EXHIBIT 4.3
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made and entered into this 28th
day of November, 1997, by and among P-Com, Inc., a Delaware corporation
("P-Com"), P-COM Services (UK) Limited, an English company and wholly-owned
subsidiary of P-Com ("Sub"), R T Masts Limited, an English company ("RTM"), the
securityholders of RTM as represented by Xxxx Xxxxxxx and Xxxxxx Xxxxxxx
(collectively, "Escrow Committee") and Xxxxxxx, Phleger & Xxxxxxxx LLP ("Escrow
Agent"). Terms not defined herein shall have the meaning set forth in the
Purchase Agreement (as defined below).
WITNESSETH
WHEREAS, P-Com, RTM, the securityholders of RTM (individually, a
"Securityholder" and, collectively, the "Securityholders) and Sub have entered
into a Share Purchase Agreement, dated as of October 14, 1997 (collectively,
with all amendments, schedules, exhibits and certificates referred to therein,
the "Purchase Agreement") and
WHEREAS, pursuant to the Purchase Agreement, an escrow (the "Escrow")
shall be established to compensate P-Com and parent or subsidiary companies for
Damages which each may incur by reason of an inaccuracy in, breach or
nonfulfillment of, or noncompliance with representations, warranties, covenants
or agreements of RTM and its Securityholders contained in the Purchase
Agreement; and
WHEREAS, the Escrow Committee has been constituted as agent for and on
behalf of the Securityholders to undertake certain obligations herein; and
WHEREAS, the Purchase Agreement provides for an escrow of shares of
P-Com Common Stock issued in connection with the purchase of the Shares, such
escrow to be held by the Escrow Agent; and
WHEREAS, the parties hereto desire to set forth further terms and
conditions in addition to those set forth in the Purchase Agreement relating to
the operation of the Escrow.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained in the Purchase Agreement and herein, and intending to be
legally bound, hereby agree as follows:
1. Escrow Pursuant to the Purchase Agreement, P-Com shall deposit in
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escrow with the Escrow Agent at the Time of the Closing the stock certificate or
certificates representing (Pounds) 900,000 of P-Com Common Stock as determined
by performing the calculations referred to in Section 2.2 of the Purchase
Agreement for calculating the
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number of Purchase Shares (the "Escrow Shares") which shall be registered in the
name of the Escrow Agent as nominee for the beneficial owners of such shares.
Concurrently therewith, the Escrow Committee shall execute a stock power with
respect to the Escrow Shares, which stock power shall be delivered to the Escrow
Agent and attached to the certificate(s) representing the Escrow Shares. The
Escrow Shares shall be held and distributed by the Escrow Agent in accordance
with the terms and conditions of the Purchase Agreement and this Agreement. The
number of Escrow Shares beneficially owned by each Securityholder is set forth
in Exhibit A attached hereto.
2. Escrow Period The Escrow shall terminate with respect to the Escrow
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Shares upon the earlier of the date of filing of the Form 10K for the 12 months
ending December 31, 1997 or March 31, 1998.
3. Application of Escrow Shares to Claims
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(a) If P-Com or any of its parent or subsidiaries (other than the
Securityholders) shall have any claim giving rise to Damages against RTM or the
Securityholders pursuant to Article VII of the Purchase Agreement, P-Com shall
promptly give written notice thereof to each member of the Escrow Committee,
including in such notice a brief description of the facts upon which such claim
is based and the amount of Damages, with a duplicate copy delivered to the
Escrow Agent. If the Escrow Committee agrees to such claim, as soon as
practicable after the expiration of the fifteen (15) business day notice period
set forth in Section 3(b) below, the Escrow Agent shall deliver out of the
Escrow to P-Com the lesser of (a) the number of the Escrow Shares (in whole
shares) in the Escrow that have an aggregate market value (determined as
provided in the Purchase Agreement) most nearly equal to such Damages or claims
for Damages thus to be satisfied, or (b) all of the Escrow Shares in the Escrow.
(b) If the Escrow Committee agrees to the validity of any claim for
Damages, it shall give written notice to P-Com within fifteen (15) business days
following receipt of P-Com's notice of claim, with a duplicate copy to the
Escrow Agent, advising P-Com that it consents to the delivery of Escrow Shares
out of Escrow to P-Com for application to such claims. Otherwise, the Escrow
Agent shall hold the Escrow Shares in Escrow until the rights of P-Com and the
Securityholders with respect thereto have been agreed upon among the Escrow
Committee and P-Com or until such rights are finally determined in accordance
with Section 3(c) hereof. The Escrow Agent may rely on any memorandum of P-Com
and all members of the Escrow Committee or any determination by the third party
or the courts referred to in Section 3(c)(i) hereof. In any such resolution to
determine the Escrow Shares to be delivered out of Escrow, the Escrow Agent
shall as soon as practicable following receipt of a copy of such determination,
deliver out of Escrow the Escrow Shares from the Escrow in accordance with the
terms thereof.
(c) In case the Escrow Committee shall not so agree in writing to
any claim or claims by P-Com, P-Com shall have twenty-five days to respond in a
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written statement to the objection of the Escrow Committee. If the Escrow
Committee and P-Com should agree after such time, a memorandum setting forth
such agreement shall be prepared and signed by P-Com and by both members of the
Escrow Committee and shall be furnished to the Escrow Agent. The Escrow Agent
shall be entitled to rely on any such memorandum and shall distribute the
Escrow Shares from the Escrow in accordance with the terms thereof. If after
such twenty-five (25) day period there remains a dispute as to any claims, the
members of the Escrow Committee shall either (i) mutually agree upon a third
party (the "Third Party") to resolve the issue, or (ii) the matter shall be
resolved by the High Courts of England and Wales. Through the Escrow or
otherwise, the Third Party may apportion among the parties the expenses of the
parties, including without limitation, attorneys' fees and costs, his own fees
and the expenses incurred by the other party.
(d) In the event P-Com becomes aware of a third party claim which P-
Com reasonably believes may result in a demand against the Escrow, P-Com shall
notify the Escrow Committee of such claim, and the Securityholders who have
Escrow Shares deposited in Escrow shall be entitled, at their own expense, to
participate in any defense of such claim. P-Com shall have the right in its sole
discretion to control the defense, settlement, compromise or other disposition
of any such claim on behalf of and for the account and risk of the
Securityholders, and the Escrow Committee shall cooperate with P-Com in any such
defense, including, without limitation, by revealing all information pertinent
thereto within their control other than attorney-client privileged
communications. The costs of defense of any third party action or claim or any
settlement or compromise thereof shall be paid from the Escrow Shares. P-Com
shall have no obligation to obtain the consent of the Escrow Committee to any
good faith settlement or disposition of any claim under this Section 3(d)
provided, however, that the Securityholders shall retain the power and authority
to object to the amount of any withdrawal by P-Com against the Escrow for
indemnity with respect to such settlement or disposition or costs, which
objection shall be resolved in accordance with the provisions of Section 3(c)
hereof.
(e) If within three months of the end of the period of twenty-five
(25) days referred to in Section 3(c) hereof the matter has neither been
referred to the Third Party nor a writ been issued from the High Courts of
England and Wales and served on the Securityholders then the claim by P-Com (or
its parent or subsidiaries) shall be deemed to have been waived and decided in
favour of the Securityholders.
4. Escrow Committee
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(a) Upon consummation of the Purchase Agreement and in consideration of
the issuance of the Escrow Shares, each Securityholder shall be deemed to have
irrevocably appointed the Escrow Committee as their attorneys in fact to give
and receive notices and communications, to authorize delivery to P-Com of the
Escrow Shares or other property from the Escrow in satisfaction of claims by
P-Com, to object to such deliveries, to agree to negotiate, enter into
settlements and compromises of, and
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demand arbitration and comply with orders of courts and awards of the Third
Party with respect to such claims, and to take all actions necessary or
appropriate in the judgment of the Escrow Committee for the accomplishment of
the foregoing. No further documentation shall be required to evidence such
appointment, and such power of attorney shall be coupled with an interest,
thereby confirming such appointment as irrevocable. Notices or communications to
or from the Escrow Committee shall constitute notice to or from each
Securityholder. A decision, act, consent or instruction of the Escrow Committee
shall constitute a decision of all Securityholders for whom shares of P-Com
Common Stock otherwise issuable to them are deposited in the Escrow and shall be
final, binding and conclusive upon each such Securityholder, and the Escrow
Agent and P-Com may rely upon any decision, act, consent or instruction of the
Escrow Committee as being the decision or instruction of each and every such
Securityholder. The Escrow Agent and P-Com are hereby relieved from any
liability to any person for any acts done by them in accordance with such
decision, act, consent or instruction of the Escrow Committee. The Escrow
Committee shall be empowered to act by unanimous vote with respect to all
matters arising under this Agreement during the term of this Agreement. No bond
shall be required of the Escrow Committee and members of the Escrow Committee
shall receive no compensation for their services.
(b) The Escrow Committee shall not be liable to anyone whatsoever by
reason of any error of judgment or for any act done or step taken or omitted by
them in good faith or for any mistake of fact or law for anything which he may
do or refrain from doing in connection therewith unless caused by or arising out
of his own gross negligence or willful misconduct, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence of such good
faith. The Securityholders and P-Com shall, jointly and severally, indemnify and
hold the Escrow Committee, and each member thereof, harmless from any and all
liability and expense (including, without limitation, attorney fees) which may
arise out of any action taken or omitted by him as an Escrow Committee member in
accordance with this Agreement, as the same may be amended, modified or
supplemented, except such liability and expense as may result from the gross
negligence or willful misconduct of the Escrow Committee.
(c) The Escrow Committee may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed to be genuine and
to have been signed or presented by the proper party or parties. The Escrow
Committee shall not be liable for other parties' forgeries, fraud or false
personalities.
(d) The Escrow Committee is hereby authorized and directed to disregard
any and all notices and warnings that may be given by any person, firm or
corporation except the final order, judgment or decree of any court made, filed,
entered or issued, whether with or without jurisdiction, from which no further
appeal may be taken and the Escrow Committee is hereby authorized to comply with
and obey any and all such final orders, judgments and decrees of any court made,
filed, entered or issued, whether with or without jurisdiction. If the Escrow
Committee shall comply with or obey any such order, judgment, or decree of any
court, the Escrow Committee shall not be liable to
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any of parties hereto, or to any other person, firm, association or corporation,
by reason of any such compliance or obedience even if such order, judgment or
decree may be subsequently revised, modified, annulled, set aside or vacated.
(e) If a former RTM Securityholder on the Escrow Committee, or his
replacement hereunder, shall die, become disabled or otherwise be unable to
fulfil his responsibilities hereunder, the remaining member or members of the
Escrow Committee shall select a replacement member or members from among those
persons who are affiliated with, or were themselves, significant Securityholders
of RTM prior to the purchase of the Shares. If the P-Com member of the Escrow
Committee, or his replacement hereunder, shall die, become disabled, resign or
otherwise be unable to fulfil his or her responsibilities hereunder, P-Com
shall choose a replacement.
(f) The Escrow Committee shall have reasonable access to information
about RTM and the reasonable assistance of RTM's officers and employees for
purposes of performing its duties and exercising its rights hereunder, provided
that the Escrow Committee shall treat confidentially and not disclose any
nonpublic information from or about RTM to anyone (except on a need to know
basis to individuals who agree to treat such information confidentially).
5. Duties of Escrow Agent The Escrow Agent shall be entitled to such
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rights and shall perform such duties of the escrow agent as set forth herein and
in Article VII of the Purchase Agreement, including but not limited to the
following (collectively, the "Duties"):
(a) The Escrow Agent shall hold and safeguard the Escrow Shares
during the Escrow Period, shall treat such Escrow as a trust fund in accordance
with the terms of this Agreement and the Purchase Agreement and not as the
property of P-Com or itself, and shall hold and dispose of the Escrow Shares
only in accordance with the terms of this Agreement and the Purchase Agreement.
(b) The Escrow Shares shall be voted by the Escrow Agent in
accordance with the instructions received by the Escrow Agent from the
beneficial owners of such shares.
(c) Promptly following the termination of the Escrow Period as set
forth in Section 2 hereof, the Escrow Agent shall deliver to the Securityholders
the remaining number of Escrow Shares in the Escrow in excess of any amount of
such Escrow Shares or other property sufficient, in the sole judgment of P-Com,
subject to the objection of the Escrow Committee and the subsequent resolution
of the matter in the manner provided in Section 3(c) above, to satisfy any
unsatisfied claims for Damages specified in any P-Com notice theretofore
delivered to the Escrow Committee and Escrow Agent prior to the termination of
the Escrow Period with respect to facts and circumstances existing prior to the
expiration of the Escrow Period, and to pay expenses as provided in this
Agreement. As soon as all such claims have been finally resolved, the Escrow
Agent shall deliver to
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the Securityholders any and all of the Escrow Shares and other property
remaining in the Escrow and not required to satisfy such claims and expenses.
Each Securityholder shall receive that number of Escrow Shares which bears the
same relationship to the total number of Escrow Shares in the Escrow and
available for distribution as the number of Escrow Shares set forth opposite the
name of each such Securityholder on Annex A hereto bears to the total number of
Escrow Shares on Annex A, as calculated by the Escrow Agent.
6. Distribution Any cash dividends, dividends payable in securities or
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other distributions of any kind (but excluding any shares of P-Com capital stock
received upon a stock split) shall be distributed by the Escrow Agent to the
beneficial holder of the Escrow Shares to which such distribution relates. Any
shares of P-Com capital stock received by the Escrow Agent upon a stock split
made in respect of any securities in the Escrow shall be added to the Escrow and
become a part thereof. Any provision hereof or in the Purchase Agreement shall
be adjusted to appropriately reflect any stock split or reverse stock split.
5. Ownership The Securityholders shall have all indicia of ownership of
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the Escrow shares while they are held in Escrow, including, without limitation,
the right to vote the Escrow Shares and the obligations to pay all taxes,
assessments and charges with respect thereto, but excluding the right to sell,
transfer, pledge or hypothecate or otherwise dispose of any Escrow Shares
provided that any distribution on or with respect to the Escrow Shares and any
other shares or securities into which such Escrow Shares may be changed or for
which they may be exchanged pursuant to corporate action of P-Com affecting
holders of P-Com Common Stock generally shall be delivered to and held by the
Escrow Agent in Escrow and shall be subject to the provisions herein and Article
VII of the Purchase Agreement. Except as contemplated hereunder, no Escrow
Shares or any beneficial interest therein may be pledged, sold, assigned or
transferred, including by operation of law, other than by will or by the laws of
descent or distribution in the event of the death of a Securityholder, by a
Securityholder or be taken or reached by any legal or equitable process in
satisfaction of any debt or other liability of such Securityholder prior to the
delivery to the Securityholder of the Escrow Shares by the Escrow Agent.
8. Exculpatory Provisions of the Escrow Agent
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(a) The Escrow Agent shall be obligated only for the performance of
such Duties as are specifically set forth herein and in the Purchase Agreement
and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall not be liable
for other parties' forgeries, frauds or false personations. The Escrow shall not
be liable for any act done or omitted hereunder as escrow agent except for gross
negligence or willful misconduct. The Escrow Agent shall, in no case or event,
be liable for any representations or warranties of P-Com, Sub, RTM or the
Securityholders. Any act done or omitted pursuant to
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advice or opinion of counsel (other than the Escrow Agent) shall be conclusive
evidence of the good faith of the Escrow Agent.
(b) The Escrow Agent is hereby authorized and directed to
disregard any and all notices and warnings that may be given by any person, firm
or corporation except the final order, judgement or decree of any court made,
filed entered or issued, whether with or without jurisdiction, from which no
further appeal may be taken and the Escrow Agent is hereby authorized to comply
with and obey any and all such final orders, judgments and decrees of any court
made, filed, entered or issued, whether with or without jurisdiction. If the
Escrow Agent shall comply with or obey any such order, judgement or decree of
any court, the Escrow Agent shall not be liable to any of the parties hereto, or
to any other person, firm, association or corporation, by reason of any such
compliance or obedience even if any such order even if any such order, judgment
or decree may be subsequently revised, modified, annulled set aside or vacated.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver the Purchase Agreement or any
documents or papers deposited or called for thereunder.
(d) The Escrow Agent shall not be liable for the outlawing of any
rights under any statute of limitations with respect to the Purchase Agreement
or any documents deposited with the Escrow Agent.
9. Resignation and Removal of the Escrow Agent The Escrow Agent may
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resign as Escrow Agent at any time with or without cause by giving at least
thirty (30) days' prior written notice to each of P-Com and the Escrow
Committee, such resignations to be effective thirty (30) days following the date
such notice is given. In addition, P-Com and the Escrow Committee may jointly
remove the Escrow Agent as escrow agent at any time with or without cause, by
an instrument (which may be executed in counterparts) given to the Escrow Agent,
which instrument shall designate the effective date of such removal. In the
event of such resignation or removal, a successor escrow agent shall be
appointed by the Escrow Committee, with the approval of P-Com, which approval
shall not be unreasonably withheld. Any such successor escrow agent shall
deliver to P-Com and the Escrow Committee a written instrument accepting such
appointment, and thereupon it shall succeed to all the rights and duties of the
escrow agent hereunder and shall be entitled to receive the assets in the
Escrow.
10. Further Instruments If the Escrow Agent reasonably requires
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other or further instruments in connection with performance of the Duties, the
necessary parties hereto shall join in furnishing such instruments.
11. Disputes It is understood and agreed that should any dispute
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arise with respect to the delivery and/or ownership or right of possession of
the securities held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed to act in
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accordance with, and in reliance upon, the terms hereof and of Article VII of
the Purchase Agreement. The Escrow Agent may hold all documents and funds and
may wait for settlement of any dispute by final appropriate proceedings.
Furthermore, the Escrow Agent may in its reasonable judgment, file an action of
interpleader requiring the parties hereto to answer and litigate any claims and
right among themselves, in which case, the Escrow Agent is authorized to deposit
with the clerk of the court all documents and funds held in Escrow, except all
costs, expenses, charges and reasonable attorneys' fees incurred by the Escrow
Agent due to the interpleader action. Upon initiating such interpleader action,
the Escrow Agent shall be fully released and discharged of and from all
obligations of this Agreement. In the event that the terms of this Agreement
conflict in any way with the provisions of the Purchase Agreement, the Purchase
Agreement shall control.
12. Indemnification Through the Escrow or otherwise, in consideration
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of the Escrow Agent's acceptance of this appointment and, if applicable, the
Third Party's appointment pursuant to Section 3(c), the other parties hereto,
jointly and severally, agree to indemnify and hold the Escrow Agent and, if
applicable, the Third Party, harmless as to any liability incurred by it to any
person, firm or corporation by reason of its having accepted such appointment or
in carrying out the terms hereof and the Purchase Agreement, and to reimburse
the Escrow Agent and, if applicable, the Third Party, for all its reasonable
costs and expenses, including, among other things, counsel fees and expenses,
incurred by reason of any matter as to which an indemnity is paid, provided,
however, that no indemnity need be paid in case of the Escrow Agent's and, if
applicable, the Third Party's gross negligence, willful misconduct or breach of
this Agreement; and provided, further, that any liability of the Escrow Agent
shall be limited to and paid out of the Escrow Shares.
13. General
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(a) Any notice given hereunder shall be in writing and shall be
deemed to have been received: (i) in the case of personal delivery, on the date
of such delivery; (ii) in the case of telex or facsimile transmission, on the
date on which the sender receives confirmation by telex or facsimile
transmission that such notice was received by the addressee, provided that a
copy of such transmission is additionally sent by mail as set forth in (iv)
below; (iii) in the case of overnight air courier, on the second business day
following the day sent, with receipt confirmed by the courier; and (iv) in the
case of mailing by first class certified or registered mail, postage prepaid,
return receipt requested, on the fifth business day following such mailing as
follows:
To P-Com:
P-Com, Inc.
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: President
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Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X Xxxxxxx, Esq
Facsmimile: (000) 000-0000
To RTM:
X X Xxxxxxx
c/o Coopers & Xxxxxxx
Central Business Exchange
Xxxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Telecopy No: 000 00 0000 353100
With a copy to:
Xxxxx Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Grafton Gate East
Central Xxxxxx Keynes MK9 1DZ
Attention: Xxxxxxx X Xxxxxxx, Esq
Telecopy No: 000 00 0000 692447
To the Escrow Committee:
P-Com, Inc.
c/o Xxxxxx Xxxxxxx
0000 X Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Escrow Committee for Control
Resources Corporation
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
0
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X Xxxxxxx, Esq
Facsimile: (000) 000-0000
X X Xxxxxxx
c/o Coopers & Xxxxxxx
Central Business Exchange
Xxxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Telecopy No: 000 00 0000 353100
With a copy to:
Xxxxx Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Grafton Gate East
Central Xxxxxx Keynes MK9 1DZ
Attention: Xxxxxxx X Xxxxxxx, Esq
Telecopy No: 000 00 0000 692447
To the Escrow Agent:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X Xxxxxxx, Esq
Facsimile: (000) 000-0000
or to such other address as any party may have furnished in writing to
the other parties in the manner provided above.
(b) This Agreement may be altered, amended, modified or revoked
only by a writing signed by all the parties hereto.
(c) This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall constitute one agreement.
(d) No party may, without the prior express written consent of each
other party, assign this Escrow Agreement in whole or in part. This Escrow
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
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(e) This Escrow Agreement shall be governed by and construed in
accordance with the laws of England and Wales as applied to contracts made and
to be performed entirely within England and Wales.
(f) The terms, conditions, covenants and provisions of the Purchase
Agreement are incorporated by reference herein as specifically set forth herein.
(g) The rights of the parties hereunder are cumulative and are not
exclusive of any other rights each party may have under the Purchase Agreement
or otherwise.
IN WITNESS WHEREOF, each of the parties hereto have executed this Agreement
as of the date first written above.
P-Com, Inc.
By: _______________________________
Title: ____________________________
P-COM Services (UK) Limited
By: _______________________________
Title: ____________________________
R T Masts Limited
By: _______________________________
Title: ____________________________
Escrow Committee
___________________________________
Xxxx Xxxxxxx
___________________________________
Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
as Escrow Agent
___________________________________
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EXHIBIT A
Allocation of Escrow Shares by Securityholders
SHAREHOLDER NUMBER OF
ESCROW SHARES
12
