ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of September 19, 1996
(the "Closing Date"), among INTEK DIVERSIFIED CORPORATION, a
Delaware corporation ("Intek"), MIDLAND INTERNATIONAL
CORPORATION, a Delaware corporation ("Midland"), and AMERICAN
STOCK TRANSFER & TRUST COMPANY, a New York corporation, as
escrow agent ("Escrow Agent"). The Escrow Agent is the
transfer agent for issuance of Common Stock. This Escrow
Agreement shall also constitute written instruction by Intek
to Escrow Agent as Intek's transfer agent.
This is the Escrow Agreement referred to in Section
3.1(a)(2) of the Amended and Restated Sale of Assets and
Trademark Agreement dated as of the date hereof (the "Amended
Assets and Trademark Agreement") among Intek, Midland and
Xxxxxxxx Capital Limited, an Ontario corporation which
indirectly owns all of the capital stock of Midland.
Pursuant to the terms of a certain Stock Purchase
Agreement dated as of June 18, 1996, as amended by the
Amendment No. 1 to Stock Purchase Agreement dated as of the
date hereof, between Intek and Securicor Communications
Limited, a corporation formed under the laws of England and
Wales ("Securicor"), Intek agreed to acquire all of the
outstanding capital stock, other than certain shares of
preferred stock, of Securicor Radiocoms Limited, a corporation
formed under the laws of England and Wales and a wholly owned
subsidiary of Securicor, in exchange for 25,000,000 shares of
Common Stock (the "Securicor Transaction"). It is currently
contemplated that the Securicor Transaction will close in the
fourth quarter of 1996. Intek, Xxxxxxxx and Midland
acknowledge that if the Securicor Transaction closes, Intek
will be able to obtain additional efficiencies and synergies
in the operations of the combined businesses being acquired by
Intek, and further that the early consummation of the
transaction among Intek, Midland and Xxxxxxxx will be a
material benefit to Intek, and that, therefore, if the
Securicor Transaction does close the purchase price of the
U.S. LMR Distribution Business (the "Purchase Price") should
be increased by an amount of up to 2,350,000 shares of Common
Stock, subject to certain downward adjustment to reflect Net
Operating Losses (as defined in the Amended Assets and
Trademark Agreement) incurred by Midland USA, a Delaware
corporation and wholly owned subsidiary of Intek ("MUSA"), in
its conduct of the U.S. LMR Distribution Business.
Pursuant to the terms of the Amended Assets and Trademark
Agreement, Midland agreed to sell to Intek, or to otherwise
provide Intek the benefit of, certain Acquired Assets (as
defined in the Amended Assets and Trademark Agreement)
including that certain Agreement (the "Hitachi Supply
Agreement") dated May 12, 1994, between Midland and Hitachi
Denshi, Ltd., a Japanese corporation ("Hitachi"), whereby
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Hitachi agreed to manufacture and sell to Midland certain
mobile radios ("Hitachi Products") and granted Midland an
exclusive right to sell Hitachi Products in a certain
territory, as such Hitachi Supply Agreement related to the
sale of Hitachi Products in the United States and its
territories and possessions. The terms of the Hitachi Supply
Agreement provide, among other things, that Hitachi may
terminate the Hitachi Supply Agreement if Midland transfers
"an important part of [Midland's] . . . stock, assets or
business to a third party . . . ." Pursuant to the terms of
the Amended Assets and Trademark Agreement, if the Securicor
Transaction is consummated but the Hitachi Supply Agreement is
terminated under certain circumstances prior to May 31, 1997,
the Purchase Price shall be subject to a reduction of up to
500,000 shares of Common Stock.
The parties, intending to be legally bound, hereby agree
as follows:
1. DEFINED TERMS.
(a) Defined terms used in the Amended Assets and
Trademark Agreement and not expressly defined herein shall
have the meanings set forth in the Amended Assets and
Trademark Agreement.
(b) "Certified Court Order" shall mean a final non-
appealable order of a court of competent jurisdiction
accompanied by a legal opinion of counsel for the presenting
party, satisfactory to the Escrow Agent, to the effect that
such court order is final and non-appealable. Escrow Agent
shall upon receipt and without further investigation, act upon
and comply with the terms of any Certified Court Order.
2. ESTABLISHMENT OF ESCROW.
(a) Intek hereby irrevocably instructs the Escrow
Agent as Intek's transfer agent to issue to and deposit with
Escrow Agent stock certificate(s) representing 2,350,000
shares of the common stock, par value $.01 per share, of Intek
(the "Initial Common Stock") pursuant to Section 3.1(a)(2) of
the Amended Assets and Trademark Agreement (as increased from
time to time by any and all stock splits, dividends and other
distributions paid in respect of the Escrow Fund (as defined
herein), including future stock dividends, and as reduced from
time to time by any disbursements, or losses on investments,
the "Common Stock") (the "Escrow Fund"). Such stock
certificates are issued in the name of Escrow Agent and are
accompanied by duly executed assignments, with signature(s)
guaranteed, as shall be necessary to enable the Escrow Agent
to deliver the Escrow Fund in whole or in part to Midland as
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provided in this Escrow Agreement. Escrow Agent acknowledges
receipt thereof.
(b) Midland hereby agrees to deposit with Escrow
Agent such other duly executed documents, as shall be
necessary to enable Escrow Agent to return the Escrow Fund in
whole or in part to Intek as provided in this Escrow
Agreement.
(c) Escrow Agent hereby agrees to act as escrow
agent and to hold, safeguard, invest and disburse the Escrow
Fund pursuant to the terms and conditions hereof.
3. TITLE TO ESCROW FUND.
(a) Until the earlier of the date of the occurrence
of a Price Adjustment Event (as defined in Section 5(a)) or
the disbursement to Midland of all or part of the Escrow Fund
as provided herein, Intek shall hold title thereto and shall
retain beneficial ownership and voting control of the Escrow
Fund and neither Midland nor its assignees shall have the
right to:
(i) sell, transfer, assign, mortgage, pledge,
subject to any lien, charge or
encumbrance, hypothecate or otherwise
transfer any right, title or interest, or
(ii) exercise any voting or other consensual
rights with respect to the Escrow Fund.
Prior to the occurrence of a Price Adjustment Event, Escrow
Agent shall not vote the shares of Common Stock contained in
the Escrow Fund except as expressly instructed by Intek;
PROVIDED, HOWEVER, that with respect to the vote of Intek's
Stockholders necessary to amend Intek's Certificate of
Incorporation and approve the Stock Purchase Agreement and the
transactions contemplated thereby as necessary to consummate
the Securicor Transaction (the "Proposed Transactions"),
Escrow Agent shall vote the shares of Common Stock contained
in the Escrow Fund, and Intek shall conduct the count of the
vote of stockholders in a two-tier voting process, as follows:
(x) Intek shall first count the vote of the
Common Stock held and actually voted at
the Stockholders' Meeting by the
stockholders of Intek who are not parties
to the Voting Agreement (the "Independent
Stockholders"); and
(y) Intek will then notify the Escrow Agent of
the results of such votes by the
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Independent Stockholders for, or against,
such Proposed Transactions. The Escrow
Agent will cast the votes of the Common
Stock in the Escrow Fund for and against
the Proposed Transactions in proportion to
the votes of such Independent
Stockholders. For illustration purposes
only: Should the Independent Stockholders
vote 55% in favor of and 45% against the
Proposed Transactions, the Escrow Agent
will cast 55% of the votes of the Escrow
Fund in favor of and 45% of the votes of
the Escrow Fund against the Proposed
Transactions. Absent such notification,
Escrow Agent will not vote the Escrow
Fund.
(b) Upon the occurrence of a Price Adjustment
Event, Intek shall assign and transfer to Midland, and Midland
shall be vested with, title in, and voting control of, the
Escrow Fund, free and clear of all liens and encumbrances,
other than those that arise through Midland, and Midland will
thereafter have:
(i) the right to receive and retain any and
all dividends and other nonstock
distributions paid in respect of the
Escrow Fund in the name of and for the
benefit of Midland or its assigns, and
(ii) the exclusive right to exercise any voting
or other consensual rights with respect to
shares of Common Stock remaining in the
Escrow Fund from time to time.
Escrow Agent, upon such assignment, will execute and deliver
such stock powers and assignments as shall be necessary to
convey title to the Escrow Fund to MIC and Intek will duly
endorse and deliver to the Escrow Agent stock certificates in
the name of MIC and evidencing all of the Common Stock in the
Escrow Fund.
4. INVESTMENT OF ESCROW FUND. The Escrow Agent shall
not sell, encumber or otherwise dispose of the Common Stock
held as a part of the Escrow Fund, other than a distribution
of the Escrow Fund as provided herein, except that the Escrow
Agent shall,
(a) upon the joint written direction of Midland and
Intek, if a Price Adjustment Event has not occurred; or
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(b) upon the written direction of Midland if a
Price Adjustment Event has occurred,
effect a sale or other disposition of Common Stock in a
transaction involving (i) the receipt by the shareholders of
Intek of cash in any merger or reorganization in exchange or
partly in exchange for shares of common stock of Intek; (ii)
the sale of all or substantially all of the assets of Intek
for cash and the distribution to shareholders of Intek of the
proceeds of such sale as a liquidating distribution; or (iii)
a cash tender offer for all or a part of the shares of common
stock of Intek. In the event of any receipt of cash by the
Escrow Agent as a result of any of such transactions, such
cash shall be invested by the Escrow Agent, from time to time,
to the extent possible, in United States Treasury bills having
a remaining maturity of 90 days or less and resale obligations
secured by such United States Treasury Bills or in money
market mutual funds invested solely in such United States
Treasury Bills, with any remainder being deposited and
maintained in a money market deposit account with Escrow
Agent, until disbursement of the Escrow Fund pursuant to the
terms and conditions set forth herein. Escrow Agent is
authorized to liquidate in accordance with its customary
procedures any portion of the Escrow Fund consisting of
investments to provide for payments required to be made under
this Agreement.
5. PURPOSE OF ESCROW. The purpose of the Escrow Fund
is:
(a) to set aside 2,350,000 shares of Common Stock
of the Purchase Price to provide a mechanism for an upward
adjustment to the Purchase Price (as defined in the Amended
Assets and Trademark Agreement) of up to 2,350,000 shares of
Common Stock if one of the following events occur (each a
"Price Adjustment Event"):
(i) the closing of the Securicor Transaction;
or
(ii) Securicor and Intek, or their respective
affiliates, enter into one or more
transactions within six months of the
termination of the Securicor Agreement
which transaction(s) collectively
convey(s) majority control of Intek to
Securicor and/or Securicor's Affiliates
(collectively) upon the closing of such
transaction(s);
and
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(b) if a Price Adjustment Event occurs, to set
aside 500,000 shares of the Escrow Fund (the "Hitachi Portion
of the Escrow Fund"), after conveyance to Midland of title to
the Escrow Fund, to provide a mechanism for indemnifying Intek
against any actual out-of-pocket loss, cost, liability or
expense incurred by Intek ("Losses") resulting from the
termination by Hitachi of the Hitachi Supply Agreement
without the consent of Intek prior to May 12, 1997 (an
"Hitachi Related Indemnity Event"); PROVIDED, HOWEVER, that
for purposes of this Agreement an Hitachi Related Indemnity
Event shall not be deemed to have occurred and Intek shall not
be entitled to any portion of the Hitachi Escrow Fund, if (i)
Intek takes an action which results in termination of the
Hitachi Supply Agreement (excluding the transactions
contemplated by the Amended Assets and Trademark Agreement);
PROVIDED, HOWEVER, that, for the purposes of the foregoing,
Intek shall not be deemed to have taken any such action if
Intek fails to satisfy any minimum purchase requirements under
the Hitachi Supply Agreement or continues to purchase 220 MHz
products from Securicor or (ii) Hitachi's action to terminate
the Hitachi Supply Agreement notwithstanding, Hitachi
continues to be willing to sell Hitachi Products to Intek
after May 12, 1997, upon substantially the terms set forth in
the Hitachi Supply Agreement or on such other terms as are
agreed to by Intek or (iii) Intek has not ordered any Hitachi
Products pursuant to the Hitachi Supply Agreement during the
sixty (60) days immediately preceding Hitachi's termination of
the Hitachi Supply Agreement.
6. INITIAL RELEASE OF ESCROW FUNDS. Upon Escrow Agent's
receipt of either joint written directions by Midland and
Intek certifying as to the occurrence of a Price Adjustment
Event, or a Certified Court Order determining that a Price
Adjustment Event has occurred and directing the Escrow Agent
to disburse all or a portion of the Escrow Fund accordingly,
accompanied by a legal opinion of counsel for the presenting
party, satisfactory to the Escrow Agent, to the effect that
such court order is final and non-appealable, the Escrow Agent
will release, or allocate, without further investigation, all
of the Escrow Fund, as follows:
(a) Such number of shares of Common Stock as shall
be equal to the purchase price adjustment for Net Operating
Losses, as determined pursuant to Section 3.1(b)(2)(B) of the
Amended Asset and Trademark Agreement, but in any event not
more than 155,000 shares of Common Stock (the "Net Operating
Loss Shares"), shall be returned by the Escrow Agent to Intek
and the Escrow Agent shall promptly thereafter deliver to
Intek a certificate or certificates evidencing all such shares
of Common Stock; and
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(b) the Hitachi Portion of the Escrow Fund shall be
set aside by the Escrow Agent to indemnify Intek pursuant to
paragraph 7 of this Agreement, although title to and voting
rights arising from such shares of Common Stock shall
immediately vest with Midland; PROVIDED, HOWEVER, that neither
Midland nor its assignees shall have the right to sell,
transfer, assign, mortgage, pledge, subject to any lien,
charge or encumbrance, hypothecate or otherwise transfer any
right, title or interest in the Hitachi Portion of the Escrow
Fund; and
(c) the balance of Escrow Fund, other than the
Hitachi Portion of the Escrow Fund and the Net Operating Loss
Shares, will be conveyed to Midland and the Escrow Agent shall
promptly thereafter deliver to Midland (i) a certificate or
certificates evidencing all such shares of Common Stock and
(ii) all other assets that are part of the Escrow Fund.
7. PAYMENT OF CLAIMS AGAINST THE HITACHI PORTION OF THE
ESCROW FUND.
(a) INDEMNITY CLAIM. Within thirty (30) days after
the occurrence of an Hitachi Related Indemnity Event, but in
any event prior to the Hitachi Escrow Termination Date (as
hereinafter defined), Intek shall give notice (the "Indemnity
Notice") to Midland and Escrow Agent specifying in reasonable
detail the occurrence of such Hitachi Related Indemnity Event
and the nature and dollar amount of Losses incurred by Intek
resulting from the occurrence of such Hitachi Related
Indemnity Event (a "Claim"); PROVIDED, HOWEVER, that Intek
shall not be entitled to reimbursement or indemnity for Claims
hereunder except to the extent that such Claims, in the
aggregate:
(i) exceed $50,000; and
(ii) are less than or equal to the Hitachi
Portion of the Escrow Fund (after
deducting all amounts expended or
disbursed by Escrow Agent pursuant to the
terms of this Escrow Agreement with
respect to the Hitachi Portion of the
Escrow Fund).
Escrow Agent shall not independently inquire into or consider
the merits of any Claim but shall be entitled to rely upon and
shall perform its duties hereunder in strict accordance with
the provisions of this Escrow Agreement.
(b) SATISFACTION OF DISPUTED INDEMNITY CLAIM. If
Midland gives notice (a "Counter Notice") to Intek and Escrow
Agent disputing a Claim which Counter Notice shall specify in
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reasonable detail the reason for the dispute and the dollar
amount in dispute (each a "Disputed Claim") within thirty (30)
days following receipt by Escrow Agent of the Indemnity Notice
asserting such Claim (the "Counter Notice Period"), Escrow
Agent shall not make any payment to Intek with respect to any
such Disputed Claim except upon Escrow Agent's receipt of, and
then only in accordance with the terms of, (i) a joint written
instruction of Intek and Midland instructing Escrow Agent to
disburse or retain all or a portion of the Escrow Fund in
resolution of such Disputed Claims, or (ii) a Certified Court
Order directing the Escrow Agent to disburse or retain a
portion of the Escrow Fund in satisfaction of such Disputed
Claims and accompanied by a legal opinion of counsel for the
presenting party, satisfactory to the Escrow Agent, to the
effect that such court order is final and non-appealable.
Escrow Agent shall upon receipt and without further
investigation, act upon and comply with the terms of any such
joint written instruction or Certified Court Order.
(c) SATISFACTION OF AN UNDISPUTED CLAIM. If the
Escrow Agent does not receive a Counter Notice with respect to
a Claim before expiration of the Counter Notice Period (an
"Undisputed Claim"), the amount of such Undisputed Claim shall
be deemed to be the amount set forth in the Indemnity Notice
asserting such Undisputed Claim and its shall be satisfied in
the manner set forth in Section 7(d) of this Escrow Agreement.
(d) PAYMENT OF CLAIMS. The Escrow Agent shall make
any payment to Intek required pursuant to Section 7(b) or
Section 7(c) of this Agreement by withdrawing from the Hitachi
Portion of the Escrow Fund and transferring to Intek, first, a
number of shares from the Hitachi Portion of the Escrow Fund
determined by dividing the amount of the Claim by the average
of then applicable Average Share Price. For purposes of this
Agreement, "Average Share Price" shall mean the average of the
last reported sale price of Common Stock on the NASDAQ System
for the ten (10) trading days immediately preceding, as
applicable, (i) the end of the Counter Notice Period (counting
the last day of such Counter Notice Period) with respect to
any Undisputed Claim, or (ii) the date upon which Escrow Agent
receives written joint written instructions from Midland and
Intek or a Certified Court Order, with respect to any Disputed
Claim. If such transfer of shares from the Hitachi Portion of
the Escrow Fund is insufficient to satisfy such Claim, then,
to the extent that there are cash or other proceeds remaining
in the Escrow Account which are derived from or identified to
the Hitachi Portion of the Escrow Fund, Escrow Agent shall
liquidate such balance and apply it to satisfy the unpaid
amount of such Claim remaining after application of Hitachi
Portion of the Escrow Fund thereto.
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8. TERMINATION OF ESCROW. This Escrow Agreement shall
terminate as to all or a portion of the Escrow Fund as
follows:
(a) TERMINATION OF ESCROW WITHOUT PRICE ADJUSTMENT
EVENT. If a Price Adjustment Event has not occurred within
Six (6) months and one (1) day following the termination of
the Securicor Agreement in accordance within its terms, this
Escrow Agreement shall terminate with respect to all of the
Escrow Fund (a "Full Termination"). Upon Escrow Agent's
receipt of either joint certification by Midland and Intek
certifying as to the Full Termination of this Escrow
Agreement; or a Certified Court Order certifying as to the
Full Termination of this Escrow Agreement and directing the
Escrow Agent to disburse the Escrow Fund accordingly,
accompanied by a legal opinion of counsel for the presenting
party, satisfactory to the Escrow Agent, to the effect that
such court order is final and non-appealable, the Escrow Agent
will release all of the Escrow Fund to Intek and the Escrow
Agent shall promptly thereafter deliver to Intek a certificate
or certificates evidencing all such shares of Common Stock.
(b) PARTIAL TERMINATION UPON DISBURSEMENT FOR PRICE
ADJUSTMENT EVENT. This Escrow Agreement shall terminate with
respect to the Escrow Fund, other than the Hitachi Portion of
the Escrow Fund, upon the disbursement by the Escrow Agent of
all of the Escrow Fund other than the Hitachi Portion of the
Escrow Fund pursuant to Section 6 of this Escrow Agreement.
(c) TERMINATION WITH RESPECT TO HITACHI PORTION OF
THE ESCROW FUND. This Escrow Agreement shall terminate with
respect to the Hitachi Portion of the Escrow Fund on the
earlier of (the "Hitachi Escrow Termination Date"):
(i) Any transaction after the occurrence of a
Price Adjustment Event resulting in
Securicor holding less 51% of the voting
securities of Intek;
(ii) Disbursement by the Escrow Agent of the
Hitachi Portion of the Escrow Fund
pursuant to the Section 7 of this Escrow
Agreement; and
(iii) May 31, 1997;
except that this Escrow Agreement shall thereafter continue in
effect with respect to the Hitachi Portion of the Escrow Fund
with respect, and then only to the extent of, any amounts
reserved against Claims pending as of the Hitachi Escrow
Termination Date. Intek shall notify Escrow Agent in writing
of the occurrence of the events described in sections 8(b) or
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8(c) above within five business days after consummation of
such events. On the Hitachi Escrow Termination Date, Escrow
Agent shall pay and distribute the then remaining balance of
the Hitachi Portion of the Escrow Fund to Midland; except that
Escrow Agent shall retain an amount equal to the aggregate
dollar amount of any Claims asserted by Intek in a Claim
Notice which are then pending until such Claims have been
resolved pursuant to Section 7(b) of this Agreement, and will
immediately after the resolution of such Claims distribute to
Midland the balance of such reserves which are not applied to
satisfy such Claims.
9. DUTIES OF ESCROW AGENT.
(a) Escrow Agent shall not be under any duty to
give the Escrow Fund held by it hereunder any greater degree
of care than it gives its own similar property and shall not
be required to invest any funds held hereunder except as
directed in this Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(b) Escrow Agent shall not be liable, except for
its own gross negligence or willful misconduct and, except
with respect to claims based upon such gross negligence or
willful misconduct that are successfully asserted against
Escrow Agent, the other parties hereto shall jointly and
severally indemnify and hold harmless Escrow Agent (and any
successor Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement. Without limiting the
foregoing, Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash
held by it hereunder in good faith, in accordance with the
terms hereof, including, without limitation, any liability for
any delays (not resulting from its gross negligence or willful
misconduct) in the investment or reinvestment of the Escrow
Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any
order, judgment, certification, demand, notice, instrument or
other writing delivered to it hereunder without being required
to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of the service
thereof. Escrow Agent may act in reliance upon any instrument
or signature believed by it to be genuine and may assume that
the person purporting to give receipt or advice or make any
statement or execute any document in connection with the
provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other
than a natural person has full power and authority to instruct
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Escrow Agent on behalf of that party unless written notice to
the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Agreement
and shall not be liable for any action taken or omitted by it
in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the
Escrow Fund deposited hereunder but is serving as escrow
holder only and having only possession thereof. Any payments
of income from this Escrow Fund shall be subject to
withholding regulations then in force with respect to United
States taxes. The parties hereto will provide Escrow Agent
with appropriate Internal Revenue Service Forms W-9 for tax
identification number certification, or non-resident alien
certifications. This Section 9(e) and Section 9(b) shall
survive notwithstanding any termination of this Agreement or
the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the
validity, value, genuineness or the collectability of any
security or other document or instrument held by or delivered
to it.
(g) Escrow Agent shall not be called upon to advise
any party as to the wisdom in selling or retaining or taking
or refraining from any action with respect to any securities
or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent)
may at any time resign as such by delivering the Escrow Fund
to any successor Escrow Agent jointly designated by the other
parties hereto in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of
and from any and all further obligations arising in connection
with this Agreement. The resignation of Escrow Agent will take
effect on the earlier of (i) the appointment of a successor
(including a court of competent jurisdiction) or (ii) the day
which is 30 days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that
time Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility
after that time shall be to retain and safeguard the Escrow
Fund until receipt of a designation of successor Escrow Agent
or a joint written disposition instruction by the other
parties hereto or a final non-appealable order of a court of
competent jurisdiction.
(i) Intek shall pay Escrow Agent compensation (as
payment in full) for the services to be rendered by Escrow
Agent hereunder in the amount of $500.00 at the time of
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execution of this Agreement and agrees to reimburse Escrow
Agent for all reasonable expenses, disbursements and advances
incurred or made by Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and
disbursements of its counsel).
(j) No printed or other matter in any language
(including, without limitation, prospectuses, notices,
reports and promotional material) that mentions Escrow Agent's
name or the rights, powers, or duties of Escrow Agent shall be
issued by the other parties hereto or on such parties' behalf
unless Escrow Agent shall first have given its specific
written consent thereto.
(k) The other parties hereto authorize Escrow
Agent, for any securities held hereunder, to use the services
of any United States central securities depository it
reasonably deems appropriate, including, without limitation,
the Depositary Trust Company and the Federal Reserve Book
Entry System.
10. LIMITED RESPONSIBILITY. This Agreement expressly
sets forth all the duties of Escrow Agent with respect to any
and all matters pertinent hereto. No implied duties or
obligations shall be read into this agreement against Escrow
Agent. Escrow Agent shall not be bound by the provisions of
any agreement among the other parties hereto except this
Agreement.
11. OWNERSHIP FOR TAX PURPOSES. For purposes of federal
and other taxes based on income, the owner of the Escrow Fund,
and the party to report all income, if any, that is earned on,
or derived from, the Escrow Fund as its income, in the taxable
year or years in which such income is properly includible and
pay any taxes attributable thereto will be the party holding
title to the Escrow Fund during such period during the term of
this Agreement.
12. NOTICES. All notices, consents, waivers and other
communications under this Agreement must be in writing and
will be deemed to have been duly given when (a) delivered by
hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt) provided
that a copy is mailed by registered mail, return receipt
requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses
and telecopier numbers as a party may designate by notice to
the other parties):
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Midland: c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxx X'Xxxx
Facsimile No.: 416-221-3800
with a copy to: Xxxxx, Day Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxx Xxxxxx, Esq.
Facsimile No.: 216-579-0212
Intek: 000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: 310-366-7712
with copies to: Securicor Communications Limited
Xxxxxx Park House
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx, XX0 0XX Xxxxxxx
Attention: Xx. Xx Xxxxx
Facsimile No.: 011-44-181-661-0205
Weil, Gotshal & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Escrow Agent: American Stock Transfer & Trust Company
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Executive Vice President
Facsimile No. 000-000-0000
with a copy to: Xxxxxxx Xxxxx, Esq.
American Stock Transfer & Trust Company
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
13. JURISDICTION; SERVICE OF PROCESS. Any action or
proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought
against any of the parties in the courts of the State of
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Delaware, or, if it has or can acquire jurisdiction, in the
United States District Court for the District of Delaware, and
each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such
action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in
the preceding sentence may be served on any party anywhere in
the world.
14. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which will be deemed to be an
original and all of which, when taken together, will be deemed
to constitute one and the same.
15. SECTION HEADINGS. The headings of sections in this
Agreement are provided for convenience only and will not
affect its construction or interpretation.
16. WAIVER. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred
to in this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to
or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred
to in this Agreement.
17. EXCLUSIVE AGREEMENT AND MODIFICATION. This
Agreement supersedes all prior agreements among the parties
with respect to its subject matter and constitutes (along with
the documents referred to in this Agreement) a complete and
exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may
not be amended except by a written agreement executed by
Intek, Midland and the Escrow Agent.
18. EXCLUSIVE REMEDY. Notwithstanding anything to the
contrary contained herein, in the Amended Assets and Trademark
Agreement or otherwise:
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(a) Intek's rights to receive the shares of Common
Stock identified to the Hitachi Escrow Fund hereunder shall
constitute Intek's sole and exclusive remedy for any Losses or
other injury incurred by Intek resulting if Midland is unable
to assign the Hitachi Supply Agreement to Intek or to
otherwise provide Intek with the benefit of the Hitachi Supply
Agreement as required pursuant to the Amended Assets and
Trademark Agreement; and
(b) Intek right to receive the shares of Common
Stock identified to the Price Adjustment Escrow Fund hereunder
shall constitute Intek's sole and exclusive remedy for payment
in the event of an adjustment to the Purchase Price pursuant
to the terms of the Amended Assets and Trademark Agreement.
19. ASSIGNMENT. This Escrow Agreement shall inure to
the benefit of and be binding upon each of the parties hereto
and their respective successors and assigns.
20. GOVERNING LAW. This Agreement shall be governed by
the laws of the State of New York, without regard to the
conflicts of law principles thereof.
[Signatures commence on next page.]
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[Signature Page for Escrow Agreement]
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
INTEK DIVERSIFIED CORPORATION MIDLAND INTERNATIONAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X'Xxxx
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxx X'Xxxx
Title: Secretary Title: Executive Vice President
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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