[Annex C to Amendment No. 1 to Merger Agreement]
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is entered into as of July 2, 2002
by and among Xxxxxx Group Inc., a Delaware corporation ("Xxxxxx"), Xxxxxx &
Company Limited, a U.K. limited company ("Xxxxxx UK"), Investment Technology
Group, Inc., a Delaware corporation ("ITG"), and Xxxxxxx X. Xxxxxxxxxx and Xxxx
X. Xxxxxx, as members of the Contingent Payment Rights Committee referred to
below.
Reference is made to the Agreement and Plan of Merger dated as of February
28, 2002 by and among Xxxxxx, ITG and Indigo Acquisition Corp., as amended by
Amendment No. 1 thereto dated as of even date herewith (the "Merger Agreement").
This is the Escrow Agreement referred to therein.
The parties hereto are simultaneously entering into the Custodian and
Paying Agent Agreement attached hereto as Exhibit A (the "Paying Agent
Agreement"), with The Bank of New York, a New York banking corporation, as
custodian and paying agent (the "Agent"), in order to implement certain
provisions of this Agreement.
In consideration of the foregoing premises (which constitute an integral
part of this Agreement) and mutual covenants hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Except with respect to the following terms, which shall have the respective
meanings specified below, all capitalized terms contained herein shall have the
meanings ascribed to them in the Merger Agreement:
"Advisors" has the meaning set forth in Section 3.03 hereof.
"Claims" means each and every claim asserted, or that may be asserted,
against any third party identified in the FSA Notices or any insurer or
reinsurer of Xxxxxx or any of its subsidiaries (collectively, the "Specified
Persons") by or on behalf of Xxxxxx or Xxxxxx UK in respect of any matter
referred to in the FSA Notices.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Committee" has the meaning set forth in Section 3.01 hereof.
"Escrow" means the escrow created by this Agreement for the purposes of
holding and dispersing the Escrow Assets to be administered by the Agent
pursuant to the Paying Agent Agreement.
"Escrow Account" has the meaning set forth in Section 2.01 hereof.
"Escrow Assets" means (i) the Initial Funding, (ii) any assets hereafter
acquired by the Escrow, (iii) the Recoveries, (iv) any investments purchased
with Escrow Assets or otherwise acquired by the Escrow and (v) all proceeds of
each of the foregoing (including, without limitation, any earning and gains
thereon), excluding assets paid, distributed, expended or otherwise disposed of
from time to time by the Committee, including for the payment of Escrow
Expenses.
"Escrow Expenses" means all fees, costs, expenses, obligations and
liabilities of every nature or description incurred on or after the date hereof,
directly or indirectly, by the Committee or any Member in connection with
establishing, maintaining and administering the Escrow and the Escrow Assets or
in carrying out the Committee's express or implied powers and duties under this
Agreement or applicable law, including without limitation (i) all costs and
expenses of prosecuting, appealing, negotiating, resolving, settling,
compromising or otherwise pursuing the Claims, including the fees and expenses
of Advisors, witnesses and court costs, whether incurred on a contingent, time
and materials or other basis, (ii) all compensation and reimbursements of the
Agent and of the Members for serving as Members, if any, (iii) all costs and
expenses of indemnifying the Agent pursuant to the Paying Agent Agreement or the
Members pursuant to this Agreement or otherwise prosecuting or defending any
other litigation involving the Escrow or the Committee, (iv) all reimbursements
of Xxxxxx and Xxxxxx UK pursuant to Sections 5.01 and 5.05 hereof, (v) all
amounts payable to ITG and its affiliates pursuant to Section 6.02 hereof and
(vi) all costs and expenses of distributing the Contingent Payment to the
Holders pursuant to Section 7.03 hereof.
"Escrow Reduction Amount" has the meaning set forth in Section 7.04 hereof.
"Holder" means, at any time, the holder at such time of a Contingent
Payment Right listed on the Register (as defined in the Paying Agent Agreement).
"Initial Funding" has the meaning set forth in Section 2.02 hereof.
"Members" has the meaning set forth in Section 3.01 hereof.
"Pursuit" has the meaning set forth in Section 3.03 hereof.
"Recoveries" means all amounts recovered or received in respect of Claims
by Xxxxxx UK, Xxxxxx, ITG or their respective subsidiaries less any amounts that
may be deducted therefrom pursuant to Section 6.02 hereof.
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ARTICLE II
ESCROW ACCOUNT
SECTION 2.01. Establishment of Escrow Account. Simultaneously with the
execution and delivery hereof, the Committee shall direct the Agent to establish
an account (the "Escrow Account") at its office located in New York, New York.
All funds accepted or held by the Agent pursuant to this Agreement and the
Paying Agent Agreement shall be held in the Escrow Account (and shall be deemed
part thereof) in accordance with this Agreement and the Paying Agent Agreement,
until released in accordance with the terms hereof and thereof.
SECTION 2.02. Initial Funding. Simultaneously with the execution and
delivery hereof, Xxxxxx UK shall deliver $2,365,000 in cash (the "Initial
Funding") to the Agent for deposit into the Escrow Account in accordance with
the Paying Agent Agreement.
SECTION 2.03. Investment. The Committee shall direct the Agent to invest
the Escrow Assets solely in the following: (i) obligations issued or guaranteed
by the United States of America or any agency or instrumentality thereof with a
maturity of not more than 365 days and (ii) money market funds substantially all
of whose funds are invested in the foregoing. Pursuant to the Paying Agent
Agreement, all earnings and gains on Escrow Assets, including interest and
dividends, shall be paid into the Escrow Account and shall constitute Escrow
Assets. If at any time the Committee deems it necessary that some or all of the
investments constituting Escrow Assets be redeemed or sold in order to raise
money necessary to comply with the provisions of this Agreement, the Committee
shall direct the Agent to effect such redemption or sale, in such manner and at
such time as the Committee directs in accordance with the Paying Agent
Agreement.
SECTION 2.04. Disbursements. From time to time at the written direction of
the Committee and in accordance with this Agreement and the Paying Agent
Agreement, the Committee shall direct the Agent to disburse such portion of the
Escrow Assets as the Committee so directs to pay Escrow Expenses. Pursuant to
the Paying Agent Agreement, the Agent shall keep a record of such disbursements.
From and after the date hereof, all Escrow Expenses shall be paid by the
Committee from the Escrow Account.
SECTION 2.05. Quarterly Statements. The Committee shall direct the Agent,
in accordance with the Paying Agent Agreement, as soon as practicable following
each March 31, June 30, September 30 and December 31, until the termination of
this Agreement, to deliver to the Committee a statement (a "Quarterly
Statement") setting forth: (a) the amount of the Escrow Assets; (b) the amount
of income or interest earned or accrued with respect to the Escrow Assets, if
any, during the period covered by such Quarterly Statement; and (c) the amount
of Escrow Expenses paid during such period.
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ARTICLE III
POWERS, RIGHTS AND OBLIGATIONS
OF THE CONTINGENT PAYMENT RIGHTS COMMITTEE
SECTION 3.01. Establishment of the Contingent Payment Rights Committee.
There is hereby established a Contingent Payment Rights Committee (the
"Committee"). The Committee shall consist of not less than two and not more than
five members ("Members"). The initial Members shall be Xxxxxxx X. Xxxxxxxxxx and
Xxxx X. Xxxxxx.
SECTION 3.02. Action of the Committee. The Committee may act only with the
concurrence of a majority of the Members; provided, however, that the Committee
may, by resolution adopted by a majority of the Members, designate a Chairman to
act as the administrative Member and delegate to the Chairman such authority as
the Committee may determine.
SECTION 3.03. Authority of Committee. The Committee shall have full power
and authority from and after the date hereof (i) to prosecute, appeal,
negotiate, resolve, settle, compromise or otherwise pursue the Claims, in whole
or in part, in accordance with the provisions of this Agreement, including by
litigation in trial or appellate courts, arbitration, alternative dispute
resolution, negotiation, settlement or compromise (collectively, the "Pursuit"
of Claims), (ii) to withdraw all or part of the Claims, terminate the Pursuit
thereof and terminate the Escrow, (iii) to retain advisors, including, without
limitation, counsel, accountants, financial advisors, arbitrators, mediators,
experts, consultants, investigators and other assistants (collectively,
"Advisors"), in connection with the foregoing, and to advise the Members with
respect to the rights and obligations of the parties under this Agreement and
the Paying Agent Agreement, and to determine the amount and method of
compensation to be paid to such Advisors, including on a contingent, time and
materials or other basis; provided that the Committee shall obtain the
acknowledgment of each such Advisor that the sole recourse for such Advisor's
fees and expenses shall be to the Escrow Assets, (iv) to direct the payment of
Escrow Expenses by the Agent, (v) to direct the investment of the Escrow Assets
by the Agent and (vi) to take such action as the Committee deems necessary or
appropriate to enforce the obligations of the parties under this Agreement;
provided, however, that without prior consultation with, and approval by (which
approval shall not be unreasonably withheld or delayed in the case of clause (b)
and may be withheld in its sole judgment in the case of clause (a) or (c)), ITG,
the Committee shall not (a) enter into or amend any contracts or agreements
binding on, or on behalf of, ITG or any of its affiliates, (b) replace Committee
members or (c) commence litigation against any person other than the Specified
Persons; provided, further, that the Committee shall (x) consult with ITG prior
to filing a lawsuit or an appeal with respect to, or agreeing to settle, any
Claims and (y) notify ITG (in advance to the extent practicable) of any material
change in the Pursuit of Claims. The Members shall have no other duties, rights
or obligations except as specifically set forth herein and no implied covenants
or obligations shall be read in to this Agreement against the Members.
SECTION 3.04. Replacement of Committee Members. If, prior to the Effective
Time, any Member shall resign, die or become incapacitated or shall otherwise
become unable or unwilling to act as a Member hereunder, Xxxxxx shall, subject
to ITG's approval (which approval
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shall not be unreasonably withheld or delayed), appoint a successor. If these
events occur after the Effective Time, subject to Section 3.03 hereof, a
majority of the remaining Members shall appoint a successor, or, if there is
only one remaining Member, such remaining Member shall appoint a successor or
successors. ITG acknowledges that a person who is a member of the board of
directors of Xxxxxx immediately prior to the Effective Time and who is not an
employee of ITG or any of its affiliates at the time of appointment is approved
by ITG.
SECTION 3.05. Committee Member May Be Holder. Any Member may also be a
Holder or an officer, director, employee or affiliate of a Holder and will have
all the rights of such a Holder to the same extent as if he or she were not a
Member.
SECTION 3.06. Cooperation with ITG. The Committee shall provide ITG such
information and cooperation as ITG reasonably requests in connection with
reports, forms, notifications, applications, tax returns and other documents to
be filed with the Internal Revenue Service or the U.K. Inland Revenue and other
applicable foreign, federal and state governmental agencies and such other
actions necessary to comply with the Code or other tax laws.
SECTION 3.07. Compliance with Applicable Laws, Etc. All actions required to
be taken by the Committee pursuant to this Agreement shall be taken in
compliance with all applicable statutes, rules, regulations, orders, writs,
decrees and injunctions of courts or other governmental agencies. None of the
parties shall take or cause to be taken, or omit to take or cause to omit to be
taken, any action such that (a) the Escrow shall be or become required to
register as an investment company under the Investment Company Act of 1940, as
amended, or any similar law; or (b) the Contingent Payment Rights shall be or
become required to be registered under the Securities Xxx 0000, as amended, the
Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, as
amended, or any similar law.
SECTION 3.08. Reliance. In taking any action hereunder, or in refraining
therefrom, the Committee, and the Members, shall be protected in relying upon
any notice, paper or other document believed by it or them to be genuine and
signed by the proper parties, or upon any evidence deemed by it or them to be
sufficient. In no event shall the Committee or any Member be liable to the
Holders for any action, failure to act, omission, decision, determination or
undertaking by the Committee or any Member. In no event shall the Committee or
any Member be liable to ITG or any of its affiliates for any action, failure to
act, omission, decision, determination or undertaking by the Committee or any
Member, other than in connection with a material breach of the rights of ITG or
any of its affiliates under this Agreement, which breach causes injury to ITG or
any of its affiliates; provided that ITG shall give written notice to the
Committee describing the particulars of such breach and provide at least 30
days' opportunity to cure the breach. In the event that the Committee, or the
Members, consult with Advisors in connection with its or their duties hereunder,
it and they shall be fully protected by any action, omission, decision,
determination or undertaking taken, suffered or permitted by it or them in good
faith and in accordance with the advice of such Advisors.
SECTION 3.09. Indemnification.
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(a) Xxxxxx (if prior to the Effective Time) or ITG (if after the Effective
Time) shall indemnify and hold harmless each Member against all claims, demands,
obligations, liabilities, costs and expenses, including amounts paid in
satisfaction of judgments, in compromise (so long as Xxxxxx or ITG, as
applicable, has approved such compromise, with such approval not to be
unreasonably withheld or delayed), or as fines or penalties, and fees of
Advisors (collectively, "Losses"), reasonably incurred by him or her in
connection with the defense or disposition of any action, suit or other
proceeding by one or more Holders or by any other person, whether civil or
criminal, in which he or she may be involved as a party or witness or with which
he or she may be threatened, while a Member or thereafter by reason of having
been a Member or resulting from administration of the Claims or the Escrow or
any decision, action or failure to act, (i) except to the extent that any such
Loss resulted from or arose out of a Member's decision, action or failure to act
made or taken with deliberate intent to cause substantial injury to the Holders
or with reckless disregard for the best interests of the Holders and (ii) except
that ITG and its affiliates shall have no obligation under this Section 3.09 in
respect of Losses in connection with a material breach of the rights of ITG or
any of its affiliates under this Agreement, which breach causes injury to ITG or
any of its affiliates; provided that ITG shall give written notice to the
Committee describing the particulars of such breach and provide at least 30
days' opportunity to cure the breach. Xxxxxx or ITG, as the case may be, shall
advance payments in connection with indemnification under this Section 3.09(a)
upon request of any Member; provided that such Member shall have given a written
undertaking to repay any amount advanced in the event it is subsequently
determined in a final non-appealable decision rendered by a court of competent
jurisdiction or other tribunal that such Member is not entitled to such
indemnification. The rights accruing to any Member under these provisions shall
not exclude any other right to which he or she may be lawfully entitled. The
obligations of Xxxxxx and ITG set forth in this Section 3.09 shall survive the
termination of this Agreement and the removal or resignation of any Member.
(b) Notwithstanding the foregoing, all Losses indemnified pursuant to
Section 3.09(a) hereof (including amounts advanced pursuant to the second
sentence thereof) shall be paid out of the Escrow Assets until such time as the
Escrow Assets are exhausted or the Escrow is terminated pursuant to Section 7.02
hereof before ITG shall be obligated to make any payments pursuant to Section
3.09(a) hereof.
(c) Until such time as the Escrow Assets are exhausted or the Escrow is
terminated pursuant to Section 7.02 hereof, the Committee shall cause ITG,
Xxxxxx and its affiliates to be reimbursed out of the Escrow Assets for any and
all losses, claims, costs, expenses and liabilities imposed on any of them in
connection with, arising out of or related to any action, claim, suit or other
proceeding arising from the establishment or administration of the Escrow,
including, without limitation, the operation or administration of the Claims or
the Escrow and the exercise (or the failure to exercise) by the Committee of any
power or authority under this Agreement or under applicable law; provided,
however, that the obligation for such reimbursement, as aforesaid, shall be
payable solely out of Escrow Assets; provided, further, that ITG shall not have
any such reimbursement or indemnification rights with respect to any action,
claim, suit or other proceeding against ITG alleging a breach of, or seeking
enforcement of, ITG's obligation under Section 7.03 hereof.
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(d) The Committee may purchase such insurance as it determines adequately
insures that each Member shall be indemnified against any such loss, liability
or damage pursuant to this Section 3.09, the cost of which insurance shall
constitute an Escrow Expense.
ARTICLE IV
CONTINGENT PAYMENT RIGHTS
SECTION 4.01. Allocation of Contingent Payment Rights. The Contingent
Payment Rights shall be allocated in accordance with Sections 2.6(b), 2.8(a) and
2.8(b) of the Merger Agreement. Holders of Contingent Payment Rights will not be
entitled to receive certificates evidencing the Contingent Payment Rights but
the Holders of the Contingent Payment Rights shall be as set forth in the
Register.
SECTION 4.02. Transfer of Contingent Payment Rights. Contingent Payment
Rights will not be assignable or otherwise transferable except by operation of
law (including the laws of descent and distribution) or by intestacy. No other
purported transfer of any Contingent Payment Right will be valid or will be
registered on the Register.
SECTION 4.03. Rights of Holders.
(a) No Holder shall have any title to, right to, possession of, management
of, or control of, the Escrow Assets.
(b) The Holders will have no rights to dividends or other distributions
other than their pro rata share of the distribution of the Contingent Payment,
if any, in accordance with Section 7.03 hereof, and will have no voting rights
and no liquidation preference.
SECTION 4.04. No Action by Holders. No Holder will have the right to
institute or maintain any suit, action or proceeding against Xxxxxx, Xxxxxx UK,
ITG, any of their affiliates, the Escrow, the Escrow Assets, the Committee, any
Member or the Agent to enforce, or otherwise act in respect of, the Contingent
Payment Rights or the provisions of this Agreement or the Paying Agent Agreement
or for any decision regarding the conduct or disposition of the Claims,
including, without limitation, any decision to dismiss, settle or cease
prosecuting any litigation at any time without obtaining any cash or other
recovery.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.01. Cooperation. Xxxxxx and Xxxxxx UK shall use commercially
reasonable efforts to provide the Committee and its Advisors with such access,
at normal business hours
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and upon reasonable notice, to their books and records relating to the Claims
and to their employees, agents, attorneys and independent accountants, including
in connection with testimony in litigation and factual investigation, all to the
extent reasonably requested by the Committee for the purpose of performing their
duties and exercising their powers hereunder. Xxxxxx and Xxxxxx UK shall be
entitled to reimbursement by the Escrow for reasonable out-of-pocket expenses
incurred in connection therewith.
SECTION 5.02. Powers-of-Attorney. Xxxxxx and Xxxxxx UK shall execute and
deliver to the Committee powers-of-attorney in form reasonably satisfactory to
the Committee to enable the Committee to file pleadings and execute any
documents on behalf of Xxxxxx and Xxxxxx UK necessary or appropriate to enable
the Committee to prosecute the Claims or otherwise necessary or useful in the
Pursuit of Claims in compliance with this Agreement, in the name of Xxxxxx and
Xxxxxx UK and without further consent or action by Xxxxxx, Xxxxxx UK, ITG or
their respective affiliates. To the extent permitted by applicable law, and to
the extent that the Pursuit of the Claims is not jeopardized, the Committee
shall prosecute all Claims on behalf of and in the name of Xxxxxx UK, and, if
the Committee deems it necessary or appropriate, ITG and its affiliates shall
cause Xxxxxx to assign its Claims to Xxxxxx UK.
SECTION 5.03. Pursuit of Claims. ITG and its affiliates will use
commercially reasonable efforts not to take any action or fail to take any
action that is reasonably expected to materially adversely affect the Claims or
the Pursuit of the Claims in compliance with this Agreement; provided that the
foregoing shall in no way affect ITG's rights under Section 3.03 hereof. ITG and
its affiliates agree not to disclose any non-public information with respect to
the Claims to any third parties except (i) to Advisors of ITG and its affiliates
who are advised of the confidential nature of such information and agree to
abide by this provision in respect of such non-public information, (ii) insofar
as such disclosure is compelled by any Governmental Entity or applicable law or
(iii) such information which is or becomes part of the public domain without
breach by ITG and its affiliates of this Section 5.03.
SECTION 5.04. Settlements. In the event of any settlement or compromise of
any Claim agreed to by the Committee, ITG agrees that it will not unreasonably
withhold such release by ITG and its affiliates as may be required by the other
party to such settlement or compromise in connection with such settlement or
compromise.
SECTION 5.05. Reimbursement. The Committee shall cause Xxxxxx and Xxxxxx UK
to be reimbursed for any fees and expenses of the type that would constitute
Escrow Expenses incurred by them after the date hereof and prior to the
Effective Time in respect of investigation or Pursuit of Claims and any
investment banking fees payable in respect of the Contingent Payment.
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ARTICLE VI
RECOVERIES ON CLAIMS
SECTION 6.01. Recoveries To Be Deposited. All Recoveries in respect of the
Claims, promptly upon receipt thereof, shall be deposited into the Escrow
Account, net of the taxes referred to in Section 6.02 hereof, and any such net
Recoveries, whether or not deposited, shall constitute Escrow Assets.
SECTION 6.02. Taxes. ITG, Xxxxxx, Xxxxxx UK and their affiliates shall be
indemnified and held harmless, on an after-tax basis, for any and all foreign,
federal, state and local taxes (including value added and withholding taxes)
which are paid or payable in connection with, or in any way relating to, or
arising out of the Contingent Payment Rights, the Escrow Assets, the Contingent
Payment or the distribution thereof or the Escrow Reduction Amount or the
distribution thereof, determined without regard to any refunds, credits,
carryforwards or other tax attributes which could or do reduce or otherwise
off-set taxes paid or payable, other than deductions for the Specified Losses,
which ITG, Xxxxxx, Xxxxxx UK and their affiliates shall use commercially
reasonable efforts to apply against any Recovery or income on the investment of
Escrow Assets. In accordance with the Paying Agent Agreement, the Agent shall
report to Xxxxxx UK and, prior to the Effective Time, ITG, as of the end of each
fiscal quarter, all income earned from the investment of the Escrow Assets. The
Committee shall direct the Agent to pay from the Escrow Assets any taxes payable
by ITG, Xxxxxx, Xxxxxx UK or any of their affiliates on income earned from the
investment of Escrow Assets and any indemnification payments pursuant to this
Section 6.02. ITG and its affiliates shall be entitled to, and prior to the
Effective Time Xxxxxx and Xxxxxx UK shall, deduct from any Recoveries the
indemnification payments pursuant to this Section 6.02 prior to deposit into the
Escrow Account.
ARTICLE VII
TERMINATION, DELIVERY AND DISTRIBUTION
SECTION 7.01. Termination of Merger Agreement. In the event that the Merger
Agreement is terminated under Section 7.1 thereof prior to the Effective Time,
the Committee shall in accordance with the Paying Agent Agreement direct the
Agent to immediately pay all Escrow Expenses, if any, that have been incurred
and have not been paid, and deliver the remaining Escrow Assets, to Xxxxxx UK,
and this Agreement and the Escrow shall terminate.
SECTION 7.02. Delivery of Escrow Assets to Xxxxxx UK; Termination of the
Escrow. Following the earliest of (i) the final settlement or other final
resolution of the Claims, (ii) a final determination by the Committee to cease
Pursuit of all Claims and (iii) the fourth anniversary of the Effective Time
(which date shall be extended in the event of any outstanding claims of
indemnification or reimbursement under Section 3.09, 5.01, 5.05 or 6.02 hereof),
the Committee shall discharge all of the Escrow's obligations, including by
directing the Agent to pay the Escrow Expenses and re-
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serve for the payment of such costs and expenses of distributing the Contingent
Payments pursuant to the Paying Agent Agreement. Following such discharge, the
Committee shall direct the Agent to liquidate all remaining Escrow Assets, if
any, and deliver the proceeds in cash to Xxxxxx UK. Following such delivery to
Xxxxxx UK, the Escrow shall terminate. At no time shall there be any
distribution of Escrow Assets to the Holders.
SECTION 7.03. Delivery of Contingent Payment to Agent; Distribution to
Holders. Promptly following the termination of the Escrow pursuant to Section
7.02 hereof, ITG shall deliver to the Agent cash in an amount equal to the
lesser of (i) the amount of cash, if any, delivered to Xxxxxx UK by the Agent
pursuant to Section 7.02 hereof plus the amount of any Recoveries which were not
deposited in the Escrow Account net of any amounts deducted therefrom pursuant
to Section 6.02 hereof, and (ii) $12,465,000 minus the Escrow Reduction Amount,
if any. Pursuant to the Paying Agent Agreement, the Agent shall distribute the
amount so received by it from ITG to the Holders, without interest, pro rata
based on the number of Contingent Payment Rights allocated to each such Holder
on the Register. At no time shall there be any distribution of the Contingent
Payment except pursuant to the preceding sentence and in compliance with the
Paying Agent Agreement. Following such distribution by the Agent, this Agreement
and the Paying Agent Agreement shall terminate. The distribution of any
Contingent Payment shall be in compliance with applicable laws.
SECTION 7.04. Pre-Closing Recoveries. Notwithstanding anything to the
contrary in the third sentence of Section 7.03 hereof, if any Recoveries are
received prior to the Effective Time, the Committee shall be entitled to direct
the Agent to withdraw from the Escrow Account (i) the amount of such Recoveries
less Escrow Expenses incurred prior to the Effective Time plus (ii) such portion
of the Initial Funding as the Committee determines (provided that in no event
shall such amount be in excess of the amount that would leave $500,000 in the
Escrow Account prior to the Effective Time) (the sum of clauses (i) and (ii),
the "Escrow Reduction Amount"), and deliver the Escrow Reduction Amount in cash
to Xxxxxx UK prior to the Effective Time. An amount equal to the Escrow
Reduction Amount, if any, shall be delivered by ITG as part of the Cash Merger
Consideration.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy upon confirmation of receipt, (b) on the
first business day following the date of dispatch if delivered by a nationally
recognized next-day courier service, or (c) on the third business day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice.
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(a) if to ITG or to Xxxxxx or Xxxxxx UK after the Effective Time, to:
Investment Technology Group, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Xxxxxx or Xxxxxx UK prior to the Effective Time, to:
Xxxxxx Group Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(c) if to the Committee or any Member, to it, him or her:
c/x Xxxxxx Group Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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(d) if to the Holders, then to them at their respective addresses set forth
in the Register.
SECTION 8.02. Counterparts. This Agreement may be executed in
counterparts, each of which shall be considered one and the same agreement and
shall become effective when both counterparts have been signed by each of the
parties and delivered to the other party, it being understood that both parties
need not sign the same counterpart.
SECTION 8.03. Entire Agreement; No Third Party Beneficiaries.
This Agreement and the Paying Agent Agreement (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof and (b)
are not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
SECTION 8.04. Creditors of Xxxxxx UK. The Escrow Assets shall
be subject to the claims of the creditors of Xxxxxx UK.
SECTION 8.05. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 8.06. Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.
SECTION 8.07. Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 8.08. Headings. Sections, subheadings and other
headings used in this Agreement are for convenience only and shall not affect
the construction of this Agreement.
SECTION 8.09. Amendment and Modification. This Agreement may
be amended or modified only by a subsequent writing signed by each of the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duty authorized as of the
day and year first above written.
XXXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Chairman and Chief Executive Officer
XXXXXX & COMPANY LIMITED
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman
MEMBERS OF THE CONTINGENT PAYMENT RIGHTS COMMITTEE:
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
/s/ Xxxx X. Xxxxxx
----------------------------------------------------
Name: Xxxx X. Xxxxxx
