Exhibit 10
LOSSES ESCROW AGREEMENT
LOSSES ESCROW AGREEMENT (the "Agreement"), dated as of August
26, 1997, by and among International Post Limited, a Delaware
corporation ("IPL"), Xxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx"); Xxxxxx X.
Xxxxxxxx ("Xxxxxxxx"); and Xxxxxx X. Xxxx ("Buck") (each a
"Stockholder" and collectively, the "Stockholders") and IBJ
Xxxxxxxx Bank & Trust Company (the "Escrow Agent"). Any reference
herein to any Stockholder shall be deemed to also include a
reference to the heirs, estate and personal representatives of such
Stockholder. Unless otherwise indicated herein, each capitalized
term used herein shall have the meaning attributed to it in the
glossary set forth in Section 20 hereof.
W I T N E S S E T H:
WHEREAS, IPL, Video Services Corporation, a New Jersey
corporation ("Video") and the Stockholders are parties to an
Agreement and Plan of Merger (the "Merger Agreement"), dated the
date hereof, which, among other things, provides for the merger
(the "Merger") of Video with and into IPL; and
WHEREAS, as a condition to the closing of the Merger, IPL and
the Stockholders have agreed to execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Appointment of Escrow Agent
IPL and the Stockholders hereby appoint the Escrow Agent as
their agent to hold and disburse all assets from time to time
deposited with the Escrow Agent pursuant hereto on the terms and
subject to the conditions set forth in this Agreement, and the
Escrow Agent hereby accepts such appointment. By their execution
of this Agreement, IPL and the Stockholders expressly authorize the
Escrow Agent to, and the Escrow Agent expressly agrees to, take the
actions contemplated by this Agreement in accordance with the
provisions of this Agreement.
Section 2. Escrow Accounts; Deposit of Funds.
(a) On the date hereof each of the Stockholders is delivering
to the Escrow Agent a stock certificate (duly endorsed in blank or
accompanied by a stock power duly endorsed in blank) representing
the number of shares of IPL Common Stock set forth opposite its
name below:
Name Number of Shares
Siracusano 878,186 (the "Siracusano Deposited Shares")
Xxxxxxxx 878,186 (the "Xxxxxxxx Deposited Shares")
Buck 16,941 (the "Buck Deposited Shares")
The shares represented by the certificates so deposited
(together with shares deposited pursuant to Section 4 hereof) are
referred to herein collectively as the "Deposited Shares". Each
Stockholder shall retain all voting rights in respect of the
Deposited Shares deposited by such Stockholder, as well as the
right to receive all cash dividends paid on such shares until such
time, if any, as they are transferred to IPL. All securities
received in respect of such shares as dividends and all other
shares of IPL Common Stock deposited pursuant to this Agreement
shall be added to the Deposited Shares and shall be deemed
Siracusano Deposited Shares, Xxxxxxxx Deposited Shares and Buck
Deposited Shares, as applicable.
(b) The Escrow Agent will, upon receipt of any funds from any
Stockholder as contemplated in Section 3 hereof, establish money-market escrow
accounts at the Escrow Agent's office, which accounts shall be designated in
the records of the Escrow Agent as follows: (i) Siracusano Escrow Account
(the "Siracusano Escrow Account"); (ii) Xxxxxxxx Escrow Account (the
"Xxxxxxxx Escrow Account"); (iii) Buck Escrow Account (the "Buck Escrow
Account"), in which the Escrow Agent shall deposit the funds submitted to it
in respect of such Stockholder. Each account listed in clauses (i) through
(iii) is referred to herein as an "Escrow Account" and the Siracusano
Escrow Account, the Xxxxxxxx Escrow Account and the Buck Escrow
Account are referred to collectively as the "Escrow Accounts".
Each Escrow Account shall be maintained by, and shall be under the
exclusive dominion and control of, the Escrow Agent. The Escrow
Accounts shall be maintained as separate accounts; funds deposited
in each Escrow Account shall not be co-mingled with the funds
deposited in any other Escrow Account; and the Escrow Agent shall
disburse the funds in the Escrow Accounts only in accordance with
the provisions of this Agreement; provided, however, that the
Escrow Agent also shall disburse funds from any of the Escrow
Accounts in accordance with written directions executed by all of
the Stockholders and IPL. Each Escrow Account may, upon the
written direction of the Stockholder depositing any funds therein,
be invested in one or more of the following: (i) securities issued
or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof, (ii) time
deposits and certificates of deposit and commercial paper issued by
any domestic commercial bank having capital and surplus in excess
of $50,000,000 (an "Approved Bank"), (iii) commercial paper issued
by any person incorporated under the laws of the United States, or
any State thereof, rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Moody's Investor's Service, Inc. and in each case
maturing within one year after the date of acquisition, (iv)
repurchase obligations with a term of not more than five days for
underlying securities of the type described in clauses (i) through
(iii) of this definition entered into with any Approved Bank, and
(v) investments in money market funds which have net assets of at
least $50 million, substantially all of whose assets comprise
securities of the types described in clauses (i) - (iv) above.
All amounts earned in each Escrow Account shall be paid over
to the appropriate Stockholder on a quarterly basis on each January
1, April 1, July 1 and October 1 (or the first Business Day
thereafter) upon the written request of such Stockholder to the
Escrow Agent and such interest shall be reported by such
Stockholder as income of such Stockholder for all income tax
purposes.
Section 3. Substitution of Cash.
(a) At any time and from time to time a Stockholder may, upon
compliance with the procedures set forth in this Section 3, obtain
possession of all or any portion of the Deposited Shares deposited
by such Stockholder in accordance with Section 2 or Section 4
hereof, by substituting therefor (a "Cash Substitution") cash in an
amount equal to the Determined Cash Amount and depositing such
amount with the Escrow Agent. At any time a Cash Substitution is
to be made pursuant hereto and upon compliance with the provisions
of this Section 3, any necessary certificates shall be delivered to
the Stockholder as soon as practicable after issuance by the
transfer agent. In connection therewith, the Escrow Agent is
authorized to submit certificates as necessary directly to the
transfer agent by FedEx or by messenger service and IPL and the
Stockholders agree and acknowledge that the Escrow Agent shall have
no duty, obligation or liability in connection with such delivery
or any action of the transfer agent.
(b) In the event that a Stockholder desires to engage in a
Cash Substitution, the Stockholder shall deliver a written notice
signed by the Stockholder to the Escrow Agent, who shall deliver
such notice to the other Stockholders and to IPL no later than one
Business Day after receipt thereof (the "Cash Substitution Notice")
which notice shall state: (i) that the Stockholder desires to
engage in such Cash Substitution; and (ii) the Determined Cash
Amount in respect thereof together with a statement setting forth
in reasonable detail the computation thereof.
(c) Within 5 Business Days (the "Section 3 Acceptance
Period") of receipt of the Cash Substitution Notice by IPL, IPL may
object to the Cash Substitution on the basis (and only on the
basis) that it disagrees with the computation of the Determined
Cash Amount by sending written notice of such objection (a "Section
3 Objection") to the Escrow Agent, who shall deliver such notice to
the Stockholders no later than one Business Day after receipt
thereof , which shall set forth the reasons therefor and the date
of IPL's receipt of the Cash Substitution Notice. Failure by IPL
to deliver a Section 3 Objection to the Escrow Agent, prior to the
end of the Section 3 Acceptance Period, shall be deemed an
acceptance of the Cash Substitution Notice and the Determined Cash
Amount. In the event that the Escrow Agent receives a Cash
Substitution Notice and fails to receive a Section 3 Objection
prior to the end of the related Section 3 Acceptance Period, the
Escrow Agent shall complete the Cash Substitution in accordance
with the terms hereof and as contemplated in the Cash Substitution
Notice.
(d) In the event that IPL timely delivers a Section 3
Objection to the Escrow Agent; who shall deliver a copy to the
Stockholders no later than one Business Day after receipt thereof:
(i) the Stockholder may submit the matter to dispute resolution
pursuant to Section 11 hereof; and (ii) the Escrow Agent shall not
complete the Cash Substitution until: (A) directed to do so
pursuant to a written instruction signed by IPL; or (B) directed to
do so pursuant to a certificate signed by the Stockholders and IPL
stating that pursuant to the dispute resolution procedures set
forth in Section 11 hereof, it has been resolved that the
Determined Cash Amount, as stated in the Cash Substitution Notice,
is correct and that the requested Cash Substitution should be
completed.
(e) In engaging in a Cash Substitution, a Stockholder shall
be entitled to substitute cash proceeds to be derived from the sale
of all or a portion of the Deposited Shares to be received in such
Cash Substitution. The Stockholders and IPL shall take such
action as is reasonably necessary to permit and facilitate any such
sale and substitution. In connection therewith, the Escrow Agent
shall only be required to act upon joint instructions signed by the
Stockholders and IPL.
Section 4. Substitution of Stock.
(a) At any time and from time to time, a Stockholder may,
upon compliance with the procedures set forth in this Section 4,
obtain possession of all or any portion of the cash held in the
Escrow Account applicable to such Stockholder, by substituting
therefore (a "Stock Substitution") certificates representing shares
of IPL Common Stock in an amount equal to the Determined Stock
Amount and depositing such certificates with the Escrow Agent. At
any time a Stock Substitution is to be made pursuant hereto and
upon compliance with the provisions of this Section 4, any
necessary certificates shall be delivered to the Stockholder as
soon as practicable after issuance by the transfer agent. In
connection therewith, the Escrow Agent is authorized to submit
certificates as necessary directly to the transfer agent by FedEx
or by messenger service and IPL and the Stockholders agree and
acknowledge that the Escrow Agent shall have no duty, obligation or
liability in connection with such delivery or any action of the
transfer agent.
(b) In the event that a Stockholder desires to engage in a
Stock Substitution, the Stockholder shall deliver a written notice
signed by the Stockholder to the Escrow Agent, who shall deliver
such notice to the other Stockholders and to IPL no later than one
Business Day after receipt thereof (the "Stock Substitution
Notice") which notice shall state: (i) that the Stockholder desires
to engage in such Stock Substitution; and (ii) the Determined Stock
Amount in respect thereof together with a statement setting forth
in reasonable detail the computation thereof.
(c) Within 5 Business Days (the "Section 4 Acceptance
Period") of receipt of the Stock Substitution Notice by IPL, IPL
may object to the Stock Substitution on the basis (and only on the
basis) that it disagrees with the computation of the Determined
Stock Amount by sending written notice of such objection (a
"Section 4 Objection") to the Escrow Agent, who shall deliver such
notice to the Stockholders no later than one Business Day after
receipt thereof, which shall set forth the reasons therefor and the
date of IPL's receipt of the Stock Substitution Notice. Failure by
IPL to deliver a Section 4 Objection to the Stockholders and the
Escrow Agent, prior to the end of the Section 4 Acceptance Period,
shall be deemed an acceptance of the Stock Substitution Notice and
the Determined Amount. In the event that the Escrow Agent receives
a Stock Substitution Notice and fails to receive a Section 4
Objection prior to the end of the related Section 4 Acceptance
Period, the Escrow Agent shall complete the Stock Substitution in
accordance with the terms hereof and as contemplated in the Stock
Substitution Notice.
(d) In the event that IPL timely delivers a Section 4
Objection to the Escrow Agent, who shall deliver a copy to the
Stockholders no later than one Business Day after receipt thereof:
(i) the Stockholder may submit the matter to dispute resolution
pursuant to Section 11 hereof; and (ii) the Escrow Agent shall not
complete the Stock Substitution until: (a) directed to do so
pursuant to a written instruction signed by IPL; or (B) directed to
do so pursuant to a certificate signed by the Stockholders and IPL
stating that pursuant to the dispute resolution procedures set
forth in Section 11 hereof, it has been resolved that the
Determined Stock Amount, as stated in the Stock Substitution
Notice, is correct and that the requested Stock Substitution should
be completed.
Section 5. Indemnification Claims.
(a) The Stockholders and IPL agree that in the event and to
the extent that any Stockholder has any liability or obligation to
provide indemnification or contribution (collectively,
"Indemnification") for any losses of IPL, its successors or assigns
(each an "Indemnified Person") pursuant to the terms of the Merger
Agreement:
(i) the claims of an Indemnified Person in respect
of such Stockholder shall be limited to the Deposited Shares and
the Escrow Account in respect of such Stockholder and no
Indemnified Person shall have any other right, claim or recourse to
such Stockholder or the assets of such Stockholder;
(ii) to the extent that such losses arise from any
obligation for which such Stockholders are jointly and severally
liable under the Merger Agreement, and in respect of which an
Indemnified Person is entitled to Indemnification under the Merger
Agreement, the right of the Indemnified Person to receive such
Indemnification in respect of any particular Stockholder regarding
any such loss and to assert any claim against the Deposited Shares
and the Escrow Account attributable to such Stockholder hereunder,
shall be limited to an amount determined by multiplying: (A) the
amount of such loss for which such Indemnification is required to
be provided under the Merger Agreement; by (B) the Stockholder
Percentage of such Stockholder; and
(iii) to the extent that such losses arise from
any obligation for which such Stockholders are not jointly or
severally liable under the Merger Agreement, and in respect of
which an Indemnified Person is entitled to Indemnification under
the Merger Agreement, the right of an Indemnified Person to receive
such Indemnification in respect of any particular Stockholder
regarding any such loss and to assert any claim against the
Deposited Shares and the Escrow Account attributable to such
Stockholder hereunder, shall be limited solely to the Deposited
Shares and the Escrow Account attributable to the particular
Stockholder having an Indemnification obligation in respect of such
loss and no Indemnified Person shall have recourse to, or have any
right to make any claim against, receive any payment from, or
receive all or any portion of the Deposited Shares or the Escrow
Account attributable to, any other Stockholder or any other assets
of any Stockholder.
(b) In the event that an Indemnified Person believes that it
is entitled to the payment of money for Indemnification from a
Stockholder pursuant to the provisions of Article X of the Merger
Agreement, such Indemnified Person shall proceed to assert any such
claim (an "Indemnification Claim") in the manner set forth in the
Merger Agreement.
(c) The Escrow Agent shall not disburse any amount with
respect to any claim for Indemnification made by any Indemnified
Person until directed to make a payment pursuant to either: (i) a
written instruction signed by the Stockholder against which such
claim is asserted (the "Subject Stockholder") and the Indemnified
Person (it being understood and agreed that, in the event that a
Stockholder agrees in writing, or it is determined by a final,
binding non-appealable order or judgment of a court of competent
jurisdiction, that he is obligated to provide a specified amount as
Indemnification to an Indemnified Person pursuant to the terms of
Article X of the Merger Agreement, then such Stockholder shall also
provide the notice contemplated herein); or (ii) a certificate
signed by the Stockholders and IPL stating that the claim has been
resolved pursuant to a final, binding non-appealable order or
judgment of a court of competent jurisdiction.
(d) In the event that the Escrow Agent is required to make
any payment in respect of a Subject Stockholder to any Indemnified
Person pursuant to the terms of Section 5(c) above, then such
payment shall be made by the Escrow Agent subject to and in
accordance with the following procedure:
(i) the Escrow Agent shall make such payment on the
fifth (5th) Business Day (provided that in the event of a Cash
Substitution or Stock Substitution during such period with respect
to which a Section 3 Objection or Section 4 Objection is given,
then the date will be the fifth day following the date such
objection is resolved or as soon as thereafter practicable pursuant
to Section 11 hereof) following the occurrence of the first to
occur of the events contemplated in Section 5(c)(i) or (ii), (the
"Payment Date");
(ii) during the four (4) Business Days prior to the
Payment Date the Subject Stockholder may, at its option, engage in
a Cash Substitution or Stock Substitution by giving a Cash
Substitution Notice or a Stock Substitution Notice pursuant to
Section 3 or 4 hereof and the Payment Date will be appropriately
extended to the minimum extent necessary to permit such Cash
Substitution or Stock Substitution to occur;
(iii) the Subject Stockholder may, at its option
by written notice to the Escrow Agent, who shall deliver a copy to
the Indemnified Person no later than one Business Day after receipt
thereof, given not less than four (4) Business Days prior to the
Payment Date, elect to have any amount to be paid hereunder, paid
in either cash from the Escrow Account, Deposited Shares, or a
combination thereof (provided that in the event of the failure of
the Escrow Agent to receive any such notice prior to the fifth day
preceding the Payment Date, such payment will be made first in cash
from the Escrow Account and then from the Deposited Shares);
(iv) for the purpose of making any payment in
Deposited Shares, the same shall be valued at Market Value
determined as of the close of business on the fourth day preceding
the Payment Date; and
(v) in executing funds transfers, the Escrow Agent
will rely upon account numbers or other identifying numbers of a
Stockholder or Indemnified Person or its bank, rather than names.
The Escrow Agent shall not be liable for any loss, liability or
expense resulting from any error made by a Stockholder or
Indemnified Person with respect to an account number or other
identifying number provided it has accurately followed written
instructions from the Stockholder or Indemnified Person in
accordance with the disbursement provisions set forth above. The
Escrow Agent will confirm the instructions set forth in such
written instructions with the authorized individuals making such
request at the authorized telephone numbers appearing above each
such individual's name. The Escrow Agent will verify by telephone
all payment orders unless they call for a transfer to a pre-identified account.
(e) Notwithstanding anything to the contrary contained
herein, the Stockholders and IPL will not take any action pursuant
to this Agreement which would constitute or result in any
assignment of a Federal Communications Commission ("FCC") license
or any change of control of any FCC licensee, whether de facto or
de jure, if such assignment of license or change of control would
require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC,
without first obtaining such approval of the FCC. The parties
hereto hereby agree that voting rights in the Deposited Shares
transferred to IPL hereunder will remain in each Stockholder unless
any required approval of the FCC shall be obtained to the transfer
of voting rights. The Stockholders hereby agree to take such
action as IPL may reasonably request in order to complete any
transfer of Deposited Shares contemplated hereby, including
specifically, at IPL's cost and expense, the use of each
Stockholders reasonable efforts to assist in obtaining the approval
of the FCC for any action or transaction contemplated hereby which
is then required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or
transferor's portion of any application or applications for consent
to the assignment of license or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of
(a) any sale or sales of Deposited Shares by or on behalf of the
Escrow Agent pursuant hereto, or (b) any assumption by IPL of
voting rights or management rights in the Deposited Shares effected
in accordance herewith.
Section 6. Final Distribution.
(a) Promptly following the date (the "Final Date") which is
the later of: (i) three (3) years following the date hereof; and
(ii) the Section 6 Date, the Escrow Agent shall, not less than five
(5) Business Days following the giving of written notice to IPL and
each Stockholder of its intention to do so, distribute all
Deposited Shares and all funds on deposit in the Escrow Accounts to
the applicable Stockholder who has deposited such funds or shares
hereunder; provided, however, that if, prior to the Final Date, an
Indemnified Person has delivered to the Escrow Agent a written
notice (a "Claim Notice") that it has asserted an Indemnification
Claim pursuant to the terms of the Merger Agreement and the amount
of such claim (the "Indemnification Claimed Amount") in respect of
any Subject Stockholder and there has been no disposition of the
Indemnification Claim covered thereby either: (A) as a result of a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction resulting in an order of such court to the
Escrow Agent regarding the payment of such Indemnification Claim;
or (B) a written agreement of the Subject Stockholder resulting in
written instructions to the Escrow Agent signed by the Indemnified
Person and the Subject Stockholder: (i) the Escrow Agent shall
continue to hold an aggregate amount (determined in the manner set
forth in Section 6(c)) through the retention of Deposited Shares
and of funds in the Escrow Account, in each case applicable to such
Stockholder, equal to the Indemnification Claimed Amount until such
Indemnification Claim is so disposed of; and (ii) shall deliver to
each Stockholder the balance of the Deposited Shares or the funds
held in the applicable Escrow Account, in excess of the amounts
required to be retained pursuant to the preceding clause (i) (such
distribution pursuant to this clause (ii) and retention pursuant to
clause (i), to be made from Deposited Shares, cash in Escrow
Accounts, or a combination thereof, as shall be designated by each
Stockholder by written notice to the Escrow Agent and IPL within
five (5) Business Days following the Final Date); provided that if
such notice has not been received by the Escrow Agent at least
three (3) days prior to the Final Date, then the Escrow Agent shall
make such distribution on the third Business Day following its
receipt of such notice. The Escrow Agent shall not make any
distribution of Deposited Shares or funds on deposit in the Escrow
Accounts until it has received written notice from the
Stockholders.
(b) Any amount or portion thereof retained pursuant to
Section 6(a), shall be: (i) applied pursuant to Section 5 hereof;
or (ii) applied pursuant to written instructions to the Escrow
Agent executed by the Indemnified Person and the Subject
Stockholder; or (iii) in the event that the Escrow Agent receives
a certificate from a Subject Stockholder and the Indemnified Person
which states that the matters set forth in the Claim Notice have
been determined by a final, binding, non-appealable order of a
court of competent jurisdiction, and the amount retained in respect
of such Indemnification Claim, pursuant to this Section 6, exceeds
the amount required to be paid pursuant to Section 5 hereof in
respect of such Indemnification Claim, then the excess shall be
paid over to the Subject Stockholder (and, in the event of any
dispute with respect to the foregoing, the same may be submitted
for resolution pursuant to the dispute resolution procedures set
forth in Section 11 hereof and the Escrow Agent shall thereafter
release amounts in the applicable Escrow Account and the applicable
Deposited Shares, in accordance with the determination resulting
therefrom).
(c) For purposes of withholding assets pursuant to Section
6(a), any Deposited Shares shall be valued at Market Value
determined in good faith by the Board of Directors of IPL as of the
Final Date and all amounts held in any Escrow Account shall be
valued at the amount of cash held in such account. For the
purposes of this Agreement, the Escrow Agent may assume, without
inquiry or responsibility, that all actions taken by the Board of
Directors of IPL shall be in good faith. In the event that any
amounts held in any Escrow Account in cash are withheld from
distribution pursuant to this Section 6, due to the existence of
any Indemnification Claim pending as of such date, then to the
extent that the amount so withheld (the "Retained Amount") exceeds
150% of the amount specified in a certificate signed by the
Stockholders and IPL as the amount finally determined by a court of
competent jurisdiction pursuant to a final, binding, non-appealable
order to be the actual amount to be paid in respect of the
Indemnification Claim, IPL shall pay to the Subject Stockholders in
respect of such Indemnification Claim, an amount (reduced by any
other earnings received by the Subject Stockholder pursuant to this
Agreement in respect of such amounts during such period) equal to
interest on such excess calculated from the Final Date until the
date of such payment, at a rate equal to 2% in excess of the
average annual interest rate paid by IPL to its then current
lending bank during each annual period (or part thereof) that such
amounts are retained (or, in the event there is no such bank during
any such period, 15% per annum), but not in excess of the maximum
rate of interest permitted by law.
Section 7. Duties and Obligations.
(a) It is agreed that the duties and obligations of the
Escrow Agent are those herein specifically provided and no other.
The Escrow Agent shall not have any liability under, or duty to
inquire into, the terms and provisions of any agreement, other than
this Agreement. The Escrow Agent's duties are ministerial in
nature and the Escrow Agent shall not incur any liability whatso-
ever so long as it has acted in good faith, except for willful
misconduct or gross negligence. In the event that, at any time,
the Escrow Agent has any question as to the interpretation or
application of any provision of this Agreement, or requests written
instructions or confirmation of any action or inaction to be taken
or not to be taken by the Escrow Agent hereunder, the Escrow Agent
may, in its discretion, refrain from taking any action or engaging
in any activity, until it has received such instruction or
confirmation as it may reasonably request and the parties hereto
will provide the same as reasonably requested by the Escrow Agent
from time to time.
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted
by it in accordance with the advice of such counsel. The Escrow
Agent shall not be bound by any modification, amendment, termina-
tion, cancellation, rescission or supersession of this Agreement
unless the same shall be in writing and signed by all of the
parties hereto.
(c) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be
entitled to commence an action in interpleader and to pay the funds
and property then held in the Escrow Accounts into court, whereupon
its sole obligation shall be to take such action as is ordered by
a final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
(d) The Escrow Agent shall not incur any liability for fol-
lowing the instructions herein contained or expressly provided for.
(e) The Escrow Agent shall not have any responsibility for
the genuineness or validity of any document or other item deposited
with it or any liability for action in accordance with any written
instructions or certificates given to it hereunder and reasonably
believed by it to be signed by the proper parties.
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or
defend any legal proceedings (including interpleader) which may be
instituted against it in respect of the subject matter of this
Agreement. If it does elect to act, it will do so only if it is
indemnified against the reasonable cost and expense of such defense
or initiation.
(g) This Agreement shall terminate when all funds and
property on deposit pursuant hereto have been disbursed as provided
in this Agreement.
Section 8. Resignation. The Escrow Agent may at any time
resign hereunder by giving written notice of its resignation to the
parties hereto, at least thirty days prior to the date specified
for such resignation to take effect, and, upon the effective date
of such resignation, all funds and property then held by the Escrow
Agent hereunder shall be delivered by it to such person as may be
designated in writing by all of IPL and the Stockholders, whereupon
all of the Escrow Agent's obligations hereunder shall cease and
terminate. If no such person shall have been designated by such
date, all obligations of the Escrow Agent hereunder shall
nevertheless cease and terminate except that the Escrow Agent's
sole responsibility thereafter shall be to continue to hold all the
funds and property then held by it and to deliver the same to a
person designated in writing by all of IPL and the Stockholders or
in accordance with the directions of a final, binding, non-appealable order or
judgment of a court of competent jurisdiction.
Section 9. Indemnification. IPL agrees to indemnify, defend
and hold the Escrow Agent harmless from and against any and all
loss, damage, tax, liability and expense, including, without
limitation, reasonable attorneys' fees, that may be incurred by the
Escrow Agent arising out of or in connection with its acceptance of
appointment as Escrow Agent hereunder, except as caused by its
gross negligence or willful misconduct, including, without
limitation, the legal costs and expenses of defending itself
against any claim or liability in connection with its performance
hereunder. Each Stockholder agrees to indemnify, defend and hold
the Escrow Agent harmless from and against any and all loss,
damage, tax, liability and expense, including, without limitation,
reasonable attorneys' fees, that may be incurred by the Escrow
Agent arising out of any wrongful act or omission by such
Stockholder hereunder, except as caused by the Escrow Agent's gross
negligence or willful misconduct, including, without limitation,
the legal costs and expenses of defending itself against any claim
or liability in connection with its performance hereunder.
Section 10. Expenses. IPL shall reimburse the Escrow Agent
for all expenses and disbursements incurred by the Escrow Agent
including, without limitation, fees and expenses, of counsel of the
Escrow Agent incurred in connection with this Agreement.
Section 11. Arbitration. Disputes that arise under this
Agreement, between the Stockholders and IPL will be resolved as
follows:
(i) except as set forth in the penultimate
paragraph of this Section 11, neither IPL nor any of the
Stockholders shall bring a civil action arising under or with
respect to this Agreement;
(ii) at any time IPL or any of the Stockholders may
demand arbitration of any dispute, arising under or with respect to
this Agreement by delivering written notice thereof to: (x) the
parties hereto; and (y) an office of JAMS/Endispute located in New
York City (or, if none, then the office of JAMS/Endispute located
closest to New York City); and
(iii) any such arbitration shall be conducted in
New York City according to JAMS/Endispute's Arbitration Rules then
in effect applicable to disputes of the types submitted to
arbitration and the results of such arbitration shall be final and
binding on the parties.
In the event that JAMS/Endispute is not available to provide such
arbitration services with respect to any such dispute, then that
dispute shall be resolved by final, binding arbitration in New York
City by three arbitrators pursuant to the rules then prevailing of
the American Arbitration Association applicable to disputes of the
type submitted to arbitration. Judgement on the award rendered by
any of the above referenced arbitrators may be confirmed and
entered in and by any court having jurisdiction.
Notwithstanding the foregoing, each party specifically
reserves the right to seek equitable remedies in a court of
competent jurisdiction.
It is understood and agreed by IPL and the Stockholders that
the purpose of this Agreement is to provide a mechanism to fund the
payment of certain indemnification obligations that may arise
pursuant to the terms of Article X of the Merger Agreement. This
Section 11 is to be utilized solely to resolve disputes under this
Agreement. The determination of the right of any party to be
indemnified or to receive any payment under Section X of the Merger
Agreement in respect of any matter is not within the subject matter
of this Agreement and is not subject to the provisions of this
Section 11.
Section 12. Fees. The fees and expenses of the Escrow Agent
are to be paid by IPL pursuant to the terms of a letter agreement
between Escrow Agent and IPL dated April 7, 1997 and the Escrow
Agent shall not collect any such fees from the amounts or property
escrowed hereunder.
Section 13. Notices. All notices, requests, demands,
waivers, consents, approvals or other communications to any party
hereunder shall be in writing and shall be deemed to have been duly
given if: (i) delivered personally to such party; or (ii) sent to
such party by telegram or telecopy, with a copy sent on the same
day via overnight delivery to the following addresses:
If to IPL, to:
International Post Limited
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Fax # (000) 000-0000
with a copy to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(000) 000-0000
Fax # (000) 000-0000
If to Siracusano, to:
Xxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
Fax # (000) 000-0000
If to Xxxxxxxx, to:
Xxxxxx X. Xxxxxxxx
c/o Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
(000) 000-0000
Fax # (000) 000-0000
If to Buck, to:
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
(000) 000-0000
Fax # (000) 000-0000
All notices to the Stockholders shall also be sent to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Fax # (000) 000-0000
If to Escrow Agent, to it at:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Fax # (000) 000-0000
or to such other address as the addressee may have specified in
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communications
shall be deemed to have been given and received as of the date so
delivered, telegraphed or telecopied, provided that any notice,
request, demand, waiver, consent, approval or other communications
sent to the Escrow Agent shall be deemed to have been given and
received as of the date received by the Escrow Agent.
Section 14. Assignment. A party hereto may assign its rights
under this Agreement upon notice to all other parties hereto,
provided that in connection with any assignment by the Escrow
Agent, the Escrow Agent shall comply with the terms of Section 8
hereof.
Section 15. Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, heirs and personal
representatives.
Section 16. Governing Law. This Agreement shall be governed
by and interpreted under the laws of the State of New York
applicable to contracts made and performed therein without giving
effect to the principles of conflict of laws thereof.
Section 17. Amendment; Waiver. No amendment, modification or
waiver of the provisions of this Agreement shall be effective
unless in a writing executed by the party against whom such
amendment or modification is sought to be enforced (or in the case
of a waiver by the party waiving one or more of its rights
hereunder).
Section 18. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but collectively all of such counterparts shall
constitute one and the same agreement.
Section 19. Adjustments. For purposes of this Agreement all
references to numbers of shares or calculations based thereon or
relating thereto, shall be appropriately adjusted for any stock
dividend, stock split, reverse stock split, combination,
recapitalization or other similar event.
Section 20. Glossary. The following terms as used in this
Agreement shall have the meanings indicated below.
"Business Day" shall mean any day other than (i) a
Saturday or Sunday; or (ii) a day on which banks in the State
of New York are required or permitted to be closed.
"Cash Substitution Percentage" shall mean, with respect
to any Cash Substitution being sought by any Stockholder, a
percentage determined by dividing the Shares to be Removed
pursuant to such Cash Substitution, by the number of Initial
Deposited Shares in respect of such Stockholder.
"Cash to be Removed" shall mean, with respect to each
Stockholder, the amount of cash it is seeking to obtain
possession of through a Stock Substitution pursuant to this
Section 4.
"Determined Cash Amount" shall mean an amount in U.S.
dollars determined, from time to time, with respect to any
Stockholder seeking to engage in a Cash Substitution, by
multiplying the Total Cash Amount in respect of such
Stockholder, by the applicable Cash Substitution Percentage.
"Determined Stock Amount" shall mean a certificate
representing a number of shares of IPL Common Stock
determined, from time to time, with respect to any Stockholder
seeking to engage in a Stock Substitution, by multiplying the
Initial Deposited Shares in respect of such Stockholder, by
the applicable Stock Substitution Percentage.
"Initial Deposited Shares" shall mean, with respect to
each of Siracusano, Ferolito and Buck, respectively, a number
of shares equal to the Siracusano Deposited Shares, the
Xxxxxxxx Deposited Shares and the Buck Deposited Shares (in
each case including only those shares deposited in escrow
pursuant to this Agreement on the date hereof), appropriately
adjusted for any stock dividend, stock split, reverse stock
split, combination, recapitalization or other similar event.
"IPL Common Stock" shall mean the authorized common
stock, $.01 par value per share, of IPL.
"Market Value" shall mean the average of the closing bid
and asked prices of a share of IPL Common Stock on The Nasdaq
Stock Market during the five (5) trading days immediately
prior to the date such calculation is made, appropriately
adjusted for stock dividends, splits, combinations,
subdivisions, recapitalizations and similar events.
"Section 6 Date" in the event that the Escrow Agent and
each Stockholder have received written notice from IPL of an
extension of the applicable statute of limitations relating to
any matter contemplated in Sections 4.8, 4.9 or 4.14 of the
Merger Agreement by agreement of IPL and any Governmental
Entity entered into prior to the expiration of three (3) years
from the date of the Closing, the date of expiration of the
last such extension.
"Shares to be Removed" shall mean, with respect to each
Stockholder, the number of Deposited Shares it is seeking to
obtain possession of through a Cash Substitution pursuant to
this Section 3.
"Stock Substitution Percentage" shall mean, with respect
to any Stock Substitution being sought by any Stockholder, a
percentage determined by dividing the Cash to be Removed
pursuant to such Stock Substitution, by the Total Cash Amount
in respect of such Stockholder.
"Stockholder Percentage" shall mean: (i) with respect to
Xxxxx X. Xxxxxxxxxx, 46.062%; (ii) with respect to Xxxxxx X.
Xxxxxxxx, 46.02%; and (iii) with respect to Xxxxxx X. Xxxx,
7.876%.
"Total Cash Amount" shall mean, with respect to: (i)
Siracusano, $2.3 million; (ii) Xxxxxxxx, $2.3 million, and
(iii) Buck, $400,000.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
INTERNATIONAL POST LIMITED
/s/
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
IBJ XXXXXXXX BANK & TRUST COMPANY
/s/
By:
