Exhibit 2iB3
ATTACHMENT B-1
DEPOSIT AGREEMENT
AGREEMENT made by and among Optelecom, Inc., a Delaware corporation
("Optelecom"), Paragon Audio Visual Limited, a United Kingdom company
("Paragon"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ (collectively, the "Browns") and Modeledge Limited, a United Kingdom
company ("Modeledge").
WHEREAS, Optelecom, Paragon, the Browns and Modeledge have entered into
an Agreement of even date herewith providing for a reorganization involving the
Company and Paragon (the "Master Agreement");
WHEREAS, pursuant to Section 1.04 of the Master Agreement, the parties
have agreed to deposit the Retirement Amount as defined therein in escrow
pending a determination of certain legal and tax issues;
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties agree as follows:
1. Retirement Amount. The Retirement Amount shall be US$272,000.
2. Deposit of Retirement Amount. At the closing under the Master
Agreement, Optelecom shall deposit the Retirement Amount with Duane, Morris &
Heckscher LLP as escrow agent ("Escrow Agent") by wire transfer into the
following non-interest bearing escrow account:
ABA: ▇▇▇▇▇▇▇▇▇
Bank Name: First Union National Bank
Account Name: Duane, Morris & Heckscher LLP Iolta Account
Account No.: 2000073771872
Attention: ▇▇▇▇▇ ▇. Bullit
3. Disbursements from Escrow. The Escrow Agent shall at all times have
authority to pay over and disburse the Retirement Amount in accordance with
joint written instructions executed by Optelecom and by either ▇▇▇▇▇ ▇. ▇▇▇▇▇ or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Written Instructions").
4. Disbursement Event. Such Written Instructions shall be given upon
receipt by Optelecom of confirmation from the Scottish Life Assurance Society or
other insurance company serving as a provider that the retirement benefit fund
has Inland Revenue approval for deductibility from United Kingdom tax; provided
that the Browns shall indemnify Paragon and hold it harmless with respect to any
tax Paragon may incur with respect to the Retirement Amount.
5. Terms of Escrow. For purposes of establishing the escrow, the
parties intend that Optelecom and ▇▇▇▇▇ ▇. ▇▇▇▇▇ will deliver a letter to the
Escrow Agent in substantially the form attached hereto as Exhibit A.
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IN WITNESS WHEREOF, the Browns have executed this Agreement, and
Optelecom, Paragon and Modeledge have caused this Agreement to be executed by
their respective duly authorized officers, as of December 12, 1997.
OPTELECOM, INC. PARAGON AUDIO VISUAL LIMITED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
President Chairman
MODELEDGE LIMITED
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT A
December 12, 1997
Duane, Morris & Heckscher LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Reorganization Involving Optelecom, Inc.,
Paragon Audio Visual Limited, et al.
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Dear Sirs:
In connection with a reorganization involving Optelecom, Inc., a
Delaware Company (the "Company"), Paragon Audio Visual Limited, a United Kingdom
Company ("Paragon") and ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇ and Modeledge Limited, a United Kingdom company, and pursuant to
Section 1.04(b) of the Master Agreement by and among such parties dated December
12, 1997 and relating to such reorganization:
(1) The Company hereby deposits with you, by wire transfer to the
Duane, Morris & Heckscher Iolta Account, Account No. 2000073771872, First Union
National Bank (ABA ▇▇▇▇▇▇▇▇▇), the amount of US$272,000 (the "Deposit Amount"),
to be held in such non-interest bearing account until receipt of instructions as
provided below;
(2) You are authorized and directed to disburse the Deposit Amount in
accordance with and promptly following receipt of joint written instructions (by
facsimile or otherwise) from the Company and either ▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇; and
(3) In furtherance and not in limitation of any other provision of law
which would limit your responsibilities as escrow agent, you shall be deemed to
have and shall have the benefit of provisions identical to those set forth in
Section 4.01 of the Escrow Agreement of even date herewith by and among the
Company, Paragon, the Browns and Modeledge.
Very truly yours,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive
Officer, Optelecom, Inc.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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