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EXHIBIT 99.1
ESCROW AGREEMENT
This Escrow Agreement (this "ESCROW AGREEMENT") is made and entered into as of
May 18, 2000 (the "EFFECTIVE TIME") by and among LIONBRIDGE TECHNOLOGIES, INC.,
a Delaware corporation ("PARENT"); HARVARD TRANSLATIONS, INC., a Massachusetts
corporation ("HT"); Robert C. Sprung as the representative of the Holders (as
defined below) (the "INDEMNIFICATION REPRESENTATIVE"); American Stock Transfer &
Trust Co., as Escrow Agent of the Escrow Shares (as defined below) (the "ESCROW
AGENT"); and each person who executes and delivers to Parent an Instrument of
Accession in the form of Schedule I hereto.
A. HT Acquisition Corp., a Massachusetts corporation and wholly owned
subsidiary of Parent ("MERGER SUB"), HT, Parent and the Indemnification
Representative have entered into an Agreement and Plan of Reorganization dated
as of March 30, 2000 (the "MERGER AGREEMENT") setting forth certain terms and
conditions pursuant to which Merger Sub is being merged into HT (the "MERGER").
B. Pursuant to Section 2.1 of the Merger Agreement, Parent Merger
Shares (as defined therein) are to be issued to the stockholders of HT
(collectively, the "Holders").
C. The Merger Agreement provides that ten percent (10%) (the "ESCROW
PERCENTAGE") of the Parent Merger Shares issuable at Closing pursuant to the
Merger Agreement will be placed in an escrow account to secure certain
indemnification obligations of the Holders to Parent under Article X of the
Merger Agreement on the terms and conditions set forth therein and herein.
D. Unless otherwise indicated herein, all terms used herein without
definition shall have the same meaning as set forth in the Merger Agreement.
NOW THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained in the Merger Agreement and in this Escrow
Agreement, the parties agree as follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT
1.1 DEPOSIT OF SHARES. Parent shall deposit as soon as
practicable on each of the Holder's behalf with the Escrow Agent stock
certificates representing the Escrow Shares issued pursuant to the Merger
registered in name of the Holders and in the amount set forth on EXHIBIT 1.1
hereto (the "INITIAL ESCROW SHARES"). Any shares of Parent capital stock that
result from any share dividend, reclassification, stock split, subdivision or
combination of shares, recapitalization, merger or other events made with
respect to any Escrow Shares held in escrow under this Escrow Agreement
("ADDITIONAL SHARES") shall be delivered to the Escrow Agent and shall be held
by the Escrow Agent in accordance with this Escrow Agreement. Unless otherwise
indicated, as used in this Escrow Agreement, the term "ESCROW SHARES" includes
the Initial Escrow Shares and any Additional Shares. The Escrow Agent agrees to
accept delivery of the Escrow Shares and to hold such Escrow Shares in escrow in
accordance with this Escrow Agreement and to release the Escrow Shares out of
escrow as provided in this Escrow Agreement.
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1.2 DIVIDENDS; VOTING AND RIGHTS OF OWNERSHIP. Any cash
dividends, dividends payable in property or other distributions of any kind
(except for Additional Shares) made in respect of the Escrow Shares shall be
distributed currently by Parent to the Holder on a pro rata basis. The Holder
shall have the right to vote the Escrow Shares held in escrow for the account of
such Holder so long as such Escrow Shares are held in escrow, and Parent and the
Escrow Agent, but only as directed in writing by Parent, shall take all steps
necessary to allow the exercise of such rights. While the Escrow Shares remain
in the Escrow Agent's possession pursuant to this Escrow Agreement, the Holder
shall retain and shall be able to exercise all other incidents of ownership of
the Escrow Shares that are not inconsistent with the terms and conditions
hereof.
1.3 POWER TO TRANSFER ESCROW SHARES. The Escrow Agent is
hereby granted the power to effect any transfer of the Escrow Shares provided
for in this Escrow Agreement.
2. RESOLUTION OF CLAIMS
2.1 INDEMNIFICATION OBLIGATIONS. The Escrow Shares shall serve
as the first source, and the sole source until the Release Date (as defined in
Section 3.1), of payment for the indemnity obligations of the Holder under
Article X of the Merger Agreement; PROVIDED, HOWEVER, that each Holder shall
further be severally liable for any breach by such Holder of such Holder's
representation in any letter of transmittal. For the purposes of this Escrow
Agreement, those obligations shall continue in accordance with Article X of the
Merger Agreement, notwithstanding the merger of Merger Sub into HT pursuant to
the Merger Agreement. Payment for any amount determined as provided below to be
owing to Parent under such indemnity obligations under the Merger Agreement
("DAMAGES") and any award of attorneys' fees and charges owing to Parent
pursuant to Section 2.3(c)(iv) or 10.2 of this Agreement (a "PREVAILING PARTY
AWARD") shall be made by the release of Escrow Shares to Parent (each such
payment, an "ESCROW ADJUSTMENT"), subject to the limitations set forth in
Section 10.4 of the Merger Agreement. The liability of any single Holder for
indemnification obligations pursuant to Article X of the Merger Agreement shall
be limited to such Holder's PRO RATA share of any indemnity obligations based on
the number of Escrow Shares deposited in escrow on behalf of such Holder
relative to the aggregate number of Escrow Shares; PROVIDED, HOWEVER, that there
will be no limitation on the indemnification obligations of any person arising
out of criminal activity or fraud by such person, including, without limitation,
any actions in such person's capacity as an employee, officer or director in HT
or its Subsidiaries, or for any Holder for breaches of any representation or
warranty contained in the letter of transmittal delivered by such Holder. By the
execution of this Escrow Agreement, each of the Holders agrees to be bound by
the indemnification provisions set forth in Article X of the Merger Agreement
and confirms that the issuance of the Escrow Percentage of the Parent Merger
Shares pursuant to the Merger Agreement is subject to this Escrow Agreement.
Notwithstanding anything to the contrary herein, Parent shall not be entitled to
receive payment of any portion of a Prevailing Party Award which is already a
part of Damages (i.e., there shall be no double payment of legal fees). Any
Escrow Adjustments and corresponding release to Parent of Escrow Shares shall be
made in proportion to each of the Holders' interest in the Escrow Shares as of
the date or dates specified and the manner provided for in this Escrow
Agreement. Each Escrow Adjustment to the Escrow Shares shall be made by the
release to Parent of Escrow Shares having an aggregate value equal to the
Damages and any Prevailing Party Award, with the per share value of such shares
being based, for all purposes under this Escrow Agreement on the Parent Average
Closing Price (adjusted for any share dividend, reclassification, stock split,
subdivision or combination of shares, recapitalization, merger or other events)
notwithstanding any changes in market value of Parent Common Shares. In lieu of
releasing any fractional Escrow Shares, any fraction of a released Escrow Share
that would otherwise be released shall be rounded to the nearest whole Escrow
Share.
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2.2 NOTICE OF CLAIMS. Promptly after the receipt by Parent of
notice or discovery of any claim, damage, or legal action or proceeding giving
rise to indemnification rights under the Merger Agreement, without regard to the
Threshold Amount (as defined in the Merger Agreement) (a "CLAIM") Parent shall
give the Indemnification Representative written notice of such Claim and shall
provide a copy of such notice to the Escrow Agent. Each notice of a Claim by
Parent (a "NOTICE OF CLAIM") shall be in writing and shall be delivered on or
before the Release Date (as defined in Section 3.1 below).
2.3 RESOLUTION OF CLAIMS. Any Notice of Claim received by the
Indemnification Representative and the Escrow Agent pursuant to Section 2.2
above shall be resolved as follows:
(a) UNCONTESTED CLAIMS. In the event that the
Indemnification Representative does not contest a Notice of Claim (an
"UNCONTESTED CLAIM") in writing within thirty (30) calendar days, as provided
below in Section 2.3(b), Parent may deliver to the Escrow Agent, with a copy to
the Indemnification Representative, a written demand by Parent (a "PARENT
DEMAND") stating that a Notice of Claim has been given as required in this
Escrow Agreement and that no notice of contest has been received from the
Indemnification Representative during the period specified in this Escrow
Agreement and further setting forth the proposed Escrow Adjustments to be made
in accordance with this Section 2.3(a). It is provided, however, that within
thirty (30) calendar days after receipt of the Parent Demand, the
Indemnification Representative may object in a written notice delivered to
Parent and the Escrow Agent to the computations or other administrative matters
relating to the proposed Escrow Adjustments (but may not object to the validity
or amount of the Claim previously disclosed in the Notice of Claim), whereupon
neither the Escrow Agent nor Parent shall make any of the Escrow Adjustments
until either: (i) Parent and the Indemnification Representative shall have given
the Escrow Agent written notice setting forth agreed Escrow Adjustments, or (ii)
the matter is resolved as provided in Sections 2.3(b) and 2.3(c). Upon
satisfaction of the foregoing, the Escrow Agent, as directed in writing by
Parent, and Parent shall promptly take all steps to implement the final Escrow
Adjustments.
(b) CONTESTED CLAIMS. In the event that the
Indemnification Representative gives written notice to Parent and the Escrow
Agent contesting all or a portion of a Notice of Claim (a "CONTESTED CLAIM")
within the 30-day period provided above, matters that are subject to third party
claims against Parent or HT in a litigation or arbitration shall await the final
decision, award or settlement of such litigation or arbitration, while matters
that arise between Parent on the one hand and HT and/or the Indemnification
Representative on the other hand, including any disputes regarding performance
or nonperformance of a party's obligations under this Escrow Agreement
("ARBITRABLE CLAIMS") shall be settled in accordance with Section 2.3(c) below.
Any portion of a Notice of Claim that is not contested or is subsequently
settled by Parent and the Indemnification Representative shall be resolved as
set forth above in Section 2.3(a), PROVIDED THAT in the case of a settlement the
value of Escrow Shares shall equal the Parent Average Closing Price
notwithstanding any change in the market value of Parent Common Shares. If
written notice is received by the Escrow Agent that a Notice of Claim is
contested by the Indemnification Representative, then the Escrow Agent shall
hold hereunder after what would otherwise be the Release Date (as defined in
Section 3.1 below), the number of Escrow Shares specified in the Release Notice
or as otherwise provided in Section 3.1, until the earlier of: (i) receipt of a
settlement agreement executed by Parent and the Indemnification Representative
setting forth a resolution of the Notice of Claim and the Escrow Adjustments;
(ii) receipt of a written notice from Parent (a "PARENT DISTRIBUTION NOTICE")
attaching a copy of the final award or decision of the arbitrator and setting
forth the Escrow Adjustments (Parent shall at the same time provide a copy of
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the Parent Distribution Notice to the Indemnification Representative); or (iii)
receipt of a written notice from the Indemnification Representative (a
"REPRESENTATIVE DISTRIBUTION NOTICE") attaching a copy of the final award or
decision of the arbitrator that no Escrow Adjustments are to be made as a result
of such award (the Holder shall at the same time provide a copy of the Holder
Distribution Notice to Parent). If the earliest of the three events described in
the preceding sentence is (i) or (ii), the Escrow Agent shall, within twenty
(20) calendar days of receipt of the settlement agreement or the Parent
Distribution Notice, as applicable, (a) release to Parent the number of Escrow
Shares specified in the Escrow Adjustments and (b) if the Release Date has
occurred, and there are no remaining unresolved Contested Claims, release to the
Holder the balance of the Escrow Shares. If the earliest of the three events
described above is (iii) and the Release Date has occurred, and there are no
remaining unresolved Contested Claims, the Escrow Agent shall, within twenty
(20) calendar days of receipt of the Representative Distribution Notice, release
to the Holder the Retained Escrow (as defined in Section 3.1), in accordance
with the Holders' interests therein, PROVIDED THAT if the Release Date has not
occurred the Escrow Shares shall continue to be held pursuant to the terms of
this Agreement. If the award or decision of the arbitrator concludes that Escrow
Shares are to be released to Parent either in satisfaction of Damages or as
Prevailing Party Awards, the arbitrator shall specify the number of Escrow
Shares to be so released to Parent either in the arbitrator's final award or
decision or a supplementary report or finding. In the event that the Escrow
Agent institutes an action for interpleader in accordance with Section 4.6 of
this Escrow Agreement as a result of a dispute between the parties, the parties
hereby agree to jointly seek to stay such interpleader action pending the
resolution of any arbitration commenced by the parties or any dispute pursuant
to this Section 2.3(b) and Section 2.3(c).
(c) ARBITRATION.
(i) ARBITRATION RULES. Any Arbitrable
Claim, and any dispute between the Indemnification Representative and Parent
under this Escrow Agreement, shall be submitted to final and binding arbitration
before a single arbitrator in Boston, Massachusetts in accordance with the
commercial arbitration rules of the American Arbitration Association.
(ii) BINDING EFFECT. The final decision of
the arbitrator shall be furnished in writing to the Escrow Agent, the
Indemnification Representative, the Holders and Parent and will constitute a
conclusive determination of the issue in question, binding upon the Holders, the
Indemnification Representative and Parent. The arbitrator shall have the
authority to grant any equitable and legal remedies that would be available in
any judicial proceeding instituted to resolve an Arbitrable Claim. Any judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction over the subject matter thereof.
(iii) COMPENSATION OF ARBITRATOR. The
arbitrator will be compensated for his or her services, as provided below in
Section 2.3(c)(iv), in accordance with the commercial arbitration rules of the
American Arbitration Association.
(iv) PAYMENT OF COSTS. The substantially
prevailing party in any arbitration shall be entitled to an award of attorneys'
fees and costs, and all costs of arbitration, including those provided for
above, will be paid by the losing party, subject in each case to a determination
by the arbitrator as to which party is the substantially prevailing party and
the amount of such fees and costs to be allocated to such party and subject to
the terms of Section 2.3(c)(iii). Any amounts payable to Parent by or on account
of the Holders under this subsection will be reimbursed as if the amount of such
awarded fees and expenses were an Uncontested Claim.
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(v) TERMS OF ARBITRATION. The arbitrator
chosen in accordance with these provisions shall not have the power to alter,
amend or otherwise affect the terms of these arbitration provisions or the
provisions of this Escrow Agreement, the Merger Agreement or any other documents
that are executed in connection therewith.
(vi) EXCLUSIVE REMEDY. Arbitration or
mediation under this Section 2.3(c) shall be the sole and exclusive remedy of
the parties for any Arbitrable Claim arising out of this Escrow Agreement.
3. RELEASE FROM ESCROW
3.1 RELEASE OF ESCROW SHARES. The Escrow Shares shall be
released by the Escrow Agent and Parent as soon as practicable, taking into
account the notices to be delivered under this Section 3.1, after the earliest
of (i) publication of Parent's audited financial results for the year ended
December 31, 2000 or (ii) expiration of the survival period for representations
and warranties as set forth in Article X and XII of the Merger Agreement (the
"RELEASE DATE") LESS: (a) any Escrow Shares delivered to or deliverable to
Parent in satisfaction of Uncontested Claims or Contested Claims which have been
settled by the parties hereto, and (b) any of the Escrow Shares subject to
delivery to Parent in accordance with Section 2.3(b) with respect to any then
pending Contested Claims. Within ten (10) of the Escrow Agent's business days
("BUSINESS DAYS") after the Release Date, Parent and the Indemnification
Representative shall deliver to the Escrow Agent a written notice (a "RELEASE
NOTICE") setting forth the number of Escrow Shares to be released by the Escrow
Agent and Parent (the "RELEASED ESCROW") including the number of Escrow Shares
to be released to each Holder and the number of Escrow Shares to be retained as
provided in this Section 3.1 (the "RETAINED ESCROW") Parent and the
Indemnification Representative shall make a good faith effort to agree on a
reasonable portion of the Escrow Shares to retain for pending Contested Claims
and Prevailing Party Awards and related expenses. Until such agreement is
reached, or a determination is made in accordance with Section 2.3(c), the
remaining Escrow Shares shall be the Retained Escrow. The Released Escrow shall
be released to the Holders in proportion to their respective interests in the
Initial Escrow Shares. In lieu of releasing any fractional Escrow Shares, any
fraction of a released Escrow Share that would otherwise be released shall be
rounded down to the nearest whole Escrow Share. Within ten (10) Business Days
after receipt of the Release Notice, Parent shall instruct the Escrow Agent to
deliver (by registered mail or overnight courier service) to each Holder
evidence of ownership of the number of Escrow Shares in the names of the
appropriate Holder. The Escrow Agent shall not be required to take such action
until the Escrow Agent has received the Release Notice executed by Parent and
the Indemnification Representative or, in the event Parent and the
Indemnification Representative fail to execute and deliver a jointly approved
Release Notice, a final award or decision which specifies the distribution of
the Escrow Shares.
3.2 RELEASE OF RETAINED ESCROW. Upon the resolution of
Contested Claims as provided for in Section 2.3(b), the Retained Escrow shall be
subject to release by the Escrow Agent to Parent and/or to the Holders in
accordance with Section 2.3(b), this Section and as otherwise provided for in
this Escrow Agreement. The Escrow Agent and Parent shall cause the transfer
agent to transfer to Parent the number of Escrow Shares to be released to Parent
pursuant to Section 2.3(b) and reissue certificates for Escrow Shares that are
to be either distributed to the Holders pursuant to Section 3.1 or further
retained by the Escrow Agent pending the resolution of Contested Claims and/or
Prevailing Party Awards. Any Escrow Shares released from escrow to Parent shall
be subject to cancellation by Parent without requiring Parent to pay any
consideration whatsoever in receipt thereof to HT or any of the Holders.
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4. ESCROW AGENT
4.1 DUTIES. The duties and responsibilities of the Escrow
Agent hereunder shall be entirely administrative and not discretionary and shall
be determined solely by the express provisions of this Escrow Agreement and no
duties shall be implied. The Escrow Agent shall be obligated to act only in
accordance with written instructions received by it as provided in this Escrow
Agreement and is authorized hereby to comply with any orders, judgments, or
decrees of any court with or without jurisdiction and shall not be liable as a
result of its compliance with the same.
4.2 LEGAL OPINIONS. As to any questions arising in connection
with the administration of this Escrow Agreement, the Escrow Agent may rely
absolutely upon the joint instruction of Parent and the Indemnification
Representative or the opinions given to the Escrow Agent by its outside counsel
and shall be free of liability for acting or refraining from acting in reliance
on such opinions.
4.3 SIGNATURES. The Escrow Agent may rely absolutely upon the
genuineness and authorization of the signature and purported signature of any
party upon any instruction, notice, release, receipt or other document delivered
to it pursuant to this Escrow Agreement.
4.4 RECEIPTS AND RELEASES. The Escrow Agent may, as a
condition to the disbursement of monies or disposition of securities as provided
herein, require from the payee or recipient a receipt therefor and, upon final
payment or disposition, a release of the Escrow Agent from any liability arising
out of its execution or performance of this Escrow Agreement, such release to be
in a form reasonably satisfactory to the Escrow Agent.
4.5 REFRAIN FROM ACTION. The Escrow Agent shall be entitled to
refrain from taking any action contemplated by this Escrow Agreement in the
event it becomes aware of any dispute between HT, the Indemnification
Representative and Parent as to any material facts or as to the happening of any
event precedent to such action.
4.6 INTERPLEADER. If any controversy arises between the
parties hereto or with any third person, the Escrow Agent shall not be required
to determine the same or to take any action, but the Escrow Agent in its
discretion may institute such interpleader or other proceedings in connection
therewith as the Escrow Agent may deem proper, and in following either course,
the Escrow Agent shall not be liable.
4.7 OTHER PROVISIONS. The Escrow Agent may rely and shall be
protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Escrow Agent shall be under no duty to inquire into or investigate the validity,
accuracy or content of any such document. The Escrow Agent shall be not be
liable for any action taken or omitted by it in good faith unless a court of
competent jurisdiction determines that the Escrow Agent's willful misconduct was
the primary cause of a loss to the Parent, the Indemnification Representative,
or the Holders. In the administration of this Escrow Agreement, the Escrow Agent
may execute any of its powers and perform its duties hereunder directly or
through agents or attorneys and may, consult with counsel, accountants and other
skilled persons to be selected and retained by it. The Escrow Agent shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons.
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5. INDEMNIFICATION
5.1 WAIVER AND INDEMNIFICATION. Parent, HT and the Holders
agree to and hereby do waive any suit, claim, demand or cause of action of any
kind which they may have or may assert against the Escrow Agent arising out of
or relating to the execution or performance by the Escrow Agent of this Escrow
Agreement, unless such suit, claim, demand or cause of action is based upon the
willful neglect or gross negligence or bad faith of the Escrow Agent. Parent, HT
and the Holders further agree, jointly and severally, to indemnify and hold
Escrow Agent and its directors, officers, agents and employees (collectively,
the "INDEMNITEES") harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties, and expenses, including out-of-pocket,
incidental expenses, legal fees and expenses, and the allocated costs and
expenses of in-house counsel and legal staff ("LOSSES") that may be imposed on,
incurred by, or asserted against, the Indemnitees or any of them for following
any instructions or other directions upon which the Escrow Agent is authorized
to rely pursuant to the terms of this Escrow Agreement. In addition, to and not
in limitation of the immediately preceding sentence, Parent, HT and the Holders
also agree, jointly and severally, to indemnify and hold the Indemnitees and
each of them harmless from and against any and all Losses that may be imposed
on, incurred by, or asserted against the Indemnitees or any of them in
connection with or arising out of the Escrow Agent's performance under this
Escrow Agreement, provided the Escrow Agent has not acted with gross negligence,
willful neglect or bad faith. The provisions of this Section 5.1 shall survive
the termination of this Escrow Agreement and the resignation or removal of the
Escrow Agent for any reason. Anything in this Escrow Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of such
loss or damage and regardless of the form of action.
5.2 CONDITIONS TO INDEMNIFICATION. In case any litigation is
brought against the Escrow Agent in respect of which indemnification may be
sought hereunder, the Escrow Agent shall give prompt notice of that litigation
to the parties hereto, and the parties upon receipt of that notice shall have
the obligation and the right to assume the defense of such litigation with
counsel reasonably satisfactory to the Escrow Agent; PROVIDED THAT failure of
the Escrow Agent to give that notice shall not relieve the parties hereto from
any of their obligations under this Section 5 unless that failure prejudices the
defense of such litigation by said parties. At its own expense, the Escrow Agent
may employ separate counsel and participate in the defense. The parties hereto
shall not be liable for any settlement without their respective consents.
6. ACKNOWLEDGMENT BY THE ESCROW AGENT
By execution and delivery of this Escrow Agreement, the Escrow Agent
acknowledges that the terms and provisions of this Escrow Agreement are
acceptable and it agrees to carry out the provisions of this Escrow Agreement on
its part.
7. RESIGNATION OR REMOVAL OF ESCROW AGENT; SUCCESSOR
7.1 RESIGNATION AND REMOVAL.
7.1.1 NOTICE. The Escrow Agent may resign as such
following the giving of thirty (30) days' prior written notice to the other
parties hereto. Similarly, the Escrow Agent may be removed and replaced
following the giving of thirty (30) days' prior written notice to be given to
the
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Escrow Agent jointly by the Indemnification Representative and Parent. In either
event, the duties of the Escrow Agent shall terminate thirty (30) days after the
date of such notice (or as of such earlier date as may be mutually agreeable),
and the Escrow Agent shall then deliver the balance of the Escrow Shares then in
its possession to a successor Escrow Agent as shall be appointed by the other
parties hereto as evidenced by a written notice filed with the Escrow Agent.
7.1.2 COURT APPOINTMENT. If the parties hereto
are unable to agree upon a successor or shall have failed to appoint a successor
prior to the expiration of thirty (30) days following the date of the notice of
resignation or removal, then the acting Escrow Agent, at the expense of the
Indemnification Representative and Parent, may petition any court of competent
jurisdiction for the appointment of a successor Escrow Agent or other
appropriate relief, and any such resulting appointment shall be binding upon all
of the parties hereto.
7.2 SUCCESSORS. Every successor appointed hereunder shall
execute, acknowledge and deliver to its predecessor, and also to the
Indemnification Representative and Parent, an instrument in writing accepting
such appointment hereunder, and thereupon such successor, without any further
act, shall become fully vested with all the duties, responsibilities and
obligations of its predecessor; but such predecessor shall, nevertheless, on the
written request of its successor or any of the parties hereto, execute and
deliver an instrument or instruments transferring to such successor all the
rights of such predecessor hereunder, and shall duly assign, transfer and
deliver all property, securities and monies held by it pursuant to this Escrow
Agreement to its successor. Should any instrument be required by any successor
for more fully vesting in such successor the duties, responsibilities, and
obligations hereby vested or intended to be vested in the predecessor, any and
all such instruments in writing shall, on the request of any of the other
parties hereto, be executed, acknowledged, and delivered by the predecessor.
7.3 NEW ESCROW AGENT. In the event of an appointment of a
successor, the predecessor shall cease to be Escrow Agent of any funds,
securities or other assets and records it may hold pursuant to this Escrow
Agreement, and the successor shall become such Escrow Agent.
7.4 RELEASE. Upon acknowledgment by any successor Escrow Agent
of the receipt of the then remaining balance of the Escrow Shares, the then
acting Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Escrow Agreement that may arise and
accrue thereafter.
7.5 SUCCESSORS. Any corporation or association into which the
Escrow Agent in its individual capacity may be merged or converted or with which
it may be consolidated, or any corporation or association resulting from any
merger, conversion or consolidation to which the Escrow Agent in its individual
capacity shall be a party, or any corporation or association to which all or
substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be sold or otherwise transferred, shall be the Escrow
Agent hereunder without further act.
8. FEE
The Escrow Agent will be paid by Parent as billed for services and
expenses hereunder in accordance with the fee schedule attached hereto as
EXHIBIT 8. In the event that the Escrow Agent is made a party to litigation with
respect to the property held hereunder, or brings an action in interpleader, or
in the event that the conditions to this Escrow Agreement are not promptly
fulfilled, or the Escrow Agent is required to render any service not provided
for in this Escrow Agreement and fee
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schedule, or there is any assignment of the interests of this Escrow Agreement
or any modification hereof, the Escrow Agent shall be entitled to reasonable
compensation from Parent for such extraordinary services and reimbursement for
all fees, costs, liability, and expenses, including attorneys fees and expenses.
9. TERMINATION; DEFICIENCY CLAIMS
This Escrow Agreement and the escrow created hereby shall terminate following
Escrow Agent's delivery, and Parent's release of all remaining Escrow Shares to
the Holder and/or Parent pursuant to Section 2 or 3. In the event that upon the
termination of this Escrow Agreement, the value of the Escrow Shares released to
Parent pursuant to the provisions of this Escrow Agreement is insufficient to
pay in full to Parent the total amount of the Damages and Prevailing Party
Awards to which it is entitled, then Parent shall be entitled to pursue its
remedies for any such deficiency under the Merger Agreement; PROVIDED, HOWEVER,
that any action with respect thereto must be commenced by Parent within ninety
(90) days after the termination of this Escrow Agreement, and PROVIDED, FURTHER,
that no party hereto in connection with any such action may contest any
Uncontested Claim or any Contested Claim that has been resolved in accordance
with the provisions of this Escrow Agreement.
10. MISCELLANEOUS PROVISIONS
10.1 PARTIES IN INTEREST. This Escrow Agreement is not
intended, nor shall it be construed, to confer any enforceable rights on any
Person not a party hereto. All of the terms and provisions of this Escrow
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto.
10.2 ATTORNEYS' FEES. In the event of any action to enforce
any provision of this Escrow Agreement, or on account of any default under or
breach of this Escrow Agreement, the substantially prevailing party in such
action shall be entitled to recover, in addition to all other relief, from the
other party all attorneys' fees incurred by the substantially prevailing party
in connection with such action (including, but not limited to, any appeal
thereof).
10.3 ENTIRE AGREEMENT. This Escrow Agreement constitutes the
final and entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior arrangements or understandings.
10.4 NOTICES. All notices, requests, demands or other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given: (i)
on the date of delivery if personally delivered by hand, (ii) upon the third day
after such notice is deposited in the United States mail, if mailed by
registered or certified mail, postage prepaid, return receipt requested, (iii)
upon the date scheduled for delivery after such notice is sent by a nationally
recognized overnight express courier or (iv) by fax upon written confirmation
(including the automatic confirmation that is received from the recipient's fax
machine) of receipt by the recipient of such notice:
IF TO PARENT: Lionbridge Technologies, Inc.
950 Winter Street, Suite 2410
Waltham, MA 02451
Attention:
Telephone No.: (781) 434-6000
Fax No.: (781) 434-6034
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<PAGE>
WITH COPIES TO:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: George W. Lloyd
Kathy A. Fields
Telephone No.: (617) 248-7000
Fax No.: (617) 248-7100
IF TO THE INDEMNIFICATION
REPRESENTATIVE: Robert C. Sprung
Telephone No.: (617) 868-6800
WITH COPIES TO:
Foley Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
Attention: David Broadwin
Telephone No.: (617) 832-1000
Fax No: (617) 832-7000
IF TO THE ESCROW AGENT: American Stock Transfer & Trust Co.
6201 15th Avenue
Brooklyn, NY 11219
Attention:
Telephone No.: (718) 921-8209
Fax No.: (718) 331-1852
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 10.4.
10.5 CHANGES. The terms of this Escrow Agreement may not be
modified or amended, or any provisions hereof waived, temporarily or
permanently, except pursuant to the written agreement of Parent, the Holder and
the Escrow Agent.
10.6 SEVERABILITY. If any term or provision of this Escrow
Agreement or the application thereof as to any Person or circumstance shall to
any extent be invalid or unenforceable, the remaining terms and provisions of
this Escrow Agreement or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby and each term and provision of this Escrow
Agreement shall be valid and enforceable to the fullest extent permitted by law.
10.7 COUNTERPARTS. This Escrow Agreement may be executed in
two or more partially or fully executed counterparts, each of which shall be
deemed an original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument. The execution and delivery
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<PAGE>
of a Signature Page to Escrow Agreement in the form annexed to this Escrow
Agreement by any party hereto who shall have been furnished the final form of
this Escrow Agreement shall constitute the execution and delivery of this Escrow
Agreement by such party.
10.8 HEADINGS. The headings of the various sections of this
Escrow Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Escrow Agreement.
10.9 GOVERNING LAW. This Escrow Agreement shall be construed
and controlled by the laws of the Commonwealth of Massachusetts without regard
to the principles of conflicts of laws. HT, the Indemnification Representative
and the Holder consent to jurisdiction and venue in the state and federal courts
in Boston, Massachusetts.
10.10 BINDING EFFECT. This Escrow Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
affiliates, successors and assigns.
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<PAGE>
SIGNATURE PAGE TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the day and year first above written.
LIONBRIDGE TECHNOLOGIES, INC. HARVARD TRANSLATIONS, INC.
By: /s/ Rory J. Cowan By: /s/ Douglas Langenberg
----------------------------------- ----------------------------
Title: Chief Executive Officer Title: President
INDEMNIFICATION REPRESENTATIVE:
/s/ Robert Sprung
---------------------------------------
Robert Sprung
AMERICAN STOCK TRANSFER & TRUST, AS ESCROW AGENT
By: /s/ Herbert J. Lemmer
------------------------------------
Vice President
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<PAGE>
INSTRUMENT OF ACCESSION
The undersigned hereby executes the Escrow Agreement (the "ESCROW AGREEMENT") by
and among Lionbridge Technologies, Inc. (the "Company") and certain other
parties which executed the same, and hereby agrees to all of the provisions of
the Escrow Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the original signatories, to a counterpart of
the Escrow Agreement. This Instrument of Accession shall take effect and shall
become an integral part of the said Escrow Agreement immediately upon execution
and delivery to the Company of this Instrument.
IN WITNESS WHEREOF, this INSTRUMENT OF ACCESSION has been duly executed
by or on behalf of the undersigned, as a sealed instrument under the laws of the
State of Delaware, as of the date below written.
Signature:
-----------------------------------
(Print Name)
Address:
Date: _______________________________
ACCEPTED AND AGREED:
LIONBRIDGE TECHNOLOGIES, INC.
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
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