ESCROW AGREEMENT
Exhibit 10.3
ESCROW AGREEMENT, dated as of July 31, 2007, by and among Brightpoint, Inc., an Indiana
corporation (“Parent”), Dangaard Holding A/S, a Danish company (“Shareholder”), and American Stock
Transfer & Trust Company, as escrow agent (the “Escrow Agent”).
RECITALS
A. WHEREAS, Parent, Target, Shareholder and Nordic Capital Fund VI (for purposes of Sections
6.16 and 12.14 only), consisting of: Nordic Capital VI Alpha, L.P. and Nordic Capital Beta, L.P.,
Jersey limited partnerships acting through their general partner Nordic Capital VI Limited, a
Jersey company, NC VI Limited, a Jersey company, and Nordic Industries Limited, a Jersey company,
entered into a Stock Purchase Agreement dated February 19, 2007 (the “Purchase Agreement”),
pursuant to which Parent agreed to acquire all of the issued and outstanding shares of capital
stock of Target, all of which is held by Shareholder (the “Target Stock”), in exchange for $100,000
cash and thirty million (30,000,000) shares of common stock, $.01 par value, of Parent (the “Parent
Shares”). Capitalized terms used but not defined herein in this Escrow Agreement shall have the
meanings given such terms in the Purchase Agreement; and
B. WHEREAS, Section 3.2 of the Purchase Agreement provides that Parent will deliver and
deposit Three Million (3,000,000) of the Parent Shares (the “Escrow Shares”) in an “Escrow Account”
with the Escrow Agent as security for the indemnification obligations of Shareholder in accordance
with the terms and conditions of Section 11 of the Purchase Agreement.
C. In order to provide for the appropriate administration of the Escrow Shares, each of
Parent, Target and Shareholder desires to establish the Escrow Account with the Escrow Agent
subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Appointment. Each of Parent, Target and Shareholder does hereby appoint and
designate the Escrow Agent as escrow agent for the purposes set forth herein, and the Escrow Agent
does hereby accept such appointment subject to the terms and conditions set forth herein.
2. Establishment of Escrow.
(a) Simultaneously with the execution and delivery hereof, Parent is depositing stock
certificates representing the Escrow Shares with the Escrow Agent, together with stock powers
executed in blank related thereto.
(b) The Escrow Agent shall hold and disburse the Escrow Shares deposited with the Escrow Agent
under this Escrow Agreement pursuant to and in accordance with this Escrow Agreement.
3. Release from Escrow; Escrow Period.
(a) Parent may at any time, and from time to time, prior to the Expiration Date, deliver
written instructions to the Escrow Agent and to Shareholder directing the Escrow Agent to disburse
all or a portion of the Escrow Shares to Parent in the amounts specified therein for the purpose of
satisfying any obligation based on, arising from or in connection with all claims for
indemnification for Losses asserted in writing by Parent pursuant to the Purchase Agreement. Such
written instruction shall be sent to Shareholder and the Escrow Agent and shall specifically
identify the nature of the Losses for which Parent seeks indemnification, the dollar amount thereof
and the number of Escrow Shares to be released. The calculation of the number of Escrow Shares
shall be the quotient of (A) the dollar amount of the Losses to be indemnified divided by (B) the
average closing sales price per share of Parent Common Stock for the five (5) trading days
immediately prior to the date such Losses become due and payable as reported on the NASDAQ Global
Market. On or promptly after the twentieth (20th) day after delivery of such
instructions to the Escrow Agent and Shareholder, and provided that Shareholder has not objected to
such notice in writing delivered to Parent and the Escrow Agent, the Escrow Agent shall release to
Parent all or part of the Escrow Shares in accordance with such instructions. If the Escrow Agent
receives such a written objection, the Escrow Agent shall not disburse and shall continue to hold
such Escrow Shares until:
(i) the Escrow Agent receives joint written instructions signed by both Parent and
Shareholder; or
(ii) the Escrow Agent receives a Final Order directing payment of such amount. For this
purpose, a “Final Order” shall mean the final decision of any court of competent jurisdiction from
which no appeal may be taken, whether because of lapsed time or otherwise.
(b) On or promptly after the first anniversary of the date hereof (the “First Anniversary
Disbursement Date”), the Escrow Agent shall disburse to Shareholder, upon joint written
instructions signed by both Parent and Shareholder (in accordance with Section 3(a) above), One
Million (1,000,000) of the Escrow Shares then held by it (or all of the Escrow Shares if less than
One Million (1,000,000) of the Escrow Shares remain in the Escrow Account on the First Anniversary
Disbursement Date) less (i) such number of Escrow Shares with a value (as calculated in accordance
with Section 3(a) above) equal to the amount which it shall have been previously instructed to
disburse pursuant to Section 3(a) above but shall not have disbursed for any reason and (ii) such
number of Escrow Shares equal to the value of the Losses (as calculated in accordance with Section
3(a) above), if any, claimed by Parent before the First Anniversary Disbursement Date.
(c) On or promptly after the second anniversary of the date hereof (the “Second Anniversary
Disbursement Date”), the Escrow Agent shall disburse to Shareholder, upon joint written
instructions signed by both Parent and Shareholder (in accordance with Section 3(a) above), One
Million (1,000,000) of the Escrow Shares then held by it (or all of the Escrow Shares if less than
One Million (1,000,000) of the Escrow Shares remain in the Escrow Account on the Second Anniversary
Disbursement Date) less (i) such number of Escrow Shares
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with a value (as calculated in accordance with Section 3(a) above) equal to the amount which
it shall have been previously instructed to disburse pursuant to Section 3(a) above but shall not
have disbursed for any reason and (ii) such number of Escrow Shares equal to the value of the
Losses (as calculated in accordance with Section 3(a) above), if any, claimed by Parent before the
Second Anniversary Disbursement Date.
(d) On or promptly after the third anniversary of the date hereof (the “Expiration Date”), the
Escrow Agent shall disburse to Shareholder, upon joint written instructions signed by both Parent
and Shareholder (in accordance with Section 3(a) above), all of the Escrow Shares, if any, then
held by it less (i) such number of Escrow Shares with a value (as calculated in accordance with
Section 3(a) above) equal to the amount which it shall have been previously instructed to disburse
pursuant to Section 3(a) above but shall not have disbursed for any reason and (ii) such number of
Escrow Shares equal to the value of the Losses (as calculated in accordance with Section 3(a)
above), if any, claimed by Parent before the Expiration Date.
(e) To the extent the Escrow Agent does not distribute Escrow Shares (“Withheld Shares”) to
Shareholder pursuant to clause (ii) of Section 3(b), (c) or (d) above and it is subsequently
determined in accordance with the Purchase Agreement that Parent is not entitled to such Withheld
Shares, then the Escrow Agent shall promptly disburse to Shareholder such Withheld Shares after
such determination upon either: (i) receipt of joint written instructions signed by both Parent and
Shareholder or (ii) receipt of a Final Order directing the disbursement of such Withheld Share to
Shareholder.
(f) Upon delivery by the Escrow Agent of all of the Escrow Shares, in accordance with the
provisions of this Escrow Agreement, this Escrow Agreement shall terminate, subject to the
provisions of Section 6 hereof, which Section shall survive such termination.
(g) Any amounts recovered by Parent under the April Stock Purchase Agreement, paid to Parent
by Shareholder pursuant to Section 6.16 of the Purchase Agreement or otherwise paid in cash to
Parent pursuant to Section 11.6 of the Purchase Agreement shall entitle Shareholder to the
distribution of, and the Escrow Agent shall so distribute promptly to Shareholder upon written
instructions from Parent, Escrow Shares from this Escrow Agreement (to the extent any Escrow Shares
continue to be held in escrow pursuant to this Escrow Agreement) with a value equal to such cash
recovery or payment based on the average closing sales price per share of Parent Common Stock for
the five (5) trading days immediately prior to the date of such recovery by Parent or payment by
Shareholder to Parent as reported on The NASDAQ Global Market.
4. Dividends and Proxies with Respect to the Escrow Shares; Sale of Escrow Shares.
(a) The Shareholder shall be entitled to exercise any and all voting and consensual rights and
powers accruing to an owner of the Escrow Shares or any part thereof for any purposes not
inconsistent with the terms of this Escrow Agreement; provided, however, that
Shareholder shall give the Escrow Agent at least five (5) days’ prior written notice of the manner
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in which it intends to exercise any such right or power; and further provided
that Shareholder’s voting rights with respect to the Parent Shares shall be governed exclusively
and at all times by Section 3.2 of that certain Shareholder Agreement dated as of the date hereof
by and between Parent and Shareholder (the “Shareholder Agreement”).
(b) Until such time as a claim for indemnification is given with respect to any of the Escrow
Shares, Shareholder shall be entitled to receive and retain any and all dividends or distributions
payable in respect of the Escrow Shares. All such dividends or distributions proceeds in respect of
the Escrow Shares shall be distributed promptly after receipt by the Escrow Agent to Shareholder.
(c) The Escrow Agent and Parent shall execute and deliver to Shareholder, or cause to be
executed and delivered to Shareholder, all such proxies, powers of attorney, dividend orders and
other instruments for the purpose of enabling Shareholder to exercise the voting or consensual
rights and powers which it is entitled to exercise pursuant to Section 4(a) and to receiving the
dividends which it is authorized to retain pursuant to Section 4(b).
(d) Notwithstanding anything herein to the contrary, Shareholder shall be entitled to include
any Escrow Shares in a registration under the Securities Act of 1933, as amended, pursuant to its
registration rights under that certain Registration Rights Agreement dated as of the date hereof
(the “Registration Rights Agreement”) entered into with Parent in connection with the acquisition
by Parent of all of the issued and outstanding shares of capital stock of Target and to sell such
Escrow Shares under such registration; provided, however, that the Escrow Agent
shall not disburse the applicable portion of the Escrow Shares until such time as the proceeds from
the sale are delivered to the Escrow Agent. In the event that such Escrow Shares are sold under
such registration, this Escrow Agreement shall be amended in order to reflect the mechanism for the
release from the escrow of the proceeds from such sale.
(e) The Escrow Agent and Parent shall execute and deliver to Shareholder or cause to be
executed and delivered to Shareholder, all documents reasonably necessary for the purpose of
enabling Shareholder to deliver the Escrow Shares in settlement of a sale of Escrow Shares pursuant
to Section 4(d).
5. Fractional Shares. Should any fractional share result from the calculations
described in this Escrow Agreement, the number of Escrow Shares shall be rounded up to the next
greater whole number if the fraction is greater or equal to one-half and rounded down to the next
lesser whole number if the fraction is less than one-half; provided, however, that
the number of Escrow Shares after giving effect to such rounding shall not exceed the total number
of Escrow Shares available and held by the Escrow Agent.
6. Duties and Responsibilities of the Escrow Agent.
(a) The duties and responsibilities of the Escrow Agent hereunder shall be determined solely
by the express provisions of this Escrow Agreement and no other or further duties or
responsibilities shall be implied. The Escrow Agent shall be under no obligation to
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refer to the Purchase Agreement or any other documents between or among the parties related in
any way to this Escrow Agreement.
(b) The Escrow Agent may rely and shall be protected in acting or refraining from acting upon
any written instructions by Parent or Shareholder furnished to it hereunder and reasonably believed
by it to be genuine and to have been signed or presented by the proper party or parties.
(c) In the event that the Escrow Agent (i) shall be uncertain as to its duties or rights
hereunder, (ii) shall receive instructions, claims or demands from any party hereto which conflict
with any of the provisions of this Escrow Agreement, (iii) shall receive an objection from any
party hereto with respect to the instructions given by any other party for the distribution of any
of the Escrow Shares, or (iv) shall resign pursuant to Section 9 hereof and it does not receive
joint written instructions regarding the disposition of the Escrow Shares, as provided therein,
then the Escrow Agent shall refrain from taking any action and its sole obligation shall be (x) to
keep safely all Escrow Shares held in escrow until it shall be directed otherwise by an order or
judgment of a court of competent jurisdiction or (y) to deliver the Escrow Shares to a court of
competent jurisdiction and commence an action for interpleader or its equivalent. The costs of the
foregoing shall be borne by whichever of Parent or Shareholder is the losing party.
(d) The Escrow Agent shall not be liable for any action taken or omitted by it in good faith
unless a court of competent jurisdiction determines that the Escrow Agent’s willful misconduct or
gross negligence was the cause of any loss to Parent or Target or Shareholder. The Escrow Agent
may consult with counsel of its own choice and, at its option, may act as its own counsel in
connection herewith.
7. Compensation of Escrow Agent. Each of Parent, on the one hand, and Shareholder,
on the other hand, shall pay the Escrow Agent fifty percent of its fee for the performance of
services by the Escrow Agent hereunder, as set forth on Schedule 1 hereto, for each year or a
portion thereof that any Escrow Shares remain in escrow and each shall reimburse the Escrow Agent
for fifty percent of the reasonable costs and expenses incurred by it in connection with the
performance of such services.
8. Stock Transfer Taxes. Any stock transfer taxes incurred in connection with the
release and delivery of the Escrow Shares by the Escrow Agent hereunder shall be borne by the
recipient of the Escrow Shares.
9. Discharge and Resignation of the Escrow Agent. The Escrow Agent may resign and be
discharged from its duties and obligations hereunder by giving notice in writing of such
resignation specifying a date at least thirty (30) days after such notice when such resignation
shall take effect. It is understood and agreed that the Escrow Agent’s resignation shall not be
effective until a successor escrow agent agrees to act hereunder; provided, that if no
successor is appointed and acting hereunder within sixty (60) days after such notice is given, the
Escrow Agent may, in its sole discretion, apply to a court of competent jurisdiction for the
appointment of a successor escrow agent or for other appropriate relief. The Escrow Agent shall,
upon the
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effectiveness of such resignation, dispose of the Escrow Shares in accordance with the joint
written instructions of Parent and Shareholder.
10. Indemnification. Parent and Shareholder hereby agree to indemnify the Escrow
Agent for, and to hold it harmless against, any loss, liability or expense, arising out of or in
connection with this Escrow Agreement and carrying out its duties hereunder, including, without
limitation, reasonable attorneys’ fees and other costs and expenses of defending itself against any
claim of liability, except to the extent such loss, liability or expense is the result of the
Escrow Agent’s willful misconduct or gross negligence; provided, however, that the
foregoing provisions of this Section 10 shall not affect the rights and remedies of Parent and
Shareholder as against each other. Anything in this Escrow Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action.
11. Notices. All notices and communications hereunder shall be in writing and shall
be sent by personal or overnight delivery as follows:
| If to the Escrow Agent: | American Stock Transfer & Trust Company | |||
| 0000 00xx Xxxxxx | ||||
| Xxxxxxxx, X.X. 00000 | ||||
| Attn: Xxxxxxxx Xxxxxxx | ||||
| Fax No: (000) 000-0000 | ||||
| If to Parent: | Brightpoint, Inc. | |||
| 0000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000 | ||||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||||
| Attn: Xxxxxx X. Xxxxx, General Counsel | ||||
| Fax No: (000) 000-0000 | ||||
| with copy to: | ||||
| Blank Rome LLP | ||||
| 000 Xxxxxxxxx Xxxxxx | ||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
| Attn: Xxxxxx X. Xxxxxxx, Esq. | ||||
| Facsimile: (000) 000-0000 | ||||
| If to Shareholder: | Dangaard Holding A/S | |||
| x/x Xxxxxx Xxxxxxx | ||||
| Xxxxx Xxxx Xxxxx 00 | ||||
| 0000 Xxxxxxxxxx K | ||||
| Denmark | ||||
| Attn: Xxxxxxxxx Xxxxx | ||||
| Fax No: x00 0000 0000 |
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| with copy to: | ||||
| Xxxxxx & Xxxxxxx LLP | ||||
| 000 Xxxxx Xxxxxx, Xxxxx 0000 | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxxxx Xxxxxx, Esq. | ||||
| Fax No: 000-000-0000 |
or to such other address as any of the above may have furnished to the other parties in writing by
certified or registered mail, return receipt requested, air courier, personal delivery, or verified
facsimile, and any such notice or communication given in the manner specified in this Section 11
shall be deemed to have been duly given on the date received by the recipient party. In the event
that the Escrow Agent, in its sole discretion, shall determine that any emergency exists, the
Escrow Agent may use such other means of communications, as the Escrow Agent reasonably deems
advisable.
12. Expenses. Except as otherwise provided herein, each party shall pay its own fees
and expenses incident to the negotiation, preparation, execution, delivery and performance hereof
and thereof, including, without limitation, the fees and expenses of its counsel, accountants and
other experts.
13. Entire Agreement. This Escrow Agreement, the Purchase Agreement, the Shareholder
Agreement and the Registration Rights Agreement contain the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements, written or oral, with
respect thereto.
14. Amendment. The provisions of this Escrow Agreement may be waived, altered,
amended or supplemented, in whole or in part, only by a writing signed by all of the parties to be
charged with such waiver, alteration, amendment or supplement.
15. Severability. If any provision of this Escrow Agreement is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall not be affected
thereby and shall be enforceable without regard thereto; provided that the essential terms
and conditions of this Agreement for the parties remain valid, binding and enforceable;
provided, further, that the economic and legal substance of the transactions
contemplated by this Escrow Agreement is not affected in any manner materially adverse to any
party. In event of any such determination, the parties agree to negotiate in good faith to modify
this Escrow Agreement to fulfill as closely as possible the original intents and purposes hereof.
To the extent permitted by Law, the parties hereby to the same extent waive any provision of Law
that renders any provision hereof prohibited or unenforceable in any respect.
16. Binding Agreement. This Escrow Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and assigns.
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17. No Third Party Beneficiaries. Nothing in this Escrow Agreement is intended or
shall be construed to give any Person, other than the parties, their successors and permitted
assigns any legal or equitable right, remedy or claim under or in respect of this Escrow Agreement
or any provision contained herein.
18. Counterparts. This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
19. Conflict Waiver. The parties hereto acknowledge and agree that the Escrow Agent
currently represents and may continue to represent Parent. The parties hereto waive the right to
raise any claim of conflict or any claim of a similar nature in connection with such
representation.
20. Controlling Law. THIS ESCROW AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
21. Jurisdiction and Process. In any action between or among any of the parties,
whether arising out of this Escrow Agreement, any of the agreements contemplated hereby or
otherwise, (a) each of the parties irrevocably consents to the exclusive jurisdiction and venue of
the federal and state courts located in New York, New York, (b) if any such action is commenced in
a state court, then, subject to applicable law, no party shall object to the removal of such action
to any federal court located in New York, New York, (c) each of the parties irrevocably waives the
right to trial by jury, (d) each of the parties irrevocably agrees to designate a service company
located in the United States as its agent for service of process and consents to service of process
by first class certified mail, return receipt requested, postage prepaid, to the address at which
such party is located, and (e) the prevailing parties shall be entitled to recover their reasonable
attorneys’ fees, costs and disbursements from the other parties (in addition to any other relief to
which the prevailing parties may be entitled).
- Signature Page Follows -
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the day and
year first above written.
| BRIGHTPOINT, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Executive Vice President, General Counsel and Secretary | |||
| DANGAARD HOLDING A/S |
||||
| By: | /s/ Xxxxxxxxx Xxxxx | |||
| /s/ Xxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxxxx Xxxxx and Xxxxxxx Xxxxxxx | |||
| Title: | Directors | |||
| ESCROW AGENT: AMERICAN STOCK TRANSFER & TRUST COMPANY |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
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