INDEMNITY ESCROW AGREEMENT
This Indemnity Escrow Agreement (the "AGREEMENT") is entered into as
of December 16, 1999 by and among DALEEN TECHNOLOGIES, INC., ("PARENTCO"),
DALEEN CANADA CORPORATION, a newly formed Nova Scotia unlimited liability
company (the "COMPANY"), the holders of all of the issued and outstanding
shares of INLOGIC SOFTWARE, INC. ("INLOGIC") identified on Exhibit A hereto as
such (collectively, the "INLOGIC SHAREHOLDERS"), Mohammed Aamir as
representative of the Inlogic Shareholders (the "ESCROW REPRESENTATIVE") and
MONTREAL TRUST COMPANY OF CANADA, as escrow agent (the "ESCROW AGENT").
WHEREAS, pursuant to a Share Purchase Agreement (the "PURCHASE
AGREEMENT") dated as of the date hereof, by and among ParentCo, the Company,
Inlogic and the Inlogic Shareholders, the Company is purchasing all of the
issued and outstanding shares in Inlogic in consideration for the issuance of
either exchangeable shares of its share capital (the "EXCHANGEABLE SHARES") or
shares of common stock, $0.01 par value per share, of ParentCo ("PARENTCO
COMMON STOCK");
AND WHEREAS, the Inlogic Shareholders have agreed to indemnify the
Company and ParentCo against breaches of the representations, warranties and
covenants made by the Inlogic Shareholders in the Purchase Agreement and
against certain other matters as specified in Article 9 of the Purchase
Agreement;
AND WHEREAS, to secure payment of the Inlogic Shareholders'
indemnification obligations, 348,485 Exchangeable Shares of the Company and
9,265 shares of ParentCo Common Stock are being deposited, pursuant to Section
2.4 of the Purchase Agreement, in escrow to be held as hereinafter provided;
and
AND WHEREAS the foregoing recitals are made as representations and
statements of fact by the parties other than the Escrow Agent.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises of the parties herein contained, and other good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Escrow and Escrow Shares.
Pursuant to the Purchase Agreement, the Company shall deposit in
escrow with the Escrow Agent, as escrow agent, such amount in cash as required
by the Purchase Agreement, a stock certificate or certificates representing
348,485 Exchangeable Shares issued, 9,265 shares of ParentCo Common Stock
(together, the "ESCROW SHARES" and together with additions to or earnings on
the same, the "ESCROW DEPOSIT") which Escrowed Shares shall be registered in
the name of the Escrow Agent, or its nominee, as agent for the beneficial
owners of such shares. The Escrow Shares shall be held and distributed by the
Escrow Agent in accordance with the terms and conditions hereof. The number of
Escrow Shares beneficially owned by each Shareholder is set forth in Schedule A
hereto.
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2. Exchange and Permitted Transfers.
The Exchangeable Shares may be exchanged into ParentCo Common Stock (or any
other securities) during the Escrow Period and the Exchangeable Shares may be
transferred within escrow solely in favour of Daleen Callco Corporation, if
required to effect such an exchange. The Inlogic Shareholder desiring such
exchange shall deliver to the Escrow Agent a notice stating the number of
Exchangeable Shares (such number not to exceed the total number of Exchangeable
Shares that the Escrow Agent is holding on behalf of such Inlogic Shareholder)
he or she wishes to exchange. The Escrow Agent shall deliver to the Company
such notice together with an Exchangeable Share certificate(s) representing at
least that number of Exchangeable Share being exchanged. The Company shall
return to the Escrow Agent the ParentCo Common Stock into which the
Exchangeable Shares have been exchanged and any other consideration resulting
from such exchange as well as a new Exchangeable Share certificate representing
the balance of any Exchangeable Shares not exchanged all of which shall form
part of the Escrow Deposit. The Company shall return such consideration within
10 business days.
The ParentCo Common Stock may be transferred within the Escrow Period,
provided that (i) such transfer is effected pursuant to the registration rights
agreement dated the date hereof between ParentCo and the Employee Shareholders
or pursuant to a valid exemption under Rule 144 of the Securities Act of 1933,
as amended; (ii) the Employee Shareholder represents in writing to the Escrow
Agent that he or she does not hold any Exchangeable Shares or ParentCo Common
Stock other than the Escrow Shares or that he or she is transferring any other
ParentCo Common Stock it holds as part of such transfer; and (iii) the Employee
Shareholder shall return to the Escrow Agent to form part of the Escrow Amount,
the pre-tax net proceeds received by the Employee Shareholder from such
transfer. The Escrow Agent shall have no duty to determine the accuracy of such
notice. Upon receipt of such notice the Escrow Agent will forward the ParentCo
Common Stock in question to the Inlogic Shareholder with a power of attorney.
The Inlogic Shareholder shall return to the Escrow Agent to form part of the
Escrow Deposit, the pre-tax net proceeds received by the Inlogic Shareholder
from such transfer and the balance of the ParentCo Common Stock represented by
the certificate released not transferred within 10 business days of the Escrow
Agent's release of same. If the Escrow Agent does not receive such proceeds
within 10 business days it will notify the Company. The Escrow Agent shall have
no duty to ensure that the Inlogic Shareholder deposits such proceeds or to
determine the sufficiency of such proceeds.
3. Investment of Escrow.
The Escrow Agent shall invest all cash, if any, held as part of the
Escrow Deposit only in such specific investments as the Company, The Inlogic
Shareholders and the Escrow Representative shall from time to time jointly
direct in writing to the Escrow Agent. If the amount of cash is insufficient to
invest the cash will be deposited into an interest bearing trust account of the
Escrow Agent.
Until further written notice, cash in the Escrow Deposit shall be
invested in an interest bearing trust account of the Escrow Agent secured by
federal regulators, money market funds, guaranteed investment certificates,
treasury bills, or any debtor bond
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obligations rated AAA by Standard & Poor's or Dominion Bond Rating Service, or
the equivalent rating by such other rating agency as the Escrow Representative,
the Company and the Inlogic Shareholders may direct. Unless otherwise directed
in writing by the Escrow Representative, the Company and the Inlogic
Shareholders, the Escrow Agent shall not invest all or any portion of the
Escrow Deposit in any investment if the maturity date of such investment is
later than the last day of the Escrow Period (as defined below).
4. Rights and Obligations of the Parties.
The Escrow Agent shall be entitled to such rights and shall perform
such duties of the escrow agent as set forth herein (collectively, the
"DUTIES"), in accordance with the terms and conditions of this Agreement.
ParentCo, the Company, the Escrow Representative and the Inlogic Shareholders
shall be entitled to their respective rights and shall perform their respective
duties and obligations as set forth herein, in accordance with the terms
hereof.
5. Escrow Period.
The Escrow Period shall terminate with respect to the Escrow Deposit
at the expiration of eighteen (18) months after the date of this Agreement;
provided, however, that all or a portion of the Escrow Deposit, which is
necessary to satisfy any unsatisfied claims specified in any Officer's
Certificate theretofore delivered to the Escrow Agent and the Escrow
Representative prior to termination of the Escrow Period with respect to facts
and circumstances existing prior to expiration of the Escrow Period, shall
remain in the Escrow Deposit until such claims have been resolved.
6. Delivery of Escrow Shares to Inlogic Shareholders.
Promptly following the termination of the Escrow Period as set forth
above, the Escrow Agent shall deliver to the Inlogic Shareholders the number of
Escrow Shares and the amount of other property in the Escrow Deposit which
exceed the number of Escrow Shares and the amount of any other property
sufficient to satisfy any unsatisfied claims specified in any notice of claim
delivered to the Escrow Agent and the Escrow Representative prior to the
termination of the Escrow Period with respect to facts and circumstances
existing prior to the expiration of the Escrow Period. As soon as all such
claims have been resolved, the Escrow Agent shall deliver to the Inlogic
Shareholders all of the Escrow Shares and other property remaining in the
Escrow Deposit and not required to satisfy such claims. Each Inlogic
Shareholder shall receive that number of Escrow Shares and the amount of any
property in the Escrow Deposit which bears the same relationship to the total
number of Escrow Shares and the amount of any property in the Escrow Deposit
available for distribution as the number of Escrow Shares set forth opposite
the name of each such Inlogic Shareholder on Exhibit A hereto bears to the
total number of Escrow Shares on Exhibit A.
7. Amounts Earned on Escrow Deposit: Tax Matters.
All amounts earned, paid or distributed with respect to the Escrow
Deposit, if any (whether interest, dividends, distributions from ParentCo with
respect to the Escrow Shares or otherwise), shall become a part of the Escrow
Deposit, shall be held hereunder upon the same terms as the original Escrow
Deposit and shall be distributed together with the underlying portion of the
original Escrow Deposit pursuant to the terms of this Agreement.
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The parties agree that the Inlogic Shareholders will include all amounts earned
on the Escrow Deposit (or allocated or distributed with respect thereto) in
their gross income for federal, provincial and local income tax (collectively,
"INCOME TAX") purposes and pay any income tax resulting therefrom, pro rata in
accordance with their combined ownership percentage as set forth on Exhibit A.
8. Claims Against Escrow Deposit.
(a) At any time or times prior to the termination of the Escrow
Period, the Company, ParentCo or any successor of the Company
or ParentCo, may make claims against the Escrow Deposit for
indemnification pursuant to and in accordance with Article 9
of the Purchase Agreement. The Company or ParentCo, as the
case may be, shall notify the Escrow Representative and the
Escrow Agent in writing (by registered mail) promptly upon
determination to make a claim and in any event prior to the
expiration of the Escrow Period of each such claim, including
a summary of the amount of, and bases for, such claim. The
Company or ParentCo shall notify the Escrow Agent forthwith
of the date upon which the Escrow Representative received the
notice by registered mail. The Escrow Agent shall have no
duty to ensure the sufficiency of any claim. If the Escrow
Representative shall dispute such claim, the Escrow
Representative shall give written notice thereof to the
Company or ParentCo and to the Escrow Agent within forty-five
(45) days after receipt of notice of the Company's or
ParentCo's claim, in which case the Escrow Agent shall
continue to hold the Escrow Deposit in accordance with the
terms of this Agreement; otherwise, such claim shall be
deemed to have been acknowledged to be payable out of the
Escrow Deposit in the full amount thereof and the Escrow
Agent shall use its best efforts to pay such claim to the
Company, ParentCo or Inlogic, as the case may be within three
(3) business days after expiration of said forty-five (45)
day period or as soon thereafter as possible following the
determination of the Current Market Price of the Escrow
Shares pursuant to Section 6(b)(ii) below. If the amount of
the claim exceeds the value of the Escrow Deposit, the Escrow
Agent shall have no liability or responsibility for any
deficiency.
(b) The Escrow Agent shall follow the procedure below in making
any payment in satisfaction of a claim against the Escrow
Deposit:
(i) The Escrow Agent shall make such payment first from
cash additions to or earnings on the Escrow Shares
or from the cash initially deposited, if any, until
all cash in the Escrow Deposit has been exhausted.
(ii) To the extent that any claim exceeds the amount of
cash in the Escrow Deposit, the Escrow Agent shall
make payment from the Escrow Shares in such number
of Escrow Shares (computed to the nearest whole
unit) having a value equal to the value of the claim
not satisfied by cash payment. Any payment of Escrow
Shares by the Escrow Agent to the Company or
ParentCo, as the case may be, shall be
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treated as a sale by the Inlogic Shareholders of
such Escrow Shares for the value described herein.
The value of an Escrow Share for purposes of this
Section shall be the Current Market Price of the
ParentCo Common Stock (as hereinafter defined).
ParentCo shall as specified in (iii), below, notify
the Escrow Representative and Escrow Agent in
writing of the Current Market Price. As well,
ParentCo will deliver to the Escrow Agent and the
Escrow Representative written notice of the number
of Escrowed Shares which are to be set aside or paid
out with respect to any claim under this Agreement,
based on its determination of the Current Market
Price on which the Escrow Agent is entitled to rely.
(iii) For the purpose of this Agreement, Current Market
Price for any date means the average of the closing
prices of a share of ParentCo Common Stock during a
period of 20 consecutive trading days ending five
trading days before such date on a national
securities exchange or the Nasdaq National Market
(in either case, a "NATIONAL EXCHANGE").
The Escrow Shares delivered to the Company or ParentCo, as the case
may be, in satisfaction of a claim shall be allocated among the Inlogic
Shareholders so as to reduce each Inlogic Shareholder's interest in the
remaining Escrow Shares in proportion to their respective ownership percentages
as set forth on Exhibit A hereto. In the event that the Escrow Agent must make
payment with a number of Escrow Shares less than or different from the number
of Shares represented by a certificate in the Escrow Deposit, the Escrow Agent
shall surrender such certificate to the Company or ParentCo, as the case may
be, the Company or ParentCo, as the case may be, shall issue to the Escrow
Agent certificates of either Exchangeable Shares of the Company or ParentCo
Common Stock, as the case may be, identical in form but for the number of
Escrow Shares as necessary to allow for proper payment of the claim so long as
the number of Escrow Shares of the new certificates plus the amount of Escrow
Shares used to satisfy such claim shall be equivalent to the total number of
Escrow Shares covered by the surrendered certificate.
9. Disputed Claims.
(a) If the Escrow Representative shall dispute an indemnification
claim of the Company or ParentCo as above provided, the
Escrow Agent shall set aside a portion of the Escrow Deposit
sufficient to pay said claim in full as reasonably determined
by the Company or ParentCo in good faith (the "SET ASIDE
AMOUNT"). ParentCo or the Company shall notify the Escrow
Agent in writing of the Set Aside Amount. If ParentCo or the
Company notifies the Escrow Agent in writing that it has made
out-of-pocket expenditures in connection with any such
disputed claim for which it is entitled to be indemnified
under the Purchase Agreement and provides paid receipts for
such expenditures, in addition to expenditures included in
the Set Aside Amount, an amount equal to such additional
expenditures shall be added to the Set Aside Amount. The
appropriate number of Escrow Shares in the Set Aside Amount
shall be determined by the procedure described in Section
8(b)(ii) above.
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(b) If the disputed indemnification claim has not been resolved
or compromised within sixty (60) days after the Escrow
Agent's receipt of the Escrow Representative's notice of
dispute of the same, or in the event of a third-party claim
or suit, within fifteen (15) days after its resolution or
compromise, said indemnification claim shall be referred to
the American Arbitration Association, to be settled by
binding arbitration before a panel of three arbitrators in
Toronto, in accordance with the commercial arbitration rules
of the Association. The fees and expenses of the arbitrators
shall be borne equally by the Inlogic Shareholders on the one
hand and the Company and ParentCo on the other. In no event
shall the Escrow Agent be responsible for any fee or expense
of any party to any arbitration proceeding. The determination
of the arbitrators as to the amount, if any, of the
indemnification claim which is properly allowable shall be
conclusive and binding upon the parties hereto and judgment
may be entered thereon in any court having jurisdiction
thereof, including, without limitation, any court in the
Province of Ontario. The arbitrators shall have the authority
in their discretion to award to the prevailing party
reasonable costs and expenses including attorney's fees and
the cost of arbitration. The Escrow Agent shall use its best
efforts to make payment of such claim, as and to the extent
allowed, to the Company or ParentCo, as the case may be, of
or out of the Set Aside Amount (or if insufficient, out of
the Escrow Deposit) within three (3) business days following
the Escrow Agent's receipt of said determination or as soon
thereafter as possible.
(c) Notwithstanding Section 9(b), if a disputed indemnification
claim has not been resolved or compromised as of the date of
termination of the Escrow Period, and such claim does not
involve a third-party claim or suit, the Company, ParentCo or
Inlogic and the Escrow Representative shall continue to
negotiate in good faith a settlement of such claims for a
period of ten (10) days after the date of termination of the
Escrow Period. If, after the expiration of such ten-day
period, such indemnification claim still has not been
resolved or compromised, such claim shall be settled in
accordance with the arbitration provisions set forth in
Section 9(b).
(d) It is understood and agreed that should any dispute arise
under this Section 9, the Escrow Agent, upon receipt of
written notice of such dispute or claim by the Escrow
Representative, is authorized and directed to retain in its
possession without liability to anyone, the Set Aside Amount
relating to such dispute plus any expenditures of the Company
or ParentCo made pursuant to Section 9(a) until such dispute
shall have been settled pursuant to this Section 9. The
Escrow Agent may, but shall be under no duty whatsoever to,
institute or defend any legal proceedings which relate to the
Escrow Deposit.
(e) In connection with the resolution of a disputed
indemnification claim, the arbitrator may award, in its
discretion, to the Inlogic Shareholders interest for the
period from the date which is 18 months from the date hereof
until the date of release of the Set Aside Amount or a
portion thereof to the Inlogic Shareholders, provided that
the Company or ParentCo has been unsuccessful
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in its indemnification claim and such interest shall be on
the portion of the Set Aside Amount which is being returned
to the Inlogic Shareholders following resolution of the
dispute. Such amount shall be paid by ParentCo promptly after
such award.
(f) Other than as otherwise provided for in Article 9 of the
Purchase Agreement, the Escrow Deposit shall constitute the
sole recourse of the Company or ParentCo to satisfy its
claims pursuant to such Article 9 of the Purchase Agreement.
(g) Once all outstanding claims have been resolved, ParentCo, the
Company and the Escrow Representative shall jointly execute a
written notice to such effect and deliver such notice to the
Escrow Agent.
10. Termination.
This Agreement shall terminate on the date that the Escrow Deposit is
reduced to zero as the result of payments by the Escrow Agent to the Company,
ParentCo, Inlogic in accordance with the provisions of Section 8 or Section 9.
If, however, the Escrow Deposit has not been reduced to zero as of the date
that there are no outstanding indemnification claims on such date of which the
Escrow Agent has received notice hereunder, the Escrow Agent shall distribute
the amount remaining in the Escrow Deposit to the Inlogic Shareholders in
accordance with Section 6 hereof. After such payment this Agreement shall
terminate; otherwise this Agreement shall continue in effect until all
indemnification claims the Company or ParentCo has made pursuant to Section 9
hereof on or prior to the date of termination of the Escrow Period shall have
been disposed of. As of the date of termination of the Escrow Period, an amount
of the Escrow Deposit adequate to cover all disputed and undisputed claims made
by the Company, ParentCo or Inlogic pursuant to Section 8 hereof will be held
by the Escrow Agent (with the number of Escrow Shares, if any, to be retained
determined in accordance with Section 8(b)(ii)) and the Escrow Agent shall
distribute on the date of termination of the Escrow Period the balance, if any,
of the Escrow Deposit to the Inlogic Shareholders in accordance with their
respective ownership percentages as set forth on Exhibit A hereto. At such time
as all remaining indemnification claims hereunder have been resolved and the
Escrow Agent has received a written notice executed by the Company, ParentCo
and the Escrow Representative pursuant to Section 9(g), or notification of a
determination of the arbitrators pursuant to Section 9(b), to that effect and
any amounts to be distributed to ParentCo or the Company in connection
therewith have been so distributed, the Escrow Agent shall distribute the
remaining Escrow Deposit, if any, to the Inlogic Shareholders in accordance
with their respective ownership percentages as set forth on Exhibit A hereto.
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11. The Escrow Agent.
(a) Direction from the Company, ParentCo and Escrow
Representative. Notwithstanding anything herein to the
contrary, the Escrow Agent shall promptly dispose of all or
any part of the Escrow Deposit as directed by a writing
signed by the Company, ParentCo and Escrow Representative.
(b) Reliance by Escrow Agent; Liability of Escrow Agent. Except
with respect to capitalized terms used herein and defined in
the Purchase Agreement, the Escrow Agent will not be subject
to, or be obliged to recognize, any other agreement between
the parties hereto or directions or instructions not
specifically set forth as provided for herein. The Escrow
Agent will not make any payment or disbursement from or out
of the Escrow Deposit that is not expressly authorized
pursuant to this Agreement. The Escrow Agent undertakes to
perform only such duties as are expressly set forth herein.
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 have no duty to
solicit any payment that may be due hereunder. The Escrow
Agent shall 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 gross negligence and
willful misconduct was the primary cause of any loss to the
Company, ParentCo or the Inlogic Shareholders. In the
administration of the Escrow Deposit hereunder, 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. The
Company, ParentCo and the Inlogic Shareholders jointly and
severally hereby agree to indemnify and hold the 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 and
incidental expenses and legal fees and expenses ("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 Agreement. In addition to
and not in limitation of the immediately preceding sentence,
the Company, ParentCo and the Inlogic Shareholders 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 Indemnities' performance under this Agreement,
provided the Indemnitees have not acted with gross negligence
or engaged in willful misconduct. In addition, without
limiting the foregoing, with respect to a
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distribution made by ParentCo or the Company or any exchange
or transfer of any Escrowed Shares, ParentCo will retain
counsel for the Escrow Agent to advise the Escrow Agent on
tax reporting issues. Anything in this 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). As between the Company and ParentCo on the one
hand and the Inlogic Shareholders on the other, each shall
bear equally the indemnification obligations set forth in
this Section 11(b). The provisions of this Section 11(b)
shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent for any reason.
(c) Fees and Expenses of the Escrow Agent. All fees of the Escrow
Agent for its services hereunder, together with any expenses
reasonably incurred by the Escrow Agent in connection with
this Agreement, shall be paid by the Company. All fees of the
Escrow Agent in connection herewith shall be due upon receipt
of an invoice from the Escrow Agent delivered to the Company.
(d) Resignation and Removal of Escrow Agent; Successor Escrow
Agent.
(i) The Escrow Agent may resign from its duties
hereunder by giving each of the parties hereto not
less than thirty (30) days prior written notice of
the effective date of such resignation (which
effective date shall be at least thirty (30) days
after the date such notice is given). In addition,
the Escrow Agent may be removed and replaced on a
date designated in a written instrument (which
effective date shall be at least thirty (30) days
after the date such notice is given) signed by the
Company, ParentCo and the Escrow Representative and
delivered to the Escrow Agent. The parties hereto
intend that a successor escrow agent mutually
acceptable to the Escrow Representative, the
Company, and ParentCo will be appointed to fulfill
the duties of the Escrow Agent hereunder for the
remaining term of this Agreement in the event of the
Escrow Agent's resignation or removal. Upon the
effective date of such resignation or removal, the
Escrow Agent shall deliver the property comprising
the Escrow Deposit to such successor escrow agent,
together with an accounting of the investments held
by it and all transactions related to this
Agreement, including any distributions made and such
records maintained by the Escrow Agent in connection
with its duties hereunder and other information with
respect to the Escrow Deposit as such successor may
reasonably request. If on or before the effective
date of such resignation or removal, a successor
escrow agent has not been appointed, the Escrow
Agent shall cease its functions at the expiry of the
notice period and may retain all and any property in
its possession hereunder on a merely safe keeping
basis, at a fee to be determined by the Escrow
Agent, acting reasonably.
Upon written acknowledgement by a successor escrow agent appointed in
accordance with this Agreement to serve as escrow agent hereunder and the
receipt of the property then
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comprising the Escrow Deposit, the Escrow Agent shall be fully released and
relieved of all duties, responsibilities and obligations under this Agreement,
subject to Section 11(b) of this Agreement, and such successor escrow agent
shall for all purposes hereof be the Escrow Agent.
(ii) Any corporation, association or other
entity into which the Escrow Agent may be
converted or merged, or with which it may
be consolidated, or to which it may sell or
otherwise transfer all or substantially all
of its corporate trust business, or any
corporation, association or other entity
resulting from any such merger, conversion,
consolidation, sale or other transfer,
shall, ipso facto, be and become successor
Escrow Agent hereunder, vested with all of
the powers, discretions, immunities,
privileges and all other matters as was its
predecessor, without the execution or
filing of any instrument or any further act
on the part or any of the parties hereto,
anything herein to the contrary
notwithstanding.
(e) The Escrow Agent shall have the right to consult
with and obtain advice from legal counsel employed
or appointed by it, who may but need not be legal
counsel for the Company, in the event of any
questions as to any of the provisions hereof or its
duties hereunder. The cost of such services shall be
reasonable expenses pursuant to s. 11(c) hereof.
(f) The Escrow Agent shall disburse monies hereunder
only to the extent that monies have been deposited
with it.
(g) The Escrow Agent shall retain the right not to act
and shall not be held liable for refusing to act
unless it has received clear documentation which
complies with the terms of this Agreement. Such
documentation must not require the exercise of any
discretion or independent judgment.
(h) The Escrow Agent shall incur no liability with
respect to the delivery or non-delivery of any
certificate or certificates whether delivered by
hand, mail or any other means.
(i) The forwarding of a cheque by the Escrow Agent will
satisfy and discharge the liability for any amounts
due to the extent of the sum or sums represented
thereby. In the event of the non-receipt of such
cheque by the payee, or the loss or destruction
thereof, the Escrow Agent, upon being furnished with
reasonable evidence of such non-receipt, loss or
destruction and indemnity reasonably satisfactory to
it, will issue to such payee a replacement cheque
for the amount of such cheque.
(j) None of the provisions contained in this Agreement
require the Escrow Agent to expend or to risk its
own funds or otherwise to incur financial liability
in the performance of any of its duties or in the
exercise of any of its rights or powers.
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12. Voting of Escrow Shares.
So long as any Escrow Shares are retained by the Escrow Agent, the
Inlogic Shareholders in accordance with their respective ownership percentages
as set forth on Exhibit A hereto, shall be entitled to exercise the voting
power, if any, with respect to the Escrow Shares, in accordance with their
respective ownership percentages as set forth on Exhibit A hereto. ParentCo and
the Company shall provide to the Escrow Agent such sufficient number of copies
of materials to be provided to the Inlogic Shareholders in sufficient time for
the Escrow Agent to provide the materials to the Inlogic Shareholders in order
that the Inlogic Shareholders may exercise their voting power. The Escrow Agent
shall not exercise the voting power of the Inlogic Shareholders.
13. Governing Law.
IT IS THE PARTIES' INTENT THAT THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE PROVINCE OF ONTARIO AND
THE FEDERAL LAWS APPLICABLE THEREIN.
14. Counterparts.
This Escrow Agreement may be executed in one or more counterparts, all
of which documents shall be considered one and the same document.
15. Notices.
Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed to have been given when received, if
personally delivered or delivered by overnight delivery service or sent by
facsimile transmission:
TO PARENTCO : Daleen Technologies, Inc.
902 Clint Moore Road
Suite 230
Boca Raton, Florida 33487
Attention: Stephen Wagman
Fax: (561) 995-1979
With a copy to: Morris, Manning & Martin L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attention: David M. Calhoun
Fax: (404) 365-9532
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TO THE COMPANY: Daleen Canada Corporation
902 Clint Moore Road
Suite 230
Boca Raton, Florida 33487
Attention: Stephen Wagman
Fax: (561) 995-1979
With a copy to: Stikeman, Elliott
Barristers & Solicitors
Suite 5300
Commerce Court West
Toronto, Ontario M5L 1B9
Attention: Nathalie Mercure
Facsimile: (416) 947-0866
And a copy to: Morris, Manning & Martin L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attention: David M. Calhoun
Facsimile: (404) 365-9532
TO THE HOLDERS: See Exhibit B
TO THE ESCROW REPRESENTATIVE: Mohammed Aamir
123 Scadding Avenue
Apt. 819
Toronto, Ontario
M5A 4J3
With a copy to: Blake, Cassels & Graydon
Box 25, Commerce Court West
Toronto, Ontario
M5L 1A9
Attention: John Tuzyk
Facsimile: (416) 863-2653
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TO THE ESCROW AGENT: Montreal Trust Company of Canada
151 Front Street West
Suite 605
Toronto, Ontario
M5J 2N1
Attention: Manager Corporate
Trust Services
Facsimile: (416) 981-9777
Addresses may be changed by written notice given pursuant to this
Section. Any notice given hereunder may be given on behalf of any party by his
counsel or other authorized representatives.
16. Force Majeure.
Neither the Company, ParentCo, Inlogic, the Inlogic Shareholders nor
the Escrow Agent shall be responsible for delays or failures in performance
under this Agreement resulting from acts beyond its control. Such acts shall
include but not be limited to acts of God, strikes, lockouts, riots, acts of
war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
17. Modifications.
This Agreement may not be altered or modified nor may any condition or
covenant set forth herein be waived, without the express written consent of the
parties hereto and the consent of the Escrow Representative shall bind each of
the Inlogic Shareholders. No course of conduct shall constitute a waiver of any
of the terms and conditions of this Escrow Agreement, unless such waiver is
specified in writing, and then only to the extent so specified. A waiver of any
of the terms and conditions of this Escrow Agreement on one occasion shall not
constitute a waiver of the other terms of this Escrow Agreement, or of such
terms and conditions on any other occasion.
18. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, and (b) certificates and other information previously or hereafter
furnished, may be reproduced by a photographic, photostatic, microfilm, optical
disk, micro-card, miniature photographic or other similar process. The parties
agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not
the original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
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IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to
be executed as of the date first written above.
DALEEN CANADA CORPORATION
By:
------------------------------------
Name:
Title:
DALEEN TECHNOLOGIES, INC.
By:
------------------------------------
Name:
MONTREAL TRUST COMPANY OF
CANADA
By:
-----------------------------------
Name
By:
-----------------------------------
Name:
-----------------------------------
Mohammed Aamir,
As Escrow Representative
INLOGIC SHAREHOLDERS:
---------------------------------------
MOHAMMED AAMIR
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------------------------------------
CARL SCASE
------------------------------------
CORNELIU IONESCU
------------------------------------
MANSOOR AHMED
------------------------------------
MING HAN
------------------------------------
CHARLES BARTON
------------------------------------
STEPHEN SMITH
------------------------------------
NAHLA RASHAD
------------------------------------
GEORGE TIMMES
01303949 ONTARIO INC.
By:
---------------------------------
Name:
Title:
SIGNATURES CONTINUED
THE VENGROWTH INVESTMENT
FUND INC.
By:
---------------------------------
Name:
Title:
