ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of February 15, 2000 (the "Escrow Agreement"),
by and among VIZACOM INC., a Delaware corporation ("Vizacom"), RENAISSANCE
COMPUTER ART CENTER INC., a New York corporation doing business as Renaissance
Multimedia ("Renaissance"), THE PERSONS WHOSE SIGNATURES APPEAR ON THE SIGNATURE
PAGE HEREOF (individually, a "Stockholder" and collectively, the
"Stockholders"), being the owners of all the issued and outstanding capital
stock of Renaissance, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇. ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (the "Stockholders' Representative),
and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC, as escrow agent (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Vizacom, Renaissance and the Stockholders have entered into an
Agreement and Plan of Merger (the "Merger Agreement") dated as of February 15,
2000, providing for, among other things, the exchange by the Stockholders and
Vizacom of all the outstanding capital stock of Renaissance for 449,870 shares
of the common stock, par value $.001 per share, of Vizacom (the "Exchange
Stock"); and
WHEREAS, Section 6.3(i) of the Merger Agreement requires that Vizacom,
Renaissance and the Stockholders agree to enter into this Escrow Agreement with
the Escrow Agent for the purpose of securing the indemnity obligations of the
Stockholders under Article VIII of the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, Vizacom, Renaissance, the Stockholders and the Escrow Agent agree
that all capitalized terms used herein without definition shall have the meaning
ascribed to them in the Merger Agreement and further agree as follows:
ARTICLE I. ESCROWED PROPERTY
1.01 Each of the Stockholders has this day delivered to the Escrow Agent
that number of shares of Exchange Stock set forth next to his signature on the
signature page hereof, which shares of Exchange Stock aggregate 224,935 shares
(hereinafter referred to collectively as the "Escrowed Property"), together with
stock powers duly executed in blank.
1.02 The Escrow Agent acknowledges receipt of negotiable certificates for
the Escrowed Property issued in the names of each of the Stockholders with blank
stock powers attached duly executed by the Stockholders, and the Escrow Agent
agrees to hold or dispose of
the Escrowed Property and any other collateral in accordance with the terms of
this Escrow Agreement.
1.03 All dividends and other distributions (whether of cash, securities or
other property) upon or in respect of any of the Escrowed Property and all
property receivable in substitution or exchange therefor shall be included with
and constitute part of the Escrowed Property.
1.04 All shares of Exchange Stock included in the Escrowed Property shall
be voted in accordance with the instructions of the Stockholders'
Representative.
ARTICLE II. APPLICATION OF ESCROWED PROPERTY
2.01 The Escrow Agent will hold the Escrowed Property in its possession
under the provisions of this Escrow Agreement until authorized hereunder to
deliver the Escrowed Property or any specified portion thereof as set forth in
Section 2.02 or Section 2.03.
2.02 The Escrow Agent shall distribute the amounts deposited as Escrowed
Property
(i) promptly upon delivery of and in accordance with a joint written notice
of Vizacom and the Stockholders' Representative providing instructions therein,
(ii) if the Escrow Agent receives a written notice (a "Unilateral Notice")
from Vizacom or the Stockholders' Representative providing instructions to
release Escrowed Property, the Escrow Agent shall promptly after receipt of such
Unilateral Notice deliver a copy of such Unilateral Notice to the other party.
If during the five business day period following delivery to the other party of
such copy of the Unilateral Notice, the Escrow Agent has not received from the
other party a written objection to such release, then the Escrow Agent shall
release such Escrowed Property in accordance with the instructions in the
Unilateral Notice to the extent not objected to by the other party. If and to
the extent an objection to such release of Escrowed Property has been received
by the Escrow Agent from the other party within five business days after
delivery of the Unilateral Notice to such other party, distribution of any of
the disputed Escrowed Property shall be made only in accordance with clause (i)
above or clauses (iii) and (iv) below),
(iii) promptly upon delivery of and in accordance with written notice of
Vizacom or the Stockholders' Representative providing instructions therein and
certifying that the dispute with respect to any Escrowed Property has been
determined and resolved by entry of a final non-appealable order, decree or
judgment by a court of competent jurisdiction in the State of New York (the time
for appeal therefrom having expired and no appeal having been perfected), or
consent to entry of any judgment concerning a claim, which notice shall be
accompanied by a copy of any such order, decree or judgment certified by the
clerk of such court, or
2
(iv) promptly upon delivery of a joint written notice of Vizacom and the
Stockholders' Representative that the Stockholders have made a payment to
Vizacom (in cash or by promissory note) of a claim for indemnification pursuant
to Article VIII of the Merger Agreement, together with proof of such payment, in
which case the Escrow Agent shall release to the Stockholders in the amounts
directed by the Stockholders' Representative in accordance with the instructions
in such joint notice an aggregate number of shares of Escrow Stock held as
Escrowed Property as equals the quotient of (i)133% of the amount of such
payment, divided by (ii) the closing price of the Buyer Common Stock on NASDAQ
(or such other securities market which is the principal trading market for the
shares of Exchange Stock) on the business day preceding the date of such
payment.
2.03 In the event that the Escrow Agent has not received notice of a claim
for indemnification under Article VIII of the Merger Agreement on or prior to
May 15, 2001 (the "Termination Date"), which remains unresolved on the
Termination Date, the Escrow Agent shall distribute the Escrowed Property to the
Stockholders' Representative or as the Stockholders' Representative otherwise
directs. In the event that on the Termination Date there exists an unresolved
claim, then in such event the Escrow Agent shall reserve from the Escrowed
Property an amount of shares of Exchange Stock held as Escrowed Property equal
to 120% the amount of the claim calculated in accordance with the provisions of
clause (iv) of Section 2.02 above based on May 15, 2001 as the pricing date, and
shall distribute any remaining balance as directed by the Stockholders'
Representative. Upon the resolution of any such unresolved claim pursuant to
Section 2.02 above, the Escrow Agent shall distribute the Escrowed Property
pursuant to the provisions of Section 2.02 above.
ARTICLE III. RELATED PROVISIONS
3.01 Upon the release and delivery of any amount of the Escrowed Property
to any party pursuant to this Escrow Agreement, the Escrow Agent shall also
release and deliver to such party the pro rata portion of the interest, other
income or property so released, up to the date of such release and delivery,
attributable to such amount of the Escrowed Property being so released and
delivered.
3.02 In connection with the delivery of written notices to the Escrow Agent
by Vizacom, the Stockholders' Representative, or both such parties, each such
written notice shall be signed by an officer of Vizacom or the Stockholders'
Representative, or both, as appropriate, and shall accurately set forth in each
case:
(a) the number of Shares that the Escrow Agent is thereby directed to
distribute out of the Escrowed Property;
(b) the party to the Escrow Agent is thereby directed to distribute
such amount; and
3
(c) the date upon which the Escrow Agent is directed to distribute
such amount; and such officer of Vizacom or the Stockholders'
Representative, or both, as the case may be, shall certify as to the
compliance with such notice and the contents thereof.
The Escrow Agent may rely fully on the provisions set forth in any such
written notice which on its face complies with the provisions of Article II and
this Section 3.02.
ARTICLE IV. SETTLEMENT OF DISPUTES
4.01 Any dispute which may arise between Vizacom and the Stockholders'
Representative under this Escrow Agreement with respect to (a) the delivery,
ownership and/or right to possession of the Escrowed Property or any portion
thereof, (b) the facts upon which the Escrow Agent's determinations hereunder
are based, (c) the duties of the Escrow Agent hereunder or (d) any other
questions arising under this Escrow Agreement, shall be settled either by (i) a
joint written notice of Vizacom and the Stockholders' Representative providing
instructions to the Escrow Agent therein or (ii) by entry of a final order,
decree or judgment by a court of competent jurisdiction in the State of New York
(the time for appeal therefrom having expired and no appeal having been
perfected).
4.02 The Escrow Agent shall be under no duty to institute or defend any
such proceedings and none of the costs and expenses of any such proceeding shall
be borne by the Escrow Agent. In the event the terms of a settlement of a
dispute hereunder increase the duties or liabilities of the Escrow Agent
hereunder and the Escrow Agent has not participated in such settlement so as to
be bound thereby, then such settlement shall be effective as to the Escrow Agent
in respect of such increase in its duties or liabilities only upon the Escrow
Agent's written assent thereto. Prior to the settlement of any disputes as
provided in this Article IV, the Escrow Agent is authorized and directed to
retain in its possession, without liability to anyone, such portion of the
Escrowed Property which is the subject of or involved in the dispute.
ARTICLE V. CONCERNING THE ESCROW AGENT.
5.01 The Escrow Agent shall be entitled to reasonable compensation for its
services hereunder and shall be reimbursed for all reasonable expenses,
disbursements and advances (including reasonable attorneys' fees and expenses)
incurred or made by it in performance of its duties hereunder. Such reasonable
compensation, disbursement, expenses and advances shall be borne by Vizacom and
shall be paid promptly upon request by the Escrow Agent.
5.02 The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice (a "Resignation Notice") of such
resignation to Vizacom and Stockholders' Representative specifying a date (not
less than 30 days after the giving of such notice) when such resignation shall
take effect. Promptly after such Registration Notice, (a) if as of the date of
the Resignation Notice, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is not a member of the Escrow agent,
then any law firm of which ▇▇. ▇▇▇▇▇▇▇ is a member or partner shall serve as
successor Escrow Agent, if such firm is willing to so serve, or (b) in all other
events, Vizacom and the Stockholders' Representative shall appoint a mutually
agreeable successor Escrow
4
Agent, such successor Escrow Agent to become Escrow Agent hereunder upon
the resignation date specified in such notice. If Vizacom and the Stockholders'
Representative are unable to agree upon a successor Escrow Agent with 30 days
after such notice, the Escrow Agent shall have the right to petition a court of
competent jurisdiction to appoint a successor, and the Escrow Agent shall
continue to serve until its successor accepts the escrow and receives the
Escrowed Property.
5.03 The Escrow Agent undertakes to perform only such duties as are
specifically set forth herein. The Escrow Agent acting or refraining from acting
in good faith shall not be liable for any mistake of fact or error of judgment
by it or for any acts or omissions by it of any kind unless caused by negligence
or willful misconduct, and shall be entitled to rely, and shall be protected in
doing so, upon (a) any written notice, instrument or signature believed by it to
be genuine and to have been signed or presented by the proper party or parties
duly authorized to do so, and (b) the advice of counsel (which may be of the
Escrow Agent's own choosing, so long as such counsel is not counsel to Vizacom
or the Stockholders' Representative). The Escrow Agent shall have no
responsibility for the contents of any writing submitted to it hereunder and
shall be entitled in good faith to rely without any liability upon the contents
thereof. The Escrow Agent has no responsibilities under, and shall be deemed to
have no knowledge of, the provisions of the Merger Agreement.
5.04 The Stockholders and Vizacom, jointly and severally, agree to
indemnify the Escrow Agent and hold it harmless against any and all liabilities
incurred by it hereunder as a consequence of such indemnifying party's action
and and the Stockholders and Vizacom, jointly and severally, further agree to
indemnify the Escrow Agent and hold it harmless against any and all losses,
costs, fees and expenses incurred by the Escrow Agent which are not a
consequence of its actions or failure to act, except, in either case for
liabilities incurred by the Escrow Agent resulting from its own gross negligence
or willful misconduct. The indemnification provided pursuant to this section
shall survive the resignation of the Escrow Agent or the termination of this
Escrow Agreement.
5.05 In the event the Escrow Agent becomes involved in any litigation or
dispute by reason hereof, it is hereby authorized to deposit with the clerk of a
court of competent jurisdiction the Escrowed Property held by it pursuant hereto
and, thereupon, shall stand fully relieved and discharged of any further duties
hereunder. Also, in the event the Escrow Agent is threatened with litigation by
reason hereof, it is hereby authorized to interplead all interested parties in
any court of competent jurisdiction and to deposit with the clerk of such court
the Escrowed Property held by it pursuant hereto and, thereupon, shall stand
fully relieved and discharged of any further duties hereunder.
5.06 In the event of any claim, dispute or litigation concerning the Merger
Agreement or this Escrow Agreement, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC or any successor
firm or successor Escrow Agreement shall nevertheless have the unqualified right
to represent Vizacom, its
5
officers and directors in respect of any such claim, dispute or litigation,
notwithstanding that it is acting as Escrow Agent hereunder.
ARTICLE VI. STOCKHOLDERS' REPRESENTATIVE
6.01 The Stockholders, and each of them, hereby appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Stockholders' Representative") as their agent to (i) execute and deliver this
Escrow Agreement on behalf of the Stockholders and to represent, act for and on
behalf of, and bind each of the Stockholders in the performance of all of their
obligations arising from or relating to this Escrow Agreement, including,
without limitation (a) the execution and delivery of any document, certificate
or agreement required under this Escrow Agreement to be delivered by the
Stockholders; (b) the negotiation and settlement of claims of Vizacom in respect
of the Escrowed Property and for indemnification pursuant to Article VIII of the
Merger Agreement and the making of any objection to such claims; and (c) the
representation of the Stockholders at any arbitration or litigation in respect
of the foregoing; (ii) give and receive notices and receive service of process
under or pursuant to this Escrow Agreement; and (iii) to represent, act for, and
bind each of the Stockholders in the performance of all of their obligations
arising from or related to this Escrow Agreement and the indemnification
provisions of Article VIII of the Merger Agreement. The Stockholders'
Representative hereby accepts such appointment.
6.02 In the event that the Stockholders' Representative shall die, become
incapacitated, resign or otherwise by unable to fulfill his duties hereunder, a
successor Stockholders' Representative shall be selected by the Stockholders
entitled to a majority of the Escrowed Property (to the extent not subject to
any claim under Article VIII of the Agreement) as Merger soon as reasonably
practicable thereafter. If the Stockholders desire to remove or replace the
Stockholders' Representative for any reason, any such Stockholders'
Representative may be so removed or replaced by the Stockholders entitled to
receive a majority of such Escrowed Property. Any decision, act, consent or
instruction of the Stockholders' Representative shall constitute a decision of
the Stockholders and shall be conclusive and binding upon the Stockholders, and
Vizacom and the Escrow Agent may rely upon any such decision, act, consent or
instruction of the Stockholders' Representative as being the decision, act,
consent or instruction of the Stockholders.
ARTICLE VII. MISCELLANEOUS
7.01 This Escrow Agreement will be binding upon, inure to the benefit of,
and be enforceable by the respective successors and assigns of the parties
hereto, but neither this Escrow Agreement, nor any of the rights, interest or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties, except with respect to the Escrow
Agent as provided in Article V hereof.
7.02 This Escrow Agreement contains the entire understanding of the parties
with respect to this subject matter, and may be amended only by a written
instrument duly executed by Vizacom, Renaissance and the Stockholders'
Representative.
6
7.03 All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be validly given, made or served, if in writing and delivered personally or sent
by registered or certified mail (return receipt requested), postage prepaid,
recognized national or international overnight delivery service or by facsimile
transmission electronically confirmed:
if to Vizacom:
Vizacom, Inc.
Glenpointe Center East
300 ▇▇▇▇▇ ▇. ▇▇▇▇ Boulevard
Box 18, 7th Floor
Teaneck, New Jersey 07666
Attn.: President
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Renaissance, the Stockholders, or the Stockholders'
Representative, to the Stockholder's Representative:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Renaissance Multimedia
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Ellenoff, Grossman, Schole & Cyruli, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
7
if to the Escrow Agent:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties. Each such notice, demand, request or other communication shall be
deemed given (i) on the date of such delivery by hand or facsimile transmission
electronically confirmed, (ii) on the first business day following the date of
such delivery to an overnight delivery service, or (iii) three business days
following certified mailing.
7.04 This Escrow Agreement shall be governed by, and construed and enforced
in accordance with the laws of the State of New York, without regard to its
conflicts of law rules.
7.05 This Escrow 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.
7.06 This Escrow Agreement shall remain in full force and effect until the
later of the Termination Date or the date the Escrow Agent shall have delivered
all of the Escrowed Property in its possession in accordance with the terms
hereof.
7.07 Article headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Escrow
Agreement.
8
IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and
delivered by Vizacom, Renaissance, the Stockholders and the Escrow Agent on the
date first above written.
VIZACOM, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President & CEO
RENAISSANCE COMPUTER ART
CENTER INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
STOCKHOLDERS:
Number of Shares of
Escrow Stock
67,480.5 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
11,246.5 /s/ ▇▇▇▇▇▇▇ Del ▇▇▇▇▇
▇▇▇▇▇▇▇ Del ▇▇▇▇▇
146,208 RIBON, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
STOCKHOLDERS'
REPRESENTATIVE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ESCROW AGENT:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Member