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EXHIBIT 2.03
Escrow Agreement dated November 12, 1996 among Registrant, the
▇▇▇▇▇▇ Shareholders, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Representative, and
▇▇▇▇▇▇ Trust and Savings Bank, as Escrow Agent.
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into as of November
12, 1996 by and among Worldtalk Communications Corporation, a Delaware
corporation ("Worldtalk"), ▇▇▇▇▇▇ Trust and Savings Bank, as Escrow Agent
("Escrow Agent"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III as representative
("Representative") of the holders of Common Stock ("▇▇▇▇▇▇ Shareholders") of
Deming Software, Inc., a Washington corporation ("Deming").
RECITALS
▇. ▇▇▇▇▇▇ and Worldtalk have entered into an Agreement and Plan
of Reorganization dated as of November 9, 1996 ("Plan of Reorganization")
pursuant to which a wholly owned subsidiary of Worldtalk will be merged with
and into ▇▇▇▇▇▇ in a reverse triangular merger, with ▇▇▇▇▇▇ to be the surviving
corporation of the merger ("Merger"). Unless otherwise specified herein, all
capitalized terms used herein shall have the meaning given to such terms in the
Plan of Reorganization.
B. Pursuant to the Plan of Reorganization, Worldtalk will issue
shares of Worldtalk Common Stock, $0.01 par value per share ("Worldtalk Common
Stock") to the ▇▇▇▇▇▇ Shareholders in exchange for their shares of ▇▇▇▇▇▇
Common Stock.
C. The Plan of Reorganization provides that 15% of the shares of
Worldtalk Common Stock to be issued to the ▇▇▇▇▇▇ Shareholders ("Escrow
Shares") will be withheld from the shares of Worldtalk Common Stock issued to
the ▇▇▇▇▇▇ Shareholders at the Closing of the Merger, and will be placed in an
escrow account ("Escrow Account") to secure the indemnification obligations of
the ▇▇▇▇▇▇ Shareholders to Worldtalk and other Indemnified Persons under the
Plan of Reorganization on the terms and conditions set forth herein. Those
Escrow Shares required to be deposited in the Escrow Account upon the Closing
of the Merger pursuant to this Agreement and the Plan of Reorganization are
shown on Exhibit A attached hereto.
D. The parties hereto desire to establish the terms and
conditions pursuant to which the Escrow Shares will be deposited, held in, and
disbursed from the Escrow Account.
NOW, THEREFORE, the parties agree as follows:
1. ESCROW AND INDEMNIFICATION.
1.1 DEPOSIT OF ESCROW SHARES. At the Closing, Worldtalk
shall cause its transfer agent to deliver to the Escrow Agent certificates
representing the Escrow Shares. The Escrow Shares will be represented by
certificates issued in the name of the Escrow Agent and will be held by the
Escrow Agent from the Closing until the expiration of the Escrow Period (as
defined in Section 3.2 below). The Escrow Shares shall include Additional
Escrow Shares (as defined in Section 3.1). The Escrow Agent need not inquire
into whether or not the correct
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number of Escrow Shares have been delivered to it and may assume that the
certificates delivered to it are all that it is required to receive.
1.2 INDEMNIFICATION. Worldtalk and the other Indemnified
Persons are indemnified pursuant to the terms of Section 10 of the Plan of
Reorganization (which terms are incorporated herein by reference) from and
against any Damages, subject to the limitations set forth in Section 10 of the
Plan of Reorganization and herein. For the purposes of this Agreement,
references to Worldtalk will include all other Indemnified Persons, as
applicable. The Escrow Shares will be security for this indemnity obligation,
subject to the limitations, and in the manner provided, in Section 10.2 of the
Plan of Reorganization and in this Agreement. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III shall
act as Representative of the ▇▇▇▇▇▇ Shareholders for purposes of this
Agreement, and is duly authorized to be such Representative and may bind the
▇▇▇▇▇▇ Shareholders as provided herein.
1.3 ACCEPTANCE OF SHARES BY THE ESCROW AGENT. The Escrow
Shares will be held in escrow by the Escrow Agent and will be available to
satisfy the indemnification obligations of the Indemnified Persons as specified
above and in the Plan of Reorganization. The Escrow Agent agrees to accept
delivery of the Escrow Shares delivered to it and to hold such Escrow Shares in
escrow in the Escrow Account in accordance with the terms and conditions of
this Agreement and to release the Escrow Shares out of escrow in accordance
with the terms and conditions of this Agreement.
2. REPRESENTATIVE. For purposes of this Agreement, the ▇▇▇▇▇▇
Shareholders, without any further act of any ▇▇▇▇▇▇ Shareholder, shall be
deemed to have consented to and approved (a) the use of the Escrow Shares as
collateral for ▇▇▇▇▇▇'▇ and the ▇▇▇▇▇▇ Shareholders' indemnification
obligations under Section 10 of the Plan of Reorganization in the manner set
forth in this Agreement, (b) the appointment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III as the
Representative of the ▇▇▇▇▇▇ Shareholders under this Agreement and as the
attorney-in-fact and agent for and on behalf of each ▇▇▇▇▇▇ Shareholder, and
the taking by the Representative of any and all actions and the making of any
decisions required or permitted to be taken by him under this Agreement
(including, without limitation, the exercise of the power to: authorize
delivery to Worldtalk of Escrow Shares in satisfaction of claims by Worldtalk;
agree to, negotiate, enter into settlements and compromises of and demand
arbitration and comply with orders of courts and awards of arbitrators with
respect to such claims; resolve any claim made pursuant to Section 10 of the
Plan of Reorganization; and take all actions necessary in the judgment of the
Representative for the accomplishment of the foregoing) and (c) all of the
other terms, conditions and limitations in the Escrow Agreement. Accordingly,
the Representative has unlimited authority and power to act on behalf of each
▇▇▇▇▇▇ Shareholder with respect to this Agreement and the disposition,
settlement or other handling of all claims, rights or obligations arising under
this Agreement, so long as all ▇▇▇▇▇▇ Shareholders are treated in material
respects in the same manner. The ▇▇▇▇▇▇ Shareholders will be bound by all
actions taken by the Representative in connection with this Agreement, and
Worldtalk and the Escrow Agent shall be entitled to rely on any action or
decision of the Representative as constituting the actions of the ▇▇▇▇▇▇
Shareholders. In performing such functions, the Representative will not be
liable to the ▇▇▇▇▇▇ Shareholders in the absence of gross negligence or willful
misconduct. All actions and notices by the Representative hereunder shall be
signed by the Representative. The Representative may resign from such
position, effective upon a new Representative being appointed to act as the
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Representative by the written consent of ▇▇▇▇▇▇ Shareholders who beneficially
own at least a majority of the Escrow Shares. The ▇▇▇▇▇▇ Shareholders must
elect a new Representative, and such written consent must be given, within
thirty days after the date of the Representative's notice of intended
resignation. ▇▇▇▇▇▇ Shareholders who beneficially own at least a majority of
the Escrow Shares may at any time and from time to time appoint by written
consent a new representative to act as the Representative in place of the
then-current Representative. The Representative shall not be entitled to
receive any compensation or reimbursement of expenses for his or her actions
taken with respect to this Agreement, either from Worldtalk or the Escrow
Account, unless and until there are Escrow Shares to be distributed to the
▇▇▇▇▇▇ Shareholders at the expiration of the Escrow Period ("Distributed
Shares"). Any out-of-pocket costs and expenses incurred by the Representative
in connection with actions taken pursuant to the terms of this Agreement will
be paid by the ▇▇▇▇▇▇ Shareholders to the Representative in proportion to their
percentage interests in the Escrow Shares set forth on Exhibit A hereto.
3. RIGHTS IN ESCROW SHARES; RELEASE FROM ESCROW.
3.1 DIVIDENDS, VOTING AND RIGHTS OF OWNERSHIP. Any shares
of Worldtalk Common Stock issued as a result of, or issued upon the conversion
or exercise of any security issued as a result of, any stock dividend,
reclassification, stock split, subdivision or combination of shares,
recapitalization, merger or other events made with respect to the Escrow Shares
while in escrow under this Agreement ("Additional Escrow Shares") will be held
in Escrow and distributed to the ▇▇▇▇▇▇ Shareholders or returned to Worldtalk
in the same manner and in the same proportions as the Escrow Shares. For all
purposes of this Agreement, Additional Escrow Shares issued with respect to
Escrow Shares will be treated the same as (and will be considered to be) Escrow
Shares. Any cash dividends, dividends payable in property other than Worldtalk
securities, or other distributions of any kind (other than Additional Escrow
Shares) made in respect of the Escrow Shares, if received by the Escrow Agent,
will be delivered by the Escrow Agent directly to the ▇▇▇▇▇▇ Shareholders in
proportion to their percentage interests set forth on Exhibit A; provided that
in the event of a merger, tender offer or other exchange of the Escrow Shares
where the holders of Worldtalk Common Stock are to receive cash or other
property in exchange for such Worldtalk Common Stock, any cash or other
property received or receivable upon exchange of the Escrow Shares will remain
in the Escrow Account and will be held or released in the same manner and in
the same proportions as the Escrow Shares would have been had such exchange not
occurred. Each ▇▇▇▇▇▇ Shareholder will have voting rights with respect to the
Escrow Shares (and Additional Escrow Shares) beneficially owned by such ▇▇▇▇▇▇
Shareholder deposited in the Escrow Account so long as such Escrow Shares (and
Additional Escrow Shares) are held in escrow. While the Escrow Shares remain
in the Escrow Agent's possession pursuant to this Agreement, the ▇▇▇▇▇▇
Shareholders will retain and will be able to exercise all other incidents of
ownership of said Escrow Shares which are not inconsistent with the terms and
conditions hereof, including the right to cause the tender of such Escrow
Shares in a tender offer for Worldtalk Common Stock, subject to the inclusion
of the consideration paid upon exchange of such Escrow Shares in the Escrow
Account as provided above.
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3.2 DISTRIBUTION OF ESCROW SHARES.
(a) Escrow Period. Unless held longer due to any
pending but unresolved Claim, the Escrow Shares will be held in escrow until
the date that is one year following the Closing, as defined in the Plan of
Reorganization ("Escrow Period").
(b) Expiration. Upon written notification to the
Escrow Agent by Worldtalk and the Representative that the Escrow Period has
expired, on which notification the Escrow Agent may rely without inquiry, the
Escrow Agent shall release from the Escrow Account to the ▇▇▇▇▇▇ Shareholders
in accordance with their percentage interests set forth in Exhibit A, the
Escrow Shares, less (i) any shares delivered to Worldtalk in accordance with
Section 5 hereof in satisfaction of claims made by Worldtalk pursuant to
Section 1.2 above, and (ii) any shares held by the Escrow Agent in accordance
with Section 5 hereof with respect to pending but unresolved claims of
Worldtalk pursuant to Section 1.2 above. Any Escrow Shares held as a result of
clause (ii) of the preceding sentence shall be released to the ▇▇▇▇▇▇
Shareholders or to Worldtalk for cancellation, as appropriate, promptly upon
resolution of each specific Claim involved, when such resolution has been
notified to the Escrow Agent by the Representative and Worldtalk in writing or
upon the delivery to the Escrow Agent of the appropriate order by a court of
competent jurisdiction or upon delivery to the Escrow Agent of a copy of the
final award of an arbitrator or court as described in Section 10.3 of the Plan
of Reorganization. Any court order or final award of any arbitrator referred
to above shall be accompanied by a legal opinion of counsel for the presenting
party satisfactory to the Escrow Agent to the effect that said court order or
final award of such arbitrator is final and enforceable and is not subject to
further appeal. The Escrow Agent shall act on such court order or final award
of such arbitrator and legal opinion without further question.
3.3 RELEASE OF SHARES. The Escrow Shares will be held by
the Escrow Agent until required to be released pursuant to Section 3.2 above.
Within five (5) business days after the applicable release condition is met and
(if necessary) the requisite share certificates have been reissued by the
transfer agent, the Escrow Agent will deliver to the ▇▇▇▇▇▇ Shareholders the
requisite number of Escrow Shares to be released on such date in the form of
stock certificates issued in the name of each ▇▇▇▇▇▇ Shareholder according to
the percentage of Escrow Shares each ▇▇▇▇▇▇ Shareholder is entitled to receive.
Worldtalk will take such action as may be necessary to cause such certificates
to be issued in the name of the appropriate ▇▇▇▇▇▇ Shareholder within such
period. Certificates representing Escrow Shares so issued that are subject to
SEC Rule 144 or 145 resale restrictions will bear a legend to that effect and
any other legend that counsel to Worldtalk reasonably determines is necessary
or appropriate. Cash will be paid by Worldtalk in lieu of any fractions of
Escrow Shares in an amount equal to the product determined by multiplying such
fraction by the value of an Escrow Share as determined in accordance with
Section 5.4 below.
3.4 NO ENCUMBRANCE. No Escrow Shares or any beneficial
interest therein may be pledged, sold, assigned, transferred, or otherwise
encumbered, including by operation of law, by the ▇▇▇▇▇▇ Shareholders or be
taken or reached by any legal or equitable process in satisfaction of any debt
or other liability of the ▇▇▇▇▇▇ Shareholders, prior to the delivery to the
▇▇▇▇▇▇ Shareholders of the Escrow Shares by the Escrow Agent upon the release
of such Escrow Shares in accordance with the provisions of Section 3.3 above.
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4. NOTICE OF CLAIM.
4.1 IN GENERAL. Promptly after the receipt by Worldtalk
of notice or discovery of any claim, damage or legal action or proceeding
giving rise to indemnification rights under the Plan of Reorganization or this
Agreement, Worldtalk will give the Representative and the Escrow Agent written
notice of its claim for indemnification of such claim, damage, legal action or
proceeding ("Claim") in accordance with the following provisions. Failure to
provide such notice in a timely manner shall not, however, reduce Worldtalk's
indemnification rights or the indemnification obligations of the ▇▇▇▇▇▇
Shareholders hereunder or under the Plan of Reorganization, unless the failure
to provide such notice materially impairs the indemnifying party's ability to
defend the Claim or mitigate damages, and then only to the extent of such
impairment.
4.2 CONTENTS. Each written notice of a Claim by
Worldtalk ("Notice of Claim") shall contain the following information to the
extent it is reasonably available to Worldtalk:
(a) Worldtalk's current good faith estimate of
the amount of the alleged Damages if reasonably determinable
("Worldtalk Valuation");
(b) A brief description of the circumstances
giving rise to the Claim and, if applicable, specific references to
the provisions of the Plan of Reorganization alleged to have been
breached; and
(c) A statement that the Notice of Claim has been
sent simultaneously to both the Escrow Agent and the Representative.
4.3 NO TRANSFER OR SALE. The Escrow Agent will not
transfer or sell any of the Escrow Shares held in the Escrow Account, as
provided in Section 5.4, pursuant to a Notice of Claim until such Notice of
Claim has been resolved in accordance with Section 5 below.
5. RESOLUTION OF NOTICE OF CLAIM AND TRANSFER OF ESCROW SHARES.
Any Notice of Claim received by the Escrow Agent will be resolved as follows:
5.1 UNCONTESTED CLAIMS. If the Representative does not,
within fifteen (15) calendar days after receipt by the Escrow Agent of a Notice
of Claim, either contest the Notice of Claim in writing to the Escrow Agent and
Worldtalk, or authorize the payment of the amount demanded (together with a
designation of the manner of payment as provided in Section 5.4 below), then
the Escrow Agent will promptly deliver to Representative and Worldtalk written
notice of such fact. If Representative does not, within five (5) calendar days
after receipt by the Representative of such notice contest the Notice of Claim
in writing to the Escrow Agent and Worldtalk, or authorize the payment of the
amount demanded (together with a designation of the manner of payment as
provided in Section 5.4 below), then Worldtalk may deliver notice of such fact,
on which notice the Escrow Agent may rely without inquiry, and the Escrow Agent
shall immediately transfer to Worldtalk that number of Escrow Shares having an
aggregate value (determined at a per share price equal to the Average Price)
equal to the amount specified in the Notice of Claim in the manner specified in
Section 5.4(a) hereof and notify the Representative in writing of such
transfer.
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5.2 CONTESTED CLAIM. If the Representative gives a
written notice ("Contested Claim Notice") contesting all, or a portion of, a
Notice of Claim to Worldtalk and the Escrow Agent ("Contested Claim") and such
Contested Claim Notice is deemed, under the provisions of Section 11 hereof, to
have been delivered to Worldtalk and the Escrow Agent within the 15-day period
or 5-day period described in Section 5.1 above, then the Representative and a
representative from Worldtalk will attempt in good faith to resolve the
dispute, and if such representatives are not able to do so within 10 days after
receipt by Worldtalk of the Contested Claim Notice then the Contested Claim
will be promptly settled by binding arbitration or litigation as provided in
Section 10.3 of the Plan of Reorganization. Any portion of the Notice of Claim
that is not contested, or the uncontested amount of any Contested Claim, will
be resolved as an uncontested claim as set forth in Section 5.1 above. The
final decision of the arbitrator or the court shall be furnished to the
Representative, Worldtalk and the Escrow Agent in writing and will constitute a
conclusive determination of the issue in question, binding upon the ▇▇▇▇▇▇
Shareholders, Worldtalk and the Escrow Agent and shall not be contested by any
of them; provided that in no event will the Escrow Agent be a party to such
arbitration.
5.3 SETTLED CLAIMS. If a Claim (including a Contested
Claim) is settled by a written settlement agreement executed by the
Representative and Worldtalk, then the Representative and Worldtalk shall
promptly deliver such executed settlement agreement to the Escrow Agent with
written instructions as to the manner of payment with respect to such Claim in
accordance with Section 5.4 below. Upon its receipt of such settlement
agreement and instructions, the Escrow Agent shall either (a) immediately
release from escrow and transfer to Worldtalk for cancellation the number of
Escrow Shares determined as provided in Section 5.4; (b) sell the number of
Escrow Shares determined as provided in Section 5.4; and/or (c) to the extent
the ▇▇▇▇▇▇ Shareholders have paid to Worldtalk the amount of the Claim in cash,
distribute to the ▇▇▇▇▇▇ Shareholders that number of Escrow Shares that are
equal in value to the agreed upon amount based upon the Average Price, all as
specified in such settlement agreement and instructions.
5.4 DETERMINATION OF AMOUNT AND MANNER OF PAYMENT OF
CLAIMS. Any amount owed to Worldtalk hereunder determined pursuant to Section
5.1, 5.2 or 5.3 or Section 7, will be immediately payable to Worldtalk, at the
option of the Representative, which option will be exercised by delivery of a
written notice to Worldtalk with the Contested Claim Notice or, if pursuant to
Section 5.3 in the settlement agreement: (a) out of the Escrow Shares then held
by the Escrow Agent at a per-share value equal to the Average Price payable by
release from escrow and transfer of such Escrow Shares to Worldtalk, which
transferred and forfeited Escrow Shares will be taken from each of the ▇▇▇▇▇▇
Shareholders in proportion to their respective percentage interest in the
Escrow Shares then outstanding as such percentage is specified on Exhibit A;
(b) in cash payable by each of the ▇▇▇▇▇▇ Shareholders in proportion to their
respective percentage interest in the Escrow Shares then outstanding as such
percentage is specified on Exhibit A within ninety (90) days following the date
on which the determination of liability is made; provided that the number of
Escrow Shares having a value (at the per share price equal to the Average
Price) equal to the amount of such cash payment will remain in escrow until
such cash payment (together with the interest described in the last sentence of
this Section 5.4) is made in full; or (c) subject to the availability of and to
compliance with Rules 144 and 145, by sale of the number of Escrow Shares by
the Escrow Agent in the public market sufficient to recover the amount of the
Claim. In the event the Representative elects to pay in cash pursuant
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to clause (b) above, the ▇▇▇▇▇▇ Shareholders shall also remit interest on the
amount owed from the date on which determination of liability is made to the
date of payment, calculated at the U.S. Treasury ▇▇▇▇ rate then in effect.
5.5 NO ELECTION OF REMEDIES. Worldtalk may institute
claims against the Escrow Shares and in satisfaction thereof may retake Escrow
Shares, after any notice to the Representative required hereunder, without
making any other claims directly against ▇▇▇▇▇▇ or the ▇▇▇▇▇▇ Shareholders and
without rescinding or attempting to rescind the transactions consummated
pursuant to the Plan of Reorganization. The assertion of any single claim for
indemnification hereunder will not bar Worldtalk from asserting other claims
hereunder. Worldtalk need not exhaust any other remedies that may be available
to it but may proceed directly in accordance with the provisions of this
Agreement.
6. LIMITATION OF ESCROW AGENT'S LIABILITY.
6.1 CONDUCT. The Escrow Agent will be indemnified and
will incur no liability with respect to any action taken or suffered by it in
reliance upon any notice, direction, instruction, consent, statement or other
documents believed by it to be genuine and duly authorized, nor for other
action or inaction except its own willful misconduct or gross negligence. The
Escrow Agent will not be responsible for the validity or sufficiency of this
Agreement. In all questions arising under this Agreement, the Escrow Agent may
rely on the advice of counsel, and for anything done, omitted or suffered in
good faith by the Escrow Agent based on such advice the Escrow Agent will not
be liable to anyone. The Escrow Agent will not be required to take any action
hereunder involving any expense unless the payment of such expense is made or
provided for in a manner satisfactory to it.
6.2 CONFLICTING DEMANDS. In the event conflicting
demands are made or conflicting notices served upon the Escrow Agent with
respect to the Escrow Account, the Escrow Agent will have the absolute right,
at the Escrow Agent's election, to do either or both of the following: (a)
withhold and stop all further proceedings pursuant to, and performance under,
this Agreement; or (b) file a suit in interpleader and obtain an order from any
court of competent jurisdiction an order requiring the parties to interplead
and litigate in such court conflicting demands or claims. In the event such
interpleader suit is brought, the Escrow Agent will thereby be fully released
and each discharged from all further obligations imposed upon it under this
Agreement with respect to the Claim(s) that are the subject of such
interpleader suit, and Worldtalk and the ▇▇▇▇▇▇ Shareholders will each pay
(subject to reimbursement pursuant to Section 7 hereof) one-half (1/2) of all
costs, expenses and reasonable attorney's fees expended or incurred by the
Escrow Agent pursuant to the exercise of Escrow Agent's rights under this
Section 6, the amount thereof to be fixed and a judgment therefor to be
rendered by the court in such suit.
7. EXPENSES. All fees and expenses of the Escrow Agent incurred
in the ordinary course of performing its responsibilities hereunder will be
paid by Worldtalk, upon receipt of a written invoice by Escrow Agent. Except
as set forth in the last clause of Section 10.3.4 of the Plan of
Reorganization, any extraordinary fees and expenses arising under this
Agreement, including without limitation any fees or expenses related to
arbitrators under Section 10 of the Plan of Reorganization or incurred by the
Escrow Agent in connection with a dispute over the
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distribution of Escrow Shares or the validity of a Notice of Claim, will be
paid one-half (1/2) by Worldtalk and one-half (1/2) by the ▇▇▇▇▇▇ Shareholders,
and the ▇▇▇▇▇▇ Shareholders' liability therefor may, but need not, be satisfied
as an undisputed claim hereunder out of the Escrow Shares. Worldtalk will
advance the cash value of such shares and pay Worldtalk's portion of the fees
and expenses of the Escrow Agent upon receipt of a written invoice from the
Escrow Agent. The amounts payable by the ▇▇▇▇▇▇ Shareholders under this
Section 7 may be paid according to the procedure specified with respect to
Claims as provided in Section 5 above upon demand by Worldtalk by complying
with the provisions of Section 5 with respect thereto.
8. INDEMNIFICATION. The Escrow Agent shall be indemnified,
jointly and severally, and saved harmless by the undersigned, from and against
any and all liability, including all expenses reasonably incurred in its
defense, to which the Escrow Agent shall be subject by reason of any action
taken or omitted or disbursement of any part of the Escrow Shares made by the
Escrow Agent pursuant to this Escrow Agreement, except as a result of the
Escrow Agent's own gross negligence or willful misconduct. The costs and
expenses of enforcing this right of indemnification shall also be paid by the
undersigned. This right of indemnification shall survive the termination of
this Escrow Agreement, and the removal or resignation of the Escrow Agent.
9. SUCCESSOR ESCROW AGENT. If the Escrow Agent becomes
unavailable or unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
written notice of resignation to the parties to this Agreement, specifying not
less than sixty (60) days' prior notice of the date when such resignation will
take effect. Worldtalk shall designate a successor Escrow Agent prior to the
expiration of such sixty-day period by giving written notice to the Escrow
Agent and the Representative. Worldtalk may appoint a successor Escrow Agent
without the consent of the Representative so long as such successor is a bank
with assets of at least $50 million, and may appoint any other successor Escrow
Agent with the consent of the Representative, which will not be unreasonably
withheld. Upon payment of its outstanding invoices for fees and expenses,
Escrow Agent will promptly transfer the Escrow Shares to such designated
successor.
10. LIMITATION OF RESPONSIBILITY; NOTICES. Escrow Agent's duties
are limited to those set forth in this Agreement and Escrow Agent may rely upon
the written notices delivered to Escrow Agent hereunder.
11. NOTICES. Any notice or other communication required or
permitted to be given under this Agreement will be in writing, will be
delivered personally or by certified mail, postage prepaid, return receipt
requested, and will be deemed given upon delivery, if delivered personally, or
three days after deposit in the mails, if mailed, to the following addresses:
If to Worldtalk:
Worldtalk Communications Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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If to the Escrow Agent:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇/Shareholder Services
If to the Representative:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 11.
12. GENERAL.
12.1 GOVERNING LAW. The internal laws of the State of
California (irrespective of its choice of law principles) will govern the
validity of this Agreement, the construction of its terms, and the
interpretation and enforcement of the rights and duties of the parties hereto.
12.2 ASSIGNMENT; BINDING UPON SUCCESSORS AND ASSIGNS.
Except as provided in Section 9, the parties hereto may not assign any of their
rights or obligations hereunder without the prior written consent of the other
parties hereto. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
12.3 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be an original as regards any party
whose signature appears thereon and all of which together will constitute one
and the same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures
of Worldtalk and the ▇▇▇▇▇▇ Shareholders.
12.4 ENTIRE AGREEMENT. This Agreement and the exhibits
hereto constitute the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto.
The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof.
12.5 NO WAIVER. The failure of any party to enforce any
of the provisions hereof will not be construed to be a waiver of the right of
such party thereafter to enforce such provisions. No waiver of any kind shall
be effective or binding, unless it is in writing and is signed by the party
against whom such waiver is sought to be enforced.
12.6 AMENDMENT. This Agreement may be amended by the
written agreement of Worldtalk, the Escrow Agent and the Representative;
provided that, if the Escrow Agent does
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not agree to an amendment agreed upon by Worldtalk and the Representative, the
Escrow Agent will resign and Worldtalk will appoint a successor Escrow Agent in
accordance with Section 9 above. No amendment of the Plan of Reorganization
will increase Escrow Agent's responsibilities or liability hereunder without
Escrow Agent's written agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first set forth above.
WORLDTALK COMMUNICATIONS CORPORATION ▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
AS ESCROW AGENT
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Assistant Vice President
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III, AS REPRESENTATIVE
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, IIII
-------------------------------------------
Each of the undersigned holders of Worldtalk Common Stock received or to be
received as a result of the Merger hereby consents to and approves the
appointment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III as their Representative and agrees to
be bound by, and have all Worldtalk securities owned by the undersigned as a
result of the Merger subject to, all of the terms and conditions of this
Agreement.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
------------------------------- ---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------- ---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Exhibit A: List of ▇▇▇▇▇▇ Shareholders
[SIGNATURE PAGE TO ESCROW AGREEMENT]
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EXHIBIT A
LIST OF ▇▇▇▇▇▇ SHAREHOLDERS
SHAREHOLDER NAME NUMBER OF ESCROW PERCENTAGE OF
AND ADDRESS SHARES DEPOSITED ESCROW SHARES
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 15,940 19.44%
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III 33,387 40.72%
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 16,328 19.92%
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 16,328 19.92%
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTAL: 81,983 100.00%
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