Exhibit 2.4
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of March 24, 1999 (this
"Agreement"), between Maxcor Financial Group Inc., a Delaware corporation (the
"Company"), Welsh, Carson, Xxxxxxxx & Xxxxx VI, L.P., a Delaware limited
partnership ("WCAS VI"), WCAS Information Partners, L.P., a Delaware limited
partnership ("WCAS Info" and, together with WCAS VI, the "Sellers"), and
Continental Stock Transfer & Trust Company, a New York corporation, as escrow
agent (the "Escrow Agent").
WHEREAS, the Company and the Sellers, concurrently with the
execution and delivery of this Agreement, are entering into a Securities
Purchase Agreement, dated as of March 24, 1999 (the "Purchase Agreement"),
providing for, among other things, the sale (the "Sale") to the Company of an
aggregate of 2,986,346 shares (the "Shares") of the Common Stock, par value
$.001 per share, of the Company owned by the Sellers;
WHEREAS, the consideration for the Sale consists of (i)
$4,226,105.50 in cash, (ii) two six-month, 7% secured promissory notes of the
Company, one payable to WCAS VI and the other to WCAS Info, in the respective
forms attached as Annex I to the Purchase Agreement and aggregating to $500,000
(the "7% Notes"), and (iii) two twelve-month, 10% secured promissory notes of
the Company in the respective forms attached as Annex II to the Purchase
Agreement and aggregating to $500,000 (the "10% Notes" and, together with the 7%
Notes, the "Notes");
WHEREAS, Section 1.03 of the Purchase Agreement provides that
at the Closing, as security for repayment of the Notes, 1,142,858 of the Shares
(the "Escrowed Shares") are to be deposited in escrow with the Escrow Agent,
together with stock transfer powers duly endorsed by the Company in blank with
respect to the Escrowed Shares (the "Stock Powers"), with the Escrowed Shares in
whole or in part, and the related Stock Powers, to be held and released by the
Escrow Agent in accordance with the terms of this Escrow Agreement and the
Purchase Agreement; and
WHEREAS, capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the
respective agreements hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DELIVERY OF ESCROWED SHARES AND STOCK POWERS
Section 1.1. At the Closing, (i) the Sellers shall deliver to
the Company, and the Company shall then forward to Continental Stock Transfer &
Trust Company, as transfer agent (the "Transfer Agent"), certificates
representing the Shares, duly endorsed by the
Sellers (with medallion guarantee) for transfer to the Company or accompanied by
stock powers duly endorsed by the Sellers (with medallion guarantee) to the
Company, (ii) the Company will cause the Transfer Agent, upon receipt of the
foregoing instruments, to prepare and deliver (x) to the Escrow Agent two
certificates, each registered in the name of the Company and representing
one-half of the Escrowed Shares (respectively "Certificate 1" and "Certificate
2" and collectively, the "Certificates"), and (y) to the Company, one
certificate, registered in the name of the Company, representing all of the
Shares other than the Escrowed Shares, (iii) the Company shall execute and
deliver to the Escrow Agent Stock Powers with respect to each of Certificate 1
and Certificate 2 and (iv) the Escrow Agent will execute a receipt,
substantially in the form attached hereto as Exhibit A, acknowledging receipt of
the Certificates and the Stock Powers (the "Escrowed Instruments"). From and
after its receipt thereof, the Escrow Agent will accept and hold the Escrowed
Instruments on deposit with it from time to time in accordance with the terms of
this Agreement. During the period in which the Escrowed Shares are so held by
the Escrow Agent, the parties will continue to treat them as treasury stock of
the Company.
ARTICLE II
RELEASE OF
ESCROWED INSTRUMENTS
Section 2.1. Promptly upon repayment of the 7% Notes in full,
the Sellers shall jointly advise the Escrow Agent of such repayment and instruct
the Escrow Agent to release to the Company Certificate 1 and the related Stock
Power, and the Escrow Agent shall promptly release Certificate 1 and the related
Stock Power to the Company.
Section 2.2. Promptly upon repayment of the 10% Notes in full,
the Sellers shall jointly advise the Escrow Agent of such repayment and instruct
the Escrow Agent to release to the Company Certificate 2 and the related Stock
Power, and the Escrow Agent shall promptly release Certificate 2 and the related
Stock Power to the Company.
Section 2.3. If the Sellers believe an Event of Default (as
defined in the Notes) has occurred, the Sellers may deliver to the Escrow Agent
an instruction (the "Instruction") instructing the release of the Certificates
and the related Stock Powers to the Sellers. The Instruction shall (i) describe
in reasonable detail the Event of Default and (ii) certify that the Company has
been delivered a copy of the Instruction. Upon its receipt, the Escrow Agent
shall also promptly forward a copy of the Instruction to the Company. The
Instruction shall automatically become effective five (5) business days after
its delivery to the Escrow Agent, unless prior to such time it is objected to by
the Company as set forth below.
Section 2.4. Unless each of the Escrow Agent and the Sellers
receives a written notice of objection (an "Objection") to the Instruction from
the Company within five (5) business days after the date of the Escrow Agent's
forwarding to the Company of the Instruction, the Company shall be deemed to
have consented to the release of the Escrow
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Instruments, and the Instruction shall automatically become effective without
further action. Any Objection delivered by the Company shall state the reasons
for the Objection with reasonable specificity and also certify that such
Objection has been delivered to each of the Sellers. Upon its receipt, the
Escrow Agent shall also promptly forward a copy of such Objection to the
Sellers.
Section 2.5. In the event that the Company delivers to the
Escrow Agent and the Sellers an Objection to the Instruction within the time
frame specified in Section 2.4, the Escrow Agent shall not release any of the
Certificates or Stock Powers to the Sellers unless and until the Escrow Agent
receives (i) a certified copy of an award in arbitration from the Arbitrator (as
defined below) specifying the Certificates and Stock Powers, if any, so to be
released or (ii) a subsequent joint instruction from the Company and the Sellers
instructing the release of the Certificates. Promptly upon receipt of such a
certified copy of an award (or a subsequent joint instruction), the Escrow Agent
shall release the Certificates and Stock Powers Stock in accordance with such
award (or instruction), and such release shall be deemed to satisfy and resolve
both the Instruction and the Objection.
Section 2.6. Notwithstanding anything to the contrary
contained in this Agreement, the Escrow Agent shall release to the Company (i)
Certificate 1 and the related Stock power upon the date which shall be 32 weeks
after the Closing and (ii) Certificate 2 and the related Stock Power upon the
date which shall be 58 weeks after the Closing, unless prior to the applicable
date the Sellers have jointly delivered an Instruction to the Escrow Agent
pursuant to Section 2.3 above and the Company's and the Sellers' respective
entitlements to the Escrowed Shares have not been finally determined and
satisfied in accordance with the terms of this Agreement, in which case, the
Certificates and the Stock Powers shall not be released until final
determination and satisfaction of such pending Instruction.
Section 2.7. Notwithstanding anything to the contrary
contained in this Agreement, the Escrow Agent shall release the Escrow
Instruments, or any portion thereof, in accordance with any instrument in
writing expressly referring to this Agreement and signed by the Company and both
of the Sellers.
ARTICLE III
ARBITRATION
Section 3.1 The Company shall be entitled to dispute an
Instruction, provided that the Company raises such dispute in an Objection
delivered to the Escrow Agent within the time frame specified in Section 2.4.
The Company also shall be entitled to dispute the failure of the Sellers to
provide an instruction under Section 2.1 or 2.2, as applicable, upon repayment
of the Notes.
Section 3.2 If, within five (5) business days after delivery
of an Objection, the Company and the Sellers have been unable to reach agreement
with respect to the dispute, the dispute shall, at the instance of either the
Company or the Sellers, be referred to
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a partner knowledgeable about the financial services industry at such
nationally-recognized accounting firm as the parties may agree and which is not
affiliated and does not have a conflict with any of the parties (the
"Arbitrator").
Section 3.3. The Arbitrator shall be charged with making a
determination, in accordance with the Purchase Agreement and this Agreement, of
the parties' respective entitlements to the Escrowed Shares. The party making
the submission shall request the Arbitrator to render a decision within 30 days.
Any such determination of the Arbitrator shall be final and binding upon the
parties and shall not, in the absence of manifest error, be subject to judicial
review.
Section 3.4. The fees and expenses of the Arbitrator shall be
paid by the party seeking the arbitration, unless the Arbitrator determines that
such party substantially prevailed in the arbitration.
Section 3.5. The parties agree that any dispute arising as to
the release of the Escrow Instruments shall be resolved solely and exclusively
pursuant to the procedures set forth or contemplated in this Article III.
ARTICLE IV
RIGHTS OF AGENT
Section 4.1. The Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein.
Section 4.2. No person, firm or corporation will be recognized
by the Escrow Agent as a successor or assignee of the Company or the Sellers
until there shall be presented to the Escrow Agent evidence satisfactory to it
of such succession or assignment.
Section 4.3. The Escrow Agent may rely upon any instrument in
writing believed in good faith by it to be genuine and sufficient and properly
presented and shall not be liable or responsible for any action taken or omitted
in accordance with the provisions thereof.
Section 4.4. The Escrow Agent shall not be liable or
responsible for any act it may do or omit to do except for its gross negligence,
bad faith or willful misconduct. The Escrow Agent may consult with counsel and
shall be fully protected with respect to any action taken or omitted by it in
good faith on written advice of counsel.
Section 4.5. The Company shall (i) reimburse the Escrow Agent
for all reasonable expenses incurred by the Escrow Agent in connection with its
duties hereunder and (ii) indemnify and hold harmless the Escrow Agent against
any and all losses, claims, liabilities, costs, payments and expenses, including
reasonable legal fees for counsel who may be selected by the Escrow Agent, which
may be imposed upon or incurred by the
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Escrow Agent hereunder, except as a result of the negligence, bad faith or
willful misconduct of the Escrow Agent. The compensation of the Escrow Agent
shall be One Hundred Dollars for each month from and after the Closing that this
Agreement is in effect.
Section 4.6. Each party shall from time to time deliver to the
Escrow Agent certificates as to the identity of the persons authorized to give
instructions, certificates and notices hereunder and otherwise to act on behalf
of such party, which certificates shall contain specimens of such persons'
signatures.
ARTICLE V
MISCELLANEOUS
Section 5.1. The Company and the Sellers shall attempt in good
faith to resolve any disputes arising hereunder promptly.
Section 5.2. This Agreement shall terminate after all Escrow
Instruments have been released in accordance with the terms hereof.
Section 5.3. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 5.4. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if (i) delivered personally, (ii) mailed by
registered or certified mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier service or (iv) sent
via facsimile confirmed in writing to the recipient, in each case as follows:
(a) if to the Company, to:
Maxcor Financial Group Inc.
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(b) if to the Sellers to them at:
x/x Xxxxx, Xxxxxx, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
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with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(c) if to the Escrow Agent, to:
Continental Stock Transfer & Trust Company
0 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Compliance Department
Facsimile: (000) 000-0000
or such other address or addresses as the Sellers, the Company or the Escrow
Agent, as the case may be, shall have designated by notice in writing to the
other parties with respect to itself. A copy of any notice, request, demand,
certificate or other communication given hereunder by any party shall be
delivered to each other party to this Agreement as well as to the addressee at
the same time as it is given to the addressee.
Section 5.5. 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.
Section 5.6. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
personal representatives, successors and assigns, provided that any assignment
of this Agreement or the rights hereunder by any party hereto without the
written consent of the other parties shall be void. Nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies under or by reason of this Agreement.
Section 5.7. Subject to the arbitration provisions hereof,
this Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York.
Section 5.8. No consent or waiver, expressed or implied, by
any party to or of any breach or default by any other in the performance by the
other of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such party
of the same or any obligations of the party. Except as otherwise expressly
provided herein, failure on the part of any party to complain of any act or
failure to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a waiver
by that party of its rights under this Agreement or otherwise.
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Section 5.9. No modification, waiver or discharge of this
Agreement shall bind any party unless it is in writing, specifically refers to
this Agreement and is signed by or on behalf of such party by a duly authorized
officer thereof
Section 5.10. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provisions hereof shall
not affect the validity and enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity or any circumstances, is invalid or unenforceable, (i) a suitable and
equitable provision shall be substituted there-for in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid and
unenforceable provision and (ii) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
Section 5.11. In the event of any conflict between the terms
of this Agreement and the Purchase Agreement, the terms of the Purchase
Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their authorized representatives, all as of the
date first above written.
MAXCOR FINANCIAL GROUP INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------------
Xxxxxxx Xxxxxx
Chairman, President and Chief Executive Officer
WELSH, CARSON, XXXXXXXX & XXXXX VI, L.P.
By WCAS VI Partners, L.P., General Partner
By: /s/ WCAS VI Partners, L.P.
------------------------------------------------
General Partner
WCAS INFORMATION PARTNERS, L.P.
By WCAS INFO Partners, L.P., General Partner
By: /s/ WCAS INFO Partners, L.P.
------------------------------------------------
General Partner
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Vice President
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Exhibit A
---------
Form of Receipt
---------------
[Date]
Maxcor Financial Group Inc.
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Dear Sirs:
This letter will acknowledge the receipt today by Continental
Stock Transfer & Trust Company, as escrow agent under, and to hold in accordance
with, that certain Escrow Agreement, dated as of March 24, 1999, to which you
are parties, of the following instruments:
(i) Common Stock Certificate No. ___ of Maxcor Financial Group
Inc., representing 571,429 shares of Common Stock;
(ii) Common Stock Certificate No. ___ of Maxcor Financial
Group Inc., representing 571,429 shares of Common Stock; and
(iii) Two Stock Powers (one with respect to each of the
foregoing Certificates) endorsed in blank by Maxcor Financial Group Inc.
Very truly yours,
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By:
------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Vice President
