Section 2.2 above shall be resolved as follows:
(a) Uncontested Claims. In the event that the Indemnification
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Representative does not contest a Notice of Claim in writing within thirty (30)
calendar days after receipt by the Indemnification Representative of such Notice
of Claim, as provided below in Section 2.3(b) (an "Uncontested Claim"), Parent
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may deliver to the Escrow Agent, with a copy to the Indemnification
Representative, a written demand by Parent (a "Parent Demand") stating that a
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Notice of Claim has been given as required in this Escrow Agreement and that no
notice of contest has been received by the Escrow Agent from the Indemnification
Representative during the period specified in this Escrow Agreement, and further
setting forth the proposed Escrow Adjustments to be made in accordance with
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this Section 2.3(a). Within thirty (30) calendar days after receipt by the
Escrow Agent of the Parent Demand, the Indemnification Representative may object
by a written notice delivered to Parent and the Escrow Agent to the computations
or other administrative matters relating to the proposed Escrow Adjustments (but
may not object to the validity or amount of the Claim previously disclosed in
the Notice of Claim and not previously timely objected to under paragraph (b)),
whereupon the Escrow Agent shall not make any of the Escrow Adjustments until
either: (i) the Escrow Agent shall have received from Parent and the
Indemnification Representative written notice setting forth agreed Escrow
Adjustments, or (ii) the matter is resolved as provided in Sections 2.3(b) and
2.3(c). Any Escrow Adjustment pursuant to this Section 2.3(a) shall be satisfied
by release of a number of Escrow Shares equal to the amount of such Claim
divided by the Topaz Average Current Price for the last five (5) days of such
thirty day period as certified to the Escrow Agent by Parent as described in
Section 2.1. Upon satisfaction of the foregoing, the Escrow Agent, as directed
in writing by Parent, and Parent shall promptly take all steps to release the
final Escrow Adjustments.
(b) Contested Claims. In the event that the Indemnification
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Representative gives written notice to Parent and the Escrow Agent contesting
all or a portion of a Notice of Claim within the 30-day period provided above (a
"Contested Claim"), (i) matters that are subject to third party claims against
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Parent or Opal in a litigation or arbitration shall await the final decision,
award or settlement of such litigation or arbitration the time for appeal having
passed, and (ii) matters that arise between Parent on the one hand, and the
Holders on the other hand, including any disputes regarding performance or
nonperformance of a party's obligations under this Escrow Agreement ("Arbitrable
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Claims") shall be settled in accordance with Section 2.3(c) below. Parent and
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Indemnification Representative shall certify in writing to the Escrow Agent
whether a Contested Claim is an Arbitrable Claim, and is thus subject to Section
2.3(c). The Parent and Indemnification Representative agree that any Arbitrable
Claim is between the Parent and Indemnification Representative, the Escrow Agent
shall not be a party to any Arbitrable Claim, and shall have no duty or
obligation to monitor or enforce the provisions of Section 2.3(c) hereof,
including without limitation any payment of costs pursuant to Section
2.3(c)(iv), or to determine whether a Contested Claim is an Arbitrable Claim.
Any portion of a Notice of Claim that is not contested or is subsequently
settled by Parent and the Indemnification Representative shall be resolved as
set forth above in Section 2.3(a), If written notice is received by the Escrow
Agent that a Notice of Claim is contested in whole or in part by the
Indemnification Representative, then the Escrow Agent shall hold hereunder after
what would otherwise be the Release Date (as defined in Section 3.1 below), the
number of Escrow Shares specified in the Release Notice (as defined in Section
3.1 below) or as otherwise provided in Section 3.1, until the earlier of: (i)
receipt of a settlement agreement executed by Parent and the Indemnification
Representative setting forth a resolution of the Notice of Claim and the Escrow
Adjustments; (ii) receipt of a written notice from Parent (a "Parent
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Distribution Notice") attaching a copy of the final award or decision of an
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arbitrator under paragraph (c) below and setting forth the Escrow Adjustments
(Parent shall at the same time provide a copy of the Parent Distribution Notice
to the Indemnification Representative); or (iii) receipt of a written notice
from the Indemnification Representative (a "Representative Distribution Notice")
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attaching a copy of the final award or decision of an arbitrator under paragraph
(c) below setting forth the Escrow Adjustments or providing that no Escrow
Adjustments are to be made as a result of such award (the Indemnification
Representative shall at the same time provide a copy of the Representative
Distribution Notice to Parent). Upon the occurrence of any of the events
described in the preceding sentence, the Escrow Agent shall, within twenty (20)
calendar days after receipt of the settlement agreement or one of the notices
described in clauses (ii) or (iii) above, as applicable, (a) release to Parent
the number of Escrow Shares specified in the Escrow Adjustments and (b) if the
Release Date
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has occurred, and there are no remaining unresolved Contested Claims, release to
the Indemnification Representative for the Holders the balance of the Escrow
Shares in accordance with their percentage interests, which are set forth in
Exhibit A hereto and shall be certified in writing to the Escrow Agent, provided
that if the Release Date has not occurred the Escrow Shares shall continue to be
held pursuant to the terms of this Agreement. If the award or decision of the
arbitrator concludes that Escrow Shares are to be released to Parent either in
satisfaction of Damages or as Prevailing Party Awards, the arbitrator shall
specify the dollar amount of such Escrow Adjustment and the number of Escrow
Shares to be so released to Parent shall be determined in accordance with
Section 2.1. In the event that the Escrow Agent institutes an action for
interpleader in accordance with Section 4.6 of this Escrow Agreement as a result
of a dispute between the parties, the parties hereby agree to jointly seek to
stay such interpleader action pending the resolution of any arbitration
commenced by the parties or any dispute pursuant to this Section 2.3(b) and
Section 2.3(c).
(c) Arbitration.
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(i) Arbitration Rules. Any Arbitrable Claim, and any
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dispute between the Holders and Parent under this Escrow Agreement, shall be
submitted to final and binding arbitration before a single arbitrator in Boston,
Massachusetts in accordance with the commercial arbitration rules of the
American Arbitration Association.
(ii) Binding Effect. The final decision of the
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arbitrator shall be furnished in writing to the Escrow Agent, the
Indemnification Representative, the Holders and Parent and will constitute a
conclusive determination of the issue in question, binding upon the Holders, the
Indemnification Representative and Parent. The arbitrator shall have the
authority to grant any equitable and legal remedies that would be available in
any judicial proceeding instituted to resolve an Arbitrable Claim. Any judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction over the subject matter thereof.
(iii) Compensation of Arbitrator. The arbitrator will
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be compensated for his or her services, as provided below in Section 2.3(c)(iv),
in accordance with the commercial arbitration rules of the American Arbitration
Association.
(iv) Payment of Costs. Subject to the limitations in
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Article X of the Merger Agreement, the substantially prevailing party in any
arbitration shall be entitled to an award of reasonable attorneys' fees and
costs, and all costs of arbitration, including those provided for above, will be
paid by the losing party, subject in each case to a determination by the
arbitrator as to which party is the substantially prevailing party and the
amount of such fees and costs to be allocated to such party and subject to the
terms of Section 2.3(c)(iii). Any amounts payable to Parent by or on account of
the Holders under this subsection will be reimbursed as if the amount of such
awarded fees and expenses were an Uncontested Claim. Notwithstanding any
provisions of this Agreement or the Merger Agreement to the contrary, neither
the Indemnification Representative nor the Holders shall have any personal
liability for any of the obligations hereunder, it being understood that the
sole recourse of Parent and the Escrow Agent hereunder shall be the Escrow
Shares. Any amounts payable hereunder by Parent for costs or otherwise, shall be
paid to the Indemnification Representative within ten (10) days after written
demand therefor.
(v) Terms of Arbitration. The arbitrator chosen in
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accordance with
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these provisions shall not have the power to alter, amend or otherwise affect
the terms of these arbitration provisions or the provisions of this Escrow
Agreement, the Merger Agreement or any other documents that are executed in
connection therewith.
(vi) Exclusive Remedy. Arbitration or mediation under
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this Section 2.3(c) shall be the sole and exclusive remedy of the parties for
any Arbitrable Claim arising out of this Escrow Agreement.
3. RELEASE FROM ESCROW
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3.1 Release of Escrow Shares. The Escrow Shares shall be released by
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the Escrow Agent and Parent as soon as practicable, taking into account the
notices to be delivered under this Section 3.1, on the date that is one (1) year
after the Effective Time (the "Release Date"). The amount of Escrow Shares to
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be released on the Release Date to the Holders (the "Released Escrow") shall
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equal all of the Escrow Shares held by the Escrow Agent at such time, less: (a)
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any Escrow Shares delivered to or deliverable to Parent in satisfaction of
Uncontested Claims or Contested Claims which have been settled by the parties
hereto, and (b) the number of the Escrow Shares subject to Notices of Claims
delivered by Parent in accordance with Section 2.3(b) which number shall be
equal to the Damages requested in such Notice of Claim divided by the Topaz
Average Current Price for the five (5) trading day period ending on the Release
Date with respect to any then pending Contested Claims. Within twenty (20) of
the Escrow Agent's business days ("Business Days") after the Final Notice Date,
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Parent and the Indemnification Representative shall deliver to the Escrow Agent
a written notice (a "Release Notice") setting forth the number of Escrow Shares
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to be released by the Escrow Agent (the "Released Escrow"), including the number
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of Escrow Shares to be released to the Indemnification Representative for each
Holder and the number of Escrow Shares to be retained as provided in this
Section 3.1 (the "Retained Escrow"). Parent and the Indemnification
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Representative shall make a good faith effort to agree on a reasonable portion
of the Escrow Shares to retain for pending Contested Claims and Prevailing Party
Awards and related expenses. Until such agreement is reached, or a
determination is made in accordance with Section 2.3(c), the remaining Escrow
Shares shall be the Retained Escrow. The Escrow Agent is authorized to act in
accordance with any Release Notice, and shall have no duty or obligation to
determine whether the Retained Escrow, if any, is sufficient to pay any
outstanding Contested Claims and/or Prevailing Party Awards, to the extent
applicable. The Released Escrow shall be released to the Indemnification
Representative for the Holders in accordance with the percentage interests set
out in Exhibit A hereto and as certified in writing to the Escrow Agent. In
lieu of releasing any fractional Escrow Shares, any fraction of a released
Escrow Share that would otherwise be released shall be rounded to the nearest
whole Escrow Share. Within twenty (20) Business Days after receipt of the
Release Notice, the Escrow Agent shall deliver (by its usual and customary
means) to the Indemnification Representative for each Holder evidence of
ownership of the number of Escrow Shares in the names of the appropriate Holders
as certified in writing to the Escrow Agent. The Escrow Agent shall not be
required to take such action until the Escrow Agent has received the Release
Notice executed by Parent and the Indemnification Representative or, in the
event Parent and the Indemnification Representative fail to execute and deliver
a jointly approved Release Notice, a final award or decision which specifies the
distribution of the Escrow Shares.
3.2 Release of Retained Escrow. Upon the resolution of Contested
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Claims as provided for in Section 2.3(b), the Retained Escrow shall be subject
to release by the Escrow Agent to Parent and/or to the Holders in accordance
with Section 2.3(b), this Section and as otherwise provided
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for in this Escrow Agreement. The Escrow Agent and Parent shall cause the
transfer agent (named in Section 12.4 herein) to transfer to Parent the number
of Escrow Shares to be released to Parent pursuant to Section 2.3(b) and reissue
certificates for Escrow Shares that are to be either distributed to the Holders
pursuant to Section 3.1 or further retained by the Escrow Agent pending the
resolution of Contested Claims and/or Prevailing Party Awards. Any Escrow Shares
released from escrow to Parent shall be subject to cancellation by Parent
without requiring Parent to pay any consideration whatsoever in receipt thereof
to Opal or any of the Holders.
3.3 Expenses of Indemnification Representative. The
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Indemnification Representative shall be entitled to be reimbursed his reasonable
out-of-pocket expenses and the reasonable fees and disbursements of counsel
retained by him. Such reimbursements shall be treated as an Uncontested Claim on
a pro rata basis among the contributors to the Escrow Shares, for all services
performed pursuant to the Merger Agreement and this Escrow Agreement; provided,
however, that payment of any reasonable expenses under this Section 3.3 shall
take priority over the payment of any Escrow Adjustment, as provided herein. The
number of Escrow Shares to be released in payment of such expenses shall equal
the amount of reimbursable expenses divided by the Topaz Current Average Price
for the five trading days immediately prior to the date of the written
instructions for reimbursement. The Escrow Agent shall follow the joint written
instructions of the Indemnification Representative and Parent concerning the
release or sale of Escrow Shares relating to the reimbursement of the
Indemnification Representative. Such written instruction shall include the
number of Escrow Shares to be released to the Indemnification Representative. If
upon termination of this Agreement the Indemnification Representative shall not
have received the reimbursements to which he is entitled hereunder, then the
Indemnification Representative shall be entitled to reimbursement from the
Holders on a joint and several basis.
(a) In connection with any sale of the Escrow Shares pursuant to this
Section 3.3, the Escrow Agent shall be entitled to receive and rely upon, prior
to taking action in that regard, joint written direction from the
Indemnification Representative and Parent as to the manner and method to be
undertaken in carrying out such sale, including without limitation written
direction (i) identifying the number of shares to be sold, (ii) identifying the
brokerage firm the Indemnification Representative and Parent request to be used
or instructing the Escrow Agent to use its affiliated brokerage service, and
(iii) setting forth any necessary or special instructions with respect to the
sale (including any stop loss or minimum price per share instruction); and the
Indemnification Representative and Parent shall execute and deliver any
instruments reasonably required by the Escrow Agent in order to carry out such
sale or liquidation.
(b) The Escrow Agent shall have no responsibility in connection with such
sale other than to make delivery of the Escrow Shares to the selected brokerage
firm, with instruction (including any special instruction provided by the
Indemnification Representative and Parent, and to receive and deposit into the
escrow account (to be administered and distributed in accordance with this
Agreement) any net sale proceeds received therefrom. The Escrow Agent shall have
no duty or obligation to determine or accomplish compliance with any applicable
transfer restrictions; and it shall be the sole obligation of the party
directing such sale to take any remaining actions, and to provide or deliver any
necessary instruments or opinions (at its expense) necessary to comply with
applicable transfer restrictions or applicable securities laws. The Escrow Agent
shall have no liability for any actions or omissions of any such brokerage firm,
and shall have no liability for the price or execution achieved. Without
limiting the generality of the foregoing, the Indemnification Representative and
Parent
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expressly acknowledge that (a) the Escrow Shares may need to be sent to a
transfer agent to be reissued in saleable form, (b) the Escrow Shares may
contain or be subject to transfer restrictions that may limit their
marketability and impose restrictions upon the number or types of purchasers to
whom they can be offered or sold, and (c) the Escrow Agent shall have no
liability for any failure or delay (or any price change during any such delay)
on the part of the Indemnification Representative and Parent or any transfer
agent, or caused by any necessary registration or delivery procedures, or
compliance with any applicable transfer restrictions involved in the transfer of
such Escrow Shares.
(c) Notwithstanding the foregoing, the Escrow Agent shall be entitled to
contract with any brokerage firm (which may be selected by the Escrow Agent
without liability on its part, taking into consideration any brokerage firm
requested by the Indemnification Representative and Parent, as provided above),
which may be affiliated with the Escrow Agent, and may enter into any such
contract on a basis which provides that such brokerage firm shall use its "best
efforts" to effect such sale. The Escrow Agent shall be jointly and severally
indemnified hereunder by the Interested Parties for any costs, expenses and
risks associated therewith or arising thereunder (other than resulting from its
own gross negligence or willful misconduct), and the proceeds of sale to which
the Indemnification Representative shall be entitled shall be net of all
brokerage commissions and charges.
(d) The net sale proceeds of any such sale of Escrow Shares received by
the Escrow Agent shall be distributed to the Indemnification Representative in
accordance with the joint written instructions of Indemnification Representative
and Parent less a $5.00 per Holder fee for the proration of the Net Sales Price
and for the preparation of individual 1099-B (the "Sales Administration Fee").
The Sales Administration fee shall be assessed each day a sale is effected until
the total number of shares specified in such written direction from the
Indemnification Representative and Parent are sold; provided that the minimum
Sales Administration Fee per sale transaction shall be $500.00.
4. ESCROW AGENT
------------
4.1 Duties. The duties and responsibilities of the Escrow Agent
------
hereunder shall be entirely administrative and shall not be discretionary or
fiduciary and shall be determined solely by the express provisions of this
Escrow Agreement and no duties shall be implied. The Escrow Agent shall not be
responsible for any of the agreements referred to or described herein (including
without limitation the Merger Agreement), or for determining or compelling
compliance therewith, and shall not otherwise be bound thereby. The Escrow
Agent shall be obligated to act only in accordance with written instructions
received by it as provided in this Escrow Agreement and is authorized hereby to
comply with any orders, judgments, or decrees of any court with or without
jurisdiction and shall not be liable as a result of its compliance with the
same.
4.2 Legal Opinions. As to any questions arising in connection
--------------
with the administration of this Escrow Agreement, the Escrow Agent may rely
absolutely upon the joint instruction of Parent and the Indemnification
Representative or the opinions given to the Escrow Agent by its outside counsel
or in-house counsel and shall be free of liability for acting or refraining from
acting in reliance on such opinions.
4.3 Signatures. The Escrow Agent may rely absolutely upon the
----------
genuineness and authorization of the signature and purported signature of any
party upon any instruction, notice, release, receipt or other document delivered
to it pursuant to this Escrow Agreement.
-9-
4.4 Receipts and Releases. The Escrow Agent may, as a condition
---------------------
to the disbursement of monies or disposition of securities as provided herein,
require from the payee or recipient a receipt therefor and, upon final payment
or disposition, a release of the Escrow Agent from any liability arising out of
its execution or performance of this Escrow Agreement, such release to be in a
form reasonably satisfactory to the Escrow Agent.
4.5 Refrain from Action. The Escrow Agent shall be entitled to
-------------------
refrain from taking any action contemplated by this Escrow Agreement in the
event it becomes aware of any dispute between Opal, the Holders and Parent as to
any material facts or as to the happening of any event precedent to such action.
4.6 Interpleader. If any controversy arises between the parties
------------
hereto or with any third person, the Escrow Agent shall not be required to
determine the same or to take any action, but the Escrow Agent in its discretion
may institute such interpleader or other proceedings in connection therewith as
the Escrow Agent may deem proper, and in following either course, the Escrow
Agent shall not be liable.
4.7 Other Provisions. 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 be
not be liable for any action taken or omitted by it unless a court of competent
jurisdiction determines that the primary cause of a loss to the Parent, the
Indemnification Representative, or the Holders was the Escrow Agent's gross
negligence, willful neglect, or bad faith. In the administration of this Escrow
Agreement, 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,
including in-house 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. The Escrow Agent
shall not be obligated to take any legal or other action hereunder which might
in its judgment involve or cause it to incur any expense or liability unless it
shall have been furnished with acceptable indemnification.
5. INDEMNIFICATION
---------------
5.1 Waiver and Indemnification. Parent, the Indemnification
--------------------------
Representative and the Holders agree to and hereby do waive any suit, claim,
demand or cause of action of any kind which they may have or may assert against
the Escrow Agent arising out of or relating to the execution or performance by
the Escrow Agent of this Escrow Agreement, unless such suit, claim, demand or
cause of action is based upon the willful neglect or gross negligence or bad
faith of the Escrow Agent. Parent and the Holders further agree, jointly and
severally, to indemnify and hold Escrow Agent and 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 without limitation, out-of-pocket, incidental expenses,
reasonable legal fees and expenses, and the allocated costs and expenses of in-
house counsel and legal staff ("Losses") that may be imposed on, incurred by, or
------
asserted against, the Indemnitees or any of them for following any instructions
or other directions upon which the Escrow Agent is authorized to rely pursuant
to the terms of this Escrow Agreement,
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provided the Escrow Agent has not acted with gross negligence, willful neglect
or bad faith. 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 in connection with or arising out of the Escrow Agent's
performance under this Escrow Agreement, provided the Escrow Agent has not acted
with gross negligence, willful neglect or bad faith. The maximum amount of each
Holders liability for indemnification under this Section 5.1 shall be the amount
of such Holders percentage interest of the Escrow Shares. The provisions of this
Section 5.1 shall survive the termination of this Escrow Agreement and the
resignation or removal of the Escrow Agent for any reason. Anything in this
Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Escrow
Agent has been advised of such loss or damage and regardless of the form of
action.
5.2 Actions by Others. The Escrow Agent shall have no more or less
-----------------
responsibility or liability on account of any action or omission of any book-
entry depository, securities intermediary or other sub-escrow agent employed by
the Escrow Agent than any such book-entry depository, securities intermediary or
other sub-escrow agent has to the Escrow Agent, except to the extent that such
action or omission of any book-entry depository, securities intermediary or
other sub-escrow agent was caused by the Escrow Agent's own gross negligence,
bad faith or willful misconduct in breach of this Agreement.
6. ACKNOWLEDGMENT BY THE ESCROW AGENT
----------------------------------
By execution and delivery of this Escrow Agreement, the Escrow Agent
acknowledges that the terms and provisions of this Escrow Agreement are
acceptable and it agrees to carry out the provisions of this Escrow Agreement on
its part.
7. RESIGNATION OR REMOVAL OF ESCROW AGENT; SUCCESSOR
-------------------------------------------------
7.1 Resignation and Removal.
-----------------------
7.1.1 Notice. The Escrow Agent may resign as such following the
------
giving of thirty (30) days' prior written notice to the other parties hereto.
Similarly, the Escrow Agent may be removed and replaced following the giving of
thirty (30) days' prior written notice to be given to the Escrow Agent jointly
by the Indemnification Representative and Parent. In either event, the duties
of the Escrow Agent shall terminate thirty (30) days after the date of such
notice (or as of such earlier date as may be mutually agreeable), and the Escrow
Agent shall then deliver share certificates representing the balance of the
Escrow Shares then in its possession endorsed for transfer to a successor Escrow
Agent as shall be appointed by Parent and the Indemnification Representative as
evidenced by a written notice filed with the Escrow Agent.
7.1.2 Court Appointment. If the parties hereto are unable to
-----------------
agree upon a successor or shall have failed to appoint a successor prior to the
expiration of thirty (30) days following the date of the notice of resignation
or removal, then the Escrow Agent, at the expense of the Holders and Parent, may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent or other appropriate relief, and any such resulting appointment
shall be binding upon all of the
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parties hereto.
7.2 Successors. Every successor appointed hereunder shall
----------
execute, acknowledge and deliver to its predecessor, and also to the
Indemnification Representative and Parent, an instrument in writing accepting
such appointment hereunder, and thereupon such successor, without any further
act, shall become fully vested with all the duties, responsibilities and
obligations of its predecessor; but such predecessor shall, nevertheless, on the
written request of its successor or any of the parties hereto, execute and
deliver an instrument or instruments transferring to such successor all the
rights of such predecessor hereunder, and shall duly assign, transfer and
deliver all property, securities and monies held by it pursuant to this Escrow
Agreement to its successor. Should any instrument be required by any successor
for more fully vesting in such successor the duties, responsibilities, and
obligations hereby vested or intended to be vested in the predecessor, any and
all such instruments in writing shall, on the request of any of the other
parties hereto, be executed, acknowledged, and delivered by the predecessor.
7.3 New Escrow Agent. In the event of an appointment of a
----------------
successor, the predecessor shall cease to be Escrow Agent of any funds,
securities or other assets and records it may hold pursuant to this Escrow
Agreement, and the successor shall become such Escrow Agent.
7.4 Release. Upon acknowledgment by any successor Escrow Agent
-------
of the receipt of the then remaining balance of the Escrow Shares, the then
predecessor Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Escrow Agreement that may arise and
accrue thereafter.
7.5 Successors. Any corporation or association into which the
----------
Escrow Agent in its individual capacity may be merged or converted or with which
it may be consolidated, or any corporation or association resulting from any
merger, conversion or consolidation to which the Escrow Agent in its individual
capacity shall be a party, or any corporation or association to which all or
substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be sold or otherwise transferred, shall be the Escrow
Agent hereunder without further action.
8. FEES AND EXPENSES
-----------------
(a) Parent agrees (i) to pay or reimburse the Escrow Agent for its
attorney's fees and expenses incurred in connection with the preparation of this
Agreement and (ii) to pay the Escrow Agent's compensation for its normal
services hereunder in accordance with the fee schedule attached as Exhibit 8,
which may be subject to change hereafter on an annual basis.
(b) Parent agrees to reimburse the Escrow Agent on demand for all costs
and expenses incurred in connection with the administration of this Agreement or
the escrow created hereby or the performance or observance of its duties
hereunder which are in excess of its compensation for normal services hereunder,
including without limitation, payment of any legal fees and expenses incurred by
the Escrow Agent in connection with resolution of any claim by any party
hereunder.
9. INDEMNIFICATION REPRESENTATIVE
------------------------------
9.1 Appointment and Authority. For purposes of this Escrow
-------------------------
Agreement, the Holders have, by the execution of this Escrow Agreement,
irrevocably consented to the
-12-
appointment of the Indemnification Representative as representative of the
Holders and as the attorney-in-fact for and on behalf of each Holder, and,
subject to the express limitations set forth below, the taking by the
Indemnification Representative of any and all actions and the making of any
decisions required or permitted to be taken by it under this Escrow Agreement,
including but not limited to the exercise of the power to: (i) authorize
delivery to Parent of the Escrow Shares, or any portion thereof, in satisfaction
of Claims otherwise in connection with an Escrow Adjustment, (ii) agree to,
negotiate, enter into settlements and compromises of, and demand arbitration and
comply with orders of courts and awards of arbitrators with respect to such
Claims, (iii) resolve any Claims, and (iv) take all actions necessary in the
judgment of the Indemnification Representative for the accomplishment of the
foregoing and all of the other terms, conditions, and limitations of this Escrow
Agreement. Any notice given to the Indemnification Representative will
constitute notice to each and all of the Holders at the time notice is given to
the Indemnification Representative. Any action taken by, or notice or
instruction received from, the Indemnification Representative will be deemed to
be an action by, or notice or instruction from, each and all of the Holders.
Parent and the Escrow Agent will disregard any notice or instruction received
from any Holder other than the Indemnification Representative with regard to
this Escrow Agreement. The Indemnification Representative shall have unlimited
authority and power to act on behalf of each Holder with respect to this Escrow
Agreement and the disposition, settlement, or other handling of all Claims,
notices, rights, or obligations arising under this Escrow Agreement so long as
all Holders are treated in the same manner (in respect of their proportional
interests in the Escrow Shares).
9.2 Indemnification. As among the Parent, the Holders and
---------------
the Indemnification Representative, the Indemnification Representative shall not
suffer any liability or loss for any act performed or omitted to be performed by
him under this Escrow Agreement in the absence of adjudicated gross negligence,
willful neglect or bad faith. The Indemnification Representative may consult
with counsel and other experts as may be reasonably necessary to advise him with
respect to his rights and obligations hereunder and shall be fully protected by
any act taken, suffered, permitted, or omitted in good faith in accordance with
the advice of such counsel and experts. The Indemnification Representative shall
not be responsible for the sufficiency or accuracy of the form, execution,
validity, or genuineness of documents or securities now or hereafter deposited
hereunder, or of any endorsement thereof or for any lack of endorsement thereon,
or for any description therein, nor shall he be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement, and the Indemnification Representative shall be fully protected in
relying upon any written notice, demand, certificate or document which he in
good faith believes to be genuine.
9.3 Death or Disability; Successors. In the event of the
-------------------------------
death or permanent disability of the Indemnification Representative, or his
resignation as the Indemnification Representative, a successor Indemnification
Representative shall be elected by a majority vote of the Holders, with each
Holder to be given a vote equal to his or her percentage interest as set forth
in Exhibit A hereto. The Holders shall cause to be delivered to Parent and the
Escrow Agent prompt written notice of such election of a successor
Indemnification Representative. Each successor Indemnification Representative
shall have all of the power, authority, rights, and privileges conferred by this
Agreement upon the original Indemnification Representative, and the term,
"Indemnification Representative" as used herein shall be deemed to include any
-------------------------------
successor Indemnification Representative. Until notified in writing by the
Indemnification Representative that he has resigned, the Escrow Agent shall be
entitled to act upon the directions, instructions and notices of the
-13-
Indemnification Representative named above and, thereafter, upon the
directions, instructions and notices of any successor named in a writing
executed by a majority-in-interest of the Holders filed with the Escrow Agent.
10. TERMINATION
-----------
This Escrow Agreement and the escrow created hereby shall terminate
following Escrow Agent's delivery of all remaining Escrow Shares to the Holders
and/or Parent pursuant to Section 2 or 3.
11. TAX MATTERS
-----------
The parties hereto acknowledge that the Escrow Shares are held in the
escrow account on behalf of the Holders and that for tax reporting purposes all
dividends or other income earned with respect to the Escrow Shares, if any,
shall be allocable and taxed to the Holders in each taxable year in which earned
on a pro rata basis according to their percentage interests as set forth in
Exhibit A hereto.
12. MISCELLANEOUS PROVISIONS
------------------------
12.1 Parties in Interest. This Escrow Agreement is not intended, nor
-------------------
shall it be construed, to confer any enforceable rights on any person not a
party hereto. All of the terms and provisions of this Escrow Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
12.2 Attorneys' Fees. In the event of any action to enforce any
---------------
provision of this Escrow Agreement, or on account of any default under or breach
of this Escrow Agreement, the substantially prevailing party in such action
shall be entitled to recover, in addition to all other relief, from the other
party all attorneys' fees incurred by the substantially prevailing party in
connection with such action (including, but not limited to, any appeal thereof).
Notwithstanding the foregoing, the Parent shall reimburse the Escrow Agent for
any fees, including any legal fees and expenses, incurred by the Escrow Agent
pursuant to Section 8 of this Agreement. The Escrow Agent shall be under no duty
or obligation to monitor or enforce any action between the Parent and
Indemnification Representative pursuant to this Section 12.2; provided, however,
that the Escrow Agent shall pay any Prevailing Party Awards from the escrow
funds in accordance with this Agreement.
12.3 Entire Agreement. This Escrow Agreement and the Merger
----------------
Agreement constitutes the final and entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior arrangements or
understandings.
12.4 Notices. All notices, requests, demands or other communications
-------
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given: (i) on the date of
delivery if personally delivered by hand, (ii) upon the date scheduled for
delivery after such notice is sent by a internationally recognized overnight or
second day express courier or (iii) by fax upon written confirmation (including
the automatic confirmation that is received from the recipient's fax machine) of
receipt by the recipient of such notice:
If to Parent: Topaz Corporation
-------------
-00-
Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Chief
Financial Officer
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
With copies to:
---------------
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Parent's
--------------
Transfer Agent: Boston EquiServe, L.P.
-------------- 000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to the Indemnification
-------------------------
Representative:
---------------
Venrock Associates
Xxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No: (000) 000-0000
With copies to:
---------------
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention Xxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No: (000) 000-0000
If to the Escrow Agent: If by mail:
-----------------------
State Street Bank and Trust Company
Global Investor Service Group
Corporate Trust Department
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Attn: Project Topaz Escrow
Telephone No.: (000) 000-0000
-15-
If by fax, addressed as above and sent to:
Attn: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
If by courier:
--------------
State Street Bank and Trust Company
Global Investor Services Group
Corporate Trust Department
2 Avenue de Lafayette, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Project Topaz Escrow
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 12.4.
12.5 Changes. The terms of this Escrow Agreement may not be modified
-------
or amended, or any provisions hereof waived, temporarily or permanently, except
pursuant to the written agreement of Parent, the Indemnification Representative
and the Escrow Agent.
12.6 Severability. If any term or provision of this Escrow Agreement
------------
or the application thereof as to any person or circumstance shall to any extent
be invalid or unenforceable, the remaining terms and provisions of this Escrow
Agreement or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby and each term and provision of this Escrow
Agreement shall be valid and enforceable to the fullest extent permitted by law.
12.7 Counterparts. This Escrow Agreement may be executed in two or
------------
more partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument. The execution and delivery of a
Signature Page to Escrow Agreement in the form annexed to this Escrow Agreement
by any party hereto who shall have been furnished the final form of this Escrow
Agreement shall constitute the execution and delivery of this Escrow Agreement
by such party.
12.8 Headings. The headings of the various sections of this Escrow
--------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Escrow Agreement.
12.9 Governing Law. This Escrow Agreement shall be construed and
-------------
controlled by the laws of the Commonwealth of Massachusetts without regard to
the principles of conflicts of laws.
12.10 Binding Effect. This Escrow Agreement shall inure to the
--------------
benefit of and be binding upon the parties hereto and their respective heirs,
affiliates, successors and assigns.
-16-
12.11 Release of Escrow Shares. Under no circumstances should the
------------------------ --
terms of the escrow agreement require the Escrow Agent to release or distribute
Escrow Shares or property (or take similar action, such as making a draw on an
underlying letter of credit) sooner than two (2) business days after the Escrow
Agent has received the requisite notices or paperwork in good form, or passage
of the applicable claims period or release date, as the case may be.
12.12 Tax Indemnification. Parent and Indemnification Representative
-------------------
agree, jointly and severally, (i) to instruct the Escrow Agent in writing with
respect to the Escrow Agent's responsibility for withholding and other taxes,
assessments or other governmental charges, and to instruct the Escrow Agent with
respect to any certifications and governmental reporting that may be required
under any laws or regulations that may be applicable in connection with its
acting as Escrow Agent under this Agreement, and (ii) to indemnify and hold the
Escrow Agent harmless from any liability or obligation on account of taxes,
assessments, additions for late payment, interest, penalties, expenses and other
governmental charges that may be assessed or asserted against the Escrow Agent
in connection with or relating to any payment made or other activities performed
under the terms of this Agreement, including without limitation any liability
for the withholding or deduction of (or the failure to withhold or deduct) the
same, and any liability for failure to obtain proper certifications or to report
properly to governmental authorities in connection with this Agreement,
including costs and expenses (including reasonable legal fees and expenses),
interest and penalties. Parent agrees to assume any and all obligations imposed
now or hereafter by any applicable tax law with respect to any payment or
distribution of Escrow Shares on performance of other activities under this
Agreement. The foregoing indemnification and agreement to hold harmless shall
survive the termination of this Agreement.
12.13 Dispute Resolution. Except as provided in Section 2.3(c), it
------------------
is understood and agreed that should any dispute arise with respect to the
delivery, ownership, right of possession, and/or disposition of the Escrow
Shares, or should any claim be made upon the Escrow Agent or the Escrow Shares
by a third party, the Escrow Agent upon receipt of notice of such dispute or
claim is authorized and shall be entitled (at its sole option and election) to
retain in its possession without liability to anyone, all or any of said Escrow
Shares until such dispute shall have been settled either by the mutual written
agreement of the parties involved or by a final order, decree or judgment of a
court in the United States of America, the time for perfection of an appeal of
such order, decree or judgment having expired. The Escrow Agent may, but shall
be under no duty whatsoever to, institute or defend any legal proceedings which
relate to the Escrow Shares.
12.14 Consent to Jurisdiction and Service. Each of the interested
-----------------------------------
parties hereby absolutely and irrevocably consents and submits to the
jurisdiction of the courts in the Commonwealth of Massachusetts and of any
Federal court located in said Commonwealth in connection with any actions or
proceedings brought against any of the interested parties (or each of them) by
the Escrow Agent arising out of or relating to this Escrow Agreement. In any
such action or proceeding, each of the interested parties each hereby absolutely
and irrevocably (i) waives any objection to jurisdiction or venue, (ii) waives
personal service of any summons, complaint, declaration or other process, and
(iii) agrees that the service thereof may be made by certified or registered
first-class mail directed to such party, as the case may be, at their respective
addresses in accordance with Section 12.4 hereof.
12.15 Force Majeure. The Escrow Agent shall not be responsible for
-------------
delays or failures in performance 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
-17-
the fact, fire, communication line failures, computer viruses, power failures,
earthquakes or other disasters.
12.16 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 any
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.
12.17 Delivery of Escrow Shares. The Escrow Agent is not the
-------------------------
transfer agent of the Escrow Shares. When shares are required to be delivered
by the Escrow Agent to Parent or the Indemnification Representative (with
respect to deliveries to the Holders) pursuant to this Agreement, delivery shall
be made by the Escrow Agent's instructing such stock transfer agent to deliver
certificates to Parent or Indemnification Representative at their addresses set
forth in 12.4. The transfer agent herein is as named in Section 12.4 and the
Escrow Agent shall be entitled to deal with him as such until the Escrow Agent
receives instructions otherwise from Parent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Signature Page to Escrow Agreement
IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as
of the day and year first above written.
TOPAZ CORPORATION
By:_________________________
Title:
Name:
INDEMNIFICATION REPRESENTATIVE:
VENROCK ASSOCIATES
By:
____________________________
Title:
Name:
ESCROW AGENT
STATE STREET BANK AND TRUST COMPANY,
SOLELY IN ITS CAPACITY AS ESCROW AGENT
By:_________________________
Name:
Title:
HOLDERS:
Xxxxxxx, Xxxxxxxx
Xxxxx, Xxxxxx
Xxxx, Karim
Barzum, Xxxxx X.
Xxxxxx, Xxxxx X.
Xxxxx, Father Xxxxxx X., as trustee of The Xxxxxx X. and Xxxxxxxxx X. Xxxxxx
Grandchildren Trust
Xxxxxxxxx, Xxxxxx
Xxxxxx, Xxxx
Xxxxxx, Xxxxxxxxx X.
Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx X.
Xxxxx, Xxxx X.
Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxx X.
Xxxxxxx, Xxxxx X.
Xxxxxxxx, Xxxxx X. and Estate of Xxxxxxx X. Xxxxxxxx
Folk, Xxxxxxx X.
Xxxxxx, Xxxxx
GTV Entrepreneurial Roundtable
Xxxxxxxx, Xxxxx X.
Xxxxx, Xxxxxx X.
International Business Machines
Xxx, Xxxxxxx
Xxxx, Xxxxxxx X.
Xxxxxxxxx, Xxxxxxx
Xxx, Xxxxxxxx
Xxxxx, Xxxx
Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxx
Miu, Xxxxx
Xxxxxx, Xxxxxx X.
Xxx, Elan X.
Xxxxxx, Xxxx X.
Xxxxxx, Xxxxxxxxx X.
Xxxxxx, Xxxxxx and Xxxxxxxx XX
Xxxxxx, Xxxxxx and Xxxxxxxxx JTWROS
Xxxxxx, Xxxxxxxx X.
Xxxxxx, Xxxxxx X.
Xxxxxx, Xxxxx X.
Xxxxx, Xxxxx X.
Xxxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxxxxxx X.
Xxxxxxxx, Xxxx X.
Xxxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxx X.
Xxxxxxxxxxx, Xxxxx X.
Renault, Xxxxxxx
Xxx, Xxxxxxx X.
Xxx, Xxxxxxx and Monami, XX
Xxx, Xxxxxxxxx
Xxxxxxxxx, Xxxx X.
Xxxxxx, Xxxxxxxx X.
Signal Lake Venture Fund, L.P.
Xxx, Xxxxxx
Song, Lifeng
St. Xxxx Venture Capital Affiliates Fund I, LLC
St. Xxxx Venture Capital V, LLC
Star Seed Enterprise
SVE Star Ventures Enterprises No. VII
SVM Star Ventures Management GmbH and Co. Xx.0
XXX Xxxx Xxxxxxxx Xxxxxxxxxx XxxX Xx. 0
XXX Star Ventures Managementgesellschaft
TSF Entrepreneurial Round Table I, L.P.
van der Kaay, Xxxx X.
Venrock Associates
Venrock Associates III, L.P.
Venrock Entrepreneurs Fund, X.X.
Xx, Bingjuan X.
Xxxxx, Xxxxx X.
Xxxxx, Xxxxxxx
Xxxxx, Jingwu
Xxxxxxxxxxxx, Xxxx
-19-
