Exhibit 99.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of May 25, 2001, by
and among Open Market, Inc., a corporation incorporated under the laws of
Delaware (the "Company"), Theddingworth International Limited ("Purchaser"), and
Xxxxxxx Xxxxxx & Green, P.C., having an address at 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000 (the "Escrow Agent"). Capitalized terms used but not defined herein shall
have the meanings set forth in the Common Stock Purchase Agreement referred to
in the first recital.
WHEREAS, the Purchaser will from time to time as requested by the Company
purchase shares of the Company's Common Stock from the Company as set forth in
that certain Common Stock Purchase Agreement (the "Purchase Agreement") dated
the date hereof between the Purchaser and the Company, which shares shall be
issued pursuant to the terms and conditions contained herein and in the Purchase
Agreement; and
WHEREAS, the Company and the Purchaser have requested that the Escrow
Agent hold in escrow and then distribute the initial documents and certain funds
which are conditions precedent to the effectiveness of the Purchase Agreement,
and have further requested that upon each exercise of a Draw Down, the Escrow
Agent hold the relevant documents and the applicable purchase price pending
receipt by Purchaser of the securities issuable upon such Draw Down;
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE I
TERMS OF THE ESCROW FOR THE INITIAL CLOSING
1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds and documents which
are referenced in Section 4.2 of the Purchase Agreement.
1.2. At the Initial Closing, the Company shall deliver to the Escrow
Agent:
(i) the original executed Registration Rights Agreement in the
form of EXHIBIT A to the Purchase Agreement;
(ii) the original executed opinion of Xxxx and Xxxx LLP in the
form of EXHIBIT C to the Purchase Agreement;
(iii) the sum of $35,000;
(iv) the original executed Company counterpart of this Escrow
Agreement;
(v) the original executed Company counterpart of the Purchase
Agreement; and
(vi) the original executed Warrant.
1.3. Upon receipt of the foregoing, and receipt of executed counterparts
from Purchaser of the Purchase Agreement, the Registration Rights Agreement and
this Escrow Agreement, the Escrow Agent shall calculate and enter the exercise
price, issuance date and termination date on the face of the Warrant and
immediately transfer the sum of $35,000 to Xxxxxxx Xxxxxx & Green, P.C. as a
non-accountable expense allowance for the Purchaser's legal, administrative and
due diligence costs and expenses and shall then arrange to have the Purchase
Agreement, this Escrow Agreement, the Registration Rights Agreement, the Warrant
and the opinion of counsel delivered to the appropriate parties.
1.4 WIRE TRANSFERS to the Escrow Agent (NOT address for notice or
delivery of documents) shall be made as follows:
Xxxxxxx Xxxxxx & Green, P.C.
Master Escrow Account
Chase Manhattan Bank
0000 Xxxxxxxx - Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No. 000000000
Account No. 035 1 346036
Attention: L. Borneo
ARTICLE II
TERMS OF THE ESCROW FOR EACH DRAW DOWN
2.1. Each time the Company shall send a Draw Down Notice to the Purchaser
as provided in the Purchase Agreement, it shall send a copy, by facsimile, to
the Escrow Agent.
2.2. Each time the Purchaser shall purchase Shares pursuant to a Draw
Down, the Purchaser shall send the applicable Purchase Price of the Draw Down
Shares to the Escrow Agent. Upon receipt of such funds, the Escrow Agent shall
advise the Company that it has received the funds for such Draw Down Shares. The
Company shall promptly, but no later than 1 Trading Day after receipt of such
funding notice from the Escrow Agent:
(i) cause its transfer agent to issue the Draw Down Shares to the
Purchaser via DTC's DWAC system to the account specified by
the Purchaser from time to time;
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(ii) deliver the original executed attorney's opinion in the form
of EXHIBIT C to the Purchase Agreement to the Purchaser;
(iii) deliver the original representation of the Company's General
Counsel referenced in Section 4.3(e) of the Purchase
Agreement; and
(iv) deliver a Form 424(b)(3) prospectus supplement to the
Purchaser.
2.3. Upon receipt of written confirmation from the transfer agent or from
the Purchaser that such Draw Down Shares have been so deposited and the opinion,
representation and the prospectus supplement have been so delivered, the Escrow
Agent shall, within 1 Trading Day, wire the Purchase Price of the Draw Down
Shares per the written instructions of the Company, net of $1,000 as escrow
expenses to the Escrow Agent.
2.4. In the event that the Draw Down Shares are not in the Purchaser's
DTC account and the opinion, representation and supplemental prospectus are not
delivered to the Escrow Agent within 3 Trading Days of the date of the Escrow
Agent's notice, then Purchaser shall have the right to demand, by notice, the
return of the Purchase Price, and the Draw Down Notice shall be deemed
cancelled.
ARTICLE III
MISCELLANEOUS
3.1. No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.
3.2. All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent by fax, overnight courier, registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
received upon receipt thereof, as set forth in the Purchase Agreement.
3.3. This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.
3.4. This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by their respective agents duly authorized in writing
or as otherwise expressly permitted herein.
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3.5. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
3.6. The parties hereto expressly agree that this Escrow Agreement shall
be governed by, interpreted under and construed and enforced in accordance with
the laws of the State of New York. Except as expressly set forth herein, any
action to enforce, arising out of, or relating in any way to, any provisions of
this Escrow Agreement shall be brought in the federal or state courts of New
York, New York as is more fully set forth in the Purchase Agreement.
3.7. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, Purchaser and the
Escrow Agent.
3.8. The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith, excepting only its own gross negligence or willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law (other than Escrow Agent itself)
shall be conclusive evidence of such good faith.
3.9. The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
3.10. The Escrow Agent shall not be liable in any respect on account of
the identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder or hereunder.
3.11. The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR THE
PURCHASER, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR THE PURCHASER, FROM TIME
TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER. THE COMPANY
CONSENTS TO THE ESCROW AGENT IN SUCH CAPACITY AS LEGAL COUNSEL FOR THE PURCHASER
AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION REPRESENTS A CONFLICT OF INTEREST
ON THE PART
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OF THE ESCROW AGENT. THE COMPANY UNDERSTANDS THAT THE PURCHASER AND THE ESCROW
AGENT ARE RELYING EXPLICITLY ON THE FOREGOING PROVISION IN ENTERING INTO THIS
ESCROW AGREEMENT.
3.12. The Escrow Agent's responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by written notice to the Company and
the Purchaser. In the event of any such resignation, the Purchaser and the
Company shall appoint a successor Escrow Agent.
3.13. If the Escrow Agent reasonably requires other or further
instruments in connection with this Escrow Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
3.14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (i) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned by a final order,
decree or judgment of a board of arbitration or court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but the
Escrow Agent shall be under no duty whatsoever to institute or defend any such
proceedings, or (ii) to deliver the escrow funds and any other property and
documents held by the Escrow Agent hereunder to a state or Federal court having
competent subject matter jurisdiction and located in the State and City of New
York in accordance with the applicable procedure therefor.
3.15. The Company and the Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses
(including reasonable attorneys' fees) in any way arising from or relating to
the duties or performance of the Escrow Agent hereunder or the transactions
contemplated hereby or by the Purchase Agreement other than any such claim,
liability, cost or expense to the extent the same shall have been determined by
final, unappealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Escrow Agent.
[SIGNATURE PAGE FOLLOWS]
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[ESCROW AGREEMENT SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
this 25th day of May, 2001.
OPEN MARKET, INC.
By: /s/ XXXXXX XXXXXX
-------------------------------------
Xxxxxx Xxxxxx, Chief Financial Officer
THEDDINGWORTH INTERNATIONAL LIMITED
By: /s/ XXXXX XXXX
-------------------------------------
Xxxxx Xxxx, Director
ESCROW AGENT:
XXXXXXX XXXXXX & GREEN, P.C.
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxx, Authorized Signatory
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