EXHIBIT 10.8
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is made and entered into as of
the 31st day of December, 1998, by and among WebMD, Inc., a Georgia corporation
("Purchaser"), xxxxxxxxxxxxxx.xxx, Inc., a Georgia corporation ("Seller"), and
SunTrust Bank, Atlanta, a Georgia banking corporation ("Escrow Agent").
WHEREAS, Purchaser, Seller and Xxxx X. "Court" Xxxxxxx, an individual
resident of Georgia and the sole voting shareholder of Seller (the
"Shareholder), have entered into an Asset Purchase Agreement on the date hereof
(the "Purchase Agreement") pursuant to which Seller and Shareholder have sold,
and Purchaser has purchased, substantially all of the assets used in connection
with the operation of a business providing services relating to the
certification of delivery of electronic mail via the Internet;
WHEREAS, Section 2 of the Purchase Agreement provides for the escrow of the
Purchase Price (as defined in the Purchase Agreement) to protect Purchaser with
respect to any claim of Purchaser arising in connection with the Purchase
Agreement against Seller or Shareholder; and
WHEREAS, Purchaser and Seller desire to appoint the Escrow Agent as escrow
agent for the purpose of receiving, holding and distributing the Deposit (as
defined below), and the Escrow Agent is willing to act as escrow agent subject
to and in accordance with the terms and conditions of this Escrow Agreement.
1. DEFINED TERMS. As used herein, all defined terms not otherwise
-------------
defined herein have the meanings ascribed to them in the Purchase Agreement.
2. APPOINTMENT AND AGREEMENT OF ESCROW AGENT. Purchaser and Seller
-----------------------------------------
hereby appoint the Escrow Agent to serve as, and the Escrow Agent hereby agrees
to act as, escrow agent upon the terms and conditions of this Escrow Agreement.
3. DEPOSIT. Purchaser warrants that it has deposited with the Escrow
-------
Agent, on the date hereof, a certificate representing 50,000 shares of
Purchaser's Series D Common Stock, issued in the name of Seller (the "Deposit"),
together with 25 stock powers, executed in blank by Seller ("Stock Powers") and
25 certified resolutions of Seller with the signatures of Seller's officers on
each such document guaranteed by a participant in the Medallion signature
guarantee program. For the purposes of this Escrow Agreement, each share of
Purchaser's Series D Common Stock shall be deemed to have a value of $20.00.
4. OPERATION OF ESCROW.
-------------------
(a) The Escrow Agent will hold the Deposit for delivery as set forth
herein.
(b) If any claim of Purchaser arises against Seller or Shareholder (a
"Claim") in connection with the Purchase Agreement, Purchaser shall provide
written notice to the Escrow Agent with a copy to Seller of (i) such Claim, (ii)
the monetary value of such Claim and (iii) the number of shares of the Deposit
(valued at $20 per share) necessary to satisfy such Claim (collectively, a
"Notice of Claim").
(c) Once Purchaser provides a Notice of Claim pursuant to Section
4(b), Seller shall have twenty days from the date Purchaser sent the Notice of
Claim to send to the Escrow Agent with a copy to Purchaser written notice (an
"Objection Notice") of: (i) objection to the release of the shares held in the
Deposit necessary to satisfy such Claim; and (ii) a request that the Claim be
submitted to arbitration in accordance with the provisions of Section 4(d).
(d) If Seller sends a timely Objection Notice to the Escrow Agent,
the Claim shall be submitted to and settled by a panel of three arbitrators
appointed by the Atlanta Regional Office of the American Arbitration Association
and shall be settled in accordance with the Commercial Rules of the American
Arbitration Association. Such arbitrators shall apply Georgia law. In rendering
a decision, the arbitrators shall make specific findings of fact and take into
account all applicable judicial precedents. The arbitrators shall be required to
provide in writing to the parties the basis for the award or order of such
arbitrators, and a court reporter shall record all hearings with such record
constituting the official transcript of such proceedings. The decision of the
arbitrators shall be binding and conclusive on all parties involved, and
judgment upon their decision may be entered in the highest court of any forum,
federal or state, having jurisdiction. All arbitration fees shall be borne
equally by the parties, provided that the prevailing party in the arbitration
proceedings shall be awarded attorney fees and all other costs and expenses
incurred directly or indirectly in connection with the proceedings, unless the
arbitrators shall for good cause determine otherwise.
(e) If Seller fails to provide a timely Objection Notice, the Escrow
Agent shall release to Purchaser the number of shares of the Deposit specified
in the Notice of Claim as set forth in Section 4(b).
(f) If the Escrow Agent is obligated to release shares of the Deposit
to Purchaser or any other party pursuant to Section 4(d) or 4(e), the Escrow
Agent shall provide to Purchaser's transfer agent the then-current stock
certificate representing the Deposit, a completed Stock Power setting forth the
number of shares to be released and instructions as to the party to whom shares
are to be distributed, pursuant to Purchaser's Notice of Claim. Upon completion
of such distribution, Purchaser's transfer agent shall be instructed to deliver
to the Escrow Agent a balance certificate representing the remaining portion of
the Deposit.
5. RELEASE OF DEPOSIT. The Deposit, less the total amount of all Claims
------------------
validly made by Purchaser and satisfied hereunder pursuant to Section 4 of this
Escrow Agreement, shall be distributed on the first business day immediately
following December 31, 1999 ("Release Date") by providing to each individual
shareholder of Seller identified on Schedule A at the applicable address set
----------
forth thereon an amount equal to the then-current number of
2
shares in the Deposit multiplied by the percentage identified on Schedule A as
----------
such shareholder's applicable portion of the Deposit. In connection therewith,
the Escrow Agent shall provide to Purchaser's transfer agent the then-current
stock certificate representing the Deposit and completed Stock Powers containing
instructions for such distributions to each individual shareholder by the
Purchaser's transfer agent. If, prior to the Release Date, Purchaser has given
notice of any Claims, the Escrow Agent shall retain a portion of the Deposit
having a value as set forth hereunder equal to the aggregate of all such Claims
as such value is estimated by Purchaser in any applicable Notice of Claim
(collectively the "Retained Portion"). The Escrow Agent shall retain the
Retained Portion in escrow, and the Escrow Agent's obligations hereunder shall
be extended with respect thereto until the resolution of all such Claims
pursuant to Section 4 hereof.
6. NOTICES. All notices, instructions and other communications provided
-------
for herein shall be in writing and shall be deemed validly given, made or
served, on the date of delivery in the case of personal delivery or if delivered
by telecopier (receipt confirmed), or forty-eight (48) hours after deposit with
the U.S. Postal Service if sent by certified mail, return receipt requested,
addressed as follows :
If to Purchaser:
WebMD, Inc.
400 The Lenox Building
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chief Executive Officer
Tax ID #: 00-0000000
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxx IV, Esq.
3
If to Seller and/or Shareholder:
xxxxxxxxxxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxx X. "Court" Xxxxxxx
Tax ID #: 00-0000000
With a copy to:
The Law Offices of Xxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Esq.
If to Escrow Agent:
SunTrust Bank, Atlanta
Corporate Trust Division
0000 Xxxxxxxx Xxxx
Xxxxxxxx 00, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
or to such other addresses as the parties may designate.
7. FEES. All fees payable to the Escrow Agent for holding the Deposit in
----
escrow, disbursing the Deposit and acting as escrow agent hereunder are as set
forth in Schedule B attached hereto and shall be paid by Purchaser at the time
-----------
of closing.
8. DUTIES OF ESCROW AGENT. The Escrow Agent's duties and
----------------------
responsibilities shall be limited to those expressly set forth in this Escrow
Agreement; provided, however, with the Escrow Agent's written consent, this
Escrow Agreement may be amended at any time or times by an instrument in writing
signed by all of the then parties in interest, including the Escrow Agent.
9. LIMITATION ON LIABILITY. The Escrow Agent shall not be liable to
-----------------------
anyone by reason of any error of judgment, or for any act done or act taken or
omitted by it in good faith, or for any mistake of fact or law, or for anything
which it may do or refrain from doing in
4
connection herewith, unless caused by or arising out of its own gross negligence
or willful misconduct.
10. RELIANCE. The Escrow Agent shall be entitled to rely and shall be
--------
protected in acting in reliance upon any writing furnished to it by any party
hereto in accordance with the terms hereof, and shall be entitled to treat as
genuine, and as the document it purports to be, any letter, paper notice or
other document furnished to it by any party and believed by the Escrow Agent in
good faith to be genuine and to have been signed by the proper party. The
Escrow Agent may consult with counsel with respect to any question relating to
its duties or responsibilities hereunder and shall not be liable for any action
taken or omitted in good faith on advice of such counsel.
11. CONFLICTING CLAIMS. In the event of any disagreement between the
------------------
parties hereto resulting in conflicting claims and demands being made in
connection with or against the Deposit, the Escrow Agent shall be entitled, at
its option, to refuse to comply with the claims or demands of any party until
such disagreement is finally resolved in the manner provided in Section 4
hereof, but shall continue to comply with the other terms and conditions of this
Escrow Agreement, and in so doing the Escrow Agent shall not be or become liable
to any party.
12. ATTACHMENT, GARNISHMENT, ETC. If all or any part of the Deposit is at
-----------------------------
any time attached, garnished or levied upon, or if the payment, assignment,
transfer, conveyance or delivery of all or any part of the Deposit shall be
stayed or enjoined by any court order, or if any order or judgment shall be made
or entered by any court affecting all or any part of the Deposit, then in any of
such events, the Escrow Agent is authorized, to rely upon and comply with any
such order, writ, judgment or decree, which it believes in good faith is binding
upon it, and if it complies with any such order, writ, judgment or decree, it
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
13. [Intentionally Omitted].
14. INDEMNIFICATION. Seller and Purchaser shall reimburse and jointly and
---------------
severally indemnify the Escrow Agent, its employees, directors, officers and
agents for, and hold each harmless against, any loss, liability or expense,
including, without limitation, reasonable attorneys' fees and expenses, incurred
without gross negligence or willful misconduct on the part of the Escrow Agent
arising out of, or in connection with the acceptance of, or the performance of,
its duties and obligations under this Escrow Agreement. Promptly after the
receipt by the Escrow Agent of notice of any demand or claim or the commencement
of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect
thereof is to be made against any of the other parties hereto, notify such other
parties thereof in writing; but the failure by the Escrow Agent to give such
notice shall not relieve such party from any liability which it may have to the
Escrow Agent hereunder, except to the extent such indemnifying party is
materially prejudiced by such failure. For the purposes hereof, the term
"expense or
5
loss" shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim, demand, action, suit or proceeding
settled with the express written consent of the indemnifying party, and all
reasonable costs and expenses, including, but not limited to, counsel fees,
expenses and disbursements paid or incurred in investigating or defending
against any such claim, demand, action, suit or proceeding. The Escrow Agent
shall have no right of setoff under this Agreement or otherwise against amounts
in the Deposit.
15. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may at any
--------------------------------------
time resign by giving thirty days' prior written notice of resignation to Seller
and Purchaser. Seller and Purchaser may at any time jointly remove the Escrow
Agent by giving thirty days' prior written notice signed by each of them to the
Escrow Agent. If the Escrow Agent shall resign or be removed, a successor escrow
agent, which shall be a bank or trust company having assets in excess of $2
billion, shall be appointed by Seller and Purchaser by written instrument
executed by Seller and Purchaser and delivered to the Escrow Agent and to such
successor escrow agent and, thereupon, the resignation or removal of the
predecessor Escrow Agent shall become effective and such successor escrow agent,
without any further act, deed or conveyance, shall become vested with all right,
title and interest to all cash and property held hereunder of such predecessor
Escrow Agent, and such predecessor Escrow Agent shall, on the written request of
Seller, Purchaser or the successor escrow agent, execute and deliver to such
successor escrow agent all the right, title and interest hereunder in and to the
Deposit of such predecessor Escrow Agent and all other rights hereunder of such
predecessor Escrow Agent. If no successor escrow agent shall have been appointed
within the effective date of the removal or resignation of the Escrow Agent, the
Escrow Agent shall be entitled to apply to a court of competent jurisdiction for
the appointment of a successor and tender into the Registry of a court of
competent jurisdiction all or a portion of the Deposit. Upon its resignation and
delivery of the Deposit as set forth above, the Escrow Agent shall be discharged
from any and all further obligations arising in connection with the escrow
contemplated by this Escrow Agreement provided, however the provisions of
Section 14 hereof shall survive any removal or resignation.
16. TERMINATION. This Escrow Agreement shall terminate on the date on
-----------
which there is no property remaining in the Deposit.
17. FURTHER ASSURANCES. From time to time on and after the date hereof,
------------------
Seller and Purchaser shall each deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do and cause to be done
such further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Escrow Agreement, to evidence compliance herewith or to secure itself that it is
protected in acting hereunder.
18. GOVERNING LAW. This Escrow Agreement shall be construed, governed,
-------------
enforced and administered in accordance with the laws of the State of Georgia,
without giving effect to the conflict of law principles thereof. Except as set
forth in Section 4 hereof, all actions and proceedings arising out of or
relating to this Escrow Agreement shall be heard and
6
determined in any state or federal court sitting in the City of Atlanta,
Georgia, and the parties hereto irrevocably submit to the jurisdiction of such
courts and waive any defense of an inconvenient forum to the maintenance of any
such action or proceeding.
19. COUNTERPARTS. This Escrow Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of the day, month and year first above written.
PURCHASER:
WebMD, Inc.
By: /s/ W. Xxxxxxx Xxxxxx
-------------------------------------
W. Xxxxxxx Xxxxxx
Executive Vice President
SELLER:
xxxxxxxxxxxxxx.xxx, Inc.
By: /s/ Xxxx X. "Court" Xxxxxxx, Jr.
-------------------------------------
Xxxx X. "Court" Xxxxxxx, Jr.
President and Chairman of the Board
of Directors
ESCROW AGENT:
SunTrust Bank, Atlanta
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
-----------------------------------
Title: Trust Officer
----------------------------------
7
