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Title: |
Escrow Agreement |
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Entities: |
Certicom Corp.; Jim Cowing; Michael Harris; Dan Moy |
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Date: |
2000 |
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Size: |
Preview shows 6KB of 20KB total |
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Price: |
$35 |
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ID: |
#340934 |
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ESCROW AGREEMENT
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ESCROW AGREEMENT dated as of September 7, 2000 (this "Agreement"), by and
among CERTICOM CORP., a Yukon, Canada corporation ("Certicom"), DRG ACQUISITION
CORP., a Delaware corporation and a wholly owned subsidiary of Certicom ("Merger
Sub"), DRG RESOURCES GROUP INC., a Delaware corporation (the "Company"), JIM
COWING, an individual resident in the State of California, MICHAEL HARRIS, an
individual resident in the State of California, and DAN MOY, an individual
resident in the State of California (Mr. Cowing, Mr. Harris and Mr. Moy
collectively, the "Shareholders" and each, individually, a "Shareholder").
W I T N E S S E T H:
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WHEREAS, pursuant to the Agreement and Plan of Merger and Merger Agreement,
both dated as of September 7, 2000, and both by and among Certicom, Merger Sub,
the Company, and Jim Cowing, Michael Harris and Dan Moy, the respective Boards
of Directors of Merger Sub and the Company have each approved the merger of
Merger Sub with and into the Company (the "Merger"), pursuant to which the
separate corporate existence of Merger Sub shall cease, and the Company shall
continue as the surviving corporation of the Merger (such surviving corporation,
the "Surviving Corporation"), in each case upon the terms and subject to the
conditions set forth in the Merger Agreement. Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Merger Agreement;
WHEREAS, in connection with consummation of the Merger, at the Closing,
each Shareholder is depositing with the Escrow Agent twenty-five percent (25%)
of the Certicom Common Shares ("Certicom Common Shares") to be issued to him in
the Merger, to be held in an escrow deposit (the "Escrow Deposit") by Certicom
as security and a source of satisfaction for any indemnification claims made by
Certicom and the other Indemnitees pursuant to Article IX of the Merger
Agreement;
WHEREAS, Certicom is willing to act as the escrow agent upon the terms and
subject to the conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby agree as follows:
1. Deposit of Escrowed Shares. Following the Closing, twenty-five percent
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(25%) of the Certicom Common Shares to be issued to each Shareholder in the
Merger (the "Escrowed Shares"), shall be retained by Certicom and be deposited
in the Escrow Deposit as provided in the Merger Agreement. Certificate(s)
representing the Escrowed Shares and the Escrowed Shares evidenced thereby shall
be held, distributed and released by Certicom pursuant to the terms and subject
to the conditions of this Agreement.
{PAGE}
2. Claims Against the Escrowed Shares; Certicom Right of Offset.
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(a) The Escrowed Shares shall be held by Certicom as security and a source
of satisfaction for indemnification claims made by Certicom, Merger Sub, the
Surviving Corporation and the other Indemnitees (individually, an "Indemnified
Party" and, collectively, the "Indemnified Parties") under Article IX of the
Merger Agreement.
(b) In the event that Certicom or any other Indemnitee wishes to make a
claim for indemnification under Article IX of the Merger Agreement, Certicom
shall deliver a written notice (a "Notice of Claim") to each Shareholder. The
Notice of Claim shall (i) contain a brief description of the nature of the claim
being made and (ii) state the aggregate dollar amount of such claim (which
amount shall be determined in good faith by the Board of Directors of Certicom
after taking into account such factors as such Board of Directors shall deem
appropriate). Upon sending the Notice of Claim, Certicom shall set aside a
number of Escrowed Shares (rounded up to the nearest whole share) having a fair
market value most nearly equal to the aggregate dollar amount of such claim (as
determined pursuant to Section 2(f)).
(c) (i) If any Shareholder wishes to object to the allowance of the
claim made in such Notice of Claim, such Shareholder shall deliver a
written objection to Certicom and the other Shareholders within ten (10)
days after receipt of such Notice of Claim expressing such objection and
explaining in reasonable detail and in good faith the nature thereof.
Following receipt by Certicom of the written objection, if any, Certicom
and the Shareholders shall promptly meet to resolve such pending claim. If
the parties are unable to resolve such pending claim within ten (10) days
of receipt by Certicom of the written objection, then Certicom shall have
the right to submit a claim for arbitration pursuant to, and in accordance
with, Section 10.12 of the Merger Agreement with respect to such claim. If
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