SPECIAL ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of October 16, 2000 (the
"Escrow Agreement"), is by and among Wit SoundView Group, Inc., a corporation
organized under the laws of Delaware ("Parent"), E*TRADE Group, Inc. as the
agent (the "Shareholders' Agent") of certain shareholders, each of whom is
listed on ANNEX A hereto (individually, a "Shareholder" and collectively the
"Shareholders") of E*OFFERING Corp., a California corporation (the "Company"),
and The Chase Manhattan Bank as escrow agent (the "Special Escrow Fund Agent").
Capitalized terms not otherwise defined in this Escrow Agreement have the
meanings ascribed to them in the Merger Agreement (as defined below).
Pursuant to the Agreement and Plan of Merger, dated as of May
15, 2000 (the "Merger Agreement"), and as amended on September 26, 2000 (the
"Amendment Agreement"), by and among Parent, Wit SoundView Corp., a corporation
organized under the laws of the State of Delaware ("Merger Sub"), and the
Company, the Company has been merged with and into Merger Sub (the "Merger").
Pursuant to Section 4.2 of the Merger Agreement, __________
shares of common stock, $0.01 par value per share, of Parent (the "Special
Escrow Shares") are being deposited by Parent into the escrow fund established
hereunder (the "Special Escrow Fund") under Article IV of the Merger Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. ESTABLISHMENT OF ESCROW. Pursuant to Section 4.2(d)
of the Merger Agreement, Parent has delivered to the Special Escrow Fund Agent
and the Special Escrow Fund Agent acknowledges receipt of the Special Escrow
Shares in the form of stock certificates registered in the name of Xxxx & Co. as
nominee for the Special Escrow Fund Agent. The name and address of each
Shareholder, the number of Special Escrow Shares initially being deposited on
each Shareholder's behalf and (if applicable) the taxpayer identification of
each Shareholder are set forth in ANNEX A attached hereto. The Special Escrow
Fund Agent shall hold the Special Escrow Shares, and any dividends or other
distributions on the Special Escrow Shares and other securities or property into
which the Special Escrow Shares may be converted or reclassified into or
exchanged for, in escrow, in its name or the name of its nominee, in accordance
with this Escrow Agreement. The Special Escrow Shares shall not be subject to
any lien, attachment, trustee process or any other judicial process of any
creditor of any party hereto.
The Special Escrow Fund Agent shall have no
responsibility for the genuineness, validity, market value, title or sufficiency
for any intended purpose of the Special Escrow Shares. The Special Escrow Fund
Agent shall be under no obligation to preserve, protect or exercise rights in
the Special Escrow Shares, and shall be responsible only for reasonable measures
to maintain the physical safekeeping thereof, and otherwise to perform and
observe such duties on its part as are expressly set forth in this Escrow
Agreement. Notwithstanding the foregoing, if the Special Escrow Fund Agent is so
requested in a written request of the Shareholders' Agent received by the
Special Escrow Fund Agent at least three (3)
business days prior to the date on which the Special Escrow Fund Agent is
requested therein to take such action (or such later date as may be acceptable
to the Special Escrow Fund Agent), the Special Escrow Fund Agent shall execute
or cause its nominee to execute, and deliver to the Shareholders' Agent a proxy
or other instrument in the form supplied to it by the Shareholders' Agent for
voting or otherwise exercising any right of consent with respect to any of the
Special Escrow Shares held by it hereunder, to authorize therein the
Shareholders' Agent to exercise such voting or consent authority in respect of
the Special Escrow Shares (provided that the Special Escrow Fund Agent shall not
be obliged to execute any such proxy or other instrument if, in its judgment,
the terms thereof may subject the Special Escrow Fund Agent to any liabilities
or obligations in its individual capacity). The Special Escrow Fund Agent shall
not be responsible for forwarding to any party, notifying any party with respect
to, or taking any action with respect to, any notice, solicitation or other
document or information, written or otherwise, received from Parent or other
person with respect to the Special Escrow Shares, including but not limited to,
proxy material, tenders, options, the pendency of calls and maturities and
expiration of rights.
2. DIVIDENDS AND DISTRIBUTIONS ON SPECIAL ESCROW SHARES.
The Special Escrow Fund Agent shall invest all cash dividends and other cash
distributions, if any, on the Special Escrow Shares (such cash dividends and
other cash distributions are referred to herein as the "Escrow Cash Dividends")
at, and pursuant to, the written direction of the Shareholders' Agent in
Eligible Investments (as defined below) (including any interest earned thereon)
and shall not be responsible or liable for any loss accruing from any investment
made in accordance herewith, and the Special Escrow Fund Agent shall hold any
noncash dividends and other noncash distributions on the Special Escrow Shares.
Dividends payable in securities or other distributions of any kind, whether by
way of stock dividends, stock splits or otherwise, shall be delivered to the
Special Escrow Fund Agent and added to the Special Escrow Fund and become a part
of the Special Escrow Fund. Such securities or other distributions shall be
considered Special Escrow Shares for purposes hereof and allocated pursuant to
the terms of this Escrow Agreement.
"Eligible Investments" means (a) obligations issued
or guaranteed by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support of interest and principal thereto); (b) certificates of deposit of
any domestic commercial bank having capital and surplus in excess of
$500,000,000; (c) repurchase obligations for underlying securities of the type
described in clause (a); (d) shares of any registered money market fund at least
ninety-five percent (95%) of the assets of which constitute obligations of the
type described in clause (a) above; (e) a trust account with The Chase Manhattan
Bank (thirty (30) day libor minus fifty (50) bps); or (f) one or more portfolios
of The Chase Vista Money Market Mutual Funds, for which affiliates of The Chase
Manhattan Bank provide investment advisory and shareholder services for a fee as
described in the prospectus for these funds which has been provided to the
parties hereto, in addition to a twenty-five (25) basis point fee as
compensation for administrative and accounting services provided to clients. No
investment except for investments in money market funds shall have a term of
more than thirty (30) days. If otherwise qualified, obligations of the Special
Escrow Fund Agent shall qualify as Eligible Investments.
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Absent its timely receipt of such specific written
investment instruction from the Shareholders' Agent, the Special Escrow Fund
Agent shall have no obligation or duty to invest (or otherwise pay interest on)
the Escrow Funds. All earnings received from the investment of the Escrow Cash
Dividends shall be credited to, and shall become a part of, the Special Escrow
Fund (and any losses on such investments shall be debited to the Special Escrow
Fund). The Special Escrow Fund Agent shall have no liability for any investment
losses, including any losses on any investment required to be liquidated prior
to maturity in order to make a payment required hereunder.
All trust investment orders involving Treasuries,
commercial paper and other direct investments will be executed through Chase
Asset Management (CAM), in the investment management division of The Chase
Manhattan Bank. Subject to the principles of best execution, transactions are
effected on behalf of the account through a broker dealer selected by CAM. In
this regard, CAM seeks to attain the best overall result for the account, taking
into consideration quality of service and reliability. An agency fee will be
assessed in connection with each transaction. Periodic statements will be
provided to Parent and Shareholders' Agent reflecting transactions executed on
behalf of the Escrow Fund. The Parent and Shareholders' Agent, upon written
request, will receive a statement of transaction details upon completion of any
securities transaction in the Escrow Fund without any additional cost.
3. TAX TREATMENT AND ALLOCATION. Dividends and other
distributions on the Special Escrow Shares shall be allocable for tax purposes
to the Shareholders in proportion to their respective Special Escrow Shares at
the time of such allocation, and the Shareholders will include any such
allocations constituting income in their gross income for federal, state and
local income tax purposes and pay any tax resulting therefrom. Any interest or
other earnings on the Special Escrow Shares and Escrow Cash Dividends shall be
allocable for tax purposes to Parent. Parent and the Shareholders' Agent will
provide the Special Escrow Fund Agent with certified tax identification numbers
for each of Parent and the Shareholders by furnishing appropriate Forms W-9 (or
Forms W-8, in the case of non-U.S. persons) and other forms and documents that
the Special Escrow Fund Agent may reasonably request to the Special Escrow Fund
Agent within fourteen (14) days of the date hereof. The parties hereto
acknowledge that in the event that a Shareholder's tax identification number is
not certified to the Special Escrow Fund Agent, the Special Escrow Fund Agent
may be required to withhold a portion of any interest, dividends or other income
earned on the Escrow Fund. The Special Escrow Fund Agent will be permitted to
withhold and pay to the appropriate taxing authority any amount of the Special
Escrow Shares, Escrow Cash Dividends and earnings thereon that the Special
Escrow Fund Agent in its determination reasonably believes is required to be
withheld and paid to the applicable taxing authority.
4. TAX INDEMNIFICATION. Each Shareholder: (i) assumes
any and all obligations imposed now or hereafter by any applicable tax law with
respect to any payment or distribution of the Special Escrow Shares or Escrow
Cash Dividends, or performance of other activities under this Escrow Agreement,
with respect to the Shareholder's Special Escrow Shares; (ii) shall instruct the
Shareholders' Agent to instruct the Special Escrow Fund Agent in writing with
respect to the Special Escrow Fund Agent's responsibility for withholding and
other taxes,
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assessments or other governmental charges, and shall instruct the Shareholders'
Agent to instruct the Special Escrow Fund Agent with respect to any
certifications and governmental reporting that may be required under any laws or
regulations that may be applicable in connection with its acting as Special
Escrow Fund Agent under this Escrow Agreement with respect to the Shareholder's
Special Escrow Shares; and (iii) shall indemnify and hold the Special Escrow
Fund Agent harmless from any liability or obligation on account of taxes,
assessments, additions for late payment, interest, penalties, expenses and other
governmental charges that may be assessed or asserted against the Special Escrow
Fund Agent in connection with or relating to any payment made or other
activities performed under this Escrow Agreement with respect to the
Shareholder's Special Escrow Shares, including without limitation any liability
for the withholding or deduction of (or the failure to withhold or deduct) the
same, and any liability for failure to obtain proper certifications or to report
properly to governmental authorities in connection with this Escrow Agreement,
including costs and expenses (including reasonable legal fees and expenses),
interest and penalties.
5. ESCROW PERIOD. This escrow shall commence on the date
hereof and shall terminate on October 16, 2003 ("Escrow Period").
6. THE SPECIAL ESCROW FUND AGENT.
(a) The Special Escrow Fund Agent shall not be
liable for any act or failure to act under this Escrow Agreement, including any
and all claims made against the Special Escrow Fund Agent as a result of its
holding the Special Escrow Shares or Escrow Cash Dividends in its own name,
except for its own gross negligence, bad faith or willful misconduct. Subject to
the foregoing, the Special Escrow Fund Agent shall not be liable for, and Parent
and the Shareholders' Agent shall, jointly and severally, indemnify and hold
harmless the Special Escrow Fund Agent and its directors, employees, officers,
agents, successors and assigns against any losses or claims (including
reasonable out-of-pocket expenses and attorney fees) arising out of any action
taken or omitted hereunder and reasonable costs of investigation and counsel
fees and expenses which may be imposed on the Special Escrow Fund Agent or
reasonably incurred by it in connection with its acceptance of this appointment
or performance of its duties hereunder. The Special Escrow Fund Agent may
decline to act and shall not be liable for failure to act if in doubt as to its
duties under this Escrow Agreement. The Special Escrow Fund Agent may act upon
any instrument or signature (including wire transfer instructions) believed by
it to be genuine and may assume that any person purporting to give any notice or
instruction hereunder, believed by it to be authorized, has been duly authorized
to do so. The Special Escrow Fund Agent's duties shall be determined only with
reference to the express duties set forth in this Escrow Agreement, each of
which duties are ministerial in nature, and applicable law. The Special Escrow
Fund Agent shall not be deemed to be a fiduciary and is not charged with
knowledge of or any duties or responsibilities in connection with any other
document or agreement, including without limitation, the Merger Agreement. The
parties hereto agree that the use of defined terms incorporated by reference to
the Merger Agreement is solely for the convenience of the other parties, and the
Special Escrow Fund Agent may rely on the use of defined terms in any
communication received by it. In no event will the Special Escrow Fund Agent be
liable for punitive, special or consequential damages or losses (including lost
profits)
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whatsoever, even if the Special Escrow Fund Agent has been informed of the
likelihood of such damages or losses. The parties hereto acknowledge that the
foregoing indemnities shall survive the resignation or removal of the Special
Escrow Fund Agent or the termination of this Escrow Agreement.
(b) On the last business day of the calendar
month following the month of the date of this Escrow Agreement, and on the last
business day of each calendar month thereafter during the Escrow Period, the
Special Escrow Fund Agent shall release one thirty-sixth of the Special Escrow
Shares, in accordance with the Schedule as set forth in ANNEX B, to the
Shareholders' addresses as set forth in ANNEX A. PROVIDED, HOWEVER, that in the
event of a Change in Control (as defined in the Strategic Alliance Agreement)
with respect to the Shareholders' Agent and a non-assumption of the Strategic
Alliance Agreement by the acquiring or successor entity, Parent or the
Shareholders' Agent shall deliver to both the Special Escrow Fund Agent and the
other party a certificate indicating that a Change in Control with respect to
the Shareholders' Agent has occurred. In such event, unless the Special Escrow
Fund Agent receives a Dispute Notice (as defined below), within fourteen (14)
days after receiving such certificate from Parent or the Shareholders' Agent,
the Special Escrow Fund Agent shall (i) deliver all remaining Special Escrow
Shares in the Special Escrow Fund to Parent's transfer agent with instruction to
distribute the Special Escrow Shares to Parent for cancellation, and (ii)
deliver any and all Escrow Cash Dividends, interest and other earnings on the
Special Escrow Shares to Parent via check to Parent's address in Section 10.
PROVIDED, FURTHER, that in the event of a Change in Control (as defined in the
Strategic Alliance Agreement) with respect to Parent, Parent or the
Shareholders' Agent shall deliver to both the Special Escrow Fund Agent and the
other party a certificate indicating that a Change in Control with respect to
Parent has occurred. In such event, unless the Special Escrow Fund Agent
receives a Dispute Notice (as defined below), within fourteen (14) days after
receiving such certificate from Parent or the Shareholders' Agent, the Special
Escrow Fund Agent shall (i) deliver all remaining Special Escrow Shares in the
Special Escrow Fund (which Special Escrow Shares shall be delivered in the name
of the Shareholders' Agent) to the Shareholders' Agent at the Shareholders'
Agent's address in Section 10 with instructions to distribute the Special Escrow
Shares to the Shareholders in accordance with their respective percentage
interests in the Special Escrow Fund as set forth in ANNEX A, (ii) deliver any
and all Escrow Cash Dividends on the Special Escrow Shares to the Shareholders'
Agent via check to the Shareholders' Agent's address in Section 10 with
instructions to distribute such Escrow Cash Dividends to the Shareholders in
accordance with their percentage interests in the Special Escrow Fund as set
forth in ANNEX A and (iii) deliver any interest or other earnings on Special
Escrow Share dividends or other distributions to Parent via check to Parent's
address in Section 10. The Special Escrow Fund Agent shall instruct Parent's
transfer agent that any Special Escrow Shares released from the Special Escrow
Fund shall continue to bear the legend on prohibition of transfer pursuant to
Section 4.2(b) of the Merger Agreement to the extent that such prohibition
continues to apply to such Special Escrow Shares at the time of such release.
(c) If, at any time during the Escrow Period,
the number of the Special Escrow Shares to be distributed to the Shareholders'
Agent pursuant to this Escrow Agreement is not evenly divisible by a whole
number, the number of Special Escrow
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Shares to be distributed to the Shareholders' Agent shall be rounded down to the
next lowest number of Special Escrow Shares, and the Special Escrow Fund Agent
shall cause Parent's transfer agent to distribute that number of Special Escrow
Shares to the Shareholders' Agent. In lieu of the additional fractional Special
Escrow Share interest to which the Shareholders' Agent is entitled, Parent shall
furnish the Special Escrow Fund Agent cash equal to the value of such fractional
Special Escrow Share interest, which value shall be set forth in a certificate
delivered to the Special Escrow Fund Agent by both Parent and the Shareholders'
Agent, and the Special Escrow Fund Agent shall pay such cash to the
Shareholders' Agent via check to the address of the Shareholders' Agent in
Section 10. Parent shall be deemed to have purchased such fractional Special
Escrow Share interest with respect to which it has furnished funds to the
Special Escrow Fund Agent.
(d) If Parent or the Shareholders' Agent, in
good faith, disputes any claim (in whole or in part) in a certificate made
pursuant to this Section 6, the Shareholders' Agent or Parent shall give written
notice thereof ("Dispute Notice") to the other party and to the Special Escrow
Fund Agent, and the Special Escrow Fund Agent must receive such Dispute Notice
within fourteen (14) days after the date the Special Escrow Fund Agent received
the related certificate. If the Special Escrow Fund Agent timely receives the
Dispute Notice, the Special Escrow Fund Agent shall continue to hold the Special
Escrow Shares in accordance with the terms of this Escrow Agreement, and no
distribution of the Special Escrow Shares shall be made by the Special Escrow
Fund Agent to Parent or to the Shareholders until either (i) such disputed claim
has been resolved as evidenced by a written notice executed by Parent and the
Shareholders' Agent instructing the Special Escrow Fund Agent as to the
distribution of the Special Escrow Shares relative to each Shareholder's
account, or (ii) such dispute shall have been adjudicated in accordance with the
arbitration procedures described in Section 6(e) hereof and the Special Escrow
Fund Agent has received such documents as are specified therein.
(e) If the Special Escrow Fund Agent does not
receive written notice executed by Parent and the Shareholders' Agent within
forty-five days (45) after the Special Escrow Fund Agent receives the Dispute
Notice to the effect that the dispute has been resolved, the claim shall be
referred to an arbitrator in accordance with Section 13.1 of the Merger
Agreement. The Special Escrow Fund Agent shall distribute or continue to hold
the Special Escrow Shares in accordance with the final arbitration
determination, in each case as and to the extent allowed as soon as practicable
following its receipt of a copy of the arbitration determination. Such
arbitration decision must specify the distribution of the Special Escrow Shares
relative to each Shareholder's position.
(f) The Special Escrow Fund Agent shall have the
right at any time to resign hereunder by giving written notice of its
resignation to the parties hereto, at the addresses set forth herein or at such
other address as the parties shall provide, at least thirty days prior to the
date specified for such resignation to take effect. The Special Escrow Fund
Agent shall have the right to withhold an amount equal to any amount due and
owing to the Special Escrow Fund Agent, plus any costs and expenses the Special
Escrow Fund Agent shall reasonably believe may be incurred by the Special Escrow
Fund Agent in connection with the termination of this Escrow Agreement. In such
event Parent shall with the approval of the Shareholders' Agent, which approval
shall not be unreasonably withheld, appoint a successor Special Escrow Fund
Agent within that thirty-day period; if Parent does not designate a successor
Special Escrow Fund
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Agent within such period, the Special Escrow Fund Agent may appoint a successor
Special Escrow Fund Agent. Upon the effective date of such resignation, the
Special Escrow Shares and Escrow Cash Dividends then held by the Special Escrow
Fund Agent hereunder shall be delivered by it to such successor Special Escrow
Fund Agent or as otherwise shall be designated in writing by Parent and the
Shareholders' Agent. If no successor Special Escrow Fund Agent is appointed as
provided herein, the Special Escrow Fund Agent may apply to a court of competent
jurisdiction for appointment of a successor Special Escrow Fund Agent.
(g) In the event that the Special Escrow Fund
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 previsions of this Escrow Agreement, it shall be
entitled to refrain from taking any action and its sole obligation shall be to
keep safely all property held in escrow until it shall be directed otherwise in
writing by all of the other parties hereto or by a final order or judgment of a
court of competent jurisdiction. The Special Escrow Fund Agent may consult
counsel satisfactory to it, including in-house counsel, and will be protected in
respect of any action taken or omitted in reliance thereon.
(h) The Special Escrow Fund Agent may execute
any of its powers or responsibilities hereunder and exercise any rights
hereunder, either directly or by or through its agents or attorneys. Nothing in
this Escrow Agreement shall be deemed to impose upon the Special Escrow Fund
Agent any duty to qualify to do business in any jurisdiction other than New York
or to act as fiduciary. The Special Escrow Fund Agent shall not be responsible
for and shall not be under a duty to examine, inquire into or pass upon the
validity, binding effect, execution or sufficiency of this Escrow Agreement or
of any amendment or supplement hereto.
7. TERMINATION.
(a) Upon the termination of the Escrow Period
("Termination Date"), the Special Escrow Fund Agent shall deliver any and all
remaining Special Escrow Shares and Escrow Cash Distributions to the
Shareholders' Agent with instructions to deliver to the Shareholders according
to their respective Special Escrow Shares then held in escrow. Special Escrow
Shares delivered in this manner upon the Termination Date shall be registered in
the name of the Shareholders' Agent. The Special Escrow Fund Agent shall deliver
any interest or other earnings on Special Escrow Share dividends or other
distributions to Parent via check to Parent's address in Section 10. This Escrow
Agreement shall terminate upon the later of the Termination Date or the
distribution of all the Special Escrow Shares in accordance with this Escrow
Agreement, provided that Section 4 shall survive termination of this Escrow
Agreement.
(b) If, upon the Termination Date, the number of
Special Escrow Shares to be delivered to the Shareholders' Agent pursuant to
this Escrow Agreement is not a whole number, the number of Special Escrow Shares
to be delivered to the Shareholders' Agent shall be rounded down to the next
lowest number of Special Escrow Shares, and the Special Escrow Fund Agent shall
cause Parent's transfer agent to distribute that number of Special Escrow Shares
to the Shareholders' Agent. In lieu of the additional fractional Special Escrow
Share interest to which the Shareholders' Agent is entitled, Parent shall
furnish the Special Escrow Fund Agent cash equal to the value of such fractional
Special Escrow Share interest,
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which value shall be set forth in a certificate delivered to the Special Escrow
Fund Agent by both Parent and the Shareholders' Agent, and the Special Escrow
Fund Agent shall pay such cash to the Shareholders' Agent via check to the
address of the Shareholders' Agent as set forth in Section 10. Parent shall be
deemed to have purchased such fractional Special Escrow Share interest with
respect to which it has furnished funds to the Special Escrow Fund Agent.
8. ESCROW FEES AND EXPENSES. Parent agrees to (i) pay
the Special Escrow Fund Agent upon execution of this Escrow Agreement and
annually thereafter reasonable compensation for the services to be rendered
hereunder, which unless otherwise agreed in writing shall be as set forth in
ANNEX C attached hereto, and (ii) pay or reimburse the Special Escrow Fund Agent
upon request for all expenses, disbursements and advances, including reasonable
attorneys' fees and expenses, incurred or made by it in connection with the
preparation, execution, performance, delivery, modification and termination of
this Escrow Agreement.
9. SHAREHOLDERS' AGENT. The Shareholders' Agent
represents and warrants to Parent and the Special Escrow Fund Agent that it is
authorized to execute this Escrow Agreement for and on behalf of the
Shareholders and to take any action deemed by it appropriate or necessary to
carry out the provisions of, and to determine the rights of the Shareholders
under, this Escrow Agreement. The Shareholders' Agent shall serve as the agent
of the Shareholders for all purposes related to this Escrow Agreement, including
without limitation service of process upon the Shareholders. By execution of
this Escrow Agreement, the Shareholders' Agent accepts and agrees to use its
best efforts to discharge the duties and responsibilities of the Shareholders'
Agent set forth in this Escrow Agreement without compensation for its services
hereunder. Parent and the Special Escrow Fund Agent shall be entitled to rely
upon the authorization and designation of the Shareholders' Agent under this
Section 9 and shall be fully protected in dealing with the Shareholders' Agent,
and shall have no duty to inquire into the authority of any person reasonably
believed by any of them to be the Shareholders' Agent.
10. NOTICES. Any notice or other communication required
or permitted hereunder shall be in writing and shall be deemed given when
delivered in person, by overnight courier, by facsimile transmission (with
receipt confirmed by telephone or by automatic transmission report) or five (5)
business days after being sent by registered or certified mail (postage prepaid,
return receipt requested), as follows:
If to Parent:
Wit SoundView Group, Inc.
000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000 000-0000
Attention: Xxxxxx X. Xxxxxx
Chief Executive Officer
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With copies to:
Wit SoundView Group, Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000 000-0000
Attention: Xxxxx X. Xxxxxx
Senior Vice President and
Co-General Counsel
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to Shareholders' Agent:
E*TRADE Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Facsimile: (000)000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
Chief Strategic Investment Officer
With copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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and
Xxxxxxx Xxxxxxx & Xxxxxxxx
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Mo, Esq.
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
If to Special Escrow Fund Agent:
Chase Manhattan Bank
Capital Markets Fiduciary Services
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxxxx
Any party may by notice given in accordance with this section to the other
parties designate another address or person for receipt of notices hereunder.
11. VOTING. Until the Termination Date, until directed
otherwise by the Shareholders' Agent pursuant to Section 1, the Special Escrow
Fund Agent will vote each of the Special Escrow Shares as directed in writing by
the Shareholders' Agent.
12. GOVERNING LAW. This Escrow Agreement is governed by
the laws of New York without regard to its conflict of law provisions, and shall
inure to the benefit of and be binding upon the successors, assigns, heirs and
personal representatives of the parties hereto.
13. COUNTERPARTS. This Escrow Agreement may be executed
in two or more counterparts, all of which documents shall be considered one and
the same document.
14. ADDITIONAL TERMS.
(a) The Special Escrow Fund Agent shall have no
more or less responsibility or liability on account of any action or omission of
any book-entry depository,
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securities intermediary or other subescrow agent employed by the Special Escrow
Fund Agent than any such book-entry depository, securities intermediary or other
subescrow agent has to the Special Escrow Fund Agent, except to the extent that
such action or omission of any book-entry depository, securities intermediary or
other subescrow agent was caused by the Special Escrow Fund Agent's own gross
negligence, bad faith or willful misconduct.
(b) Each of the parties hereby absolutely and
irrevocably consents and submits to the jurisdiction of the courts in New York
and of any Federal court located in New York in connection with any actions or
proceedings brought against any of the parties (or each of them) by the Special
Escrow Fund Agent arising out of or relating to this Escrow Agreement. In any
such action or proceeding, the parties each hereby absolutely and irrevocably
(i) waive any objection to jurisdiction or venue, (ii) waive personal service of
any summons, complaint, declaration or other process, and (iii) agree that the
service thereof may be made by certified or registered first-class mail directed
to such party, as the case may be, at their respective addresses in accordance
with Section 10 hereof.
(c) The Special Escrow Fund Agent shall not be
responsible for delays or failures in performance resulting from acts beyond its
control. Such acts shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations superimposed
after the fact, fire, communication line failures, computer viruses, power
failures, earthquakes or other disasters.
(d) This Escrow Agreement shall be binding upon
the respective parties hereto and their heirs, executors, successors and
assigns.
(e) This Escrow Agreement may not be altered or
modified without the express written consent of the parties hereto. No course of
conduct shall constitute a waiver of any of the terms and conditions of this
Escrow Agreement, unless such waiver is specified in writing, and then only to
the extent so specified. A waiver of any terms and conditions of this Escrow
Agreement on one occasion shall not constitute a waiver of the other terms of
this Escrow Agreement, or of such terms and conditions on any other occasion.
(f) The parties agree that this Escrow Agreement
and all documents relating thereto, including, without limitation, (i) consents,
waivers and modifications which may hereafter be executed, and (ii) certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process and shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
(g) In the event funds transfer instructions are
given (other than in writing at the time of execution of this Escrow Agreement),
whether in writing, by telecopier or otherwise, the Special Escrow Fund Agent is
authorized to seek confirmation of such instructions by telephone call-back to
the person or persons designated on ANNEX D, and the Special Escrow
11
Fund Agent may rely upon the confirmation of anyone purporting to be the person
or persons so designated. The persons and telephone numbers for call-backs may
be changed only in a writing actually received and acknowledged by the Special
Escrow Fund Agent. The Special Escrow Fund Agent and the beneficiary's bank in
any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by Parent or the Shareholders' Agent to identify
(i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Special Escrow Fund Agent may apply any of the escrowed funds for any
payment order it executes using any such identifying number, even where its use
may result in a person other than the beneficiary being paid, or the transfer of
funds to a bank other than the beneficiary's bank or an intermediary bank
designated. The parties to this Escrow Agreement acknowledge that these security
procedures are commercially reasonable.
[Remainder of Page Intentionally Left Blank]
12
Counterpart Signature Page
Special Escrow Agreement
IN WITNESS WHEREOF, the parties have executed this Special
Escrow Agreement on the date first above written.
WIT SOUNDVIEW GROUP, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Co-President
E*TRADE GROUP, INC.
as Shareholders' Agent
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Chief Legal Affairs Officer
and Corporate Secretary
THE CHASE MANHATTAN BANK
as Special Escrow Fund Agent
By: /s/ Xxxxxx XxXxxxx
---------------------------------------
Authorized Signatory
Name: Xxxxxx XxXxxxx
Title: Assistant Vice President
13
ANNEX A
-------
SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------
Name of Shareholder Address Taxpayer Identification Number of Special
Number (if applicable) Escrow Shares
--------------------------------------------------------------------------------
GAP Coinvestment
Partners II LP
--------------------------------------------------------------------------------
General Atlantic
Partners 61 LP
--------------------------------------------------------------------------------
Softbank Technology
Ventures Advisors Fund
V L.P.
--------------------------------------------------------------------------------
Softbank Technology
Ventures Entrepreneurs
Fund V L.P.
--------------------------------------------------------------------------------
Softbank Technology
Ventures V L.P.
--------------------------------------------------------------------------------
E*TRADE Group, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------
Total Number of
Special Escrow Shares
--------------------------------------------------
14
ANNEX B
-------
SCHEDULE
Name of Shareholder Number of Special Escrow Shares to be
distributed monthly during Escrow Period
--------------------------------------------------------------------------------
GAP Coinvestment Partners II LP
General Atlantic Partners 61 LP
Softbank Technology Ventures Advisors
Fund V L.P.
Softbank Technology Ventures
Entrepreneurs Fund V L.P.
Softbank Technology Ventures V L.P.
E*TRADE Group, Inc.
15
ANNEX C
-------
FEES OF SPECIAL ESCROW FUND AGENT
15 basis points of the highest value of collateral held on deposit per annum or
any part thereof without proration for partial years, subject to a minimum of
$7,500.00 per annum or any part thereof without proration for partial years
(includes investment in a Chase Manhattan Bank Money Market Account, Chase
Manhattan Bank Deposit Acount or The Chase Manhattan Bank Mutual Fund known as
the Vista Fund).
$75 per investment (excludes Money Market, Deposit Account or Vista Fund
Investments).
16
ANNEX D
-------
TELEPHONE NUMBER(S) FOR CALL-BACKS AND
PERSON(S) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS
-----------------------------------------------------------
If to Parent:
NAME TELEPHONE NUMBER
---- ----------------
1. Xxxx Xxxxxx (000) 000-0000
2. Xxxxxxxx Xxxxxxxxx (000) 000-0000
3. Xxxxxxx Xxxxxx (000) 000-0000
If to Shareholders' Agent:
NAME TELEPHONE NUMBER
---- ----------------
1. _________________ _______________
2. _________________ _______________
3. _________________ _______________
Telephone call-backs shall be made to both Parent and Shareholders' Agent if
joint instructions are required pursuant to this Escrow Agreement.
17
