Exhibit 10.19
EXECUTION COPY
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ESCROW AND PLEDGE AGREEMENT
dated as of January 19, 2000
among
SUNTRUST BANK,
OPUS360 CORPORATION,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III, individually
and as Sellers' Representative
and
THE OTHER PARTIES HERETO
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TABLE OF CONTENTS
Page No.
SECTION 1. APPOINTMENT OF ESCROW AGENT.......................................1
SECTION 2. DELIVERY OF RESERVED SHARES.......................................1
SECTION 3. PLEDGE............................................................1
SECTION 4. RIGHTS TO PLEDGED COLLATERAL......................................3
SECTION 5. CLAIMS............................................................4
SECTION 6. RELEASE OF PLEDGED COLLATERAL.....................................5
SECTION 7. TERMINATION.......................................................6
SECTION 8. ESCROW AGENT......................................................6
SECTION 9. INVESTMENTS.......................................................8
SECTION 10. DISPUTES..........................................................9
SECTION 11. NOTICES..........................................................10
SECTION 12. COUNTERPARTS.....................................................11
SECTION 13. GOVERNING LAW....................................................11
SECTION 14. BENEFITS OF AGREEMENT............................................11
SECTION 15. MODIFICATION.....................................................12
SECTION 16. DESCRIPTIVE HEADINGS.............................................12
SECTION 17. ENTIRE AGREEMENT.................................................12
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SCHEDULES AND EXHIBITS
Schedules
Schedule I - Names and Tax IDs of Indemnifying Sellers
Exhibits
Exhibit A - Instructions for Release of Pledged Collateral
Exhibit B - Notice of Certified Judgment
Exhibit C - Notice of Appeal
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EXECUTION COPY
ESCROW AND PLEDGE AGREEMENT dated as of
January 19, 2000, among OPUS360 CORPORATION, a
Delaware Corporation ("Parent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
III, individually and in his capacity as the
Sellers' Representative (the "Sellers'
Representative"), SUNTRUST BANK, a Georgia banking
corporation (the "Escrow Agent"), and the other
parties named on the signature page hereto.
This Escrow and Pledge Agreement is being executed in accordance
with Section 2.4 of the Agreement and Plan of Merger dated as of January 19,
2000 (the "Merger Agreement"), among Parent, Ithority Corporation, a California
corporation ("Ithority"), certain stockholders of Ithority and the other parties
thereto. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Merger Agreement.
In consideration of the mutual covenants contained herein and in the
Merger Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Appointment of Escrow Agent.
The Escrow Agent is hereby appointed to act as escrow agent
hereunder, and the Escrow Agent agrees to act as such.
Section 2. Delivery of Merger Share Reserved Shares.
On the date hereof, Parent is delivering to the Escrow Agent
certificate(s) representing the Merger Share Reserved Shares, and the Escrow
Agent is accepting such property for deposit in escrow pursuant to the
provisions of this Agreement.
Section 3. Pledge.
(a) As general and continuing collateral security for the payment
and performance by the Indemnifying Sellers of all of their Secured Obligations
(as defined below), the Indemnifying Sellers hereby pledge, hypothecate, assign,
transfer, set over and deliver unto Parent, and grant to Parent a security
interest in, all of their respective right, title and interest in and to the
Merger Share Reserved Shares, any shares of Parent capital stock that have been
derived from or issued in respect of such Merger Share Reserved Shares
(collectively, the "Pledged Securities") and any cash or additional securities
or other property at any time and from time to time receivable or otherwise
distributable in respect of, in exchange for, or in substitution of, the Pledged
Securities and any and all products and proceeds therefrom, together with and
all other rights, titles, interests, powers, privileges and preferences
pertaining to said property (the "Pledged Collateral").
(b) The security interest created hereby is granted to Parent, to
secure the prompt performance and payment in full of the following
(collectively, the "Secured Obligations"): (i) all obligations of the
Indemnifying Sellers under the Merger Agreement, (ii) expenses
incurred by Parent or Parent's counsel in connection with the realization of the
security provided under this Agreement, including, without limitation, any
reasonable costs or expenses of any proceedings to which this Agreement may give
rise, and reasonable fees, disbursements and other charges of its counsel and of
any experts or agents, and its fully allocated internal costs, that Parent may
incur in connection with (A) the exercise or enforcement of any of the rights of
Parent under this Agreement and (B) damages arising out of the failure of any
Indemnifying Seller to perform or observe any of the provisions hereof.
(c) Each Indemnifying Seller hereby represents and warrants to
Parent as follows:
(i) Such Seller, is, and will at all times continue to be, the
legal and beneficial owner of the Pledged Collateral. No financing
statement under the Uniform Commercial Code of any jurisdiction which
names such Indemnifying Seller as debtor or covers any of the Pledged
Collateral, or any other notice filed in the public records indicating the
existence of a Lien thereon, has been filed and is still effective in any
state or other jurisdiction, other than Uniform Commercial Code financing
statements filed in favor of Parent, and such Indemnifying Seller has not
signed any such financing statement or notice or any security agreement
authorizing the filing of any such financing statement or notice, other
than Uniform Commercial Code financing statements filed in favor of
Parent.
(ii) The social security number, or the Internal Revenue
Service taxpayer identification number, as applicable, of such
Indemnifying Seller is set forth on Schedule I attached hereto.
(iii) Such Indemnifying Seller (A) has the power and authority
to pledge the Pledged Collateral in the manner provided herein or as
contemplated hereby and (B) will defend his title thereto or interest
therein against any and all Liens of all Persons (other than the Liens
created by this Agreement).
(iv) No consent or approval of any Governmental Entity or any
securities exchange was or is necessary to the validity of the pledge
effected hereby.
(d) Each Indemnifying Seller hereby unconditionally covenants and
agrees as follows:
(i) Such Indemnifying Seller will not create, assume, incur or
permit or suffer to exist or to be created, assumed or incurred, any Lien
on any of the Pledged Collateral (or any interest therein) and will not,
sell, lease, assign, transfer or otherwise dispose of all or any portion
of the Pledged Collateral (or any interest therein).
(ii) Until this Agreement has terminated in accordance with
its terms, any certificates, instruments or other documents constituting
Pledged Collateral shall be delivered to the Escrow Agent and shall be
subject to the terms and conditions of this Agreement. The Indemnifying
Sellers shall take such further actions to vest Parent in the security
interest provided hereunder with respect to such additional Pledged
Collateral.
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(e) Each Indemnifying Seller shall, at Parent's cost and expense,
take all actions that may be necessary or desirable in Parent's sole discretion,
so as at all times to maintain the validity, perfection, enforceability and
priority of Parent's security interest in the Pledged Collateral, or to enable
Parent to exercise or enforce its rights hereunder, including without limitation
(i) delivering to Parent, endorsed or accompanied by such instruments of
assignment as Parent may specify, any and all chattel paper, instruments,
letters of credit and all other advices of guaranty and documents evidencing or
forming a part of the Pledged Collateral and (ii) executing and delivering
financing statements, pledges, designations, notices and assignments, in each
case in form and substance satisfactory to Parent, relating to the creation,
validity, perfection, priority or continuation of the security interest granted
hereunder. Each Indemnifying Seller agrees to take, and authorizes Parent to
take on such Seller's behalf, any or all of the following actions with respect
to any Pledged Collateral as Parent shall deem necessary to perfect the security
interest and pledge created hereby or to enable Parent to enforce its rights and
remedies hereunder: (A) to register in the name of Parent any Pledged Collateral
in certificated or uncertificated form; (B) to endorse in the name of Parent any
Pledged Collateral issued in certificated form; and (C) by book entry or
otherwise, identify as belonging to Parent a quantity of securities that
constitutes all or part of the Pledged Collateral. Notwithstanding the
foregoing, each Indemnifying Seller agrees that Pledged Collateral which is not
in certificated form or is otherwise in book-entry form shall be held for the
account of Parent. Each Indemnifying Seller hereby authorizes Parent to execute
and file in all necessary and appropriate jurisdictions (as determined by
Parent) one or more financing or continuation statements (or any other document
or instrument referred to in the immediately preceding clause (B)) in the name
of such Indemnifying Seller and to sign such Seller's name thereto. Each
Indemnifying Seller authorizes Parent to file any such financing statement,
document or instrument without the signature of such Indemnifying Seller to the
extent permitted by applicable law. To the extent permitted by applicable law, a
carbon, photographic, xerographic or other reproduction of this Agreement or any
financing statement is sufficient as a financing statement. Any property
comprising part of the Pledged Collateral required to be delivered to Parent
pursuant to this Agreement shall be accompanied by proper instruments of
assignment duly executed by such Indemnifying Seller and by such other
instruments or documents as Parent may reasonably request.
(f) This Agreement shall create a continuing security interest in
the Pledged Collateral and shall remain in full force and effect until it
terminates in accordance with its terms. Each Indemnifying Seller and Parent
hereby agree that the security interest in the Pledged Collateral created by
this Section 3 shall not terminate and shall continue and remain in full force
and effect notwithstanding the transfer to Parent of a portion of the Pledged
Collateral.
(g) All rights of Parent hereunder, the grant of a security interest
in the Pledged Collateral and all obligations of the Indemnifying Sellers
hereunder, shall be absolute and unconditional irrespective of any lack of
validity or enforceability of the Merger Agreement or any other Related
Document, or instrument relating to any of the foregoing.
Section 4. Rights to Pledged Collateral.
(a) The Pledged Collateral shall be held for the exclusive benefit
of Parent and the Indemnifying Sellers and their respective successors, assigns,
heirs, administrators and estates,
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and no other Person shall have any right, title or interest therein. Any claim
of any Person to the Pledged Collateral, or any part thereof, shall be subject
and subordinate to the prior right thereto of Parent and Sellers.
(b) So long as no Claim (as hereinafter defined) shall have been
asserted by Parent (a "Demand"), the Sellers, after giving 2 days prior written
notice to Parent, shall be entitled to exercise any and all voting and/or
consensual rights and powers accruing to an owner of the Pledged Collateral or
any part thereof for any purpose not inconsistent with the terms and conditions
of this Agreement or any agreement giving rise to or otherwise relating to any
of the Secured Obligations; provided, however, that the Indemnifying Sellers
shall not exercise, or refrain from exercising, any such right or power if any
such action could have an adverse effect on the value of such Pledged Collateral
in the sole judgment of Parent. Upon the occurrence and during the continuance
of a Demand, all rights of the Indemnifying Sellers to exercise the voting
and/or consensual rights and powers which the Indemnifying Sellers are entitled
to exercise pursuant to this Section 4 shall cease, and all such rights
thereupon shall become immediately vested in Parent, which shall have, to the
extent permitted by law, the sole and exclusive right and authority to exercise
such voting and/or consensual rights and powers which the Indemnifying Sellers
shall otherwise be entitled to exercise pursuant to this Section 4. During the
term of this Agreement, the Indemnifying Sellers shall not be entitled to retain
in their possession or control or use any cash dividends paid on the Pledged
Collateral, including any stock and/or liquidating dividends, other
distributions in property, return of capital or other distributions made on or
in respect of Pledged Securities, whether resulting from a subdivision,
combination or reclassification of outstanding securities which are pledged
hereunder or received in exchange for Pledged Collateral or any part thereof or
as a result of any merger, consolidation, acquisition or other exchange of
assets or on the liquidation, whether voluntary or involuntary, of Parent, or
otherwise, such property being Pledged Collateral hereunder. If any Indemnifying
Seller shall receive any dividends or other property which he is not entitled to
receive under this Agreement, such Indemnifying Seller shall hold the same in
trust for Parent, without commingling the same with other funds or property of
or held by such Seller, and shall promptly deliver the same to the Escrow Agent
upon receipt by him in the identical form received, together with any necessary
endorsements.
Section 5. Claims.
(a) In the event Parent asserts a claim for indemnification under
the Merger Agreement, Parent shall execute and deliver to the Escrow Agent and
the Sellers' Representative a written notice to such effect (a "Parent Claim
Notice"; and the claim being asserted in a Parent Claim Notice being hereinafter
referred to as a "Claim") setting forth the nature and details of such Claim and
the amount thereof (or if not ascertainable, a reasonable maximum amount
thereof), and the basis of the Sellers' liability therefor under the Merger
Agreement, and instructing the Escrow Agent to deliver, in accordance with
Section 6 below, that portion of the Pledged Collateral having a value equal to
the amount of the Claim (or, if the amount of the Claim shall be greater than
the aggregate value of the Pledged Collateral, the balance of the Pledged
Collateral) to Parent. Parent shall deliver to the Sellers' Representative a
copy of each Parent Claim Notice on or prior to the date of the delivery thereof
to the Escrow Agent, and the Escrow Agent shall use reasonable efforts also to
deliver a copy thereof to the Sellers' Representative promptly after receipt
from the Parent (provided that the failure of the Escrow
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Agent to make such delivery to the Sellers' Representative shall not affect the
obligation of the Escrow Agent to release Pledged Collateral pursuant to Section
6(a)(ii) below).
(b) The Sellers' Representative may object to any Parent Claim
Notice by delivering to the Parent and the Escrow Agent, within 15 days after
receipt of the Parent Claim Notice, a written notice (an "Objection Notice")
stating that all or a portion of the amount specified in such Parent Claim
Notice should not be released to the Parent. The Sellers' Representative shall
deliver to the Parent a copy of each Objection Notice on or prior to the date of
the delivery thereof to the Escrow Agent, and the Escrow Agent shall use
reasonable efforts also to deliver a copy thereof to the Parent promptly after
receipt from the Sellers' Representative. The Sellers' Representative and Parent
shall use commercially reasonable efforts to resolve any dispute set forth in
any Objection Notice.
Section 6. Release of Pledged Collateral.
(a) The Escrow Agent shall release the Pledged Collateral as
follows:
(i) Promptly upon receipt of joint written instructions,
substantially in the form of Exhibit A hereto, signed by Parent and the
Sellers' Representative ("Joint Instructions") in accordance with and to
the Persons set forth in such Joint Instructions;
(ii) On the 16th day following the receipt of any Parent Claim
Notice which is received by the Escrow Agent prior to January __, 2001 and
which is not the subject of an Objection Notice, to the Parent in
accordance with the Parent Claim Notice;
(iii) On January __, 2001, the balance of the Pledged
Collateral, if any, which is not subject to an Unresolved Claim (as
defined below) (if any), in accordance with and to the Persons set forth
in written instructions provided by the Sellers' Representative.
As used herein, "Unresolved Claim" means the amount of a claim stated in a
Parent Claim Notice or, following delivery of an Objection Notice, the disputed
portion thereof, which amount shall be deemed outstanding from the date such
Parent Claim Notice or Objection Notice, as applicable, is given until the date
such claim is resolved in accordance with the terms of Section 6(b) below.
(b) In the event that the Escrow Agent receives an Objection Notice
from the Sellers' Representative, that portion of the Pledged Collateral having
a value equal to the Unresolved Claim (as set forth in such Objection Notice)
shall be held by the Escrow Agent until the occurrence of one of the following
events:
(i) Receipt by the Escrow Agent of Joint Instructions
instructing the Escrow Agent to release the disputed portion of the
Pledged Collateral to such party or parties and in such amount or amounts
as is specified in such Joint Instructions; or
(ii) Receipt by the Escrow Agent of a written notice (a
"Certified Judgment Notice"), substantially in the form of Exhibit B
hereto, from Parent or the Sellers' Representative certifying that a
final, nonappealable court judgment or settlement with
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respect to the claim covered by the Parent Claim Notice is attached to
such Certified Judgment Notice, in which case the Escrow Agent shall
distribute the disputed portion of the Pledged Collateral in accordance
with such judgment on the 10th day following the receipt of any Certified
Judgment Notice, unless prior to such date the Escrow Agent receives a
written notice (an "Appeal Notice"), substantially in the form of Exhibit
C hereto, from the party not submitting such Certified Judgment Notice,
stating that the judgment has or can and will be appealed. A party
delivering a Certified Judgment Notice or an Appeal Notice shall deliver
to the other party hereto a copy thereof on or prior to the date of
delivery thereof to the Escrow Agent, and the Escrow Agent shall use
reasonable efforts also to deliver a copy of each Certified Judgment
Notice or Appeal Notice to the party which did not deliver the same
promptly after the Escrow Agent's receipt thereof (provided that the
failure of the Escrow Agent to make such delivery shall not affect the
obligation of the Escrow Agent to release funds pursuant to this Section
6(b)). If the judgment is appealed, no release of the disputed portion of
the Escrow Fund will be made until delivery of a subsequent Certified
Judgment Notice to the Escrow Agent, which notice is not the subject of a
subsequent Appeal Notice delivered in accordance with this Section
6(b)(ii).
(c) Any release of the Pledged Collateral to Parent pursuant to this
Section 6 shall be accompanied by a stock power in respect of all securities to
be forfeited, duly endorsed for transfer to Parent.
Section 7. Termination.
This Agreement shall terminate upon the release by the Escrow Agent
of all of the Pledged Collateral in accordance with the terms of this Agreement.
Section 8. Escrow Agent.
(a) Obligations.
(i) The sole obligations of the Escrow Agent are those
specifically provided in this Agreement and the Escrow Agent shall have no
liability under, or duty to inquire into, the terms and provisions of any
agreement between the parties hereto, including but not limited to the
Merger Agreement. The duties of the Escrow Agent are purely ministerial in
nature and the Escrow Agent shall not incur any liability whatsoever,
except for its own willful misconduct or gross negligence.
(ii) The Escrow Agent shall not have any responsibility for
the genuineness or validity of any document or other item deposited with
it or of any signature thereon reasonably believed by the Escrow Agent to
be signed by the proper parties and shall not have any liability for
acting in accordance with any written instructions or certificates given
to it hereunder and reasonably believed by it to be signed by the proper
parties.
(b) Resignation and Removal. The Escrow Agent may resign and be
discharged from its duties hereunder at any time by giving at least 30 days
notice of such resignation to Parent and the Sellers' Representative, specifying
a date upon which such resignation shall take effect; provided, however, that
the Escrow Agent shall continue to serve until its successor
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accepts the Pledged Collateral and assumes all responsibilities as escrow agent
hereunder. Upon receipt of such notice, a successor Escrow Agent shall be
jointly appointed by Parent and the Sellers' Representative, such successor
escrow agent to become the Escrow Agent hereunder on the resignation date
specified in such notice. If an instrument of acceptance by a successor escrow
agent shall not have been delivered to the resigning Escrow Agent within 40 days
after the giving of such notice of resignation, the resigning Escrow Agent may
tender into the registry or custody of any court of competent jurisdiction any
part or all of the Pledged Collateral and thereafter be relieved of its duties
and obligations hereunder. Parent and the Sellers' Representative may at any
time substitute a new Escrow Agent by giving 10 days written notice thereof to
the existing Escrow Agent and paying all fees and expenses of such Escrow Agent
incurred to the date of the substitution.
(c) Indemnification. The Indemnifying Sellers shall hold the Escrow
Agent harmless from, and shall indemnify the Escrow Agent against, any loss,
liability, expense (including attorney's fees and expenses), claim or demand (a
"Loss") arising out of or in connection with the performance of its obligations
in accordance with the provisions of this Agreement or which are attributable to
any act or omission of the Indemnifying Sellers or the Sellers' Representative,
except for any of the foregoing arising out of the gross negligence or willful
misconduct of the Escrow Agent. Parent shall hold the Escrow Agent harmless
from, and indemnify the Escrow Agent against, any Loss arising out of or in
connection with the performance of its obligations in accordance with the
provisions of this Agreement and which are attributable to any act or omission
of Parent or any affiliate of Parent, except for any of the foregoing arising
out of the gross negligence or willful misconduct of the Escrow Agent. Parent
and the Indemnifying Sellers shall hold the Escrow Agent harmless from, and
indemnify (with one-half to be borne by Parent and one-half to be borne by the
Sellers) the Escrow Agent against, any Loss arising out of or in connection with
the performance of its obligations in accordance with the provisions of this
Agreement and which are not attributable to any act or omission of Parent, any
of the Indemnifying Sellers or the Sellers' Representative, except for any of
the foregoing arising out of the gross negligence or willful misconduct of the
Escrow Agent. The foregoing indemnities in this paragraph shall survive the
resignation or substitution of the Escrow Agent or the termination of this
Agreement.
(d) Fees and Expenses of Escrow Agent. For its services hereunder,
the Escrow Agent shall be entitled to a fee of $2,500 per annum, pro rated for
any shorter period for which the Escrow Agent shall act hereunder, payable in
advance. No increase in the rate of any fee charged by the Escrow Agent shall be
valid hereunder unless previously approved in writing by Parent. Such fees shall
be paid by Parent. In addition, the Escrow Agent shall be reimbursed for all
reasonable out-of-pocket expenses, disbursements and advances (including, but
not limited to postage, courier, overnight mail insurance, money wire transfer,
long distance telephone charges, facsimile, stationery and travel expenses), and
including reasonable attorneys' fees and reasonable accounting fees, incurred by
the Escrow Agent not in the ordinary course of business. The amount of such
reimbursement shall be paid by Parent. These fees described in this paragraph
(d) do not include extraordinary services which will be priced according to the
required time and scope of duties and shall be previously approved in writing by
Parent. The fees described in this paragraph (d) shall be deemed earned in full
upon receipt by the Escrow Agent, and no portion shall be refundable for any
reason, including without limitation, termination of the Agreement.
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(e) Reliance on Counsel. The Escrow Agent may from time to time
consult with legal counsel of its own choosing in the event of any disagreement,
controversy, question or doubt as to the construction of any of the provisions
hereof or its duties hereunder, and it shall incur no liability and shall be
fully protected in acting in good faith in accordance with the opinion or
instructions of such counsel. Any such fees and expenses of such legal counsel
shall be considered part of the fees and expenses of the Escrow Agent described
herein.
Section 9. Investments.
(a) Initially the Escrow Agent will invest all cash included in the
Pledged Collateral in commercial paper with maturities not to exceed 90 days
given on the date of such investment a credit rating of at least P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. or A-1 by the Standard & Poor's Corporation. The Escrow
Agent will invest the cash included in the Pledged Collateral in such other
Permitted Investments as directed by Parent from time to time pursuant to
written instructions signed by Parent and referencing the desired Permitted
Investments and the maturity date thereof. As used in this Agreement, "Permitted
Investments" means any of the following:
(i) direct obligations of, or obligations fully guaranteed by,
the United States of America or any agency thereof;
(ii) bonds, debentures, notes or other evidence of
indebtedness issued by any of the following agencies: Federal Farm Credit
System; Federal Home Loan Bank System; Export-Import Bank of the United
States; Federal National Mortgage Association; Government National
Mortgage Association; Federal Financing Bank; or any agency or
instrumentality of the Federal government which shall be established for
the purpose of acquiring the obligations of any of the foregoing or
otherwise providing financing therefor;
(iii) direct and general obligations of, or obligations
unconditionally guaranteed by, any state of the United States or political
subdivision of such state, but only if (A) such obligations or guarantees
are entitled to the full faith and credit of such state or political
subdivision of such state, respectively, and such obligations provide that
the state or political subdivision has the obligation to repay, in full
and on a timely basis, such obligations, and (B) at the time of their
purchase under this Agreement, such obligations are rated in any of the
two highest rating categories by a nationally recognized bond rating
service;
(iv) certificates of deposit, whether negotiable or
non-negotiable, of any bank, trust company or national banking
association, provided that such certificates of deposit shall be (A)
issued by a bank, trust company or national banking association having
capital stock and surplus of more than $500,000,000, (B) fully insured by
the Federal Deposit Insurance Corporation or (C) fully and continuously
secured by direct obligations of, or obligations unconditionally
guaranteed by, the United States of America, which (1) shall have a market
value (exclusive of accrued interest) at all times at least equal to the
principal amount of such certificates of deposit, (2) shall be lodged with
the Escrow Agent (or any correspondent bank or trust company designated by
the
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Escrow Agent), as custodian, by the bank, trust company or national
banking association issuing such certificate of deposit and (3) the bank,
trust company or national banking association issuing each certificate of
deposit required to be so secured shall furnish the Escrow Agent with an
undertaking that the aggregate market value of such obligations securing
each such certificate of deposit will at all times be an amount equal to
the principal amount of each such certificate of deposit (and the Escrow
Agent shall be entitled to rely on each such undertaking);
(v) a readily redeemable interest bearing "money market
account" sponsored by a bank described in clause (iv)(A) above and having
on the date of such investment total assets of at least $1,000,000,000;
(vi) any repurchase agreement with any bank or trust company
organized under the laws of any state of the United States or any national
banking association or any government securities dealer which is listed as
reporting to the market statistics division of the Federal Reserve Bank of
New York secured by any one or more of the securities described in clauses
(i) or (ii) above;
(vii) readily marketable commercial paper of corporations
doing business in and incorporated under the laws of the United States of
America or any state thereof or of any corporation that is the holding
company for a bank described in clause (iv)(A) above given on the date of
such investment a credit rating of at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. or A-1 by Standard & Poor's Corporation, in each case due
within 90 days after the date of the making of the investment; and
(viii) a readily redeemable "money market mutual fund"
sponsored by a bank described in clause (iv) (A) above, or a registered
broker or dealer described in clause (vi) above, that has and maintains an
investment policy limiting its investments primarily to instruments of the
types described in clauses (i) through (vii) above and having on the date
of such investment total assets of at least $1,000,000,000.
(b) Maturities or unexpired terms of maturities of instruments in
which the cash included in the Pledged Collateral shall be invested shall not
exceed 90 days. The Escrow Agent is authorized to sell such investments as may
be required to make any payment under this Agreement (except the Pledged
Securities), and the Escrow Agent shall not be liable for any loss due to early
redemption. In the event that no such written instructions are given by Parent
as to any uninvested portion of the cash included in the Pledged Collateral,
such portion shall be invested by the Escrow Agent in commercial paper for a
30-day period given on the date of such investment a credit rating of at least
P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by the Standard & Poor's
Corporation; provided, however, that if such period is not available, such
portion shall be invested for the closest period of shorter duration.
Section 10. Disputes.
If any dispute should arise with respect to the payment or ownership
or right of possession of the Pledged Collateral, the Escrow Agent is authorized
and directed to retain in its possession, without liability to anyone, all or
any part of the Pledged Collateral until such dispute
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shall have been settled either by mutual agreement of the parties concerned or
by the final order, decree or judgment of a court of competent jurisdiction in
the United States of America (the time for appeal having expired with no appeal
having been taken) in a proceeding to which Parent and the Indemnifying Sellers
or the Sellers' Representative are parties, but the Escrow Agent shall be under
no duty whatsoever to institute or defend any such proceedings. Promptly after
receipt of any such final order, decree or judgment, Parent and the Sellers'
Representative shall deliver a copy thereof to the Escrow Agent, together with
instructions as to the release of the Pledge Collateral as a result thereof.
Section 11. Notices.
All notices and other communications required hereunder or in
connection herewith shall be in writing and shall be deemed to have been duly
given if personally delivered or if sent by nationally-recognized overnight
courier, by facsimile, or by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
if to the Sellers' Representative, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Esq.
if to Parent, to:
OPUS360 Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
10
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Escrow Agent, to:
SunTrust Bank
Corporate Trust Division
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
or to such other address as the parties hereto to whom notice is to be given may
have furnished in writing to the other parties hereto. Any such notice or
communication shall be deemed to have been received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of nationally-recognized
overnight courier, on the next Business Day after the date when sent, (c) in the
case of facsimile transmission, when received, and (d) in the case of mailing,
on the third Business Day following that on which the piece of mail containing
such communication is posted.
Section 12. Counterparts.
This Agreement may be executed in any number of counterparts and
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 13. Governing Law.
This agreement will be governed by and construed in accordance with
the domestic laws of the State of New York, without giving effect to any choice
of law or conflicting provision or rule (whether of the State of New York or any
other jurisdiction) that would cause the laws of any jurisdiction other than the
State of New York to be applied. In furtherance of the foregoing, the internal
law of the State of New York will control the interpretation and construction of
this agreement, even if under such jurisdiction's choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily
apply. It is the intention of the parties hereto that the situs of the Pledged
Collateral is and shall be administered in the state in which the principal
office of the Escrow Agent from time to time acting hereunder is located.
Section 14. Benefits of Agreement.
All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Anything contained herein to the contrary notwithstanding, this
Agreement shall not be assignable by any party
11
hereto without the prior written consent of Parent, the Sellers' Representative
and the Escrow Agent.
Section 15. Modification.
This Agreement shall not be altered or otherwise amended except
pursuant to an instrument in writing signed by the Escrow Agent, Parent and the
Sellers' Representative.
Section 16. Descriptive Headings.
The descriptive headings in this Agreement are for convenience only
and shall not control or affect the meaning or construction of any provision
hereof.
Section 17. Entire Agreement.
This Agreement, the Merger Agreement, the Related Documents and the
other agreements and documents referenced herein contain the entire agreement
among the parties with respect to the transactions contemplated hereby and
supersede all prior agreements and understandings among the parties with respect
thereto.
* * * * *
12
IN WITNESS WHEREOF, the parties hereto have caused this Escrow and
Pledge Agreement to be executed and delivered on the date first above written.
OPUS360 CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. VP, CFO
SUNTRUST BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trust Officer
INDEMNIFYING SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III, individually and as
Sellers' Representative
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE I
Social Security/Taxpayer Identification Numbers
Seller Social Security/Taxpayer Identification Number
------ ----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III ###-##-####
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
EXHIBIT A
[Date]
SunTrust Bank
Corporate Trust Division
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Instructions for Release of Pledged Collateral
Ladies and Gentlemen:
Reference is made to the Escrow and Pledge Agreement dated as of
January __, 2000 (the "Escrow Agreement"), among Opus360 Corporation, the
Sellers' Representative, you and the other parties thereto. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with Section 6(a)(i) of the Escrow Agreement, the
undersigned hereby instructs you to disburse from the Pledged Collateral to the
following Persons the items set forth opposite their respective names:
Name Items
--------------------------- ---------------------------
--------------------------- ---------------------------
OPUS360 CORPORATION
By:
----------------------------------
Name:
Title:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III, as Sellers'
Representative
EXHIBIT B
[Date]
SunTrust Bank
Corporate Trust Division
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notice of Certified Judgment
Gentlemen:
Reference is made to the Escrow and Pledge Agreement dated as of
January __, 2000 (the "Escrow Agreement"), among Opus360 Corporation, the
Sellers' Representative, you and the other parties thereto. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with Section 6(b)(ii) of the Escrow Agreement, the
undersigned hereby instructs you to disburse from the Escrow Fund to the persons
named in the final court judgment (a certified copy of which is attached hereto)
the amounts set forth therein.
OPUS360 CORPORATION
By:
----------------------------------
Name:
Title:
-or-
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III, as Sellers'
Representative
EXHIBIT C
[Date]
SunTrust Bank
Corporate Trust Division
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notice of Appeal
Gentlemen:
Reference is made to the Escrow and Pledge Agreement dated as of
January __, 2000 (the "Escrow Agreement"), among Opus360 Corporation, the
Sellers' Representative, you and the other parties thereto. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with Section 6(b)(ii) of the Escrow Agreement, the
undersigned hereby instructs you not to disburse from the Escrow Fund to the
persons named in the court judgment certified to you as final pursuant to a
notice dated ______________, _____ . This judgment has or can and will be
appealed.
OPUS360 CORPORATION
By:
----------------------------------
Name:
Title:
-or-
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III, as Sellers'
Representative