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Exhibit 10.28
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of July 31, 1996 (the "Escrow
Agreement"), by and among ALLEGRO NEW MEDIA, INC., a Delaware corporation
("Allegro"), SERIF (EUROPE) LIMITED, an English Company with registered number
02117968 ("Serif"), THE PERSONS WHOSE SIGNATURES APPEAR ON THE SIGNATURE PAGE
HEREOF (individually, a "Stockholder" and collectively, the "Stockholders"),
being the owners of all the issued and outstanding capital stock of Serif, XXXX
XXXXX (the "Stockholders' Representative"), and BLAU, KRAMER, WACTLAR &
XXXXXXXXX, P.C., as escrow agent (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Allegro, Serif and the Stockholders have entered
into an Agreement and Plan of Reorganization (the "Reorganization Agreement")
dated as of July 31, 1996, providing for, among other things, the exchange by
the Stockholders and Allegro of all the outstanding capital stock of Serif
(other than the shares held by Serif Inc.) for 754,597 shares of the common
stock, par value $.001 per share, of Allegro (the "Exchange Stock"); and
WHEREAS, Section 3.3 of the Reorganization Agreement
requires that Allegro, Serif and the Stockholders agree to enter into this
Escrow Agreement with the Escrow Agent for the purpose of securing the indemnity
obligations of the Stockholders under Section 11 of the Reorganization
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, Allegro, Serif, the Stockholders and the Escrow
Agent agree that all capitalized terms used herein without definition shall have
the meaning ascribed to them in the Reorganization Agreement and further agree
as follows:
ARTICLE I. ESCROWED PROPERTY
1.01 Each of the Stockholders has this day delivered to the Escrow
Agent that number of Exchange Shares set forth next to his signature on the
signature page hereof, which Exchange Shares aggregate 252,864 shares
(hereinafter referred to collectively as the "Escrowed Property").
1.02 The Escrow Agent acknowledges receipt of negotiable certificates
for the Escrowed Property issued in the names of each of the Stockholders with
blank stock powers attached properly executed by the Stockholders, and the
Escrow Agent agrees to hold or dispose of the Escrowed Property and any other
collateral in accordance with the terms of this Escrow Agreement.
1.03 All dividends and other distributions (whether of cash, securities
or other property) upon or in respect of any of the Escrowed Property and all
property receivable in substitution or exchange therefor shall be included with
and constitute part of the Escrowed Property.
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ARTICLE II. APPLICATION OF ESCROWED PROPERTY
2.01 The Escrow Agent will hold the Escrowed Property in its possession
under the provisions of this Escrow Agreement until authorized hereunder to
deliver the Escrowed Property or any specified portion thereof as set forth in
Section 2.02 or Section 2.03.
2.02 The Escrow Agent shall distribute the amounts deposited as
Escrowed Property promptly upon delivery of and in accordance with (i) a joint
written notice of Allegro and the Stockholders' Representative providing
instructions therein or (ii) written notice of Allegro and the Stockholders'
Representative providing instructions therein and certifying that the dispute
with respect to any amount or amounts deposited in the escrow provided for
herein has been determined and resolved by entry of a final order, decree or
judgment by a court of competent jurisdiction in the State of New York (the time
for appeal therefrom having expired and no appeal having been perfected), or
consent to entry of any judgment concerning a claim, which notice shall be
accompanied by a copy of any such order, decree or judgment certified by the
clerk of such court.
2.03 In the event that prior to May 1, 1998 (the "Termination Date"),
the Escrow Agent has not received notice of a claim for indemnification under
Section 11 of the Reorganization Agreement which remains unresolved on the
Termination Date, the Escrow Agent shall distribute the Escrowed Property to the
Stockholders' Representative or as he otherwise directs. In the event that on
the Termination Date there exists an unresolved claim, then in such event the
Escrow Agent shall reserve from the Escrowed Property an amount equal to the
amount of the claim, as determined in accordance with the provisions of Article
IV hereof, and shall distribute any remaining balance.
ARTICLE III. RELATED PROVISIONS
3.01 Upon the release and delivery of any amount of the Escrowed
Property to any party pursuant to this Escrow Agreement, the Escrow Agent shall
also release and deliver to such party the pro rata portion of the interest,
other income or property so released, up to the date of such release and
delivery, attributable to such amount of the Escrowed Property being so released
and delivered.
3.02 In connection with the delivery of written notices to the Escrow
Agent by Allegro, the Stockholders' Representative, or both such parties, each
such written notice shall be signed by an officer of Allegro or the
Stockholders' Representative, or both, as appropriate, and shall accurately set
forth in each case:
(a) the total amount that the Escrow Agent is thereby directed
to distribute out of the Escrowed Property;
(b) the party to whom, or the fund to which, the Escrow Agent
is thereby directed to distribute such amount; and
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(c) the date upon which the Escrow Agent is directed to
distribute such amount; and such officer of Allegro or the
Stockholders' Representative, or both, as the case may be, shall
certify as to the compliance with such notice and the contents thereof.
The Escrow Agent may rely fully on the provisions set forth in any such written
notice which on its face complies with the provisions of Article II and this
Section 3.02.
ARTICLE IV. SETTLEMENT OF DISPUTES
4.01 Any dispute which may arise between Allegro and the Stockholders'
Representative under this Escrow Agreement with respect to (a) the delivery,
ownership and/or right to possession of the Escrowed Property or any portion
thereof, (b) the facts upon which the Escrow Agent's determinations hereunder
are based, (c) the duties of the Escrow Agent hereunder and (d) any other
questions arising under this Escrow Agreement, shall be settled either by (i) a
joint written notice of Allegro and the Stockholders' Representative providing
instructions to the Escrow Agent therein or (ii) by entry of a final order,
decree or judgment by a court of competent jurisdiction in the State of New York
(the time for appeal therefrom having expired and no appeal having been
perfected).
4.02 The Escrow Agent shall be under no duty to institute or defend any
such proceedings and none of the costs and expenses of any such proceeding shall
be borne by the Escrow Agent. In the event the terms of a settlement of a
dispute hereunder increase the duties or liabilities of the Escrow Agent
hereunder and the Escrow Agent has not participated in such settlement so as to
be bound thereby, then such settlement shall be effective as to the Escrow Agent
in respect of such increase in its duties or liabilities only upon the Escrow
Agent's written assent thereto. Prior to the settlement of any disputes as
provided in this Article IV, the Escrow Agent is authorized and directed to
retain in its possession, without liability to anyone, such portion of the
Escrowed Property which is the subject of or involved in the dispute.
ARTICLE V. CONCERNING THE ESCROW AGENT.
5.01 The Escrow Agent shall be entitled to reasonable compensation for
its services hereunder and shall be reimbursed for all reasonable expenses,
disbursements and advances (including reasonable attorneys' fees and expenses)
incurred or made by it in performance of its duties hereunder. Such reasonable
compensation, disbursement, expenses and advances shall be borne equally by
Allegro and the Stockholders' Representative and shall be paid promptly upon
request by the Escrow Agent.
5.02 The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice of such resignation to Allegro and
Stockholders' Representative specifying a date (not less than 30 days after the
giving of such notice) when such resignation shall take effect. Promptly after
such notice, Allegro and the Stockholders' Representative shall appoint a
mutually agreeable successor Escrow Agent, such successor Escrow Agent to become
Escrow Agent hereunder upon the resignation date specified in such notice. If
Allegro and the Stockholders' Representative are unable to agree upon a
successor Escrow Agent with 30 days after such notice, the Escrow Agent shall
have the right to petition a court of competent jurisdiction to appoint a
successor, and the Escrow Agent shall continue to serve until its successor
accepts the escrow and receives the Escrowed Property.
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5.03 The Escrow Agent undertakes to perform only such duties as are
specifically set forth herein. The Escrow Agent acting or refraining from acting
in good faith shall not be liable for any mistake of fact or error of judgment
by it or for any acts or omissions by it of any kind unless caused by gross
negligence or willful misconduct, and shall be entitled to rely, and shall be
protected in doing so, upon (a) any written notice, instrument or signature
believed by it to be genuine and to have been signed or presented by the proper
party or parties duly authorized to do so, and (b) the advice of counsel (which
may be of the Escrow Agent's own choosing, so long as such counsel is not
counsel to Allegro or the Stockholders' Representative). The Escrow Agent shall
have no responsibility for the contents of any writing submitted to it hereunder
and shall be entitled in good faith to rely without any liability upon the
contents thereof. The Escrow Agent has no responsibilities under, and shall be
deemed to have no knowledge of, the provisions of the Reorganization Agreement.
5.04 Allegro and the Stockholders agree to indemnify the Escrow Agent
and hold it harmless against any and all liabilities incurred by it hereunder as
a consequence of such indemnifying party's action and the Allegro and the
Stockholders further agree to indemnify the Escrow Agent and hold it harmless
against any and all losses, costs, fees and expenses incurred by the Escrow
Agent which are not a consequence of its actions or failure to act, except, in
either case for liabilities incurred by the Escrow Agent resulting from its own
gross negligence or willful misconduct. One-half of the amount of any such
payment or indemnification shall be paid to the Escrow Agent by Allegro and the
other half of the amount of any such payment or indemnification shall be paid by
the Stockholders. The indemnification provided pursuant to this section shall
survive the resignation of the Escrow Agent or the termination of this Escrow
Agreement.
5.05 In the event the Escrow Agent becomes involved in any litigation
or dispute by reason hereof, it is hereby authorized to deposit with the clerk
of a court of competent jurisdiction the Escrowed Property held by it pursuant
hereto and, thereupon, shall stand fully relieved and discharged of any further
duties hereunder. Also, in the event the Escrow Agent is threatened with
litigation by reason hereof, it is hereby authorized to interplead all
interested parties in any court of competent jurisdiction and to deposit with
the clerk of such court the Escrowed Property held by it pursuant hereto and,
thereupon, shall stand fully relieved and discharged of any further duties
hereunder.
5.06 In the event of any claim, dispute or litigation concerning the
Reorganization Agreement or this Escrow Agreement, Blau, Kramer, Wactlar &
Xxxxxxxxx, P.C. shall nevertheless have the unqualified right to represent
Allegro, its officers and directors in respect of any such claim, dispute or
litigation, notwithstanding that it is acting as Escrow Agent hereunder.
ARTICLE VI. STOCKHOLDERS' REPRESENTATIVE
6.01 The Stockholders, and each of them, hereby appoint Xxxx Xxxxx (the
"Stockholders' Representative") as their agent to (i) execute and deliver this
Escrow Agreement on behalf of the Stockholders and to represent, act for and on
behalf of, and bind each of the Stockholders in the performance of all of their
obligations arising from or relating to this Escrow Agreement, including,
without limitation (a) the execution and delivery of any document, certificate
or agreement required under this Escrow Agreement to be delivered by the
Stockholders; (b) the negotiation and settlement of claims of Allegro in respect
of the Escrowed Property and for indemnification pursuant to Section 11 of the
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Reorganization Agreement and the making of any objection to such claims; and (c)
the representation of the Stockholders at any arbitration or litigation in
respect of the foregoing; (ii) give and receive notices and receive service of
process under or pursuant to this Escrow Agreement; and (iii) to represent, act
for, and bind each of the Stockholders in the performance of all of their
obligations arising from or related to this Escrow Agreement and the
indemnification provisions of Section 11 of the Reorganization Agreement. The
Stockholders' Representative hereby accepts such appointment.
6.02 In the event that the Stockholders' Representative shall die,
become incapacitated, resign or otherwise by unable to fulfill his duties
hereunder, a successor Stockholders' Representative shall be selected by the
Stockholders receiving a majority of the Escrowed Property as soon as reasonably
practicable thereafter. If the Stockholders desire to remove or replace the
Stockholders' Representative for any reason, any such Stockholders'
Representative may be so removed or replaced by the Stockholders entitled to
receive a majority of the Escrowed Property. Any decision, act, consent or
instruction of the Stockholders' Representative shall constitute a decision of
the Stockholders and shall be conclusive and binding upon the Stockholders, and
Allegro and the Escrow Agent may rely upon any such decision, act, consent or
instruction of the Stockholders' Representative as being the decision, act,
consent or instruction of the Stockholders.
ARTICLE VII. MISCELLANEOUS
7.01 This Escrow Agreement will be binding upon, inure to the benefit
of, and be enforceable by the respective successors and assigns of the parties
hereto, but neither this Escrow Agreement, nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties, except with respect to the Escrow
Agent as provided in Article V hereof.
7.02 This Escrow Agreement contains the entire understanding of the
parties with respect to this subject matter, and may be amended only by a
written instrument duly executed by Allegro, Serif and the Stockholders'
Representative.
7.03 All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be validly given, made or served, if in writing and delivered personally or sent
by registered or certified mail (return receipt requested), postage prepaid,
recognized national or international air courier or by facsimile transmission
electronically confirmed:
if to Allegro:
Allegro New Media, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attn.: Xxxxx X. Cinnamon
Chairman of the Board
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with a copy to:
Xxxx X. Xxxxxxx, Esq.
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx ll753
Fax: (000) 000-0000
if to Serif, the Stockholders, or the Stockholders'
Representative, to the Stockholder's Representative:
Xxxx Xxxxx
Serif Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxx Xxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Eking Xxxxxxx
00 Xxx Xxxxxxxx
Xxxxxxxxxx XX0 0XX
Fax: (000) 00-000-000-0000
if to the Escrow Agent:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx ll753
Fax: (000) 000-0000
Attn.: Xxxx X. Xxxxxxx, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties.
7.04 This Escrow Agreement shall be governed by, and construed and
enforced in accordance with the laws of the State of New York, without regard to
its conflicts of law rules.
7.05 This Escrow Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.06 This Escrow Agreement shall remain in full force and effect until
the later of May 1, 1998 or the date the Escrow Agent shall have delivered all
of the Escrowed Property in its possession in accordance with the terms hereof.
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7.07 Article headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Escrow
Agreement.
IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and
delivered by Allegro, Serif, the Stockholders and the Escrow Agent on the date
first above written.
ALLEGRO NEW MEDIA, INC.
By: /s/ Xxxxx X. Cinnamon
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Xxxxx X. Cinnamon
Chairman of the Board
SERIF INC.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
STOCKHOLDERS'
REPRESENTATIVE:
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
ESCROW AGENT:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
By: /s/ Xxxx X. Xxxxxxx
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Number of
Exchanged Shares STOCKHOLDER
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89,223 /s/ Xxxx Xxxxx
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Xxxx Xxxxx
20,637 /s/ Xxxxxx Xxxxxxxxx-Attorney-in-Fact
-------------------------------------------
Xxxxxx Xxxxxxxxx
8,750 /s/ Xxx Xxxxx-Attorney-in-Fact
-------------------------------------------
Xxx Xxxxx
17,092 /s/ Xxxxx Xxxxxxx
-------------------------------------------
Xxxxx Xxxxxxx
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11,647 /s/ Xxxx Xxxxxx-Attorney-in-Fact
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Xxxx Xxxxxx
8,750 /s/ Espirit Automations-Attorney-in-Fact
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Esprit Automations
4,128 /s/ Xxxx Xxx-Attorney-in-Fact
-------------------------------------------
Xxxx Xxx
3,440 /s/ Xxxxxx X'Xxxx-Attorney-in-Fact
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Xxxxxx X'Xxxx
1,376 /s/ Xxxxxx Xxxxxxx-Attorney-in-Fact
-------------------------------------------
Xxxxxx Xxxxxxx
1,376 /s/ Xxxx Xxxxxx-Attorney-in-Fact
-------------------------------------------
Xxxx Xxxxxx
1,376 /s/ Xxxx Daintree-Attorney-in-Fact
-------------------------------------------
Xxxx Daintree
894 /s/ Xxxxx Xxxxxxxxxx-Attorney-in-Fact
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Xxxxx Xxxxxxxxxx
5,847 /s/ Xxxxx Xxxxxx-Attorney-in-Fact
-------------------------------------------
Xxxxx Xxxxxx
7,712 /s/ Xxxxx Xxxxx-Attorney-in-Fact
-------------------------------------------
Xxxxx Xxxxx
7,712 /s/ Xxxxxxx Xxxxx-Attorney-in-Fact
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Xxxxxxx Xxxxx
61,570 /s/ Xxxxx X. Cinnamon
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Xxxxx X. Cinnamon
Co-Trustee of the Serif (Europe) Limited
Employee Share Option Scheme
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