FORM OF
ESCROW AGREEMENT
ESCROW AGREEMENT, dated ________ ___, 2001, by and among (i) XxXxxxxxx
& Co Inc., a Delaware corporation ("PURCHASER"), (ii) the Representatives (as
defined in Section 1 hereof), for and on behalf of the individuals listed on
SCHEDULE I hereto (the "STOCKHOLDERS") and (iii) ___________________________
(the "ESCROW AGENT").
B A C K G R O U N D F A C T S:
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A. Pursuant to an Agreement and Plan of Merger dated as of January 18,
2001 (the "MERGER Agreement"), by and between Purchaser and XXXX XXXX XxXXXXX
Financial Services, Inc., a Delaware corporation ("TARGET"), the Stockholders
have received, as partial consideration for the outstanding shares of Common
Stock of Target held by them, shares of Series A Preferred Stock, $.01 par value
per share, of Purchaser (the "PURCHASER SERIES A PREFERRED STOCK").
B. Pursuant to the Merger Agreement, the Stockholders are obligated to
indemnify Purchaser for certain loss contingencies, and the Stockholders have
acknowledged such obligation in separate RPM Stockholder Agreements entered into
by and between Purchaser and each Stockholder (individually, a "Stockholder
Agreement" and collectively, the "Stockholder Agreements").
C. Pursuant to the Merger Agreement, if there is an Adjusted Net Book
Value Deficiency (as defined in the Merger Agreement), the Stockholders are
severally obligated to return to Purchaser certain shares of Purchaser Series A
Preferred Stock received by them pursuant to the Merger Agreement which, in the
aggregate, have a liquidation preference equal to the amount of such Adjusted
Net Book Value Deficiency.
D. It is a requirement under the Merger Agreement that the
Representatives, Purchaser and the Escrow Agent shall have executed and
delivered an agreement in the form hereof, the purpose of which is to provide a
fund consisting of the shares of Purchaser Series A Preferred Stock delivered to
the Escrow Agent pursuant to the Merger Agreement and deposited as provided
herein to satisfy the several obligations of the Stockholders to (i) indemnify
Purchaser pursuant to the Merger Agreement and (ii) return shares of Purchaser
Series A Preferred Stock to Purchaser in the event, and to the extent, of any
Adjusted Net Book Value Deficiency pursuant to the Merger Agreement.
E. The Representatives have been authorized to enter into and perform
this Agreement for and on behalf of the Stockholders.
A G R E E M E N T:
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NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the following meanings:
"ADJUSTMENT SHARES" shall have the meaning set forth in
Section 4(a) hereof.
"ALLOCABLE PORTION" shall have the meaning set forth in
Section 4(a) hereof.
"CLAIM CERTIFICATE" shall have the meaning set forth in
Section 4(b)(i) hereof.
"ESCROW CERTIFICATES" shall have the meaning set forth in
Section 3 hereof.
"ESCROW FUND" shall mean the sum of the Escrowed Purchaser
Shares and any other securities delivered to the Escrow Agent pursuant
to Section 7 hereof.
"ESCROWED PURCHASER SHARES" shall mean the shares of Purchaser
Series A Preferred Stock at any time represented by the Escrow
Certificates delivered to the Escrow Agent as provided in Section 3 and
any other securities received by the Escrow Agent as provided in
Section 7 hereof. For all purposes of this Agreement, the value of any
Escrowed Purchaser Shares shall be equal to their aggregate liquidation
preference (which the parties hereto agree is equal to $1,000 per
Escrowed Purchaser Share), excluding any portion of such liquidation
preference in respect of accrued but unpaid dividends.
"FINAL DETERMINATION" shall mean the settlement of any dispute
or the final decision of any court or arbitration panel of competent
jurisdiction which has become final and non-appealable.
"INDEMNITY SHARES" shall have the meaning set forth in Section
4(b)(i) hereof.
"RETURN CERTIFICATE" shall have the meaning set forth in
Section 4(a) hereof.
"STOCKHOLDER ACCOUNT" shall have the meaning set forth in
Section 3 hereof.
"STOCKHOLDER LOSSES" shall mean the amount of indemnifiable
Liabilities or Losses for which a Stockholder is finally determined to
be liable pursuant to, and in accordance with, Section 10.2(b) of the
Merger Agreement, subject to the limitations, terms and conditions with
respect thereto contained in the Merger Agreement.
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"TARGET LOSSES" shall mean the amount of indemnifiable
Liabilities or Losses for which the Stockholders and Option Holders are
finally determined to be liable pursuant to, and in accordance with,
Sections 10.2(a) and 10.4 of the Merger Agreement, subject to the
limitations, terms and conditions with respect thereto contained in the
Merger Agreement.
"TERMINATION DATE" shall mean the earlier of (i) the date
which is eighteen (18) months after the Closing Date, or (ii) the date
on which Purchaser and the Representatives terminate this Agreement
pursuant to the terms hereof.
Capitalized terms not otherwise defined herein shall have the
respective meanings assigned to such terms in the Merger Agreement.
2. ESCROW FUND. This Agreement has been executed and delivered, and the
Escrow Fund has been established, for the purpose of providing (i) a fund for
the satisfaction of the Stockholders' indemnification obligations in accordance
with, and subject to the limitations contained in, Article X of the Merger
Agreement and (ii) a fund for the satisfaction of the Stockholders' several
obligations to return shares of Purchaser Series A Preferred Stock to Purchaser
pursuant to Section 3.4(b)(i) of the Merger Agreement in the event, and to the
extent, of any Adjusted Net Book Value Deficiency. The Escrow Fund shall be held
by the Escrow Agent as a trust fund in a separate account maintained for the
purpose, on the terms and subject to the conditions of this Agreement. The
Merger Agreement contains provisions which establish the notice requirements and
mechanics of defense for all claims of indemnification and claims for the return
of Escrowed Purchaser Shares in the event of any Adjusted Net Book Value
Deficiency for which the Escrow Fund is available, and such provisions are
incorporated by reference herein. This Agreement is not intended to create any
rights to indemnification or other payments in addition to those provided in the
Merger Agreement.
3. ESCROWED PURCHASER SHARES. At the Closing, Purchaser shall deliver
to the Escrow Agent, for the account of the Stockholders, two separate
certificates registered in the name of the Escrow Agent (the "ESCROW
CERTIFICATES"), one of which shall be for the number of shares of Purchaser
Series A Preferred Stock deliverable pursuant to Section 3.2 of the Merger
Agreement, and the second of which shall be for the number of shares of
Purchaser Series A Preferred Stock deliverable pursuant to Section 3.3 of the
Merger Agreement. The shares of Purchaser Series A Preferred Stock represented
by the Escrow Certificates shall be held by the Escrow Agent in accordance with
the terms of this Agreement, and shall not, except as provided in Section 6
hereof, be sold or disposed of by the Escrow Agent and shall not be available
to, and shall not be used by, the Escrow Agent to set-off any obligations of
Purchaser or the Stockholders owing to the Escrow Agent in any capacity.
Purchaser shall provide, and the Escrow Agent shall maintain, a written record
of the name and address of each Stockholder and the number of Escrowed Purchaser
Shares and/or amount of other property credited to his account (the "STOCKHOLDER
ACCOUNT"). Initially, the Escrowed Purchaser Shares shall be credited to the
Stockholder Accounts in the amounts set forth on SCHEDULE I attached hereto.
Thereafter, the Stockholder Accounts shall be adjusted as provided in this
Agreement. The interest of a Stockholder in the Escrow Fund shall be
transferable and assignable so long as the Escrowed Purchaser Shares credited to
the Stockholder Account of such
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Stockholder remain in the Escrow Fund and subject to the terms of this
Agreement, provided that the Escrow Agent (a) shall have received appropriate
instruments of transfer in form and substance reasonably acceptable to the
Escrow Agent and Purchaser, and (b) is satisfied that the transferee of such
Stockholder's interest in the Escrow Fund is aware of the provisions of this
Agreement. Notice of any transfer permitted by this Section 3 shall be given
to Purchaser and the Escrow Agent, and no such transfer shall be valid until
such notice is given.
4. CLAIMS AGAINST ESCROW FUND.
(a) SECTION 3.2 CLAIMS. The portion of the Escrow Fund
consisting of the shares of Purchaser Series A Preferred Stock delivered to the
Escrow Agent pursuant to Section 3.2 of the Merger Agreement (the "ADJUSTMENT
SHARES") shall be available to satisfy the Stockholders' several obligations to
return shares of Purchaser Series A Preferred Stock to Purchaser pursuant to
Section 3.4(b)(i) of the Merger Agreement in the event, and to the extent, of
any Adjusted Net Book Value Deficiency, as finally determined pursuant to
Section 3.4 of the Merger Agreement. Upon completion of the determination of the
Final Adjusted Net Book Value in accordance with the provisions of Section
3.4(a) of the Merger Agreement, Purchaser and the Representatives shall jointly
deliver to the Escrow Agent a certificate ("RETURN CERTIFICATE") stating whether
or not Purchaser is entitled to receive any Adjustment Shares and, if so,
specifying the number of such Adjustment Shares which Purchaser is entitled to
receive in accordance with Section 3.4(b)(i) of the Merger Agreement, whereupon
the Escrow Agent shall promptly transfer title and deliver to Purchaser
Adjustment Shares equal in value to the amount specified in such Return
Certificate and charge each Stockholder Account with that number of such
Adjustment Shares which is equal to such Stockholder's allocable portion, as set
forth on SCHEDULE I hereto (the "ALLOCABLE PORTION"), of the number of such
Adjustment Shares returned to Purchaser. The remainder of the Adjustment Shares
(or all the Adjustment Shares in the event there is no Adjusted Net Book Value
Deficiency) shall be distributed promptly by the Escrow Agent to the
Stockholders pro rata based on their respective Allocable Portions, at their
last known address appearing on the records of the Escrow Agent or at such other
addresses provided by the Stockholders.
(b) SECTION 3.3 CLAIMS.
(i) The portion of the Escrow Fund consisting of the shares of
Purchaser Series A Preferred Stock delivered to the Escrow Agent pursuant to
Section 3.3 of the Merger Agreement (the "INDEMNITY SHARES") shall be available
as the sole source of payment to Purchaser by the Stockholders in accordance
with the Merger Agreement for and in respect of Liabilities and Losses for which
Purchaser is entitled to indemnification under Sections 10.2 and 10.4 of the
Merger Agreement. If Purchaser shall suffer or incur Liabilities or Losses, it
shall provide notice thereof to the Representatives and shall deliver to the
Escrow Agent (with a copy also to be delivered simultaneously to the
Representatives) a certificate ("CLAIM CERTIFICATE") signed by the Chief
Executive Officer or Chief Financial Officer of Purchaser stating that Purchaser
has suffered or incurred Liabilities or Losses for which Purchaser is entitled
to indemnification from the Stockholders under Section 10.2 or 10.4 of the
Merger Agreement in the amount specified in such Claim Certificate (which shall
not exceed the value of the Indemnity Shares then remaining in the
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Escrow Fund) and setting forth (i) the basis for such Liabilities or Losses
(including whether such Liabilities or Losses are Target Losses or
Stockholder Losses), (ii) the amount of such Liabilities or Losses for which
Purchaser is entitled to indemnification under Sections 10.2 and 10.4 of the
Merger Agreement, subject to the limitations contained in Section 10.5 of the
Merger Agreement, and (iii) the portion of such Liabilities or Losses for
which each Stockholder is potentially liable. No Claim Certificate may be
delivered by Purchaser after the close of business on the Business Day
immediately preceding the Termination Date. If the Escrow Agent does not
receive, within twenty (20) Business Days after its receipt of the Claim
Certificate, a written notice from the Representatives stating that they
dispute Purchaser's assertion that it is entitled to the amount specified in
the Claim Certificate, then except as otherwise provided herein, the Escrow
Agent shall, subject to the limitations set forth in Section 4(b)(ii) hereof,
transfer title and deliver to Purchaser Indemnity Shares equal in value to
the amount of the Liabilities or Losses specified in such Claim Certificate,
which shall not exceed the value of the Escrowed Purchaser Shares. If the
Escrow Agent receives, within twenty (20) Business Days after its receipt of
the Claim Certificate, a written notice from the Representatives stating that
they dispute Purchaser's assertion that it is entitled to the amount
specified in the Claim Certificate, the Escrow Agent shall set aside
Indemnity Shares equal in value to the amount of the Liabilities or Losses
specified in the Claim Certificate and shall thereafter dispose of such
Indemnity Shares only as provided in an instruction signed by both Purchaser
and the Representatives or in a Final Determination.
(ii) In the event the Liabilities or Losses with respect to
which the Escrow Agent has delivered Indemnity Shares to Purchaser out of the
Escrow Fund pursuant to Section 4(b)(i) hereof are Target Losses, the Escrow
Agent shall reduce the Stockholder Accounts pro rata based on the Stockholders'
respective Equity Percentages. In the event the Liabilities or Losses with
respect to which the Escrow Agent has delivered Indemnity Shares to Purchaser
out of the Escrow Fund pursuant to Section 4(b)(i) hereof are Stockholder
Losses, the Escrow Agent shall reduce only the Stockholder Account of the
Stockholder or Stockholders responsible for such Stockholder Losses.
(c) DELIVERY OF ESCROWED PURCHASER SHARES. Any delivery by the
Escrow Agent of Escrowed Purchaser Shares pursuant to Section 4(a) or (b) hereof
shall be effected by surrender to Purchaser, or its transfer agent, of the
Escrow Certificate representing the Adjustment Shares or the Indemnity Shares
(as the case may be) then in the Escrow Agent's possession, whereupon Purchaser,
or its transfer agent, shall promptly issue to the Escrow Agent (i) a new
certificate representing the number of Escrowed Purchaser Shares required to be
delivered pursuant to Section 4(a) or (b) hereof, registered in the name of each
such Person to whom such Escrowed Purchaser Shares are to be delivered,
whereupon the Escrow Agent shall promptly deliver such new stock certificate to
such Person, and (ii) a new Escrow Certificate for the balance of any remaining
Escrowed Purchaser Shares represented by the surrendered Escrow Certificate.
(d) ADDITIONAL DELIVERY IN RESPECT OF RETURN OF DIVIDENDS. In
the event that (i) any Escrowed Purchaser Shares are delivered to Purchaser
pursuant to Section 4(a) or (b) of this Agreement, and (ii) any amount of cash
or non-cash dividends with respect to such Escrowed
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Purchaser Shares previously shall have been paid to the Stockholders pursuant
to Section 8(b) hereof, then there shall also be delivered to Purchaser an
additional number of Escrowed Purchaser Shares (an "ADDITIONAL DELIVERY")
having an aggregate value equal to the aggregate amount of dividends paid to
the Stockholders in respect of the Escrowed Purchaser Shares referred to in
clause (i) of this Section 4(d). In the event an Additional Delivery is made
in connection with either an Adjusted Net Book Value Deficiency or Target
Losses, the Escrow Agent shall reduce the Stockholder Account of each
Stockholder pro rata based on either such Stockholder's Allocable Portion, in
the case of an Adjusted Net Book Value Deficiency, or such Stockholder's
Equity Percentage, in the case of Target Losses, of the amount of the
Additional Delivery. In the event an Additional Delivery is made in
connection with Stockholder Losses, the Escrow Agent shall reduce only the
Stockholder Account of the Stockholder or Stockholders responsible for such
Stockholder Losses by the amount of the Additional Delivery. In no event,
however, shall dividends in respect of Escrowed Purchaser shares which have
been previously accounted for in an Additional Delivery be accounted for in
any subsequent Additional Delivery.
5. TERMINATION. Except as otherwise provided herein, this Agreement
shall terminate on the earlier of (a) the Termination Date, or (b) the Escrow
Agent's receipt of written notice of termination from Purchaser and the
Representatives. Any Escrowed Purchaser Shares held in the Escrow Fund upon such
termination shall be distributed by the Escrow Agent in accordance with the
provisions of Section 6 hereof. Notwithstanding the foregoing, if on or before
the Termination Date, Purchaser has duly delivered one or more Claim
Certificates to the Escrow Agent with respect to a claim or claims for
Liabilities or Losses for which Purchaser is entitled to indemnification under
Sections 10.2 or 10.4 of the Merger Agreement and which have not been satisfied
pursuant to this Agreement, then, as to Indemnity Shares only, the Escrow Fund
shall not terminate with respect to such claims until all such claims have been
fully satisfied or resolved in writing by Purchaser and the Representatives or a
Final Determination has been rendered with respect thereto. Until such
termination, the Escrow Agent shall retain in the Escrow Fund that number of
Indemnity Shares equal in value to the aggregate amount of Losses or Liabilities
specified in such Claim Certificates for which Purchaser is entitled to
indemnification under Section 10.2 or 10.4 of the Merger Agreement; provided,
however, that if at any time after the Termination Date, the value of the
Indemnity Shares then remaining in the Escrow Fund exceeds the aggregate amount
of Losses or Liabilities specified in such pending Claim Certificates, Purchaser
shall, by written notice to the Escrow Agent and the Representatives, authorize
the Escrow Agent to deliver to the stockholders that number of Indemnity Shares
which is equal in value to the amount of such excess. Notwithstanding the
foregoing, in the event any portion of the Losses or Liabilities specified in
such pending Claim are Stockholder Losses, Indemnity Shares equal in value to
such portion which are allocated to the Stockholder Accounts of the Stockholders
who are not obligated to indemnify Purchaser for such Stockholder Losses shall
not be retained in the Escrow Fund, but shall be distributed to such
Stockholders in accordance with Section 6 hereof. Except as otherwise provided
herein, upon the Escrow Agent's distribution or other delivery of any Escrowed
Purchaser Shares in accordance with Section 4 or 5 hereof, the Escrow Agent
shall have no further obligations under this Agreement with respect to such
Escrowed Purchaser Shares. Upon the Escrow Agent's
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distribution or delivery of all the Escrowed Purchaser Shares pursuant
hereto, the Escrow Agent shall have no further obligation hereunder and this
Agreement shall terminate.
6. DISTRIBUTION OF ESCROWED PURCHASER SHARES. Upon the termination of
the Escrow Fund pursuant to Section 5 hereof, and subject to the terms of such
Section 5, the Escrow Agent shall, within ten (10) Business Days after such
termination, distribute to each of the Stockholders at his last known address
appearing on the records of the Escrow Agent or at such other address provided
in writing by such Stockholder to the Escrow Agent, the Escrowed Purchaser
Shares allocated to the Stockholder Account of such Stockholder.
7. DELIVERY AND DEPOSIT OF ADDITIONAL SECURITIES. Any securities
distributable in exchange for any of the Escrowed Purchaser Shares by reason of
stock splits or recapitalizations shall be delivered to, and deposited with, the
Escrow Agent, who shall hold such securities in the Escrow Fund, subject to all
the provisions of this Agreement relating thereto. Any such distributions of
securities shall be added to the Stockholder Accounts in accordance with their
respective interests in the Escrow Fund. Any securities, cash or other property
distributable with respect to any Escrowed Purchaser Shares by reason of stock
dividends, liquidations, mergers, consolidations, spin-offs, split-offs or
similar transaction shall be delivered to the respective Stockholders to whose
Stockholder Accounts such Escrowed Purchaser Shares are allocated and shall not
be subject to the terms of this Escrow Agreement or otherwise recoverable by
Purchaser. In the event Purchaser repurchases any Escrowed Purchaser Shares for
cash, such cash shall be paid to the respective Stockholders to whose
Stockholder Accounts such Escrowed Purchaser Shares are allocated and shall not
be held in the Escrow Fund.
8. VOTING; DIVIDENDS.
(a) Each of the Stockholders shall have the right, in his
discretion, to direct the Escrow Agent in writing as to the exercise of any
voting rights pertaining to the Escrowed Purchaser Shares credited to his
Stockholder Account, and the Escrow Agent shall comply with any such directions
of such Stockholder. The Escrow Agent shall not vote any of the Escrowed
Purchaser Shares as to which no voting instructions have been given.
(b) Any cash or non-cash dividends payable or distributable
with respect to the Escrowed Purchaser Shares shall be paid to the respective
Stockholders to whose Stockholder Accounts such Escrowed Purchaser Shares are
allocated and not to the Escrow Agent. Subject to the provisions of Section 4(d)
hereof, such dividends shall not be subject to the terms of this Escrow
Agreement or otherwise recoverable by Purchaser.
9. REPRESENTATIONS AND WARRANTIES OF THE REPRESENTATIVES. Each of the
Representatives represents and warrants as follows:
(a) The execution and delivery of this Agreement, and the
consummation and performance by him of the transactions contemplated hereby, by
him for and on behalf of the Stockholders have been, if applicable, duly and
validly authorized by all necessary proceedings. He
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has full right, power and authority to execute and deliver this Agreement and
perform the transactions contemplated hereby, for and on behalf of the
Stockholders. This Agreement has been duly executed and delivered by him for
and on behalf of the Stockholders and constitutes his legal, valid and
binding obligation, enforceable against him in accordance with this
Agreement's terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors'
rights generally or by principles governing the availability of equitable
remedies); and
(b) His execution, delivery and performance of this Agreement
for and on behalf of the Stockholders does not violate, conflict with,
constitute a default under or result in the breach of any term, condition or
provision of, or require the consent of any other party to, (i) any note, credit
agreement, bond, mortgage, deed of trust, security interest, indenture, lease,
license, contract, agreement, plan or other instrument or obligation to which he
is a party or by which he or any of his properties or assets may be bound or
affected, or (ii) violate any judgment, order, writ, injunction, decree,
statute, law, ordinance, rule or regulation applicable to him or his properties
or assets, except for such violations, breaches, defaults or rights of
termination, cancellation, acceleration, creation, imposition, suspension,
revocation or modification as to which he has obtained requisite waivers or
consents, copies of which have been delivered to Purchaser, or except as would
not have a material adverse effect on such Representative's ability to perform
his obligations hereunder.
10. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Representatives, on behalf of the Stockholders, as follows:
(a) Its execution and delivery of this Agreement, and the
consummation and performance by it of the transactions contemplated hereby, have
been duly and validly authorized by all necessary proceedings. It has full
right, power and authority to execute and deliver this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by it, and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with this Agreement's terms (except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or similar laws affecting creditors' rights generally or by principles governing
the availability of equitable remedies); and
(b) Its execution, delivery and performance of this Agreement
do not violate, conflict with, constitute a default under or result in the
breach of any term, condition or provision of, or require the consent of any
other party to, (i) any note, credit agreement, bond, mortgage, deed of trust,
security interest, indenture, lease, license, contract, agreement, plan or other
instrument or obligation to which it is a party or by which it or any of its
properties or assets may be bound or affected, or (ii) violate any judgment,
order, writ, injunction, decree, statute, law, ordinance, rule or regulation
applicable to it or its properties or assets, except for such violations,
breaches, defaults or rights of termination, cancellation, acceleration,
creation, imposition, suspension, revocation or modification as to which it has
obtained requisite waivers or consents, copies of which have been delivered to
the Representatives, or except as would not have a material adverse effect on
Purchaser's ability to perform its obligations hereunder.
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11. PROVISION OF DOCUMENTS TO ESCROW AGENT. Purchaser and the
Representatives, to the extent within their respective powers, shall provide to
the Escrow Agent all instruments and documents as are reasonably necessary for
the Escrow Agent to perform its duties and responsibilities hereunder.
12. NOTICE. Unless written designation of a different address is filed
with each of the other parties hereto, all notices, Return Certificates and
Claim Certificates required to be given under this Agreement shall be deemed to
have been properly given if in writing and delivered or mailed by registered or
certified mail, postage prepaid. Mailed notices, Return Certificates and Claim
Certificates shall be deemed given when duly mailed and addressed as follows:
Purchaser:
XxXxxxxxx & Co Inc.
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx XxXxxxxxx
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Representatives:
Xxxxxx X. Xxxx, Xx.
c/x XxXxxxxxx & Co. LLC
Xxx Xxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxx X. Xxxxxx
c/x XxXxxxxxx & Co. LLC
Xxx Xxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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With a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
Two Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxx X. XxXxxxx, Esq.
and
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Escrow Agent:
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13. LIABILITY OF THE ESCROW AGENT. The Escrow Agent may act upon any
instrument or other writing believed by it in good faith to be genuine and to be
signed or presented by the proper person and shall not be liable in connection
with the performance by it of its duties pursuant to the provisions of this
Agreement, except for its own willful misconduct or gross negligence. The Escrow
Agent may retain counsel and act with respect to this Agreement and its
obligations hereunder on the advice of such counsel. The Escrow Agent shall be,
and hereby is, indemnified and saved harmless by Purchaser from all losses,
costs and expenses (including reasonable attorneys' fees) which may be incurred
by it as a result of its involvement in any litigation arising from performance
of its duties hereunder, provided that such litigation or action in interpleader
shall not result from any action taken or omitted by the Escrow Agent and for
which it shall have been adjudged to have acted in bad faith or to have been
grossly negligent. Purchaser and the Representatives may give written directions
to the Escrow Agent to prepare and file tax information or to withhold any
payments hereunder for tax purposes. Purchaser shall indemnify and hold harmless
the Escrow Agent from and against all liability for tax withholding and/or
reporting for any payments made by the Escrow Agent pursuant to this Agreement.
The Escrow Agent shall have no duties or obligations except those expressly set
forth in this Escrow Agreement, and no implied duties or obligations shall be
read into this Escrow Agreement against the Escrow Agent. The Escrow Agent shall
have no obligation to make any payment, investment or disbursement of any
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type pursuant hereto or to incur any financial liability in the performance
of its duties hereunder unless Purchaser shall have deposited with the Escrow
Agent sufficient funds therefor. The Escrow Agent may conclusively rely upon
and shall be protected in acting upon the written (which shall include
instructions given by telecopier or other telecommunications device) or oral
instructions given jointly by (i) any officer or agent of Purchaser and the
Representatives or (ii) counsel to Purchaser and counsel to the
Representatives with respect to any matter relating to its actions as Escrow
Agent hereunder, and the Escrow Agent shall be entitled to request that
further instructions be given by such persons or to request that instructions
be given in writing.
14. FEES AND EXPENSES. Purchaser shall pay to the Escrow Agent its
reasonable fees for the services rendered by the Escrow Agent pursuant to the
provisions of this Agreement with respect to the Escrow Fund and will reimburse
the Escrow Agent for its reasonable expenses (including reasonable fees and
disbursements of its counsel) incurred in connection with the performance by it
of such services. Purchaser shall pay any transfer taxes incurred as a result of
the operation of any provision of this Agreement relating to the Escrow Fund.
15. RESOLUTION OF DISPUTES. Disputes arising under this Agreement shall
be resolved in the same manner as provided in the Merger Agreement, provided,
however, that if any dispute arises as to any matter arising under this Escrow
Agreement or there arises any uncertainty as to the meaning or applicability of
any of the provisions hereof, or as to the Escrow Agent's duties, rights or
responsibilities hereunder, the Escrow Agent may, at its option at any time
thereafter, deposit the Escrowed Purchaser Shares then being held by it with a
court having appropriate jurisdiction, and the Escrow Agent shall thereby be
discharged and relieved of all liability hereunder.
16. GOVERNING LAW. This Agreement shall be governed by and interpreted
and construed in accordance with the laws of the State of New York, without
reference to its conflicts of laws provisions.
17. BINDING EFFECT. This Agreement and all action taken hereunder in
accordance with its terms shall be binding upon and inure to the benefit of
Purchaser, the Stockholders, the Representatives and the Escrow Agent and their
respective heirs, successors and assigns.
18. SUCCESSOR ESCROW AGENT. The Escrow Agent, or any successor to it
hereafter appointed, may at any time resign by giving notice in writing to
Purchaser and the Representatives and shall be discharged of its duties
hereunder upon the appointment of a successor Escrow Agent as hereinafter
provided. In the event of any such resignation, a successor Escrow Agent, which
shall be a bank depository institution or trust company organized under the laws
of the United States of America or any state thereof having a combined capital
and surplus of not less than $50,000,000, shall be appointed by Purchaser. Any
such successor Escrow Agent shall deliver to Purchaser and the Representatives a
written instrument accepting such appointment hereunder, and thereupon it shall
succeed to all the rights and duties of the Escrow Agent hereunder and shall be
entitled to receive the entire Escrow Fund.
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19. CONFIRMATION OF ESCROW AGENT'S APPOINTMENT. Purchaser and the
Representatives hereby confirm the appointment of the Escrow Agent under this
Escrow Agreement, and the Escrow Agent hereby accepts such appointment.
20. ENTIRE AGREEMENT. This Agreement, the Merger Agreement and the
Stockholder Agreements contain the entire agreement among the parties hereto and
the Stockholders with respect to the transactions contemplated hereby and
supersede all prior agreements and understandings, whether written or oral,
among the parties hereto with respect to the subject matter of this Agreement.
21. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provisions, and this
Agreement shall be construed in all respects as though such invalid or
unenforceable provisions were omitted.
22. AMENDMENTS. This Agreement may only be amended or modified by a
written instrument executed by Purchaser, the Representatives (on behalf of the
Stockholders) and the Escrow Agent.
23. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement on the day, month and year first written above.
XxXXXXXXX & CO INC.
By:
------------------------------------
Name: Xxxxxx X.X. XxXxxxxxx
Title: Chairman, Chief Executive
Officer and President
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XXXXXX X. XXXX, XX., as a Representative
---------------------------------------
XXXXXX X. XXXXXX, as a Representative
Accepted and Agreed:
___________________, as Escrow Agent
By:
---------------------------------
Name:
Title:
ESCROW AGREEMENT
SCHEDULE 1
STOCKHOLDERS AND ALLOCATION OF ESCROWED PURCHASER SHARES
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NAME OF STOCKHOLDER NUMBER OF INDEMNITY NUMBER OF ALLOCABLE PORTION
------------------- ------------------- --------- -----------------
SHARES ADJUSTMENT SHARES
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