ESCROW AGREEMENT
UNDER
JACO ELECTRONICS, INC.
RESTRICTED STOCK PLAN
ESCROW Agreement dated March 27th, 1998, by and between Jaco
Electronics, Inc. having offices at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
(the "Company"), , (the "Participant") and Xxxxxxxx Xxxxx Singer & Xxxxxxxxx
having offices at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 as escrow agent (the
"Escrow Agent").
RECITALS:
WHEREAS, the Company has adopted the Jaco Electronics, Inc. Restricted
Stock Plan ("Plan") under which eligible employees selected by the Board of
Directors (the "Board") of the Company may purchase certain stock of the
Company, subject to those restrictions as determined by the Board; and
WHEREAS, the Participant is an employee of the Company and has been
selected by the Board of Directors of the Company to purchase Restricted Stock
in accordance with the Plan; and
WHEREAS, the defined and capitalized terms of this agreement have the
same meaning and definition as in the Plan, unless otherwise provided herein;
and
WHEREAS, the Board has required Participant to deposit the Restricted
Stock purchased by Participant, in escrow, in order to insure compliance with
the terms of the Plan and the Stock Purchase Agreement executed by the
Participant contemporaneously herewith; and
WHEREAS, the parties desire to specifically set forth the terms and
conditions under which the Restricted Stock has been delivered by the Company to
the Participant and thereupon delivered by the Participant to the Escrow Agent
and under which such Restricted Stock will either be redelivered to the
Participant or delivered to the Company.
NOW, THEREFORE, the Company, the Participant and the Escrow Agent agree
as follows:
1. Receipt by the Participant. The Participant acknowledges receipt
from the Company of _______________ common shares ("Restricted Stock")
registered in the name of the Participant and delivered by the Company to the
Participant pursuant to the terms of the Plan and the Stock Purchase Agreement.
2. Receipt by the Escrow Agent. The Escrow Agent acknowledges receipt
from the Participant of the Restricted Stock, registered in the name of the
Participant, and acknowledges receipt of stock powers executed in blank by the
Participant covering all of the Restricted Stock.
3. Delivery by the Escrow Agent.
a. Upon receipt by the Escrow Agent of a written notice from
the Company that the Participant has fully satisfied the terms and provisions of
the Plan and/or the Stock Purchase Agreement including, without limitation, the
restrictions and representations incorporated in the Stock Purchase Agreement,
or that the Participant is otherwise entitled to receive some or all of the
Restricted Stock, the Escrow Agent shall deliver some or all of the Restricted
Stock, as so directed, to the Participant. The Company shall simultaneously
provide a copy of such notice to the Participant.
b. Upon receipt by the Escrow Agent of a written notice from
the Company together with an affidavit of an officer of the Company stating that
the Participant has not fully satisfied the terms and provisions of the Plan
and/or the Stock Purchase Agreement including, without limitation, the
restrictions and representations incorporated in the Stock Purchase Agreement,
the Escrow Agent shall deliver the Restricted Stock to the Company. The Company
shall simultaneously provide a copy of such notice to the Participant. Upon
receipt of the Restricted Stock, the Company shall make any required payment to
Participant in respect of the Repurchase Price.
c. In acting pursuant to the provisions of either
subparagraphs a. or b. above, the Escrow Agent shall be entitled to rely fully
upon the notice and/or the notice and affidavit received by it and the Escrow
Agent shall not be required under any circumstances to make any further or
additional inquiries or investigations before acting in accordance with the
provisions of this paragraph.
d. Upon acting in accordance with the provisions of this
paragraph, the Escrow Agent shall be automatically relieved and released of all
liability hereunder, except for its fraud or willful misconduct.
4. Voting Rights; Dividends; Capital Changes. The Participant, in
accordance with the Plan and the Stock Purchase Agreement, shall have the full
power to vote all of the Restricted Stock held by the Escrow Agent from time to
time and shall be entitled to receive all dividends declared upon any of the
Restricted Stock held by the Escrow Agent from time to time. All new, additional
or different stock or securities of the Company or some other corporation, which
the Participant may receive or become entitled to receive with respect to such
Restricted Stock by virtue of a stock split or stock dividend or any other
change in the corporate or capital structure of the Company, shall be subject to
all of the terms and conditions of this Escrow Agreement.
5. Indemnification. The Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein. The Escrow Agent shall
have no liability for acting in accordance with the provisions of Paragraph 3 or
otherwise in accordance with the other terms and provisions of this Agreement
and, therefore, the Company and the Participant shall indemnify and hold
harmless the Escrow Agent against any liability, loss, cost or expense
(including reasonable counsel fees and disbursements) arising out of any act or
omission to act in connection with this Agreement, unless arising out of the
Escrow Agent's fraud or willful misconduct. The Escrow Agent shall have no
responsibility as to the validity or value of the Restricted Stock held in
escrow hereunder. Furthermore, the Escrow Agent shall have no duty as to the
collection or protection of the Restricted Stock (or any additional securities
issued by the Company which may be distributed on or with respect to the
Restricted Stock) or income thereon, nor as to the preservation of any rights
pertaining thereto, beyond the safe custody of any such Restricted Stock
actually in its possession. The Escrow Agent may rely on any certificate,
statement, request, consent, agreement, instrument or other document which it
reasonably believes to be genuine and to have been signed or presented by a
person or entity. 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 Restricted Stock held in pledge hereunder which, in
its reasonable opinion, are in conflict with any of the provisions of this
Agreement or any instructions received from the other party to this Agreement,
the Escrow Agent shall be entitled: (i) to refrain from taking any action other
than to keep the Restricted Stock until such time as there has been a final
determination of the rights of the Company and the Participant with respect to
the Restricted Stock as hereinafter provided or (ii) to deposit the Restricted
Stock held hereunder into court pursuant to relevant statutes and commence an
action in interpleader in order to obtain a judicial determination as to the
party legally entitled to receive the Restricted Stock. In the event of such an
interpleader action, or any action against or involving the Escrow Agent with
respect to the escrow, the Escrow Agent's costs and expenses, including
reasonable attorney's fees (either paid to retained attorneys or representing
the fair value of legal services rendered by the Escrow Agent to itself) with
regard thereto, shall be reimbursed to the Escrow Agent by the party determined
by a court of competent jurisdiction not to be entitled to the Restricted Stock.
The Escrow Agent shall have a lien on the escrowed property to the extent of
such costs and expenses.
6. Binding Effect. This Escrow Agreement shall be binding upon and
inure to the benefit of the Company, the Participant and the Escrow Agent and
their respective heirs, legal representatives, successors and assigns.
7. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
8. Waiver. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by the Board; provided that such
waiver shall be effective only if in writing and confirmed by a writing executed
and delivered with the same formality as this Agreement.
9. Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or three (3)
business days following deposit in the United States Post Office, by registered
or certified mail, postage prepaid, addressed to the other parties at the
addresses shown above, or at such other address or addresses as any party shall
designate to the other in accordance with this Paragraph 9.
10. Pronouns. Wherever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine, or neuter
forms. The singular form of nouns and pronouns shall include the plural, and the
plural form of nouns and pronouns shall include the singular.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings
relating to the subject matter of this Agreement.
12. Amendment. This Agreement may be amended or modified only by a
written instrument executed with the same formality as this Agreement.
13. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same instrument, and
shall become effective when one or more counterparts have been signed by each or
the parties and delivered to all the other parties.
14. Headings. The headings contained in this Agreement are for
reference only and shall not under any circumstances be deemed to affect the
meaning or interpretation of this Agreement.
15. Costs of Escrow Agent. The Company shall pay the Escrow Agent
reasonable compensation for its services and it shall receive reimbursement for
its out of pocket expenses, including reasonable counsel fees, that it may incur
as a result of its acting as Escrow Agent hereunder or in connection with the
performance of its duties hereunder.
16. Resignation or Removal of Escrow Agent. The Escrow Agent may at any
time resign by giving ten (10) days' written notice to the Company and the
Participant. The Board may at any time remove the Escrow Agent by giving ten
(10) days' written notice to the Escrow Agent. Upon such resignation or removal,
a successor Escrow Agent shall be appointed by the Board and thereupon the
resignation or removal of the Escrow Agent shall become effective upon the
Escrow Agent delivering the Restricted Stock in its possession to the successor
Escrow Agent and thereupon the Escrow Agent hereunder shall be automatically
relieved and released of all further liability hereunder. Simultaneously with
delivery of the Restricted Stock to the successor Escrow Agent, such successor
shall execute a counterpart of this Agreement and it shall thereupon be bound by
all of the terms and provisions hereof.
17. Recitals. The recitals are deemed a part of this Agreement.
18. Litigation. This Agreement shall be governed and interpreted in
accordance with the laws of the State of New York and, regardless of the order
in which the signatures of the parties are affixed, it shall be deemed executed
at the Company's address, as above. The parties consent to the jurisdiction and
venue of any state or federal court located within the State of New York, the
County of New York or the Southern District of the U.S. District Court and agree
that all actions or proceedings arising, directly or indirectly, from this
Agreement shall be litigated only in courts having such situs and in any such
action or proceeding, the parties waive trial by Jury and as between the Company
and the Participant only, the successful party shall be entitled to recover
reasonable counsel fees and the expenses of such litigation; and the Escrow
Agent's rights as to counsel fees and expenses of the litigation shall be
governed by Paragraph 5 above. In any such action or legal proceeding, the court
shall apply such rule of law of the State of New York including any conflicts of
law rule, which shall have the effect of sustaining the validity of all the
terms and provisions of this Agreement.
Company: JACO ELECTRONICS, INC.
ATTEST:
By:
Participant:
ATTEST:
By:
Escrow
ATTEST: Agent:
By:
