Exhibit 12
AGREEMENT
Agreement dated this 26th day of August, 1997 by and among Xxxxx X.
Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), and
Xxxxxx X. Xxxx ("Buck").
BACKGROUND
This agreement (the "Agreement") sets forth the agreement among
Siracusano, Ferolito and Buck, (each, a "Stockholder" and
collectively, the "Stockholders"), the three stockholders of Video
Services Corporation ("Video"), regarding, among other things,
shares of Common Stock of Video ("Video Shares") and shares of
Common Stock ("IPL Shares") of International Post Limited ("IPL").
Reference is made to the Agreement and Plan of Merger among Video,
IPL and the Stockholders dated as of June 27, 1997 (the "Merger
Agreement") relating to the proposed merger (the "Merger") of IPL
and Video and the Stock Resale Agreement (the "Stock Resale
Agreement") among the Stockholders, The Equitable Life Assurance
Society of the United States ("ELAS"), Equitable Deal Flow Fund,
L.P. ("EDFF"), Xxxxxxxx X. Xxxxx ("Xxxxx") and Xxxxxxx X. Xxxxxx
("Xxxxxx") attached as Exhibit 7.16(a) to the Merger Agreement.
Each capitalized term not defined in this letter shall have the
meaning attributed to it in the Merger Agreement.
NOW THEREFORE, the parties hereto desiring to be legally bound, do
hereby agree as follows:
1. 509 Plan/212 Plan. From time to time following notice by
Siracusano, the Stockholders agree to grant stock options
to employees of or consultants to Video or IPL or their
respective subsidiaries to purchase up to 721,529 IPL
Shares. The options ("Options") will be on terms
(including, without limitation, exercise price) as shall
be determined by Siracusano provided that the same terms
and provisions shall be applicable to all of the
Stockholders, and will be granted by the Stockholders in
a ratio of 48.720% (with respect to Siracusano), 48.720%
(with respect to Xxxxxxxx), and 2.560% (with respect to
Buck) (the "Ratio"). In order to facilitate the grant of
options and to secure the availability of the underlying
shares in connection with the exercise of any such
option, certificates representing 661,529 shares (721,529
less any shares deposited with counsel to Xxxxx and
Xxxxxx in replacement of existing options) will be
deposited with the law firm of Xxxxxx Xxxxxx Butowsky
Xxxxxxx Shalov & Xxxx pursuant to an escrow agreement to
be entered into by the Stockholders and that law firm.
Such shares will be held for five years (or as otherwise
directed in a writing signed by all such Stockholders)
but released to an option holder on exercise thereof.
The deposit of such shares will be made by the
Stockholders as follows: 322,294 by each of Siracusano
and Xxxxxxxx and 16,941 by Buck. Shares remaining after
the expiration of the five year period (or as otherwise
directed in a writing signed by all such Stockholders)
will be released in a ratio of 46.062% (with respect to
Siracusano), 46.062% (with respect to Xxxxxxxx) and
7.876% (with respect to Buck) (the "Release Ratio"). All
amounts paid to the Stockholders pursuant to the exercise
of any option will be shared by the Stockholders pro rata
in accordance with the Release Ratio and the Stockholders
shall make such payments to one another as is necessary
to achieve that result. References herein to numbers of
shares shall be appropriately adjusted for stock
dividends, stock splits and other appropriate
extraordinary transactions.
2. Existing Stockholder Agreement. Effective upon
completion of the Merger, the stockholders agreement with
respect to Video, among Siracusano, Ferolito and Buck, as
amended on April 26, 1994, will be, and hereby is,
terminated and will have no further force or effect.
3. Lock-Up. The Stockholders agree that, unless otherwise
agreed among themselves, for a period of six-months
following the Effective Time of the Merger (as
contemplated in the Merger Agreement) they shall not
transfer any of the IPL Shares that they obtain in the
Merger other than pursuant to: (i) the Losses Escrow
Agreement, (ii) the granting of Options and the issuance
of IPL Shares thereunder, or (iii) a transfer to a
Permitted Transferee in accordance with the terms of the
Stock Resale Agreement. Notwithstanding the foregoing,
the Stockholders agree that Siracusano may sell IPL
Shares as permitted in Section 6 of the Stock Resale
Agreement (Taxes) and Xxxxxxxx may sell up to 305,000 IPL
Shares (but not in excess of an amount that would result
in a breach of Section 7 of the Stock Resale Agreement),
pursuant to the terms of Section 7 of the Stock Resale
Agreement during the six-month period after the Effective
Time of the Merger. The provisions of this Section 3
shall, as among the Stockholders, constitute a limitation
of their rights under Section 7 of the Stock Resale
Agreement so that any transfer proposed to be made by LS
under Section 6 of the Stock Resale Agreement or of any
of them under Section 7 of the Stock Resale Agreement,
shall be subject to and limited by, the terms of this
Section 3.
4. Spin Co. Following the Effective Time of the Merger, the
Stockholders agree on behalf of the corporations included
in such transaction (and with recourse only to those
corporations) that such corporations will pay to
Xxxxxxxx, in the aggregate, the sum of $7,000 per month
(subject to withholding) in exchange for reasonable
consulting services until the earlier of: (i) the one (1)
year period following the closing of the Merger; and (ii)
the date on which Xxxxxxxx has sold any shares of IPL.
5. Credit Cards. Prior to the closing of the Merger, Video
will cause Video and its subsidiaries to pay in full all
amounts owing under and to cancel the following charge
card accounts:
American Express Account #0000-000000-00000
American Express Account #3782-601037-92202
6. Resignation. In connection with the closing of the
Merger, Xxxxxxxx will, and hereby does, resign all of his
positions, offices and directorships with Video and its
subsidiaries (other than those corporations to be spun
off pursuant to the Spin-Off Transaction ("Spin Co."))
and agrees that he will have no further rights or claims
against: (i) Video or any of its subsidiaries (other than
Spin Co.); or (ii) IPL or any of its subsidiaries (other
than the consulting agreement to be entered into pursuant
to the Merger Agreement and any rights to indemnification
contemplated in Section 7.9 of the Merger Agreement).
7. Further Actions. Each of the parties hereto will take
such action and enter into such documents, instruments
and agreements as are necessary to complete and carry out
the terms and intentions of this Agreement.
8. Miscellaneous. This Agreement constitutes the entire
agreement between the parties with respect to the subject
matter hereof and supersedes all previous written, and
all previous or contemporaneous oral, negotiations,
understandings, arrangements, and agreements.
The headings in this Agreement are for convenience of
reference only and are not part of the substance of this
letter.
This Agreement will be binding upon and inure to the
benefit of the parties and their respective successors
and assigns.
This letter has been executed, delivered, and accepted by the
parties in New Jersey, will be deemed to have been made in New
Jersey, and will be interpreted and the rights of the parties
determined in accordance with the laws of the United States
applicable thereto and the internal laws of the State of New Jersey
applicable to an agreement executed, delivered and performed
therein without giving effect to the choice-of-law rules thereof or
any other principle that could require the application of the
substantive law of any other jurisdiction.
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
/s Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
