ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made and entered into
effective as of this _____ day of __________, 1998, by and among OAK
TECHNOLOGY, INC. ("Oak"), XXXXXX X. XXXXX, XXXX X. XXXXXX, XXXXXXX X.
X'XXXXXX, XXXXXX X. XXXX and XXXXXXX X. XXXXX (each a "Stockholder
Representative" and collectively, the "Stockholder Representatives") and
STATE STREET BANK AND TRUST COMPANY (the "Escrow Agent"), and the Exchange
Agent, with respect to the duties of the Exchange Agent described in
Section 4 of this Escrow Agreement.
R E C I T A L S
This Escrow Agreement is being entered into in accordance with the
provisions of that certain Plan of Reorganization and Agreement of Merger
dated as of January ____, 1998 (the "Plan of Reorganization"), by and among
Oak, Pixel Magic, Inc., OTI Acquisition Corporation, Xerographic Laser
Images Corporation ("XLI") and certain stockholders of XLI. Capitalized
terms used but not defined herein shall have the respective meanings
assigned to such terms in the Plan of Reorganization.
NOW, THEREFORE, in consideration of the mutual agreements set forth
below and in the Plan of Reorganization, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
A G R E E M E N T
1. Appointment of Stockholder Representatives. XLI, with the
approval of the required affirmative vote of the stockholders of XLI
entitled to vote on the Plan of Reorganization, irrevocably nominated,
constituted and appointed the Stockholder Representatives, and each of
them, as the agent and true and lawful attorney-in-fact of the stockholders
of XLI, to act in the name, place and stead of the stockholders of XLI and
any holders of options, warrants or other rights to acquire the capital
stock of XLI (collectively, the "XLI Stockholders") for purposes of
executing any documents and taking any actions that said Stockholder
Representatives may in their sole discretion determine to be necessary or
desirable in connection with this Escrow Agreement or any of the
transactions contemplated hereby, and each of said Stockholder
Representatives has accepted said appointment. Pursuant to the Plan of
Reorganization, the Stockholder Representatives are granted full authority
to execute, deliver, acknowledge, certify and file on behalf of the XLI
Stockholders (in the name of any or all of the XLI Stockholders or
otherwise) any and all documents which the Stockholder Representatives may
in their sole discretion determine to be necessary, desirable or
appropriate, in such forms and containing such provisions as the
Stockholder Representatives may in their sole discretion determine to be
appropriate, including without limitation amendments to this Escrow
Agreement, amendments to any agreements, instruments or other documents
executed in connection with this Escrow Agreement, documents relating to
this Escrow Agreement (including escrow instructions) and other documents
which may be required to be executed, delivered, acknowledged or certified
in connection with any of the foregoing documents. Oak, the Escrow Agent
and the Exchange Agent shall be entitled to deal exclusively with the
Stockholder Representatives on all matters relating to this Escrow
Agreement, including without limitation any notice to, or any consent,
approval or action to be given or taken by, any XLI Stockholder, and any
amount to be distributed or paid to any XLI Stockholder or any holder of an
XLI Warrant. Oak, the Escrow Agent and the Exchange Agent shall be
entitled to rely on any action taken by the Stockholder Representatives
with respect to this Escrow Agreement or any of the transactions
contemplated hereby as being fully binding on the XLI Stockholders, and any
action of the Stockholder Representatives shall fully bind the XLI
Stockholders provided that such action is taken in accordance with the
provisions of Section 6 of this Agreement. The agency and power of
attorney granted in this Section 1 shall not be affected by the subsequent
incapacity of any XLI Stockholder. If for any reason there is only one
Stockholder Representative at any time, then, so long as there is only one
Stockholder Representative, such references herein to the Stockholder
Representatives shall mean such Stockholder Representative.
2. Plan of Reorganization. The Escrow Agent hereby acknowledges receipt
of a copy of the Plan of Reorganization, but except for reference thereto
for definitions of certain words or terms not defined herein, the Escrow
Agent is not charged with any duties or responsibilities with respect to
the Plan of Reorganization.
3. Funds Placed Into Escrow.
3.1 Merger Cash Funds. Pursuant to the Plan of Reorganization,
including Section 2.5.2.2 thereof, Oak shall deliver to the Escrow Agent
not later than one business day following the Effective Date, by wire
transfer of funds, an amount equal to Merger Cash, multiplied by the total
number of shares of XLI Common Stock purchasable under the Private Warrants
outstanding at the Effective Time, which aggregate amount together with
interest earned thereon (collectively, the "Merger Cash Funds") is to be
held by the Escrow Agent and released in accordance with the provisions of
this Escrow Agreement.
3.2 Contingent Cash Funds. Commencing with the calendar quarter
ending March 31, 1998 and terminating with the calendar quarter ending
March 31, 1999, Oak shall deliver to the Escrow Agent an amount equal to
the amount of Contingent Cash, if any, due by Oak for each such calendar
quarter under Section 2 of the Plan of Reorganization (subject to any
adjustments provided for in Sections 9 and 10 of the Plan of Reorganization).
Thereafter, pursuant to the Plan of Reorganization, including Section 2.6.1.2
thereof, Oak shall deliver to the Escrow Agent an amount equal to the amount
of Contingent Cash, if any, due by Oak for any calendar quarter under
Section 2 of the Plan of Reorganization, multiplied by the total number of
shares of XLI Common Stock purchasable under the Private Warrants outstanding
at the end of such calendar quarter. The Contingent Cash amount for any
calendar quarter shall be delivered by Oak to the Escrow Agent5) days after
the end of such calendar quarter, provided, however, that the Contingent
Cash amount, if any, due for the calendar quarter ended March 31, 1999
shall be delivered by Oak to the Escrow Agent within thirty (30) days
after the end of such calendar quarter. All such Contingent Cash amounts
delivered to the Escrow Agent pursuant to this Section 3.2, together with
interest earned thereon (collectively, the "Contingent Cash Funds"),
shall be held by the Escrow Agent and released in accordance with the
provisions of this Escrow Agreement.
3.3 Escrow Account; Investment of Escrowed Funds. The Escrow Agent
shall open an account in the name of "Oak Technology, Inc./Xerographic Laser
Images Escrow Fund" (the "Account"), and, pending disposition of the Merger
Cash Funds and the Contingent Cash Funds (collectively, the "Escrowed Funds")
in accordance with this Escrow Agreement, the Escrow Agent shall invest the
Escrowed Funds as the Stockholder Representatives shall direct. The Escrowed
Funds may, at the direction of the Stockholder Representatives, be invested
by the Escrow Agent in (a) any obligation issued or guaranteed by, or
backed by the full faith and credit of, the United States of America
(including any certificates or any other evidence of an ownership interest in
any such obligation or in specified portions thereof, which may consist of
specified portions of the principal thereof or the interest thereon),
(b) certificates of deposit secured at all times by direct obligations of the
United States of America or obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America,
(c) deposit accounts in, money market deposits or certificates of deposit
issued by, and bankers' acceptances of, any bank, trust company or
national banking association which is a member of the Federal Reserve
System (which may include the Escrow Agent and which may include an
SSgA money market account), having capital stock and surplus aggregating
not less than Fifty Million Dollars ($50,000,000), which are fully insured
by the Federal Deposit Insurance Corporation, (d) obligations issued or
guaranteed by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to the authority
granted by the Congress of the United States, (e) commercial paper rated
Prime-1 or A-1 by Xxxxx'x or Standard & Poors ("S&P"), or (f) obligations
rated not less than "A" or equivalent by Xxxxx'x or S&P issued or guaranteed
by any state of the United States or the District of Columbia, or any
political subdivision of any such state or District, or obligations of a
public housing authority fully secured by contracts with the United States.
In no event shall Oak or the Escrow Agent have any liability under this
Escrow Agreement for investment losses incurred on any investment or
reinvestment made in accordance with the terms of this Escrow Agreement.
3.4 Tax Reporting; Withholding. The parties hereto agree that, for
tax reporting purposes, all interest or other income earned from the
investment of the Escrowed Funds shall be allocable to Oak. Oak agrees to
provide the Escrow Agent with a certified tax identification number by
signing and returning a Form W-9 (or Form W-8, in case of non-U.S. persons)
to the Escrow Agent prior to the date on which any income earned on the
investment of the Escrowed Funds is credited to such Escrowed Funds. The
parties hereto understand that, in the event Oak's tax identification number
is not certified to the Escrow Agent, the Internal Revenue Code, as amended
from time to time, may require withholding of a portion of any interest or
other income earned on the investment of the Escrowed Funds. Oak hereby
agrees to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to the payment of Escrowed Funds under this
Escrow Agreement, and to indemnify and hold the Escrow Agent harmless from
and against any taxes, additions for late payment, interest, penalties,
governmental charges and other expenses (including reasonable legal fees
and expenses) that may be assessed against or may be incurred by the Escrow
Agent in connection with the making of any such payments. Oak and the
Stockholder Representatives undertake to instruct the Escrow Agent in
writing with respect to the Escrow Agent's responsibility for withholding
and other taxes, assessments or other governmental charges, certifications
and governmental reporting in connection with its acting as Escrow Agent
under this Escrow Agreement; provided, however, that instructions with
respect to the matters addressed by this Section 3.4 shall be required only
in the event of a change in the terms set forth in this Section 3.4.
3.5 Indemnity of Escrow Agent. Oak covenants and agrees to indemnify
the Escrow Agent and hold it harmless without limitation from and against
any loss, liability or expense of any nature incurred by the Escrow Agent
arising out of or in connection with this Escrow Agreement or with the
administration of its duties hereunder, including but not limited to
reasonable legal fees and other costs and expenses of defending or preparing
to defend against any such claim or liability, unless such loss, liability
or expense shall be caused by the Escrow Agent's gross negligence, bad faith
or willful misconduct. Except in the case of the Escrow Agent's gross
negligence, bad faith or willful misconduct, the Escrow Agent shall not be
liable for indirect, punitive, special or consequential damages. The Escrow
Agent shall have no more or less responsibility or liability on account of
any action or omission of any book entry depository employed by the Escrow
Agent than any such book entry depository has to the Escrow Agent, provided
such book entry depository is liable in the case of such book entry
depository's gross negligence, bad faith or willful misconduct, except to
the extent that such action or omission of any book entry depository was
caused by the Escrow Agent's own gross negligence, bad faith or willful
misconduct.
4. Release of Escrowed Funds. The Escrow Agent shall release the Escrowed
Funds as described in this Section 4, subject to the terms and conditions of
this Escrow Agreement. Determinations by the Escrow Agent or the Exchange
Agent of the Exercise Price Amount (which term is defined in Section 4.2
below) due in connection with any XLI Warrant exercise pursuant to
Section 4.2 of this Escrow Agreement, and determinations by the Escrow
Agent of the per share amount of Merger Cash and the per share amount of
Contingent Cash payable by the Escrow Holder under this Escrow Agreement,
shall be based on the information provided to the Escrow Agent by the
Stockholder Representatives and Oak, respectively, pursuant to Section 4.4 of
this Escrow Agreement. Determinations by the Escrow Agent of the XLI
Stockholders (including any holders of XLI Warrants who exercised such XLI
Warrants pursuant to Section 4.2 of this Escrow Agreement) entitled to
distributions of Escrowed Funds under this Escrow Agreement shall be based
on the information provided to the Escrow Agent by the Exchange Agent.
The Escrow Agent agrees to provide at least ten (10) days prior written
notice to the Exchange Agent, the Stockholder Representatives and Oak of
any release of Escrowed Funds pursuant to Sections 4.1, 4.2 or 4.3 of
this Escrow Agreement, which notice shall include a description of the
calculations and allocations made by the Escrow Agent in connection
with such release of Escrowed Funds. Any objection by Oak or the
Stockholder Representatives to such calculations or allocations must
be delivered in writing to the Escrow Agent, with a copy to the other
party or parties hereto, within five (5) days following delivery by
the Escrow Agent of such notice.
4.1 Initial Escrow Distribution. Subject to the provisions of the
immediately preceding paragraph, not later than fifteen (15) calendar days
following delivery to the Escrow Agent of the amount, if any, of Contingent
Cash payable by Oak for the calendar quarter ended March 31, 1999, the
Escrow Agent shall deliver to the Exchange Agent, for distribution to the
XLI Stockholders, the Escrowed Funds then held by the Escrow Agent, less
the sum of (i) Merger Cash Funds held in escrow with respect to any Private
Warrant that has not been exercised prior to March 31, 1999 and has not
otherwise terminated ("Unexpired Private Warrant"), (ii) Contingent Cash
Funds held in escrow with respect to any Unexpired Private Warrant and
(iii) any Exercise Price Amount then held in escrow under Section 4.2 below
(the "Initial Distribution Amount"). For purposes of calculating the
amount to be withheld from the Initial Distribution Amount, the Escrow
Agent may rely upon written instructions furnished to the Escrow Agent by
the Exchange Agent, by no later than April 5, 1999, identifying the
Unexpired Private Warrants outstanding at March 31, 1999, and the amounts
of Merger Cash and Contingent Cash payable with respect to such Unexpired
Private Warrants. Any interest earned on the Escrowed Funds that is
otherwise allocable to the funds required to be retained in escrow by the
Escrow Agent under this Section 4.1 shall be distributed to the XLI
Stockholders of record at March 31, 1999 (including any holders of XLI
Warrants who exercised such XLI Warrants prior to March 31, 1999) as part
of the Initial Distribution Amount. The Initial Distribution Amount shall
be distributed by the Exchange Agent in accordance with the provisions of
the Exchange Agreement and shall be allocated pro rata to (a) all
outstanding shares of XLI Common Stock held by XLI Stockholders at the
Effective Time (excluding any shares of XLI Common Stock into which
outstanding shares of XLI Preferred Stock were convertible at the Effective
Time), (b) all outstanding shares of XLI Preferred Stock held by XLI
Stockholders at the Effective Time, on an as converted basis, and (c) all
shares of XLI Common Stock (including shares of XLI Common Stock into which
shares of XLI Preferred Stock, that were issued upon exercise of the
Underwriter's Warrant, were converted) attributable to XLI Warrants
exercised after the Effective Time and prior to March 31, 1999.
4.2 Upon Exercise of XLI Warrants. Promptly following delivery
to the Exchange Agent of documentation evidencing exercise of any XLI
Warrant, in form and substance reasonably acceptable to the Exchange Agent,
and receipt by the Exchange Agent of the exercise price per share payable
in connection with the exercise of such XLI Warrant (the "Exercise Price
Amount"), the Exchange Agent shall deliver to the holder of such XLI
Warrant the sum of Merger Cash and Contingent Cash per share of XLI
Common Stock (including shares of XLI Common Stock into which shares of
XLI Preferred Stock have been converted) for which the Exercise Price
Amount has been paid to the Exchange Agent. Merger Cash payable to the
holder of a Private Warrant under this Section 4.2 shall be paid to the
holder of such Private Warrant from the Merger Cash Funds delivered to
the Escrow Agent by Oak pursuant to Section 3.1 of this Escrow Agreement,
which funds shall be delivered to the Exchange Agent by the Escrow Agent.
Merger Cash payable to the holder of any XLI Warrant, other than a
Private Warrant, shall be paid by the Exchange Agent to the holder of
such XLI Warrant from the Exercise Price Amount delivered by the holder of
such XLI Warrant to the Exchange Agent pursuant to this Section 4.2.
Contingent Cash payable to the holder of any XLI Warrant (including any
Private Warrant), who exercises such XLI Warrant (including any Private
Warrant) prior to March 31, 1999, shall be paid by the Escrow Agent, for
the period commencing on January 1, 1998 and ending on March 31, 1999,
in accordance with the provisions of Section 4.1 of this Escrow Agreement.
Contingent Cash payable to the holder of any Private Warrant, who exercises
such Private Warrant subsequent to March 31, 1999, shall be paid to the
holder of such Private Warrant from the Contingent Cash Funds retained in
escrow by the Escrow Agent pursuant to Section 4.1 of this Escrow Agreement
and Contingent Cash Funds delivered by Oak to the Escrow Agent pursuant to
Section 3.2 of the Escrow Agreement subsequent to June 30, 1999 and prior
to delivery by Oak to the Exchange Agent of any Contingent Cash Funds due
for the calendar quarter in which the exercise of such Private Warrant
occurs. Any Contingent Cash Funds payable by the Escrow Agent pursuant
to the immediately preceding sentence shall be delivered by the Escrow
Agent to the Exchange Agent for distribution to such holders of Private
Warrants. Net exercises of XLI Warrants shall not be permitted, and
no XLI Warrant shall be exercisable for shares of the capital stock
of XLI or of Oak or any Oak Subsidiary, including, without limitation,
Pixel Magic, Inc. Within five (5) business days following receipt by
the Exchange Agent of the Exercise Price Amount, the Exchange Agent shall
deliver to Oak the Exercise Price Amount, net of any amount of Merger
Cash paid by the Exchange Agent to the holder of an XLI Warrant, other
than a Private Warrant, from such Exercise Price Amount in accordance
with the provisions of this Section 4.2. The Exchange Agent shall provide
written notice to Oak and to the Stockholder Representatives of any
exercise of an XLI Warrant, including the number of shares of XLI Common
Stock (including shares of XLI Common Stock into which shares of XLI
Preferred Stock were converted), date of exercise of such XLI Warrant,
the Exercise Price Amount covered by such XLI Warrant exercise and the
amount of the Exercise Price Amount, if any, utilized to pay Merger Cash
pursuant to this Section 4.2. Such notice shall also indicate whether
any shares of XLI Stock remain available for purchase under such
XLI Warrant.
4.3 Upon Termination of Escrow Agreement. Upon termination of this
Escrow Agreement (which shall occur upon expiration or exercise of all
rights to purchase shares of XLI Stock under the XLI Warrants, including
the Private Warrants), all Escrowed Funds, if any, remaining in escrow
upon termination of this Escrow Agreement shall be paid out within
fifteen (15) business days following the termination of this Escrow
Agreement. Such amount shall be delivered by the Escrow Agent to the
Exchange Agent for distribution to the XLI Stockholders, and shall be
allocated in accordance with Section 4.1 of this Agreement as though it
were an Initial Escrow Distribution.
4.4 Delivery of Information to Escrow Agent.
4.4.1 Determination of Merger Cash and Contingent Cash Amounts.
Within one business day following the Effective Date, Oak and the
Stockholder Representatives shall provide joint written notice to the
Escrow Agent of the date which is the Effective Date and the per share
determination of Merger Cash, as calculated in accordance with the
provisions of Section 2.4.3 of the Plan of Reorganization. Within
forty-five (45) days after the close of each calendar quarter, Oak and
the Stockholder Representatives shall provide joint written notice to
the Escrow Agent of the per share determination of Contingent Cash as of
the end of such calendar quarter, calculated in accordance with the
provisions of Section 2.4.4 of the Plan of Reorganization. Oak and the
Stockholder Representatives agree to provide to the Escrow Agent such
other Merger Cash and Contingent Cash calculations as are required by the
Escrow Agent in order to fulfill its duties hereunder.
4.4.2 List of XLI Stockholders and Holders of XLI Warrants.
Within one business day following the Effective Date, the Stockholder
Representatives shall deliver or cause to be delivered to the Escrow Agent,
with a copy to Oak: (i) a list of the names, addresses and number of
shares of XLI Stock held by all XLI Stockholders at the Effective Time,
which list shall include the names of Dissenting Stockholders and the
number of shares of XLI Stock held by any Dissenting Stockholder, and
shall also include for each holder of XLI Preferred Stock the number of
shares of XLI Common Stock into which shares of XLI Preferred Stock were
convertible at the Effective Time, including shares of XLI Preferred
Stock held by any Dissenting Stockholder; and (ii) a list of the names and
addresses of all holders of XLI Warrants outstanding at the Effective
Time, which list shall include the number of shares of XLI Common Stock
into which each such XLI Warrant is convertible upon exercise of such XLI
Warrant, including shares of XLI Common Stock into which shares of XLI
Preferred Stock are convertible, the Exercise Price Amount payable by
the holder of such XLI Warrant and the date of expiration of such XLI
Warrant. Without limiting the generality of the foregoing, the list of
XLI Warrants outstanding at the Effective Time shall indicate by
individual holder the type or types of XLI Warrants held by such holder,
with the information required by clause (ii) above presented separately
for each XLI Warrant. The Stockholder Representatives agree to provide
to the Escrow Agent, with a copy to Oak, such other information regarding
the capital stock of XLI, including any XLI Warrants, issued and
outstanding, at the Effective Time.
4.4.3 Notice of Expiration of XLI Warrants. Within ten (10)
business days prior to the expiration of all rights to purchase shares of
XLI Stock under the Class A Warrants, or the Underwriter's Warrant, or
the Private 1995 Warrants or the Private 1996 Warrants, the Stockholder
Representatives shall deliver notice of same to the Escrow Agent, the
Exchange Agent and Oak.
4.5 Delivery of Information by Exchange Agent.
4.5.1 Letter of Instruction. As soon as practicable after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of an XLI Warrant instructions for use in effecting the exercise
of any XLI Warrant. Oak and the Stockholder Representatives shall
cooperate with the Exchange Agent in furnishing such instructions.
4.5.2 Notice of Exercise of XLI Warrant. Within five (5)
business days following the exercise of any XLI Warrant and payment of the
Exercise Price Amount therefor, pursuant to and in accordance with the
provisions of this Escrow Agreement, the Exchange Agent shall provide
written notice to the Escrow Agent of the name and address of any holder
of XLI Warrants who exercised XLI Warrants subsequent to the Effective
Time of the Merger, which list shall include the number of shares of XLI
Common Stock (including shares of XLI Common Stock into which shares of
XLI Preferred Stock were converted) covered by the exercise of such XLI
Warrant. Written notice of any such XLI Warrant exercise shall be
delivered by the Exchange Agent to Oak and the Stockholder Representatives
pursuant to and in accordance with Section 4.2 of this Escrow Agreement.
4.6 Lost, Stolen or Destroyed XLI Warrants. In the event any XLI
Warrant shall have been lost, stolen or destroyed, upon the making of any
affidavit of that fact by the person claiming such XLI Warrant to be lost,
stolen or destroyed, and upon delivery of a bond in such sum as the
Exchange Agent may reasonably direct, as indemnity against any claim that
may be made against the Exchange Agent with respect to the XLI Warrant
alleged to have been lost, the Exchange Agent or the Escrow Agent, as
the case may be, will issue, upon receipt by the Exchange Agent of the
Exercise Price Amount payable in connection with the exercise of such
XLI Warrant, the consideration as provided in this Section 4 in exchange
for such lost, stolen or destroyed XLI Warrant.
4.7 Abandoned Property. Notwithstanding anything to the contrary
contained in this Section 4 or elsewhere in this Escrow Agreement, neither
the Escrow Agent nor any other party to this Escrow Agreement shall be
liable to any holder of the capital stock of XLI, including any holder of
an XLI Warrant who has exercised all or a portion of such XLI Warrant, for
any amount properly paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
5. Duties of the Escrow Agent. It is agreed that the duties of the
Escrow Agent are only those specifically provided herein, which are purely
ministerial in nature. The Escrow Agent shall have no responsibility with
respect to the Escrowed Funds other than to follow the instructions
contained herein. The Escrow Agent shall incur no liability in connection
with this Escrow Agreement except for gross negligence, misconduct or bad
faith in the performance of its duties hereunder. The Escrow Agent shall
not be required to defend any legal proceedings which may be instituted
against the Escrow Agent with respect to the subject matter of this Escrow
Agreement unless requested to do so by one or more of the parties hereto
and indemnified by the requesting party to the Escrow Agent's satisfaction.
If any action is threatened or instituted against the Escrow Agent, the
Escrow Agent may interplead the parties hereto and may deposit the subject
matter of this Escrow Agreement into court, and in such event the Escrow
Agent shall be relieved of and discharged from any and all obligations and
liabilities under this Escrow Agreement. The Escrow Agent may rely on and
shall be protected in acting or refraining from acting upon any written
notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by it to be genuine and to
have been signed or presented by the proper person, and shall have no
responsibility for determining the accuracy thereof. The Escrow
Agent may also consult counsel satisfactory to it, including in-house
counsel, and may reasonably rely on the advice of such counsel,
provided the Escrow Agent acts in good faith and in accordance with
the advice of such counsel, and provided further that the Escrow has
no independent knowledge of any material error or omission in such
advice. The Escrow Agent shall not be required to institute legal
proceedings of any kind. Without limiting the generality of the
preceding sentence, if there is any controversy in connection with
the Escrowed Funds or any question as to the construction of this
Escrow Agreement or any action to be taken by the Escrow Agent, the
Escrow Agent shall not be required to resolve the controversy or take
any action in connection therewith and may await the settlement of
any such controversy by final legal proceedings or otherwise as the
Escrow Agent may require. The Escrow Agent may resign and be
discharged from its duties hereunder by giving not less than forty-
five (45) days prior written notice of such resignation to Oak and
the Stockholder Representatives, which notice shall specify the date
when such resignation of such Escrow Agent shall take effect. Prior
to the effective date of the resignation as specified in such notice,
Oak will issue to the Escrow Agent a written instruction authorizing
redelivery of the Escrowed Funds to a bank or trust company that it
selects as successor to the Escrow Agent hereunder, subject to the
reasonable consent of the Stockholder Representatives. If, however,
Oak shall fail to name such a successor escrow agent within thirty
(30) days after the notice of resignation from the Escrow Agent, the
Stockholder Representatives shall be entitled to name such successor
escrow agent. If no successor escrow agent is named by Oak or the
Stockholder Representatives, the Escrow Agent may apply to a court of
competent jurisdiction for appointment of a successor escrow agent.
Any successor escrow agent appointed in accordance with the foregoing
procedures shall succeed as the Escrow Agent hereunder and Oak and
the Stockholder Representatives hereby consent to and approve such
successor.
6. Actions and Instructions of Stockholder Representatives. Any
action required to be taken, or notice or instructions required
to be given, to the Escrow Agent, the Exchange Agent or Oak under
this Escrow Agreement may be taken or given by a majority of the
Stockholder Representatives; provided, however, that less than a
majority of the Stockholder Representatives may take such action or
give such notice or instructions upon delivery to the Escrow Agent,
the Exchange Agent and Oak of a notice signed by a majority of the
Stockholder Representatives stating that any action may be taken and
any notice or instructions may be given to the Escrow Agent, the
Exchange Agent and Oak by the number of Stockholder Representatives
specified in such notice. If for any reason there is only one
Stockholder Representative at any time, then the Escrow Agent, the
Exchange Agent and Oak shall be entitled to rely on any action taken
by, or notice or instructions given by, such Stockholder
Representative. Written notice of any resignation or removal of a
Stockholder Representative, or any appointment of a successor
Stockholder Representative, shall be promptly provided to the Escrow
Agent, the Exchange Agent and Oak.
7. Miscellaneous.
7.1 Governing Laws. It is the intention of the parties
hereto that the internal laws of the Commonwealth of Massachusetts
(irrespective of its choice of law principles) shall govern the
validity of this Escrow Agreement, the construction of its terms, and
the interpretation and enforcement of the rights and duties of the
parties hereto. The parties hereto hereby absolutely and irrevocably
consent and submit to the jurisdiction of the court in the
Commonwealth of Massachusetts and of any Federal court located in
said Commonwealth in connection with any actions or proceedings
brought against them by the Escrow Agent arising out of or relating
to this Escrow Agreement. In any such action or proceeding, the
parties hereto hereby absolutely and irrevocably waive personal
service of any summons, complaint, declaration or other process and
hereby absolutely and irrevocably agree that the service thereof may
be made by certified or registered first-class mail directed to such
parties at their respective addresses in accordance with the
provisions hereof.
7.2 Other Provisions. This Escrow Agreement is binding
upon and inures to the benefit of the successors and assigns of the
parties hereto. This Escrow Agreement and the Plan of
Reorganization, the exhibits and schedules hereto and thereto,
including the Exchange Agreement, and the documents referenced herein
and therein constitute the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied,
written or oral, between the parties hereto and thereto. This Escrow
Agreement may only be amended or observance of any terms of this
Escrow Agreement may be waived only by a writing signed by the party
to be bound thereby.
7.3 Notices. Whenever any party hereto desires or is
required to give any notice, demand or request with respect to this
agreement, each such communication shall be in writing and shall be
given or made by, telecopy, telegraph, cable, mail or other delivery
and telecopied, telegraphed, cabled, mailed or delivered to the
intended recipient at the addresses specified below:
If to Oak: Oak Technology, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, General Counsel
Telecopier: (000) 000-0000
With a copy to: Xxxxxxxxx Xxxxx Morosoli & Maser LLP
000 Xxxx Xxxx Xxxx, Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
If to the Stockholder c/o Xerographic Laser Images
Representatives: 000 Xxxxxxxxx Xxxxxx
0 Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. X'Xxxxxx
Telecopier: (000) 000-0000
With a copy to: Warner & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
If to the Escrow Agent: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Division
Xx. Xxxxx Xxxx
Telecopier: (000) 000-0000
If to the Exchange Agent: State Street Bank and Trust Company
000 Xxxxx Xxxxxx
Mail Stop 45-02-71
Xxxxxx, XX 00000
Attn: Xx. Xxx XxXxxxxx
Telecopier: (000) 000-0000
Except as may be otherwise provided elsewhere in this Agreement, all
such communications shall be deemed to have been duly given when transmitted
by telecopier with verified receipt by the receiving telecopier, when
delivered to the telegraph or cable office, when personally delivered, or
in the case of a mailed notice, five (5) days after being deposited in the
United States certified or registered mail, postage prepaid. Any party may
change its address for such communications by giving notice thereof to the
other parties in conformance with this Section 7.3 (Notices).
7.4 Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be
reasonably requested by any other party, to better evidence and reflect
the transactions described herein and contemplated hereby, and to carry
into effect the intents and purposes of this Escrow Agreement.
7.5 Severability. If any provision of this Escrow Agreement, or
the application thereof, shall for any reason and to any extent be invalid
or unenforceable, the remainder of this Escrow Agreement and application
of such provision to other persons or circumstances shall be interpreted
so as best to reasonably effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable provision of
this Escrow Agreement with a valid and enforceable provision which will
achieve, to the extent possible, the economic, business and other purposes
of the void or unenforceable provision.
7.6 Remedies Cumulative. All rights and remedies of the parties
under this Escrow Agreement are cumulative and are in addition to and
shall not be deemed to exclude any other right or remedy allowed by law
and all rights and remedies may be exercised concurrently.
7.7 Non-Waiver. No condoning, excusing or waiver by any party of
any default, breach or non-observance by any other party at any time or
times in respect of any provision contained in this Escrow Agreement shall
operate as a waiver of that party's rights under this Escrow Agreement in
respect of any continuing or subsequent default, breach or non-observance,
or so as to defeat or affect in any way the rights of that party in respect
of any such continuing or subsequent default, breach or non-observance,
and no waiver shall be inferred from or implied by anything done or omitted
to be done by the party having those rights.
7.8 Counterparts. This Escrow Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
7.9 Attorneys' Fees. Should suit be brought to enforce or interpret
any part of this Escrow Agreement, the prevailing party shall be entitled
to recover, as an element of the costs of suit and not as damages,
reasonable attorneys' fees to be fixed by the court (including without
limitation, costs, expenses and fees on any appeal). The prevailing party
shall be the party entitled to recover its costs of suit, regardless of
whether such suit proceeds to final judgment. A party not entitled to
recover its costs shall not be entitled to recover attorneys' fees. No
sum for attorneys' fees shall be counted in calculating the amount of a
judgment for purposes of determining if a party is entitled to recover
costs or attorneys' fees.
7.10 Construction of Agreement. This Escrow Agreement has been
negotiated by the respective parties hereto and their attorneys and the
language hereof shall not be construed for or against any party. The
recital to this Escrow Agreement shall be deemed to be a part of this
Escrow Agreement. The titles and headings herein are for reference
purposes only and shall not in any manner limit the construction of
this Escrow Agreement, which shall be considered as a whole. Whenever
required by the context hereof, the singular number shall include the
plural, and vice versa, the masculine gender shall include the feminine
and neuter genders, and the neuter gender shall include the masculine
and feminine genders.
7.11 Fees. Oak agrees to pay or reimburse the Escrow Agent for
reasonable legal fees incurred in connection with the preparation of
this Escrow Agreement and to pay the Escrow Agent's reasonable
compensation for its normal services hereunder in accordance with the
attached fee schedule, which may be subject to change hereafter on an
annual basis. The Escrow Agent shall be entitled to reimbursement on
demand for all reasonable expenses incurred in connection with the
administration of this Escrow Agreement or the escrow created hereby
which are in excess of its compensation for normal services hereunder,
including without limitation, payment of any reasonable legal fees and
expenses incurred by the Escrow Agent in connection with resolution of any
claim by any party hereunder.
7.12 Succession. Any Stockholder Representative, or any successor
to any of them hereafter appointed, may resign and shall be discharged of
his duties. In case of such resignation, or the death or inability to act
of any Stockholder Representative, a successor or successors shall be
named by the remaining Stockholder Representatives or, if only one
Stockholder Representative remains, by such Stockholder Representative.
Each such successor Stockholder Representative shall have all the power,
authority, rights and privileges hereby conferred upon the original
Stockholder Representatives, and the Stockholder Representatives as used
herein shall be deemed to include such successor(s).
7.13 Force Majeure. The Escrow Agent shall not be responsible for
delays or failures in performance resulting from acts beyond its control.
Such acts shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire communication line failures, computer
viruses, power failures, earthquakes or other disasters.
7.14 Reproduction of Documents. This Escrow Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, and
(b) instructions, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, optical disk, micro-card, miniature photographic or other
similar process. The parties agree that any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence,
and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
[INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date first hereinabove written.
STATE STREET BANK AND TRUST OAK TECHNOLOGY, INC.
COMPANY
By:___________________________ By:___________________________
Its:_________________________ Its:__________________________
STOCKHOLDER REPRESENTATIVES:
____________________________ _____________________________
Xxxxxx X. Xxxxx Xxxxxx X. Xxxx
____________________________ _____________________________
Xxxx Xxxxxx Xxxxxxx X. Xxxxx
____________________________
Xxxxxxx X. X'Xxxxxx
Acknowledged and Agreed with respect
to the duties of the Exchange Agent
under Section 4 of the Escrow Agreement.
EXCHANGE AGENT
STATE STREET BANK AND TRUST COMPANY
By:_______________________________
Its:______________________________
