Exhibit 2.2
ESCROW AGREEMENT
BY AND AMONG
FUNDTECH LTD.,
FUNDTECH NETHERLANDS B.V.i.o.,
DR. XXXXX XXXXXX AS ESCROW AGENT
AND
XXX BIVERONI AS REPRESENTATIVE FOR THE SHAREHOLDERS
PARTY TO THE SHARE PURCHASE AGREEMENT REFERRED TO HEREIN
DATED AS OF JUNE 16, 1999
TABLE OF CONTENTS PAGE
SECTION 1 APPOINTMENT OF ESCROW AGENT; CREATION OF ESCROW DEPOSIT....................................1
1.1 Appointment of Escrow Agent.......................................................1
1.2 Creation of Escrow Deposit........................................................1
SECTION 2 DISPOSITION OF ESCROW DEPOSIT..............................................................2
2.1 Term of Escrow Deposit............................................................2
2.2 Fundtech Indemnity Claims.........................................................2
2.3 Fundtech Indemnity Claims Not Disputed by Representative..........................2
2.4 Fundtech Indemnity Claims Disputed by Representative in Whole.....................2
2.5 Fundtech Indemnity Claims Disputed by Representative in Part......................3
2.6 Notice to Withhold on the Expiration Date.........................................3
2.7 Distribution of the Escrow Deposit................................................3
2.8 Retention of Escrow Deposit After Expiration Date.................................3
2.9 Reservation of Fundtech's Rights..................................................4
2.10 Valuation of Escrowed Shares......................................................4
2.11 Reporting.........................................................................4
2.12 Voting Authority..................................................................4
SECTION 3 INVESTMENT OF ESCROW DEPOSIT AND ACCOUNTING................................................4
3.1 Investment of Escrow Deposit......................................................4
3.2 Accounting........................................................................5
SECTION 4 ESCROW AGENT...............................................................................5
4.1 Duties............................................................................5
4.2 Reliance..........................................................................5
4.3 Liability.........................................................................5
4.4 Disputes..........................................................................5
4.5 Resignation.......................................................................5
4.6 Removal of Escrow Agent...........................................................6
4.7 Compensation......................................................................6
4.8 Indemnification...................................................................6
4.9 Disclosure........................................................................7
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TABLE OF CONTENTS
(CONTINUED)
SECTION 5 MISCELLANEOUS..............................................................................7
5.1 Term..............................................................................7
5.2 Notices...........................................................................7
5.3 Assignment........................................................................8
5.4 GOVERNING LAW.....................................................................8
5.5 Counterparts......................................................................8
5.6 Headings..........................................................................8
5.7 Construction......................................................................8
5.8 Amendment.........................................................................8
5.9 Jurisdiction......................................................................8
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made as of the 16th day of June,
1999, by and among Fundtech Ltd., a corporation organized under the laws of the
State of Israel ("Fundtech"), Fundtech Netherlands B.V.i.o. a Dutch corporation
in formation and a wholly-owned subsidiary of Fundtech ("Acquisition"), Dr.
Xxxxx Xxxxxx, attorney at law, Zurich, as escrow agent (the "Escrow Agent"), and
Xxx Biveroni (the "Representative"), as Representative for the shareholders
party to the Share Purchase Agreement referred to below (the "Shareholders").
W I T N E S S E T H :
WHEREAS, pursuant to that certain Share Purchase Agreement
(the "Share Purchase Agreement") dated as of the date hereof, among Fundtech,
Acquisition, Biveroni Xxxxxxxxxx Partners AG, a Swiss corporation ("BBP") and
the Shareholders, Acquisition has acquired or will acquire all of the
outstanding capital stock of BBP (the "BBP Acquisition").
WHEREAS, in connection with the BBP Acquisition, the
Shareholders will receive 105,315 ordinary shares of Fundtech, nominal value NIS
0.01 per share (the "Fundtech Shares");
WHEREAS, the Share Purchase Agreement provides that on the
Closing Date (as defined in the Share Purchase Agreement), the Fundtech Shares
paid in connection with the BBP Acquisition (the "Escrowed Shares") shall be
deposited in escrow (the "Escrow Deposit"), to be held and disposed of by the
Escrow Agent as provided herein; and
WHEREAS, Fundtech, Acquisition and the Representative wish to
appoint the Escrow Agent to serve as the escrow agent hereunder, and the Escrow
Agent is willing to do so upon the terms and conditions hereinafter set forth.
NOW THEREFORE, it is agreed:
SECTION 1
APPOINTMENT OF ESCROW AGENT; CREATION OF ESCROW DEPOSIT
1.1 Appointment of Escrow Agent Fundtech, Acquisition and the
Representative hereby appoint the Escrow Agent, and the Escrow Agent hereby
agrees to act, as depository and administrator of the Escrow Deposit, upon the
terms and conditions set forth below.
1.2 Creation of Escrow Deposit. Promptly following the
execution and delivery of this Agreement, Fundtech, pursuant to the Share
Purchase Agreement, shall deliver to the trust account specified in writing by
the Escrow Agent, for deposit into the Escrow Deposit, the Escrowed Shares.
SECTION 2
DISPOSITION OF ESCROW DEPOSIT
2.1 Term of Escrow Deposit
(a) The Escrowed Shares held in the Escrow Deposit shall be
held by the Escrow Agent on the terms and subject to the conditions set forth
herein and in the Share Purchase Agreement (but the Escrow Agent shall have no
responsibility with respect to the Share Purchase Agreement other than to
perform as provided in this Agreement) to satisfy (in whole or in part) the
indemnification obligations of the Shareholders pursuant to the Share Purchase
Agreement.
(b) The Escrowed Shares held in the Escrow Deposit shall be
held by the Escrow Agent on the terms and subject to the conditions set forth
herein and in the Share Purchase Agreement until the first anniversary of the
Closing Date (the "Expiration Date"). On the Expiration Date, the Escrow Agent
shall release the remaining Escrowed Shares and any proceeds thereof
(collectively, "Escrowed Property") held in the Escrow Deposit to the
Shareholders, subject to the terms and conditions set forth in Sections 2.7 and
2.8.
2.2 Fundtech Indemnity Claims. Upon the occurrence of an event
which Fundtech asserts constitutes an event for which the Shareholders would be
required to indemnify or make any payment to Fundtech pursuant to the Share
Purchase Agreement (a "Fundtech Indemnity Claim"), and for which Fundtech
determines to seek recourse (in whole or in part) against the Escrowed Shares,
Fundtech shall furnish notice of such event (the "Indemnity Notice") to the
Representative and the Escrow Agent promptly (and in any event on or prior to
the Expiration Date), setting forth Fundtech's then good-faith estimate of the
reasonably foreseeable maximum amount of the Fundtech Indemnity Claim.
2.3 Fundtech Indemnity Claims Not Disputed by Representative
If, within thirty (30) days after receipt of the Indemnity Notice, the
Representative does not give the notice provided for in Section 2.4, Fundtech
shall be entitled to make demand upon the Escrow Agent that it retain for future
remittal to Acquisition as and when the amount is determined, if the amount is
not then determined, or that it then disburse to Acquisition, if the amount has
then been determined, the full amount set forth in the Indemnity Notice in
Fundtech Shares or other Escrowed Property as provided in the Share Purchase
Agreement (up to the aggregate amount of the Escrowed Property).
2.4 Fundtech Indemnity Claims Disputed by Representative in
Whole. If the Representative disputes either the Fundtech Indemnity Claim
described in the Indemnity Notice or the amount Fundtech seeks as indemnity on
account of such Fundtech Indemnity Claim, the Representative shall, within
fifteen (15) days after receipt of the Indemnity Notice, notify the Escrow Agent
and Fundtech of such dispute, setting forth the basis therefor in reasonable
detail, based on his then good-faith belief. In the event the Representative
disputes the entire Fundtech Indemnity Claim, the Escrow Agent shall not
distribute any amount of Escrowed Property with respect thereto until the Escrow
Agent receives a written agreement signed by the Representative and Fundtech
stating the amount to which Fundtech is entitled in connection with such
Fundtech Indemnity Claim, or a copy of a court order or judgment together with
an opinion of counsel reasonably acceptable to the Escrow Agent to the effect
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that such order or judgment is a final order or judgment of a court of competent
jurisdiction binding on Fundtech and the Shareholders from which no appeal may
be taken or for which the time to appeal has expired (a "Final Judgment"), at
which time the Escrow Agent shall disburse to Acquisition the amount of Escrowed
Property set forth in such agreement or Final Judgment.
2.5 Fundtech Indemnity Claims Disputed by Representative in
Part In the event the Representative disputes a part (but not all) of a Fundtech
Indemnity Claim, the Escrow Agent shall, if the amount is undetermined, retain
for future remittance to Acquisition, or, if the amount is determined, remit to
Acquisition, the amount of Escrowed Property attributable to that portion of the
Fundtech Indemnity Claim which is not disputed by the Representative up to the
entire amount of the Escrowed Property. The Escrow Agent shall not distribute
any amount of Escrowed Property with respect to the balance of such Fundtech
Indemnity Claim except in accordance with the procedures set forth in Section
2.4.
2.6 Notice to Withhold on the Expiration Date Prior to or the
latest five business days after the Expiration Date, Fundtech shall furnish
notice (the "Withholding Notice") to the Escrow Agent and the Representative of
the amount of Escrowed Property, if any, to be retained on account of Fundtech
Indemnity Claims for which an Indemnity Notice has been provided pursuant to
Section 2.2 that are not, at such time, absolute as to liability or liquidated
as to amount. The Withholding Notice shall contain the information specified in
Section 2.2 to the extent it requires supplementation or change based on
Fundtech's knowledge on the notice date. Upon the receipt by the Escrow Agent of
the Withholding Notice, the Escrow Agent shall retain the amount set forth in
the Withholding Notice (plus any interest accrued on the Escrowed Property held
in the Escrow Deposit which arose in respect of the amount to be withheld). In
the event Fundtech does not timely provide the Withholding Notice, the Escrowed
Property shall be distributed by the Escrow Agent to the Shareholders in
accordance with, and to the extent provided in, Section 2.7.
2.7 Distribution of the Escrow Deposit. As soon as practicable
following the Expiration Date, any Escrowed Property as shall remain in the
Escrow Deposit after deduction of Escrowed Property pursuant to the provisions
of Section 2.6 hereof, shall be released from the provisions of this Agreement
and distributed promptly by the Escrow Agent to the Shareholders.
2.8 Retention of Escrow Deposit After Expiration Date. Upon
receipt of the Withholding Notice, the Escrow Agent shall continue to hold after
the Expiration Date, with respect to each Fundtech Indemnity Claim included in
such Withholding Notice, the amount of Escrowed Property specified by such
notice until such time as the Escrow Agent receives a written agreement signed
by the Representative and Fundtech stating the amount of Escrowed Property, if
any, to which Acquisition is entitled in connection with such Fundtech Indemnity
Claim, or a copy of a Final Judgment with respect to such Fundtech Indemnity
Claim, at which time the Escrow Agent shall remit to Acquisition, with respect
to such Fundtech Indemnity Claim, the amount of Escrowed Property specified in
such agreement or Final Judgment and shall distribute to the Shareholders, such
Escrowed Property, if any, which the Escrow Agent continued to hold after the
Expiration Date pursuant to Section 2.6 by reason of such Fundtech Indemnity
Claim and which is in excess of the amount so distributed to Acquisition with
respect thereto; provided, however, that, to the extent the distribution of such
Escrowed Property to the Shareholders would cause the Escrowed Property
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remaining after such distribution to fall below the amount (as stipulated in the
Withholding Notice) of all still unresolved Fundtech Indemnity Claims identified
in the Withholding Notice, such Escrowed Property shall be retained by the
Escrow Agent and shall be available for distribution to Acquisition upon the
resolution of any unresolved Fundtech Indemnity Claims, and such Escrowed
Property shall not be distributed to the Shareholders until such time, if any,
as such distribution can be made without causing the Escrowed Property remaining
in the Escrow Deposit to fall below the amount of all remaining unresolved
Fundtech Indemnity Claims identified in the Withholding Notice.
2.9 If, within one (1) year after the Expiration Date Fundtech
and/or Acquisition have not furnished to the Escrow Agent (i) a written
agreement signed by the Representative and Fundtech stating the amount of
Escrowed Property to be further retained by the Escrow Agent, or (ii) sufficient
proof to the effect that Fundtech and/or Acquisition have made pending in the
District Court of Baden, Switzerland, a lawsuit against one or several
Shareholders in the amount of Escrowed Property being retained pursuant to the
Withholding Notice, or (iii) sufficient proof to the effect that a third party
has made pending in any competent court of law or in a court of arbitration a
claim against BBP, Fundtech or Acquisition, which claim, if admitted by the
court of law or arbitration, would be the basis for a Fundtech Indemnity Claim
as defined in the Share Purchase Agreement, or (iv) sufficient proof to the
effect that BBP has been served with a notice from a Governmental Authority (as
defined in the Share Purchase Agreement) which, if final and no longer subject
to appeal, would be the basis for a Fundtech Indemnity Claim, the amount of
Escrowed Property not subject to such agreement as provided for in (i) or to
such legal procedure or notice as provided for in (ii)-(iv), shall be released
from the provisions of this Agreement and distributed promptly by the Escrow
Agent to the Shareholders.
2.10 Reservation of Fundtech's and/or Acquisition's Rights The
rights of Acquisition to receive disbursements from the Escrow Account in
respect of Fundtech Indemnity Claims shall be without prejudice to any other
rights Fundtech or Acquisition may have, under the Share Purchase Agreement or
otherwise, to seek indemnity for Fundtech Indemnity Claims.
2.11 Valuation of Escrowed Shares. For purposes hereof, any
Escrowed Shares remitted to Acquisition in satisfaction of any Fundtech
Indemnity Claims shall be valued in the aggregate at CHF 5,000,000.
2.12 Reporting The parties hereto shall, for income tax
purposes and, to the extent permitted by applicable law, local tax purposes,
report consistent with the Shareholders as the owner of the Escrowed Property
and the Representative shall cause the Shareholders to furnish any required tax
forms consistent with the foregoing.
2.13 Voting Authority. The Shareholders shall retain full
voting authority with respect to the Escrowed Shares.
SECTION 3
INVESTMENT OF ESCROW DEPOSIT AND ACCOUNTING
3.1 Investment of Escrow Deposit. Any cash held as Escrowed
Property shall be invested by the Escrow Agent in an interest bearing trust
account or in such other investments as Fundtech and the Representative may
agree in a writing delivered to the Escrow Agent. All interest and other income
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earned on the Escrowed Property shall be added to, and become part of, the
Escrowed Property, and the distribution thereof shall be subject to the terms of
this Agreement.
3.2 Accounting The Escrow Agent shall provide a written
account to Fundtech and the Representative at the Expiration Date listing all
transactions with respect to the Escrowed Property.
SECTION 4
ESCROW AGENT
4.1 Duties. The duties and obligations of the Escrow Agent
shall be determined solely by the express provisions of this Agreement and shall
be limited to the performance of such duties and obligations as are specifically
set forth in this Agreement, as it may be amended from time to time with the
Escrow Agent's written consent as provided in Section 5.8. In particular, the
Escrow Agent has no duties or obligations whatsoever with reagard to taxation of
the Escrowed Property (including but not limited to tax reporting, reclaiming of
withholding taxes etc.).
4.2 Reliance. In the performance of its duties hereunder, the
Escrow Agent shall be entitled to rely upon any document or instrument
reasonably believed by it to be genuine and signed by Fundtech or the
Representative. The Escrow Agent may assume that any person purporting to give
any notice in accordance with the provisions hereof has been duly authorized to
do so.
4.3 Liability. The Escrow Agent shall not be liable for any
error of judgment, or any action taken or omitted to be taken hereunder in good
faith, except in the case of its bad faith, gross negligence or willful
misconduct. The Escrow Agent shall be entitled to consult with counsel of its
choosing (including internal counsel) and shall not be liable for any act
suffered or omitted by it in good faith in accordance with the advice of such
counsel.
4.4 Disputes. In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder, or shall receive instructions
from any party hereto with respect to the Escrowed Property which, in its
opinion, are in conflict with any of the provisions of this Agreement, it shall
be entitled to refrain from taking any action until such time as there has been
a final determination of the rights of Fundtech, Acquisition and the
Shareholders with respect to the Escrowed Property (or relevant portion
thereof). For purposes of this Section 4.4, there shall be deemed to have been a
final determination of the rights of Fundtech, Acquisition and the Shareholders
with respect to the Escrowed Property (or relevant portion thereof) at such time
as the Escrow Agent shall receive (i) an executed counterpart of an agreement
between the Representative and Fundtech or (ii) a copy of a Final Judgment which
provides for the disposition of the Escrowed Property (or relevant portion
thereof).
4.5 Resignation. The Escrow Agent may resign at any time and
be discharged of the duties imposed hereunder (but without prejudice for any
liability in the case of its bad faith, gross negligence or willful misconduct
hereunder) by giving notice to the Representative and Fundtech at least sixty
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(60) business days prior to the date specified for such resignation to take
effect, in which case, upon the effective date of such resignation:
(a) all property then held by the Escrow Agent hereunder shall
be delivered by it to such person as may be designated in writing by Fundtech
and the Representative, whereupon the Escrow Agent's obligations hereunder shall
cease and terminate;
(b) if no such person has been designated by such date, all
obligations of the Escrow Agent hereunder shall, nevertheless, cease and
terminate, subject to clause (c) below; and
(c) the Escrow Agent's sole responsibility thereafter shall be
to keep all property then held by it (and to make the investments as
hereinbefore provided) and to deliver the same to the successor escrow agent
designated in writing by Fundtech and the Representative or, if no such
successor escrow agent shall have been so designated, in accordance with the
directions of a Final Judgment, and the provisions of Section 4.7 and Section
4.8 shall remain in effect.
4.6 Removal of Escrow Agent. Fundtech and the Representative
may, upon at least thirty (30) business days prior written notice to the Escrow
Agent, dismiss the Escrow Agent hereunder and appoint a successor. In such
event, the Escrow Agent shall promptly account for and deliver to the successor
escrow agent named in such notice the balance of the Escrowed Property,
including all investments thereof and accrued income thereon, on the date of
such accounting and delivery. Upon acceptance thereof and of such accounting by
such successor escrow agent, and upon reimbursement to the Escrow Agent of all
expenses due to it hereunder through the date of such accounting and delivery,
the Escrow Agent shall be released and discharged from all of its duties and
obligations hereunder, but without prejudice to any liability of the Escrow
Agent for its bad faith, gross negligence or willful misconduct hereunder.
4.7 Compensation. From time to time upon the Escrow Agent's
written request, Fundtech and the Representative on behalf of the Shareholders
each shall pay the Escrow Agent one-half of any compensation payable to the
Escrow Agent for its services hereunder, including reasonable out-of-pocket
expenses (including but not limited to bank charges, fees payable to foreign
counsel hired by the Escrow Agent according to sec. 4.3 of this Agreement,
bookeeping fees etc.) incurred in the performance of its duties and the
enforcement of its rights hereunder. The Escrow Agent's compensation shall be on
an hourly basis at the rate of CHF 350 per hour plus V.A.T. (if applicable).
4.8 Indemnification. Each of Fundtech, Acquisition and the
Representative on behalf of the Shareholders shall jointly indemnify and hold
the Escrow Agent harmless against any loss, liability, claim, damage, injury,
demand or expense, including reasonable legal fees, arising out of or in
connection with the performance of the Escrow Agent's obligations hereunder,
including the costs and expenses incurred in connection with the collection of
its fees and including the costs and expenses of defending itself against any
claim or liability arising out of or in connection with the performance of its
duties hereunder, except for any loss, liability, claim, damage, injury, demand
or expense resulting from the Escrow Agent's bad faith, gross negligence or
willful misconduct; provided, however, that promptly after the receipt by the
Escrow Agent of notice of any claim or the commencement of any suit, action or
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proceeding, the Escrow Agent shall, if a claim of indemnification in respect
thereof is to be made against any of the other parties hereto, notify such other
parties thereof in writing; and provided, further, that the indemnifying party
or parties shall be entitled, jointly or severally and at their own expense, to
participate in or assume the defense of any such action, suit or proceeding. The
right of the Escrow Agent (or any successor escrow agent appointed hereunder) to
indemnification under this Section 4.8 shall survive the termination of this
Agreement.
4.9 Disclosure. The Escrow Agent is authorized to disclose
this Agreement, if necessary, to the Swiss tax and social security authorities.
SECTION 5
MISCELLANEOUS
5.1 Term. This Agreement shall continue in force until the
final distribution of all amounts held by the Escrow Agent in the Escrow
Deposit.
5.2 Notices. All notices and other communications hereunder
shall be given in writing and delivered personally, by registered or certified
mail (postage prepaid, return receipt requested), by overnight courier (postage
prepaid), facsimile transmission or similar means, to the party to receive such
notices or communications at the address set forth below (or such other address
as shall from time to time be designated by such party to the other parties in
accordance with this Section 5.2):
If to the Representative:
Xxx X. Biveroni
Xxxxxxxxx 000
Xx-0000 Xxxxxxxxxxxx
Xxxxxxxxxxx
If to Fundtech or
Acquisition, addressed:
Fundtech Ltd.
c/o Fundtech Corp.
00 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
With copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
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If to the Escrow Agent:
Xxxxx Xxxxxx, Esq.
Hubatka Xxxxxx & Partner
Xxxxxxxxxx 0
XX-0000 Xxxxxx
Xxxxxxxxxxx
All such notices and communications hereunder shall be deemed
given when received, as evidenced by the signed acknowledgment of receipt of the
person to whom such notice or communication shall have been personally
delivered, the acknowledgment of receipt returned to the sender by the
applicable postal authorities or the confirmation of delivery rendered by the
applicable overnight courier service. A copy of any notice or other
communication given by any party to any other party hereto, with reference to
this Agreement, shall be given at the same time to the other parties to this
Agreement.
5.3 Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective representatives,
successors and assigns. Neither this Agreement nor any rights, duties or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the parties hereto.
5.4 GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS
AGREEMENT, AND THE RESPECTIVE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SWITZERLAND, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREUNDER.
5.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original.
5.6 Headings. The Section headings in this Agreement are for
convenience only and do not constitute part of this Agreement.
5.7 Construction. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.
5.8 Amendment. This Agreement may be amended only by a writing
signed by Fundtech, Acquisition, the Escrow Agent and the Shareholders.
5.9 Jurisdiction. Each of the parties hereto submits to the
jurisdiction of any court sitting in the City of Baden, Switzerland, in any
action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above set forth.
FUNDTECH:
FUNDTECH LTD.
By: /s/ Xxxxxxxxx Xxxxx
--------------------------------
Its: Attorney-in-Fact
FUNDTECH NETHERLANDS, B.V.i.o.
By: FUNDTECH LTD.
By: /s/ Xxxxxxxxx Xxxxx
--------------------------------
Its: Attorney-in-Fact
ESCROW AGENT:
/s/ Xxxxx Xxxxxx
--------------------------------
REPRESENTATIVE:
/s/ Xxx X. Biveroni
--------------------------------
as Representative
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