EXHIBIT 2.3
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of July 15,
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1997, by and among Discreet Logic Inc., a corporation organized under the laws
of the province of Quebec ("Buyer"), State Street Bank and Trust Company, a
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Massachusetts Trust Company, as escrow agent ("Escrow Agent") and each of the
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parties listed on the signature pages attached hereto (individually, a "Holder"
or collectively, the "Holders").
RECITALS
WHEREAS, Buyer, Holders and D-Vision Systems, Inc., an Illinois
corporation, have entered into a Stock Purchase Agreement dated as of July 15,
1997 (the "Purchase Agreement"). Capitalized terms used in this Agreement and
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not otherwise defined in this Agreement shall have the meanings ascribed to them
in the Purchase Agreement;
WHEREAS, Section 2.02 of the Purchase Agreement provides that at the
Closing $3,925,360 (the "Escrow Amount") shall be deposited by Buyer in
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escrow (such deposit, together with any interest accrued thereon,
constituting the "Escrow Fund") and shall be held as collateral for the
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indemnification obligations of the Holders under Article 11 of the Purchase
Agreement;
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties to this Agreement desire to establish the terms and
conditions pursuant to which the Escrow Amount will be deposited into, held in,
and disbursed from, the Escrow Fund.
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. Escrow; Indemnification and Investment of Funds.
(a) Escrow Fund. The Escrow Agent agrees to accept delivery of such Escrow
Amount and to hold such Escrow Amount delivered to it in escrow subject to the
terms and conditions of this Agreement and Article 11 of the Purchase Agreement
(which Article 11 is attached to this Agreement as Appendix A) (collectively,
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the "Escrow Provisions") until the Escrow Agent is required to release such
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Escrow Amount pursuant to the terms of this Agreement.
(b) Indemnification. The Escrow Agent is hereby notified that the Holders
have agreed pursuant to Article 11 of the Purchase Agreement to indemnify and
hold harmless Buyer and the other Indemnitees from and against specified Losses
as set forth in the Purchase Agreement. The Holders agree that the Escrow
Amount will be held to satisfy this indemnity obligation in the manner provided
in the Escrow Provisions. Promptly after the receipt by Buyer of notice or
discovery of any Loss giving rise to indemnification rights under the Purchase
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Agreement, Buyer will give the Holder Representatives (as defined in Section 10
hereof) and the Escrow Agent written notice of such Loss (a "Claim") in
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accordance with Section 3 hereof. Buyer shall notify the Holder Representatives
of the progress of any such Claim and shall permit the Holder Representatives to
participate in such defense in accordance with Section 11 of the Purchase
Agreement, and Buyer shall not compromise or settle any such Claim without the
written consent of the Holder Representatives, which consent will not be
unreasonably withheld.
(c) Investment of Funds. The Escrow Agent shall continually invest and
reinvest the Escrow Amount and any income or interest therefrom in Qualified
Investments (as defined below) in accordance with written instructions received
from the Buyer from time to time, or if no such instructions are received by
Escrow Agent, the Escrow Agent shall invest such funds in the Seven Seas Money
Market Fund. The Term "Qualified Investments" means:
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(i) Marketable obligations of the United States having a maturity of
not more than three months from the date of acquisition;
(ii) Marketable obligations directly and fully guaranteed by the
United States having a maturity of not more than three months from the date
of acquisition;
(iii) Money market funds (including those of the Escrow Agent) rated in
the highest category by Xxxxx'x Investors Services and Standard & Poor's
Rating Service; and
(iv) Interest-bearing bank accounts, certificates of deposit, and
other interest-bearing obligations issued by any bank organized under the
laws of the United States or any state thereof (which may include the
Escrow Agent) with capital, surplus and undivided profits aggregating at
least $50,000,000, in each case having a maturity of not more than three
months from the date of acquisition.
2. Release From Escrow.
(a) Delivery of Escrow Amount. On July 15, 1997, the Closing Date, Buyer
will deliver the Escrow Amount to the Escrow Agent for deposit into the Escrow
Fund.
(b) Release to Holders.
(i) so long as any portion of the Escrow Amount remains held pursuant
to this Agreement, the Escrow Agent shall pay to Buyer the portion of the
Escrow Amount equal to the amount of indemnification claims by Buyer under
Section 11.02(a) of Article XI of the Purchase Agreement, if any, written
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notice of which shall be provided to the Escrow Agent in accordance with
Section 1 and 3 of this Agreement, which have been settled or finally
determined between Buyer and Holders in accordance with Section 4 below;
(ii) on September 30, 1998, the Escrow Agent shall pay to Holders an
amount equal to $1,925,360 of the Escrow Amount held pursuant to the Escrow
Agreement
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minus (i) an amount equal to the indemnification claims of Buyer under
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Section 11.02(a) of Article XI of the Purchase Agreement, if any, written
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notice of which shall be provided to the Escrow Agent in accordance with
Section 1 and 3 of this Agreement, that have been settled or finally
determined between Buyer and Holders on or before August 31, 1998 and (ii)
an amount equal to the amount of any unresolved indemnification claims by
Buyer set forth in Buyer's notice pursuant to Article XI of the Purchase
Agreement and Section 3 below given on or prior to August 31, 1998. Such
retained portion shall be retained only until the claim for indemnification
is settled or finally determined between Buyer and Holders;
(iii) on September 30, 1999, the Escrow Agent shall pay to Holders
the portion of the Escrow Amount, if any, remaining held pursuant to the
Escrow Agreement; provided that the Escrow Agent shall retain and not pay
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to Holders the portion of the Escrow Amount, if any, equal to the amount of
any unresolved indemnification claims by Buyer (it being understood that
the portion to be retained shall be the amount set forth in Buyer's notice
pursuant to Article XI of the Purchase Agreement, which shall be
provided to the Escrow Agent in accordance with Section 1 and 3 of this
Agreement, and Section 3 below and any other portion shall be
released), and such retained portion shall be retained only until the claim
for indemnification is settled or finally determined between Buyer and
Holders.
(c) Release of Escrow Amount. The Escrow Amount will be held by the Escrow
Agent in accordance with the terms of this Agreement until required to be
released pursuant to Section 2(b). For purposes of this Agreement, "Release
Date" shall mean September 30, 1998 and September 30, 1999, as applicable.
Within three (3) business days after the Release Date, the Escrow Agent will
deliver to each Holder the requisite Escrow Amount to be released on such date
as such amount is identified by Buyer and the Holder Representatives to the
Escrow Agent at least 3 business days prior to the applicable Release
Date. Escrow Amount shall be released to the respective Holders in proportion
to their respective interests as set forth in Exhibit A hereto. Buyer will take
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such action as may be necessary to cause such amounts to be payable in the names
of the appropriate Holders.
(d) No Encumbrance. No Escrow Amount or any beneficial interest therein
may be pledged, sold, assigned or transferred, including by operation of law, by
a Holder or be taken or reached by any legal or equitable process in
satisfaction of any debt or other liability of a Holder, prior to the delivery
to such Holder of the Escrow Amount by the Escrow Agent.
3. Notice of Claim.
(a) Each notice of a Claim by Buyer (the "Notice of Claim") shall be
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delivered in writing to the Holder Representatives and the Escrow Agent, and
shall contain the following information to the extent it is reasonably available
to Buyer:
(i) Buyer's good faith estimate of the reasonably foreseeable maximum
amount of the alleged Loss;
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(ii) a brief description in reasonable detail of the facts,
circumstances or events giving rise to the alleged Loss based on Buyer's
good faith belief thereof; and
(iii) the specific bases upon which indemnification may be sought
consistent with the provisions of the Purchase Agreement.
(b) The Escrow Agent will not release any of the Escrow Amount held in the
Escrow Fund to Buyer pursuant to a Notice of Claim until such Notice of Claim
has been resolved or is uncontested in accordance with Section 4 below.
4. Resolution of Notice of Claim and Release of Escrow Amount. Any Notice
of Claim received by the Holder Representatives and the Escrow Agent pursuant to
Section 3 above will be resolved as follows:
(a) Uncontested Claims. In the event that neither Holder Representatives
contests a Notice of Claim (or contests only a portion of the claim) in writing
to the Escrow Agent and Buyer within twenty (20) days after such Notice of Claim
is deemed delivered pursuant to Section 11 below, the Escrow Agent will promptly
release to Buyer in accordance with its written instructions set forth in the
Notice of Claim that portion of the Escrow Amount equal to the amount specified
in the Notice of Claim (that is not contested) and notify the Holder
Representatives of such transfer.
(b) Contested Claims. In the event that either the Holder Representative
gives written notice contesting all, or a portion of, a Notice of Claim to Buyer
and the Escrow Agent (a "Contested Claim") within the twenty (20) day period
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provided above, the Escrow Agent shall not release any Escrow Amount to the
Buyer and the Holder Representatives and an officer of Buyer shall attempt to
resolve the matter, but if such matter is not resolved in writing within sixty
(60) days after the Notice of Claim is deemed delivered pursuant to Section 11,
then the matter will be settled by binding arbitration. Any portion of the
Notice of Claim which is not contested shall be disbursed by Escrow Agent in
accordance with Section 4(a). The final decision of the arbitrator shall be
furnished to the Escrow Agent, the Holder Representatives, the Holders and Buyer
in writing and will constitute a conclusive determination of the issue in
question, binding upon the Holders, the Holder Representatives and Buyer and
shall not be contested or appealed by any of them. After receipt of notice that
the Notice of Claim is contested by the Holder Representatives, the Escrow Agent
will continue to hold in the Escrow Fund in accordance with the terms of this
Agreement that portion of the Escrow Amount equal to the contested amount to
cover such Claim (notwithstanding the expiration of the Release Date) until the
earlier of receipt by it of (i) execution of a written settlement agreement by
Buyer and each of the Holder Representatives setting forth a resolution of the
Notice of Claim and directing the Escrow Agent to release a specified amount to
the Buyer, or (ii) a copy of the final award of the arbitrator. The Escrow Agent
shall have no responsibilities with respect to the arbitration of Contested
Claims.
(c) Arbitration. Any Contested Claim shall be settled by (i) agreement of
each of the Holder Representatives and Buyer or (ii) arbitration in Boston,
Massachusetts, except as
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herein specifically stated, in accordance with the commercial arbitration rules
of the American Arbitration Association ("AAA Rules") then in effect. However,
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in all events, these arbitration provisions shall govern over any conflicting
rules which may now or hereafter be contained in the AAA Rules. Any judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction over the subject matter thereof. The arbitrator shall have the
authority to grant any equitable and legal remedies that would be available in
any judicial proceeding instituted to resolve a Contested Claim.
(i) Compensation of Arbitrator. Any such arbitration shall be
conducted before a single arbitrator who shall be compensated for his or
her services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily
consulting rates for the arbitrator in the event the parties are not able
to agree upon his or her rate of compensation.
(ii) Selection of Arbitrator. The AAA Rules for the selection of
the arbitrator shall be followed by Buyer and the Holder Representatives.
(iii) Payment of Costs. The initial compensation to be paid to the
arbitrator in any such arbitration, attorneys' fees and costs, and all
costs of arbitration, including the costs of transcripts and other normal
and regular expenses of the arbitration proceedings shall be paid by the
non-prevailing party in such arbitration; provided, however, if neither
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party has clearly prevailed, the arbitrator shall have the power to
apportion such fees and costs between Buyer and the Holders.
(iv) Discovery. The parties shall be entitled to conduct discovery
proceedings in accordance with the provisions of the Federal Rules of Civil
Procedure, subject to any limitation imposed on all parties by the
arbitrator.
(v) Burden of Proof. For any Claim submitted to arbitration, the
burden of proof shall be as it would be if the claim were litigated in a
judicial proceeding.
(vi) Judgment. Upon the conclusion of any arbitration proceedings
hereunder, the arbitrator shall render findings of fact and conclusions of
law and a written opinion setting forth the basis and reasons for any
decision reached by him and shall deliver such documents to each party to
this Agreement along with a signed copy of the award.
(vii) Terms of Arbitration. The arbitrator chosen in accordance
with these provisions shall not have the power to alter, amend or otherwise
affect the terms of these arbitration provisions or the provisions of this
Agreement or the Purchase Agreement.
(viii) Exclusive Remedy. Except as specifically provided in this
Agreement or the Purchase Agreement, arbitration shall be the sole and
exclusive remedy of the Buyer and Holders for any Contested Claim arising
out of such agreements.
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(d) Determination of Amount of Claims. Any amount owed to Buyer hereunder
determined pursuant to Section 4(a) or (b) above, will be immediately payable to
Buyer in accordance with Section 11 of the Purchase Agreement and will be paid
promptly.
(e) No Exhaustion of Remedies. Buyer need not exhaust any other remedies
that may be available to it but may proceed directly in accordance with the
provisions of this Agreement. Buyer may make Claims against the Escrow Amount
and in satisfaction thereof may recover all or a portion of the Escrow Amount,
in accordance with and subject to the terms of this Agreement, without making
any other Claims directly against the Holders and without rescinding or
attempting to rescind the transactions consummated pursuant to the Purchase
Agreement. The assertion of any single Claim for indemnification hereunder will
not bar Buyer from asserting other claims hereunder. Notwithstanding the
foregoing, if Buyer elects to make a Claim against the Escrow Fund for any
breach or default by the Company and/or the Holders under the Purchase Agreement
arising out of an action against a third party, then the Holder Representatives,
on behalf of the Holders, shall be subrogated to the rights of Buyer with
respect to such a Claim, and Buyer shall assign all of its rights in connection
with such Claim necessary for the Holder Representatives to assert such claim
against such third party.
(f) Payment of Costs. The Escrow Agent is authorized and directed to
disburse pro rata any payments due the Holders under this Agreement out of the
Escrow Fund in accordance with Section 2(b) and their interest as set forth on
Exhibit A hereof, after (i) payment of any attorneys' and accountants' and other
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fees and expenses incurred on behalf of the Holders as contemplated by this
Agreement under Section 6 and (ii) withholding such amounts to pay costs and
expenses relating to potential disputes arising with respect to indemnification
or other obligations of other Holders under the Escrow Provisions, such amounts
to be set forth in writing of the Seller Representative and Buyer.
(g) As to compliance with any of the foregoing restrictions and
limitations, the Escrow Agent shall have no responsibility to independently
calculate or otherwise determine such matters but may rely conclusively on the
other parties hereto in their related requests and instructions.
5. Limitation of the Escrow Agent's Liability.
(a) The parties acknowledge and agree that the Escrow Agent shall not be
responsible for any of the agreements referred to herein or in the Purchase
Agreement but shall only be obligated for the performance of such duties as are
specifically set forth herein. The Escrow Agent (and its directors, officers
and employees) will incur no liability with respect to any action taken or
suffered by it in reliance upon any notice, direction, instruction, consent,
statement or other document believed by it to be genuine and to have been signed
by the proper person (and shall have no responsibility to determine the
authenticity or accuracy thereof), nor for any other action or inaction, except
its own willful misconduct, bad faith or gross negligence. In no event shall
the Escrow Agent be liable for indirect consequential damages. The Escrow Agent
will not be responsible for the validity or sufficiency of the Escrow
Provisions, including the amount of Escrow Amount. In all questions arising
under the Escrow Provisions, the Escrow Agent may
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rely on the advice of counsel (which may be in-house counsel), and for anything
done, omitted or suffered in good faith by the Escrow Agent based on such
advice, the Escrow Agent will not be liable to anyone. The Escrow Agent will not
be required to take any action under the Escrow Provisions involving any expense
unless the payment of such expense is made or provided for in a manner
satisfactory to it. In no event shall the Escrow Agent have any liability under
this Agreement for investment losses incurred on any investment or reinvestment
of the Escrow Fund made in accordance with the terms of this Agreement.
(b) In the event conflicting demands are made or notices are served upon
the Escrow Agent with respect to the Escrow Fund or should a third party make a
claim on such Escrow Fund, the Escrow Agent will have the absolute right, at the
Escrow Agent's election, to do any of the following: (i) resign so a successor
can be appointed pursuant to Section 7, (ii) file a suit in interpleader and
obtain an order from a court of competent jurisdiction requiring the parties to
interplead and litigate in such court their several claims and rights among
themselves; or (iii) retain all or any of the Escrow Fund in its possession,
without liability to anyone, until such dispute shall have been settled as
contemplated in Section 4. In no event shall the Escrow Agent be obligated to
take any legal or other action hereunder which might in its judgment involve any
expense or liability of the Escrow Agent unless it shall have been furnished
with acceptable indemnification. In the event an interpleader suit is brought,
the Escrow Agent will thereby be fully released and discharged from all further
obligations imposed upon it under the Escrow Provisions, and the non-prevailing
party in such dispute will pay the Escrow Agent all costs, expenses and
reasonable attorneys' fees expended or incurred by the Escrow Agent pursuant to
the exercise of the Escrow Agent's rights under this Section 5 (such costs, fees
and expenses will be treated as extraordinary fees and expenses for the purposes
of Section 6). The resignation of the Escrow Agent under this section shall not
affect the right of the Escrow Agent to be paid any amount due to the Escrow
Agent hereunder.
6. Expenses and Tax Reporting.
(a) Escrow Agent. All fees and expenses including attorney's fees of the
Escrow Agent incurred in entering into this Agreement and in the ordinary course
of performing its responsibilities (in accordance with the attached fee schedule
which may be subject to change annually) hereunder will be paid by Buyer upon
receipt of a written invoice by the Escrow Agent. Any extraordinary fees and
expenses including attorney's fees, including without limitation any fees or
expenses incurred by the Escrow Agent in connection with a dispute over the
distribution of Escrow Amount or the validity of a Claim or Claims by Buyer will
be paid by the non-prevailing party in such dispute, provided, however, if
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neither party has clearly prevailed, the arbitrator may apportion such fees and
expenses between Buyer and the Holders, subject to the provisions of Section
4(f). The Holders' liability for the extraordinary fees and expenses of the
Escrow Agent may be paid by Buyer and recovered as a Claim hereunder out of the
Escrow Fund. If Buyer has paid the Holders' portion of such fees and expenses
as permitted under this Section 6(a) then the Escrow Agent will, upon demand by
Buyer, transfer to Buyer a portion of the Escrow Amount equal to such portion of
fees and expenses.
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In the event the balance in the Escrow Fund is not sufficient to pay the
extraordinary fees and expenses of the Escrow Agent, as described in the prior
paragraph, or in the event the Escrow Agent incurs any liability by reason of
its acceptance or administration of this Escrow Agreement, Buyer and the
Holders, jointly and severally as between Buyer and the Holders collectively,
and severally and not jointly as among the Holders individually, agree to
indemnify the Escrow Agent, its officers, directors and employees, against any
such liability or for its extraordinary fees and expenses or costs and expenses,
including, without limitation, counsel fees and expenses, as the case may be.
Notwithstanding the foregoing, no indemnity need be paid in the event of the
Escrow Agent's gross negligence, bad faith or willful misconduct.
Buyer and the Holders, jointly and severally as between Buyer and the
Holders collectively, and severally and not jointly as among the Holders
individually, agree to assume any and all obligations imposed now or hereafter
by any applicable tax law with respect to the holding and payment of Escrow
Amount under this Agreement, and to indemnify and hold the Escrow Agent harmless
from and against any taxes, additions of late payment, interest, penalties and
other expenses, that may be assessed against the Escrow Agent on any such
payment or other activities under this Agreement. Buyer and the Holders
undertake to instruct the Escrow Agent in writing with respect to the Escrow
Agent's responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting in connection
with its acting as Escrow Agent under this Agreement. Buyer and the Holders,
jointly and severally as between Buyer and Holders collectively, and severally
and not jointly as among the Holders individually, agree to indemnify and hold
the Escrow Agent harmless from any liability on account of taxes, assessments or
other governmental charges, including without limitation the withholding or
deduction or the failure to withhold or deduct same, and any liability for
failure to obtain proper certifications or to properly report to governmental
authorities, to which the Escrow Agent may be or become subject in connection
with or which arises out of this Agreement, including costs and expenses
(including reasonable legal fees), interest and penalties.
(b) Holder Representatives. The Holder Representatives will not be
entitled to receive any compensation from Buyer or the Holders in connection
with this Agreement. Any fees and expenses incurred by the Holder
Representatives in connection with actions taken pursuant to the terms of the
Escrow Provisions will be paid by the Holders to the Holder Representatives,
and, to the extent any Escrow Amount remains available for distribution on the
Release Date, such fees and expenses shall be paid out from such Escrow Amount
prior to distribution to the Holders, but only upon the written direction of the
Buyer and Holder Representatives to be given to Escrow Agent at least three (3)
business days prior to a Release Date, but in any event after all distributions
to Buyer and only upon the written instruction of the Holder Representatives.
(c) Tax Reporting. The parties hereto agree that, for tax reporting
purposes, all interest or other income earned from the investment of the Escrow
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Fund shall be allocable to the Holders.
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(d) Certification of Tax Identification Number. The Holders hereto agree
to provide the Escrow Agent with a certified tax identification number by
signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons)
to the Escrow Agent prior to the date on which any income earned on the
investment of the Escrow Funds is credited to such Escrow Fund. The Holders
understand that, in the event their tax identification numbers are not certified
to the Escrow Agent, the Internal Revenue Code, as amended from time to time,
may require withholding of a portion of any interest or other income earned on
the investment of the Escrow Fund.
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7. Successor Escrow Agent. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity as such, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
written notice of resignation to the Holder Seller Representatives and Buyer,
specifying not less than thirty (30) days prior written notice of such a date
when such resignation will take effect. Buyer will designate a successor Escrow
Agent prior to the expiration of such thirty (30) day period by giving written
notice to the Escrow Agent and the Holder Representatives. Buyer may appoint a
successor Escrow Agent without the consent of the Holders or the Holder
Representatives so long as such successor is a bank or trust company with assets
of at least One Hundred Million Dollars ($100,000,000), and may appoint any
other successor Escrow Agent with the consent of the Holder Representatives,
which consent will not be unreasonably withheld. The Escrow Agent will promptly
transfer the Escrow Amount to such designated successor. In the event no
successor Escrow Agent is appointed as described in this Section 7, the Escrow
Agent may apply to a court of competent jurisdiction for the appointment of a
successor Escrow Agent.
8. Limitation of Responsibility; Notices. The Escrow Agent's duties are
limited to those set forth in the Escrow Provisions, and no implied duties or
obligations shall be implied; and the Escrow Agent may rely upon the written
notices delivered to the Escrow Agent hereunder and under the Escrow Provisions.
9. Incorporation by Reference of Section 11. With respect to the Buyer
and Holders only, The parties agree that the terms of Section 11 of the Purchase
Agreement shall be deemed to be incorporated by reference in this Agreement as
if such Section had been set forth in its entirety herein provided except that
the provisions of this Agreement shall control the responsibilities and
obligations of the Escrow Agent and the Escrow Agent shall not have any
responsibility for any matters addressed in the Purchase Agreement.
10. Holders' Representatives. By virtue of their approval of the Purchase
Agreement, the Holders will be deemed to have irrevocably constituted and
appointed, effective as of the Closing, Xxxx Xxxxxx and Xxxxx Xxxx (together
with their permitted successors, the "Holder Representatives"), as their true
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and lawful agent and attorney-in-fact to enter into any agreement in connection
with the transactions contemplated by this Agreement or the Purchase Agreement,
including, without limitation, the exercise of all or any of the powers,
authority and discretion conferred on him under any such agreement, to waive any
terms and conditions of any such agreement (other than the payment of the Escrow
Amount), to give and receive notices and communications, to authorize delivery
to Buyer of the Escrow Amount or other property from
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the Escrow Fund in satisfaction of claims by Buyer, to object to such
deliveries, to agree to, negotiate, enter into settlements and compromises of,
and demand arbitration and comply with orders of courts and awards of
arbitrators with respect to such claims, and to take all actions necessary or
appropriate in the judgment of the Holder Representatives for the accomplishment
of the foregoing. Such agency may be changed by the Holders of a majority in
interest of the Escrow Fund from time to time upon not less than ten (10) days,
prior written notice to Buyer and Escrow Agent. No bond shall be required of the
Holder Representatives, and the Holder Representatives shall receive no
compensation for his services. Notices or communications to or from the Holder
Representatives shall constitute notice to or from each of the Holders. This
power of attorney is coupled with an interest and is irrevocable. The Holders
will be bound by all actions jointly taken by the Holder Representatives in
connection with this Agreement and Buyer and Escrow Agent shall be entitled to
rely on any joint action or decision of the Holder Representatives. In
performing his functions hereunder, the Holder Representatives will not be
liable to the Holders in the absence of gross negligence or willful misconduct.
11. Notices. Any notice provided for or permitted under the Escrow
Provisions will be treated as having been received (a) when delivered
personally, (b) when sent by confirmed telecopy, (c) one (1) day following when
sent by commercial overnight courier with written verification of receipt, or
(d) three (3) business days following when mailed postage prepaid by certified
or registered mail, return receipt requested, to the party to be notified, at
the address set forth below, or at such other place of which the other party has
been notified in accordance with the provisions of this Section 11.
Escrow Agent: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust Department,
Fifth Floor
Attention: Discreet Logic Escrow
Facsimile: (000) 000-0000
Holder Representatives:
Attention:
Facsimile:
With copy to: Xxxxxxx, Xxxxxx & Xxxxxxx
Xxxxx 0000 - Quaker Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
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Buyer: Discreet Logic Inc.
00 xxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With copy to: Xxxxx Xxxxxxx, & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Such notice will be treated as having been received upon actual receipt.
12. General.
(a) Governing Law. It is the intention of the parties hereto that the
internal laws of the Commonwealth of Massachusetts (irrespective of its choice
of law principles) shall govern the validity of this Agreement, the construction
of its terms, and the interpretation and enforcement of the rights and duties of
the parties to this Agreement.
(b) Binding Upon Successors and Assigns. Subject to, and unless otherwise
provided in, this Agreement, each and all of the covenants, terms, provisions,
and agreements contained in this Agreement shall be binding upon, and inure to
the benefit of, the permitted successors, executors, heirs, representatives,
administrators and assigns of the parties to this Agreement.
(c) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears on such counterpart and all of which together shall constitute
one and the same instrument. This Agreement shall become binding when one or
more counterparts of this Agreement, individually or taken together, shall bear
the signatures of all of the parties reflected in this Agreement as signatories.
(d) Entire Agreement. Except as set forth in the Purchase Agreement, this
Agreement, the documents referenced in this Agreement and the exhibits to such
documents, constitute the entire understanding and agreement of the parties to
this Agreement with respect to the subject matter of this Agreement and of such
documents and exhibits and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to this Agreement, provided that with respect
to the Escrow Agent, this Agreement (without reference to any other agreements)
sets
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forth the entire understanding of the parties. Notwithstanding anything to the
contrary in the previous sentence, in the event that any term(s) or provision(s)
of this Agreement conflict(s) with a term or provision of the Purchase
Agreement, the term(s) and condition(s) of the Purchase Agreement will control
(except with respect to the responsibilities of the Escrow Agent). The express
terms of this Agreement control and supersede any course of performance or usage
of the trade inconsistent with any of the terms of this Agreement.
(e) Waivers. No waiver by any party to this Agreement of any condition or
of any breach of any provision of this Agreement will be effective unless in
writing. No waiver by any party of any such condition or breach, in any one
instance, will be deemed to be a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach of any other
provision contained in this Agreement.
(f) Amendment. This Agreement may be amended with the written consent of
Buyer, the Escrow Agent and the Holder Representatives; provided, that Exhibit A
-------- ---------
hereto may be amended with the consent of the Buyer, the Escrow Agent, and the
Holder(s) for which amendment to Exhibit A is being sought. In addition, if the
---------
Escrow Agent does not agree to an amendment agreed upon by Buyer and the Holder
Representatives or Buyer and the Holder(s), as the case may be (except an
amendment which may adversely affect the rights or interests of the Escrow
Agent), Buyer will appoint a successor Escrow Agent in accordance with Section
7.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as
of the day and year first above written.
DISCREET LOGIC INC.:
By: /s/ Xxxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxxxx F.
Title: Senior V.P. & C.F.O.
State Street Bank and Trust Company, as
ESCROW AGENT:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Assistant Vice President
-----------------------------
HOLDERS:
Xxxxxxx X. Xxxx, Trustee for Xxxxxxx X. Xxxx
Revocable Living Trust under dated 2/12/91
By: /s/ Xxxxxxx X. Xxxx
------------------------------
Its: Trustee
-----------------------------
/s/ Xxxxxxx X. Xxxx
---------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
-14-
*
---------------------------------
Xxxxx X. Xxxxx
*
---------------------------------
Xxxx X. Xxxxx
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
/s/ Xxxxx X. Xxxx
---------------------------------
Xxxxx X. Xxxx
Geocapital III, L.P.
By: *
------------------------------
Its:
-----------------------------
Platinum Venture Partners I, L.P.
By: *
------------------------------
Its:
-----------------------------
*
---------------------------------
Xxxxxx X. Xxxxxx
*
---------------------------------
Xxxxxx X. Steel
Presidents Forum/D-Vision L.L.C.
By: *
------------------------------
Its:
-----------------------------
-15-
*
---------------------------------
Xxxxxxx X. Steel
Sunbeam Ventures Ltd.
By: *
------------------------------
Its:
-----------------------------
*
---------------------------------
Xxxxxxx Xxxxx
*
---------------------------------
Xxxxxxx Xxxx
*
---------------------------------
Xxxx Xxxxxx
*
---------------------------------
Xxxxxxx Xxxxxx
* /s/ Xxxx Xxxxxx
----------------------
Xxxx Xxxxxx
Attorney-in-Fact
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
/s/ Xxx Xxxx
--------------------------------
Xxx Xxxx
/s/ Xxx Xxxx
--------------------------------
Xxx Xxxx
