Exhibit 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made this 11th day of July,
2001, between The Kiplinger Washington Editors, Inc. (the "Purchaser"),
Individual Investor Group, Inc. (the "Seller"), and First Union National Bank
(the "Escrow Agent").
Recitals:
WHEREAS, the Purchaser and the Seller have entered into an Agreement,
dated as of July 9, 2001 (the "Purchase Agreement"), pursuant to which the
Purchaser has purchased certain assets of the Seller.
WHEREAS, the Purchaser and the Seller wish to provide for certain
escrow arrangements contemplated by the Purchase Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Deposit into Escrow Account. Concurrently with the execution and
delivery hereof, the Buyer has delivered to the Escrow Agent the sum of One
Hundred Twenty-five Thousand Dollars ($125,000.00) for deposit in an account,
from which the Escrow Agent alone has the power of withdrawal (the "Escrow
Account"), to be held by the Escrow Agent under and subject to the terms and
provisions of this Agreement. Receipt of the funds so deposited is hereby
acknowledged by the Escrow Agent. The Purchaser and the Seller respectively do
hereby confirm the Purchase Agreement and promise and agree to take such action
in connection with the effectuation and administration of this Agreement as
shall be reasonable and proper to fulfill their respective duties and
obligations under the Purchase Agreement.
2. Investment. Escrow Agent shall invest (and reinvest as appropriate)
all sums held in the Escrow Account in Evergreen Cash Management Money Market
Fund. All interest or other income received from the investment and reinvestment
of the funds in the Escrow Account, less losses, if any, incurred on such
investment and reinvestment, shall be held by the Escrow Agent in the Escrow
Account.
3. Income. All income earned on the Escrow Account shall be for the
account of Seller as nominee. The Tax Identification Number of Seller is
00-0000000. Federal law may require withholding on income earned in the absence
of the Escrow Agent's receipt of a Tax Identification Number for the beneficial
owner.
4. Disbursements from the Escrow Account.
The Escrow Agent shall be authorized to make disbursements out of
the Escrow Account in accordance with the following, but not otherwise:
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(a) Any and all refund requests received by Seller on account of
subscribers of Individual Investor Magazine shall be forwarded promptly to
Communications Data Services, Inc. ("CDS"). CDS shall prepare a summary of such
refund requests, together with any processing fees or other costs attributable
to such refund request, on at least a monthly basis and send a copy of such
summary to Seller and Purchaser and to Escrow Agent. Purchaser shall likewise
prepare a summary of refunds requests received by it and send a copy of such
Summary to Seller and Escrow Agent. Seller and Purchaser shall have five (5)
business days to object to the payment of any such refunds and CDS processing
fees or other costs, at which time Escrow Agent shall pay to CDS and/or
Purchaser, as the case may be, an amount equal to all refunds on such summary to
which objections have not been made. Purchaser and Seller shall attempt to
resolve in good faith any dispute over any particular refunds.
(b) Escrow Agent shall pay to Seller the funds remaining in the Refund
Escrow Account, if any, together with interest accrued thereon, on the 180th day
after the date hereof.
5. Responsibility.
(a) The duties and responsibilities of the Escrow Agent shall be
limited to those expressly set forth in this Agreement. No implied duties of the
Escrow Agent shall be read into this Agreement. The Escrow Agent shall have no
duty to determine the performance or non-performance of any term, covenant or
condition of the Asset Purchase Agreement or any other contract or agreement
between the Purchaser and the Seller.
(b) The Escrow Agent is authorized, in its sole discretion, to
disregard any and all notices or instructions given by any other party hereto or
by any other person, firm or corporation, except only such notices or
instructions as are herein provided for and orders or process of any court
entered or issued with or without jurisdiction.
(c) If any property subject hereto is at any time attached,
garnished, or levied upon under any court order or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment, or decree
shall be made or entered by any court affecting such property or any party
hereto, then and in any of such events the Escrow Agent is authorized, in its
sole discretion, to rely upon and comply with any such order, writ, judgment or
decree as it is so advised by legal counsel of its own choosing, and if it
complies with any such order, writ, judgment or decree it shall not be liable to
any party hereto or to any other person, firm or corporation by reason of such
compliance even though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside, or vacated.
6. Reliance.
(a) In performing its duties hereunder, the Escrow Agent is entitled
to rely upon the authenticity of all documents transmitted to it by the parties
to this Agreement and on the truth and accuracy of the information contained in
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said documents, except those instances where the information contained in said
documents is so patently false or incorrect that failure to recognize same would
be tantamount to gross negligence or willful misconduct.
(b) The Escrow Agent may rely, and shall be protected in acting or
refraining from acting, upon any instrument furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the
appropriate party or parties, including without limitation, with respect to any
party which is a corporation, any instrument purporting to have been signed on
its behalf by its duly authorized representative. The Escrow Agent may request
such certificates, opinions or other documents evidencing such authorizations,
as it deems reasonably necessary.
7. Limitation of Liability.
(a) The Escrow Agent shall not be responsible or liable for any act
or failure to act hereunder except in the case of its gross negligence or
willful misconduct. The Escrow Agent may act in good faith reliance upon the
advice of counsel satisfactory to it in reference to any matter connected with
the Escrow Account and shall not be responsible or liable for any act taken or
omitted by it in good faith in accordance with such advice. The Escrow Agent
shall have no responsibility whatsoever with respect to the recitals contained
herein or in any other document or documents exchanged between the Purchaser and
the Seller.
(b) The Purchaser and the Seller each hereby release the Escrow
Agent from any claim, demand, loss, or liability, that the Purchaser or the
Seller may respectively have or bring, becoming due, arising under, out of, as a
result of, in connection with or related to, this Agreement or the Escrow
Agent's performance hereunder, provided such claim, demand, loss, liability, or
expense has not directly resulted from the Escrow Agent's gross negligence or
willful misconduct.
(c) In no event shall the Escrow Agent be liable for any
consequential, special, punitive, or indirect loss or damage that any party to
this Agreement may incur or suffer in connection with this Agreement.
8. Indemnification. The Purchaser and the Seller jointly and severally
agree to indemnify the Escrow Agent and its officers, directors and employees
for, and hold the Escrow Agent and its officers, directors and employees
harmless against, any and all claims, demands, losses, liabilities, or expenses
(including reasonable attorneys' fees and expenses) of any person or entity
becoming due, arising under, out of, as a result of, in connection with, or
related to this Agreement or the Escrow Agent's performance hereunder, provided
such claim, demand, loss, liability, or expense has not directly resulted from
the Escrow Agent's gross negligence or willful misconduct, and a lien to secure
this indemnification is hereby created on any funds now or hereafter deposited
in the Escrow Account in favor of the Escrow Agent.
9. Escrow Statement. The Escrow Agent will furnish monthly statements
of transactions in the Escrow Account and quarterly asset statements.
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10. Costs and Fees. All costs of initiating, maintaining and
terminating the Escrow Account and of modifying, amending, or terminating this
Agreement, including without limitation the fees of legal counsel with whom the
Escrow Agent may find it necessary to consult, shall be paid by the Seller. The
fees of the Escrow Agent for its services shall be as follows:
Administration Fee $500.00
Out-of-Pocket As incurred
The amount of $500.00 is due upon execution of this Agreement and shall be
deducted from the Escrow Account. If extraordinary duties are requested, an
additional charges may be made commensurate with time and responsibilities
involved to execute such duties. The amount of any such additional charges shall
be disclosed promptly to the Seller and the Purchaser. A lien to secure payment
of such costs, fees and charges is hereby created on any funds now or hereafter
deposited in the Escrow Account in favor of the Escrow Agent.
11. Disputes. In the event any dispute should arise with respect to
this Agreement or the funds deposited hereunder, whether such disputes arise
between the Purchaser and the Seller and others or between the Purchaser and the
Seller, it is understood and agreed that the Escrow Agent shall have the
absolute right to elect to do either of the following: (i) withhold and stop all
further proceedings in and performance of this Agreement or (ii) file in
interpleader and obtain an order from the court requiring the parties to the
dispute to interplead and litigate in such court their several claims and rights
among themselves. In the event such interpleader suit is brought, the Escrow
Agent shall ipso facto be fully released and discharged from all obligations
imposed upon it in this escrow, and the Purchaser and the Seller jointly and
severally agree to pay all costs, expenses, and reasonable attorney's fees
expended or incurred by the Escrow Agent in connection therewith. Any such cost,
expenses and fees that may be incurred in accordance with the foregoing shall be
a first lien against any funds on deposit or to be deposited in the Escrow
Account.
12. Notices.
(a) For purposes of notices and correspondence, the parties'
addresses shall be:
Purchaser: The Kiplinger Washington Editors, Inc.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Vice President for Finance
Telephone (000) 000-0000
Telecopy: (000) 000-0000
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Seller: Individual Investor Group, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Escrow Agent: First Union National Bank
CMG/Corporate Trust Group, LM
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Assistant Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) All notices required or permitted hereunder, except as noted below,
shall be hand delivered or shall be sent (i) by overnight delivery service (ii)
by certified, or express mail, postage prepaid, or (iii) by facsimile
transmission followed by a "hard-copy" sent by either method (i) or (ii),
addressed in each case to the other party at its address and/or fax number
stated above or at such other address and/or fax number designated hereinafter
by the receiving party in writing). All regular bank advises of receipt and
disbursement transactions and Escrow Statements shall be sent (i) by the methods
described above at the expense of the party requesting such method, or (ii) by
first class mail, postage prepaid by the Escrow Agent.
13. Resignation. The Escrow Agent may resign at any time as Escrow
Agent by giving thirty (30) days written notice to the Purchaser and the Seller.
Upon such resignation, the Escrow Agent shall (i) immediately cease disbursement
of moneys from the Escrow Account; (ii) as soon as practicable and within
fourteen (14) days, make an accounting to all the parties of the funds in the
Escrow Account; (iii) execute any and all documents required for the appointment
of, and performance by, a successor Escrow Agent, and (iv) thereafter distribute
said funds to the successor Escrow Agent indicated in writing by the Purchaser
and the Seller or to the parties in accordance with their mutual instructions.
If no successor Escrow Agent has been appointed as of the effective date of the
resignation, all obligations of the Escrow Agent hereunder shall nevertheless
cease and terminate, except that the Escrow Agent's sole responsibility
thereafter shall be to keep safely the funds in the Escrow Account and to
deliver the same either to the person(s) jointly designated in writing by the
Purchaser and Seller or in accordance with the direction of a final order or
judgment of a court of competent jurisdiction.
14. Termination.
(a) The Purchaser and Seller may, acting jointly, terminate the
appointment of the Escrow Agent hereunder upon written notice specifying the
date upon which such termination shall take effect. Upon its receipt of written
instructions and payment in full of any amounts due the Escrow Agent hereunder,
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the Escrow Agent shall promptly deliver all funds then held by it in the Escrow
Account to the person(s) jointly designated by the Purchaser and Seller in such
written instructions.
(b) When the Escrow Agent has taken all of the actions required by
this Agreement, the Escrow Agent shall thereupon and thereafter be freed and
discharged of all obligations and liabilities under this Agreement. Termination
of this Agreement shall not relieve either the Seller or the Purchaser of any
obligation hereunder to pay any fees, charges or expenses properly incurred by
the Escrow Agent.
(c) The Purchaser and Seller agree to execute and deliver to the
Escrow Agent such further documents as it may reasonably request to evidence
termination of this Escrow Agreement and to induce their consent to the final
payment of the funds in the Escrow Account.
(d) The provisions of Sections 7 and 8 shall survive the termination
of this Agreement.
15. Miscellaneous.
(a) This Agreement and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with the laws of the
District of Columbia, both of interpretation and performance, without regard to
its conflicts of laws principles.
(b) The invalidity, illegality, or unenforceability of any provision
of this Agreement shall not affect the validity, legality, or enforceability of
any of the other provisions of this Agreement, which shall remain effective.
(c) The Escrow Agent shall be under no obligation to institute or
defend any actions, suit or legal proceeding in connection herewith or to take
any other action likely to involve it in expense unless first indemnified to its
satisfaction.
(d) This Agreement constitutes the complete and exclusive expression
of the terms of the agreement between the parties relating to the subject matter
of this Agreement.
(e) The parties further agree that this Agreement may not in any way
be explained or supplemented by a prior or existing course of dealings between
the parties or by any other prior performance between the parties pursuant to
this Agreement or otherwise, and no course of dealing among the parties shall be
effective to amend, modify, or change any provision of this Agreement.
(f) No amendment to this Agreement shall be effective unless it is
in writing and signed by duly authorized representatives of each of the parties
hereto.
(g) All signatories to this Agreement warrant that they have full
and complete authority to enter into and sign this Agreement on behalf of
themselves and/or the entity on whose behalf they are signing. Each of the
parties shall execute such documents and other papers and take such further
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actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
(h) This Agreement may be executed by the parties hereto individually
or in any combination, in one or more counterparts, each of which shall be an
original and all of which together constitute one and the same agreement.
(i) THE PURCHASER, THE SELLER, AND THE ESCROW AGENT SPECIFICALLY
WAIVE THE RIGHT TO TRIAL BY JURY IN RESOLVING ANY CLAIM OR COUNTER CLAIM RELATED
TO THIS AGREEMENT.
[SIGNATURE PAGES FOLLOW]
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[Signature Page to Escrow Agreement]
Seller:
Individual Investor Group, Inc.
/s/ Xxxxxx X. Xxxxx
By: ____________________________
Xxxxxx X. Xxxxx
Name: _________________________
VP - Controller
Title: __________________________
Purchaser:
The Kiplinger Washington Editors, Inc.
/s/ Xxxxxxxx X. Xxxxxx
By: ____________________________
Xxxxxxxx X. Xxxxxx
Name: __________________________
Sr. V.P., Publishing
Title: _____________________________
Escrow Agent:
First Union National Bank
/s/
By:______________________
Name:
Title:
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