Exhibit 2
ESCROW AGREEMENT
This ESCROW AGREEMENT (this 'Agreement') is entered into as
of November 15, 2005 (the 'Closing Date'), by and among EPIQ
Systems, Inc., a Missouri corporation ('Buyer'), Ajuta
International Pty. Ltd., an Australian Company as Trustee of
Hypatia Trust, a trust created under the laws of Victoria,
Australia ('Indemnifying Shareholder'), and Xxxxx Fargo Bank,
N.A. (the 'Escrow Agent').
WHEREAS, the Indemnifying Shareholder is the sole
shareholder of nMatrix, Inc., a Delaware corporation ('nMatrix
U.S.') and of nMatrix Australia Pty. Ltd., an Australian company
('nMatrix Australia'), and nMatrix Australia is in turn the sole
shareholder of nMatrix Ltd., a company registered in England and
Wales ('nMatrix U.K.', and together with nMatrix U.S. and
nMatrix Australia U.K. are herein collectively called the
'Company');
WHEREAS, the Indemnifying Shareholder desires to sell to
Buyer, and Buyer desires to purchase from the Indemnifying
Shareholder, all of the issued and outstanding shares of capital
stock of nMatrix U.S. and of nMatrix Australia, all on the terms
and subject to the conditions set forth in the Stock Purchase
Agreement between the Indemnifying Shareholder and Buyer dated
the date hereof (as amended from time to time, the 'Stock
Purchase Agreement');
WHEREAS, as a condition to the consummation of the
acquisition and pursuant to the Stock Purchase Agreement, the
Indemnifying Shareholder has agreed that on the date hereof,
245,679 shares of common stock of Buyer that the Indemnifying
Shareholder received, consisting of 20% of the Share
Consideration (as defined in the Stock Purchase Agreement) shall
be placed in escrow for a period of time after the Closing Date,
in order to secure the performance of the indemnity obligation
of the Indemnifying Shareholder under the Stock Purchase
Agreement; and
WHEREAS, the parties hereto desire to establish the terms
and conditions pursuant to which such escrow account will be
established and maintained.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
ESCROW SHARES
1.1 Consent of Escrow
The Indemnifying Shareholder and Buyer hereby, and by
virtue of its approval of the Stock Purchase Agreement, agrees
to: (a) the establishment of this escrow to secure the
Indemnifying Shareholder's indemnification obligations under the
Stock Purchase Agreement in the manner set forth herein and
(b) all of the other terms, conditions and limitations contained
in this Agreement.
1.2 Delivery; Escrow Fund
As soon as practicable after the execution of this
Agreement, Buyer shall cause its stock transfer agent to deliver
to the Escrow Agent a stock certificate registered in the name
of the Escrow Agent representing an aggregate of 245,679 shares
of common stock of Buyer, par value $0.01 per share, (the
'Escrow Shares'). The Escrow Agent will acknowledge receipt of
the Escrow Shares and the Escrow Agent agrees to hold the Escrow
Shares in an escrow account (the 'Escrow Account'), subject to
the terms and conditions of this Agreement (the Escrow Shares
and any cash, property, securities or other proceeds arising
from the sale, conversion or exchange of, the Escrow Shares,
including any Escrow Cash, and any non-cash distributions on or
with respect to the Escrow Shares are collectively referred to
herein as the 'Escrow Fund'). For the purpose of this
Agreement, Escrow Cash shall mean the gross proceeds from sales
of the Escrow Shares, less all reasonable brokerage commissions
and charges and any other fees and expenses arising directly
from the sale of such Escrow Shares, but not reduced by any
taxes arising from such sale, plus any interest or dividends
earned with respect to such Escrow Cash. All cash dividends on
the Escrow Shares and all earnings on the Escrow Cash shall be
paid over by the Escrow Agent to the Indemnifying Shareholder no
less often than once per calendar quarter.
1.3 Receipt; Escrow Account
The Escrow Agent hereby agrees (i) to accept delivery of
the Escrow Shares and (ii) to hold the Escrow Shares in the
Escrow Account in accordance with the terms and conditions of
this Agreement and for the uses and purposes stated herein. In
no event shall any part of the Escrow Shares be commingled with
any other securities held by the Escrow Agent or any of its
parents, subsidiaries or affiliates. The Escrow Agent shall,
promptly following the end of each calendar month, send to the
Indemnifying Shareholder and Buyer with respect to the Escrow
Shares a statement of holdings and transactions in form and
substance customarily provided to clients. It is the intention
of the Indemnifying Shareholder that the Escrow Account shall
not be subject to any lien or attachment by any creditor of the
Indemnifying Shareholder and shall be used solely for the
purposes set forth in this Agreement. The Escrow Shares and any
amounts in the Escrow Account shall not be used by the Escrow
Agent to offset any obligations that either the Indemnifying
Shareholder or Buyer might have to the Escrow Agent or any of
its affiliates, whether under this Agreement or under any other
agreement or arrangement in any other capacity, nor shall the
Escrow Agent have any lien or claim upon the Escrow Fund in any
form whatsoever.
1.4 Dividends, Etc.
Any securities distributed in respect of or in exchange for
any of the Escrow Shares, whether by way of stock dividends,
stock splits or otherwise, shall be issued in the name of the
Escrow Agent or its nominee, and shall be delivered to the
Escrow Agent, who shall hold such securities in the Escrow
Account. Such securities shall be considered Escrow Shares for
purposes hereof.
1.5 Voting of Shares
All voting rights with respect to the Escrow Shares shall
be exercised by the Indemnifying Shareholder, by delivering
written voting instructions to the Escrow Agent. The
Indemnifying Shareholder shall have the authority to instruct
the Escrow Agent whether or not to accept any tender or exchange
offers with respect to the Escrow Shares. The Escrow Agent
shall forward to the Indemnifying Shareholder all proxy
statements, reports, and tender and exchange offer materials
received by it with respect to the Escrow Shares. The Escrow
Agent will then vote or tender the Escrow Shares in accordance
with such written instructions. In the absence of such written
instructions, the Escrow Agent shall not vote or cause the
voting of such shares.
1.6 Transferability; Sale
(a) Transferability. The Indemnifying Shareholder
shall not sell, pledge, assign, or transfer (including by
operation of law) or otherwise dispose of, its interest in the
Escrow Fund, directly or indirectly, or subject its interest in
the Escrow Fund to a transaction which would have the same
effect, or subject its interest in the Escrow Fund to any swap,
hedge or other arrangement that transfers, in whole or in part,
any of the economic consequences of ownership of the Escrow
Fund, in cash or otherwise, so long as such Escrow Fund is held
by the Escrow Agent hereunder.
(b) Sales of Escrow Shares. Subject to Section 1.5
above, the Escrow Agent shall have no authority to sell or
dispose of any Escrow Shares unless pursuant to and in
accordance with, joint written instructions from Buyer and the
Indemnifying Shareholder.
1.7 Manner of Sale
The Escrow Agent shall have no responsibility in connection
with such sale other than to make delivery of the Escrow Shares
to the brokerage firm selected by Buyer and the Indemnifying
Shareholder (or, if Buyer and the Indemnifying Shareholder do
not designate a brokerage firm, then to the brokerage firm
selected by the Escrow Agent), with its delivery instructions
and any special instructions provided by the Buyer and the
Indemnifying Shareholder, and to receive and deposit the Escrow
Cash arising from such sale into the Escrow Account. The Escrow
Agent shall have no duty or obligation to determine or
accomplish compliance with any applicable transfer restrictions;
and it shall be the sole obligation of the party directing such
sale to take any remaining actions, and to provide or deliver
any necessary instruments or opinions (at its expense) necessary
to comply with applicable transfer restrictions or applicable
securities laws. The Escrow Agent shall have no liability for
any actions or omissions of any such brokerage firm, and shall
have no liability for the price or execution achieved. Without
limiting the generality of the foregoing, the Indemnifying
Shareholder expressly acknowledges that (a) the Escrow Shares
that are the subject of a sale may be sent to a transfer agent
to be reissued in saleable form, (b) the Escrow Shares may
contain or be subject to transfer restrictions that may limit
their marketability and impose restrictions upon the number or
types of purchasers to whom they can be offered or sold, and (c)
the Escrow Agent shall have no liability for any failure or
delay (or any price change during any such delay) on the part of
Buyer, the Indemnifying Shareholder or any transfer agent, or
caused by any necessary registration or delivery procedures, or
compliance with any applicable transfer restrictions involved in
the transfer of such Escrow Shares.
ARTICLE II
DISBURSEMENTS
2.1 Disbursements Upon Joint Instructions
The Escrow Agent will disburse the Escrow Fund, or any
portion thereof only in accordance with (a) a written instrument
delivered to the Escrow Agent that is executed by both Buyer and
the Indemnifying Shareholder and that instructs the Escrow Agent
as to the disbursement of some or all of the Escrow Fund or (b)
the provisions of Sections 2.2, 2.3 or 2.4.
2.2 Disbursements upon Receipt of Final Determination
If either the Indemnifying Shareholder or Buyer delivers to
the Escrow Agent and the other party hereto a final notice of
the claim for indemnification and the amount of Losses related
thereto (the 'Final Determination Notice'), together with a copy
of an order of a court of competent jurisdiction providing for
the disbursement of Escrow Fund (each an 'Order') and a
certificate, signed by an officer of Buyer or the trustee of the
Indemnifying Shareholder (as applicable), stating that such
order is not subject to appeal, or that the appeal period with
respect to such order has elapsed and no appeal has been taken,
together with a written certification that a copy of the Order
has been delivered to the parties involved, then the Escrow
Agent shall disburse the Escrow Fund, or any portion thereof, in
accordance with the Order within the 10 business days following
the Escrow Agent's receipt of the Order, such certificate and
certification of delivery. The Escrow Agent shall send for
overnight delivery a copy of the Order to the non-delivering
party at the address set forth in Section 5.7.
2.3 Disbursements Following Termination Date
Within 3 business days after May 14, 2007 (the 'Termination
Date'), the Escrow Agent shall release to the Indemnifying
Shareholder all of the Escrow Fund; provided that, if Buyer has
on or before the Termination Date delivered to the Escrow Agent
a written notice that (i) Buyer has previously delivered to the
Indemnifying Shareholder one or more Claim Notices (as defined
in the Stock Purchase Agreement), (ii) the claim or claims
covered thereby have not been resolved either by agreement of
Buyer and the Indemnifying Shareholder or by a final,
non-appealable order of a court of competent jurisdiction, and
(iii) specifying the claim amount(s) covered in the unresolved
Claim Notice or Notices, then the Escrow Agent shall retain in
the Escrow Fund Escrow Cash and such number of Escrow Shares as
together have an aggregate Fair Market Value (as defined in
Section 3.1(a)) equal to 100% of the claim amount covered by the
unresolved Claim Notice or Claim Notices and establish a new
Termination Date. If Buyer has delivered to the Escrow Agent a
written notice in accordance with the proviso in the preceding
sentence, Buyer may direct the Escrow Agent to sell all Escrow
Shares retained in the Escrow Account without further consent or
action by the Indemnifying Shareholder.
2.4 Method of Disbursement
Disbursements to the Indemnifying Shareholder shall be made
by courier delivery of stock certificates and/or checks to the
Indemnifying Shareholder at its address shown in Section 5.7 (or
such other address as may be provided in writing to the Escrow
Agent by the Indemnifying Shareholder).
ARTICLE III
VALUATION; INVESTMENT OF ESCROW CASH
3.1 Valuation; Investment of Escrow Cash
(a) Valuation of Escrow Shares. For purposes of this
Agreement, the 'Fair Market Value' of any Escrow Shares shall
equal the average closing price per share of Buyer's common
stock on NASDAQ for the five-day period ending on the day prior
to the date on which the indemnification claim was 'finally
determined'. For purposes of this Section 3.1(a), the date on
which an indemnification claim was 'finally determined' shall
mean (i) in the case of Section 2.1, the payment date stated in
the joint written instructions, (ii) the case of Section 2.2,
the payment date stated in the Final Determination Notice, and
(iii) in the case of Section 2.3, the Termination Date. The
value of Escrow Cash shall be face value of such Escrow Cash.
For the purposes of any disbursement of Escrow Shares, the
number of Escrow Shares required to satisfy a claim with respect
to the Escrow Account shall be rounded to the nearest whole
share of common stock of Buyer. The Buyer and the Indemnifying
Shareholder agree that the Escrow Agent shall have no
responsibility for determining, or reporting, the Fair Market
Value of the Escrow Shares.
(b) Permitted Investments of Escrow Cash. Escrow
Cash shall be invested by the Escrow Agent, to the extent
permitted by law and as directed by the Indemnifying
Shareholder, in (i) obligations issued or guaranteed by the
United States of America or any agency or instrumentality
thereof, (ii) obligations (including certificates of deposit and
bankers' acceptances) of domestic commercial banks which at the
date of their last public reporting had total assets in excess
of $500,000,000, (iii) commercial paper rated at least A-1 or
P-1 or, if not rated, issued by companies having outstanding
debt rated at least AA or Aa and (iv) money market mutual funds
invested exclusively in some or all of the securities described
in the foregoing clauses (i), (ii) and (iii). Absent receipt of
specific written investment instructions from the Buyer or
Indemnifying Shareholder, the Escrow Agent shall have no
obligation or duty to invest (or otherwise pay interest on) the
Escrow Cash; provided, however, that in the event the Escrow
Agent shall not have received such written investment
instruction, the Escrow Agent shall be authorized to invest any
of the Escrow Cash in the Xxxxx Fargo Advantage Government Money
Market Fund until such investment instruction is received. All
earnings received from the investment of the Escrow Cash shall
be credited to, and shall become a part of, the Escrow Fund (and
any losses on such investments shall be debited to the Escrow
Fund). The Escrow Agent shall have no liability for any
investment losses, including without limitation any market loss
on any investment liquidated prior to maturity in order to make
a payment required hereunder. The investments in the Xxxxx
Fargo Advantage Fund are not obligations of, or endorsed or
guaranteed by, the Escrow Agent or its Affiliates and are not
insured by the Federal Deposit Insurance Corporation. The
Escrow Agent serves as advisor, custodian, and transfer agent
for the Xxxxx Fargo Advantage Fund and will be paid, and its
affiliates may be paid, fees for services to the Xxxxx Fargo
Advantage Fund and those fees may include processing
organization fees. The Escrow Agent will have the right to
liquidate any investments of the Escrow Fund held by the Escrow
Agent hereunder in order to provide funds necessary to make
required payments hereunder.
(c) Tax Reporting. The parties hereto agree that,
for tax reporting purposes, all interest or other income earned
from the investment of any Escrow Cash or any portion thereof in
any tax year shall be reported as allocated to the Indemnifying
Shareholder.
ARTICLE IV
ESCROW AGENT
4.1 Appointment
The Indemnifying Shareholder and Buyer hereby appoint the
Escrow Agent to serve as the escrow agent hereunder, and the
Escrow Agent hereby accepts such appointment and agrees to
perform all duties which are expressly set forth in this
Agreement.
4.2 Fees and Expenses of Escrow Agent
Buyer and the Indemnifying Shareholder shall each (a) pay
one-half of the fees of the Escrow Agent for the services to be
rendered by the Escrow Agent hereunder, which are set forth on
Attachment A hereto, and (b) reimburse the Escrow Agent for one-
half of its reasonable expenses (including reasonable attorneys'
fees and expenses) incurred in connection with the preparation
and performance of its duties under this Agreement; provided
that any fees and expenses relating to any sale of Escrow Shares
pursuant to Section 1.6 shall be promptly paid in full by the
Indemnifying Shareholder and shall be deducted from the gross
proceeds of such sale of Escrow Shares. In the event of any
material change in the fees charged by the Escrow Agent, the
Escrow Agent shall notify the Indemnifying Shareholder and Buyer
in writing of such change as soon as practicable after the
Escrow Agent is made aware of the change. The Escrow Agent may
withhold its unpaid fees and expenses from any final
disbursement from the Escrow Fund.
4.3 Limitation of Escrow Agent's Duties and Liabilities.
(a) Limitation on Liability. The Escrow Agent shall
not be responsible for determining or compelling compliance with
the Stock Purchase Agreement and shall not be bound by or incur
any liability with respect to any other agreement or
understanding to which the Escrow Agent is not a party,
including the Stock Purchase Agreement. The Escrow Agent shall
be obligated only for the performance of such duties as are
expressly and specifically set forth in this Agreement on its
part to be performed, which are ministerial (and shall not be
construed to be fiduciary) in nature, and no implied duties or
obligations of any kind shall be read into this Agreement
against or on the part of the Escrow Agent. The Escrow Agent
shall incur no liability with respect to any action taken or
suffered by it in reliance upon any notice, direction,
instruction, consent, statement or other documents believed by
it to be genuine and duly authorized, nor for other action or
inaction except its own willful misconduct or gross negligence.
In all questions arising under the Agreement, the Escrow Agent
may rely on the advice of counsel, and the Escrow Agent shall
not be liable to anyone for anything done, omitted or suffered
in good faith by the Escrow Agent based on such advice. The
Escrow Agent shall not be required to take any action hereunder
involving any expense unless the payment of such expense is made
or provided for in a manner reasonably satisfactory to it. In
no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damages.
(b) Sales of Escrow Shares. In connection with any
sale of Escrow Shares pursuant to Section 1.6 of this Agreement,
the Escrow Agent shall be entitled to receive and rely upon,
prior to taking action in that regard, written direction from
the Buyer and the Indemnifying Shareholder as to the manner and
method to be undertaken in carrying out such sale, including,
without limitation written direction (1) identifying the number
of Escrow Shares to be sold, (2) requesting the Escrow Agent to
use a brokerage firm identified by the Buyer and the
Indemnifying Shareholder therein, or requesting the Escrow Agent
to use its affiliated brokerage service, and (3) setting forth
any necessary or special instructions with respect to the sale
(including any stop loss or minimum price per share
instruction); and the Indemnifying Shareholder shall execute and
deliver any instruments reasonably required by the Buyer or the
Escrow Agent in order to carry out such sale or liquidation.
4.4 No Security Interest
The Indemnifying Shareholder warrants to and agrees with
Buyer and the Escrow Agent that, unless otherwise expressly set
forth in this Agreement, there is no security interest in the
Escrow Fund, Escrow Account or any part thereof created by it or
in respect of any of its obligations or liabilities. The
Indemnifying Shareholder knows of no financing statement under
the Uniform Commercial Code, which is on file in any
jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Fund, the Escrow
Account or any part thereof.
4.5 Indemnification
Indemnifying Shareholder and Buyer hereby agree to jointly
and severally indemnify the Escrow Agent for, and to hold it
harmless against any fee, cost, loss, liability or expense
arising out of or in connection with this Agreement and carrying
out its duties hereunder, including, without limitation,
attorneys' fees and expenses and the costs and expenses of
investigating or defending itself against any claim of
liability, except in those cases where the Escrow Agent has been
guilty of gross negligence or willful misconduct; provided,
that, without limiting the foregoing, the Indemnifying
Shareholder, on the one hand, and Buyer on the other hand, agree
between themselves that each shall pay one half of such amounts.
This right of indemnification shall survive the termination of
this Agreement and the resignation or removal of the Escrow
Agent.
4.6 Tax Indemnification
The Indemnifying Shareholder shall assume and promptly pay
when and as due any and all obligations imposed now or hereafter
by any applicable tax law, rule or regulation with respect to
any payment or disbursement of the Escrow Fund, each and every
sale, exchange or conversion of the Escrow Shares and dividends
or distributions with respect to the Escrow Shares, any
distribution of the Escrow Shares or performance of any other
activity under this Agreement. The Indemnifying Shareholder also
agrees 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, and to
instruct the Escrow 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 the Escrow Agent under this Agreement. The foregoing
indemnification and agreement to hold harmless shall survive the
termination of this Agreement. Indemnifying Shareholder and
Buyer will provide a completed IRS Form W-9 or W-8 to the Escrow
Agent upon the signing of this Escrow Agreement. The Escrow
Agent will report to the Internal Revenue Service, as of each
calendar year-end, and to Indemnifying Shareholder all income
earned from the investment of any sum held in the Acquisition
Fund against Indemnifying Shareholder, whether or not said
income has been distributed during such year, as and to the
extent required by law under the provisions of the Internal
Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (the 'Code'). Any tax returns required
to be prepared and filed will be prepared and filed by
Indemnifying Shareholder with the Internal Revenue Service in
all years income is earned, whether or not income is received or
distributed in any particular tax year, and Escrow Agent will
have no responsibility for the preparation and/or filing or any
tax return with respect to any income earned by the Acquisition
Fund. The Indemnifying Shareholder is required to prepare and
file any and all income or other tax returns applicable to the
Acquisition Fund with the Internal Revenue Service and all
required state and local departments of revenue in all years
income is earned in any particular tax year as and to the extent
required under the provisions of the Code. Any taxes payable on
income earned from the investment of any sums held in the Escrow
Fund will be the responsibility of Indemnifying Shareholder,
whether or not the income was distributed by the Escrow Agent
during any particular year as and to the extent required under
the provisions of the Code.
4.7 Successor Escrow Agent
In the event the Escrow Agent becomes unavailable or
unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations
hereunder by delivering a resignation to the parties to this
Agreement, not less than 60 days prior to the date when such
resignation shall take effect. Buyer may appoint a successor
Escrow Agent so long as such successor is a bank with assets of
at least $500,000,000, and may appoint any other successor
Escrow Agent with the consent of the Indemnifying Shareholder,
which shall not be unreasonably withheld or delayed. If, within
such notice period, Buyer provides to the Escrow Agent written
instructions with respect to the appointment of a successor
Escrow Agent and directions for the transfer of any Escrow
Shares then held by the Escrow Agent to such successor, the
Escrow Agent shall act in accordance with such instructions and
promptly transfer such Escrow Shares to such designated
successor. If no successor Escrow Agent is named as provided in
this Section 4.7 prior to the date on which the resignation of
the Escrow Agent is to properly take effect, the Escrow Agent
may apply to a court of competent jurisdiction for appointment
of a successor Escrow Agent.
4.8 Investment
The Escrow Agent is hereby authorized, in making or
disposing of any investment permitted by this Agreement, or in
carrying out any sale of the Escrow Fund permitted by this
Agreement, to deal with itself (in its individual capacity) or
with any one or more of its affiliates, whether it or such
affiliate is acting as a subagent of the Escrow Agent or for any
third person or dealing as principal for its own account.
4.9 Action by Escrow Agent
Notwithstanding any term in this Agreement to the contrary,
in no instance shall the Escrow Agent be required or obligated
to distribute any Escrow Fund (or take other action that may be
called for hereunder to be taken by the Escrow Agent) sooner
than two (2) business days after (i) it has received the
applicable documents required under this Agreement in good form,
or (ii) passage of the applicable time period, as the case may
be.
ARTICLE V
OTHER PROVISIONS
5.1 Representation and Warranties of Indemnifying
Shareholder and Buyer
Each of Indemnifying Shareholder and Buyer hereby
represents and warrants (a) that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes
its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Agreement by each of
Indemnifying Shareholder and Buyer does not and will not violate
any applicable law or regulation.
5.2 Termination
This Agreement shall terminate upon the disbursement by the
Escrow Agent of the Escrow Fund in accordance with this
Agreement; provided that the provisions of Sections 4.2, 4.5 and
4.6 shall survive such termination.
5.3 Entire Agreement
This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes
any prior understandings, agreements or representations by or
among the parties, written or oral, with respect to the subject
matter hereof.
5.4 Succession and Assignment
This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective
successors and permitted assigns.
5.5 Counterparts and Facsimile Signature
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature. Signatures by
facsimile shall be deemed to be their original signatures for
all purposes.
5.6 Headings
The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
5.7 Notices
All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to
have been duly given or made (i) five business days after being
sent by registered or certified mail, return receipt requested,
(ii) upon delivery, if hand delivered, (iii) one business day
after being sent by prepaid overnight courier with guaranteed
delivery, with a record of receipt, or (iv) upon transmission
with confirmed delivery if sent by cable, telegram, facsimile or
telecopy, to the parties at the following addresses (or at such
other addresses as shall be specified by the parties by like
notice):
If to Buyer:
EPIQ Systems, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxx.xxx
Copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
E-mail: xxxxxxx@xxxxxxx.xxx
If to Indemnifying Shareholder:
___________________
___________________
Attention: ___________
Telephone: ___________
Telecopy: ___________
E-mail:
With a Copy to:
Wormser, Kiely, Galef & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (212) ___-____
Telecopy: (000) 000-0000
E-mail:
If to the Escrow Agent:
Xxxxx Fargo Bank, N.A. Escrow Agent
Attn: Corporate Trust & Escrow Services
Xxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
E-mail: xxxxxxx.xxxxxx@xxxxxxxxxx.xxx and
xxxx.xxx@xxxxxxxxxx.xxx
Any party may give any notice, instruction or other
communication hereunder using any other means, but no such
notice, instruction or other communication shall be deemed to
have been duly given unless and until it actually is received by
the party to whom it is intended. Any party may change the
address to which notices, instructions, or other communications
hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 5.7.
5.8 Amendments and Waivers
This Agreement may be amended only with the written consent
of Buyer, the Escrow Agent and the Indemnifying Shareholder. No
waiver of any right or remedy hereunder shall be valid unless
the same shall be in writing and signed by the party giving such
waiver. No waiver by any party with respect to any condition,
default or breach of covenant hereunder shall be deemed to
extend to any prior or subsequent condition, default or breach
of covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
5.9 Governing Law and Submission to Jurisdiction
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE LAWS THAT MIGHT BE APPLICABLE UNDER CONFLICTS OF
LAWS PRINCIPLES.
Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the
exclusive jurisdiction of any New York state court, or Federal
court of the United States of America, sitting in New York, New
York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the
agreements delivered in connection herewith or the transactions
contemplated hereby or thereby or for recognition or enforcement
of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (i) agrees not to commence any
such action or proceeding except in such courts, (ii) agrees
that any claim in respect of any such action or proceeding may
be heard and determined in such New York state court or, to the
extent permitted by law, in such Federal court, (iii) waives, to
the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of
venue of any such action or proceeding in any such New York
state or Federal court, and (iv) waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such New York
state or Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. Each party
to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 5.7. Nothing in this
Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
5.10 Force Majeure
The Escrow 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.
5.11 Dispute Resolution
It is understood and agreed that, should any dispute arise
with respect to the delivery, ownership, right of possession,
and/or disposition of the Escrow Fund, or should any claim be
made upon the Escrow Agent or the Escrow Fund by a third party,
the Escrow Agent upon receipt of notice of such dispute or claim
is authorized and shall be entitled (at its sole option and
election) to retain in its possession without liability to
anyone, all or any of said Escrow Fund until such dispute shall
have been settled either by the mutual written agreement of the
parties involved or by a final order, decree or judgment of a
court in the United States of America, the time for perfection
of an appeal of such order, decree or judgment having expired.
The Escrow Agent may, but shall be under no duty whatsoever to,
institute or defend any legal proceedings that relate to the
Escrow Fund.
* * * *
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
EPIQ SYSTEMS, INC.
'Buyer':
By: /s/ Xxxxxxxxxxx X.
Olofson_____________
Title: President & Chief
Operating Officer
AJUTA INTERNATIONAL PTY. LTD.,
as Trustee of Hypatia Trust
'Indemnifying Shareholder':
By: /s/ Xxx X.
Stechel___________________
Title: Attorney in Fact
XXXXX FARGO BANK, N.A.
'Escrow Agent'
By: /s/ Xxxx X.
Lee______________________
Xxxx X. Xxx, Vice President
ATTACHMENT A
Escrow Agent Fees
Acceptance Fee $500
Our acceptance fee covers the review, acceptance and assumption
of all responsibilities and duties as Escrow Agent,
participation in document conferences, establishing records and
accounts, receipt of funds, and consultation with counsel.
Annual Escrow Agent Fee $5,000
This annual fee includes the normal day-to-day administration of
the issue performed in accordance with the Escrow Agreement,
maintenance of all administrative records, and the duties and
functions associated with the Escrow Agent. Our annual
administration fee is billed annually in advance for any year or
part thereof. The first annual fee is due at closing.
Stock Sale Transactions $500
In the event of the sale of Escrow Shares per 1.6(b) of the
Escrow Agreement, this fee will be charged per sale to sale
proceeds.
Disbursements upon Receipt of Final Determination $1,000
Out-of-Pocket Expenses None Anticipated
The Trustee does not typically charge for out-of-pocket expenses
but we reserve the right to charge for significant,
unanticipated out-of-pocket expenses incurred in connection with
the acceptance of the Escrow Agent appointment and annual
administration. Any out-of-pocket expenses incurred by us will
be billed at cost. These items may include, but are not be
limited to, legal costs, travel expenses, courier services, etc.
Investments Included
Xxxxx Fargo does not charge transaction fees for cash
investments nor do we charge sweep fees for investment of funds
in the Xxxxx Fargo Money Market Fund family.
Guaranteed Investment Contracts or Forward Delivery Agreements
(If any)
In the event we are asked to administer a guaranteed Investment
contract or forward purchase agreement an annual fee of $750
will be charged. This fee includes the set-up, review and
maintenance of any STANDARD investment agreement or similar
instrument. The investment activities included in this fee
assume there will be no more than one (1) draw on the instrument
per month. Fees for NON-STANDARD agreements such as
repurchase/swap/hedge agreements or for investment funds held
outside the bank (such as CAMP or LAIF) will be negotiated
separately.
Extraordinary Services
Fees indicated in this schedule are based upon services rendered
in accordance with established procedures and during normal
business hours. Unusual or extraordinary services, such as
those provided upon an Event of Default, are subject to
additional charges based on the duties, responsibilities, and
other factors involved. Fees for services not specifically set
forth in this schedule will be determined by appraisal. Such
services may include, but not be limited to, additional
responsibilities and services incurred in connection with
amendments or extensions of the governing documents, unusual
cash and/or investment transactions, calculations, reports or
notices, or in case of litigation.
Customized Services
Customized services can be provided as needed. Additional fees
will be assessed as out-of-pocket expenses for performing non-
standard services such as generating specialized reports,
arbitrage calculations provided by third parties, default
administration, custody services, etc. Additional fees may be
assessed for excessive administration time or other duties
required as mandated by future laws or regulatory agencies.
Fees will be determined commensurate with the type of service
and the time and responsibility involved.
This Fee Schedule is based upon the assumptions listed below
which pertain to the responsibilities and risks involved in
Xxxxx Fargo Bank, N.A. undertaking the roles of Escrow Agent.
These assumptions are based on information provided to us as of
the date of this Fee Schedule. Our fees are subject to review
and acceptance of the final documents. Should any of the
assumptions, duties or responsibilities change, we reserve the
right to affirm, modify or rescind our proposal.
PRICING NOTES AND ASSUMPTIONS
* All interest and investment earnings will be credited to the
Escrow Account, including interest earned on money market
funds. No additional fees are debited against earnings.
* No investment transaction fees are charged for investing in
sweep vehicles or individual securities. Xxxxx Fargo
Brokerage Services Inc., a full-service brokerage company, is
available for investment purchases, including commercial
paper.
* There will be no charge for the first twenty-four (24) wires.
Additional wires will be $25 each.
* Should any transaction fail to close through no fault of
Xxxxx Fargo Bank, N.A., all or a portion of our acceptance
fee, as well as legal and out-of-pocket expenses incurred by
Xxxxx Fargo Bank, N.A., may be due and payable.
Xxxxxxxx over 30 days past due are subject to a 1.5 % late
fee.
Xxxxx Fargo Bank, N.A.
By: Xxxx X. Xxx on November 10, 2005
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