1
Exhibit 99(c)(5)
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into
as of December 21, 1999 by and among XXX Xxxxxxxxxxx, a Massachusetts
corporation ("Parent"), Eagle Merger Corp., a Delaware corporation and a wholly
owned subsidiary of Parent (the "Purchaser"),Computer Concepts Corp., a Delaware
corporation (the "Major Shareholder"), and State Street Bank and Trust Company,
Inc., a Massachusetts trust company, as escrow agent (the "Escrow Agent").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed in Section 1 hereof.
WHEREAS, Parent, Purchaser and Softworks, Inc., a Delaware
corporation (the "Company"), are parties to an Agreement and Plan of Merger
dated as of December 21, 1999 (the "Merger Agreement") which provides that,
among other things, upon the terms and subject to the conditions thereof,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (in such capacity, the
"Surviving Entity"); and
WHEREAS, Parent, Purchaser, the Major Shareholder and Xxxxx
Xxxxxxxxx, Xxxxxx Xxxxxx and Xxxxxxx Xxxx, as trustees (the "Trustees") under
the Voting Trust Agreement, are parties to a Stock Tender Agreement dated as of
December 21, 1999 (the "Stock Tender Agreement") which provides that, among
other things, the Major Shareholder and the Trustees will take such actions as
may be necessary to tender the Shares held by the Major Shareholder pursuant to
the Offer, grant Parent an option to purchase such Shares under certain
circumstances and grant Purchaser a proxy with respect to the voting of such
Shares, all upon the terms and subject to the conditions set forth in the Stock
Tender Agreement; and
WHEREAS, as a condition and inducement to Parent and Purchaser
entering into the Merger Agreement, Parent and Purchaser have requested that the
Major Shareholder agree, and the Major Shareholder has agreed, to provide
indemnification to Parent, Purchaser and the Surviving Entity, as set forth in
the Indemnification Agreement dated as of the date hereof by and among Parent,
Purchaser and the Major Shareholder (the "Indemnification Agreement"); and
WHEREAS, Parent, Purchaser and the Major Shareholder desire
that a portion of the consideration received by the Major Shareholder in
consideration of the purchase of the Shares held by the Major Shareholder
pursuant to the Offer be deposited into escrow, upon the terms and subject to
the conditions set forth below in order to secure the indemnification
obligations set forth in the Indemnification Agreement.
2
NOW, THEREFORE, in consideration of the foregoing and the
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Parent, Purchaser, the
Major Shareholder and the Escrow Agent hereby agree as follows:
1. Certain Definitions. For purposes of this Escrow Agreement,
except as otherwise expressly provided or unless the context clearly requires
otherwise:
(a) "Closing" shall mean the consummation of the
purchase by Purchaser of Shares in the Offer.
(b) "Escrow Amount" shall mean $10 million.
(c) "Escrow Release Date" shall mean close of
business (Eastern United States time) on the date 12 months after the date upon
which the Closing occurred.
(d) "Interested Parties" shall mean Parent,
Purchaser, the Surviving Entity and their respective Subsidiaries and officers,
directors, employees and agents.
(e) "Loss" or "Losses" shall mean any loss, liability
(including any liability for Taxes), damage, deficiency, fine, penalty, cost and
expense (including reasonable expenses of investigation, amounts paid in
settlement, interest, court costs, reasonable fees and expenses of attorneys and
accountants and other costs of litigation).
(f) "Offer" shall mean the cash tender offer to be
made by Purchaser pursuant to Section 1.1 of the Merger Agreement to acquire any
and all issued and outstanding Shares at $10 per Share net to the seller in
cash, or such increased amount, if any, as the Purchaser may offer to pay as
contemplated by Section 1.1(a) and Section 5.5(b) of the Merger Agreement.
(g) "Shares" shall mean the shares of common stock,
par value $.001 per share, of the Company.
(h) "Subsidiary" shall mean, with respect to any
party, any corporation or other organization, whether incorporated or
unincorporated, of which (a) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
Board of Directors or others per-
2
3
forming similar functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or (b) such party or any other Subsidiary of such
party is a general partner (excluding any such partnership where such party or
any Subsidiary of such party does not have a majority of the voting interest in
such partnership).
(i) "Tax" or "Taxes" shall mean all taxes, charges,
fees, duties, levies, tariffs, imposts, penalties or other assessments of any
kind imposed by any federal, state, local or foreign governmental authority,
including, but not limited to, income, gross receipts, excise, profits, ad
valorem, net worth, value added, service, special assessments, workers'
compensation, utility, severance, production, excise, stamp, occupation,
premiums, windfall profits, real or personal property, sales, gain, use,
license, custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum estimated, and other taxes, and shall
include interest, penalties or additions attributable thereto; provided that
"Tax" or "Taxes" as used herein shall not include (i) any amounts arising as a
result of the filing of any amended tax return filed by the Company unless such
amendment is required by applicable law, rule or regulation or (ii) as a result
of the negligence of Parent or the Purchaser.
(j) "Voting Trust Agreement" shall mean the Voting
Trust Agreement, dated as of August 3, 1998, between the Company, the Major
Share holder and the Trustees.
2. Escrow Funds.
(a) At the Closing, the Major Shareholder shall
deposit the Escrow Amount with the Escrow Agent by wire transfer of immediately
available funds. In satisfaction of the obligation in the preceding sentence,
the Major Share holder hereby irrevocably authorizes the Purchaser to deliver to
the Escrow Agent a portion of the proceeds payable to the Major Shareholder from
the purchase of the Shares of the Major Shareholder in the Offer equal to the
Escrow Amount. The Escrow Agent agrees to hold and administer the Escrow Amount,
together with any investment income earned thereon pursuant to the terms hereof
(such deposit amount together with such income, if any, collectively, the
"Escrow Funds") subject to the terms of this Escrow Agreement.
3. Investment of Escrow Funds; Interest
(a) The Escrow Agent shall invest the Escrow Funds
at, and pursuant to, the written direction of Parent and Major Shareholder, or
if no such
3
4
direction shall be given, to the extent possible, in United States Treasury
bills having a remaining maturity of 90 days or less and repurchase obligations
secured by such United States Treasury bills, with any remainder being deposited
and maintained in a money market deposit account with the Escrow Agent until
disbursement of all of the Escrow Funds in accordance with this Escrow
Agreement. The Escrow Agent is authorized to liquidate in accordance with its
customary procedures any portion of the Escrow Funds consisting of investments
to provide for payments required to be made therefrom under this Escrow
Agreement. Any income earned or accrued with respect to the Escrow Amount shall
be taxable solely to the Major Shareholder, and the parties shall follow the
procedures set forth in Section 3(b) hereof with respect thereto. The Escrow
Agent shall have no liability for any investment losses, including any losses on
any investment required to be liquidated prior to maturity in order to make a
payment required hereunder.
(b) All interest or other amounts earned on the
Escrow Amount shall be added to the, and shall then be considered, Escrow Funds
and shall be considered the currently reportable income, for all tax purposes,
of the Major Shareholder.
(c) The Escrow Agent shall provide the Major Share
holder with such information as may be required by the Major Shareholder in
connection with the filings and notices to be made by the Major Shareholder.
4. Claims on Escrow Funds.
(a) At any time on or prior to the Escrow Release
Date (as defined in Section 1(c)), Parent, Purchaser or the Surviving Entity
("the Indemnified Party") may assert an indemnification claim pursuant to the
Indemnification Agreement (an "Indemnification Claim"), by sending written
notice to the Escrow Agent, with a copy to the Major Shareholder ("Notice of
Claim"). The Notice of Claim shall state the basis for the Indemnification Claim
and the estimated amount claimed (the "Claimed Amount"). Upon receipt, on or
before the Escrow Release Date, by the Escrow Agent and the Major Shareholder,
of a Notice of Claim from an Indemnified Party that such Indemnified Party is
asserting an Indemnification Claim, the Escrow Agent shall retain, set aside and
continue to hold the Escrow Funds, or such lesser portion of the Escrow Funds
having a value equal to the Claimed Amount, in escrow hereunder subject to the
further provisions hereof.
(b) Within 15 Business Days (as hereinafter defined)
after the receipt of a Notice of Claim by the Escrow Agent, the Major
Shareholder shall provide to Parent and the Surviving Entity, with a copy to the
Escrow Agent, a
4
5
written response (a "Response Notice") in which the Major Shareholder shall: (i)
agree that the full Claimed Amount specified in such Notice of Claim shall be
released to Parent from the Escrow Funds, (ii) agree that part, but not all, of
the Claimed Amount specified in such Notice of Claim (the "Agreed Amount") may
be released to Parent from the Escrow Funds and contest the release to Parent of
the balance of such Claimed Amount or (iii) contest the release to Parent of any
part of the Claimed Amount specified in such Notice of Claim from the Escrow
Funds. If no Response Notice is received by the Escrow Agent by 5:00 p.m.
(Eastern United States time) on the last Business Day of such 15 Business Day
period, the Major Shareholder shall be deemed to have agreed that all of the
Claimed Amount shall be released to Parent from the Escrow Funds. As used
herein, "Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(c) If the Major Shareholder in any Response Notice
agrees (or is deemed to have agreed) that the entire Claimed Amount specified in
such Notice of Claim may be released to Parent from the Escrow Funds, the Escrow
Agent shall promptly thereafter pay to Parent the Escrow Funds having an
aggregate value equal to the Claimed Amount (or such lesser value of Escrow
Funds as are held in escrow hereunder at such time).
(d) If the Major Shareholder in any Response Notice
agrees that part, but not all, of the Claimed Amount specified in the related
Notice of Claim may be released to Parent from the Escrow Funds, the Escrow
Agent shall promptly thereafter, following the receipt of the Response Notice by
the Escrow Agent, pay to Parent the Escrow Funds having an aggregate value equal
to the Agreed Amount (or such lesser amount of the Escrow Funds as are held in
escrow hereunder at such time).
(e) If the Major Shareholder in any Response Notice
contests the release of all or part of the Claimed Amount specified in the
related Notice of Claim (the "Contested Amount"), the matter shall be resolved
or settled either by mutual agreement of Parent and the Major Shareholder, by
arbitration if Parent and the Major Shareholder mutually agree thereto or by a
final order, decree or judgment of a court of competent jurisdiction in the
United States of America (which order, decree or judgment shall have become
final by expiration of the applicable appeal period without appeal having been
perfected or by definitive resolution of the dispute by the highest court to
which an appeal may be made), all costs and expenses of which shall be borne by
the losing party in any such proceeding (with costs and expenses to be assessed
and assigned by the arbitrator in the
5
6
event of an arbitration in which there is no losing party). Notwithstanding any
provision of this Escrow Agreement or the Merger Agreement to the contrary,
after delivery of any Response Notice which contests the Claimed Amount
specified in the related Notice of Claim, the Escrow Agent, pursuant to this
Section 4, shall continue to hold Escrow Funds having a value equal to the
Contested Amount (up to the amount of Escrow Funds then held in escrow
hereunder), notwithstanding the occurrence of the Escrow Release Date, until (i)
receipt by the Escrow Agent of a copy of a settlement agreement executed by
Parent and the Major Shareholder setting forth written instructions to the
Escrow Agent as to the release of the Escrow Funds, if any, that shall be made
with respect to the Contested Amount, (ii) receipt by the Escrow Agent of a
final order, decree or judgment of a court of competent jurisdiction in the
United States of America as described above or (iii) receipt by the Escrow Agent
of a copy of a final arbitration decision, setting forth written instructions
to the Escrow Agent as to the release of the Escrow Funds, if any, that shall be
made with respect to the Contested Amount. Upon the mutual direction of the
parties or upon receipt of such order, decree, judgment or decision, the Escrow
Agent shall promptly thereafter release those Escrow Funds from escrow (to the
extent that any portion of the Escrow Funds is then held in escrow hereunder) in
accordance with such agreement, order, decree, judgment or instructions. The
Escrow Agent shall be under no duty whatsoever to institute or defend any
proceedings which might in its judgment involve expense or liability unless it
shall have been furnished with indemnity from Parent and the Major Shareholder
acceptable to it. The Escrow Agent shall have the right to interplead the
parties to any dispute in any court of competent jurisdiction and request that
such court determine the respective rights of the parties with respect to this
Escrow Agreement, and upon doing so, the Escrow Agent shall be released from any
obligations or liability as a consequence of such claims or demands.
(f) Within three Business Days after the Escrow
Release Date, the Escrow Agent shall release to the Major Shareholder an amount
equal to the amount, if any, by which the Escrow Funds then exceeds the
aggregate Claimed Amount in respect of all Indemnification Claims theretofore
asserted by the Indemnified Party and not theretofore finally resolved,
including any Contested Claims ("Outstanding Claims"). Under no circumstances
should the terms of this Escrow Agreement require the Escrow Agent to release or
distribute escrowed funds or property (or take similar action, such as making a
draw on an underlying letter of credit) sooner than two Business Days after the
Escrow Agent has received the requisite notices or paperwork in good form, or
passage of the applicable claims period or release date, as the case may be.
5. Duties of Escrow Agent.
6
7
(a) The Escrow Agent shall not be under any duty to
give the Escrow Funds held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any funds
held hereunder except as directed in this Escrow Agreement.
(b) The Escrow Agent shall not be liable to anyone
for any action taken or omitted to be taken by it hereunder, except for its own
gross negligence or willful misconduct, and except with respect to claims based
upon such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the Interested Parties hereto shall jointly and
severally indemnify and hold harmless the Escrow Agent from and against any and
all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of and in connection
with this Escrow Agreement. Without limiting the foregoing, the Escrow Agent
shall in no event be liable in connection with its investment or reinvestment of
the Escrow Funds held by it hereunder in good faith, in accordance with the
terms hereof, including without limitation any liability for any delays (not
resulting from its gross negligence or willful misconduct) in the investment or
reinvestment of the Escrow Funds, or any loss of interest incident to any such
delays. The foregoing indemnification and agreement to hold harmless shall
survive the termination of this Escrow Agreement.
(c) The Escrow Agent shall be entitled to rely upon
any order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder reasonably believed by the Escrow Agent to be
authentic, correct and properly and validly served without being required to
determine the authenticity or the correctness of any fact stated therein or the
propriety or validity of the service thereof. The Escrow Agent may act in
reliance upon any instrument or signature reasonably believed by it to be
genuine and may assume that the person purporting to give notice or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(d) The Escrow Agent may act pursuant to the advice
of counsel with respect to any matter relating to this Escrow Agreement and
shall not be liable for any action taken or omitted by it in accordance with
such advice, except that the Escrow Agent shall be liable for any actions or
omissions which result from the Escrow Agent's gross negligence or willful
misconduct.
Each Interested Party and the Major Shareholder acknowledges
and agrees that the Escrow Agent (i) shall not be responsible for any of the
agreements referred to or described herein (including without limitation the
Indemnification Agreement) or for determining or compelling compliance
therewith, and shall not
7
8
otherwise be bound thereby, and (ii) shall be obligated only for the performance
of such duties as are expressly and specifically set forth in this Escrow
Agreement on its part to be performed, each of which are ministerial (and shall
not be construed to be fiduciary) in nature, and no implied duties or
obligations of any kind shall be read into this Escrow Agreement against or on
the part of the Escrow Agent.
In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damage or loss (including but not limited to
lost profits) whatsoever, even if the Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action.
The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry depository,
securities intermediary or other subescrow agent employed by the Escrow Agent
than any such book-entry depository, securities intermediary or other subescrow
agent has to the Escrow Agent, except to the extent that such action or omission
of any book-entry depository, negligence, bad faith or wilful misconduct in
breach of this Escrow Agreement.
(e) The Escrow Agent does not have any interest in
the Escrow Funds deposited hereunder other than as escrow agent hereunder. Any
payments from or release of the Escrow Funds shall be subject to withholding if
required under any applicable law.
(f) The Escrow Agent may at any time resign as Escrow
Agent hereunder by giving thirty days' prior written notice of resignation to
Parent and Major Shareholder. Prior to the effective date of the resignation as
specified in such notice, Parent will issue to the Escrow Agent a written
instruction authorizing redelivery of the Escrow Funds to a bank or trust
company that it selects as successor to the Escrow Agent hereunder subject to
the consent of Major Shareholder (which consent shall not be unreasonably
withheld or delayed). If, however, Parent shall fail to name such a successor
escrow agent within twenty days after the notice of resignation from the Escrow
Agent, the Major Shareholder shall be entitled to name such successor escrow
agent. If no successor escrow agent is named by Parent or Major Shareholder, the
Escrow Agent may apply to a court of competent jurisdiction for appointment of
a successor escrow agent.
(g) In the event of any disagreement between the
Major Shareholder and Parent relating to this Escrow Agreement, including
without limitation with respect to the disposition of the Escrow Funds, or in
the event that the Escrow Agent is in doubt as to what action it should take
hereunder, the Escrow
8
9
Agent shall be entitled to retain the Escrow Funds until the Escrow Agent shall
have received (i) a copy of the final arbitration decision directing in writing
delivery of the Escrow Funds, (ii) a written agreement executed by the Major
Shareholder and Parent, directing delivery of the Escrow Funds or (iii) a final
order, decree or judgment of a court of competent jurisdiction in the United
States of America directing delivery of the Escrow Funds, and in any such event
the Escrow Agent shall disburse the Escrow Funds in accordance with such
decision, agreement, order, decree or judgment.
(h) Each of the Interested Parties agrees, jointly
and severally (i) to pay or reimburse the Escrow Agent for its attorney's fees
and expenses incurred in connection with the preparation of this Escrow
Agreement and (ii) to pay the Escrow Agent's compensation for its normal
services hereunder in accordance with the attached fee schedule, which may be
subject to change hereafter on an annual basis.
Each of the Interested Parties agrees, jointly and severally,
to reimburse the Escrow Agent on demand for all costs and expenses incurred in
connection with the administration of this Escrow Agreement or the escrow
created hereby or the performance or observance of its duties hereunder which
are in excess of its compensation for normal services hereunder, including
without limitation, payment of any legal fees and expenses incurred by the
Escrow Agent in connection with resolution of any claim by any party hereunder.
6. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
sent by facsimile (if confirmed) or mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, as specified below):
(a) if to Parent, Purchaser or the Surviving Entity, to:
XXX Xxxxxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Vice President, Corporate Development
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
9
10
XXX Xxxxxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Office of the General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) If to the Major Shareholder:
Computer Concepts Corp.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxxXxxxxx, Xx., President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) If to the Escrow Agent:
State Street Bank and Trust Company, Inc.
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxx, 0xx Xxxxx
Telephone No.: (000) 000-0000
10
11
Facsimile No.: (000) 000-0000
The address of a party for the purposes of this Section 6 may be changed by
giving written notice to the other parties hereto of such change in the manner
provided herein for giving notice. Unless and until such written notice is
received, the addresses as provided herein shall be deemed to continue in effect
for all purposes hereunder.
7. Wiring Instructions. Any funds to be paid to or by the
Escrow Agent hereunder shall be sent by wire transfer pursuant to the following
instructions (or by such method of payment and pursuant to such instruction as
may have been given in advance and in writing to or by the Escrow Agent, as the
case may be, in accordance with Section 6 hereof):
If to Parent/Purchaser/Surviving Entity:
Bank: BankBoston Corporation
ABA#: 011 000 0390
A/C#: 270-42122
Attn: Xxx Xxxxxxxx
Ref: EMC/Softworks Escrow
If to Major Shareholder:
Bank: European American Bank
ABA#: 000000000
A/C#: 000-00000-0
Attn: Computer Concepts Money Market
Ref: EMC/Softworks Escrow
If to the Escrow Agent:
Bank: State Street Bank and Trust Company, Inc.
ABA#: 0110 0002 8
A/C#: 0000-000-0
Attn: Corporate Trust Department
Ref: EMC/Softworks Escrow
8. Entire Agreement; Binding Effect. This Escrow Agreement and
the agreements, documents and other instruments referred to herein (a) consti
tute the entire agreement, and supersede all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by any party (by operation
of law or otherwise) without the prior written consent of the other parties.
11
12
9. Applicable Law. This Escrow Agreement shall be governed by
and be construed in accordance with the laws of the State of Delaware, without
giving effect to the principles thereof relating to conflicts of law. The
parties hereby consent to the jurisdiction of Massachusetts state and federal
courts over all matters relating to this Escrow Agreement.
10. Parties in Interest. This Escrow Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
respective successors and permitted assigns, and nothing in this Escrow
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this Escrow
Agreement.
11. Counterparts. This Escrow Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be deemed an original, but all
of which together shall constitute one and the same instrument.
12. Interpretation. The section and other headings contained
in this Escrow Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Escrow Agreement. Whenever the
words "include," "includes" or "including" are used in this Escrow Agreement,
they shall be deemed to be followed by the words "without limitation." Unless
otherwise indicated herein or the context otherwise requires, the masculine
pronoun shall include the feminine and neuter, and the singular shall include
the plural. The word "or" shall not be deemed exclusive.
13. Severability. In case any term, provision, covenant or
restriction of this Escrow Agreement is held to be invalid, illegal or
unenforceable by a competent court in any jurisdiction, the validity, legality
and enforceability of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or restriction in any other
jurisdiction, shall not in any way be affected or impaired thereby.
14. Amendment and Waiver. No amendment of any provision of
this Escrow Agreement shall in any event be effective, unless the same shall be
in writing and signed by the parties hereto. Any failure of any party to comply
with any obligation, agreement or condition hereunder may only be waived in
writing by the other party, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. No failure by any
party to take any action against any breach of this Escrow Agreement or default
by the other party shall constitute a
12
13
waiver of such party's right to enforce any provision hereof or to take any such
action.
15. Termination. This Escrow Agreement shall terminate upon
the Escrow Release Date, if no Indemnification Claim is outstanding, or if such
a claim is outstanding, the first date after the Escrow Release Date on which no
Indemnification Claim remains outstanding. Upon termination of the Escrow
Agreement, the Escrow Agent shall pay to the Major Shareholder, any amounts
remaining in the Escrow Funds.
16. Tax Related Terms.
(a) Tax Reporting. The Interested Parties agree that,
for tax reporting purposes, all interest or other income earned from the
investment of the Escrow Funds in any tax year shall (i) to the extent such
interest or other income is distributed by the Escrow Agent to any person or
entity pursuant to the terms of this Escrow Agreement during such tax year, be
allocated to such person or entity, and (ii) otherwise shall be allocated to the
Major Shareholder.
(b) Certification of Taxpayer Identification Number.
The Interested Parties hereto agree to provide the Escrow Agent with a certified
tax identification number by signing and returning a Form W-9 (or Form W-8, in
case of non-U.S. persons) to the Escrow Agent prior to the date on which any
income earned on the investment of the Escrow Funds is credited to the Escrow
Funds. The Interested Parties understand that, in the event their tax
identification numbers are not certified to the Escrow Agent, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Funds.
(c) Tax Indemnification. Each of the Interested
Parties agree, jointly and severally, (i) to assume any and all obligations
imposed now or hereafter by any applicable tax law with respect to any payment
or distribution of the Escrow Funds or performance of other activities under
this Escrow Agreement, (ii) to instruct the Escrow Agent in writing with respect
to the Escrow Agent's responsibility for withholding and other taxes,
assessments or other governmental charges, and to instruct the Escrow Agent with
respect to any certifications and governmental reporting that may be required
under any laws or regulations that may be applicable in connection with its
acting as Escrow Agent under this Escrow Agreement, and (iii) to indemnify and
hold the Escrow Agent harmless from any liability or obligation on account of
taxes, assessments, additions for late payment, interest, penalties, expenses
and other governmental charges that may be assessed or asserted against the
13
14
Escrow Agent in connection with or relating to any payment made or other
activities performed under the terms of this Escrow Agreement, including without
limitation any liability for the withholding or deduction of (or the failure to
withhold or deduct) the same, in connection with this Escrow Agreement,
including costs and expense (including reasonable legal fees and expenses),
interest and penalties. The foregoing indemnification and agreement to hold
harmless shall survive the termination of this Escrow Agreement.
17. Force Majeure.
The Escrow Agent shall not be responsible for delays or
failures in performance resulting from acts beyond its control. Such acts shall
include but not be limited to acts of God, strikes, lockouts, riots, acts of
war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
18. Reproduction of Documents. This Escrow Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, and (b) certificates and
other information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
14
15
IN WITNESS WHEREOF, the parties have executed and delivered
this Escrow Agreement as of the date first written above.
XXX XXXXXXXXXXX
By: /s/ Xxxxxxx X. Xxxx
---------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President,
Corporate Development
EAGLE MERGER CORP.
By: /s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
COMPUTER CONCEPTS CORP.
By: /s/ Xxxxxx XxxXxxxxx
----------------------
Name: Xxxxxx XxxXxxxxx
Title: Chairman
STATE STREET BANK AND
TRUST COMPANY, INC. AS ESCROW
By: /s/
----------------------
Name:
Title: Vice President
15
