EXHIBIT 2.3
DATED 2 MARCH 1998
------------------
ARIS CORPORATION
and
XXXXXX & CO
and
THE PERSONS whose names are set out in Schedule 1
and
XXXXX XXXXXX SMOUHA ADDA
____________________________
ESCROW AGREEMENT
IN RELATION TO THE SALE AND PURCHASE OF
THE ENTIRE ISSUED SHARE CAPITAL OF
BAREFOOT COMPUTER TRAINING LIMITED
BY AN AGREEMENT DATED 28 FEBRUARY 1998
_____________________________
XXXXX & CO
AN INTERNATIONAL LAW FIRM
00 Xxxxxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
Ref: KMW/CBH/9800503
THIS ESCROW AGREEMENT (the "Escrow Agreement"), is made as a deed on 2 March
1998
BETWEEN:
(1) ARIS CORPORATION, a corporation organised and existing under the laws of
Washington, U.S.A, and having its principal place of business at Fort Dent
Two, Suite 250, 0000 Xxxx Xxxx Xxx, Xxxxxxx Xxxxxxxxxx 00000, Xxxxxx Xxxxxx
of America ("ARIS");
(2) XXXXXX & CO, registered in England with registered number 36695 and whose
registered office is at 00 Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the "Escrow
Agent");
(3) THE PERSONS whose names and addresses are set out in Schedule 1 (the
"Sellers"); and
(4) XXXXX XXXXXX XXXXXX XXXX of 00 Xxxxxx Xxxxxx, Xxxxxx XX0 0XX ("Mr
Adda"),
together "the Parties".
RECITALS
A. ARIS and the Sellers have entered into an agreement dated 28 February 1998
("the Agreement") whereby ARIS has agreed to purchase all of the issued
shares of Barefoot Computer Training Limited ("the Company").
B. It is an obligation of the Sellers under the Agreement that this Escrow
Agreement be entered into with ARIS.
C. Copies of this Escrow Agreement, the Tax Covenant (as defined in the
Agreement) and the Agreement have been delivered to the Escrow Agent, and
the Escrow Agent is willing to act as escrow agent hereunder.
NOW THIS DEED WITNESSES as follows:-
1. INTERPRETATION
1.1 Save as expressly provided in this Escrow Agreement, words and expressions
shall have the same meanings as in the Agreement.
1.2 The section headings contained in this Escrow Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
2. THE ESCROW FUND
2.1 As soon as practicable after Completion of the transactions contemplated by
the Agreement, each of the Sellers shall deliver to the Escrow Agent share
certificates in respect of the number of Escrowed Shares set out opposite
his name in Schedule 1, such share certificates endorsed to effect transfer
of such Escrowed Shares to ARIS.
2.2 Such Escrowed Shares shall comprise the escrow fund (the "Escrow Fund"),
to be held, administered and disposed of as hereinafter provided.
2.3 The share certificates referred to in this clause 2 and any share
certificates issued by ARIS in accordance with clause 6.3 below shall
hereinafter be referred to as the "Share Certificates".
3. Legal and Beneficial Owners
3.1 Subject to the terms and conditions of this Escrow Agreement, each Seller
shall be the legal and beneficial owner of the number of Escrowed Shares
set out opposite his name in Schedule 1 and shall be entitled to exercise
the voting rights attaching thereto.
3.2 Except as might be occasioned by the death of a Seller, and then only by
will or pursuant to the laws of intestate succession, none of the Sellers
shall sell, assign or transfer his rights in the Escrow Fund or the
Escrowed Shares (or any of them) without obtaining the prior written
consent of ARIS; provided always, that the Sellers shall have the right to
sell the Escrowed Shares in the circumstances described in clause 4.
4. CONVERSION
At any time the Escrowed Shares remain in the Escrow Fund, the Sellers (or
any of them) shall have the right (subject to any restrictions on sale
under U.S. securities laws in relation to the Escrowed Shares) to sell the
Escrowed Shares provided that, until termination of escrow as described in
clause 8, any proceeds of sale of such Escrowed Shares ("the Escrowed
Cash") shall be held by the Escrow Agent as part of the Escrow Fund in
substitution for the Escrowed Shares so sold.
5. SELLER'S REPRESENTATIVE
5.1 By the execution and delivery of this Escrow Agreement, each of the Sellers
hereby constitutes and appoints Mr Adda, and Mr Adda hereby accepts his
appointment, as representative of all of the Sellers hereunder (the
"Sellers' Representative"), with full power and authority to receive, give
or make all notices, objections, directions and other communications to be
received, given or made by or on behalf of the
Sellers hereunder, to take any action or give any consents or waivers which
may be taken or given by or on behalf of the Sellers hereunder, to bind and
act on behalf of the Sellers with respect to any matters which may arise
under or in connection with this Escrow Agreement, and to otherwise act for
and on behalf of the Sellers as provided herein.
5.2 If the Sellers' Representative should die or become incapacitated or be
otherwise unable or unwilling to act as the Sellers' Representative, the
Escrow Agent shall so notify the Sellers upon the Escrow Agent becoming
aware of any such event. Any Seller shall be entitled to nominate any
person as a successor Sellers' Representative, by notice of such nomination
to the Escrow Agent in such fashion as the Escrow Agent shall direct. If
only one person is so nominated during the thirty (30) calendar days
following receipt or deemed receipt of such notice by the last Seller to
receive it, the person nominated shall thereupon be the Sellers'
Representative. If more than one person is so nominated, the Sellers shall
thereupon elect the successor Sellers' Representative, each Seller having a
proportionate vote equivalent to his pro rata interest in the Escrow Fund.
6. CLAIMS AGAINST THE ESCROW FUND
6.1 The Escrow Fund shall be retained in escrow, on the terms herein set out,
to protect ARIS, its subsidiary, affiliated or related companies and
corporations, their officers, directors, agents and employees, and their
representatives, successors and assigns against and in respect of any and
all losses, damages, charges and expenses of any kind whatsoever
(including, without limitation, all out-of-pocket expenses, including
lawyers' and accountants' fees and expenses) arising out of or in
connection with:
(a) any breach of any of the Warranties;
(b) Property Liability;
(c) Taxation; and/or
(d) the Tax Covenant.
6.2 If ARIS shall claim that it has suffered a loss as to which it is entitled
to reimbursement hereunder, ARIS shall notify the Escrow Agent and the
Sellers' Representative, such notification to be made in a manner
subsequently set forth in this Escrow Agreement. Such notice shall describe
the claim by ARIS and shall specify the loss, damage, charge or expense
(including, without limitation, out-of-pocket expenses, including lawyers'
and accountants' fees and expenses) incurred by ARIS in connection with
such claim. If such loss, damage, charge or expense is liquidated in
amount, the notice shall so state and shall also set forth the manner in
which the loss, damage, charge or expense has been calculated. Such
liquidated
amount shall be deemed to be the amount of the claim of ARIS against the
Escrow Fund. If the amount is not liquidated, the notice shall so state,
and, in such event, a claim shall be deemed asserted against the Escrow
Fund on behalf of ARIS, but no payment shall be made on account thereof
until the amount of such claim is liquidated and notice in the form
described above for loss, damage, charge or expense liquidated in amount
has been given by ARIS to the Escrow Agent and to the Seller's
Representative. Such liquidated amount shall be deemed to be the amount of
the claim of ARIS against the Escrow Fund.
6.3 If the Sellers' Representative shall not, within thirty (30) calendar days
after receipt or deemed receipt of such notice, advise ARIS and the Escrow
Agent, in writing, that he denies the right to reimbursement in respect of
such claim, the Escrow Agent is, at the end of such period, authorized to
release and shall release (at once if said claim is liquidated, or
subsequently at such time as any claim has become liquidated) to ARIS Share
Certificates for the total number of Escrowed Shares the "Value" (as
defined below) of which is equal to or more than the amount of ARIS' claim
or, to the extent that no Escrowed Shares remain in the Escrow Fund, the
Escrowed Cash; provided however, that the Escrow Agent shall ensure that
the Share Certificates which are released to ARIS in accordance with this
clause 6.3 as nearly as possible reflect a division between the Sellers of
the value of ARIS' claim pro rata to the Sellers' respective interests in
the Escrow Fund. The "Value" for the purposes of this Escrow Agreement
means the closing quotation for the Escrowed Shares on 27 February 1998 on
the Nasdaq National Market.
If the Escrow Agent releases to ARIS Share Certificates in respect of a
number of Escrowed Shares the "Value" of which exceeds the amount of ARIS'
claim, ARIS shall issue new Share Certificates in the stock of ARIS for the
excess number of Escrowed Shares, one Share Certificate to be issued to
each Seller in accordance with his pro rata interest in the Escrow Fund;
provided however, that each such Seller shall immediately endorse any Share
Certificate issued to him under this clause 6.3 to effect transfer of the
Escrowed Shares represented thereby to ARIS and shall thereupon deliver the
same to the Escrow Agent to be held in escrow in accordance with the terms
hereof.
6.4 If the Sellers' Representative shall notify ARIS and the Escrow Agent, in
writing, that he disputes any claim made against the Escrow Fund, ARIS and
the Sellers shall endeavour to settle or compromise said claim. In the
absence of any such settlement or compromise being reached within thirty
(30) calendar days after receipt or deemed receipt of such notice by ARIS,
such claim may be submitted by ARIS or the Sellers to an independent firm
of Chartered Accountants for final settlement, whereupon the Parties shall
be entitled to make reasonable representations to such independent firm of
chartered accountants with respect to such claim. Such firm of Chartered
Accountants shall be appointed by agreement between the parties but in
default of agreement within five (5) business days of ARIS making a
proposal to the Sellers' Representative (or vice versa) shall be
appointed upon the request of either of them by the President for the time
being of the Institute of Chartered Accountants in England and Wales. Any
liability established by reason of such compromise or settlement shall be
satisfied from the Escrow Fund in the same manner set forth in clause 6.3
above with respect to undenied claims by ARIS.
6.5 ARIS will as soon as reasonably practicable give written notice to the
Sellers' Representative of the relevant facts of any claim of any third
party which may reasonably be expected to result in a claim by ARIS against
the Escrow Fund. The Sellers' Representative shall have the right, at his
expense and at no expense to ARIS, to participate in the defence of such
claim (with counsel selected by him and reasonably satisfactory to ARIS)
provided the Sellers' Representative shall consult and cooperate at all
times with counsel for ARIS and, if the proceedings involve matters of
concern to ARIS in addition to such a claim or the basis therefor, such
matters and the defence thereof shall be the sole responsibility of ARIS
and ARIS shall direct the defence thereof.
6.6 ARIS shall have the right to assert claims pursuant to this Escrow
Agreement against the Escrow Fund from time to time and the assertion
and/or disposition of any such claims shall be without prejudice to any
other rights or remedies available to ARIS from time to time pursuant to
the Agreement or otherwise.
6.7 In respect of any settlement, compromise or submission to an independent
firm of chartered accountants of any claim hereunder, or the determination
of any other matter requiring consent or approval of the Sellers in the
Escrow Fund, the Escrow Agent shall be fully authorized to act on the
written consent or approval of the Sellers' Representative. If at the time
of any claim made in accordance with this clause 6 there shall be no
Sellers' Representative, the Escrow Agent shall give notice of such claim
to each of the Sellers, and, if within thirty (30) calendar days after
receipt or deemed receipt of such notice by the last Seller to receive it,
the Sellers shall not have named a successor Sellers' Representative who
shall have admitted or disputed such claim, the Escrow Agent is authorised
at the end of such thirty (30) calendar day period to release and shall
release to ARIS Share Certificates in respect of the amount or in excess of
such claim determined in accordance with clause 6.3 above.
7. FEES AND EXPENSES
7.1 For its services the Escrow Agent shall be entitled to:
(a) an initial fee of one thousand seven hundred and fifty pounds sterling
(pounds 1,750) excluding value added tax ("VAT") plus the reasonable
legal costs incurred in relation to establishing the Escrow Fund, such
legal costs not to exceed one thousand five hundred pounds sterling
(pounds 1,500); and
(b) an annual fee of seven hundred and fifty pounds sterling (pounds 750)
excluding VAT for the twelve (12) month period or fraction thereof
plus its reasonable expenses.
7.2 All such fees, costs and expenses of the Escrow Agent shall be borne
equally by ARIS on the one part and the Sellers on the other and shall be
paid within seven (7) days of the Escrow Agent's written demand therefor.
8. TERMINATION OF ESCROW; DISTRIBUTION OF ESCROW FUND
8.1 Subject always to the provisions contained in clause 8.2 below, any Share
Certificates then held by the Escrow Agent shall be released by the Escrow
Agent to the relevant Seller(s) on the earlier of twelve (12) months after
the date of Completion or the date upon which ARIS has completed its first
audit of ARIS' consolidated financial statements. Any such distribution
shall be made on a pro rata basis calculated with respect to each Seller's
interest in the Escrow Fund.
8.2 In the event that any claim of which the Escrow Agent has been notified by
ARIS remains unliquidated or unpaid in whole or in part on the earlier of
twelve (12) months after the date of Completion or the date upon which ARIS
has completed its first audit of ARIS' consolidated financial statements,
the Escrow Agent shall immediately release to the Sellers any Escrowed Cash
and Share Certificates (in that order) which are not then needed to protect
and secure ARIS in respect of any claim of which the Escrow Agent has been
notified, based (when such claim is unliquidated) on the amount notified to
the Escrow Agent by ARIS as the maximum amount of liability (including the
lawyers' and accountants' fees and expenses relating thereto) with respect
to such claim.
9. ESCROW AGENT
The Escrow Agent hereby accepts its appointment and agrees to act as Escrow
Agent under the terms and conditions of this Escrow Agreement. In taking
any action hereunder the Escrow Agent shall be protected in relying upon
any notice, paper or other document believed by it to be genuine or upon
any evidence deemed by it to be sufficient, and in no event shall it be
liable for any act performed or omitted to be performed by it hereunder in
the absence of negligence, recklessness or wilful misconduct. The Escrow
Agent may consult with a suitably qualified legal adviser in connection
with its duties hereunder and shall be fully protected by any act taken,
suffered or permitted by it in good faith in accordance with the written
advice of such legal adviser. The Escrow Agent shall be entitled to
recover, as an expense pursuant to clause 7 hereof, the reasonable fees and
expenses of such legal adviser.
10. LITIGATION INVOLVING ESCROW AGENT
10.1 If the Escrow Agent becomes involved in litigation by reason hereof:
(a) it is hereby authorised to deposit with the clerk of the court in
which the litigation is pending any property held by it pursuant
hereto and, thereupon, shall stand fully relieved and discharged of
any further duties hereunder; and
(b) it shall be entitled to recover under clause 7 its reasonable
expenses arising as a result of such litigation.
10.2 If the Escrow Agent is threatened with litigation by reason hereof, it is
hereby authorised to interplead all interested parties in any court of
competent jurisdiction and to deposit with the clerk of such court any and
all property held by it pursuant hereto, and, thereupon, shall stand fully
relieved and discharged of any further duties hereunder.
11. INSPECTION
All property held as a part of the Escrow Fund shall at all times be
clearly identified as being held by the Escrow Agent hereunder. Any Party
hereto may inspect the Escrow Fund at any time during the Escrow Agent's
business hours, provided that twenty four (24) hours' prior written notice
has been given.
12. NOTICES
12.1 Any notice or other communication to be given under or in connection with
this Agreement shall be in writing, addressed to the Party to be served and
delivered personally or sent by international overnight courier or by
facsimile:
(a) in the case of an individual, to the address herein stated; and
(b) in the case of a company or corporation, to its principal place
of business for the time being,
or (in either case) to such other address as the addressee may from time to
time specify for the purpose of, and in accordance with the provisions of,
this clause 12.
12.2 In the absence of evidence of earlier receipt, a notice or other
communication is deemed given:
(a) if delivered personally, when left at the address referred to in
clause 12.1;
(b) if sent by international overnight courier, three (3) Business
Days after
having been deposited with an international overnight courier; and
(c) if sent by facsimile, three (3) hours after completion of its
transmission if transmitted before 2.00 pm on any Business Day and
otherwise by 11.00 am on the next Business Day.
12.3 In proving the giving of notice it shall be sufficient to prove that the
notice was left or that the envelope containing such notice was properly
addressed and deposited with an international overnight courier or that the
facsimile was transmitted.
13. REMEDIES
Nothing contained in this Escrow Agreement is intended to or shall be
construed so as to limit any rights to remedies available to ARIS from time
to time arising out of or in connection with the Agreement, any of the
documents, appendices, exhibits or other agreements delivered pursuant
thereto (including without limitation the Tax Covenant) or otherwise.
14. BINDING EFFECT; BENEFIT
This Escrow Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. The Escrow Fund provided for herein shall
be for the exclusive benefit of the Sellers and of ARIS, its subsidiary,
affiliated or related companies and corporations, their officers,
directors, agents and employees, and their representatives, successors and
assigns, and no other person, firm or corporation shall have any right,
title or interest hereunder; and any claim of any person, firm or
corporation to the Escrow Fund, or any part thereof, shall be subject and
subordinate to the prior rights and charge of ARIS and the Sellers under
the terms hereof.
15. MODIFICATION
No amendments, changes, modifications, or additions to this Agreement shall
be valid unless the same shall be in writing, signed by ARIS, the Escrow
Agent and the Sellers' Representative and made in accordance with the
provisions of this Escrow Agreement.
16. GOVERNING LAW
This Escrow Agreement shall be governed by and construed exclusively in
accordance with English Law and the parties submit to the exclusive
jurisdiction of the English courts.
17. COUNTERPARTS
This Escrow Agreement may be executed in any number of separate
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
THIS AGREEMENT is executed as a Deed and is delivered on the date stated at the
beginning of this Agreement.
SCHEDULE 1
THE SELLERS
Number of
Name Address Escrowed Shares
1. Xxxxx Xxxxxx Xxxxxx Xxxx and 00 Xxxxxx Xxxxxx, 000
Xxxxxxxx Adda as trustees of the Xxxxxx,XX0 0XX
Olivia Adda Settlement
2. Xxxxx Xxxxxx Xxxxxx Xxxx and 00 Xxxxxx Xxxxxx, 000
Xxxxxxxx Adda as trustees of the Xxxxxx, XX0 0XX
Jacques Adda Settlement
3. Xxxxx Xxxxxx Xxxxxx Xxxx and 00 Xxxxxx Xxxxxx, 000
Xxxxxxxx Adda as trustees of the Xxxxxx, XX0 0XX
Xxxxxxx Adda Settlement
4. Xxxxx Xxxxxx Xxxxxx Xxxx and 00 Xxxxxx Xxxxxx, 000
Xxxxxxxx Adda as trustees of the Xxxxxx, XX0 0XX
Xxxxxxxx Adda Settlement
5. STC International Limited as XX Xxx 000, Xxxxxxxx, 00,000
Trustee of the Adda Settlement Tortola, British
Virgin Islands
TOTAL 27,861
EXECUTED AS A DEED by )
ARIS CORPORATION
Acting by:
Director ) /s/ Xxxx Xxxxxxx-Xxxxx
Secretary ) /s/ Xxxxxxx X. Xxxxxxx, Xx.
EXECUTED AS A DEED by )
XXXXXX & CO
acting by:
Director ) /s/ signature illegible
Director/Secretary )
SIGNED AND DELIVERED AS A DEED ) /s/ Xxxxx Xxxxxx Smouha Adda
by XXXXX XXXXXX XXXXXX XXXX AND ) /s/ Xxxxx Xxxx Xxxxxx
PERNILLE ADDA AS TRUSTEES OF THE OLIVIA ) By Xxxxx Xxxx Xxxxxx duly
ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Olivia Adda Settlement
in the presence of: ) /s/ Xxxxxxxxx Xxxxxxxx
SIGNED AND DELIVERED AS A DEED ) /s/ Xxxxx Xxxxxx Smouha Adda
by XXXXX XXXXXX XXXXXX XXXX AND ) /s/ Xxxxx Xxxx Xxxxxx
PERNILLE ADDA AS TRUSTEES OF THE ) By Xxxxx Xxxx Xxxxxx duly
XXXXXXX XXXX SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Jacques Adda Settlement
in the presence of: ) /s/ Xxxxxxxxx Xxxxxxxx
SIGNED AND DELIVERED AS A DEED ) /s/ Xxxxx Xxxxxx Smouha Adda
by XXXXX XXXXXX XXXXXX XXXX AND ) /s/ Xxxxx Xxxx Xxxxxx
PERNILLE ADDA AS TRUSTEES OF THE ) By Xxxxx Xxxx Xxxxxx duly
XXXXXXX ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Xxxxxxx Adda Settlement
in the presence of: ) /s/ Xxxxxxxxx Xxxxxxxx
SIGNED AND DELIVERED AS A DEED ) /s/ Xxxxx Xxxxxx Smouha Adda
by XXXXX XXXXXX XXXXXX XXXX AND ) /s/ Xxxxx Xxxx Xxxxxx
PERNILLE ADDA AS TRUSTEES OF THE ) By Xxxxx Xxxx Xxxxxx duly
XXXXXXXX ADDA SETTLEMENT ) authorised attorney for
) Pernille Adda as Trustee of
) the Xxxxxxxx Adda Settlement
in the presence of: ) /s/ Xxxxxxxxx Xxxxxxxx
EXECUTED AS A DEED by )
STC INTERNATIONAL LIMITED AS TRUSTEE OF )
THE ADDA SETTLEMENT )
Acting by: )
Director ) /s/ Xxxxx Xxxx Xxxxxx
By Xxxxx Xxxx Xxxxxx duly
authorised attorney for
STC International Limited
as Trustee of the Adda
Settlement
Director/Secretary )
SIGNED AND DELIVERED AS A DEED by ) /s/ Xxxxx Xxxxxx Smouha Adda
XXXXX XXXXXX XXXXXX XXXX
in the presence of: ) /s/ Xxxxx Xxxx Xxxxxx
