CHANGE IN CONTROL BONUS ESCROW AGREEMENT
Exhibit (e) (9)
THIS CHANGE IN CONTROL BONUS ESCROW AGREEMENT (this
“Agreement”) is made and effective as of
February 14, 2005, by and among MLB Advanced Media, L.P., a
Delaware limited partnership (“MLBAM”),
U.S. Bank, N.A., as escrow agent (“Escrow
Agent”), and each of the parties listed in
Schedule I attached hereto (the
“Beneficiaries”).
WHEREAS, MLBAM and Xxxxxxx.xxx, Inc., a Delaware
corporation (“Xxxxxxx.xxx”), have contemporaneously
herewith entered into an Agreement and Plan of Merger, dated as
of February 14, 2005 (as the same may be modified from time
to time, the “Merger Agreement”), pursuant to
which MLBAM Acquisition Corp., the wholly-owned subsidiary of
MLBAM, will merge with and into Xxxxxxx.xxx, with MLBAM owning
all of the outstanding equity securities of the surviving
entity; and
WHEREAS, pursuant to Section 5.01 of the Merger
Agreement, MLBAM has agreed to deposit an aggregate of
$3,475,334.01 (the “Deposit”) with the Escrow
Agent at the time specified therein, which Deposit shall be
available, in accordance with the terms and conditions of this
Agreement, for distribution to the Beneficiaries at any time
commencing on the sixth (6th) business day following a
Qualifying Acquisition, as that term is defined in those certain
Restated Change of Control Bonus Agreements, dated
February 9, 2005, entered into between Xxxxxxx.xxx and each
of the Beneficiaries (collectively, the “Bonus
Agreements”).
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as
follows:
ARTICLE I.
ARTICLE II.
or liquidate, in its sole discretion, any one or more
investments before the maturity of such investment, and Escrow
Agent shall not be liable to any of MLBAM or the Beneficiaries
for any losses or penalties resulting from or relating to any
such sale or liquidation. In no instance shall Escrow Agent have
any obligation to provide investment advice of any kind. Escrow
Agent shall not be liable or responsible for any loss resulting
from any investment or reinvestment made pursuant to this
Section 2.1, other than as a result of the gross
negligence or willful misconduct of Escrow Agent.
ARTICLE III.
3.1. At any time commencing on the sixth (6th) business day
following the occurrence of a Qualifying Acquisition (as that
term in defined in Article II of the Bonus Agreements), if
amounts then due and owing to any Beneficiary pursuant to such
Beneficiary’s Bonus Agreement has not been paid in full,
such Beneficiary may submit a completed and executed Notice of
Payment Due, the form of which is attached hereto as
Exhibit A (the “Notice of Payment
Due”), along with a completed and executed General
Release, the form of which is attached hereto as
Exhibit B (the “General Release”),
to Escrow Agent, along with copies of each to MLBAM, in
accordance with the notice provisions set forth in
Article VIII below.
3.2. As soon as practicable following Escrow Agent’s
receipt of a completed and executed Notice of Payment Due and
completed and executed General Release of even date therewith,
Escrow Agent shall release out of the Escrow Amount to the
Beneficiary submitting such Notice of Payment Due and General
Release the amount indicated in such Notice of Payment Due;
provided, however, that in no event shall (i) such amount
exceed the amount indicated opposite the name of the Beneficiary
submitting such Notice of Payment Due in the column titled
“Change of Control Bonus Amount” on
Schedule I hereto; or (ii) Escrow Agent release
any amounts to any Beneficiary unless the applicable Notice of
Payment Due is also accompanied by a completed and executed
General Release of even date therewith.
3.3. All payments out of the escrow account to any
Beneficiary shall be distributed by federal funds wire transfer
to the account set forth on such Beneficiary’s Notice of
Payment Due.
3.4. In no event shall Escrow Agent distribute amounts to
any Beneficiary, whether through one or more Notices of Payment
Due, that aggregate in excess of the amount indicated opposite
the name of such Beneficiary in the column titled “Change
of Control Bonus Amount” on Schedule I hereto.
3.5. In no event shall one Beneficiary submit or be
entitled to submit a Notice of Payment Due on behalf of any
other Beneficiary.
3.6. Escrow Agent shall promptly deliver any and all
General Releases received by Escrow Agent pursuant hereto to
MLBAM.
ARTICLE IV.
The escrow provided for under this Agreement shall terminate
upon the earlier to occur of (i) the date of distribution
of all Escrow Amounts in accordance with the provisions hereof,
(ii) upon receipt by Escrow Agent of a completed and
executed Notice of Termination of Escrow, the form of which is
attached hereto as Exhibit C (“Notice of
Termination of Escrow”); provided, however, that no
such Notice of Termination of Escrow may be submitted until the
date that is thirty (30) days following consummation of the
Merger (as such term is defined in the Merger Agreement); or
(iii) June 30, 2005. Upon termination of the escrow
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provided for under this Agreement, all amounts then remaining in
such escrow, including all Escrow Income thereon, shall be
distributed to MLBAM.
ARTICLE V.
5.1. Escrow Agent shall have no duties or obligations
hereunder except those specifically set forth herein, and such
duties and obligations shall be determined solely by the express
provisions of this Agreement. In connection with its duties
hereunder, Escrow Agent shall be conclusively protected in
acting or refraining from acting upon any written notice,
request, consent, certificate, order, affidavit, letter,
telegram or other document furnished to it hereunder and
reasonably believed by it to be genuine and to have been signed
or sent by the proper party or parties. Escrow Agent shall not
be liable for anything it may do or refrain from doing in
connection with its duties hereunder including, without
limitation, any mistake of fact or error of judgment or any acts
or omissions of any kind, except as a result of its own gross
negligence or willful misconduct. Escrow Agent may consult with
counsel and shall be protected in respect of any action taken or
omitted to be taken by it in good faith on the advice of such
counsel. To the extent Escrow Agent has any reporting and
withholding obligations for payments or disbursements made to
any of the Beneficiaries under this Agreement, Escrow Agent
shall issue any required Form 1099 (or similar form) in the
name of the Beneficiaries.
5.2. As compensation for Escrow Agent’s services
hereunder, MLBAM shall pay all of the fees set forth on
Schedule II hereto. Subject to the preceding sentence,
MLBAM, on the one hand, and the Beneficiaries (acting, for these
purposes, jointly as one party), on the other hand, shall each
pay one-half (1/2) of Escrow Agent’s Agent Losses (as
hereinafter defined) as provided in Section 5.3.
5.3. The parties hereby agree, severally and not jointly,
to indemnify and hold harmless Escrow Agent from and against any
and all liabilities, losses, damages, judgments, claims, costs
and expenses (excluding, for the avoidance of doubt, the fees
set forth on Schedule II) (“Agent Losses”)
relating to its duties as Escrow Agent under this Agreement
(including, without limitation, the reasonable fees and
disbursements of one counsel to Escrow Agent, which may be
imposed on, incurred by or assessed against Escrow Agent at any
time in connection with the performance of its duties as Escrow
Agent hereunder, except for Agent Losses resulting from the
gross negligence or willful misconduct of Escrow Agent. The
indemnification obligation in this Section 5.3 shall
survive any termination of this Agreement or of Escrow
Agent’s services hereunder.
ARTICLE VI.
If at any time Escrow Agent is unable to determine, to Escrow
Agent’s sole satisfaction, the proper disposition of any
portion of the Escrow Amount or Escrow Agent’s proper
actions with respect to its obligations hereunder, or if the
parties have not within thirty (30) days of the furnishing
by Escrow Agent of a notice of resignation pursuant to
Article VII hereof, appointed a successor Escrow
Agent to act hereunder, then Escrow Agent may, in its sole
discretion, petition (by means of an interpleader action or any
other appropriate method) any state or federal court of
competent jurisdiction in the State of Wisconsin, County of
Milwaukee, for instructions with respect to such dispute or
uncertainty, and to the extent required by law, pay into such
court for holding and disposition in accordance with the
instructions of such court, all funds and other property held by
it in the escrow account, after deduction and payment to Escrow
Agent of all reasonable fees and expenses (including court costs
and reasonable attorneys’ fees) payable to, incurred by, or
expected to be incurred by Escrow Agent in connection with the
performance of its duties and the exercise of its rights
hereunder.
Escrow Agent shall have no liability to the parties, their
respective shareholders or partners, or any other person, with
respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed
liability that may arise or be alleged to have arisen as a
result of any delay in the
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disbursement of funds held in the escrow account or delay in or
with respect to any other action required or requested of Escrow
Agent.
ARTICLE VII.
Escrow Agent may resign from the performance of its duties
hereunder at any time by giving thirty (30) days’
prior written notice to the parties, or may be removed, with or
without cause, by the parties, acting jointly, at any time by
the giving of thirty (30) days’ prior written notice
to Escrow Agent. Such resignation or removal shall take effect
upon the appointment of and acceptance of such appointment by a
successor Escrow Agent as provided herein below. Upon any such
notice of resignation or removal, the parties jointly shall
appoint a successor Escrow Agent hereunder, which shall be a
commercial bank, trust company or other financial institution
with a combined capital and surplus in excess of
$500 million, or such other person acceptable to the
parties. Upon the acceptance in writing of any appointment as
Escrow Agent hereunder by a successor Escrow Agent, such
successor Escrow Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Escrow Agent and, except as set forth below, the
retiring Escrow Agent shall be discharged from any further
duties and obligations under this Agreement, but shall not be
discharged from any liability for actions taken as Escrow Agent
hereunder prior to such succession. After any retiring Escrow
Agent’s resignation or removal, the provisions of this
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Escrow Agent under this
Agreement. The retiring Escrow Agent shall transmit all records
pertaining to the escrow account and shall pay all funds held by
it in each escrow account to the successor Escrow Agent, after
making copies of such records as the retiring Escrow Agent deems
advisable.
ARTICLE VIII.
All notices, requests, demands and other communications under
this Agreement shall be given in writing and shall be personally
delivered; sent by telecopier or facsimile transmission; or sent
to the applicable parties at their respective addresses
indicated hereunder by private overnight mail courier service,
as follows:
| (a) | If to MLBAM, to: |
| MLB Advanced Media, L.P. | |
| 00 Xxxxx Xxxxxx | |
| Xxx Xxxx, Xxx Xxxx 00000 | |
| Attention: General Counsel | |
| Facsimile: (000) 000-0000 | |
| (with a copy to) | |
| Xxxxx & Xxxxxxx LLP | |
| 000 Xxxx Xxxxxxxxx Xxxxxx | |
| Xxxxxxxxx, Xxxxxxxxx 00000 | |
| Attention: Xxx X. Xxxxxxx | |
| Facsimile: (000) 000-0000 |
| (b) | If to Escrow Agent, to: |
| U.S. Bank, N.A. | |
| 0000 Xxxxx XxxxxXxxxxx Xxxxx | |
| Xxxxx 000 | |
| Xxxxxxxxx, Xxxxxxxxx 00000 | |
| Attention: Xxxxxx X. Posto |
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| Facsimile: (000) 000-0000 |
| (c) | If to the Beneficiaries, to: |
| To the Addresses set forth on Schedule I. |
or to such other person or address as any party shall have
specified by notice in writing to the other parties. If
personally delivered, such communication shall be deemed
delivered upon actual receipt; if sent by telecopier or
facsimile transmission, such communication shall be deemed
delivered the day of the transmission, or if the transmission is
not made on a business day, the first business day after
transmission (and sender shall bear the burden of proof of
delivery); if sent by overnight courier, such communication
shall be deemed delivered upon receipt.
ARTICLE IX.
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application of the laws of another jurisdiction. Any court of
competent jurisdiction sitting within the City of Milwaukee,
Wisconsin will be the exclusive jurisdiction and venue for any
dispute arising out of or relating to this Agreement.
[Remainder of this Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement on the date and year first above written.
| MLB Advanced Media, L.P., | |
| a Delaware limited partnership | |
| By: MLB Advanced Media, Inc., | |
| a Delaware corporation, its General Partner |
| By: | /s/ Xxxxxxx X. Xxxxxx |
|
|
|
| Name: Xxxxxxx X. Xxxxxx | |
|
|
|
| Title: Senior Vice President & General Counsel | |
|
|
|
| U.S. Bank, N.A. |
| By: | /s/ Xxxxxx X. Posto |
|
|
|
| Name: Xxxxxx X. Posto | |
|
|
|
| Title: Assistant Vice President | |
|
|
Beneficiaries
|
/s/ Xxx Xxxxxxx _______________________________________ Xxx Xxxxxxx |
|
|
/s/ Xxxxxx Xxxxxx
_______________________________________ Xxxxxx Xxxxxx |
|
|
/s/ Xxxx Xxxxxx _______________________________________ Xxxx Xxxxxx |
|
|
/s/ Xxxxxxxxx Xxxxx
_______________________________________ Xxxxxxxxx Xxxxx |
|
|
/s/ Xxxxxx Xxxxx
_______________________________________ Xxxxxx Xxxxx |
|
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/s/ Xxxxx Xxxxx _______________________________________ Xxxxx Xxxxx |
|
|
/s/ Xxxxxxxxx Xxxx
_______________________________________ Xxxxxxxxx Xxxx |
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SCHEDULE I
Beneficiaries
| Change of Control Bonus | ||||||||
| Executive | Amount ($$) | Address for Notice | ||||||
|
Xxx Xxxxxxx
|
$ | 1,662,839.23 | ||||||
|
Xxxxxx Xxxxxx
|
$ | 399,081.42 | ||||||
|
Xxxx Xxxxxx
|
$ | 399,081.42 | ||||||
|
Xxxxxxxxx Xxxxx
|
$ | 399,081.42 | ||||||
|
Xxxxxx Xxxxx
|
$ | 399,081.42 | ||||||
|
Xxxxx Xxxxx
|
$ | 83,141.96 | ||||||
|
Xxxxxxxxx Xxxx
|
$ | 133,027.14 | ||||||
|
Total
|
$ | 3,475,334.01 | ||||||
SCHEDULE II
EXHIBIT A
Form of Notice of Payment Due
[Date]
U.S. Bank, N.A.
0000 Xxxxx XxxxxXxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
[Beneficiary Name]
[Beneficiary Street Address]
[Beneficiary City State ZIP]
Re: Change of Control Bonus Escrow Agreement Dated
February 14, 2005 (the “Escrow Agreement”);
Escrow Account No.
[ ].
Sir,
Pursuant to the above-identified Escrow Agreement, the
undersigned hereby submits this Notice of Payment Due (this
“Notice”) by Xxxxxxx.xxx, Inc.
(“Xxxxxxx.xxx”), with respect to its obligation
to make payment under that certain Restated Change of Control
Bonus Agreement, dated February 9, 2005 (the “Bonus
Agreement”). In that regard, the undersigned, certifies
as follows (except as otherwise noted, all capitalized terms
used herein shall have the meanings ascribed to them in Escrow
Agreement):
| 1. A Qualifying Acquisition with MLBAM occurred on , 2005, which is more than five (5) business days prior to the date hereof; | |
| 2. Pursuant to the Bonus Agreement, Xxxxxxx.xxx is obligated to make a payment to the undersigned of $ ; | |
| 3. As of the date of this Notice, Xxxxxxx.xxx has made payments pursuant to the Bonus Agreement to the undersigned in the aggregate amount of $ ; and | |
| 4. This Notice constitutes the undersigned’s demand for payment of the remaining obligation of $ (the “Remainder”), which is due and owing to the undersigned pursuant to the terms of the Bonus Agreement. |
|
|
|
| [Name] |
Wire transfer instructions for Beneficiary’s account:
EXHIBIT B
| 1. The Executive hereby acknowledges and agrees that upon receipt of the sum of $ , less applicable deductions and withholdings, either from the Company or from the escrow account established pursuant to that certain Change in Control Bonus Escrow Agreement, dated as of February 14, 2005, by and among MLB Advanced Media, L.P. (“Parent”), U.S. Bank, N.A. as escrow agent and the individuals party thereto (the “Bonus Escrow Agreement”), in either case, (a) such payment shall be in full satisfaction of all obligations to the Executive pursuant to the Bonus Agreement, and (b) the Bonus Agreement shall be terminated and rendered null and void and of no further force or effect. | |
| 2. The Executive, for [himself] and [his] spouse, heirs, assigns, executors, administrators, personal representatives, successors, attorneys, and agents, if any, fully, finally and forever releases and discharges Parent, MLBAM Acquisition Corp. (“Purchaser”), the Company, all subsidiary and/or affiliated companies, as well as its and their successors, assigns, officers, owners, directors, agents, representatives, attorneys, and employees, of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, as a result of actions or omissions occurring through the Effective Time of the Merger (as such terms are defined in that certain Agreement and Plan of Merger, dated February 14, 2005, by and among Parent, Purchaser and the Company); provided, however, that there is specifically excluded from such release and discharge: |
| i. Claims for indemnification pursuant to the Company’s Certificate of Incorporation and/or Bylaws for acts or omissions in the Executive’s capacity as an officer and/or director, or former officer and/or director, of the Company; and | |
| ii. Claims related to obligations of the Company under or pursuant to those agreements, arrangements, contracts, plans or commitments (other than the Bonus Agreement) set forth on Schedule 1 of that certain Estoppel Certificate, dated February 14, 2005, given by the Executive to each of Parent, Purchaser and the Company. |
| 3. With respect to the matters released herein, the Executive expressly waives any and all rights under Section 1542 of the California Civil Code, and any like provision or principal of common law in any foreign jurisdiction. Section 1542 provides as follows: |
| SECTION 1542. [CERTAIN CLAIMS NOT AFFECTED BY GENERAL RELEASE] A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. |
Notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and
discharge of all matters released herein, the Executive
expressly acknowledges that this General Release is intended to
include, without limitation, claims and causes of action which
[he/she] does not know or suspect to exist in [his/her] favor at
the time of execution hereof, and that this General Release
contemplates extinguishment of all such claims and causes of
action.
| 4. Should any provision of this General Release and/or any attachments hereto become legally unenforceable, no other provision of this General Release and/or any attachments hereto shall be |
| affected, and this General Release and any attachments shall be construed as if they had never included the unenforceable provision. | |
| 5. Each of the parties acknowledge that this General Release was jointly negotiated and reviewed and approved by them and that they had the opportunity to consult with an attorney. The General Release shall not be construed by any court of law or equity against any party solely by virtue of any party having drafted this General Release. | |
| 6. No Modifications Unless In Writing. The parties to this General Release agree that any modification of this General Release must be in writing signed by the Executive and the Company, and must refer specifically to this General Release and the provisions modified. No other modifications will be valid. | |
| 7. The provisions of this General Release are contractual and not a mere recital and this General Release is entered into by the Executive with full and complete knowledge and understanding of its contents and its implications. |
| By: | |
|
|
|
| Name: | |
|
|
|
| Title: | |
|
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EXHIBIT C
Form of Notice of Termination of Escrow
[Date]
U.S. Bank, N.A.
0000 Xxxxx XxxxxXxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
| Re: | Change of Control Bonus Escrow Agreement Dated February 14, 2005 (the “Escrow Agreement”); Escrow Account No. [ ]. |
Sir,
Pursuant to the above-identified Escrow Agreement, the
undersigned hereby submits this Notice of Termination of Escrow
(this “Notice”) by and on behalf of MLBAM. In that
regard, the undersigned, certifies as follows (except as
otherwise noted, all capitalized terms used herein shall have
the meanings ascribed to them in Escrow Agreement):
| 1. The Merger (as such term is defined in the Merger Agreement) occurred on , 2005, which is more than thirty (30) days prior to the date hereof; |
Pursuant to the terms of the Escrow Agreement, please release
all amounts currently remaining in escrow, including all Escrow
Income thereon, to MLBAM upon receipt of this Notice.
| MLB ADVANCED MEDIA, L.P. |
| By: |
|
|
|
| Xxxxxx X. Xxxxxx | |
| President and Chief Executive Officer |