Exhibit 99.6
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is dated as of the 19th day of
February, 2002, by and among I-Many, Inc., a Delaware corporation (the
"Company"), the persons named below as "Purchasers" (the "Purchasers"), and Hale
and Dorr LLP, as escrow agent. The Company and the Purchasers are sometimes
referred to herein, collectively, as the "Interested Parties." The Interested
Parties acknowledge that Hale and Dorr is acting as escrow agent on an interim
basis at the request of and for the convenience of both of the Interested
Parties, and the Interested Parties agree to use commercially reasonable efforts
to establish other mutually agreed escrow arrangements as promptly as
practicable.
WHEREAS, the Company and the Purchasers have entered into an agreement
of even date (the "Securities Purchase Agreement") pursuant to which the
Purchasers have purchased Securities, including the Preferred Stock and
Warrants; and
WHEREAS, the Company and the Purchasers wish to engage the Escrow Agent
to act, and the Escrow Agent is willing to act, as escrow agent hereunder and,
in that capacity, to hold, administer and distribute the amounts deposited in
escrow hereunder in accordance with, and subject to, the terms of this
Agreement;
NOW THEREFORE, for valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Agreement.
SECTION 2. DEPOSIT OF ESCROW FUNDS OR PROPERTY.
On the date hereof, (i) the Purchasers shall deposit with the Escrow
Agent in immediately available funds the aggregate amount of $17,000,000 (the
"Escrow Funds"), and (ii) the Company shall deliver to the Escrow Agent the
shares of Preferred Stock and Warrants listed on the attached SCHEDULE A (the
"Escrow Shares"), and the Escrow Agent shall hold and administer the Escrow
Funds and the Escrow Shares (said Escrow Funds, together with any investment
income received by the Escrow Agent from the investment thereof from time to
time pursuant to Section 4 below, and said Escrow Shares, together with any
dividends and other distributions therefrom or proceeds thereof received by the
Escrow Agent, are collectively referred to as the "Escrow Property") subject to
the terms of this Agreement. The Escrow Agent agrees to hold the Escrow Funds in
an account (the "Escrow Account"), and to administer the Escrow Property, in
accordance with the terms of this Agreement.
SECTION 3. CLAIMS AND PAYMENT; RELEASE FROM ESCROW.
(a) If a Registration Statement covering the resale of the Underlying
Shares has not been declared effective by the Commission by the Effectiveness
Date (as defined in the Registration Rights Agreement), then the Purchasers and
the Company shall countersign and deliver to the Escrow Agent a copy of a
written notice sent either by a Purchaser or by the
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Company to the other requiring the redemption of all (but not less than all) of
the Preferred Stock then held by the Purchasers (if such a notice has been
sent). Such notice shall direct the Escrow Agent to deliver (i) the Escrow Funds
to the Purchasers pro rata in accordance with their ownership of Preferred
Stock, and (ii) the Shares and the Warrants to the Company. Upon the receipt of
such notice, the Escrow Agent shall deliver the Escrow Funds, the Shares and the
Warrants as aforesaid by the close of business on the 2nd Trading Day following
the date on which such copy of the notice is delivered.
(b) If the Escrow Agent shall not have received a Holder Conversion
Notice from each Purchaser or a Company Conversion Notice on or prior to 6:30
p.m. (New York City time) on the fifth Trading Day following the Settlement Date
(which such Settlement Date the Interested Parties shall mutually confirm in
writing to the Escrow Agent once known), the Escrow Agent shall deliver (i) the
Escrow Funds to the Purchaser or Purchasers from whom a Holder Conversion Notice
was not received pro rata in accordance with their ownership of Preferred Stock
on the date of this Agreement), and (ii) the Shares and the Warrants to the
Company. The Escrow Agent shall deliver the Escrow Funds, the Shares and the
Warrants as aforesaid by the close of business on the 2nd Trading Day following
the later of (i) the fifth Trading Day following the Settlement Date or (ii) the
day on which the Interested Parties give the Escrow Agent written notice
confirming the Settlement Date).
(c) If the Escrow Agent shall have received a Holder Conversion Notice
from one or more Purchasers or a Company Conversion Notice prior to the end of
the fifth Trading Day following the Settlement Date (which such Settlement Date
the Interested Parties shall mutually confirm in writing to the Escrow Agent
once known), and the Company shall have delivered to the Escrow Agent a
certificate for the number of Underlying Shares being acquired upon the
conversion of shares of Preferred Stock pursuant to each such Holder Conversion
Notice or Company Conversion Notice (the "Common Stock certificate") (along with
a calculation showing the number of shares of Preferred Stock being converted),
the Escrow Agent shall prior to the close of business on 2nd Trading Day
following the delivery of such Common Stock certificate, deliver (i) the Escrow
Funds to the Company and, (ii) the Common Stock certificate and the Warrants to
the Purchasers so converting pro rata in accordance with their ownership of
Preferred Stock; provided, however, that in the event that the aggregate number
of Underlying Shares that would be issued to the Holders as a result of such
conversion notices exceeds 3,000,000 shares (as reflected in a written summary
signed by the Interested Parties), the excess of such number of shares over
3,000,000 shall be returned to the Company, and the Escrow Agent shall
distribute to the Purchasers pro rata in accordance with their ownership of
Preferred Stock (immediately prior to such conversion) Escrow Funds equal to the
Stated Value of the Preferred Shares convertible into such excess Underlying
Shares.
SECTION 4. INVESTMENT OF FUNDS.
(a) The Escrow Agent shall invest the Escrow Property in a non-interest
bearing account or in a federally-insured money market account (subject to any
limitations on insurance thereon).
(b) Subject to paragraph 4(a), the Escrow Agent shall have no
obligation or duty to invest the Escrow Property. All earnings received from the
investment of the Escrow Property shall be credited to, and shall become a part
of, the Escrow (and any losses on such investments
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shall be debited to the Escrow Account). The Escrow Agent shall have no
liability for any investment losses, including without limitation any market
loss on any investment liquidated prior to maturity in order to make a payment
required hereunder.
(c) The Interested Parties agree that, for tax reporting purposes, all
interest or other income earned from the investment of the Escrow Property in
any tax year shall to the extent such interest or other income is distributed by
the Escrow Agent to any person or entity pursuant to the terms of this Agreement
during such tax year, be reported as allocated to such person or entity.
(d) The Interested Parties hereto agree to provide the Escrow Agent
with a certified tax identification number by signing and returning a Form W-9
(or Form W-8 BEN, in case of non-U.S. persons) to the Escrow Agent upon the
execution and delivery of this Agreement. The Interested Parties understand
that, in the event their tax identification numbers are not certified to the
Escrow Agent, the Internal Revenue Code, as amended from time to time, may
require withholding of a portion of any interest or other income earned on the
investment of the Escrow Property.
SECTION 5. CONCERNING THE ESCROW AGENT.
(a) Each Interested Party acknowledges and agrees that the Escrow Agent
(i) shall not be responsible for any of the agreements referred to or described
herein (including without limitation the Agreement), or for determining or
compelling compliance therewith, and shall not otherwise be bound thereby, (ii)
shall be obligated only for the performance of such duties as are expressly and
specifically set forth in this Agreement on its part to be performed, each of
which is ministerial (and shall not be construed to be fiduciary) in nature, and
no implied duties or obligations of any kind shall be read into this Agreement
against or on the part of the Escrow Agent, (iii) shall not be obligated to take
any legal or other action hereunder which might in its judgment involve or cause
it to incur any expense or liability unless it shall have been furnished with
acceptable indemnification, (iv) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction (including, without
limitation, wire transfer instructions, whether incorporated herein or provided
in a separate written instruction), instrument, statement, certificate, request
or other document furnished to it hereunder and believed by it to be genuine and
to have been signed or presented by the proper person, and shall have no
responsibility or duty to make inquiry as to or to determine the genuineness,
accuracy or validity thereof (or any signature appearing thereon), or of the
authority of the person signing or presenting the same, and (v) may consult
counsel satisfactory to it, including Hale and Dorr LLP, and the opinion or
advice of such counsel in any instance shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or advice of such
counsel.
(b) The Escrow Agent shall not be liable to anyone for any action taken
or omitted to be taken by it hereunder except in the case of the Escrow Agent's
gross negligence or willful misconduct in breach of the terms of this Agreement.
In no event shall the Escrow Agent be liable for indirect, punitive, special or
consequential damage or loss (including but not limited to lost profits)
whatsoever, even if the Escrow Agent has been informed of the likelihood of such
loss or damage and regardless of the form of action.
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(c) The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry depository,
securities intermediary or other subescrow agent employed by the Escrow Agent
than any such book-entry depository, securities intermediary or other subescrow
agent has to the Escrow Agent, except to the extent that such action or omission
of any book-entry depository, securities intermediary or other subescrow agent
was caused by the Escrow Agent's own gross negligence or willful misconduct in
breach of this Agreement.
(d) The Escrow Agent is hereby authorized, in making or disposing of
any investment permitted by this Agreement, to deal with itself (in its
individual capacity) or with any one or more of its affiliates, whether it or
such affiliate is acting as a subagent of the Escrow Agent or for any third
person or dealing as principal for its own account.
(e) Notwithstanding any term appearing in this Agreement to the
contrary, in no instance shall the Escrow Agent be required or obligated to
distribute any Escrow Property (or take other action that may be called for
hereunder to be taken by the Escrow Agent) sooner than two (2) Trading Days
after (i) it has received the applicable documents required under this Agreement
in good form, or (ii) passage of the applicable time period (or both, as
applicable under the terms of this Agreement), as the case may be.
(f) Unless and except to the extent otherwise expressly set forth
herein, all deposits and payments hereunder, or pursuant to the terms hereof,
shall be in U.S. dollars.
SECTION 6. COMPENSATION, EXPENSE REIMBURSEMENT AND INDEMNIFICATION.
(a) Each of the Interested Parties agrees, jointly and severally, to
reimburse the Escrow Agent on demand for all costs and expenses incurred in
connection with the administration of this Agreement or the escrow created
hereby or the performance or observance of its duties hereunder which are in
excess of its compensation for normal services hereunder, including without
limitation, payment of any legal fees and expenses incurred by the Escrow Agent
in connection with resolution of any claim by any party hereunder. Subject to
the preceding sentence, the Company agrees that if Hale and Dorr LLP resigns as
Escrow Agent hereunder and any successor escrow agent charges fees and expenses
for its services hereunder, the Company will pay such fees and expenses.
(b) Each of the Interested Parties covenants and agrees, jointly and
severally, to indemnify the Escrow Agent (and its directors, officers and
employees) and hold it (and such directors, officers and employees) harmless
from and against any loss, liability, damage, cost and expense of any nature
incurred by the Escrow Agent arising out of or in connection with this Agreement
or with the administration of its duties hereunder, including but not limited to
attorney's fees and other costs and expenses of defending or preparing to defend
against any claim of liability unless and except to the extent such loss,
liability, damage, cost and expense shall be caused by the Escrow Agent's gross
negligence, or willful misconduct. The foregoing indemnification and agreement
to hold harmless shall survive the termination of this Agreement.
(c) Notwithstanding anything herein to the contrary, the Escrow Agent
shall have and is hereby granted a possessory lien on and security interest in
the Escrow Property, and all proceeds thereof, to secure payment of all amounts
owing to it from time to time hereunder, whether now
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existing or hereafter arising. The Escrow Agent shall have the right to deduct
from the Escrow Property, and proceeds thereof, any such sums, upon one Business
Day's notice to the Interested Parties of its intent to do so.
SECTION 7. TAX INDEMNIFICATION.
Each of the Interested Parties agrees, jointly and severally, (i) to
assume any and all obligations imposed now or hereafter by any applicable tax
law with respect to any payment or distribution of the Escrow Property or
performance of other activities under this Agreement, (ii) to instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges, and to
instruct the Escrow Agent with respect to any certifications and governmental
reporting that may be required under any laws or regulations that may be
applicable in connection with its acting as Escrow Agent under this Agreement,
and (iii) to indemnify and hold the Escrow Agent harmless from any liability or
obligation on account of taxes, assessments, additions for late payment,
interest, penalties, expenses and other governmental charges that may be
assessed or asserted against the Escrow Agent in connection with, on account of
or relating to the Escrow Property, the management established hereby, any
payment or distribution of or from the Escrow Property pursuant to the terms
hereof or other activities performed under the terms of this Agreement,
including without limitation any liability for the withholding or deduction of
(or the failure to withhold or deduct) the same, and any liability for failure
to obtain proper certifications or to report properly to governmental
authorities in connection with this Agreement, including costs and expenses
(including reasonable legal fees and expenses), interest and penalties. The
foregoing indemnification and agreement to hold harmless shall survive the
termination of this Agreement.
SECTION 8. RESIGNATION.
(a) The Escrow Agent may at any time resign as Escrow Agent hereunder
by giving ten (10) days' prior written notice of resignation to the Company and
the holders of a majority of the shares of Preferred Stock (the "Majority
Purchasers"). Prior to the effective date of the resignation as specified in
such notice, the Company will issue to the Escrow Agent a written instruction
authorizing redelivery of the Escrow Property to a bank or trust company that it
selects as successor to the Escrow Agent hereunder subject to the consent of the
Majority Purchasers (which consent shall not be unreasonably withheld or
delayed); provided however, that the Company's stock transfer agent and State
Street Bank and Trust Company are hereby deemed to be acceptable to the
Interested Parties. If no successor escrow agent is so named, the Escrow Agent
may apply to a court of competent jurisdiction for appointment of a successor
escrow agent. The parties agree to negotiate and consider in good faith any
changes to this Agreement reasonably requested by such successor agent.
The Interested Parties acknowledge that Hale and Dorr LLP provides
legal services to the Company, and that nothing herein (including the
appointment of Hale and Dorr as Escrow Agent hereunder) shall be deemed to
constitute a conflict of interest that precludes Hale and Dorr's representation
of the Company in the future, including as to the Agreement and other matters
between the Company and the Purchasers.
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SECTION 9. DISPUTE RESOLUTION.
It is understood and agreed that, should any dispute arise with respect
to the delivery, ownership, right of possession, and/or disposition of the
Escrow Property, or should any claim be made upon the Escrow Agent or the Escrow
Property by a third party, the Escrow Agent upon receipt of notice of such
dispute or claim is authorized and shall be entitled (at its sole option and
election) to retain in its possession without liability to anyone, all or any of
said Escrow Property until such dispute shall have been settled either by the
mutual written agreement of the parties involved or by a final order, decree or
judgment of a court in the United States of America, the time for perfection of
an appeal of such order, decree or judgment having expired. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any legal
proceedings which relate to the Escrow Property.
SECTION 10. CONSENT TO JURISDICTION AND SERVICE.
Each of the Interested Parties hereby absolutely and irrevocably
consents and submits to the jurisdiction of the courts in the Commonwealth of
Massachusetts and of any Federal court located in said Commonwealth in
connection with any actions or proceedings brought against the Interested
Parties (or any of them) by the Escrow Agent arising out of or relating to this
Escrow Agreement. In any such action or proceeding, the Interested Parties each
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 their respective addresses in accordance with Section 13 hereof.
SECTION 11. WAIVER OF JURY TRIAL.
THE ESCROW AGENT AND THE INTERESTED PARTIES HEREBY WAIVE A TRIAL BY
JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR
THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF ITS PROVISIONS OR ANY NEGOTIATIONS IN CONNECTION HEREWITH.
SECTION 12. 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.
SECTION 13. NOTICES; WIRING INSTRUCTIONS.
Any notice permitted or required hereunder shall be in writing, and
shall be sent (i) by personal delivery, overnight delivery by a recognized
courier or delivery service, or (ii) mailed by registered or certified mail,
return receipt requested, postage prepaid, or (iii) by confirmed telecopy
accompanied by mailing of the original on the same day by first class mail,
postage prepaid, in each case the Interested Parties at their address set forth
in the Agreement (or to such other address as any such party may hereafter
designate by written notice to the other parties), and to the Escrow Agent at 60
State Street, Boston, MA 02109, attention: Jeffrey A. Stein.
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SECTION 14. MISCELLANEOUS.
(a) BINDING EFFECT; SUCCESSORS. This Agreement shall be binding upon
the respective parties hereto and their heirs, executors, successors and
assigns. If the Escrow Agent consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Escrow Agent.
(b) MODIFICATIONS. This Agreement may not be altered or modified
without the express written consent of the Company, the Majority Purchasers and
the Escrow Agent. No course of conduct shall constitute a waiver of any of the
terms and 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 of this Escrow Agreement, or of such
terms and conditions on any other occasion. Notwithstanding any other provision
hereof, consent to an alteration or modification of this Agreement may not be
signed by means of an e-mail address.
(c) GOVERNING LAW. THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS.
(d) COUNTERPARTS. This Escrow Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf as of the 19th day of
February, 2002.
FIRST INVESTORS HOLDING CO., INC.
By: /s/ Kenneth L. Henderson
-------------------------------------
Title: Attorney-in-fact
Name: Kenneth L. Henderson
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf as of the 19th day of
February, 2002.
PINE RIDGE FINANCIAL INC.
By: /s/ Kenneth L. Henderson
-------------------------------------
Title: Attorney-in-fact
Name: Kenneth L. Henderson
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf as of the 19th day of
February, 2002.
[Purchaser]
By:
-------------------------------------
Title:
Name:
I-many, Inc.
By: /s/ A. Leigh Powell
-------------------------------------
Title: CEO
Name: A. Leigh Powell
Hale and Dorr LLP
By:
-------------------------------------
Title:
Name:
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf as of the 19th day of
February, 2002.
[Purchaser]
By:
-------------------------------------
Title:
Name:
I-many, Inc.
By:
-------------------------------------
Title:
Name:
Hale and Dorr LLP
By: /s/ Jeffrey A. Stein
-------------------------------------
Title:
Name: Jeffrey A. Stein
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Schedule A
List of Escrow Shares
1. Certificate Number 1 for 919 shares of the Company's Series A Convertible
Preferred Stock, $.01 par value per share, purchased by First Investors Holding
Co., Inc.
2. Certificate Number 2 for 781 shares of the Company's Series A Convertible
Preferred Stock, $.01 par value per share, purchased by Pine Ridge Financial
Inc.
3. Warrant No. FIHC-3, for shares of the Company's Common Stock.
4. Warrant No. PRFI-3, for shares of the Company's Common Stock.
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