Exhibit 99.1
[Annex A to Amendment No. 1 to Merger Agreement]
[Exhibit D to Merger Agreement]
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is entered into as of July
2, 2002 by and among Xxxxxx Group Inc., a Delaware corporation ("Xxxxxx"),
Xxxxxx & Company Limited, a U.K. limited company ("Xxxxxx UK"), Investment
Technology Group, Inc., a Delaware corporation ("ITG"), and Xxxxxxx X.
Xxxxxxxxxx and Xxxx X. Xxxxxx, as members of the Contingent Payment Rights
Committee referred to below.
Reference is made to the Agreement and Plan of Merger dated as of
February 28, 2002 by and among Xxxxxx, ITG and Indigo Acquisition Corp., as
amended by Amendment No. 1 thereto dated as of even date herewith (the
"Merger Agreement"). This is the Escrow Agreement referred to therein.
The parties hereto are simultaneously entering into the Custodian
and Paying Agent Agreement attached hereto as Exhibit A (the "Paying Agent
Agreement"), with The Bank of New York, a New York banking corporation, as
custodian and paying agent (the "Agent"), in order to implement certain
provisions of this Agreement.
In consideration of the foregoing premises (which constitute an
integral part of this Agreement) and mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Except with respect to the following terms, which shall have the
respective meanings specified below, all capitalized terms contained herein
shall have the meanings ascribed to them in the Merger Agreement:
"Advisors" has the meaning set forth in Section 3.03 hereof.
"Claims" means each and every claim asserted, or that may be
asserted, against any third party identified in the FSA Notices or any
insurer or reinsurer of Xxxxxx or any of its subsidiaries (collectively,
the "Specified Persons") by or on behalf of Xxxxxx or Xxxxxx UK in respect
of any matter referred to in the FSA Notices.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" has the meaning set forth in Section 3.01 hereof.
"Escrow" means the escrow created by this Agreement for the
purposes of holding and dispersing the Escrow Assets to be administered by
the Agent pursuant to the Paying Agent Agreement.
"Escrow Account" has the meaning set forth in Section 2.01 hereof.
"Escrow Assets" means (i) the Initial Funding, (ii) any assets
hereafter acquired by the Escrow, (iii) the Recoveries, (iv) any
investments purchased with Escrow Assets or otherwise acquired by the
Escrow and (v) all proceeds of each of the foregoing (including, without
limitation, any earning and gains thereon), excluding assets paid,
distributed, expended or otherwise disposed of from time to time by the
Committee, including for the payment of Escrow Expenses.
"Escrow Expenses" means all fees, costs, expenses, obligations and
liabilities of every nature or description incurred on or after the date
hereof, directly or indirectly, by the Committee or any Member in
connection with establishing, maintaining and administering the Escrow and
the Escrow Assets or in carrying out the Committee's express or implied
powers and duties under this Agreement or applicable law, including without
limitation (i) all costs and expenses of prosecuting, appealing,
negotiating, resolving, settling, compromising or otherwise pursuing the
Claims, including the fees and expenses of Advisors, witnesses and court
costs, whether incurred on a contingent, time and materials or other basis,
(ii) all compensation and reimbursements of the Agent and of the Members
for serving as Members, if any, (iii) all costs and expenses of
indemnifying the Agent pursuant to the Paying Agent Agreement or the
Members pursuant to this Agreement or otherwise prosecuting or defending
any other litigation involving the Escrow or the Committee, (iv) all
reimbursements of Xxxxxx and Xxxxxx UK pursuant to Sections 5.01 and 5.05
hereof, (v) all amounts payable to ITG and its affiliates pursuant to
Section 6.02 hereof and (vi) all costs and expenses of distributing the
Contingent Payment to the Holders pursuant to Section 7.03 hereof.
"Escrow Reduction Amount" has the meaning set forth in Section
7.04 hereof.
"Holder" means, at any time, the holder at such time of a
Contingent Payment Right listed on the Register (as defined in the Paying
Agent Agreement).
"Initial Funding" has the meaning set forth in Section 2.02
hereof.
"Members" has the meaning set forth in Section 3.01 hereof.
"Pursuit" has the meaning set forth in Section 3.03 hereof.
"Recoveries" means all amounts recovered or received in respect of
Claims by Xxxxxx UK, Xxxxxx, ITG or their respective subsidiaries less any
amounts that may be deducted therefrom pursuant to Section 6.02 hereof.
ARTICLE II
ESCROW ACCOUNT
SECTION 2.01. Establishment of Escrow Account. Simultaneously with
the execution and delivery hereof, the Committee shall direct the Agent to
establish an account (the "Escrow Account") at its office located in New
York, New York. All funds accepted or held by the Agent pursuant to this
Agreement and the Paying Agent Agreement shall be held in the Escrow
Account (and shall be deemed part thereof) in accordance with this
Agreement and the Paying Agent Agreement, until released in accordance with
the terms hereof and thereof.
SECTION 2.02. Initial Funding. Simultaneously with the execution
and delivery hereof, Xxxxxx UK shall deliver $2,365,000 in cash (the
"Initial Funding") to the Agent for deposit into the Escrow Account in
accordance with the Paying Agent Agreement.
SECTION 2.03. Investment. The Committee shall direct the Agent to
invest the Escrow Assets solely in the following: (i) obligations issued or
guaranteed by the United States of America or any agency or instrumentality
thereof with a maturity of not more than 365 days and (ii) money market
funds substantially all of whose funds are invested in the foregoing.
Pursuant to the Paying Agent Agreement, all earnings and gains on Escrow
Assets, including interest and dividends, shall be paid into the Escrow
Account and shall constitute Escrow Assets. If at any time the Committee
deems it necessary that some or all of the investments constituting Escrow
Assets be redeemed or sold in order to raise money necessary to comply with
the provisions of this Agreement, the Committee shall direct the Agent to
effect such redemption or sale, in such manner and at such time as the
Committee directs in accordance with the Paying Agent Agreement.
SECTION 2.04. Disbursements. From time to time at the written
direction of the Committee and in accordance with this Agreement and the
Paying Agent Agreement, the Committee shall direct the Agent to disburse
such portion of the Escrow Assets as the Committee so directs to pay Escrow
Expenses. Pursuant to the Paying Agent Agreement, the Agent shall keep a
record of such disbursements. From and after the date hereof, all Escrow
Expenses shall be paid by the Committee from the Escrow Account.
SECTION 2.05. Quarterly Statements. The Committee shall direct the
Agent, in accordance with the Paying Agent Agreement, as soon as
practicable following each March 31, June 30, September 30 and December 31,
until the termination of this Agreement, to deliver to the Committee a
statement (a "Quarterly Statement") setting forth: (a) the amount of the
Escrow Assets; (b) the amount of income or interest earned or accrued with
respect to the Escrow Assets, if any, during the period covered by such
Quarterly Statement; and (c) the amount of Escrow Expenses paid during such
period.
ARTICLE III
POWERS, RIGHTS AND OBLIGATIONS
OF THE CONTINGENT PAYMENT RIGHTS COMMITTEE
SECTION 3.01. Establishment of the Contingent Payment Rights
Committee. There is hereby established a Contingent Payment Rights
Committee (the "Committee"). The Committee shall consist of not less than
two and not more than five members ("Members"). The initial Members shall
be Xxxxxxx X. Xxxxxxxxxx and Xxxx X. Xxxxxx.
SECTION 3.02. Action of the Committee. The Committee may act only
with the concurrence of a majority of the Members; provided, however, that
the Committee may, by resolution adopted by a majority of the Members,
designate a Chairman to act as the administrative Member and delegate to
the Chairman such authority as the Committee may determine.
SECTION 3.03. Authority of Committee. The Committee shall have
full power and authority from and after the date hereof (i) to prosecute,
appeal, negotiate, resolve, settle, compromise or otherwise pursue the
Claims, in whole or in part, in accordance with the provisions of this
Agreement, including by litigation in trial or appellate courts,
arbitration, alternative dispute resolution, negotiation, settlement or
compromise (collectively, the "Pursuit" of Claims), (ii) to withdraw all or
part of the Claims, terminate the Pursuit thereof and terminate the Escrow,
(iii) to retain advisors, including, without limitation, counsel,
accountants, financial advisors, arbitrators, mediators, experts,
consultants, investigators and other assistants (collectively, "Advisors"),
in connection with the foregoing, and to advise the Members with respect to
the rights and obligations of the parties under this Agreement and the
Paying Agent Agreement, and to determine the amount and method of
compensation to be paid to such Advisors, including on a contingent, time
and materials or other basis; provided that the Committee shall obtain the
acknowledgment of each such Advisor that the sole recourse for such
Advisor's fees and expenses shall be to the Escrow Assets, (iv) to direct
the payment of Escrow Expenses by the Agent, (v) to direct the investment
of the Escrow Assets by the Agent and (vi) to take such action as the
Committee deems necessary or appropriate to enforce the obligations of the
parties under this Agreement; provided, however, that without prior
consultation with, and approval by (which approval shall not be
unreasonably withheld or delayed in the case of clause (b) and may be
withheld in its sole judgment in the case of clause (a) or (c)), ITG, the
Committee shall not (a) enter into or amend any contracts or agreements
binding on, or on behalf of, ITG or any of its affiliates, (b) replace
Committee members or (c) commence litigation against any person other than
the Specified Persons; provided, further, that the Committee shall (x)
consult with ITG prior to filing a lawsuit or an appeal with respect to, or
agreeing to settle, any Claims and (y) notify ITG (in advance to the extent
practicable) of any material change in the Pursuit of Claims. The Members
shall have no other duties, rights or obligations except as specifically
set forth herein and no implied covenants or obligations shall be read in
to this Agreement against the Members.
SECTION 3.04. Replacement of Committee Members. If, prior to the
Effective Time, any Member shall resign, die or become incapacitated or
shall otherwise become unable or unwilling to act as a Member hereunder,
Xxxxxx shall, subject to ITG's approval (which approval shall not be
unreasonably withheld or delayed), appoint a successor. If these events
occur after the Effective Time, subject to Section 3.03 hereof, a majority
of the remaining Members shall appoint a successor, or, if there is only
one remaining Member, such remaining Member shall appoint a successor or
successors. ITG acknowledges that a person who is a member of the board of
directors of Xxxxxx immediately prior to the Effective Time and who is not
an employee of ITG or any of its affiliates at the time of appointment is
approved by ITG.
SECTION 3.05. Committee Member May Be Holder. Any Member may also
be a Holder or an officer, director, employee or affiliate of a Holder and
will have all the rights of such a Holder to the same extent as if he or
she were not a Member.
SECTION 3.06. Cooperation with ITG. The Committee shall provide
ITG such information and cooperation as ITG reasonably requests in
connection with reports, forms, notifications, applications, tax returns
and other documents to be filed with the Internal Revenue Service or the
U.K. Inland Revenue and other applicable foreign, federal and state
governmental agencies and such other actions necessary to comply with the
Code or other tax laws.
SECTION 3.07. Compliance with Applicable Laws, Etc. All actions
required to be taken by the Committee pursuant to this Agreement shall be
taken in compliance with all applicable statutes, rules, regulations,
orders, writs, decrees and injunctions of courts or other governmental
agencies. None of the parties shall take or cause to be taken, or omit to
take or cause to omit to be taken, any action such that (a) the Escrow
shall be or become required to register as an investment company under the
Investment Company Act of 1940, as amended, or any similar law; or (b) the
Contingent Payment Rights shall be or become required to be registered
under the Securities Xxx 0000, as amended, the Securities Exchange Act of
1934, as amended, the Trust Indenture Act of 1939, as amended, or any
similar law.
SECTION 3.08. Reliance. In taking any action hereunder, or in
refraining therefrom, the Committee, and the Members, shall be protected in
relying upon any notice, paper or other document believed by it or them to
be genuine and signed by the proper parties, or upon any evidence deemed by
it or them to be sufficient. In no event shall the Committee or any Member
be liable to the Holders for any action, failure to act, omission,
decision, determination or undertaking by the Committee or any Member. In
no event shall the Committee or any Member be liable to ITG or any of its
affiliates for any action, failure to act, omission, decision,
determination or undertaking by the Committee or any Member, other than in
connection with a material breach of the rights of ITG or any of its
affiliates under this Agreement, which breach causes injury to ITG or any
of its affiliates; provided that ITG shall give written notice to the
Committee describing the particulars of such breach and provide at least 30
days' opportunity to cure the breach. In the event that the Committee, or
the Members, consult with Advisors in connection with its or their duties
hereunder, it and they shall be fully protected by any action, omission,
decision, determination or undertaking taken, suffered or permitted by it
or them in good faith and in accordance with the advice of such Advisors.
SECTION 3.09. Indemnification.
(a) Xxxxxx (if prior to the Effective Time) or ITG (if after the
Effective Time) shall indemnify and hold harmless each Member against all
claims, demands, obligations, liabilities, costs and expenses, including
amounts paid in satisfaction of judgments, in compromise (so long as Xxxxxx
or ITG, as applicable, has approved such compromise, with such approval not
to be unreasonably withheld or delayed), or as fines or penalties, and fees
of Advisors (collectively, "Losses"), reasonably incurred by him or her in
connection with the defense or disposition of any action, suit or other
proceeding by one or more Holders or by any other person, whether civil or
criminal, in which he or she may be involved as a party or witness or with
which he or she may be threatened, while a Member or thereafter by reason
of having been a Member or resulting from administration of the Claims or
the Escrow or any decision, action or failure to act, (i) except to the
extent that any such Loss resulted from or arose out of a Member's
decision, action or failure to act made or taken with deliberate intent to
cause substantial injury to the Holders or with reckless disregard for the
best interests of the Holders and (ii) except that ITG and its affiliates
shall have no obligation under this Section 3.09 in respect of Losses in
connection with a material breach of the rights of ITG or any of its
affiliates under this Agreement, which breach causes injury to ITG or any
of its affiliates; provided that ITG shall give written notice to the
Committee describing the particulars of such breach and provide at least 30
days' opportunity to cure the breach. Xxxxxx or ITG, as the case may be,
shall advance payments in connection with indemnification under this
Section 3.09(a) upon request of any Member; provided that such Member shall
have given a written undertaking to repay any amount advanced in the event
it is subsequently determined in a final non-appealable decision rendered
by a court of competent jurisdiction or other tribunal that such Member is
not entitled to such indemnification. The rights accruing to any Member
under these provisions shall not exclude any other right to which he or she
may be lawfully entitled. The obligations of Xxxxxx and ITG set forth in
this Section 3.09 shall survive the termination of this Agreement and the
removal or resignation of any Member.
(b) Notwithstanding the foregoing, all Losses indemnified pursuant
to Section 3.09(a) hereof (including amounts advanced pursuant to the
second sentence thereof) shall be paid out of the Escrow Assets until such
time as the Escrow Assets are exhausted or the Escrow is terminated
pursuant to Section 7.02 hereof before ITG shall be obligated to make any
payments pursuant to Section 3.09(a) hereof.
(c) Until such time as the Escrow Assets are exhausted or the
Escrow is terminated pursuant to Section 7.02 hereof, the Committee shall
cause ITG, Xxxxxx and its affiliates to be reimbursed out of the Escrow
Assets for any and all losses, claims, costs, expenses and liabilities
imposed on any of them in connection with, arising out of or related to any
action, claim, suit or other proceeding arising from the establishment or
administration of the Escrow, including, without limitation, the operation
or administration of the Claims or the Escrow and the exercise (or the
failure to exercise) by the Committee of any power or authority under this
Agreement or under applicable law; provided, however, that the obligation
for such reimbursement, as aforesaid, shall be payable solely out of Escrow
Assets; provided, further, that ITG shall not have any such reimbursement
or indemnification rights with respect to any action, claim, suit or other
proceeding against ITG alleging a breach of, or seeking enforcement of,
ITG's obligation under Section 7.03 hereof.
(d) The Committee may purchase such insurance as it determines
adequately insures that each Member shall be indemnified against any such
loss, liability or damage pursuant to this Section 3.09, the cost of which
insurance shall constitute an Escrow Expense.
ARTICLE IV
CONTINGENT PAYMENT RIGHTS
SECTION 4.01. Allocation of Contingent Payment Rights. The
Contingent Payment Rights shall be allocated in accordance with Sections
2.6(b), 2.8(a) and 2.8(b) of the Merger Agreement. Holders of Contingent
Payment Rights will not be entitled to receive certificates evidencing the
Contingent Payment Rights but the Holders of the Contingent Payment Rights
shall be as set forth in the Register.
SECTION 4.02. Transfer of Contingent Payment Rights. Contingent
Payment Rights will not be assignable or otherwise transferable except by
operation of law (including the laws of descent and distribution) or by
intestacy. No other purported transfer of any Contingent Payment Right will
be valid or will be registered on the Register.
SECTION 4.03. Rights of Holders.
(a) No Holder shall have any title to, right to, possession of,
management of, or control of, the Escrow Assets.
(b) The Holders will have no rights to dividends or other
distributions other than their pro rata share of the distribution of the
Contingent Payment, if any, in accordance with Section 7.03 hereof, and
will have no voting rights and no liquidation preference.
SECTION 4.04. No Action by Holders. No Holder will have the right
to institute or maintain any suit, action or proceeding against Xxxxxx,
Xxxxxx UK, ITG, any of their affiliates, the Escrow, the Escrow Assets, the
Committee, any Member or the Agent to enforce, or otherwise act in respect
of, the Contingent Payment Rights or the provisions of this Agreement or
the Paying Agent Agreement or for any decision regarding the conduct or
disposition of the Claims, including, without limitation, any decision to
dismiss, settle or cease prosecuting any litigation at any time without
obtaining any cash or other recovery.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.01. Cooperation. Xxxxxx and Xxxxxx UK shall use
commercially reasonable efforts to provide the Committee and its Advisors
with such access, at normal business hours and upon reasonable notice,
to their books and records relating to the Claims and to their employees,
agents, attorneys and independent accountants, including in connection with
testimony in litigation and factual investigation, all to the extent
reasonably requested by the Committee for the purpose of performing their
duties and exercising their powers hereunder. Xxxxxx and Xxxxxx UK shall be
entitled to reimbursement by the Escrow for reasonable out-of-pocket
expenses incurred in connection therewith.
SECTION 5.02. Powers-of-Attorney. Xxxxxx and Xxxxxx UK shall
execute and deliver to the Committee powers-of-attorney in form reasonably
satisfactory to the Committee to enable the Committee to file pleadings and
execute any documents on behalf of Xxxxxx and Xxxxxx UK necessary or
appropriate to enable the Committee to prosecute the Claims or otherwise
necessary or useful in the Pursuit of Claims in compliance with this
Agreement, in the name of Xxxxxx and Xxxxxx UK and without further consent
or action by Xxxxxx, Xxxxxx UK, ITG or their respective affiliates. To the
extent permitted by applicable law, and to the extent that the Pursuit of
the Claims is not jeopardized, the Committee shall prosecute all Claims on
behalf of and in the name of Xxxxxx UK, and, if the Committee deems it
necessary or appropriate, ITG and its affiliates shall cause Xxxxxx to
assign its Claims to Xxxxxx UK.
SECTION 5.03. Pursuit of Claims. ITG and its affiliates will use
commercially reasonable efforts not to take any action or fail to take any
action that is reasonably expected to materially adversely affect the
Claims or the Pursuit of the Claims in compliance with this Agreement;
provided that the foregoing shall in no way affect ITG's rights under
Section 3.03 hereof. ITG and its affiliates agree not to disclose any
non-public information with respect to the Claims to any third parties
except (i) to Advisors of ITG and its affiliates who are advised of the
confidential nature of such information and agree to abide by this
provision in respect of such non-public information, (ii) insofar as such
disclosure is compelled by any Governmental Entity or applicable law or
(iii) such information which is or becomes part of the public domain
without breach by ITG and its affiliates of this Section 5.03.
SECTION 5.04. Settlements. In the event of any settlement or
compromise of any Claim agreed to by the Committee, ITG agrees that it will
not unreasonably withhold such release by ITG and its affiliates as may be
required by the other party to such settlement or compromise in connection
with such settlement or compromise.
SECTION 5.05. Reimbursement. The Committee shall cause Xxxxxx and
Xxxxxx UK to be reimbursed for any fees and expenses of the type that would
constitute Escrow Expenses incurred by them after the date hereof and prior
to the Effective Time in respect of investigation or Pursuit of Claims and
any investment banking fees payable in respect of the Contingent Payment.
ARTICLE VI
RECOVERIES ON CLAIMS
SECTION 6.01. Recoveries To Be Deposited. All Recoveries in
respect of the Claims, promptly upon receipt thereof, shall be deposited
into the Escrow Account, net of the taxes referred to in Section 6.02
hereof, and any such net Recoveries, whether or not deposited, shall
constitute Escrow Assets.
SECTION 6.02. Taxes. ITG, Xxxxxx, Xxxxxx UK and their affiliates
shall be indemnified and held harmless, on an after-tax basis, for any and
all foreign, federal, state and local taxes (including value added and
withholding taxes) which are paid or payable in connection with, or in any
way relating to, or arising out of the Contingent Payment Rights, the
Escrow Assets, the Contingent Payment or the distribution thereof or the
Escrow Reduction Amount or the distribution thereof, determined without
regard to any refunds, credits, carryforwards or other tax attributes which
could or do reduce or otherwise off-set taxes paid or payable, other than
deductions for the Specified Losses, which ITG, Xxxxxx, Xxxxxx UK and their
affiliates shall use commercially reasonable efforts to apply against any
Recovery or income on the investment of Escrow Assets. In accordance with
the Paying Agent Agreement, the Agent shall report to Xxxxxx UK and, prior
to the Effective Time, ITG, as of the end of each fiscal quarter, all
income earned from the investment of the Escrow Assets. The Committee shall
direct the Agent to pay from the Escrow Assets any taxes payable by ITG,
Xxxxxx, Xxxxxx UK or any of their affiliates on income earned from the
investment of Escrow Assets and any indemnification payments pursuant to
this Section 6.02. ITG and its affiliates shall be entitled to, and prior
to the Effective Time Xxxxxx and Xxxxxx UK shall, deduct from any
Recoveries the indemnification payments pursuant to this Section 6.02 prior
to deposit into the Escrow Account.
ARTICLE VII
TERMINATION, DELIVERY AND DISTRIBUTION
SECTION 7.01. Termination of Merger Agreement. In the event that
the Merger Agreement is terminated under Section 7.1 thereof prior to the
Effective Time, the Committee shall in accordance with the Paying Agent
Agreement direct the Agent to immediately pay all Escrow Expenses, if any,
that have been incurred and have not been paid, and deliver the remaining
Escrow Assets, to Xxxxxx UK, and this Agreement and the Escrow shall
terminate.
SECTION 7.02. Delivery of Escrow Assets to Xxxxxx UK; Termination
of the Escrow. Following the earliest of (i) the final settlement or other
final resolution of the Claims, (ii) a final determination by the Committee
to cease Pursuit of all Claims and (iii) the fourth anniversary of the
Effective Time (which date shall be extended in the event of any
outstanding claims of indemnification or reimbursement under Section 3.09,
5.01, 5.05 or 6.02 hereof), the Committee shall discharge all of the
Escrow's obligations, including by directing the Agent to pay the Escrow
Expenses and reserve for the payment of such costs and expenses of
distributing the Contingent Payments pursuant to the Paying Agent
Agreement. Following such discharge, the Committee shall direct the Agent
to liquidate all remaining Escrow Assets, if any, and deliver the proceeds
in cash to Xxxxxx UK. Following such delivery to Xxxxxx UK, the Escrow
shall terminate. At no time shall there be any distribution of Escrow
Assets to the Holders.
SECTION 7.03. Delivery of Contingent Payment to Agent;
Distribution to Holders. Promptly following the termination of the Escrow
pursuant to Section 7.02 hereof, ITG shall deliver to the Agent cash in an
amount equal to the lesser of (i) the amount of cash, if any, delivered to
Xxxxxx UK by the Agent pursuant to Section 7.02 hereof plus the amount of
any Recoveries which were not deposited in the Escrow Account net of any
amounts deducted therefrom pursuant to Section 6.02 hereof, and (ii)
$12,465,000 minus the Escrow Reduction Amount, if any. Pursuant to the
Paying Agent Agreement, the Agent shall distribute the amount so received
by it from ITG to the Holders, without interest, pro rata based on the
number of Contingent Payment Rights allocated to each such Holder on the
Register. At no time shall there be any distribution of the Contingent
Payment except pursuant to the preceding sentence and in compliance with
the Paying Agent Agreement. Following such distribution by the Agent, this
Agreement and the Paying Agent Agreement shall terminate. The distribution
of any Contingent Payment shall be in compliance with applicable laws.
SECTION 7.04. Pre-Closing Recoveries. Notwithstanding anything to
the contrary in the third sentence of Section 7.03 hereof, if any
Recoveries are received prior to the Effective Time, the Committee shall be
entitled to direct the Agent to withdraw from the Escrow Account (i) the
amount of such Recoveries less Escrow Expenses incurred prior to the
Effective Time plus (ii) such portion of the Initial Funding as the
Committee determines (provided that in no event shall such amount be in
excess of the amount that would leave $500,000 in the Escrow Account prior
to the Effective Time) (the sum of clauses (i) and (ii), the "Escrow
Reduction Amount"), and deliver the Escrow Reduction Amount in cash to
Xxxxxx UK prior to the Effective Time. An amount equal to the Escrow
Reduction Amount, if any, shall be delivered by ITG as part of the Cash
Merger Consideration.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered personally, or by telecopy upon confirmation
of receipt, (b) on the first business day following the date of dispatch if
delivered by a nationally recognized next-day courier service, or (c) on
the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid.
All notices hereunder shall be delivered as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to
receive such notice.
(a) if to ITG or to Xxxxxx or Xxxxxx UK after the Effective Time,
to:
Investment Technology Group, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Xxxxxx or Xxxxxx UK prior to the Effective Time, to:
Xxxxxx Group Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(c) if to the Committee or any Member, to it, him or her:
c/x Xxxxxx Group Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(d) if to the Holders, then to them at their respective addresses
set forth in the Register.
SECTION 8.02. Counterparts. This Agreement may be executed in
counterparts, each of which shall be considered one and the same agreement
and shall become effective when both counterparts have been signed by each
of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
SECTION 8.03. Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Paying Agent Agreement (a) constitute the entire
agreement and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof and (b) are not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
SECTION 8.04. Creditors of Xxxxxx UK. The Escrow Assets shall be
subject to the claims of the creditors of Xxxxxx UK.
SECTION 8.05. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 8.06. Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.
SECTION 8.07. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
successors and assigns.
SECTION 8.08. Headings. Sections, subheadings and other headings
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement.
SECTION 8.09. Amendment and Modification. This Agreement may be
amended or modified only by a subsequent writing signed by each of the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first above written.
XXXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman and CEO
XXXXXX & COMPANY LIMITED
By: /s/ Xxxx X. Xxxxxx
_______________________________
Name: Xxxx X. Xxxxxx
Title: Director
INVESTMENT TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx Xx.
_______________________________
Name: Xxxxxxx X. Xxxxxxx Xx.
Title: Chairman
MEMBERS OF THE CONTINGENT PAYMENT
RIGHTS COMMITTEE:
/s/ Xxxxxxx X. Xxxxxxxxxx
___________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
/s/ Xxxx X. Xxxxxx
___________________________________
Name: Xxxx X. Xxxxxx
