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EXHIBIT 10.20
EXECUTION COPY
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ESCROW AGREEMENT
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This ESCROW AGREEMENT (this "Agreement"), dated as of the 23rd day of
April, 2000, by and among MRV Communications, Inc. ("MRV"), the Selling
Shareholders of Optronics International Corp. ("OIC") and the law firm of Xxxxx
& XxXxxxxx, Taipei Office (the "Escrow Agent") having Xxxxx X. Xxxx as its
representative.
WITNESSTH
WHEREAS, MRV and Selling Shareholders have entered into a Stock Purchase
Agreement dated April 23, 2000 (the "SPA") pursuant and subject to which MRV is
acquiring up to One Hundred Percent (100%), but not less than Seventy Five
Percent (75%), of the shares of OIC ("OIC Shares") from Selling Shareholders;
WHEREAS, all capitalized terms not otherwise defined herein have the
meaning ascribed to such term in the SPA; and
WHEREAS, Section 10.2.3 of the SPA contemplates that the Parties will enter
into an agreement with the Escrow Agent pursuant to which the Escrow Agent will
hold up to Six Hundred and Eighty Thousand (680,000) MRV Shares, subject to pro
rata adjustment based on the percentage of OIC Shares acquired by MRV, to be
issued to the Selling Shareholders of OIC under the SPA in escrow.
WHEREAS, Section 10.2.3 of the SPA contemplates that the representations,
warranties, covenants and obligations of the Selling Shareholders shall be
secured by placing the aforesaid MRV Shares owned by Selling Shareholders in
escrow under this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions set forth below, the parties hereto hereby agree as
follows:
1. At the Closing, MRV shall transfer the Escrowed Shares to the Selling
Shareholders and then the Selling Shareholders shall deliver the Escrowed
Shares directly to the Escrow Agent. The title of the Escrowed Shares shall
be under the name of the authorized representative of the Selling
Shareholders or as otherwise agreed by MRV. The Escrowed Shares delivered
to the Escrow Agent shall be in the form of one (1) share certificate or
other form as reasonably deemed appropriate by MRV. The Selling
Shareholders will deliver to the Escrow Agent a Power of Attorney and a
Stock Assignment, as attached in the Appendix A and B hereof, respectively,
and with respect to the Escrowed Shares granting the Escrow Agent the
exclusive right to vote, transfer, sell, assign, pledge and/or otherwise
dispose of the Escrowed Shares according to MRV's instruction.
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2. The Escrow Agent agrees to keep the Escrowed Shares in a security vault or
safe deposit box, and will act with respect to such Escrowed Shares
pursuant to the terms of this Agreement and the SPA.
3. The Selling Shareholders represent that Xx. X. X. Xxxxx (or his lawful
successors designated by Selling Shareholders) has the power of attorney
from all other Selling Shareholders in connection with any acts or
omissions regarding disposition of the Escrowed Shares stipulated herein.
4. On the date which is two (2) years from the date of Closing defined in SPA
(or, if not a business day, then on the next occurring business day
thereafter), the Escrow Agent shall deliver to Xx. X. X. Xxxxx (or his
lawful successors designated by Selling Shareholders) on behalf of the
Selling Shareholders all of the Escrowed Shares subject to the SPA and this
Agreement.
5. Except for the Escrow Shares belonging to Principal Employees, the Parties
agree that one third (1/3) of the Escrowed Shares, or of the Escrowed
Shares remaining after any call down exercised by MRV under Article 10 of
the SPA, as the case may be, shall be released by the Escrow Agent to the
Selling Shareholders on the date which is one (1) calendar year following
the Closing Date. The remainder of the Escrow Shares shall be released on
the date in accordance with Article 4 hereof.
6. The Escrow Agent may take any action, including without limitation the
transfer of title and possession of the affected Escrowed Shares to MRV,
not specified in this Agreement upon receipt by the Escrow Agent of MRV's
instruction to deal with the situations, including without limitation,
relating to the disputes among the parties in connection of Section 10.2
and other provisions of the SPA and this Agreement as may be applicable, or
claims by any third party directly or indirectly, formally or informally,
filed, occurred or made known to MRV or the Escrow Agent. If the above
third party claim is filed, occurred or made known to MRV or the Escrow
Agent, the title of the Escrowed Shares shall be deemed to be already
transferred to MRV prior to such event as indicated above.
7. The Escrow Agent undertakes to perform only such duties as are expressly
set forth herein.
8. MRV and the Selling Shareholders hereby agree to jointly and severally
indemnify and hold the Escrow Agent harmless from and against any losses,
costs, claims, or actions arising from or incurred in connection with the
Escrow Agent's performance of his obligations in the SPA and this
Agreement.
9. The Escrow Agent may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or
presented by the proper party according to this Agreement. The Escrow Agent
may conclusively
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presume that the undersigned representative of any party hereto which is a
legal entity other than a natural person has full power and authority to
instruct the Escrow Agent on behalf of that party unless written notice to
the contrary is delivered to the Escrow Agent according to this Agreement.
10. The Escrow Agent shall not be liable for any action taken by it in good
faith and believed by it to be authorized or within the rights or powers
conferred upon it by this Agreement, and may consult with counsel of its
own choice and shall have full and complete authorization and protection
for any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel.
11. The Escrow Agent may resign and be discharged from its duties or
obligations hereunder by giving notice in writing of such resignation
specifying a date upon which such resignation shall take effect, whereupon
a successor Escrow Agent shall be appointed by MRV (subject to approval of
Selling Shareholders, which shall not be unreasonably withheld).
12. The Escrow Agent shall be entitled to compensation (the "Escrow Fees") in
the amount equivalent to 0.3 % of the value of the Escrowed Shares
(equaling US$70.588 per share) for the services to be rendered by it
hereunder and in addition to be reimbursed for all losses, liabilities or
expenses, including reasonable attorneys' fees ("Reimbursement"), incurred
or made by it without gross negligence or bad faith arising out of or in
connection with its entering into this Agreement or carrying out its duties
hereunder, including the costs and expenses of defending itself against any
claim of liability in the premises. The Escrow Fees shall be shared equally
between the Selling Shareholders and MRV. The Selling Shareholder's half of
the Escrow Fees has been deducted from the MRV Shares being transferred to
the Selling Shareholders, and as a result MRV shall pay the entire Escrow
Fees to the Escrow Agent on or before Closing. The Reimbursement shall be
borne equally by the Selling Shareholders and MRV with the joint and
several liability among the Selling Shareholders. For avoidance of doubt,
the Escrow Fees only cover the services of taking custody of the Escrowed
Shares.
13. This Agreement expressly sets forth all the duties of the Escrow Agent with
respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Agreement against the Escrow Agent. The
Escrow Agent shall not be bound by the provisions of any agreement among
the parties hereto except this Escrow Agreement.
14. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective heirs, successors, assigns and legal
representatives, and shall be governed by and construed in accordance with
the laws of Delaware, the United States applicable to contracts made and to
be performed therein and cannot be changed or terminated except by a
writing signed by MRV, Selling Shareholders and the Escrow Agent.
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15. This Agreement shall be interpreted in accordance with laws of Delaware,
the United States without regard to its conflicts of law principles. The
federal or state court of California shall have the exclusive jurisdiction
over any disputes arising out of or in relation to this Agreement.
16. All notices and other communications pursuant to this Agreement shall be in
writing and shall be given (and shall be deemed to have been duly given if
so given) by hand delivery, cable, telegram or telex, or by mail
(registered or certified mail, postage prepaid, return receipt requested)
to the respective parties as follows:
(a) In the case of MRV:
MRV Communications, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
X.X.X.
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxx & XxXxxxxx
00X, 000 Xxx Xxx X. Xxxx,
Xxxxxx, Xxxxxx
Attention: Xxxxx X. Xxxx
(b) In the case of Selling Shareholders:
X. X. Xxxxx
Xx. 00, Xxxx Xxxxxx XX Xxxx
Xxxxxxx-Xxxxx Xxxxxxxxxx Xxxx
Hsin-Chu, Taiwan, R.O.C. 30077
(c) In the case of Escrow Agent:
Xxxxx & XxXxxxxx
00X, 000 Xxx Xxx X. Xxxx,
Xxxxxx, Xxxxxx
Attention: Xxxxx X. Xxxx
or to such other person or address as any of the parties hereto shall
specify by notice in writing to all the other parties hereto.
17. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original instrument and all of which together
shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
on the date first above written.
MRV COMMUNICATIONS INC.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Vice President and CFO
SELLING SHAREHOLDERS OF
OPTRONICS INTERNATIONAL CORP.
By: /s/ X. X. Xxxxx
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Xx. X. X. Xxxxx
On behalf of the Selling
Shareholders
XXXXX & XxXXXXXX, TAIPEI OFFICE
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Senior Partner
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APPENDIX A
POWER OF ATTORNEY
I, Xx. X. X. Xxxxx on behalf of the Selling Shareholders, hereby irrevocably
constitutes and appoints Xxxxx X. Xxxx of Xxxxx & XxXxxxxx, Attorneys-at-Law, to
be my attorney in the Republic of China, with full power of substitution and
revocation, to hold up to Six Hundred and Eighty Thousand (680,000) shares, with
all dividends, rights and interests accruing to or accrue upon the same, of MRV
Communications Inc., which are registered in the name of the Selling
Shareholders on the shareholders' roster of MRV; and to vote, transfer, assign,
sell, pledge or otherwise dispose of the Escrowed Shares during the term of the
Escrow Agreement and in accordance with the provisions of the Escrow Agreement.
IN WITNESS WHEREOF, I have executed this Power of Attorney on the 23rd day of
April, 2000.
Selling Shareholders
/s/ X. X. Xxxxx
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Name: X. X. Xxxxx
Title: Authorized Representative
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APPENDIX B
STOCK ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
________________________________________________________________________________
__________________________________Shares of the Common Stock ___________________
Stock of MRV Communications, Inc. Corporation standing in ______________________
name(s) on the books of said Corporation represented by Certificate(s) No.
__________________________________________ herewith and do hereby irrevocable
constitute and appoint _________________________________________________________
____________________________________________________________ attorney to
transfer the said stock on the books of the within name corporation with full
power of substitution.
Date:
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Signature Guaranteed:
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