EXHIBIT 99.4
ESCROW AGREEMENT
This Escrow Agreement (this "ESCROW AGREEMENT") is made and entered
into as of May 22, 2000 (the "EFFECTIVE TIME") by and among Lionbridge
Technologies, Inc., a Delaware corporation ("PARENT"); INT'L.com, Inc., a
Delaware corporation ("INT'L.COM"); Steven Fingerhood, as the representative of
the Holders (as defined below) (the "INDEMNIFICATION REPRESENTATIVE"); and
American Stock Transfer & Trust Co., as escrow agent for the Escrow Shares (as
defined below) (the "ESCROW AGENT"); and each person who executes and delivers
to Parent an Instrument of Accession in the form of Schedule I hereto.
A. LTI Acquisition Corporation, a Delaware corporation and wholly owned
subsidiary of Parent ("MERGER SUB"), INT'L.com and Parent have entered into an
Amended and Restated Agreement and Plan of Reorganization dated as of March 30,
2000 (the "MERGER AGREEMENT"), setting forth certain terms and conditions
pursuant to which Merger Sub is being merged into INT'L.com (the "MERGER").
B. Pursuant to Section 2.1 of the Merger Agreement, Parent Merger
Shares (as defined therein) are to be issued to security holders of INT'L.com
(collectively, the "HOLDERS").
C. The Merger Agreement provides (a) that 10% of the Parent Merger
Shares issuable at Closing pursuant to the Merger Agreement (excluding any
Parent Merger Shares issuable after the Closing with respect to Outstanding
INT'L.com Options, the Excluded Shares, the Series C Excluded Shares and the
Series D Excluded Shares), rounded to the nearest whole shares (the "Escrow
Amount") will be placed in an escrow account to secure certain indemnification
obligations of the Holders to Parent under the Merger Agreement on the terms and
conditions set forth therein and herein and (b) that each Holder shall execute
this Escrow Agreement as a condition to receiving any Parent Merger Shares.
D. Unless otherwise indicated herein, all terms used herein without
definition shall have the same meaning as set forth in the Merger Agreement.
NOW THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained in the Merger Agreement and in this Escrow
Agreement, the parties agree as follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT
1.1 DEPOSIT OF SHARES. Parent shall deposit as soon as
practicable on the Holders' behalf with the Escrow Agent stock certificates
representing the Escrow Shares issued pursuant to the Merger registered in the
respective names of the Holders and in the relative amounts set forth on EXHIBIT
1.1 hereto (the "INITIAL ESCROW SHARES"), together with stock transfer powers
signed in blank with guaranteed signatures. Any shares of Parent capital stock
that result from any share dividend, reclassification, stock split, subdivision
or combination of shares, recapitalization, merger or other events made with
respect to any Escrow Shares held in escrow under this Escrow Agreement
("ADDITIONAL SHARES") shall, subject to Section 3.1, be delivered to the Escrow
Agent and shall be held by the Escrow Agent in accordance with this Escrow
Agreement. Unless otherwise indicated, as used in this Escrow Agreement, the
term "ESCROW SHARES" includes the Initial Escrow Shares and any Additional
Shares. The Escrow Agent agrees to accept delivery of the Escrow Shares and to
hold such Escrow Shares in escrow in accordance with this Escrow Agreement and
to release the Escrow Shares, and all related stock transfer powers out of
escrow as provided in this Escrow Agreement. The Escrow Agent shall be under no
obligation to preserve, protect or exercise rights in the Escrow Shares and
shall be responsible only for the taking of reasonable measures to maintain the
physical safekeeping thereof. The Escrow Agent shall have no responsibility for
the genuineness, validity, market value, title or sufficiency for any intended
purposes of the Escrow Shares.
1.2 DIVIDENDS; VOTING AND RIGHTS OF OWNERSHIP. Any cash
dividends, dividends payable in property or other distributions of any kind
(except for Additional Shares) made in respect of the Escrow Shares shall be
distributed currently by Parent directly to the Holders on a pro rata basis.
Each Holder shall have the right to vote the Escrow Shares held in escrow for
the account of such Holder so long as such Escrow Shares are held in escrow, and
Parent and the Escrow Agent shall take all steps necessary to allow the exercise
of such rights. While the Escrow Shares remain in the Escrow Agent's possession
pursuant to this Escrow Agreement, the Holders shall retain and shall be able to
exercise all other incidents of ownership of the Escrow Shares that are not
inconsistent with the terms and conditions hereof. Any income tax reporting
required with respect to dividends paid on the Escrow Shares shall be the
responsibility of Parent.
1.3 POWER TO TRANSFER ESCROW SHARES. The Escrow Agent is
hereby granted the power to effect any transfer of the Escrow Shares provided
for in this Escrow Agreement.
1.4 AGREEMENT. Each of the Holders has, either by virtue of
approval of the Merger Agreement or through the execution of this Escrow
Agreement and a Letter of Transmittal, (i) agreed to be severally bound by the
indemnification provisions set forth in the Merger Agreement, such Letter of
Transmittal and this Escrow Agreement and (ii) confirmed that the issuance of
the Escrow Amount of the Parent Merger Shares pursuant to the Merger Agreement
is subject to this Escrow Agreement and the Letter of Transmittal.
2. RESOLUTION OF CLAIMS
2.1 INDEMNIFICATION OBLIGATIONS. The Escrow Shares shall serve
as the first source, and the sole source until the Release Date (and thereafter
shall serve as a "cap" on indemnification payments, subject to the proviso
below), of payment for the indemnity obligations of the Holders under the Merger
Agreement, PROVIDED, HOWEVER, that each Holder shall further be severally liable
for any breach by such Holder of such Holder's representation in a Letter of
Transmittal, it being agreed and understood that except as set forth in the
immediately preceding proviso and Sections 3.3 and 11 below, no Holder shall
have any liability beyond such Holder's allocable portion of the Escrow Shares
as set forth on EXHIBIT 1.1 hereto. The liability
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of any single Holder for indemnification obligations pursuant to Article IX of
the Merger Agreement shall be limited to such Holder's PRO RATA share of any
indemnity obligations based on the number of Escrow Shares deposited in escrow
by such Holder relative to the aggregate number of Escrow Shares and the
aggregate liability of any single Holder for indemnification obligations
pursuant to Article IX of the Merger Agreement shall be equal to a dollar amount
equal to the Parent Average Closing Price multiplied by the aggregate number of
Escrow Shares deposited in escrow by such Holder; PROVIDED, HOWEVER, that there
will be no limitation on the indemnification obligations of any person arising
out of criminal activity or fraud by such person, including, without limitation,
any actions in such person's capacity as an employee, officer or director of
INT'L.com or its Subsidiaries, or for any Holder for breaches of any
representation or warranty contained in the Letter of Transmittal delivered by
such Holder. For the purposes of this Escrow Agreement, those obligations shall
continue in accordance with the Merger Agreement, notwithstanding the merger of
Merger Sub into INT'L.com pursuant to the Merger Agreement. Payment for any
amount determined as provided below to be owing to Parent under such indemnity
obligations under the Merger Agreement ("DAMAGES") and any award of attorneys'
fees and charges (a "PREVAILING PARTY AWARD") owing to a party hereto pursuant
to Section 2.3(c)(iv) or 11.2 of this Agreement shall be made by the release of
Escrow Shares to the appropriate party (each such payment, an "ESCROW
ADJUSTMENT"), subject to the limitations set forth in Section 9.3 of the Merger
Agreement. Notwithstanding anything to the contrary herein or in the Merger
Agreement, Parent shall not be entitled to receive payment of any portion of a
Prevailing Party Award which is already a part of Damages (i.e., there shall be
no double payment of legal fees or expenses). Any Escrow Adjustments and
corresponding release to Parent of Escrow Shares shall be made in proportion to
each of the Holders' interest in the Escrow Shares as of the date or dates
specified as set forth on EXHIBIT 1.1, and in the manner provided for in this
Escrow Agreement. Each Escrow Adjustment to the Escrow Shares shall be made by
the release to Parent of Escrow Shares having an aggregate value equal to the
Damages and the release to Parent or the Indemnification Representative, as
applicable, of any Prevailing Party Award, with the per share value of such
shares being based, for all purposes under this Escrow Agreement, on the Parent
Average Closing Price (adjusted for any share dividend, reclassification, stock
split, subdivision or combination of shares, recapitalization, merger or other
events) notwithstanding any changes in market value of Parent Common Stock. In
lieu of releasing any fractional Escrow Shares, any fraction of a released
Escrow Share that would otherwise be released shall be rounded to the nearest
whole Escrow Share.
2.2 NOTICE OF CLAIMS. Promptly after the receipt by Parent of
notice or discovery of any claim, damage, or legal action or proceeding giving
rise to indemnification rights under the Merger Agreement, after giving effect
to the Threshold Amount (a "CLAIM"), Parent shall give the Indemnification
Representative written notice of such Claim, including reasonable detail
regarding the nature, basis and dollar amount thereof, to the extent reasonably
ascertainable (a "NOTICE OF CLAIM") and shall provide a copy of such notice to
the Escrow Agent. Each Notice of Claim by Parent shall be in writing and shall
be delivered on or before the Release Date (as defined in Section 3.1 below).
Failure to provide prompt Notice of Claim shall result in a loss by claimant of
rights to pursue such claim hereunder and under the Merger Agreement, but only
if, and only to the extent, such failure to provide timely such Notice of Claim
prejudices the rights of the Indemnification Representative or Holders to
properly defend or otherwise limit damages.
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2.3 RESOLUTION OF CLAIMS. Any Notice of Claim received by the
Indemnification Representative and the Escrow Agent pursuant to Section 2.2
above shall be resolved as follows:
(a) UNCONTESTED CLAIMS. In the event that the
Indemnification Representative does not contest a Notice of Claim (an
"UNCONTESTED CLAIM") in writing within thirty (30) calendar days after receipt
thereof (the "FIRST NOTICE PERIOD"), as provided below in Section 2.3(b), Parent
may deliver to the Escrow Agent, with a copy to the Indemnification
Representative, a written demand by Parent (a "PARENT DEMAND") stating that a
Notice of Claim has been given as required in this Escrow Agreement and that no
notice of contest has been received from the Indemnification Representative
during the period specified in this Escrow Agreement and further setting forth
the proposed Escrow Adjustments to be made in accordance with this Section
2.3(a). The Indemnification Representative may object within thirty (30)
calendar days after receipt of the Parent Demand (the "SECOND NOTICE PERIOD") in
a written notice delivered to Parent and the Escrow Agent to the computations or
other administrative matters relating to the proposed Escrow Adjustments (but
may not, after the First Notice Period, object to the validity or amount of the
Claim previously disclosed in the Notice of Claim), whereupon neither the Escrow
Agent nor Parent shall make any of the Escrow Adjustments until either: (i)
Parent and the Indemnification Representative shall have given the Escrow Agent
written notice setting forth agreed Escrow Adjustments, or (ii) the matter is
resolved as provided in Sections 2.3(b) and 2.3(c). Upon satisfaction of the
foregoing, the Escrow Agent, as directed in writing by Parent, and Parent shall
promptly take all steps to implement the final Escrow Adjustments.
(b) CONTESTED CLAIMS. In the event that the
Indemnification Representative gives written notice to Parent and the Escrow
Agent contesting all or a portion of a Notice of Claim (a "CONTESTED CLAIM")
within the First Notice Period, matters that are subject to third party claims
against Parent or INT'L.com in a litigation or arbitration shall await the final
decision, award or settlement of such litigation or arbitration, while matters
that arise between Parent on the one hand and INT'L.com and/or the Holders on
the other hand, including any disputes regarding performance or nonperformance
of a party's obligations under this Escrow Agreement ("ARBITRABLE CLAIMS") shall
be settled in accordance with Section 2.3(c) below. Any portion of a Notice of
Claim that is not contested or is subsequently settled by Parent and the
Indemnification Representative shall be resolved as set forth above in Section
2.3(a). If written notice is received by the Escrow Agent that a Notice of Claim
is contested by the Indemnification Representative, then the Escrow Agent shall
hold hereunder after what would otherwise be the Release Date (as defined in
Section 3.1 below), the number of Escrow Shares as specified in the Release
Notice as Retained Escrow (as defined in Section 3.1) or as otherwise provided
in Section 3.1, until the earlier of: (i) receipt of a settlement agreement
executed by Parent and the Indemnification Representative setting forth a
resolution of the Notice of Claim and the Escrow Adjustments; (ii) receipt of a
written notice from Parent (a "PARENT DISTRIBUTION NOTICE") attaching a copy of
the final award or decision of the arbitrator and setting forth the Escrow
Adjustments (Parent shall at the same time provide a copy of the Parent
Distribution Notice to the Indemnification Representative); or (iii) receipt of
a written notice from the Indemnification Representative (a "REPRESENTATIVE
DISTRIBUTION NOTICE") attaching a
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copy of the final award or decision of the arbitrator that no Escrow Adjustments
are to be made as a result of such award (the Indemnification Representative
shall at the same time provide a copy of the Representative Distribution Notice
to Parent). If the earliest of the three events described in the preceding
sentence is (i) or (ii), the Escrow Agent shall, within twenty (20) calendar
days of receipt of the settlement agreement or the Parent Distribution Notice,
as applicable, (a) release to Parent the number of Escrow Shares specified in
the Parent Distribution Notice as the Escrow Adjustments and (b) if the Release
Date has occurred, and there are no remaining unresolved Contested Claims,
release to the Holders the balance of the Escrow Shares and the related stock
transfer powers. If the earliest of the three events described above is (iii)
and the Release Date has occurred, and there are no remaining unresolved
Contested Claims, the Escrow Agent shall, within twenty (20) calendar days of
receipt of the Representative Distribution Notice, release to the Holders the
balance of the Escrow Shares and the related stock transfer powers, pro rata in
accordance with EXHIBIT 1.1, PROVIDED THAT if the Release Date has not occurred
the Escrow Shares shall continue to be held pursuant to the terms of this
Agreement. If the award or decision of the arbitrator concludes that Escrow
Shares are to be released to Parent in satisfaction of Damages and Prevailing
Party Awards, the arbitrator shall specify the number of Escrow Shares
(determining value as provided in the penultimate sentence of Section 2.1 above,
and in any event, subject to the first sentence of such Section 2.1) to be so
released to Parent either in the arbitrator's final award or decision or a
supplementary report or finding. In the event that the Escrow Agent institutes
an action for interpleader in accordance with Section 4.6 of this Escrow
Agreement as a result of a dispute between the parties, the parties hereby agree
to jointly seek to stay such interpleader action pending the resolution of any
arbitration commenced by the parties or any dispute pursuant to this Section
2.3(b) and Section 2.3(c).
(c) ARBITRATION.
(i) ARBITRATION RULES. Any Arbitrable
Claim, and any dispute between the Holders and Parent under this Escrow
Agreement, shall be submitted to final and binding arbitration before a single
arbitrator jointly selected by Parent and the Indemnification Representative
(or, if such parties cannot agree on an arbitrator, before a single arbitrator
jointly selected by one arbitrator selected by Parent and one arbitrator
selected by the Indemnification Representative) in Boston, Massachusetts in
accordance with the commercial arbitration rules of the American Arbitration
Association.
(ii) BINDING EFFECT. The final decision
of the arbitrator shall be furnished in writing to the Escrow Agent, the
Indemnification Representative, the Holders and Parent and will constitute a
conclusive determination of the issue in question, binding upon the Holders, the
Indemnification Representative and Parent. The arbitrator shall have the
authority to grant any equitable and legal remedies that would be available in
any judicial proceeding instituted to resolve an Arbitrable Claim, PROVIDED,
HOWEVER, that for all purposes of valuing Escrow Shares, the arbitrator shall
rely upon the provision set forth in the penultimate sentence of Section 2.1
above. Any judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction over the subject matter thereof.
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(iii) COMPENSATION OF ARBITRATOR. The
arbitrator will be compensated for his or her services, as provided below in
Section 2.3(c)(iv), in accordance with the commercial arbitration rules of the
American Arbitration Association.
(iv) PAYMENT OF COSTS. Subject to the
limitations in the Merger Agreement, the substantially prevailing party in any
arbitration shall be entitled to an award of attorneys' fees and costs, and all
costs of arbitration, including those provided for above, will be paid by the
losing party, subject in each case to a determination by the arbitrator as to
which party is the substantially prevailing party and the amount of such fees
and costs to be allocated to such party and subject to the terms of Section
2.3(c)(iii). Any amounts payable to Parent by or on account of the Holders under
this subsection will be disbursed from the Escrow Shares as if the amount of
such awarded fees and expenses were an Uncontested Claim.
(v) TERMS OF ARBITRATION. The arbitrator
chosen in accordance with these provisions shall not have the power to alter,
amend or otherwise affect the terms of these arbitration provisions or the
provisions of this Escrow Agreement, the Merger Agreement or any other documents
that are executed in connection therewith.
(vi) EXCLUSIVE REMEDY. Arbitration or
mediation under this Section 2.3(c) shall be the sole and exclusive remedy of
the parties for any Arbitrable Claim arising out of this Escrow Agreement.
3. RELEASE FROM ESCROW
3.1 RELEASE OF ESCROW SHARES. The Escrow Shares and all
related stock transfer powers shall be released by the Escrow Agent as soon as
practicable, taking into account the notices to be delivered under this Section
3.1, after the earliest of (i) publication of Parent's audited financial results
for the year ended December 31, 2000 or (ii) expiration of the survival period
for representations and warranties as set forth in Article IX and XI of the
Merger Agreement (the "RELEASE DATE") LESS: (a) any Escrow Shares delivered to
or deliverable to Parent in satisfaction of Uncontested Claims or Contested
Claims which have been settled by the parties hereto, and (b) any of the Escrow
Shares subject to delivery to Parent in accordance with Section 2.3(b) with
respect to any then pending Contested Claims. Parent shall give written notice
to the Indemnification Representative and the Escrow Agent of the publication of
Parent's audited financial results for the year ended December 31, 2000, if the
Release Date shall not already have transpired. Promptly, and no later than
seven (7) of the Escrow Agent's business days ("BUSINESS DAYS") after the
Release Date, Parent and the Indemnification Representative shall deliver to the
Escrow Agent a written notice (a "RELEASE NOTICE") setting forth the number of
Escrow Shares to be released by the Escrow Agent (the "RELEASED ESCROW")
including the number of Escrow Shares to be released to each Holder and the
number of Escrow Shares to be retained as provided in this Section 3.1 (the
"RETAINED ESCROW"). Parent and the Indemnification Representative shall make a
good faith effort to agree on a reasonable portion of the Escrow Shares to
retain for pending Contested Claims and Prevailing Party Awards, if any. Until
such agreement is reached, or a determination is made in accordance with Section
2.3(c), the remaining Escrow Shares shall be the Retained Escrow. The Released
Escrow shall be released to the Holders in proportion to their respective
interests in the Initial Escrow Shares as set forth
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on EXHIBIT 1.1. In lieu of releasing any fractional Escrow Shares, any fraction
of a released Escrow Share that would otherwise be released shall be rounded to
the nearest whole Escrow Share. The Release Notice shall instruct the Escrow
Agent to deliver (by registered mail or overnight courier service) to each
Holder evidence of ownership of the number of Escrow Shares in the names of the
appropriate Holders. The Escrow Agent shall not be required to take such action
until the Escrow Agent has received the Release Notice executed by Parent and
the Indemnification Representative (which Parent and Indemnification
Representative agree to do promptly and in good faith) or, in the event Parent
and the Indemnification Representative fail to execute and deliver a jointly
approved Release Notice, a final award or decision which specifies the
distribution of the Escrow Shares.
3.2 RELEASE OF RETAINED ESCROW. Upon the resolution of
Contested Claims as provided for in Section 2.3(b), the Retained Escrow shall be
subject to release by the Escrow Agent to Parent and/or to the Holders in
accordance with Section 2.3(b), this Section and as otherwise provided for in
this Escrow Agreement. The Escrow Agent, Parent and the Indemnification
Representative shall cause the Escrow Agent to transfer to Parent the number of
Escrow Shares to be released to Parent pursuant to Section 2.3(b) and transfer
the number of Escrow Shares that are to be either distributed to the Holders
pursuant to Section 3.1 or further retained by the Escrow Agent pending the
resolution of Contested Claims and/or Prevailing Party Awards. Any Escrow Shares
released from escrow to Parent shall be subject to cancellation by Parent
without requiring Parent to pay any consideration whatsoever in receipt thereof
to INT'L.com or any of the Holders.
3.3 EXPENSES OF INDEMNIFICATION REPRESENTATIVE. The
Indemnification Representative shall be entitled to be reimbursed his reasonable
out-of-pocket expenses and the reasonable fees and disbursements of counsel
retained by him. Such reimbursements shall be treated as an Uncontested Claim on
a pro rata basis among the Holders (based on the percentages set forth on
EXHIBIT 1.1), for all services performed pursuant to the Merger Agreement and
this Escrow Agreement; PROVIDED, HOWEVER, that payment of any Escrow Adjustment
shall take priority over payments to the Indemnification Representative, as
provided herein. The Escrow Agent shall follow the joint written instructions of
the Indemnification Representative and Parent concerning the release of Escrow
Shares relating to the reimbursement of the Indemnification Representative. If
upon termination of this Agreement, the Indemnification Representative shall not
have received the reimbursements to which he is entitled hereunder, then the
Indemnification Representative shall be entitled to reimbursement from the
Holders on a several basis.
4. ESCROW AGENT
4.1 DUTIES. The duties and responsibilities of the Escrow
Agent hereunder shall be entirely administrative and not fiduciary or
discretionary in nature and shall be determined solely by the express provisions
of this Escrow Agreement and no duties shall be implied. The Escrow Agent shall
be obligated to act only in accordance with written instructions received by it
as provided in this Escrow Agreement and is authorized hereby to comply with any
orders, judgments, or decrees of any court with or without jurisdiction and
shall not be liable as a result of its compliance with the same. Parent,
INT'L.com and the Holders agree that, notwithstanding anything to the contrary
herein, the Escrow Agent shall not be responsible for
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any of the other agreements referred to or described herein (including, without
limitation, the Merger Agreement) or for determining or compelling compliance
therewith, and shall not otherwise be bound thereby.
4.2 LEGAL OPINIONS. As to any questions arising in connection
with the administration of this Escrow Agreement, the Escrow Agent may rely
absolutely upon the joint instruction of Parent and the Indemnification
Representative or the opinions given to the Escrow Agent by its outside counsel
and shall be free of liability for acting or refraining from acting in reliance
on such opinions.
4.3 SIGNATURES. The Escrow Agent may rely absolutely upon the
genuineness and authorization of the signature and purported signature of any
party upon any instruction, notice, release, receipt or other document delivered
to it pursuant to this Escrow Agreement.
4.4 RECEIPTS AND RELEASES. The Escrow Agent may, as a
condition to the release or disposition of securities as provided herein,
require from the payee or recipient a receipt therefor and, upon final payment
or disposition, a release of the Escrow Agent from any liability arising out of
its execution or performance of this Escrow Agreement, such release to be in a
form reasonably satisfactory to the Escrow Agent.
4.5 REFRAIN FROM ACTION. The Escrow Agent shall be entitled to
refrain from taking any legal or other action contemplated by this Escrow
Agreement in the event it becomes aware of any dispute between INT'L.com, the
Holders and Parent as to any material facts or as to the happening of any event
precedent to such action and the Escrow Agent shall be entitled to refrain from
taking any action that might in its judgement involve or cause it to incur any
expense or liability unless it shall first have been furnished with acceptable
indemnification.
4.6 INTERPLEADER. If any controversy arises between the
parties hereto or with any third person, the Escrow Agent shall not be required
to determine the same or to take any action, but the Escrow Agent in its
discretion may institute such interpleader or other proceedings in connection
therewith as the Escrow Agent may deem proper, and in following either course,
the Escrow Agent shall not be liable.
4.7 OTHER PROVISIONS. The Escrow Agent may rely upon and shall
be protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Escrow Agent shall be under no duty to inquire into or investigate the validity,
accuracy or content of any such document. The Escrow Agent shall be not be
liable for any action taken or omitted by it in good faith unless a court of
competent jurisdiction determines that the Escrow Agent's willful misconduct was
the primary cause of a loss to the Parent, the Indemnification Representative,
or the Holders. In the administration of this Escrow Agreement, the Escrow Agent
may execute any of its powers and perform its duties hereunder directly or
through agents or attorneys and may, consult with counsel, accountants and other
skilled persons to be selected and retained by it. The Escrow Agent shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons.
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4.8 SALE OF ESCROW SHARES. Notwithstanding anything herein to
the contrary, the Escrow Agent shall have no duty to sell the Escrow Shares
hereunder.
5. INDEMNIFICATION
5.1 WAIVER AND INDEMNIFICATION. Parent, INT'L.com, the
Indemnification Representative and the Holders agree to and hereby do waive any
suit, claim, demand or cause of action of any kind which they may have or may
assert against the Escrow Agent arising out of or relating to the execution or
performance by the Escrow Agent of this Escrow Agreement, unless such suit,
claim, demand or cause of action is based upon the willful neglect, gross
negligence or bad faith of the Escrow Agent. Parent and INT'L.com further agree,
jointly and severally, to indemnify and hold Escrow Agent and its directors,
officers, agents and employees (collectively, the "INDEMNITEES") harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties,
and expenses, including out-of-pocket, incidental expenses, reasonable legal
fees and expenses (including the reasonable fees and expenses of not more than
one outside counsel), and the allocated costs and expenses of in-house counsel
and legal staff ("LOSSES") that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any instructions or other
directions upon which the Escrow Agent is authorized to rely pursuant to the
terms of this Escrow Agreement, provided the Escrow Agent has not acted with
gross negligence, willful neglect or bad faith. In addition, to and not in
limitation of the immediately preceding sentence, Parent and INT'L.com also
agree, jointly and severally, to indemnify and hold the Indemnitees and each of
them harmless from and against any and all Losses that may be imposed on,
incurred by, or asserted against the Indemnitees or any of them in connection
with or arising out of the Escrow Agent's performance under this Escrow
Agreement, provided the Escrow Agent has not acted with gross negligence,
willful neglect or bad faith. The provisions of this Section 5.1 shall survive
the termination of this Escrow Agreement and the resignation or removal of the
Escrow Agent for any reason. Anything in this Escrow Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect, punitive or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Escrow Agent has been
advised of such loss or damage and regardless of the form of action.
5.2 CONDITIONS TO INDEMNIFICATION. In case any litigation is
brought against the Escrow Agent in respect of which indemnification may be
sought hereunder, the Escrow Agent shall give prompt notice of that litigation
to the parties hereto, and the parties upon receipt of that notice shall have
the obligation and the right to assume the defense of such litigation with
counsel reasonably satisfactory to the Escrow Agent; PROVIDED THAT failure of
the Escrow Agent to give that notice shall not relieve the parties hereto from
any of their obligations under this Section 5 unless that failure prejudices the
defense of such litigation by said parties. At its own expense, the Escrow Agent
may employ separate counsel and participate in the defense. The parties hereto
shall not be liable for any settlement without their respective consents.
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6. ACKNOWLEDGMENT BY THE ESCROW AGENT
By execution and delivery of this Escrow Agreement, the Escrow Agent
acknowledges that the terms and provisions of this Escrow Agreement are
acceptable and it agrees to carry out the provisions of this Escrow Agreement on
its part.
7. RESIGNATION OR REMOVAL OF ESCROW AGENT; SUCCESSOR
7.1 RESIGNATION AND REMOVAL.
7.1.1 NOTICE. The Escrow Agent may resign as
such following the giving of thirty (30) days' prior written notice to the other
parties hereto. Similarly, the Escrow Agent may be removed and replaced
following the giving of thirty (30) days' prior written notice to be given to
the Escrow Agent jointly by the Indemnification Representative and Parent. In
either event, the duties of the Escrow Agent shall terminate thirty (30) days
after the date of such notice (or as of such earlier date as may be mutually
agreeable), and the Escrow Agent shall then deliver the balance of the Escrow
Shares, and all related stock transfer powers then in its possession to a
successor Escrow Agent as shall be appointed by the other parties hereto as
evidenced by a written notice filed with the Escrow Agent.
7.1.2 COURT APPOINTMENT. If the parties hereto
are unable to agree upon a successor or shall have failed to appoint a successor
prior to the expiration of thirty (30) days following the date of the notice of
resignation or removal, then the acting Escrow Agent, at the expense of the
Holders and Parent, may petition any court of competent jurisdiction for the
appointment of a successor Escrow Agent or other appropriate relief, and any
such resulting appointment shall be binding upon all of the parties hereto.
7.2 SUCCESSORS. Every successor appointed hereunder shall
execute, acknowledge and deliver to its predecessor, and also to the
Indemnification Representative and Parent, an instrument in writing accepting
such appointment hereunder, and thereupon such successor, without any further
act, shall become fully vested with all the duties, responsibilities and
obligations of its predecessor; but such predecessor shall, nevertheless, on the
written request of its successor or any of the parties hereto, execute and
deliver an instrument or instruments transferring to such successor all the
rights of such predecessor hereunder, and shall duly assign, transfer and
deliver all property, securities and monies held by it pursuant to this Escrow
Agreement to its successor. Should any instrument be required by any successor
for more fully vesting in such successor the duties, responsibilities, and
obligations hereby vested or intended to be vested in the predecessor, any and
all such instruments in writing shall, on the request of any of the other
parties hereto, be executed, acknowledged, and delivered by the predecessor.
7.3 NEW ESCROW AGENT. In the event of an appointment of a
successor, the predecessor shall cease to be escrow agent of any funds,
securities or other assets and records it may hold pursuant to this Escrow
Agreement, and the successor shall become such escrow agent.
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7.4 RELEASE. Upon acknowledgment by any successor Escrow Agent
of the receipt of the then remaining balance of the Escrow Shares, the then
acting Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Escrow Agreement that may arise and
accrue thereafter.
7.5 SUCCESSORS. Any corporation or association into which the
Escrow Agent in its individual capacity may be merged or converted or with which
it may be consolidated, or any corporation or association resulting from any
merger, conversion or consolidation to which the Escrow Agent in its individual
capacity shall be a party, or any corporation or association to which all or
substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be sold or otherwise transferred, shall be the Escrow
Agent hereunder without further act.
8. FEE
The Escrow Agent will be paid by Parent as billed for services and
expenses hereunder in accordance with the fee schedule attached hereto as
EXHIBIT 8, (which fee schedule is subject to change on an annual basis at the
same rate at which the Escrow Agent changes its rates generally for comparable
services provided to its other customers). Without limiting the foregoing,
Parent will reimburse the Escrow Agent for reasonable costs and expenses
incurred in the preparation and administration of this Agreement in the manner
contemplated by this Agreement, all in accordance with the fee schedule attached
hereto as EXHIBIT 8. In the event that the Escrow Agent is made a party to
litigation with respect to the property held hereunder, or brings an action in
interpleader, or in the event that the conditions to this Escrow Agreement are
not promptly fulfilled, or the Escrow Agent is required to render any service
not provided for in this Escrow Agreement and fee schedule, or there is any
assignment of the interests of this Escrow Agreement or any modification hereof,
the Escrow Agent shall be entitled to reasonable compensation from Parent for
such extraordinary services and reimbursement for all fees, costs, liability,
and expenses, including attorneys fees and expenses.
9. INDEMNIFICATION REPRESENTATIVE
9.1 APPOINTMENT AND AUTHORITY. The Holders have, by either
virtue of approval of the Merger Agreement or through the execution of this
Escrow Agreement, irrevocably consented to the appointment of Steven Fingerhood
as the Indemnification Representative as representative of the Holders and as
the attorney-in-fact for and on behalf of each Holder, and, subject to the
express limitations set forth below, the taking by the Indemnification
Representative of any and all actions and the making of any decisions required
or permitted to be taken by him under this Escrow Agreement, including but not
limited to the exercise of the power to: (i) authorize delivery to Parent of the
Escrow Shares, or any portion thereof, in satisfaction of Claims otherwise in
connection with an Escrow Adjustment, (ii) agree to, negotiate, enter into
settlements and compromises of, and demand arbitration and comply with orders of
courts and awards of arbitrators with respect to such Claims, (iii) resolve any
Claims, and (iv) take all actions necessary in the judgment of the
Indemnification Representative for the accomplishment of the foregoing and all
of the other terms, conditions, and limitations of this Escrow Agreement. Any
notice given to the Indemnification Representative will constitute
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notice to each and all of the Holders at the time notice is given to the
Indemnification Representative. Any action taken by, or notice or instruction
received from, the Indemnification Representative will be deemed to be an action
by, or notice or instruction from, each and all of the Holders. Parent and the
Escrow Agent will disregard any notice or instruction received from any Holder
other than the Indemnification Representative with regard to this Escrow
Agreement. The Indemnification Representative shall have unlimited authority and
power to act on behalf of each Holder with respect to this Escrow Agreement and
the disposition, settlement, or other handling of all Claims, notices, rights,
or obligations arising under this Escrow Agreement so long as all Holders are
treated in the same manner (in respect of their proportional interests in the
Escrow Shares). Until notified in writing by the Indemnification Representative
that such Indemnification Representative has resigned or by a majority in
interest of the Holders that the Indemnification Representative has been
removed, the Escrow Agent may act upon the directions, instructions and notices
of the Indemnification Representative named herein or any successor named in a
writing signed by a majority-in-interest of the Holders and filed with the
Escrow Agent.
9.2 INDEMNIFICATION. Parent, INT'L.com, the Surviving
Corporation and the Holders agree to and hereby do waive any suit, claim, demand
or cause of action of any kind which they may have or may assert against the
Indemnification Representative, in his capacity as such, arising out of or
relating to the execution or performance by the Indemnification Representative
hereunder, unless such suit, claim, demand or cause of action is based upon the
willful neglect, gross negligence or bad faith of the Indemnification
Representative. The Indemnification Representative shall not suffer any
liability or loss for any act performed or omitted to be performed by him under
this Escrow Agreement in the absence of adjudicated gross negligence, bad faith
or willful misconduct. The Indemnification Representative may consult with
counsel and other experts as may be reasonably necessary to advise him with
respect to his rights and obligations hereunder, with the fees and expenses
thereof to be paid as set forth in Section 3.3 above, and the Indemnification
Representative shall be fully protected by any act taken, suffered, permitted,
or omitted in good faith in accordance with the advice of such counsel and
experts. The Indemnification Representative shall not be responsible for the
sufficiency or accuracy of the form, execution, validity, or genuineness of
documents or securities now or hereafter deposited hereunder, or of any
endorsement thereof or for any lack of endorsement thereon, or for any
description therein, nor shall he be responsible or liable in any respect on
account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any such document, security or
endorsement, and the Indemnification Representative shall be fully protected in
relying upon any written notice, demand, certificate or document which he in
good faith believes to be genuine.
9.3 DEATH OR DISABILITY; SUCCESSORS. In the event of the death
or permanent disability of the Indemnification Representative, or his
resignation as the Indemnification Representative, a successor Indemnification
Representative shall be elected by a majority vote of the Holders, with each
Holder to be given a vote equal to his proportionate share of the Escrow Shares.
The Holders shall cause to be delivered to Parent and the Escrow Agent prompt
written notice of such election of a successor Indemnification Representative.
Each successor Indemnification Representative shall have all of the power,
authority, rights, and privileges conferred by this Agreement upon the original
Indemnification Representative, and the term,
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"INDEMNIFICATION Representative" as used herein shall be deemed to include any
successor Indemnification Representative.
10. TERMINATION; DEFICIENCY CLAIMS
This Escrow Agreement and the escrow created hereby shall
terminate following Escrow Agent's delivery and release of all remaining Escrow
Shares, and all related stock transfer powers to the Holders and/or Parent
pursuant to Section 2 or 3. In the event that upon the termination of this
Escrow Agreement, the value of the Escrow Shares released to Parent pursuant to
the provisions of this Escrow Agreement (determined as provided in the
penultimate sentence of Section 2.1 above) is insufficient to pay in full to
Parent the total amount of the Damages and Prevailing Party Awards to which it
is entitled at that time, if any, then, Parent shall have no further recourse;
PROVIDED, HOWEVER, that each Holder shall further be severally liable for any
breach by such Holder of such Holder's representation as to title to shares of
INT'L.com common and/or preferred stock made by such Holder in a Letter of
Transmittal.
11. MISCELLANEOUS PROVISIONS
11.1 PARTIES IN INTEREST. This Escrow Agreement is not
intended, nor shall it be construed, to confer any enforceable rights on any
Person not a party hereto. All of the terms and provisions of this Escrow
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto.
11.2 ATTORNEYS' FEES. In the event of any action to enforce
any provision of this Escrow Agreement, or on account of any default under or
breach of this Escrow Agreement with regard to Parent, INT'L.com and/or the
Holders, the substantially prevailing party in such action shall be entitled to
recover, in addition to all other relief, from the other party all attorneys'
fees and all other fees and costs incurred by the substantially prevailing party
in connection with such action (including, but not limited to, any appeal
thereof); PROVIDED, HOWEVER, that, except as explicitly provided in the first
sentence of Section 2.1 above, in no event shall any Holder be liable hereunder
for any amounts in excess of such Holder's allocable portion of the Escrow
Shares.
11.3 ENTIRE AGREEMENT. This Escrow Agreement constitutes the
final and entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior arrangements or understandings.
11.4 NOTICES. All notices, requests, demands or other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given: (i)
on the date of delivery if personally delivered by hand, (ii) upon the third day
after such notice is deposited in the United States mail, if mailed by
registered or certified mail, postage prepaid, return receipt requested, (iii)
upon the date scheduled for delivery after such notice is sent by a nationally
recognized overnight express courier or (iv) by fax upon written confirmation
(including the automatic confirmation that is received from the recipient's fax
machine) of receipt by the recipient of such notice:
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IF TO PARENT: Lionbridge Technologies, Inc.
950 Winter Street, Suite 2410
Waltham, MA 02451-1291
Attention: Rory J. Cowan
Telephone No.: (781) 434-6000
Fax No.: (781) 434-6034
WITH COPIES TO:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: George W. Lloyd, Esq.
Kathy A. Fields, Esq.
Telephone No.: (617) 248-7000
Fax No.: (617) 248-7100
IF TO THE INDEMNIFICATION Steven Fingerhood
REPRESENTATIVE: 87 Hillside Avenue
Mill Valley, CA 94941
Telephone No: (415) 383-9719
IF TO THE ESCROW AGENT: American Stock Transfer & Trust Co.
6201 15th Avenue
Brooklyn, NY 11219
Attention: Herbert Lemmer
Telephone No.: (718) 921-8209
Fax No.: (718) 331-1852
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 11.4.
11.5 CHANGES. The terms of this Escrow Agreement may not be
modified or amended, or any provisions hereof waived, temporarily or
permanently, except pursuant to the written agreement of Parent, the
Indemnification Representative and the Escrow Agent.
11.6 SEVERABILITY. If any term or provision of this Escrow
Agreement or the application thereof as to any Person or circumstance shall to
any extent be invalid or unenforceable, the remaining terms and provisions of
this Escrow Agreement or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby and each term and provision of this Escrow
Agreement shall be valid and enforceable to the fullest extent permitted by law.
11.7 COUNTERPARTS. This Escrow Agreement may be executed in
two or more partially or fully executed counterparts, each of which shall be
deemed an original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument. The execution and delivery of a
Signature Page to Escrow Agreement in the form annexed to this
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Escrow Agreement by any party hereto who shall have been furnished the final
form of this Escrow Agreement shall constitute the execution and delivery of
this Escrow Agreement by such party.
11.8 HEADINGS. The headings of the various sections of this
Escrow Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Escrow Agreement.
11.9 GOVERNING LAW JURISDICTION. This Escrow Agreement shall
be construed and controlled by the laws of the State of Delaware without regard
to the principles of conflicts of laws. Parent, INT'L.com, the Holders and the
Indemnification Representative hereby irrevocably consent and submit to the
jurisdiction of state and federal courts in the State of Delaware in connection
with any actions or proceedings brought against any of Parent, INT'L.com, the
Holders and the Indemnification Representative (or each of them) by the Escrow
Agent, or brought against the Escrow Agent by any of such parties, arising out
of or relating to this Escrow Agreement. In any such action or proceeding, each
of the parties hereby absolutely and irrevocably (i) waives any objection to
jurisdiction or venue, (ii) waives personal service of any summons, complaint,
declaration or other process, and (iii) agrees that the service thereof may be
made by certified or registered first-class mail directed to such party, as the
case may be, at the party's addresses given in or provided under Section 11.4.
11.10 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.
11.11 REPRODUCTION OF DOCUMENTS. This 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.
11.12 BINDING EFFECT. This Escrow Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
affiliates, successors and assigns.
11.13 COUNTERPARTS. This Agreement may be executed in two or
more partially or fully executed counterparts each of which will be deemed an
original and will bind the signatory, but all of which together will constitute
one and the same instrument
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the day and year first above written.
LIONBRIDGE TECHNOLOGIES, INC. INT'L.COM, INC.
By: /S/ RORY J. COWAN By: /S/ ROGER O. JEANTY
----------------- -------------------
Name: Rory J. Cowan Name: Roger O. Jeanty
Title: Chief Executive Officer Title: Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST Co. Indemnification Representative
As Escrow Agent
By: /S/ HERBERT J. LEMMER By: /S/ STEVEN FINGERHOOD
--------------------- ---------------------
Name: Herbert J. Lemmer Steven Fingerhood
Title: Vice President
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Schedule I
INSTRUMENT OF ACCESSION
The undersigned hereby executes the Escrow Agreement (the "ESCROW AGREEMENT") by
and among Lionbridge Technologies, Inc. (the "COMPANY") and certain other
parties which executed the same, and hereby agrees to all of the provisions of
the Escrow Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the original signatories, to a counterpart of
the Escrow Agreement. This Instrument of Accession shall take effect and shall
become an integral part of the said Escrow Agreement immediately upon execution
and delivery to the Company of this Instrument.
IN WITNESS WHEREOF, this INSTRUMENT OF ACCESSION has been duly executed
by or on behalf of the undersigned, as a sealed instrument under the laws of the
State of Delaware, as of the date below written.
Signature:
-----------------------------------
(Print Name)
Address:
Date: __________________________
ACCEPTED AND AGREED:
LIONBRIDGE TECHNOLOGIES, INC.
By:
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Name:
-----------------------
Title:
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