ESCROW AGREEMENT
THIS ESCROW AGREEMENT made this 26th day of April, 2005 (this
"Agreement") by and among MPLC, Inc., a Delaware corporation ("MPLC"), Xxxxx
Xxxxxxx, on behalf of the current stockholders of MPLC (the "Designated
Representative"), XXXXX XXXXX, President ("Escrow Administrator") and NORTH FORK
BANK, a New York banking corporation, as escrow agent (the "Escrow Agent").
RECITALS
WHEREAS, MPLC, and First Americas Partners, LLC ("First Americas")
are parties to that certain Stock Purchase Agreement dated January 24, 2005 (the
"Purchase Agreement") pursuant to which First Americas is acquiring shares of
MPLC's common stock, $.01 par value which, after giving effect to such sale,
shall constitute 90% of MPLC's common stock on a fully-diluted basis;
WHEREAS, MPLC's plan of reorganization, which included the
transactions contemplated by the Purchase Agreement, including this Escrow
Agreement, has been approved (the "Plan");
WHEREAS, the Plan contemplates that the current stockholders of MPLC
shall appoint a committee to represent them to oversee distributions to the
current stockholders of MPLC and such committee is composed of a single member,
the Designated Representative;
WHEREAS, pursuant to Section 5.5 of the Purchase Agreement to the
extent that, immediately prior to the closing of the Purchase Agreement, MPLC
has Allowed Claims or Administrative Expenses (each as defined in the Plan) that
have not been satisfied (collectively, the "Outstanding Claims") then at such
time MPLC and the Designated Representative on behalf of the current
stockholders will enter into an escrow agreement with an escrow agent to be
agreed to by the Designated Representative and MPLC.
WHEREAS immediately prior to the closing of the Purchase Agreement
MPLC will deposit into an escrow account with Escrow Agent [$1,300,000.00]
("Initial Escrow").
WHEREAS, pursuant to Section 5.5 of the Purchase Agreement, MPLC and
the Designated Representative have appointed Xxxxx Xxxxx to act as the
administrator of the Escrowed Amount (the "Escrow Administrator") with the
authority on behalf of the current stockholders and MPLC to (i) settle any of
the Outstanding Claims and (ii) make interim distributions to the current
stockholders assuming there is a sufficient reserve for Outstanding Claims; and
WHEREAS, MPLC and the Designated Representative are desirous of
entering into this Agreement and appointing as escrow agent hereunder Escrow
Agent, and Escrow Agent is willing to act in such capacity on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained and subject to the conditions hereinafter set
forth, the parties hereto agree as follows:
1. Establishment of Escrow Account. MPLC and the Designated
Representative hereby appoint Escrow Agent as escrow agent for purposes of this
Agreement and Escrow Agent accepts such appointment subject to the terms and
conditions of this Agreement. Concurrently with the execution of this Agreement,
the Escrow Agent shall establish an interest bearing account in the name of
Millbrook Press Liquidation Company Inc. (the "Escrow Account"), account
#9614024777, subject to the terms and conditions of this Agreement and to the
extent not inconsistent with the terms hereof, Escrow Agent's customary
procedures as set forth in Escrow Agent's applicable disclosures.
2. Deposit of Property. Concurrently with the execution of this
Agreement, MPLC is delivering the Initial Escrow to Escrow Agent. In addition,
from time to time at Escrow Administrator's discretion, the Escrow Administrator
on behalf of MPLC and the current stockholders of MPLC shall cause to be
delivered to the Escrow Agent the Additional Escrow.
3. Escrow Instructions.
(a) Escrow Agent shall, and is hereby directed to, deliver from the
Escrowed Amount upon joint written instructions from the Designated
Representative and the Escrow Administrator such amounts which are determined by
the Escrow Administrator to be necessary to enable the Escrow Administrator to
(i) settle any of the Outstanding Claims and (ii) make interim distributions to
the current stockholders assuming that there is a sufficient reserve in the
Escrowed Amount to cover any Outstanding Claims. At such time as all of the
Outstanding Claims are settled, then upon joint written instructions from the
Escrow Administrator and the Designated Representative, the Escrow Agent shall
release any amounts remaining in the Escrow Account to such entity as is
directed in such written instructions to enable the remaining balance of the
Escrowed Amount to be distributed to Current Stockholders. In addition, the
Escrow Agent shall be authorized to make distributions from the Escrowed Amount
upon the issuance of a final non-appealable order of a court of competent
jurisdiction directing the delivery of the Escrow Fund in a particular manner.
4. Language Concerning the Escrow Agent. To induce the Escrow Agent
to act hereunder, it is further agreed by the undersigned that:
(a) The Escrow Agent shall not be under any duty to give the
Escrowed Amount 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.
(b) This Escrow Agreement expressly sets forth all the duties of the
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations shall be read into this agreement against the Escrow
Agent. The Escrow Agent shall not be bound by the provisions of any agreement
among the other parties hereto (including the Purchase Agreement) except this
Escrow Agreement. The Escrow Agent shall have no duty to enforce any obligation
2
of any person to make any payment or delivery or to direct or cause any payment
or delivery to be made or to enforce any obligation of any person to perform any
other act. The Escrow Agent shall be under no liability to the other parties
hereto or to anyone else by reason of any failure on the part of any other party
heretofore, any maker, guarantor, endorser or other signatory of any document or
any other person to perform such person's obligations under any such document.
(c) The Escrow Agent shall not be liable to the other parties hereto
or to anyone else for any action taken or omitted by it, or any action suffered
by it to be taken or omitted in good faith and in the exercise of its own
judgment, except in the event of its willful misconduct or gross negligence.
Except with respect to claims based upon such gross negligence or willful
misconduct that are successfully asserted against the Escrow Agent, the other
parties hereto shall jointly and severally indemnify and hold harmless the
Escrow Agent (and any successor Escrow Agent) from and against any and all
losses, liabilities, claims, actions, damages and expenses, including reasonable
attorneys' fees (either paid to retain attorneys or amounts representing the
fair value of legal services rendered to or for itself) and disbursements
(whether to a third party or for services rendered to itself) actually incurred,
arising out of and in connection with this Escrow Agreement. The Escrow Agent is
hereby granted a security interest in, and shall have a first lien on, the
Escrowed Amount for any such losses, liabilities, claims, actions, damages and
expenses. In furtherance of and without limiting the foregoing, the Escrow Agent
shall not be liable for an damage or loss resulting from any delay or failure of
performance arising out of the acts or omissions of any third parties,
including, but not limited to various communication services, courier services,
the Federal Reserve System, any other bank or any third party who may be
affected by funds transactions, fire, mechanical, computer or electrical
failures or other unforeseen contingencies, strikes or other causes beyond the
reasonable control of Escrow Agent. In no event shall Escrow Agent be liable for
lost profits or consequential, special, direct, indirect or punitive damages
even if Escrow Agent has been advised of the possibility of the foregoing.
(d) The 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. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any 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. The
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof.
(e) The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Escrow Agreement and shall not be liable
for any action taken or omitted in good faith in accordance with such advice.
The other parties hereto jointly and severally, agree to reimburse Escrow Agent
for all reasonable counsel fees incurred by Escrow Agent pursuant to this
Section 3(e).
3
(f) The Escrow Agent does not have any interest in the Escrowed
Amount deposited hereunder but is serving as escrow agent only. Any payments of
income from this Escrow Account shall be subject to withholding regulations then
in force with respect to United States taxes. The parties hereto will provide
the Escrow Agent with appropriate W-9 forms for tax I.D. It is understood that
the Escrow Agent shall be responsible for income reporting only with respect to
interest earned on the Escrowed Amount and is not responsible for any other
reporting. The other parties hereto jointly and severally agree to indemnify the
Escrow Agent for any tax liability, penalties, or interest, incurred by the
Escrow Agent arising hereunder and agree to pay in full any such tax liability
together with penalty and interest if any is ultimately assessed against the
Escrow Agent for any reason as a result of its actions hereunder (except for
Escrow Agent's individual tax liability) This paragraph and paragraph 3(c) shall
survive notwithstanding any termination of this Escrow Agreement or the
resignation of the Escrow Agent.
(g) The Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any funds or other document or
instrument held by or delivered to it.
(h) The 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 property deposited hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may at any
time resign for any reason upon thirty (30) days prior written notice to the
Escrow Administrator and the Designated Representative specifying the date upon
which such resignation shall take effect. In the event of such resignation, upon
the expiration of the thirty (30) day period, the Escrow Agent may deliver the
Escrowed Amount to any successor escrow agent appointed by Escrow Administrator
and the Designated Representative; or if no successor has been appointed, to any
court of competent jurisdiction, whereupon the Escrow Agent shall be discharged
of and from any and all further obligations arising in connection with this
Escrow Agreement.
(j) The Escrow Agent shall have no responsibility for the contents
of any writing of any third party contemplated herein as a means to resolve
disputes and may rely without any liability upon the contents thereof.
(k) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection with the
Escrowed Amount, or in the event that the Escrow Agent in good faith is in doubt
as to what action it should take hereunder, the Escrow Agent shall be entitled
to (i) refrain from taking any action other than to keep the Escrowed Amount
until such time as Escrow Agent shall have received either a final
non-appealable order of a court of competent jurisdiction directing delivery of
the Escrowed Amount or a written agreement executed by the Escrow Administrator
and the Designated Representative directing delivery of the Escrowed Amount, in
which event the Escrow Agent shall disburse the Escrowed Amount in accordance
with such order or agreement or (ii) deposit at any time the Escrowed Amount
into any court of competent jurisdiction and to commence an action in the nature
of interpleader at the cost and expense of MPLC and Designated Representative to
adjudicate the parties' rights thereto and thereafter shall have no further
obligations or liabilities to anyone under this Agreement. Any court order shall
be accompanied by a legal opinion by counsel for the presenting party reasonably
satisfactory to the Escrow Agent to the effect that said order is final and
non-appealable.
4
(l) The Designated Representative and the Escrow Administrator
agrees to reimburse the Escrow Agent upon demand for all reasonable expenses,
disbursements and advances incurred or made by the Escrow Agent in performance
of its duties hereunder (including reasonable attorneys fees and expenses).
(m) Unless otherwise agreed to by the parties, the exclusive forum
for resolving disputes between the parties arising out of this Escrow Agreement
shall be the United States Bankruptcy Court until a final decree of bankruptcy
has been issued. Any action arising out of or concerning this Agreement shall be
heard by a judge sitting without a jury. The parties hereto submit to the
exclusive jurisdiction of the state court of the State of New York and waive any
defense of inconvenient forum.
(n) No printed or other matter in any language (including without
limitation prospectuses, notices, reports and promotional material) that
mentions the Escrow Agent's name or the rights, powers, or duties of the Escrow
Agent shall be issued by the other parties hereto or on such parties' behalf
unless the Escrow Agent shall first have given its specific written consent
thereto.
(o) This Escrow Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their respective successors and assigns
and shall not be enforceable by or inure to the benefit of any third party
except as provided in paragraph (i) with respect to a resignation by the Escrow
Agent. No party may assign any of its rights or obligations under this Escrow
Agreement without the written consent of the other parties. This Escrow
Agreement shall be construed in accordance with and governed by the internal
laws of the State of New York, without giving effect to the choice of law rules.
(p) This Escrow Agreement may be modified, amended or supplemented
only by a writing signed by all of the parties hereto, and no waiver hereunder
shall be effective unless in writing signed by the party to be charged.
(q) Upon delivery by the Escrow Agent of the entire Escrowed Amount
in accordance with this Escrow Agreement, the Escrow Agent shall be discharged
from all of its obligations hereunder.
5. Notices. Any notice required by or permitted to be given in
connection with this Agreement shall be in writing, and shall be delivered by
hand to the addresses listed below or by next-business day delivery service or
sent by facsimile or certified or registered mail, return receipt requested,
postage prepaid, to the respective parties as provided below.
5
If to MPLC:
MPLC
0 Xxx Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
If to the Escrow Administrator:
Mr. Xxxx Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
If to the Designated Representative:
Mr. Xxxxx Xxxxxxx
287 Devonshire Lane
Orange Park County Club
Xxxxxx Xxxx, Xxxxxxx 00000
With a copy to:
Xx. Xxx Xxxxxxxxxxx
Olshan, Grundman, Frome, Xxxxxxxxxx and Wolosky
Park Avenue Tower
00 Xxxx 00xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
If to Escrow Agent:
North Fork Bank
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
Each of the parties may change the address to which it desires
notices to be sent if it notifies the other parties of such change in accordance
with the provisions of this Section 4. Any notice will be deemed to be given:
(i) when received at the appropriate address(es), if delivered by hand, (ii) on
the next business day after the day when properly dispatched by next-business
day delivery service, (iii) on the day sent by telecopy (confirmation received)
if sent on a business day (and otherwise on the first business day thereafter)
and, (iv) if mailed, three business days after deposit in the United States
mail, properly addressed, with proper postage affixed.
6. Termination. Except as otherwise set forth herein, this Agreement
shall terminate upon the release of all of the Escrowed Amount pursuant to
Section 2 hereof.
6
7. Designated Representative. The Designated Representative shall
act as the representative of the Current Shareholders and shall be authorized to
act on behalf of the Current Shareholders and to take any and all actions
required or permitted to be taken by current shareholders under this Agreement.
In all matters relating to this Agreement, the Designated Representative shall
be the only party entitled to assert the rights of the current shareholders and
the Designated Representative shall perform all of the obligations of current
shareholders hereunder. Escrow Agent shall be entitled to rely on all
statements, representations and decisions of Designated Representative. The
current shareholders shall be bound by all actions taken by the Designated
Representative in his capacity thereof and agree that any notice given to the
Designated Representative in accordance with the terms hereof shall be deemed to
have been given to each of the current shareholders.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
9. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter described herein and supersedes all prior agreements or understandings,
written or oral, between the parties with respect thereto. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.
10. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall not affect the validity or
enforceability of any other provision in such jurisdiction or the validity or
enforceability of such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date set forth above.
MPLC, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------------
Name: Xxxxx Xxxxx
Title: President
/s/ Xxxxx Xxxxx
-------------------------------------------
Xxxxx Xxxxx, as Escrow Administrator
/s/ Xxxxx Xxxxxxx
-------------------------------------------
Xxxxx Xxxxxxx, as Designated Representative
7
Agreed and Accepted:
The Escrow Agent:
[ ]
/s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Managing Director/SVP
8
