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EXHIBIT NO. 10.3
ESCROW AGREEMENT
AGREEMENT made as of July 30, 1997 by and among Nextera Enterprises,
L.L.C., a Delaware limited liability company ("Buyer"), Symmetrix, Inc., a
Massachusetts corporation (the "Company"), the holders of the Company's capital
stock set forth on Exhibit A attached hereto (herein collectively referred to as
the "Stockholders" and individually as a "Stockholder") and certain holders of
options to purchase shares of the Company's capital stock set forth on Exhibit B
attached hereto (herein collectively referred to as the "Optionholders " and
individually as an "Optionholder;" the Stockholders and the Optionholders are
collectively referred to as the "Holders" and individually as a "Holder") and
State Street Bank and Trust Company, as escrow agent (the "Escrow Agent").
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock Purchase
Agreement") dated as of July 30, 1997 by and among Buyer, the Company and the
Holders, Buyer is acquiring the all outstanding shares of the Company's capital
stock from the Stockholders and the Company is canceling the options to purchase
capital stock of the Company held by the Optionholders; and
WHEREAS, the Holders have agreed to indemnify Buyer against breaches
of the representations, warranties and covenants made by the Company and certain
of the Holders in the Stock Purchase Agreement and against certain other matters
as specified in Section 10 of the Stock Purchase Agreement; and
WHEREAS, to secure payment of certain of the Holders' indemnification
obligations, ONE MILLION SEVEN HUNDRED AND FIFTY THOUSAND DOLLARS ($1,750,000)
(such amount, the "Escrow Amount") is being deposited, pursuant to Section 1.3
of the Stock Purchase Agreement, in escrow to be held as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises of the parties herein contained, and other good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Establishment of Escrow: Investment. Buyer has herewith deposited
the Escrow Amount with the Escrow Agent on the date of the Closing. The
consideration deposited hereunder, including any additions to or earnings on the
same, shall be referred to as the "Escrow Fund." The Escrow Fund shall be held
in escrow in an account designated as the Symmetrix, Inc. Escrow Account or an
account having such other similar designation, subject to the terms and
conditions set forth herein. Xxxxxxx Xxxxx shall serve as the exclusive
representative of the Holders with respect to the Escrow Fund and this Agreement
(the "Escrow Representative"). If, for any reason, the Escrow Representative
shall be either unable or unwilling to serve, a successor Escrow Representative
shall be appointed by written consent of all Holders and all references to the
Escrow Representative shall be deemed to include such successor. Unless
otherwise directed in writing by the Escrow Representative and Buyer, the Escrow
Agent shall invest the cash held in the Escrow Fund in any State Street Insured
Money Market Account, U.S. Government obligations, bank certificates of deposit
(up to the maximum insured amount of any such deposit) or repurchase agreements
secured by U.S. Government obligations, (individually, an "Investment"
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and collectively, the "Investments"), and the Escrow Agent shall not be
responsible for any loss incurred upon any such investment made in good faith.
Unless otherwise directed in writing by the Escrow Representative and Buyer, the
Escrow Agent shall not invest all or any portion of the Escrow Fund in any
Investment if the maturity date of such Investment is later than the Termination
Date (as defined below).
2. Amounts Earned on Escrow Fund: Tax Matters. All amounts earned,
paid or distributed with respect to the Escrow Fund (whether interest, dividends
or otherwise) shall become a part of the Escrow Fund, shall be held hereunder
upon the same terms as the original Escrow Fund and shall be distributed
together with the underlying portion of the original Escrow Fund pursuant to the
terms of this Agreement. The parties agree that to the extent permitted by
applicable law, including Section 46813(g) of the Internal Revenue Code of 1986,
as amended, the Buyer will include all amounts earned on the Escrow Fund in its
gross income for federal, state and local income tax (collectively, "income
tax") purposes and pay any income tax resulting therefrom.
3. Claims Against Escrow Fund. At any time or times prior to the
expiration of this Agreement, Buyer may make claims against the Escrow Fund for
indemnification pursuant to and in accordance with Section 10 of the Stock
Purchase Agreement. Buyer shall notify the Escrow Representative and the Escrow
Agent in writing prior to the expiration of this Agreement of each such claim,
including a summary of the amount of and bases for such claim. If the Escrow
Representative shall dispute such claim, the Escrow Representative shall give
written notice thereof to Buyer and to the Escrow Agent within thirty (30) days
after receipt of notice of Buyer's claim, in which case the Escrow Agent shall
continue to hold the Escrow Fund in accordance with the terms of this Agreement;
otherwise, such claim shall be deemed to have been acknowledged to be payable
out of the Escrow Fund in the full amount thereof and the Escrow Agent shall use
its best efforts to pay such claim in immediately available funds to Buyer
within three (3) business days after expiration of said thirty day period or as
soon thereafter as possible. If the amount of the claim exceeds the value of the
Escrow Fund, the Escrow Agent shall have no liability or responsibility for any
deficiency.
4. Disputed Claims.
(a) If the Escrow Representative shall dispute an indemnification
claim of Buyer as above provided, the Escrow Agent shall set aside a portion of
the Escrow Fund sufficient to pay said claim in full (the "Set Aside Amount").
If Buyer notifies the Escrow Agent in writing that it has made out-of-pocket
expenditures in connection with any such disputed claim, and provides paid
receipts for such expenditures, in addition to expenditures included in the Set
Aside Amount, an amount equal to such additional expenditures shall be added to
the Set Aside Amount.
(b) If the disputed indemnification claim has not been resolved
or compromised within sixty (60) days after the Escrow Representative sends
notice of dispute of the same, or in the event of a third-party claim or suit,
within fifteen (15) days after its resolution or compromise, said
indemnification claim shall be referred to the American Arbitration Association,
to be settled
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by binding arbitration in Boston, Massachusetts, in accordance with the
commercial arbitration rules of the Association. The fees and expenses of the
arbitrator shall, as between the Holders and Buyer, be borne by them in such
proportions as shall be determined by the arbitrator, or if there is no such
determination, then such fees and expenses shall be borne equally by the Holders
and Buyer. In no event shall the Escrow Agent be responsible for any fee or
expense of any party to any arbitration proceeding. The determination of the
arbitrator as to the amount, if any, of the indemnification claim which is
properly allowable shall be conclusive and binding upon the parties hereto and
judgment may be entered thereon in any court having jurisdiction thereof,
including, without limitation, any Superior Court in the Commonwealth of
Massachusetts. The Escrow Agent shall use its best efforts to make payment of
such claim, as and to the extent allowed, to Buyer out of the Set Aside Amount
(or if insufficient, out of the Escrow Fund) within three (3) business days
following said determination or as soon thereafter as possible.
(c) Notwithstanding Section 4(b), if a disputed indemnification
claim has not been resolved or compromised as of the Termination Date (as
hereinafter defined), and such claim does not involve a third-party claim or
suit, Buyer and the Escrow Representative shall continue to negotiate in good
faith a settlement of such claims for a period of ten (10) days. If, after the
expiration of such ten-day period, such indemnification claim still has not been
resolved or compromised, such claim shall be settled in accordance with the
arbitration provisions set forth in Section 4(b).
(d) It is understood and agreed that should any dispute arise
under this Section 4, the Escrow Agent, upon receipt of written notice of such
dispute or claim by the Escrow Representative, is authorized and directed to
retain in its possession without liability to anyone, the Set Aside Amount
relating to such dispute plus any expenditures of Buyer made pursuant to Section
4(a) until such dispute shall have been settled pursuant to this Section 4. The
Escrow Agent may, but shall be under no duty whatsoever to, institute or defend
any legal proceedings which relate to the Escrow Fund.
5. Termination. This Agreement shall terminate on the date that the
Escrow Fund is reduced to zero as the result of payments by the Escrow Agent to
Buyer in accordance with the provisions of Section 3 or Section 4. If, however,
the Escrow Fund has not been reduced to zero as of the date that is one (1) year
following the date of this Agreement (the "Termination Date") and there are no
outstanding indemnification claims on the Termination Date, this Agreement shall
terminate and the Escrow Agent shall distribute the amount remaining in the
Escrow Fund to the Holders in accordance with their pro rata interest in the
Escrow Fund as set forth in Exhibit C attached hereto; otherwise this Agreement
shall continue in effect until all indemnification claims Buyer has made
pursuant to Section 3 hereof on or prior to the Termination Date shall have been
disposed of. As of the Termination Date, an amount of the Escrow Fund adequate
to cover all disputed and undisputed claims made by Buyer pursuant to Section 3
hereof, plus an additional twenty percent (20%) of any such amount to cover
expenses of Buyer associated with such claims, will be held by the Escrow Agent,
and the Escrow Agent shall distribute on the Termination Date the balance, if
any, of the Escrow Fund to the Holders in accordance with their pro rata
interest in the Escrow Fund as set forth in Exhibit C attached hereto. At such
time as all remaining indemnification claims hereunder have been resolved and
the Escrow Agent has
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received a written notice executed by Buyer and the Escrow Representative, or
notification of a determination of an arbitrator pursuant to Section 4(b), to
that effect and any amounts to be distributed to Buyer in connection therewith
have been so distributed, the Escrow Agent shall distribute the remaining Escrow
Fund, if any, to the Holders in accordance with their pro rata interest in the
Escrow Fund.
6. The Escrow Agent. Notwithstanding anything herein to the contrary,
the Escrow Agent shall promptly dispose of all or any part of the Escrow Fund as
directed by a writing signed by the Escrow Representative and Buyer. The
reasonable fees and expenses of the Escrow Agent, including legal fees incurred
in connection with the preparation of this Agreement and including the fees and
disbursements of its counsel, if any, in connection with its performance of this
Agreement shall be paid from the income on the Escrow Fund and, if and to the
extent not so paid, shall be borne equally by the Holders and Buyer. The Escrow
Agent shall be entitled to reimbursement on demand for all expenses incurred in
connection with the administration of this Agreement or the escrow created
hereby which are in excess of its compensation for normal services hereunder,
including without limitation, payment of any legal fees and expenses incurred by
the Escrow Agent in connection with resolution of any dispute hereunder. The
Escrow Agent, its directors, officers and employees shall not be liable for any
act or omission to act under this Escrow Agreement except for its own gross
negligence or willful misconduct. The Escrow Agent shall not be liable for, and
Buyer, the Company and the Holders shall jointly and severally indemnify the
Escrow Agent against, any losses or claims arising out of or any action taken or
omitted in good faith hereunder and upon the advice of counsel, including
in-house counsel. The Escrow Agent may decline to act and shall not be liable
for failure to act if in doubt as to its duties under this Agreement. The Escrow
Agent may act upon any instrument or signature believed by it to be genuine and
shall have no responsibility for determining the accuracy thereof, and may
assume that any person purporting to give any notice or instruction hereunder,
reasonably believed by it to be authorized, has been duly authorized to do so.
The Escrow Agent's duties shall be determined only with reference to this Escrow
Agreement and applicable laws, and the Escrow Agent is not charged with
knowledge of or any duties or responsibilities in connection with any other
document or agreement, including the Stock Purchase Agreement. The Escrow Agent
shall not be obligated to take any legal or other action hereunder which might
in its judgment involve any expense or liability unless it shall have been
furnished with acceptable indemnification. In no event shall the Escrow Agent be
liable for indirect, punitive, special or consequential damages.
Buyer, the Company and the Holders jointly and severally, agree to
assume any and all obligations imposed now or hereafter by any applicable tax
law with respect to the payment of Escrow Funds under this Agreement, and to
indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses, that may be
assessed against the Escrow Agent in any such payment or other activities under
this Agreement. Buyer, the Company and the Holders 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 Agreement. Buyer, the Company and the Holders, jointly
and severally, agree to indemnify and hold the Escrow Agent harmless from any
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liability on account of taxes, assessments or other governmental charges,
including without limitation the withholding or deduction or the failure to
withhold or deduct the same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which the
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees
and expenses), interest and penalties.
The Escrow Agent shall have the right at any time to resign hereunder
by giving written notice of its resignation to the parties hereto, at the
addresses set forth herein or at such other address as the parties shall
provide, at least thirty (30) business days prior to the date specified for such
resignation to take effect. If the parties hereto do not designate a successor
escrow agent within said thirty (30) business days, the Escrow Agent may apply
to a court of competent jurisdiction for appointment of a successor escrow
agent. The provisions of paragraph 6 shall survive termination of this
Agreement. Upon the effective date of such resignation, all cash and other
payments and all other property then held by the Escrow Agent hereunder shall be
delivered by it to such successor escrow agent or as otherwise shall be
designated in writing by the parties hereto.
In the event that the Escrow Agent should at any time be confronted
with inconsistent or conflicting claims or demands by the parties hereto, the
Escrow Agent shall have the right but not the duty to interplead said parties in
any court of competent jurisdiction and request that such court determine such
respective rights of the parties with respect to this Escrow Agreement, and upon
doing so, the Escrow Agent shall be released from any obligations or liability
to either party as a consequence of any such claims or demands.
The Escrow Agent may execute any of its powers or responsibilities
hereunder and exercise any rights hereunder, either directly or by or through
its agents or attorneys including in-house counsel. Nothing in this Escrow
Agreement shall be deemed to impose upon the Escrow Agent any duty to qualify to
do business or to act as fiduciary or otherwise in any jurisdiction other than
the State of Massachusetts. The Escrow Agent shall not be responsible for and
shall not be under a duty to examine into or pass upon the validity, binding
effect, execution or sufficiency of this Escrow Agreement or of any agreement
amendatory or supplemental hereto.
7. Miscellaneous. This Agreement shall be construed under and governed
by the laws of the Commonwealth of Massachusetts and shall inure to the benefit
of and be binding upon the successors, assigns, heirs and personal
representatives of the parties hereto.
8. Counterparts. This Escrow Agreement may be executed in one or more
counterparts, all of which documents shall be considered one and the same
document.
9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given when
received, if personally delivered or sent by facsimile transmission, or three
(3) days after deposited in the U.S. mails for delivery by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
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TO BUYER: Nextera Enterprises, L.L.C.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
With a copy to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx, Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
TO THE COMPANY: Symmetrix, Inc.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
With a copy to: Xxxxx Xxxxxx, Esq.
General Counsel
Symmetrix, Inc.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
and a copy to: Xxxxxxx X. Xxxxxxx
Xxxxxx & Xxxxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
TO ANY HOLDER: Xxxxxx X. Xxxxx
Symmetrix, Inc.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
TO ESCROW AGENT: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department,
Fifth Floor
Symmetrix, Inc. Escrow Account
Facsimile: (000) 000-0000
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Addresses may be changed by written notice given pursuant to this Section. Any
notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
10. Certification of Tax Identification Number. The parties hereto
agree to provide the Escrow Agent with a certified tax identification number by
signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons)
to the Escrow Agent prior to the date on which any income earned on the
investment of the Escrow Funds is credited to such Escrow Funds. The parties
hereto understand that, in the event their tax identification numbers are 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 Escrow Fund.
11. Consent to Jurisdiction and Service. Buyer, the Company and the
Holders hereby absolutely and irrevocably consent and submit to the jurisdiction
of the courts in the Commonwealth of Massachusetts and of any Federal court
located in said Commonwealth in connection with any actions or proceedings
brought against Buyer, the Company and the Holders by the Escrow Agent arising
out of or relating to this Escrow Agreement. In any such action or proceeding,
Buyer, the Company and the Holders 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 Buyer, the Company and the
Holders, as the case may be, at their respective addresses in accordance with
Section 9 hereof.
12. Force Majeure. Neither Buyer, the Company, the Holders nor Escrow
Agent shall 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.
13. Modifications. This Agreement may not be altered or modified
without the express written consent of the parties hereto. No course of conduct
shall constitute a waiver of any of the terms and conditions of this Escrow
Agreement, unless such waiver is specified in writing, and then only to the
extent so specified. A waiver of any of the terms and conditions of this Escrow
Agreement on one occasion shall not constitute a waiver of the other terms of
this Escrow Agreement, or of such terms and conditions on any other occasion.
14. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by a
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 whether or not such reproduction was made by a party in the
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regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to
be executed by their duly authorized representatives, as of the date first
written above.
BUYER:
NEXTERA ENTERPRISES, L.L.C.
By: /s/ XXXXXXX X. XXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Treasurer
THE COMPANY:
SYMMETRIX, INC.
By: /s/ XXXXXXX XXXX XXXXX
---------------------------------
Name: Xxxxxxx Xxxx Xxxxx
Title: Chief Operating Officer
HOLDERS:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
By: /s/ XXXX XXXXX
---------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
FAIRVIEW MEDICAL SERVICES
CORPORATION
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
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/s/ XXXX XXXXXX
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Xxxx Xxxxxx
/s/ XXXXXX XXXXXXX
------------------------------------
Xxxxxx Xxxxxxx
/s/ XXXXXXX XXXX
------------------------------------
Xxxxxxx Xxxx
/s/ XXXXXXX XXXXX
------------------------------------
Xxxxxxx Xxxxx
/s/ XXXX XXXX
------------------------------------
Xxxx Xxxx
/s/ XXX XXXXX
------------------------------------
Xxx Xxxxx
/s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
/s/ XXX XXXXXX
------------------------------------
Xxx Xxxxxx
/s/ XXXX XXXXXXX
------------------------------------
Xxxx Xxxxxxx
/s/ XXXX XXXX
------------------------------------
Xxxx Xxxx
ESCROW AGENT:
STATE STREET BANK AND TRUST
COMPANY, as Escrow Agent
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
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