RETAINED SHARE ESCROW AGREEMENT
Exhibit 10.4
THIS ESCROW AGREEMENT, dated as of March 24, 2005 (this “Escrow Agreement”), is by and among
▇▇▇▇ ▇▇▇▇▇▇▇ of ▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ (the “First Seller”), SPRINGREEL LIMITED
(company number 538794), whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ (the “Second Seller,” together with the First Seller, the “Sellers”), ACE*COMM
CORPORATION, a Maryland Corporation (“ACE*COMM”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association, as escrow agent hereunder (“Escrow Agent”).
BACKGROUND
A. Sellers and ACE*COMM have entered into a Purchase Agreement (as amended, the “Underlying
Agreement”), dated as of March 24, 2005, pursuant to which ACE*COMM is purchasing from Sellers the
entire issued share capital of Double Helix Solutions Limited, a company incorporated and
registered in England and Wales with company number 3522680 whose registered office is at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ (the “Transaction”). The Underlying Agreement provides that
ACE*COMM shall place the number of shares of the common shares of ACE*COMM set forth on
Schedule A (the “ACE*COMM Stock”) with a value for purposes of the Escrow Agreement as set
forth on Schedule A (the “Escrow Shares”) in a segregated escrow account to be held by
Escrow Agent to fund indemnity obligations of Sellers set forth in the Underlying Agreement.
B. Escrow Agent has agreed to accept, hold, and disburse the Escrow Shares deposited with it
and the earnings and dividends thereon in accordance with the terms of this Escrow Agreement.
C. Pursuant to this Escrow Agreement, Sellers and ACE*COMM have each appointed the
Representatives (as defined below) to represent them for all purposes in connection with the Escrow
Shares to be deposited with Escrow Agent, the indemnification provisions of Sections 9 and 10 of
the Underlying Agreement and this Escrow Agreement.
D. In order to establish the escrow of Escrow Shares and to effect the
indemnification provisions of the Underlying Agreement, the parties hereto have entered into this
Escrow Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby
agree as follows:
1. Definitions. The following terms shall have the following meanings when used
herein.
“ACE*COMM Representative” shall mean any person so designated on Schedule A hereto or
any other person designated in a writing signed by ACE*COMM and delivered to Escrow Agent and the
Sellers Representatives in accordance with the notice provisions of this Escrow Agreement, to act
as its representative under this Escrow Agreement.
“Claim” shall mean a claim for indemnification by ACE*COMM pursuant to Section 9 of the
Underlying Agreement.
“Claim Notice” shall mean a written notification, signed by an ACE*COMM Representative, which
shall specify the obligation, representation or agreement in the Underlying Agreement with respect
to which a Claim is being made, the facts giving rise to and the alleged basis for such Claim, the
Estimated Claim Amount of such Claim, the sequential number of such Claim in relation to all Claim
Notices previously delivered hereunder, the date of such Claim Notice, and the aggregate Estimated
Claim Amounts of all Claims as to which Claim Notices have been delivered. Each Claim Notice also
shall include a certification by an ACE*COMM Representative that the Claim is being made pursuant
to the Underlying Agreement and this Escrow Agreement.
“Claim Response” shall mean a written notification, signed by a Sellers Representative, which
shall set forth whether or not Seller disputes any matter with respect to a Claim Notice or the
Claim described therein.
“Court Order” shall mean a written order of a court of competent jurisdiction.
“Escrow Period” shall mean the period commencing on the date hereof and ending on the
applicable date set forth on Schedule A hereto.
“Escrow Shares” shall mean the Escrow Shares deposited with Escrow Agent pursuant to
Section 3 of this Escrow Agreement, together with any interest, dividends and other
distributions and/or income thereon.
“Estimated Claim Amount” shall mean the amount designated by the ACE*COMM Representative to
be the amount of any Claim (and the number of shares that represent that amount) for which a Claim
Notice has been delivered. For purposes of determining the number of Escrow Shares to be paid in
any payment of an Estimated Claim Amount, the Escrow Shares shall be valued for purposes of this
Escrow Agreement at the per share price set forth in Schedule A.
“Joint Written Direction” shall mean a written direction executed by the Representatives and
directing Escrow Agent to disburse all or a portion of the Escrow Shares or to take or refrain
from taking an action pursuant to this Escrow Agreement.
“Representatives” shall mean one Sellers Representative and one ACE*COMM Representative.
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“Sellers Representative” shall mean any person so designated on Schedule A hereto or
any other person designated in a writing signed by Sellers and delivered to Escrow Agent and the
ACE*COMM Representatives in accordance with the notice provisions of this Escrow Agreement, to act
as their representative under this Escrow Agreement.
2. Appointment of and Acceptance by Escrow Agent. Sellers, ACE*COMM and the
Representatives hereby appoint Escrow Agent to serve as escrow agent hereunder. Escrow Agent
hereby accepts such appointment and, upon receipt by delivery of the ACE*COMM Stock representing
the Escrow Shares in accordance with Section 3 below, agrees to hold, invest and disburse
the Escrow Shares in accordance with this Escrow Agreement.
3. Deposit of Escrow Shares. Simultaneously with the execution and delivery of this
Escrow Agreement, ACE*COMM will transfer the number of shares of ACE*COMM Stock set forth on
Schedule A hereto to Escrow Agent, by delivery of such Escrow Shares to the Escrow Agent at
the address set forth on Schedule A hereto. The ACE*COMM Stock held as the Escrow Shares
shall be valued for all purposes under this Escrow Agreement at the per share price set forth on
Schedule A. The ACE*COMM Stock held as the Escrow Shares shall be registered one-half in
the name of ▇▇▇▇ ▇▇▇▇▇▇▇ and one-half in the name of Springreel Limited, provided, however, that
each of ▇▇▇▇ ▇▇▇▇▇▇▇ and Springreel Limited shall execute and deliver to the Escrow Agent stock
powers, with the name of the transferee left blank and the date of transfer left blank, in respect
of the shares of ACE*COMM Stock held in escrow as part of the Escrow Shares to which they have
rights. So long as such shares remain deposited with the Escrow Agent, the Sellers shall have the
right to vote all shares of ACE*COMM held by the Escrow Agent on behalf of Sellers in the
proportions set forth above.
4. Disbursements of Escrow Shares.
a. Failure to Respond to Claim. In the event that Sellers Representative does
not notify the Escrow Agent and ACE*COMM with a Claim Response within ninety (90) days of
the receipt by Sellers Representative of a Claim Notice, the Escrow Agent
shall return from the Escrow Shares the Estimated Claim Amount for the Claim to
ACE*COMM. Upon receipt of such Escrow Shares so returned, ACE*COMM shall retire such
Escrow Shares.
b. Joint Written Direction or Court Order. In the event a Claim Response is
received by the Escrow Agent, then the Escrow Agent shall disburse Escrow Shares, at any
time and from time to time, only upon receipt of and in accordance with a Joint Written
Direction or a Court Order.
c. Expiration of Escrow Period. Upon the expiration of the Escrow Period,
Escrow Agent shall: (a) retain in the Escrow Shares a sufficient number of shares of
ACE*COMM or funds to pay in full all Estimated Claim Amounts, if any, that have not been
resolved at such time by the delivery to Escrow Agent of a Joint Written Direction; and
(b) distribute, as promptly as practicable, the balance of the Escrow Shares, one-half to
each Seller, without any further instruction or direction from the Representatives.
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If upon the expiration of the Escrow Period, Escrow Agent has retained any Escrow Shares
with respect to Estimated Claim Amounts pursuant to this Section 4, then the Escrow Agent
may, in its sole discretion, either (i) retain all such remaining Escrow Shares, to be held and
invested in accordance with the provisions of this Escrow Agreement, until receipt by Escrow Agent
of a Joint Written Direction with respect to the disposition of such amounts, or (ii) pay over all
remaining Escrow Shares to a court of competent jurisdiction in the manner described in
Section 6 below.
All disbursements of Escrow Shares shall be made in the manner specified in this Section
4 and in Schedule A and shall be subject to the claims and fees of Escrow Agent and
the Indemnified Parties (as defined below) pursuant to Section 10 and Section 11
below.
5. Indemnification Claims. An ACE*COMM Representative shall deliver each
Claim Notice to the Sellers Representatives and Escrow Agent, such delivery to be in
accordance with the notice provisions of this Escrow Agreement.
Upon receipt of any Claim Notice, Escrow Agent shall promptly make entries or notations in the
account records relating to the Escrow Shares, indicating that shares of ACE*COMM Stock in the
amount of the Estimated Claim Amount are reserved to satisfy such Claim, and identifying the date
and number of such Claim Notice.
Within ninety (90) days of receipt by at least one Seller Representative of any Claim Notice,
a Sellers Representative shall deliver a Claim Response to an ACE*COMM Representative and Escrow
Agent, such delivery to be in accordance with the notice provisions of this Escrow Agreement.
Failure to provide such Claim Response to the Escrow Agent shall result in payment of the
Estimated Claim Amount to ACE*COMM by the Escrow Agent. Escrow Agent shall have no responsibility
to determine whether any Claim Notice or Claim Response has been received by Sellers or ACE*COMM,
as applicable, or to provide any Claim Notice or Claim Response to Sellers or ACE*COMM.
6. Suspension
of Performance; Disbursement Into Court. If, at any time, (i) there
shall exist any dispute between Sellers, ACE*COMM or the Representatives with respect to the
holding or disposition of any portion of the Escrow Shares or any other obligations of Escrow
Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow Agent’s sole
satisfaction, the proper disposition of any portion of the Escrow Shares or Escrow Agent’s proper actions
with respect to its obligations hereunder, or (iii) the Representatives have not within 30
days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 8
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take
either or both of the following actions:
a. suspend the performance of any of its obligations under this Escrow Agreement until
such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or
until a successor Escrow Agent shall have been appointed (as the case may be).
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b. petition (by means of an interpleader action or any other appropriate method) any
court of competent jurisdiction in any venue convenient to Escrow Agent, for instructions
with respect to such dispute or uncertainty, and to the extent required or permitted by
law, pay into such court, for holding and disposition in accordance with the instructions
of such court, all Escrow Shares, after deduction and payment to Escrow Agent of all fees
and expenses (including court costs and attorneys’ fees) payable to, incurred by, or
expected to be incurred by Escrow Agent in connection with the performance of its duties
and the exercise of its rights hereunder.
Escrow Agent shall have no liability to Sellers, ACE*COMM, their respective shareholders or
members or any other person with respect to any suspension of performance or disbursement into
court (including, without limitation, the disbursement authorized in Section 4 hereof),
specifically including any liability or claimed liability that may arise, or be alleged to have
arisen, out of or as a result of any delay in the disbursement of ACE*COMM Stock held in the Escrow
Shares or any delay in or with respect to any other action required or requested of Escrow Agent.
7. Investment of Funds. Escrow Agent is herein directed and instructed to hold the
Escrow Shares at its offices. With respect to any interest, dividends or other funds related to
the Escrow Shares (“Escrow Funds”), the Escrow Agent is herein directed and instructed to
initially invest and reinvest the such funds in the investment indicated on Schedule A
hereto. With the execution of this document, the parties hereto acknowledge receipt of
prospectuses and/or disclosure materials associated with the investment vehicle, either through
means of hardcopy or via access to the website associated with the investment selected by the
parties to this Escrow Agreement. The parties hereto acknowledge that they have discussed the
investment and are in agreement as to the selected investment. The Sellers and ACE*COMM may
provide instructions changing the investment of the Escrow Funds (subject to applicable minimum
investment requirements) by the furnishing of a Joint Written Direction to Escrow Agent; provided,
however, that no investment or reinvestment may be made except in the following:
a. direct obligations of the United States of America or obligations the
principal of and the interest on which are unconditionally guaranteed by the United
States of America;
b. certificates of deposit issued by any bank, bank and trust company, or
national banking association (including Escrow Agent and its affiliates),
which certificates of deposit are insured by the Federal Deposit Insurance Corporation or a
similar governmental agency;
c. repurchase agreements with any bank, trust company, or national banking
association (including Escrow Agent and its affiliates); or
d. any institutional money market fund offered by Escrow Agent, including
any institutional money market fund managed by Escrow Agent or any of its affiliates.
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If Escrow Agent has not received a Joint Written Direction at any time that an investment
decision must be made, Escrow Agent shall invest the Escrow Funds, or such portion thereof as to
which no Joint Written Direction has been received, in investments described in clause (d) above.
Each of the foregoing investments shall be made in the name of Escrow Agent. No investment shall
be made in any instrument or security that has a maturity of greater than six (6) months.
Notwithstanding anything to the contrary contained herein, Escrow Agent may, without notice to the
Representatives, sell or liquidate any of the foregoing investments at any time if the proceeds
thereof are required for any disbursement of Escrow Funds permitted or required hereunder. All
investment earnings shall become part of the Escrow Shares and investment losses shall be charged
against the Escrow Shares. Escrow Agent shall not be liable or responsible for loss in the value
of any investment made pursuant to this Escrow Agreement, or for any loss, cost or penalty
resulting from any sale or liquidation of the Escrow Shares. With respect to any Escrow Funds
received by Escrow Agent after ten o’clock, a.m., Charlotte, North Carolina time, Escrow Agent
shall not be required to invest such funds or to effect any investment instruction until the next
day upon which banks in Charlotte, North Carolina are open for business.
8. Resignation of Escrow Agent. Escrow Agent may resign and be discharged from
the performance of its duties hereunder at any time by giving ten (10) days prior written
notice to the Sellers and ACE*COMM specifying a date when such resignation shall take effect. Upon
any such notice of resignation, the Representatives jointly shall appoint a successor Escrow
Agent hereunder prior to the effective date of such resignation. The retiring Escrow Agent
shall transmit all records pertaining to the Escrow Shares and shall pay all Escrow Shares to the
successor Escrow Agent, after making copies of such records as the retiring Escrow Agent
deems advisable and after deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys’ fees) payable to, incurred by, or expected to
be incurred by the retiring Escrow Agent in connection with the performance of its duties and the
exercise of its rights hereunder. After any retiring Escrow Agent’s resignation, the
provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Escrow Agent under this Escrow Agreement. Any corporation or association into
which Escrow Agent may be merged or converted or with which it may be consolidated, or any
corporation or association to which all or substantially all of the escrow business of Escrow
Agent’s corporate trust line of business may be transferred, shall be Escrow Agent under this
Escrow Agreement without further act.
9. Liability of Escrow Agent. Escrow Agent undertakes to perform only such duties
as are expressly set forth herein and no duties shall be implied. Escrow Agent shall have no
liability under and no duty to inquire as to the provisions of any agreement other than this
Escrow Agreement. Escrow Agent shall not be liable for any action taken or omitted by it in
good faith except to the extent that a court of competent jurisdiction determines that Escrow
Agent’s gross negligence or willful misconduct was the primary cause of any loss to the
Sellers or ACE*COMM. Escrow Agent’s sole responsibility shall be for the safekeeping and
disbursement of the Escrow Shares in accordance with the terms of this Escrow Agreement.
Escrow Agent shall have no implied duties or obligations and shall not be charged with
knowledge or notice of any fact or circumstance not specifically set forth herein. Escrow
Agent may rely upon any notice, instruction, request or other instrument, not only as to its due
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execution, validity and effectiveness, but also as to the truth and accuracy of any information
contained therein, which Escrow Agent shall believe to be genuine and to have been signed or
presented by the person or parties purporting to sign the same. In no event shall Escrow Agent be
liable for incidental, indirect, special, consequential or punitive damages (including, but not
limited to lost profits), even if Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. Escrow Agent shall not be obligated to take any legal
action or commence any proceeding in connection with the Escrow Shares, any account in which Escrow
Shares are deposited, this Escrow Agreement or the Underlying Agreement, or to appear in, prosecute
or defend any such legal action or proceeding. Escrow Agent may consult legal counsel selected by
it in the event of any dispute or question as to the construction of any of the provisions hereof
or of any other agreement or of its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instruction of such counsel. Sellers and
ACE*COMM, jointly and severally, shall promptly pay, upon demand, the reasonable fees and expenses
of any such counsel. Escrow Agent shall have no liability or responsibility to question or
determine the accuracy or reasonableness of any Estimated Claim Amount.
Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process
entered by any court with respect to the Escrow Shares, without determination by Escrow Agent of
such court’s jurisdiction in the matter. If any portion of the Escrow Shares is at any time
attached, garnished or levied upon under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court
order, or in case any order, judgment or decree shall be made or entered by any court affecting
such property or any part thereof, then and in any such event, Escrow Agent is authorized, in its
sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is
advised by legal counsel selected by it is binding upon it without the need for appeal or other
action; and if Escrow Agent complies with any such order, writ, judgment or decree, it shall not
be liable to any of the parties hereto or to any other person or entity by reason of such
compliance even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
10. Indemnification of Escrow Agent. From and at all times after the date of this
Escrow Agreement, Sellers and ACE*COMM, jointly and severally, shall, to the fullest extent
permitted by law, defend, indemnify and hold harmless Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the “Indemnified Parties”)
against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs
and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’
fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and
after the date hereof, whether direct, indirect or consequential, as a result of or arising from
or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation Sellers or ACE*COMM, whether threatened
or initiated, asserting a claim for any legal or equitable remedy against any person under any
statute or regulation, including, but not limited to, any federal or state securities laws, or
under any common law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of this Escrow
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Agreement or any transactions contemplated herein, whether or not any such Indemnified Party
is a party to any such action, proceeding, suit or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for
any liability finally determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful misconduct of such Indemnified
Party. Each Indemnified Party shall, in its sole discretion, have the right to select and employ
separate counsel with respect to any action or claim brought or asserted against it, and the
reasonable fees of such counsel shall be paid upon demand by the Sellers and ACE*COMM jointly and
severally. The obligations of Sellers and ACE*COMM under this Section 10 shall survive any
termination of this Escrow Agreement and the resignation or removal of Escrow Agent.
The parties agree that neither the payment by Sellers or ACE*COMM of any claim by Escrow
Agent for indemnification hereunder nor the disbursement of any amounts to Escrow Agent from the
Escrow Shares in respect of a claim by Escrow Agent for indemnification shall impair, limit,
modify, or affect, as between Sellers and ACE*COMM, the respective rights and obligations of
Sellers, on the one hand, and ACE*COMM, on the other hand, under the Underlying Agreement.
11. Fees and Expenses of Escrow Agent. ACE*COMM shall compensate Escrow Agent for its
services hereunder in accordance with Schedule A attached hereto and, in addition, shall
reimburse Escrow Agent for all of its reasonable out-of-pocket expenses, including attorneys’
fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail
and overnight delivery charges), copying charges and the like. The additional provisions and
information set forth on Schedule A are hereby incorporated by this reference, and form a
part of this Escrow Agreement. All of the compensation and reimbursement obligations set forth in
this Section 11 shall be payable by ACE*COMM upon demand by Escrow Agent. The obligations
of ACE*COMM under this Section 11 shall survive any termination of this Escrow Agreement
and the resignation or removal of Escrow Agent. Escrow Agent is authorized to, and may, disburse
to itself from the Escrow Shares, from time to time, the amount of any compensation and
reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which
Escrow Agent or any Indemnified Party is entitled to seek indemnification pursuant to Section
10 hereof). Escrow Agent shall notify the Representatives of any disbursement from the Escrow
Shares to itself or any Indemnified Party in respect of any compensation or reimbursement
hereunder and shall furnish to the Representatives copies of all related invoices and other
statements. ACE*COMM, Sellers and the Representatives hereby grant to Escrow Agent and the
Indemnified Parties a security interest in and lien upon the Escrow Shares to secure all
obligations with respect to the right to offset the amount of any compensation or reimbursement
due any of them hereunder (including any claim for indemnification pursuant to Section 10
hereof) against the Escrow Shares, which security interest and lien shall automatically be
released upon the first to occur of termination of this Escrow Agreement or disbursement of the
Escrow Shares.
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12. Representations and Warranties. Each of Sellers and ACE*COMM respectively makes
the following representations and warranties to Escrow Agent:
(i) It is duly organized, validly existing, and in good standing under the laws of the
state of its incorporation or organization (if an entity), and has full power and authority
to execute and deliver this Escrow Agreement and to perform its obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all necessary action, including
any necessary shareholder or membership approval, has been executed by its duly authorized
officers, and constitutes its valid and binding agreement, enforceable in accordance with
its terms.
(iii) The execution, delivery, and performance of this Escrow Agreement is in
accordance with the Underlying Agreement and will not violate, conflict with, or cause a
default under its articles of incorporation, articles of organization, bylaws, management
agreement or other organizational document, as applicable, any applicable law or
regulation, any court order or administrative ruling or decree to which it is a party or
any of its property is subject, or any agreement, contract, indenture, or other binding
arrangement, including without limitation the Underlying Agreement, to which it is a party
or any of its property is subject.
(iv) The applicable persons designated on Schedule A hereto have been duly
appointed to act as representatives hereunder and have full power and authority to execute
and deliver any Joint Written Direction, to amend, modify or waive any provision of this
Escrow Agreement and to take any and all other actions as the Representatives under this
Escrow Agreement, all without further consent or direction from, or notice to, it or any
other party.
(v) No party other than the parties hereto has, or shall have, any lien, claim or
security interest in the Escrow Shares or any part thereof. No financing statement under
the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in
or describing (whether specifically or generally) the Escrow Shares or any part thereof.
(vi) All of its representations and warranties contained herein are true and complete
as of the date hereof and will be true and complete at the time of any disbursement of the
Escrow Shares.
13. Identifying Information. Sellers and ACE*COMM acknowledge that a portion of the
identifying information set forth on Schedule A is being requested by Escrow Agent in
connection with the USA Patriot Act, Pub.L. 107-56 (the “Act”), and Sellers and ACE*COMM agree to
provide any additional information requested by Escrow Agent in connection with the Act or any
similar legislation or regulation to which Escrow Agent is subject, in a timely manner. The Sellers
and ACE*COMM each represent that all identifying information set
forth on Schedule A,
including without limitation, its Taxpayer Identification Number assigned by the
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Internal Revenue Service or any other taxing authority, is true and complete on the date hereof and
will be true and complete at the time of any disbursement of the Escrow Shares.
14. Consent to Jurisdiction and Venue. In the event that any party hereto commences a
lawsuit or other proceeding relating to or arising from this Escrow Agreement, the parties hereto
agree that the federal courts of the State of Maryland shall have the sole and exclusive
jurisdiction. If such court lacks federal subject matter jurisdiction, the parties agree that the
state courts of the State of Maryland shall have sole and exclusive jurisdiction. Any of these
courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto
waive any objection to such venue. The parties hereto consent to and agree to submit to the
jurisdiction of any of the courts specified herein and agree to accept service of process to vest
personal jurisdiction over them in any of these courts.
15. Notice. All notices, approvals, consents, requests, and other communications
hereunder shall be in writing and shall be deemed to have been given when the writing is delivered
if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed
receipt) to the address or facsimile number set forth on Schedule A hereto, or to such
other address as each party may designate for itself by like notice, and shall be deemed to have
been given on the date deposited in the mail, if mailed, by first-class, registered or certified
mail, postage prepaid, addressed as set forth on Schedule A hereto, or to such other
address as each party may designate for itself by like notice.
16. Amendment or Waiver. This Escrow Agreement may be changed, waived, discharged
or terminated only by a writing signed by the Representatives and Escrow Agent. No delay or
omission by any party in exercising any right with respect hereto shall operate as a waiver. A
waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion.
17. Severability. To the extent any provision of this Escrow Agreement is prohibited
by or invalid under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Escrow Agreement.
18. Governing Law. This Escrow Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Maryland without giving effect to the conflict of
laws principles thereof.
19. Entire Agreement. This Escrow Agreement constitutes the entire agreement
between the parties relating to the holding, investment and disbursement of the Escrow Shares and
sets forth in their entirety the obligations and duties of Escrow Agent with respect to the Escrow
Shares.
20. Binding Effect. All of the terms of this Escrow Agreement, as amended from time
to time, shall be binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of Sellers, ACE*COMM and Escrow Agent.
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21. Execution in Counterparts; Facsimile. This Escrow Agreement and any Joint
Written Direction may be executed in two or more counterparts, which when so executed shall
constitute one and the same agreement or direction. This Escrow Agreement and any Joint Written
Direction can be executed by facsimile.
22. Termination. Upon the first to occur of (i) the expiration of the Escrow Period
(provided there is no outstanding Claim Notice on such date), (ii) the disbursement of all Escrow
Shares pursuant to Joint Written Directions or (iii) the disbursement of all Escrow Shares into
court pursuant to Section 4, Section 6 or Section 9 hereof, this Escrow
Agreement shall terminate, Escrow Agent shall be released from its obligations hereunder and Escrow
Agent shall have no further liability with respect to the Escrow Shares, this Escrow Agreement, or
any action or refusal to take action hereunder, to Sellers, ACE*COMM, their respective shareholders
or members, the Representatives, or any other person.
23. Dealings. Escrow Agent and any stockholder, director, officer or employee of
Escrow Agent may buy, sell, and deal in any of the securities of the Sellers or ACE*COMM and become
pecuniarily interested in any transaction in which the Sellers or ACE*COMM may be interested, and
contract and lend money to the Sellers or ACE*COMM and otherwise act as fully and freely as though
it were not Escrow Agent under this Escrow Agreement. Nothing herein shall preclude Escrow Agent
from acting in any other capacity for the Sellers or ACE*COMM or for any other entity.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed
under seal as of the date first above written.
| SPRINGREEL LIMITED | ||||||||
| By: ▇▇▇▇ ▇▇▇▇▇▇▇ | ||||||||
| Title: DIRECTOR | ||||||||
| /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | ||||||||
| By: | ||||||||
| Title: | ||||||||
| ACE*COMM CORPORATION | ||||||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| Title: | SR. VP & CFO | |||||||
| WACHOVIA BANK, NATIONAL ASSOCIATION | ||||||||
| as Escrow Agent | ||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||||
| Title: | Vice President | |||||||
12
SCHEDULE A
| 1. | Escrow Shares. |
| Escrow Shares amount: | 264,044 shares of the common stock of ACE*COMM Corporation valued for purposes of this Escrow Agreement at $3.16480 per share or $835,648.00 in the aggregate. |
| 2. | Escrow Agent Fees. |
| Acceptance Fee: | Waived | |||
| Annual Escrow Fee: | $1,500 | |||
| Other Fees: | $250 per tax recording occurrence | |||
| $25 per 1099 | ||||
| $25 per stock exchange |
The Acceptance Fee and the Annual Escrow Fee are payable upon execution of the
escrow documents. In the event the escrow is not funded, the Acceptance Fee and all related
expenses, including attorneys’ fees, remain due and payable, and if paid, will not be
refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not
pro-rated in the year of termination.
The fees quoted in this schedule apply to services ordinarily rendered in the
administration of an Escrow Account and are subject to reasonable adjustment based on final
review of documents, or when Escrow Agent is called upon to undertake unusual duties or
responsibilities, or as changes in law, procedures, or the cost of doing business demand.
Services in addition to and not contemplated in this Escrow Agreement, including, but not
limited to, document amendments and revisions, non-standard cash and/or investment
transactions, calculations, notices and reports, and legal fees, will be billed as
extraordinary expenses.
Unless otherwise indicated, the above fees relate to the establishment of one escrow
account. Additional sub-accounts governed by the same Escrow Agreement may incur an
additional charge. Transaction costs include charges for wire transfers, checks, internal
transfers and securities transactions.
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| 3. | Taxpayer Identification Numbers. |
| First Seller: | NS357713D | |||
| ACE*COMM: | ▇▇-▇▇▇▇▇▇▇ |
| 4. | Termination and Disbursement. Unless earlier terminated by the provisions of the Escrow Agreement, the Escrow Period will terminate on December 24, 2006. Any Escrow Shares remaining on such date and not subject to a Claim Notice shall be distributed 100% to Sellers pursuant to Section 4 of the Escrow Agreement. |
| 5. | Investment Instructions |
Escrow Shares will be held by the Escrow Agent. Any dividends or interest on such shares
will be invested in the Evergreen Institutional Treasury Money Market Fund #697. The fee for
investing in the fund is 0.25% and is deducted from the interest earned before it is posted
to the account.
| 6. | Representatives. |
Each of the following persons is hereby designated and appointed as a Sellers
Representative under the Escrow Agreement:
| ▇▇▇▇▇▇ ▇▇▇▇▇ | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||||||
Each of the following persons is hereby designated and appointed as an ACE*COMM
Representative under the Escrow Agreement:
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
A-2
| 7. | Representative Information. The following information should be provided to Escrow Agent separately by each Representative and any future Representative. |
1. Date of Birth
2. Address
3. Mailing Address, if different
4. Social Security Number
2. Address
3. Mailing Address, if different
4. Social Security Number
| 8. | Notice Addresses. |
If to Sellers at:
| (a) | Address: | ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ | ||||
| ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ | ||||||
| ▇▇▇▇▇ | ||||||
| ▇▇▇▇▇▇ ▇▇▇▇▇ | ||||||
| Phone number: | ▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇ | |||||
| Fax number: | ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇ | |||||
| ATTENTION: | ▇▇▇▇-▇▇▇▇▇▇▇▇ Joudouin | |||||
| (b) | Address: | ▇ ▇▇▇▇▇ ▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇ | ||||||
| ▇▇▇▇▇▇ | ||||||
| Phone number: | ▇▇▇ (▇▇) ▇▇▇▇ ▇▇▇▇ | |||||
| Fax number: | ▇▇▇(▇▇)▇▇▇▇ ▇▇▇▇ | |||||
| ATTENTION: | ▇▇▇▇ ▇▇▇▇▇▇▇ |
with a copy for information purposes only to:
Hill ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
Phone number: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
Fax number: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
ATTENTION: ▇▇▇ ▇▇▇▇▇, Esq.
A-3
If to ACE*COMM at:
ACE*COMM CORPORATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy for information purposes only to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
Columbia Square
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Phone number: ▇▇▇ (▇▇▇) ▇▇▇▇▇▇▇
Fax number: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
ATTENTION: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Escrow |
||
Agent at:
|
Wachovia Bank, National Association, as Escrow Agent | |
| Corporate Trust Bond Administration | ||
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
| ATTENTION: Corporate Trust — VA9646 | ||
| Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇ |
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