ESCROW AGREEMENT
ESCROW
AGREEMENT
This
Escrow Agreement (this “Agreement”), dated as of August 1, 2007, is entered into
by and among Language Access Network, Inc., a Nevada corporation (“LAN”), iBS
Merger Sub LLC, an Ohio limited liability company (“Merger Sub”), iBeam
Solutions LLC, an Ohio limited liability company and surviving company in the
merger of Merger Sub with and into the former iBeam Solutions LLC which was
also
an Ohio limited liability company (the “Surviving Company,” and collectively
with LAN and the Merger Sub, the “Escrow Beneficiaries”), all of the pre-merger
Members of the former iBeam Solutions LLC (the “Members”), and Squire,
Xxxxxxx & Xxxxxxx L.L.P. (the “Escrow Agent”). LAN, Merger Sub, the
Surviving Company, the Members and the Escrow Agent are sometimes referred
to
herein individually as a “Party” and collectively as the “Parties.”
Background
Whereas,
all of the parties other than the Escrow Agent entered into an Agreement and
Plan of Merger, dated as of August 1, 2007 (the “Merger Agreement”), whereby LAN
has on the date hereof acquired the former iBeam Solutions LLC through its
being
the Surviving Company in the merger with the Merger Sub provided for in the
Merger Agreement;
Whereas,
under the Merger Agreement and in connection with the transactions described
therein, the Escrow Beneficiaries are entitled to indemnification from the
Members with respect to Indemnity Claims (as such term is defined in the Merger
Agreement);
Whereas,
the terms of the Merger Agreement require that, within the period of ten (10)
days after the Closing (as such term is defined in the Merger Agreement), all
of
the Merger Shares (as such term is defined in the Merger Agreement) (the
“Deposited Shares”) are to be deposited, held and administered in escrow
immediately following the Closing; and
Whereas,
the Parties have agreed upon and wish to set forth in this Agreement the terms
and conditions with respect to the Deposited Shares being placed in escrow
and
held by the Escrow Agent hereunder;
NOW,
THEREFORE, the Parties agree as set forth below.
Agreement
1. Escrow
Agent.
The
Parties hereby designate and appoint the Escrow Agent to serve, and the Escrow
Agent hereby agrees to act as such and serve, in accordance with and upon the
terms, conditions and provisions of this Agreement.
2. Establishment
of Escrow.
Concurrently with the execution of this Agreement, and subject to the terms
and
provisions herein contained, the Members hereby authorize and direct delivery
on
their behalf to the Escrow Agent of the Deposited Shares, duly endorsed in
blank
or with accompanying executed blank stock powers, to be held in escrow pursuant
to the terms of this Agreement.
3. Investment
of Escrow Assets.
Until
termination of this Agreement, the Escrow Agent shall hold without reinvestment
all of the Deposited Shares. In the event any cash dividends or other assets
of
any kind are received with respect to the Deposited Shares, the Escrow Agent
shall invest and reinvest the same in accordance with the written directions
of
the Members holding a majority of the Deposited Shares (the “Majority Members”)
and subject to the terms of this Section 3 in (a) U.S. treasury bills or
treasury notes, (b) any other direct obligation issued by or guaranteed in
full
as to principal and interest by the United States of America or
(c) certificates of deposit issued by one or more commercial banks having
capital, surplus and undivided profits of not less than $100,000,000, in each
case with a maturity of less than 180 days. The Deposited Shares, together
with
any cash or other assets received with respect thereto and any investment
earnings thereon, shall be the full escrow assets covered hereby (the “Escrow
Assets”). The Escrow Agent is authorized to liquidate any portion of the Escrow
Assets consisting of investments (except for the Deposited Shares - see Section
5(a)) to provide for payments required to be made under this Agreement. None
of
the Parties shall be liable or responsible in any manner for any loss or
depreciation resulting from any such investment or liquidation, or for any
costs
in connection therewith, and all of said losses and costs shall be an adjustment
to the Escrow Assets.
4. Indemnification
Claims.
If any
of the Escrow Beneficiaries determines to make any claim for indemnification
pursuant to §8.03 of the Merger Agreement (an “Indemnification Claim”), then
such Escrow Beneficiary (the “Indemnification Claimant”) shall notify the Escrow
Agent and the Members in writing of the Indemnification Claim, describing in
such notice (an “Indemnification Notice”) the nature of the Indemnification
Claim, the representations, warranties and/or agreements with respect to which
the Indemnification Claim is made, the specific facts giving rise to an alleged
basis for the Indemnification Claim and the amount thereof if then ascertainable
or, if not ascertainable, a reasonable estimate of the maximum amount thereof,
and shall deliver to the Members copies of any documentation of which the
Indemnification Claimant is aware with respect to the Indemnification Claim.
On
the thirtieth (30th)
calendar day (the “Indemnification Distribution Date”) following the Escrow
Agent’s receipt of the Indemnification Notice, the Escrow Agent shall distribute
to the Indemnification Claimant from the Escrow Assets the amount requested
by
the Indemnification Claimant in the Indemnification Notice unless, prior to
the
Indemnification Distribution Date, the Majority Members deliver to both the
Escrow Agent and the Indemnification Claimant a written notice (a “Dispute
Notice”) disputing the Indemnification Claimant’s right to all or part of the
amount set forth in the Indemnification Notice. If, prior to the Indemnification
Distribution Date, the Escrow Agent receives a Dispute Notice, then the Escrow
Agent shall pay to the Indemnification Claimant the undisputed portion of the
Indemnification Claim (if any) and the disputed portion of the Indemnification
Claim shall thereafter be considered an “Open Indemnification Claim” and the
Escrow Agent shall maintain such portion of the Escrow Assets as is equal to
the
amount of the Open Indemnification Claim as reserve assets (the “Indemnification
Claim Reserve Assets”). Thereafter, the Indemnification Claim Reserve Assets
shall be distributed by the Escrow Agent from escrow hereunder to the
Indemnification Claimant only in accordance with joint written instructions
by
the Indemnification Claimant and the Majority Members or pursuant to a final
non-appealable order issued by a court of competent jurisdiction. The
Indemnification Claim Reserve Assets shall not be distributed by the Escrow
Agent except in the manner set forth in the preceding sentence.
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5. Release
and Application of Escrow Assets.
The
Escrow Agent shall hold the Escrow Assets under the provisions of this Agreement
until authorized hereunder to deliver any specified portion thereof as
follows:
(a) Distributions
of portions of the Escrow Assets shall be made to an Indemnification Claimant
in
satisfaction of Indemnification Claims (if any) made by the Indemnification
Claimant, which distributions shall be in the manner and to the extent
authorized under Section 4 and as further provided in this clause (a). All
distributions of Escrow Assets to an Indemnification Claimant shall be made
in
Deposited Shares first to the extent thereof prior to distribution of any other
Escrow Assets. In distributing Escrow Assets other than cash to an
Indemnification Claimant, the Deposited Shares shall be valued at $3.00 per
Deposited Share, and all other assets shall be valued at their fair market
value. All distributions of the Deposited Shares to an Indemnification Claimant
as a part of the Escrow Assets shall include any accompanying stock powers
executed in blank. Notwithstanding anything to the contrary herein, the Members
may elect to satisfy any Indemnification Claim in cash in lieu of any
distribution of the Escrow Assets as provided herein, and if the Members so
elect and satisfy the Indemnification Claim they must do so and notify the
Escrow Agent in writing that they have done so prior to the Indemnification
Distribution Date.
(b) The
entire balance of the Escrow Assets, minus
the
aggregate amount of any then existing Indemnification Claim Reserve Assets
for
Open Indemnification Claims as to which an Indemnification Notice has been
delivered prior to the second anniversary of the Closing, shall be distributed
to the Members after the second anniversary of the date of the Closing and
no
later than such date as is thirty (30) days after the second anniversary of
the
date of the Closing (the “Escrow Distribution Date”).
(c) After
the
Escrow Distribution Date, at such time when the Escrow Agent receives joint
written instructions by the applicable Indemnification Claimant and the Majority
Members, or pursuant to a final and non-appealable order from a court of
competent jurisdiction (a “Final Determination”) with respect to each Open
Indemnification Claim, (i) the amount distributable to an Indemnification
Claimant under the Final Determination for an Open Indemnification Claim, if
any, shall be distributed to the Indemnification Claimant from the
Indemnification Claim Reserve Assets therefor, and (ii) the balance of such
Indemnification Claim Reserve Assets (if any) shall then be distributed to
the
Members, as applicable.
(d) Notwithstanding
any provision herein to the contrary, if at any time the Escrow Beneficiaries
and the Majority Members jointly execute a written notice providing the Escrow
Agent with distribution instructions for all or part of the Escrow Assets then
remaining, the Escrow Agent shall distribute such all or part of the Escrow
Assets in accordance with the instructions contained in such
notice.
(e) All
distributions to the Members as provided in this Section 5 shall be made pro
rata based on their respective percentage of the Deposited Shares deposited
by
them under this Agreement.
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6. Rights
With Respect to Deposited Shares.
During
the period any Deposited Shares are held hereunder, the Members shall have
the
right to vote their respective Deposited Shares which have been deposited by
them hereunder as Deposited Shares. However, all dividends, distributions,
interest, realized gains and other investment income on the Escrow Assets shall
be retained in the escrow hereunder as part of the Escrow Assets until
distributed pursuant to Section 5.
7. Responsibilities
of Escrow Agent.
The
Escrow Agent shall have no duties or responsibilities except those expressly
set
forth herein. The Escrow Agent shall have no responsibility for the validity
of
any agreements referred to in this Agreement, or for the performance of any
such
agreements by any party thereto or for interpretation of any of the provisions
of any of such agreements. The liability of the Escrow Agent hereunder shall
be
limited solely to bad faith, willful misconduct or gross negligence on its
part.
The Escrow Agent shall be protected in acting upon any certificate, notice
or
other instrument whatsoever received by the Escrow Agent under this Agreement,
not only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information therein
contained, which the Escrow Agent in good faith believes to be genuine and
to
have been signed or presented by a proper person or persons. The Escrow Agent
shall have no responsibility as to the validity, collectibility or value of
any
property held by it in escrow hereunder pursuant to this Agreement, and the
Escrow Agent may rely on any notice, instruction, certificate, statement,
request, consent, confirmation, agreement or other instrument which it believes
to be genuine and to have been signed or presented by a proper person or
persons. In the event that the Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions from any of the undersigned
with respect to any property held by it in escrow hereunder pursuant to this
Agreement which, in the opinion of the Escrow Agent, are in conflict with any
of
the provisions of this Agreement, the Escrow Agent shall be entitled to refrain
from taking any action until it shall be directed otherwise in writing jointly
by the Escrow Beneficiaries and the Majority Members or by an order of a court
of competent jurisdiction. The Escrow Agent shall not be deemed to have notice
of, or duties with respect to, any agreement or agreements with respect to
any
property held by it in escrow hereunder pursuant to this Agreement other than
this Agreement or except as otherwise provided herein. This Agreement sets
forth
the entire agreement among the Parties relating to the subject matter hereof.
Notwithstanding any provision to the contrary contained in any other agreement
(excluding any amendment to this Agreement) between any of the Parties, the
Escrow Agent shall have no interest in the property held by it in escrow
hereunder except as provided in this Agreement. In the event that any of the
terms and provisions of any other agreement (excluding any amendment to this
Agreement) between any of the Parties conflict or are inconsistent with any
of
the terms and provisions of this Agreement, the terms and provisions of this
Agreement shall govern and control in all respects to the extent necessary
to
determine the rights, duties or obligations of the Escrow Agent.
8. Amendment
and Cancellation.
The
Escrow Agent shall not be bound by any cancellation, waiver, modification or
amendment of this Agreement, including the transfer of any interest hereunder,
unless such modification is in writing and signed by the Escrow Beneficiaries
and all of the Members and, if the duties of the Escrow Agent hereunder are
affected in any way, the Escrow Agent.
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9. Legal
Counsel.
The
Escrow Agent may consult with, and obtain advice from, legal counsel in the
event of any question as to any of the provisions hereof or its duties
hereunder, and it shall incur no liability and shall be fully protected in
acting in good faith in accordance with the written opinion and instructions
of
such counsel.
10. Resignation.
The
Escrow Agent shall have the right, in its discretion, to resign as escrow agent
hereunder at any time, by giving at least thirty (30) days’ prior written notice
of such resignation to the Escrow Beneficiaries and the Members. In such event,
the Escrow Beneficiaries and the Members shall promptly select a bank with
capital, surplus and undivided profits of not less than $100,000,000, which
bank
will be appointed as successor escrow agent hereunder, and the Escrow
Beneficiaries and the Members shall then enter into an agreement with such
bank
in substantially the form of this Agreement. Resignation by the Escrow Agent
shall relieve the Escrow Agent of any responsibility or duty thereafter arising
hereunder, but shall not relieve the Escrow Agent from responsibility to account
to any other Party for assets received by the Escrow Agent prior to the
effective date of such resignation. If a substitute for the Escrow Agent
hereunder shall not have been selected, as aforesaid, the Escrow Agent shall
be
entitled to petition any court for the appointment of a substitute for it
hereunder or, in the alternative, it may (a) transfer and deliver the
assets deposited in escrow hereunder to or upon the order of such court or
(b) keep all assets in escrow hereunder until it receives joint written
notice from the Escrow Beneficiaries and the Majority Members of a substitute
appointment. The Escrow Agent shall be discharged from all further duties
hereunder upon acceptance by the substitute of its duties hereunder or upon
transfer and delivery of the said assets in escrow hereunder to or upon the
order of any court.
11. Fees
and Expenses.
The
Escrow Agent shall serve hereunder without any fee. The Escrow Beneficiaries
and
the Members shall mutually bear the Escrow Agent’s expenses incurred in
connection herewith.
12. Distributions.
At any
time the Escrow Agent is required to distribute any Escrow Assets held by or
received by it under any of the provisions of this Agreement, such distribution
shall be effected by mailing or otherwise delivering such Escrow Assets to
the
relevant person at the address of the relevant person on file with the Escrow
Agent, provided that any person may, by written notice delivered to the Escrow
Agent, direct that distributions to such person be effected by mail or delivery
to any other or changed address specified in such notice, and distributions
after such notice is received shall be made in accordance with such notice
(until changed by subsequent notice delivered by such person to the Escrow
Agent).
13. Notices.
All
notices, requests, demands, claims and other communications hereunder shall
be
in writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly given (a) when delivered, if personally delivered,
(b) on the date telecommunicated, if faxed and confirmed by telephone
confirmation (with hard copy to follow via first class mail, postage prepaid),
or (c) one business day after deposit with a reputable overnight courier,
in each case addressed to the intended recipient to the address set forth below,
or to such other address as may be designated in writing hereafter. Any Party
may change the address and/or telecopier number to which notices, requests,
demands, claims and other communications hereunder are to be delivered by giving
the other Parties notice in the manner herein set forth. Notwithstanding any
of
the foregoing, no notice or instructions to the Escrow Agent shall be deemed
to
have been received by the Escrow Agent prior to actual receipt by the Escrow
Agent, and any computation of a time period which is to begin after receipt
of a
notice by the Escrow Agent shall run from the date of such receipt by the Escrow
Agent. All notices hereunder shall be sent to the following
addresses:
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If
to the
Escrow
Beneficiaries,
to: Language
Access Network, Inc.
000
Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxx 00000
Telecopier
No.: (000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxxx, CEO
If
to the
Members, to: Pre-Merger
Members of iBeam Solutions LLC
c/o
Bricker & Xxxxxx LLP
000
Xxxxx
Xxxxx Xxxxxx
Xxxxxxxx,
Xxxx 00000
Telecopier
No.: (000) 000-0000
Attention:
Xxxx X. Xxxxxxx, Esq.
If
to the
Escrow Agent, to: Squire,
Sanders&
Xxxxxxx L.L.P.
0000
Xxxxxxxxxx Xxxxxx
00
Xxxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxx 00000
Attn:
Xxxxxx X. Xxxxx, Esq.
.
14. Termination.
This
Agreement shall terminate and be of no further force or effect upon the
distribution and release of all of the Escrow Assets.
15. Captions.
The
section captions used herein are for reference purposes only, and shall not
in
any way affect the meaning or interpretation of this Agreement.
16. Capitalized
Terms.
Capitalized terms used but not defined herein have the meanings assigned to
such
terms in the Merger Agreement.
17. Indemnification
of Escrow Agent.
The
Escrow Beneficiaries and the Members each agree to hold the Escrow Agent
harmless and to each indemnify the Escrow Agent against one-half of any loss,
liability, claim or demand arising out of or in connection with the performance
of its obligations in accordance with the provisions of this Agreement, except
for bad faith, gross negligence or willful misconduct of the Escrow
Agent.
18. Disagreements.
If any
disagreement or dispute arises among the Parties concerning the meaning or
validity of any provision under this Agreement or concerning any other matter
relating to this Agreement, the Escrow Agent (a) shall be under no obligation
to
act, except under process or final, non-appealable order of court, and shall
sustain no liability for its failure to act pending such process or final,
non-appealable court order, and (b) may deposit, in its sole and absolute
discretion, the Escrow Assets or that portion of the Escrow Assets it then
holds
with any court of competent jurisdiction and interplead the other Parties.
Upon
such deposit and filing of interpleader, the Escrow Agent shall be relieved
of
all liability as to the Escrow Assets and shall be entitled to recover from
the
other Parties its reasonable attorneys’ fees and other costs incurred in
commencing and maintaining such action.
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19. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Ohio without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Ohio or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Ohio.
20. Counterparts.
This
Agreement may be executed in counterparts, all of which taken together shall
constitute one instrument.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, each of the Parties has executed this Agreement as of the
date
first above written.
| LAN: | COMPANY: |
| LANGUAGE ACCESS NETWORK, INC. | iBEAM SOLUTIONS LLC |
| By: _______________ | By: _______________ |
| Name: Xxxxxxx Xxxxxxxxxx | Name: Xxxx Xxxxxxx |
| Title: CEO | Title: President |
| MERGER SUB: | MEMBERS: |
| iBS MERGER SUB LLC | XXXXXXX & XXXXXX LLP |
| By: _______________ | By: _______________ |
| Name: Xxxxxxx Xxxxxxxxxx | Name: Xxxxxx Xxxxxx |
| Title: CEO | Title: Administrative Partner |
| _______________ | |
| Xxxx X. Xxxxxxx | |
| _______________ | |
| Xxxx Xxxxxx | |
| _______________ | |
| Xxxxxx Xxxxxxx | |
| _______________ | |
| Xxxxx Xxxxxx | |
| _______________ | |
| Xxxxxx Xxxx | |
| _______________ | |
| Xxxxxxx Xxxx | |
| Escrow Agent: | |
| SQUIRE, XXXXXXX & XXXXXXX L.L.P. | |
| By: _______________ | |
| Name: Xxxxxx X. Xxxxx | |
| Title: Partner |
