EXHIBIT 4.8
LOCK-UP ESCROW AGREEMENT
This LOCK-UP ESCROW AGREEMENT, dated as of _________, 2002 (this
"Agreement"), by and among NETWORD, INC., a Delaware corporation ("Parent"),
HOME DIRECTOR, INC., a Delaware corporation ("HD"), and [CONTINENTAL STOCK
TRANSFER AND TRUST COMPANY], as Lock-Up Escrow Agent (the "Lock-Up Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Parent, Webspeak Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Netword ("Sub") and HD have entered into an Agreement
and Plan of Merger, dated as of April ___, 2002 (the "Merger Agreement"),
whereby Sub will merge with and into HD on the terms and subject to the
conditions set forth in the Merger Agreement (the "Merger");
WHEREAS, the Merger Agreement provides that each holder of HD Shares will,
at the Effective Time, be entitled to receive, in exchange for its HD Shares, a
number of Parent Shares as determined in accordance with the Merger Agreement
(the "Merger Consideration");
WHEREAS, the parties desire (i) that 50% of the Parent Shares issued in the
Merger, (the "Lock-Up Shares") be subject to the lock-up restrictions described
herein (the "Lock-Up"), and, (ii) at the Effective Time, the Lock-Up Shares be
deposited with the Lock-Up Escrow Agent subject to release in accordance with
the terms hereof; and
WHEREAS, the Lock-Up Escrow Agent is willing to act as Lock-Up Escrow
Agent, upon the express terms and subject to the express conditions of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed to them in the Merger
Agreement.
2. APPOINTMENT OF LOCK-UP ESCROW AGENT. HD and Parent hereby appoint
the Lock-Up Escrow Agent to act as agent on their behalf pursuant to this
Agreement, and the Lock-Up Escrow Agent hereby consents to its appointment in
such capacity on the terms and conditions of this Agreement.
3. DEPOSIT OF LOCK-UP SHARES. On the Closing Date, Parent will deliver
to the Lock-Up Escrow Agent (i) a list containing the name, address and number
of Lock-Up Shares held by each HD Stockholder (the "HD Stockholder List"), (ii)
certificates representing the Lock-Up Shares to be issued to each HD Stockholder
("Lock-Up Certificates"), and (iii) any and all other documents required from
time to time by the Lock-Up Escrow Agent to effect transfers of the Lock-Up
Shares in accordance herewith.
4. Release of Lock-Up Shares.
4.1 Authorized Disbursements. The Lock-Up Escrow Agent is hereby
authorized to disburse the Lock-Up hares only as follows:
(a) to the HD Stockholders in accordance with Section 4.2 of this
Agreement;
(b) to the HD Stockholders upon receipt of a written instruction
signed by Parent and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ventures, Inc. ("STV"); or
(c) to the HD Stockholders in accordance with a final and binding
judgment rendered by a court of competent jurisdiction and delivered to the
Lock-Up Escrow Agent together with a certificate signed by Parent (upon
which certificate the Lock-Up Escrow Agent shall conclusively rely and act)
certifying that said judgment represents a final adjudication by a court of
competent jurisdiction.
4.2 Expiration of Lock-Up; Release of Lock-Up Shares. Unless released
earlier pursuant to Section 4.1, the Lock-Up Escrow Agent shall release and
deliver the Lock-Up Shares to the HD Stockholders, upon their written
instructions, (in the denominations set forth in the HD Stockholder List) on the
date that is three months following the Closing Date.
5. Certain Rights of the Stockholders.
5.1 Distributions and Dividends. As of the Effective Time, each HD
Stockholder that complies with the exchange procedures set forth in Section
3.3(a) of the Merger Agreement shall be entitled to receive directly from
Parent all cash dividends and other distributions paid or made with respect
to the Lock-Up Shares.
6. Lock-Up Escrow Agent.
6.1 Duties of Lock-Up Escrow Agent. The Lock-Up Escrow Agent shall treat
the Lock-Up Shares with such degree of care as it treats its own similar
property. It is agreed that the duties of the Lock-Up Escrow Agent are only such
as are herein specifically provided, and the Lock-Up Escrow Agent shall have no
other duties, implied or otherwise. The Lock-Up Escrow Agent's duties are as a
depository only, and the Lock-Up Escrow Agent shall incur no responsibility or
liability whatsoever, except for its willful misconduct or gross negligence.
Except where the terms of this Agreement expressly refer thereto, the Lock-Up
Escrow Agent shall not be bound in any way by any of the terms of the Merger
Agreement or any other agreement to which one or more of Parent and HD are
parties, whether or not the Lock-Up Escrow Agent has knowledge thereof, and the
Lock-Up Escrow Agent shall not in any way be required to determine whether or
not the Merger Agreement or any other agreement has been complied with by Parent
and HD or any other party thereto. In the event that the Lock-Up Escrow Agent
shall be uncertain as to any of its duties or rights hereunder or shall receive
instructions, claims or demands which, in its sole judgment, are in conflict
with any of the provisions of this Agreement, it shall be entitled to refrain
from taking any action other than to keep safely all Lock-Up Shares held in
escrow until it shall be directed otherwise pursuant to a written notice from
and executed by Parent, STV and the Lock-Up Escrow Agent shall not be
responsible or liable for any damages while waiting for such written notice.
This Agreement shall not create any fiduciary duty of the Lock-Up Escrow Agent
to Parent or any other person or entity whatsoever nor disqualify the Lock-Up
Escrow Agent from representing any of such parties as transfer agent and/or
registrar.
6.2 Reliance by Lock-Up Escrow Agent on Written Notices. The Lock-Up Escrow
Agent may conclusively rely and shall be fully authorized and protected in
relying upon any written notice, direction, instruction, demand, certificate,
advice, opinion or document which it, in good faith, believes to be genuine. Set
forth in Schedule 6.2 hereto is a list of the names of the persons authorized to
act for Parent and STV under this Agreement. The Lock-Up Escrow Agent may
conclusively rely on and shall be authorized and fully protected in acting upon
the written, facsimile or electronically delivered instructions of Parent and
STV.
6.3 Risk to Lock-Up Escrow Agent. In no event shall the Lock-Up Escrow
Agent be liable (i) for any consequential, punitive or special damages or (ii)
for an amount in excess of he value of the Lock-Up Shares, valued as of the date
of deposit. The Lock-Up Escrow Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Lock-Up Escrow
Agent (including but not limited to any act or provision of any present or
future law or regulation or governmental authority, any act of God or war, or
the unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
6.4 No Investigation by Lock-Up Escrow Agent. The Lock-Up Escrow Agent
shall not be required or bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, entitlement, order, approval or other paper or
document.
6.5 Lock-Up Escrow Agent's Execution of Power. The Lock-Up Escrow Agent may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, custodians, or nominees
appointed with due care, and shall not be responsible or liable for the acts or
omissions of any agent, attorney, custodian or nominee so appointed except for
acts that constitute willful misconduct or gross negligence.
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6.6 Legal Proceedings.
(a) The Lock-Up Escrow Agent shall not be required to institute legal
proceedings of any kind.
(b) If at any time the Lock-Up Escrow Agent is served with any
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process which in any way affects all or any
portion of the Lock-Up Shares (including but not limited to orders of
attachment or garnishment or other forms of levies or injunctions or stays
relating to the transfer of all or any portion of the Lock-Up Shares), the
Lock-Up Escrow Agent is authorized to comply therewith in any manner as it
or legal counsel of its own choosing deems appropriate; and if the Lock-Up
Escrow Agent complies in good faith with any such judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process, the Lock-Up Escrow Agent shall not be liable to any
of the parties hereto or to any other person or entity even though such
order, judgment, decree, writ or process may be subsequently modified or
vacated or otherwise determined to have been without legal force or effect.
The Lock-Up Escrow Agent shall provide Parent with notice, in accordance
with Section 7.3, of any such orders, judgments, decrees or writs (along
with copies of any related documentation), and the Lock-Up Escrow Agent
shall reasonably consult with Parent and HD and its counsel with respect to
such legal actions.
6.7 Lock-Up Escrow Agent Reporting. Notwithstanding anything to the
contrary herein, except as required by law, in no event shall the Lock-Up Escrow
Agent be under a duty to file any reports or withhold or deduct any amounts
in respect of taxes due for payments made pursuant to this Agreement.
6.8 Fees of the Lock-Up Escrow Agent. Parent covenants and agrees to pay to
the Lock-Up Escrow Agent from time to time, and the Lock-Up Escrow Agent shall
be entitled to, the fees and expenses agreed to in writing between Parent and
the Lock-Up Escrow Agent (which at the date hereof are set forth in Schedule 6.8
hereto) and will further pay or reimburse the Lock-Up Escrow Agent upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Lock-Up Escrow Agent in accordance with any of the provisions hereof or
any other documents executed in connection herewith (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and of
all persons not regularly in its employ), which related expenses, disbursements
and advances shall be paid by the requesting party, as set forth therein. The
obligations of Parent under this Section 6.8 to compensate the Lock-Up Escrow
Agent and to pay or reimburse the Lock-Up Escrow Agent for reasonable expenses,
disbursements and advances shall survive the satisfaction and discharge of this
Agreement or the earlier resignation or removal of the Lock-Up Escrow Agent.
6.9 Indemnification of the Lock-Up Escrow Agent. Parent agrees to indemnify
and hold the Lock-Up Escrow Agent and its directors, employees, officers,
agents, successors and assigns harmless from and against any and all losses,
claims, damages, liabilities and expenses, including, without limitation,
reasonable costs of investigation and reasonable counsel fees and expenses which
may be imposed on the Lock-Up Escrow Agent or incurred by it in connection with
its acceptance of this appointment as the Lock-Up Escrow Agent hereunder or the
performance of its duties hereunder, except as a result of the Lock-Up Escrow
Agent's gross negligence or willful misconduct. Such indemnity includes, without
limitation, all losses, damages, liabilities and expenses (including reasonable
counsel fees and expenses) incurred in connection with any litigation (whether
at the trial or appellate levels) arising from this Agreement or involving the
subject matter hereof. The indemnification provisions contained in this Section
6.9 are in addition to any other rights any of the indemnified parties may have
by law or otherwise and shall survive the termination of this Agreement or the
resignation or removal of the Lock-Up Escrow Agent.
6.10 Successor to Lock-Up Escrow Agent. Any corporation or other entity
whatsoever into which the Lock-Up Escrow Agent may be merged or converted or
with which it may be consolidated, and any corporation or other entity
whatsoever resulting from any merger, conversion or consolidation to which the
Lock-Up Escrow Agent shall be a party or any corporation or other entity
whatsoever succeeding to the business of the Lock-Up Escrow Agent shall be the
successor of the Lock-Up Escrow Agent hereunder without the execution or filing
of any paper with any party hereto except where an instrument of transfer or
assignment is required by law to effect such succession.
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6.11 Resignation of Lock-Up Escrow Agent. If the Lock-Up Escrow Agent at
any time, in its sole discretion, deems it necessary or advisable to resign as
the Lock-Up Escrow Agent hereunder, it may do so by giving prior written notice
of such event to Parent, HD and STV and thereafter delivering the Lock-Up Shares
to any other agent designated by Parent and STV as communicated to the Lock-Up
Escrow Agent in writing, and if no such agent shall be designated by Parent and
STV within 60 calendar days of such written notice, then the Lock-Up Escrow
Agent may do so by delivering the Lock-Up Shares either (a) to any bank or trust
located in the State of New York which is willing to act as Lock-Up Escrow Agent
hereunder in its place (provided that the fees charged by such bank or trust
company are not in excess of the fees charged by the Lock-Up Escrow Agent for
its services hereunder) or (b) if no such bank or trust company can be retained
within a reasonable period after such 60 calendar day period after the delivery
by the Lock-Up Escrow Agent of its written notice, then the Lock-Up Escrow Agent
shall seek the appointment of its successor as prescribed by the clerk or other
proper officer of a court of competent jurisdiction located within the State of
New York to the extent permitted by law (any such successor to the Lock-Up
Escrow Agent, whether designated by Parent and STV or pursuant to the clause
above or otherwise, is hereinafter referred to as the "Successor Agent"). The
costs and expenses (including reasonable attorneys' fees and expenses) incurred
by the Lock-Up Escrow Agent in connection with such proceeding for the
appointment of a Successor Agent shall be paid by Parent. Parent and STV may, at
any time after the date hereof, upon 30 calendar days prior written notice to
the Lock-Up Escrow Agent, appoint a Successor Agent for the resignation or
removal of the Lock-Up Escrow Agent, whereupon the Lock-Up Escrow Agent shall
deliver the Lock-Up Shares to such Successor Agent, as provided below. The
reasonable fees of any Successor Agent shall be borne by Parent. Upon receipt of
the identity of the Successor Agent, the Lock-Up Escrow Agent shall deliver the
Lock-Up Shares then held hereunder to the Successor Agent. Upon delivery of the
Lock-Up Shares to the Successor Agent, (i) the Lock-Up Escrow Agent shall be
discharged from any and all responsibility or liability with respect to the
Lock-Up Shares (except as otherwise provided herein) and (ii) all references
herein to the "Lock-Up Escrow Agent" shall, where applicable, be deemed to
include such Successor Agent and such Successor Agent shall thereafter become
the Lock-Up Escrow Agent for all purposes of this Agreement.
7. Miscellaneous.
7.1 Construction; Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Article, section, schedule, exhibit, recital
and party references are to this Agreement unless otherwise stated. No party,
nor its counsel, shall be deemed the drafter of this Agreement for purposes of
construing the provisions of this Agreement, and all provisions of this
Agreement shall be construed in accordance with their fair meaning, and not
strictly for or against any party.
7.2 Amendments and Modifications. No party hereto shall be bound by any
modification, amendment, termination, cancellation, rescission or supersession
of this Agreement unless the same shall be in writing and signed by it.
7.3 Notices. All notices and other communications hereunder shall be in
writing and shall be effective when actually received by the party to which
notice is sent as follows:
With copies to:
(a) If to Parent, to: (which shall not constitute notice)
Netword, Inc.
1270 Avenue of the Americas Kronish ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Suite 1800 1114 Avenue of the Americas
New York, N.Y. 10036 ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
(c) If to the Lock-Up Escrow Agent, to:
[Continental Stock Transfer & Trust
Company]
Facsimile:
Attention:
or to such other address as the person to whom notice is being given may have
previously furnished to the other parties in writing in the manner set forth
above.
7.4 Assignment. Subject to Sections 6.10 and 6.11, neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any party (whether by operation of law or otherwise) without the prior written
consent of Parent, HD and the Lock-Up Escrow Agent; provided that Parent may
assign its rights and obligations to any affiliate, but no such assignment shall
relieve such Parent of its obligations hereunder. This Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.
7.5 Termination of Agreement. This Agreement shall terminate when all of
the Lock-Up Shares have been delivered according to the terms of this Agreement.
7.6 Representation. Each of the parties hereby represents and warrants that
this Agreement has been duly authorized, executed and delivered on its behalf
and constitutes its legal, valid and binding obligation.
7.7 Other Miscellaneous Provisions.
(a) This Agreement may be executed simultaneously in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(b) Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday, or banking holiday, such
time shall be extended to the next day on which Lock-Up Escrow Agent is
open for business.
(c) Each party agrees that any suit, action or proceeding with respect
to this Agreement, and the performance of the parties hereunder shall only
be brought in the courts of the State of Delaware, including any federal
court located within the State of Delaware. Accordingly, each party submits
irrevocably to the exclusive jurisdiction of such courts for the purpose of
any such suit, action or proceeding and waives irrevocably any right which
it may have to bring any such suit, action or proceeding in any forum other
than a court of the State of Delaware, or in any federal court located
within the State of Delaware, and any defense which it may have to the
enforcement of this provision, whether based on the inconvenience of the
forum or otherwise.
(d) The Lock-Up Escrow Agent does not have any interest in the Lock-Up
Shares deposited hereunder but is serving as escrow holder only. Parent
agrees to pay or reimburse the Lock-Up Escrow Agent upon request for any
transfer taxes or other taxes relating to the Lock-Up Shares incurred in
connection herewith and shall indemnify and hold harmless the Lock-Up
Escrow Agent for any amounts that it is obligated to pay in the way of such
taxes. Any payments of income in respect of the Lock-Up Shares shall be
subject to withholding regulations then in force with respect to United
States taxes. The parties hereto will provide the Lock-Up Escrow Agent with
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appropriate forms for tax I.D. number certifications.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -
THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
NETWORD, INC.
By: ____________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President and CEO
HOME DIRECTOR, INC.
By: ____________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and CEO
LOCK-UP ESCROW AGENT:
[CONTINENTAL STOCK TRANSFER & TRUST
COMPANY], as Lock-Up Escrow Agent
By: _____________________________
Name:
Title:
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