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EXHIBIT 2.2
ESCROW AGREEMENT
This Escrow Agreement is made as of this 29th day of August, 1996, by and
among Elias J. Blawie in his capacity as corporate Secretary of ISOCOR ("Escrow
Agent"), ISOCOR, a California corporation ("ISOCOR"), and Marco Brueders as
agent ("Agent") of the former stockholders of NetCS Informationstechnik GmbH, a
German corporation ("NetCS"). Terms not otherwise defined in this Escrow
Agreement shall have the respective meanings set forth in the Purchase Agreement
(as defined below).
RECITALS
WHEREAS, ISOCOR, NetCS and certain stockholders of NetCS (the "Selling
Stockholders") have entered into a Stock Purchase Agreement dated as of August
29, 1996 (the "Purchase Agreement"), providing for the acquisition of all or
substantially all of the outstanding stock of NetCS by ISOCOR or its wholly
owned subsidiary (the "Acquisition"); and
WHEREAS, pursuant to Article VIII of the Purchase Agreement, a copy of
which is attached to this Escrow Agreement as ANNEX A, an escrow fund (the
"Escrow Fund") is to be established consisting of the Escrow Amount which shall
be available to compensate ISOCOR and certain related persons for any Damages
they may incur by reason of a breach by NetCS or the Selling Stockholders of any
of their representations, warranties, covenants or agreements contained in the
Purchase Agreement; and
WHEREAS, the Agent has been constituted as agent for and on behalf of the
Selling Stockholders with such rights, powers and duties as are set forth in
Section 9.1 of the Purchase Agreement; and
WHEREAS, Section 8.8 of the Purchase Agreement provides for an Escrow Fund
of such number of shares of Parent Common Stock issued in the Acquisition as is
equal to the Escrow Amount to be held by the Escrow Agent; and
WHEREAS, the parties to this Escrow Agreement desire to set forth further
terms and conditions in addition to those set forth in the Purchase Agreement
relating to the operation of the Escrow Fund.
NOW, THEREFORE, the parties to this Escrow Agreement, in consideration of
the mutual covenants contained herein and in the Purchase Agreement, and
intending to be legally bound, hereby agree as follows:
1. Escrow and Escrow Shares.
(a) Pursuant to the Purchase Agreement, ISOCOR shall cause to be
deposited in escrow with the Escrow Agent, as escrow agent, a stock certificate
or certificates representing shares of Parent Common Stock equal to the Escrow
Amount (the "Escrow Shares"). Such certificate(s) shall be registered in the
name of the Escrow Agent (or its nominee) as nominee for the beneficial owners
of such shares. The Escrow Shares shall be held and distributed by the
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Escrow Agent in accordance with the terms and conditions of Article VIII of the
Purchase Agreement and this Escrow Agreement and, to the extent a distribution
is made to the Selling Stockholders, the instructions of the Agent. The name,
address, taxpayer identification number (if applicable) for, and the number of
Escrow Shares beneficially owned by, each Selling Stockholder is set forth in
ANNEX B attached to this Escrow Agreement.
(b) The Selling Stockholders shall be responsible for any tax
liability attributable to the placement of the Escrow Shares in the escrow and
the payment of any dividends or other amounts payable to the Selling
Stockholders with respect to the Escrow Shares. As a condition to the receipt of
any distribution from the Escrow Fund, each Selling Stockholder shall provide
the Escrow Agent with an executed IRS Form W-9 or W-8, as applicable. ISOCOR and
the Selling Stockholders, jointly and severally, agree to assume any and all
obligations imposed now or hereafter by any applicable tax law with respect to
the payment of Escrow Funds under this Escrow Agreement, and to indemnify and
hold the Escrow Agent harmless from and against any taxes, additions for late
payment, interest, penalties and other expenses, that may be assessed against
the Escrow Agent on any such payment or other activities under this Escrow
Agreement. ISOCOR and the Selling Stockholders undertake 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,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Escrow Agreement. ISOCOR and the Selling Stockholders,
jointly and severally, agree to indemnify and hold the Escrow Agent harmless
from any liability on account of taxes, assessments or other governmental
charges, including without limitation the withholding or deduction or the
failure to withhold or deduct same, and any liability for failure to obtain
proper certifications or to properly report to governmental authorities, to
which the Escrow Agent may be or become subject in connection with or which
arises out of this Escrow Agreement, including costs and expenses (including
reasonable legal fees and expenses), interest and penalties. To the extent that
ISOCOR is required to make any payments pursuant to this Section 1(b), the
Selling Stockholders, jointly and severally, agree to reimburse ISOCOR for any
such payment promptly upon written notice thereof.
(c) Except as contemplated hereunder, no Escrow Shares or any
beneficial interest therein may be pledged, sold, assigned or transferred,
including by operation of law, other than by will or by the laws of descent or
distribution in the event of the death of a Selling Stockholder, by any Selling
Stockholder, nor may the Escrow Shares or any beneficial interest therein be
taken or reached by any legal or equitable process in satisfaction of any debt
or other liability of any Selling Stockholder, prior to the delivery of the
Escrow Shares to the Selling Stockholder by the Escrow Agent.
2. Rights and Obligations of the Parties. The Escrow Agent shall be
entitled to such rights and shall perform such duties of the escrow agent as set
forth herein (collectively, the "Duties"), in accordance with the terms and
conditions of this Escrow Agreement. ISOCOR and the Agent shall be entitled to
their respective rights and shall perform their respective duties and
obligations as set forth herein and in the Purchase Agreement, in accordance
with the terms hereof and thereof. In the event that the terms of this Escrow
Agreement conflict in any way with the
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provisions of the Purchase Agreement as between ISOCOR and the Agent, the
Purchase Agreement shall control.
3. Escrow Period. The escrow shall terminate with respect to the Escrow
Shares as set forth in Section 8.8 of the Purchase Agreement.
4. Duties of Escrow Agent. The Duties of the Escrow Agent shall include
the following:
(a) The Escrow Agent shall hold and safeguard the Escrow Shares
during the term of the escrow, shall treat such Escrow Fund as a trust fund in
accordance with the terms of this Escrow Agreement and the Purchase Agreement
and not as the property of ISOCOR, and shall hold and dispose of the Escrow
Shares only in accordance with the terms of this Escrow Agreement.
(b) The Escrow Shares shall be voted by the Escrow Agent in
accordance with the instructions received by the Escrow Agent from the Agent on
behalf of the beneficial owners of such shares. If no instructions are received
from the beneficial owners of the Escrow Shares, such shares shall not be voted
by the Escrow Agent.
(c) With respect to any claim for Damages by ISOCOR or any other
Parent Group Member pursuant to Article VIII of the Purchase Agreement, as to
which (i) no timely objection shall have been received by the Escrow Agent from
the Agent, (ii) agreement shall have been reached between ISOCOR and the Agent
or (iii) the Damages attributable to such claim shall have been resolved in
accordance with Section 8.9(b) of the Purchase Agreement, the Escrow Agent shall
deliver to ISOCOR Escrow Shares equal in value, based upon the Average Price, to
the amount of such Damages incurred by ISOCOR or such other Parent Group Member.
(d) Promptly following termination of the escrow as set forth in
Section 3 of this Escrow Agreement, the Escrow Agent shall deliver to the
Selling Stockholders, in accordance with instructions by the Agent, the proper
number of Escrow Shares and other property in the Escrow Fund in excess of any
amount of such Escrow Shares or other property sufficient, in the reasonable
judgment of ISOCOR, subject to the objection of the Agent and the subsequent
arbitration of the matter in the manner provided in Section 8.9(b) of the
Purchase Agreement, to satisfy any unsatisfied claims specified in any
certificate theretofore delivered by ISOCOR to the Escrow Agent prior to
termination of the escrow with respect to facts and circumstances existing prior
to expiration of the applicable periods set forth in Section 8.8 of the Purchase
Agreement, and to pay expenses as provided in Section 11 of this Escrow
Agreement. As soon as all such claims have been resolved, the Escrow Agent shall
deliver to the Selling Stockholders, in accordance with instructions by the
Agent, all of the Escrow Shares and other property remaining in the Escrow Fund
and not required to satisfy such claims and expenses. Each Selling Stockholder
shall receive that number of Escrow Shares which bears the same relationship to
the total number of Escrow Shares in the Escrow Fund and available for
distribution as the number of Escrow Shares set forth opposite the name of each
such Selling Stockholder on ANNEX B hereto bears to the Escrow Amount, as
calculated by the Agent.
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5. Distribution. Any cash dividends paid with respect to any securities in
the Escrow Fund, and any shares of Parent Common Stock or other equity
securities or property received by the Escrow Agent upon a stock split made or
other distribution in respect of any securities in the Escrow Fund, shall be
added to the Escrow Fund and become a part thereof. Any provision hereof shall
be adjusted to appropriately reflect any stock split, reverse stock split, stock
dividend or similar recapitalization.
6. Exculpatory Provisions.
(a) The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper party
or parties. The Escrow Agent shall not be liable for forgeries or false
personations. The Escrow Agent shall not be liable for any act done or omitted
hereunder as escrow agent except for gross negligence or willful misconduct. The
Escrow Agent shall in no case or event be liable for any representations or
warranties of ISOCOR or any Selling Stockholder. Any act done or omitted
pursuant to the advice or opinion of counsel shall be conclusive evidence of the
good faith of the Escrow Agent. The Escrow Agent shall not be deemed to have
knowledge of any document or instrument other than this Escrow Agreement and
Article VIII of the Purchase Agreement with respect to the matters addressed
herein.
(b) The Escrow Agent is hereby expressly authorized to disregard any
and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law or arbitrations as provided in
Section 8.9(b) of the Purchase Agreement, and is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court or rulings of any
arbitrators. In case the Escrow Agent obeys or complies with any such order,
judgment or decree of any court or such ruling of any arbitrator, the Escrow
Agent shall not be liable to any of the parties hereto or to any other person by
reason of such compliance, notwithstanding any such order, judgment, decree or
arbitrators' ruling being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on account
of the identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver this Escrow Agreement or any documents or
papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of any
rights under any statute of limitations with respect to this Escrow Agreement or
any documents deposited with the Escrow Agent.
(e) The Escrow Agent shall not be obligated to take any legal or
other action hereunder which might in its judgment involve expense or liability
unless it shall have been furnished with indemnity acceptable to it.
7. Alteration of Duties. The Duties may be altered, amended,
modified or revoked only by a writing signed by all of the parties hereto.
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8. Resignation and Removal of the Escrow Agent. The Escrow Agent may
resign as Escrow Agent at any time with or without cause by giving at least
thirty (30) days' prior written notice to each of ISOCOR and the Agent, such
resignation to be effective thirty (30) days following the date such notice is
given. In addition, ISOCOR and the Agent may jointly remove the Escrow Agent as
escrow agent at any time with or without cause, by an instrument (which may be
executed in counterparts) given to the Escrow Agent, which instrument shall
designate the effective date of such removal. In the event of any such
resignation or removal, a successor escrow agent which shall be a bank or trust
company organized under the laws of the United States of America or any state
thereof having a combined capital and surplus of not less than U.S.
$100,000,000, shall be appointed by ISOCOR with the approval of the Agent, which
approval shall not be unreasonably withheld. Any such successor escrow agent
shall deliver to ISOCOR and the Agent a written instrument accepting such
appointment, and thereupon it shall succeed to all the rights and duties of the
escrow agent hereunder and shall be entitled to receive the Escrow Fund.
Thereafter, the predecessor Escrow Agent shall be discharged for any further
duties and liabilities under this Escrow Agreement. In the event no successor
Escrow Agent is appointed, the Escrow Agent may apply to a court of competent
jurisdiction for the appointment of a successor Escrow Agent. The provisions of
Section 1(a) and Section 12 hereof shall survive the resignation or removal of
the Escrow Agent or the termination of this Escrow Agreement.
9. Further Instruments. If the Escrow Agent reasonably requires other or
further instruments in connection with performance of the Duties, the necessary
parties hereto shall join in furnishing such instruments.
10. Disputes. It is understood and agreed that should any dispute arise
with respect to the delivery and/or ownership or right of possession of the
securities held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed to act in accordance with, and in reliance upon, the terms hereof
and of Article VIII of the Purchase Agreement.
11. Escrow Fees and Expenses.
(a) The Escrow Agent shall be entitled to reimbursement on demand
for all expenses incurred in connection with the administration of the escrow
created hereby, including without limitation, payment of any legal fees and
expenses incurred by the Escrow Agent in connection with the resolution of any
claim by any party hereunder.
(b) Any out-of-pocket fees and expenses incurred by the Agent shall
be paid out of the Escrow Amount of the Escrow Fund in preference to other
distributions from such Escrow Amount, other than the expenses of the Escrow
Agent.
12. Indemnification. The Escrow Agent shall not be liable to anyone for
any action taken or omitted to be taken by it or hereunder except in the case of
gross negligence, bad faith or willful misconduct. ISOCOR and the Selling
Stockholders, jointly and severally, covenant and agree to indemnify the Escrow
Agent and hold it harmless without limitation from and against any loss,
liability or expense of any nature incurred by the Escrow Agent arising out of
or in connection with this Escrow Agreement or with the administration of its
duties hereunder, including, but not limited to, legal fees and expenses and
other costs and expenses of defending or
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preparing to defend against any claim of liability in the premises, unless such
loss, liability or expense shall be caused by the Escrow Agent's gross
negligence, bad faith or willful misconduct. In no event shall the Escrow Agent
be liable for indirect, punitive, special or consequential damages.
13. General.
(a) All notices and other communications required or permitted
hereunder shall be in writing and shall be delivered by hand, mailed by
registered or certified mail (return receipt requested) or registered airmail if
sent internationally, postage prepaid, or delivered by recognized air courier,
freight prepaid, or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
To ISOCOR:
ISOCOR
3420 Ocean Park Boulevard
Santa Monica, CA 90405
Attention: President
Facsimile: (310) 581-8111
With a copy to:
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
Attention: Elias J. Blawie
Facsimile: (415) 854-1121
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To Agent:
Marco Brueders
c/o NetCS Informationstechnik GmbH
Katharinenstr. 17-18
D-10711 Berlin
Germany
Facsimile No.: 011 49 30 89 66 09 99
To Escrow Agent:
Elias J. Blawie
Secretary, ISOCOR
c/o Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 94025
Facsimile: (415) 854-1121
Each such notice or other communication shall for all purposes of this
Escrow Agreement be treated as effective when received, and shall in any event
be deemed to have been received (i) when delivered, if delivered personally or
sent by telecopy and confirmed in writing, (ii) if sent by certified or
registered mail (registered airmail if sent internationally), five (5) business
days after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States or German mail, as applicable, addressed and
mailed as aforesaid, or (iii) two (2) business day after the business day of
deposit with a recognized air courier, addressed and shipped as aforesaid.
(b) The captions in this Escrow Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Escrow Agreement.
(c) This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall constitute one agreement.
(d) No party may, without the prior express written consent of each
other party, assign this Escrow Agreement in whole or in part. This Escrow
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
(e) This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts made
and to be performed entirely within the State of California. The parties to this
Escrow Agreement hereby agree to submit to personal jurisdiction in the State of
California.
(f) Neither ISOCOR nor the Selling Stockholders nor the Escrow Agent
shall be responsible for delays or failure in performance resulting from acts
beyond their control. Such
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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.
(g) This Escrow Agreement may not be altered or modified without the
consent of the parties hereto, which consent shall not constitute a waiver of
any of the terms or conditions of this Escrow Agreement, unless such waiver is
specified in writing, and then only to the extent so specified. A waiver of any
of the terms and conditions of this Escrow Agreement on one occasion shall not
constitute a waiver of the other terms and conditions of this Escrow Agreement,
or of such terms and conditions on any other occasion.
14. Reproduction of Documents. This Escrow Agreement and all documents
relating hereto, 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 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.
15. Waiver of Conflict. The parties to this Escrow Agreement understand
and acknowledge that Escrow Agent is a director of Venture Law Group, A
Professional Corporation ("VLG"), and that VLG prepared this Escrow Agreement in
its capacity as counsel to ISOCOR. The parties confirm that they are familiar
with the existence of such relationships, have had the opportunity to consult
with their independent counsel with respect to this Escrow Agreement and hereby
waive any conflict that may be deemed to exist as a result of Escrow Agent
acting as such under this Escrow Agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Escrow Agreement
as of the date first above written.
Elias J. Blawie, Secretary of ISOCOR, as
ESCROW AGENT
____________________________________________
ISOCOR
By:_________________________________________
Name:
Title:
AGENT
____________________________________________
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ANNEX B
NAME AND ADDRESS OF SELLING STOCKHOLDER NUMBER OF ESCROW SHARES BENEFICIALLY
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OWNED
-----
Carsten Bormann 9,500
Doehlendamm 3
D-28359 Bremen
German
Marco Brueders 7,125
Uhlandstr. 53
D-10719 Berlin
Germany
Stefan Koehler 11,875
Wittenauer Str. 127
D-13469 Berlin
Germany
Jochen Roehrig 4,750
An den Hennwiesen 16
D-63743
Aschaffenburg-Schweinheim
Germany
Clemens Schrimpe 9,025
Hornstr. 21
D-10963 Berlin
Germany
NetCS Mitarbeiter GbR 5,225
NAME AND ADDRESS OF PARTNERS OF NetCS NUMBER OF ESCROW SHARES OF NetCS
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MITARBEITER GbR MITARBEITER GbR BENEFICIALLY OWNED
--------------- ----------------------------------
Jens Peter Haack 2,375
Am Sportplatz 2
D-63814 Mainaschaff.
Germany
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Oliver Korfmacher 2,375
Sodentalstr. 66
D-63834 Sulzbach/Soden.
Germany
Cornelia Sternke 237.5
Reichsstr. 70b
D-14052 Berlin
Germany
Thomas Schaefer 237.5
Grevesmuehlener Str. 10
D-13059 Berlin
Germany
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