EXHIBIT 4.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of November 11, 1999 (the "Escrow
Agreement"), is made by and among CELEBRITY INTERVIEWS, INC. a Delaware
corporation (the "Purchaser"), with offices at 000 Xxxxxxxxx Xxxxxx, 4(th)
Floor, New York, New York 10013, Xxxx Xxxxxx ("Berlin"), an individual having
his address at 0000 Xxxxxx Xxxx Xxxx, Xxx Xxxxxxx, XX 00000 and Xxx Xxxxxx
("Tombak", and together with Berlin, the "Sellers"), an individual having her
address at 0000 Xxxxxx Xxxx Xxxx, Xxx Xxxxxxx, XX 00000 and Levisohn, Lerner,
Xxxxxx & Xxxxxxx ("LLBL") (the "Escrow Agent") with offices at 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, as escrow agent under this Agreement.
BACKGROUND
A. The Purchaser and the Sellers have entered into the Asset Purchase
Agreement "Purchase Agreement") dated as of November 11, 1999, pursuant to which
the Purchaser has acquired from the Sellers the business conducted and intended
to have been conducted by Audio Magazines, Inc. (the "Company"), a dissolved New
York corporation, in exchange for the Share Consideration. Capitalized terms
used in this Agreement without definition shall have the respective meanings
given them in the Purchase Agreement.
B. The Purchaser and the Sellers propose to engage the Escrow Agent for the
purpose of receiving depositing and holding certain portions of the Share
Consideration until such portions are available for delivery to the Sellers or
returned to the Purchaser in accordance with the terms of this Agreement.
C. Berlin and the Purchaser have entered into the Employment Agreement,
pursuant to which Berlin will be employed by the Purchaser.
D. The Purchaser and the Sellers have agreed that at the Closing two-thirds
of those shares of the Purchaser's Common Stock which comprises the Share
Consideration (the "Escrowed Property") would be placed into escrow for release
from time to time during Berlin's employment under the Employment Agreement.
E. The Escrow Agent has agreed to act as escrow agent to hold and distribute
the Escrowed Property in accordance with the terms of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. APPOINTMENT AND ACKNOWLEDGMENT OF THE ESCROW AGENT. The Purchaser and
the Sellers hereby appoint the Escrow Agent, and the Escrow Agent hereby agrees
to serve, as escrow agent pursuant to the terms of this Agreement.
2. DEPOSIT INTO ESCROW. There is hereby deposited into escrow 121,543
shares of the Purchaser's Common Stock, which shares, together with any and all
dividends paid theron and all proceeds thereof, constitute the Escrowed
Property.
3. DISTRIBUTION OF SHARES HELD IN ESCROW. If the Purchaser or the Company
terminate Berlin's employment for Cause or if Berlin terminates his employment
with the Company voluntarily prior to the
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respective dates set forth below, then promptly upon such termination, the
Escrow Agent will redeliver to the Purchaser the Escrowed Property set forth
below:
DATE OF TERMINATION OF EMPLOYMENT SHARE CONSIDERATION
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On or prior to October 1, 2000............... 121,543 shares of the Purchaser's Common
Stock
After October 1, 2000 but on or prior to
October 1, 2001............................ 60,772 shares of the Purchaser's Common Stock
After October 1, 2001........................ No shares of the Purchaser's Common Stock
PROVIDED, that the foregoing provisions shall not apply if Berlin's termination
of his employment follows the occurrence and continuance of a breach by the
Purchaser of its obligations under the Employment Agreement (and in no event
shall Berlin's death or disability (as defined in the Employment Agreement) be
deemed to be termination of employment for the purposes of this Section);
PROVIDED, FURTHER, that Berlin has complied fully with the requirements of
Section 7.d of the Employment Agreement as to such breach (such breach being
referred to below as a "Fully Noticed Purchaser Breach"). If and to the extent
that the Purchaser has not terminated Berlin's employment for Cause and Berlin
has not terminated his employment with the Purchaser on or prior to each of the
dates set forth above, then the Escrow Agent will deliver to Berlin promptly
after October 1, 2000 and October 1, 2001 one or more certificates representing
60,771 shares and 60,772 shares of the Share Consideration, respectively. If
upon the expiration of all notice and cure periods relating to a Fully Noticed
Purchaser Breach, such Fully Noticed Purchaser Breach is continuing and Berlin
terminates his employment with the Company within ten business days thereafter,
the Escrow Agent will promptly, upon notice from Berlin, deliver to Berlin all
Escrowed Property which at the time is subject to this Agreement.
4. SHARES SUBJECT TO CLAIMS BY THE PURCHASER. If during the term of this
Agreement, the Purchaser shall notify the Escrow Agent that it has made a claim
for indemnifiction under Article 7 of the Purchase Agreement and that the
threshold set forth in Section 7.5 has been exceeded by claims payable
thereunder and if the notice further specifies the number of shares of the Share
Consideration that the Purchase estimates will satisfy its claim (the "Estimated
Shares"), then notwithstanding any other provision of this Agreement the Escrow
Agrent shall retain and not distribute the Estimated Shares and will hold the
Estimated Shares until (i) instructed by a joint instrument signed by the
Purchaser and the Sellers or (ii) directed by a final order issued by a court
that has adjudicated the disposition of the Estimated Shares as between the
Purchaser and the Sellers.
5. FURTHER PROVISIONS RELATING TO THE ESCROW.
(a) The Purchaser shall indemnify and hold harmless the Escrow Agent against
and in respect of any and all claims, suits, actions, proceedings (formal
and informal), investigations, judgments, deficiencies, damages,
settlements, liabilities and legal and other expenses (including legal
fees and expenses of attorneys chosen by the Escrow Agent) as and when
incurred arising out of or based upon any act, omission, alleged act or
alleged omission by the Escrow Agent, or its agents, or any other cause,
in any case in connection with the acceptance of or the performance or
non-performance by the Escrow Agent, or its agents, of any of the Escrow
Agent's duties under this Escrow Agreement. The Escrow Agent shall be
fully protected by acting in reliance upon any notice, advice, direction,
other document, or signature believed by Escrow Agent to be genuine, by
assuming that any person purporting to give the Escrow Agent any notice,
advice, direction or other document in accordance with the provisions
hereof, in connection with this Escrow Agreement, or in connection with
the Escrow Agent's duties under this Escrow Agreement, has been duly
authorized so to do, or by acting or failing to act in good faith on the
advice of any counsel retained by the Escrow Agent.
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(b) The Escrow Agent shall not be liable to the Purchaser or any Seller for
any mistake of fact or of law, any error of judgment, any act or omission
to act or any act of negligence. The Purchaser and each Seller waive any
such claim against the Escrow Agent.
(c) The Escrow Agent makes no representation as to the validity, value,
genuineness, or the collectibility of any security or other document or
instrument held by or delivered to the Escrow Agent.
(d) The Escrow Agent shall have no duties or responsibilities except those
expressly set forth herein. The Escrow Agent shall not be bound by any
notice of a claim, or demand with respect hereto, or any waiver,
modification, amendment, termination, cancellation, or revision of this
Escrow Agreement, unless it is in writing, signed by the other parties
hereto and received by the Escrow Agent. If the Escrow Agent's duties as
the Escrow Agent hereunder are affected by any such waiver, modification,
amendment, termination, cancellation or revision of this Agreement, then
the Escrow Agent shall not be bound thereby unless the Escrow Agent shall
have given its prior written consent thereto. The Escrow Agent shall not
be bound by any assignment by the Purchaser or any Seller of its rights
hereunder unless the Escrow Agent shall have received written notice
thereof from the assignor. The Escrow Agent is authorized to comply with
and obey all laws, orders, judgments, decrees, and regulations of any
governmental authority, court, tribunal, or arbitrator. If the Escrow
Agent complies with any such law, order, judgment, decree, or regulation,
the Escrow Agent shall not be liable to any of the parties hereto or to
any other person even if such law, order, judgment decree, or regulation
is subsequently reversed, modified, annulled, set aside, vacated, found
to have been entered without jurisdiction or found to be in violation of
or beyond the scope of a constitution or a law.
(e) If the Escrow Agent shall be uncertain as to the Escrow Agent's duties
or rights hereunder, shall receive any notice, advice, direction or other
document from any other party with respect to the Escrowed Property
which, in the Escrow Agent's opinion, is in conflict with any of the
provisions of this Escrow Agreement, or should be advised that a dispute
has arisen with respect to the payment, ownership, or right of possession
of the Escrowed Property or any part thereof (or as to the delivery,
non-delivery or content of any notice, advice, direction, or other
document), the Escrow Agent shall be entitled, without liability to
anyone, to refrain from taking any action other than to use the Escrow
Agent's best efforts to keep safely the Escrowed Property until the
Escrow Agent shall be directed otherwise in writing by the other parties
hereto or by an order, decree, or judgment of a court of competent
jurisdiction which has been finally affirmed on appeal or which by lapse
of time or otherwise is no longer subject to appeal. The Escrow Agent
shall be under no duty to institute or to defend any such proceeding
although the Escrow Agent may, in the Escrow Agent's discretion and at
the expense of the Purchaser, institute or defend such proceedings.
(f) If LLBL shall be unable to act or shall resign as the Escrow Agent
hereunder, the successor escrow agent shall be a proper entity chosen by
the Purchaser in its sole discretion (the "Successor"). LLBL and any
other Escrow Agent may at any time give written notice of its resignation
(the "Resignation Notice") to the other parties hereto, Such resignation
shall take effect when the Successor accepts in writing its appointment
as successor escrow agent and receives the Escrowed Property. If no
successor escrow agent has been appointed and has accepted the Escrowed
Property within 5 days after the Resignation Notice is sent, the
Purchaser or the Seller may petition any court of competent jurisdiction
for the appointment of a successor escrow agent. Such court may thereupon
appoint a successor escrow agent after the Escrowed Property has been
deposited into court and after such notice, if any, to the other parties
hereto as the court may deem proper and prescribe. This Escrow Agreement
shall not otherwise be assignable by LLBL without the prior written
consent of the other parties hereto.
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(g) The Purchaser and the Sellers authorize LLBL if LLBL is threatened with
litigation or is sued, to interplead all interested parties in any court
of competent jurisdiction and to deposit the Escrowed Property with the
clerk of that court.
(h) LLBL "s responsibilities and liabilities hereunder, except as a result
of LLBL "s own bad faith or gross negligence, will terminate upon the
delivery by LLBL of all the Escrowed Property under any provision of this
Escrow Agreement.
6. FURTHER ACTION. At any time and from time to time, the Purchaser
agrees, at its expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Escrow Agreement. The Purchaser shall pay any transfer tax arising out of the
placing of the Escrowed Property into the Escrow, the delivery of the Escrowed
Property out of the Escrow, or the transfer of the Escrowed Property into the
name of a person or entity other than the Purchaser if the Escrowed Property is
delivered other than to the Purchaser pursuant to the terms of this Escrow
Agreement. LLBL shall have no liability if the Purchaser fails to comply with
the obligations set forth in the prior sentence.
7. SURVIVAL. The covenants, agreements, representations, and warranties
contained in or made pursuant to this Escrow Agreement shall survive the
delivery by LLBL of the Escrowed Property.
8. MODIFICATION. This Escrow Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements among them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
9. NOTICES. Any notice, advice, direction, or other document or
communication required or permitted to be given hereunder shall be in writing
and shall be delivered either by certified mail, return receipt requested,
Federal Express, or similar overnight delivery or courier service, or delivered
(in person or by telecopy, or similar telecommunications equipment) against
receipt to the party to whom it is to be. given at the address of such party set
forth in the preamble or Schedule A to this Escrow Agreement (or to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 9). Any notice, advice, direction, or other document
or communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof. Any notice given by other
means permitted by this Section 9 shall be deemed given at the time of receipt
thereof.
10. WAIVER. Any waiver by any party of a breach of any provision of this
Escrow Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Escrow Agreement. The failure of a party to insist upon strict adherence to any
term of this Escrow Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Escrow Agreement. Any waiver
must be in writing.
11. BINDING EFFECT. The provisions of this Escrow Agreement shall be
binding upon and inure to the benefit of the Purchaser, each Investor and the
Escrow Agent and their respective heirs, executors, successors and assigns.
12. NO THIRD PARTY BENEFICIARIES. This Escrow Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Escrow Agreement.
13. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the rules governing the conflict of laws.
14. JURISDICTION. The parties hereby irrevocably consent to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out of
or relating to this Escrow Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this Escrow Agreement, a
breach of this Escrow Agreement or of
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any such document or instrument, or the Escrowed Property. The parties also
agree that service of process may be satisfied by the delivery of notice of such
process as set forth in Section 9 of this Escrow Agreement which shall
constitute good and sufficient service.
15. SEPARABILITY. To the extent any provision of this Escrow Agreement is
held to be invalid by a court of competent jurisdiction, such provision shall be
unenforceable without affecting the enforceability of the remainder of such
provision or the remaining provisions of this Escrow Agreement.
16. HEADINGS. The headings in this Escrow Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Escrow Agreement.
17. COUNTERPARTS. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as of
the date first written above.
CELEBRITY INTERVIEWS, INC.
By:
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Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Chairman
Escrow Agent
LEVISOHN XXXXXX XXXXXX & XXXXXXX
By:
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Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Partner
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Xxxx Xxxxxx
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Xxx Xxxxxx
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