[THE BANK OF NEW YORK LOGO]
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ESCROW AGREEMENT
between
TRANSITION ANALYSIS COMPONENT TECHNOLOGY, INC.
and
THE BANK OF NEW YORK
Dated as of June 30, 1997
ACCOUNT NUMBER(S)____________________________
SHORT TITLE OF ACCOUNT_______________________________
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ESCROW AGREEMENT made this 30th day of June 1997 by and between
THE BANK OF NEW YORK, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx as
escrow agent (the "Escrow Agent") and Transition Analysis Component Technology,
Inc., a Delaware corporation, at 00000 Xxxx Xxxxx Xxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx, as depositor (the "Depositor" or "TACTech").
WHEREAS, the Depositor is a 90% owned subsidiary of Zing
Technologies, Inc. ("Zing"), a New York corporation, and maintains a data base
of certain components for military equipment;
WHEREAS, there are currently issued and outstanding 15,200 shares
of common stock, $0.01 par value;
WHEREAS, the Board of Directors of TACTech has approved a stock
split of 36.436 shares of common stock for each share of common stock currently
outstanding ("Stock Split") as a result of which there will be issued and
outstanding 553,830 shares of common stock.
WHEREAS, the Depositor has filed a registration statement on Form
SB-1 under the Securities and Exchange Act of 1933 on January 30, 1997 and will
commence, as soon as practicable following the Securities and Exchange
Commission's declaration of effectiveness, the distribution (the "Distribution")
of 90% of its shares of common stock, to the stockholders of Zing as of the
Record Date with the remaining 10% to be held by Xxxxxxx Xxxx, TACTech's
Executive Vice President, and will as of the date of such Distribution (the
"Distribution Date") operate on a stand alone basis;
WHEREAS, the Escrow Agent shall hold in escrow and shall
distribute, in accordance with and subject to the following Instructions and
Terms and Conditions, the certificates evidencing shares of stock of TRANSITION
ANALYSIS COMPONENT TECHNOLOGY, INC. to the stockholders of Zing on the basis of
one (1) share of the common stock, $.01 par value, of TACTech stock for every
five (5) shares of Zing common stock held by Zing stockholders as of the Record
Date, as further set forth herein.
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties hereby agree as follows:
I. INSTRUCTIONS:
1. Escrow Property
The property and funds deposited or to be deposited with the
Escrow Agent by the Depositor shall be as follows:
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(a) Stock Certificates representing 498,447 shares of common
stock, $.01 par value, (the "Common Stock") of Transition Analysis Component
Technology, Inc., after giving effect to the Stock Split; and
(b) Cash representing an amount of appropriate funds to be to be
delivered by the Escrow Agent to the shareholders of Zing in lieu of fractional
share interests of such shares of Common Stock.
The foregoing property and funds (collectively the "Distributions")
received by the Escrow Agent are collectively referred to herein as "Escrow
Property."
2. Investment of Escrow Property (The Depositor is to select one of the
following options, initial the option selected and, if "(b)" is selected, insert
the appropriate information.)
_X_ (a) The Escrow Agent shall have no obligation to pay interest on or to
invest or reinvest any Escrow Property deposited or received hereunder.
___ (b) The Escrow Agent shall invest or reinvest Escrow Property, without
distinction between principal and income, in accordance with the following:
The Escrow Agent shall have no liability for any loss arising from
or related to any such investment other than in accordance with paragraph 4 of
the Terms and Conditions.
3. Distribution of Escrow Property
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The Escrow Agent is directed to hold and distribute the Escrow Property to
the Bank of New York, as transfer agent, upon instruction of Depositor.
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4. Notice.
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All notices and other communications required or permitted to be given
under this Escrow Agreement shall be dated and in writing and shall be deemed to
have been duly given when (a) personally delivered, (b) upon delivery of a
telephonic facsimile transmission with a confirmed telephonic transmission
answered back, (c) three days after being deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid, or (d) one
day after having been dispatched by a nationally recognized overnight courier
service, addressed to the party or parties to this Escrow Agreement to whom it
is directed:
If to the Escrow Agent:
The Bank of New York
Corporate Trust Department,
000 Xxxxxxx Xxxxxx - 00X Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Transition Analysis Component Technology, Inc.
If to Zing:
Zing Technologies, Inc.
000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
If to TACTech:
Transition Analysis Component Technology, Inc.
00000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx
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with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
or to such other address or addresses as may be designated by a party hereto by
notice delivered to the other parties.
5. Distribution of Escrow Property Upon Termination
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This Escrow Agreement shall terminate at such time as all shares of the
Depositor's Common Stock shall have been received by the Zing stockholders then
entitled to receive such shares and upon the payment by the Escrow Agent of all
amounts payable to those Zing stockholders entitled to receive cash in lieu of
fractional share interests. Upon termination of this Escrow Agreement, the
Escrow Property then held hereunder shall have been fully distributed.
6. Compensation
(a) At the time of execution of this Escrow Agreement, the Depositor shall
pay the Escrow Agent the following fees, payable on an annual basis:
Escrow Services Fee $3,000
Spin-Off Services Fee $1,500
Transfer Agent Services Fee $7,500
(b) The Depositor shall be responsible for and shall reimburse the Escrow
Agent upon demand for all expenses, disbursements and advances incurred or made
by the Escrow Agent in connection with this Agreement.
II. TERMS AND CONDITIONS:
1. The duties, responsibilities and obligations of the Escrow Agent shall
be limited to those expressly set forth herein and no duties, responsibilities
or obligations shall be inferred or implied. The Escrow Agent shall not be
subject to, nor required to comply with, any other agreement between or among
the Depositor and another entity or to which the Depositor is a party, even
though reference thereto may be made herein, or to comply with any direction or
instruction (other than those contained herein or delivered in accordance with
this Escrow Agreement) from the Depositor or any entity acting on its behalf.
The Escrow Agent shall not be required to, and shall not, expend or risk any of
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder.
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2. This Agreement is for the exclusive benefit of the parties hereto and
their respective successors hereunder, and shall not be deemed to give, either
express or implied, any legal or equitable right, remedy, or claim to any other
entity or person whatsoever.
3. If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Escrow Property (including but
not limited to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Escrow Property), the Escrow
Agent is authorized to comply therewith in any manner as it or its legal counsel
of its own choosing deems appropriate; and if the Escrow Agent complies with any
such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect.
4. (a) The Escrow Agent shall not be liable for any action taken or omitted
or for any loss or injury resulting from its actions or its performance or lack
of performance of its duties hereunder in the absence of gross negligence or
willful misconduct on its part. In no event shall the Escrow Agent be liable (i)
for acting in accordance with or relying upon any instruction, notice, demand,
certificate or document from the Depositor or any entity acting on behalf of the
Depositor, (ii) for any consequential, punitive or special damages, (iii) for
the acts or omissions of its nominees, correspondents, designees, subagents or
subcustodians, or (iv) for an amount in excess of the value of the Escrow
Property, valued as of the date of deposit.
(b) If any fees, expenses or costs incurred by, or any obligations owed
to, the Escrow Agent hereunder are not promptly paid when due the Escrow Agent
may reimburse itself therefor from the Escrow Property and may sell, convey or
otherwise dispose of any Escrow Property for such purpose.
(c) As security for the due and punctual performance of any and all of
the Depositor's obligations to the Escrow Agent hereunder, now or hereafter
arising, individually and collectively, hereby pledge, assign and grant to the
Escrow Agent a continuing security interest in, and a lien on, the Escrow
Property and all Distributions thereon or additions thereto (whether such
additions are the result of deposits by the Depositor or the investment of
Escrow Property). The security interest of the Escrow Agent shall at times be
valid, perfected and enforceable by the Escrow Agent against the Depositor and
all third parties in accordance with the terms of this Escrow Agreement.
(d) The Escrow Agent may consult with legal counsel at the expense of
the Depositor as to any matter relating to this Escrow Agreement, and the Escrow
Agent shall not incur any liability in acting in good faith in accordance with
any advice from such counsel.
(e) The Escrow Agent shall not incur any liability for not performing
any act or fulfilling any duty, obligation or responsibility hereunder by reason
of any occurrence beyond the control of the Escrow Agent (including but not
limited to any act or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the unavailability of the
Federal Reserve Bank wire or telex or other wire or communication facility).
5. Unless otherwise specifically set forth herein, the Escrow Agent shall
proceed as soon as practicable to collect any checks or other collection items
at any time deposited hereunder. All such collections shall be subject to the
Escrow Agent's usual collection practices or terms regarding items received by
the Escrow Agent for deposit or collection. The Escrow Agent shall not be
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required, or have any duty, to notify anyone of any payment or maturity under
the terms of any instrument deposited hereunder, nor to take any legal action to
enforce payment of any check, note or security deposited hereunder or to
exercise any right or privilege which may be afforded to the holder of any such
security.
6. The Escrow Agent shall provide to the Depositor monthly statements
identifying transactions, transfers or holdings of Escrow Property and each such
statement shall be deemed to be correct and final upon receipt thereof by the
Depositor unless the Escrow Agent is notified in writing to the contrary within
thirty (30) business days of the date of such statement.
7. The Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities deposited
hereunder, or for any description therein, or for the identity, authority or
rights of persons executing or delivering or purporting to execute or deliver
any such document, security or endorsement.
8. Notices, instructions or other communications shall be in writing and
shall be given to the address set forth in the "Addresses" provision herein (or
to such other address as may be substituted therefor by written notification to
the Escrow Agent or the Depositor. Notices to the Escrow Agent shall be deemed
to be given when actually received by Escrow Agent's Corporate Trust
Department. The Escrow Agent is authorized to comply with and rely upon any
notices, instructions or other communications believed by it to have been sent
or given by the Depositor or by a person or persons authorized by the Depositor.
Whenever under the terms hereof the time for giving a notice or performing an
act falls upon a Saturday, Sunday, or banking holiday, such time shall be
extended to the next day on which the Escrow Agent is open for business.
9. The Depositor shall be liable for and shall reimburse and indemnify the
Escrow Agent and hold the Escrow Agent harmless from and against any and all
claims, losses, liabilities, costs, damages or expenses (including reasonable
attorneys' fees and expenses) (collectively, "Losses") arising from or in
connection with or related to this Escrow Agreement or being Escrow Agent
hereunder (including but not limited to Losses incurred by the Escrow Agent in
connection with its successful defense, in whole or in part, of any claim of
gross negligence or willful misconduct on its part), provided, however, that
nothing contained herein shall require the Escrow Agent to be indemnified for
Losses caused by its gross negligence or willful misconduct.
10. (a) The Depositor may remove the Escrow Agent at any time by giving to
the Escrow Agent thirty (30) calendar days' prior notice in writing signed by
the Depositor. The Escrow Agent may resign at any time by giving to the
Depositor fifteen (15) calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of
removal to the Escrow Agent or receiving the foregoing notice of resignation
from the Escrow Agent, the Depositor shall jointly agree on and appoint a
successor Escrow Agent. If a successor Escrow Agent has not accepted such
appointment by the end of such 10-day period, the Escrow Agent may, in its sole
discretion, deliver the Escrow Property to the Depositor at the address provided
herein or may apply to a court of competent jurisdiction for the appointment of
a successor Escrow Agent or for other appropriate relief. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Escrow
Agent in connection with such proceeding shall be paid by, and be deemed a joint
and several obligation of, the Depositor.
(c) Upon receipt of the identity of the successor Escrow Agent, the
Escrow Agent shall either deliver the Escrow Property then held hereunder to the
successor Escrow Agent, less
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Escrow Agent's fees, costs and expenses or other obligations owed to
the Escrow Agent, or hold such Escrow Property (or any portion thereof), pending
distribution, until all such fees, costs and expenses or other obligations are
paid.
(d) Upon delivery of the Escrow Property to successor Escrow Agent, the
Escrow Agent shall have no further duties, responsibilities or obligations
hereunder.
11. (a) In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by the Escrow Agent
hereunder, The Escrow Agent may, in its sole discretion, refrain from taking any
action other than retain possession of the Escrow Property, unless the Escrow
Agent receives written instructions, signed by the Depositor, which eliminates
such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or
among the Depositor and/or any other person or entity with respect to any Escrow
Property, the Escrow Agent shall be entitled, in its sole discretion, to refuse
to comply with any and all claims, demands or instructions with respect to such
Escrow Property so long as such dispute or conflict shall continue, and the
Escrow Agent shall not be or become liable in any way to the Depositor for
failure or refusal to comply with such conflicting claims, demands or
instructions. The Escrow Agent shall be entitled to refuse to act until, in its
sole discretion, either (i) such conflicting or adverse claims or demands shall
have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to
appeal, or settled by agreement between the conflicting parties as evidenced in
a writing satisfactory to the Escrow Agent or (ii) Escrow Agent shall have
received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all Losses which it may incur by reason of so
acting. The Escrow Agent may, in addition, elect, in its sole discretion, to
commence an interpleader action or seek other judicial relief or orders as it
may deem, in its sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed a joint and several obligation
of, the Depositor.
12. This Agreement shall be interpreted, construed, enforced and
administered in accordance with the internal substantive laws (and not the
choice of law rules) of the State of New York. Each of the Depositor hereby
submits to the personal jurisdiction of and each agrees that all proceedings
relating hereto shall be brought in courts located within the City and State of
New York or elsewhere as the Escrow Agent may select. The Depositor hereby
waives the right to trial by jury and to assert counterclaims in any such
proceedings. To the extent that in any jurisdiction the Depositor may be
entitled to claim, for itself or its assets, immunity from suit, execution,
attachment (whether before or after judgment) or other legal process, each
hereby irrevocably agrees not to claim, and hereby waives, such immunity. The
Depositor waives personal service of process and consents to service of process
by certified or registered mail, return receipt requested, directed to it at the
address last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
13. Except as otherwise permitted herein, this Escrow Agreement may be
modified only by a written amendment signed by all the parties hereto, and no
waiver of any provision hereof shall be effective unless expressed in a writing
signed by the party to be charged.
14. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
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15. The Depositor hereby represents and warrants (a) that this Escrow
Agreement has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Escrow Agreement by the Depositor does not and
will not violate any applicable law or regulation.
16. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of any
other provision; and if any provision is held to be enforceable as a matter of
law, the other provisions shall not be affected thereby and shall remain in full
force and effect.
17. This Agreement shall constitute the entire agreement of the parties with
respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.
18. The provisions of these Terms and Conditions shall survive termination
of this Escrow Agreement and/or the resignation or removal of the Escrow Agent.
19. No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions "The Bank of New York"
by name or the rights, powers, or duties of the Escrow Agent under this
Agreement shall be issued by any other parties hereto, or on such partyAEs
behalf, without the prior written consent of the Escrow Agent.
20. The headings contained in this Agreement are for convenience of
reference only and shall have no effect on the interpretation or operation
hereof.
21. This Escrow Agreement may be executed by each of the parties hereto in
any number of counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all such counterparts shall
together constitute one and the same agreement.
22. This Escrow Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this agreement against the Escrow Agent. The
Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Escrow Agreement.
23. The Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Depositor shall pay or reimburse the Escrow Agent upon
request for any transfer taxes or other taxes relating to the Escrow Property
incurred in connection herewith and shall indemnify and hold harmless the Escrow
Agent any amounts that it is obligated to pay in the way of such taxes. Any
payments of income from this Escrow Account shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide the Escrow Agent with appropriate W-9 forms for tax I.D.,
number certifications, or W-8 forms for non-resident alien certifications. It is
understood that the Escrow Agent shall be responsible for income reporting only
with respect to income earned on investment of funds which are a part of the
Escrow Property and is not responsible for any other reporting. This paragraph
and paragraph (9) shall survive notwithstanding any termination of this Escrow
Agreement or the resignation of the Escrow Agent.
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IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to
be executed by a duly authorized officer as of the day and year first written
above.
TRANSITION ANALYSIS
COMPONENT TECHNOLOGY, INC., as Depositor
By: s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
THE BANK OF NEW YORK, as Escrow Agent
By: s/ Xxxxxx Xxxxx-Xxx
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Name: Xxxxxx Xxxxx-Xxx
Title: Corporate Trust Administration
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