Document:

EX-10.2

 

EXHIBIT 10.2

Execution Copy

Bonus Plan/Documents ESCROW AGREEMENT

     This Bonus Plan/Documents  Escrow Agreement (this “Agreement”) is
made as of this 13th day of July 2007, by and among the Persons listed on Exhibit
A attached hereto (each, a “Seller,” and collectively, the “Sellers”), Lexico Publishing Group,
LLC, a California limited liability company (the “Company”), Answers Corporation, a Delaware
corporation (the “Purchaser”), Brian Kariger, as representative for and on behalf of the Sellers
(the “Sellers’ Representative”) and American Stock transfer & Trust Co. (“Escrow Agent”).

     Capitalized terms used but not defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement (as defined below). If the terms of this Agreement conflict in any
way with the provisions of the Purchase Agreement, then the provisions of the Purchase Agreement
shall control. This Agreement shall become effective as of the Closing Date.

RECITALS

     A. Purchaser, Sellers, Sellers’ Representative and Company, have entered into that certain
Purchase Agreement, of even date herewith (the “Purchase Agreement”), a copy of which is attached
hereto as Exhibit B.

     B. Pursuant to Section 1.2.1 of the Purchase Agreement, at the Closing, Purchaser shall
deliver to and deposit with the Escrow Agent the Purchase Price (subject to any adjustments thereto
in accordance with the Purchase Agreement) (the “Purchase Price”), to be held by the Escrow Agent
pursuant to the terms of this Agreement.

     C. Pursuant to Section 2.2 of the Purchase Agreement, on the date hereof the Sellers have
deposited with the Escrow Agent the Escrow Documents (as defined below), to be held by the Escrow
Agent pursuant to the terms of this Agreement.

     D. Pursuant to Section 1.4 of the Purchase Agreement, an aggregate gross amount of
US$10,000,000 (inclusive of all Taxes, whether to be borne by the employee or employer) (the
"Escrow Cash”) is to be delivered to and deposited with the Escrow Agent and held in an escrow fund
(the Escrow Cash together with any interest and other income earned on the Escrow Cash, shall be
referred to as the “Escrow Fund”). The Escrow Fund is held to secure the payment to participants in
the Employee Bonus Plan under the Purchase Agreement. The Escrow Fund shall be governed by the
provisions set forth herein and in the Purchase Agreement.

     E. The Sellers’ Representative has been appointed as agent for, and to act on behalf of, the
Sellers to undertake certain obligations specified in the Purchase Agreement.

     F. The parties hereto desire to set forth additional terms and conditions relating to the
operation of the Escrow Fund.

     NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

 

     1. Escrow Documents.

          (a) Concurrently with the signing of this Agreement, each of the Sellers has deposited with
the Escrow Agent each of the documents in the form of as Schedules 1(a)(i)-(iii) duly
executed by such Seller (collectively, the “Escrow Documents”):

          (i) instruments of transfer of Membership Interests, validly executed by each
of the Sellers, evidencing the transfer of his Membership Interest to the Purchaser,
free and clean of any Encumbrance (dated blank);

          (ii) spousal consent to the transfer of Membership Interests, validly executed
by the spouse of each of the Sellers (if applicable), relating to the transfer of
Membership Interest to the Purchaser (dated blank); and

          (iii) the list of Company’s Members maintained pursuant to Section 17058(a)(1)
of the California Corporations Code, evidencing the withdrawal of the Sellers as
Members and the admission of the Purchaser as the sole Member (with the date of
admission blank).

          (b) The Escrow Agent agrees to accept the Escrow Documents. The Escrow Cash shall be held and
distributed by the Escrow Agent in accordance with the provisions of the Purchase Agreement and
this Agreement. The parties (other than the Escrow Agent) acknowledge and irrevocably agree that
the Escrow Documents shall evidence and constitute the complete and irrevocable transfer and
assignment of the Interests (and any beneficial right therein) from the Sellers to the Purchaser,
and each of parties hereby waives any claim that such documents are not intended or do not pass the
full legal title, ownership and rights related to or arising from the Interests.

     2. Escrow Fund.

          (a) Pursuant to Section 1.4 of the Purchase Agreement, on the Closing Date, Purchaser shall
make or cause to be made available to the Escrow Agent, the Escrow Cash. Exhibit A-1
attached hereto sets forth (i) the name, address and taxpayer identification number of each Seller,
and (ii) the pro rata share of each Seller in the Escrow Fund (each, the “Seller’s Pro Rata
Share”). Exhibit A-2, to be attached hereto on the Closing Date, shall set forth (i) the
name, address and taxpayer identification number of each participant in the Employee Bonus Plan (a
"Participant”), and (ii) the initial allocation of the Escrow Fund among the Participants (subject
to the provisions of Section 7 below). The Escrow Agent agrees to accept delivery of the Escrow
Cash and to hold such Escrow Cash in escrow subject to the terms and conditions of this Agreement
and the Purchase Agreement.

          (b) As of any particular time, the Escrow Agent may assume, without inquiry, that the Escrow
Cash that shall have been or caused to be deposited with the Escrow Agent by Purchaser is all of
the Escrow Cash required to be held in the Escrow Fund by the Escrow Agent and that Exhibit A s
A-1 and A-2 remain correct and in full force and effect. The Escrow Cash shall be held and
distributed by the Escrow Agent in accordance with the provisions of the Purchase Agreement and
this Agreement. Neither the Escrow Cash nor any beneficial interest therein may be pledged,
encumbered, sold, assigned or transferred (including any transfer by operation of law), by the
Escrow Agent, Purchaser, any Seller or any Participant or be taken or reached by any legal or
equitable process in satisfaction of any debt or other liability of the Escrow Agent, Purchaser,
any Seller or any Participant, (and in case of the Sellers or the Participants, prior to the
distribution to each in accordance with this Agreement, if any).

- 2 -

 

     3. Rights and Obligations of the Parties. The Escrow Agent shall be entitled to such
rights and shall perform such duties in its capacity as the escrow agent, as set forth herein and
as set forth in the Purchase Agreement (collectively, the “Duties”), in accordance with the
provisions of this Agreement and the Purchase Agreement. Purchaser and the Sellers’ Representative
shall be entitled to their respective rights and shall perform their respective duties and
obligations as set forth herein and in the Purchase Agreement, in accordance with the provisions of
this Agreement and the Purchase Agreement.

     4. Effectiveness; Escrow Period.

          (a) This Agreement shall be effective only as of and subject to the execution and delivery of
the Purchase Agreement by the parties thereto.

          (b) The period during which the Escrow Agent shall hold the Escrow Documents shall commence on
the date hereof and terminate on the earlier of termination of the Purchase Agreement in accordance
with Section 8 thereof or the Closing (the applicable “Escrow Period”). As soon as practicable
after the termination of the Purchase Agreement in accordance with Section 8 thereof, each of
Purchaser or Sellers’ Representative shall notify the Escrow Agent (with duplicate copy to the
other party).

          (b) The period during which the Escrow Agent shall hold the Escrow Fund shall commence at the
Closing and terminate following the last distribution to be made pursuant to Section 7 (the
applicable “Escrow Period”). As soon as practicable after the Closing Date, Purchaser shall notify
the Escrow Agent of the Closing Date (without failure of delivery of such notice impairing or
modifying any of the rights set forth herein or in the Purchase Agreement).

     5. Duties of Escrow Agent. In addition to the Duties set forth in the Purchase
Agreement, the Duties of the Escrow Agent shall include the following:

          (a) The Escrow Agent shall (i) safeguard and treat the Escrow Fund as a trust fund in
accordance with the provisions of this Agreement and not as the property of Purchaser, and shall
hold the Escrow Fund in a separate account, apart from any other funds or accounts of the Escrow
Agent or any other Person, and (ii) hold and dispose of the Escrow Fund only in accordance with the
provisions of this Agreement.

          (b) The Duties of the Escrow Agent with respect to the Escrow Cash may be altered, amended,
modified or revoked only by a writing signed by Purchaser, the Escrow Agent and the Sellers’
Representative.

     6. Escrow Documents; Purchase Price.

          (a) Purchaser shall deliver to the Escrow Agent and to the Sellers’ Reprehensive a written
notice on the date on which the last of the conditions set forth in Section 7 of the Purchase
Agreement has been satisfied or waived (if permissible). Unless otherwise agreed between the
Purchaser and the Sellers Representative, the Closing Date shall be on the date specified by
Purchaser which will be no earlier than third Business Day and not later than the fifth Business
Day after delivery of the Purchaser’s notice (the “Designated Closing Date”).

          (b) No later than two (2) Business Days prior to the Closing Date set forth in the notice
delivered pursuant to clause (a) above, the Company shall deliver to the Purchaser (with a
duplicate copy to the Escrow Agent) the Estimated Closing Adjustments Certificate. Failure of the

- 3 -

 

Company to timely and duly deliver the Estimated Closing Adjustments Certificate may be waived by
Purchaser, in its sole discretion (without derogating from any rights or remedies under this
Agreement, including, without limitation, under Section 9 of the Purchase Agreement).

          (c) No later than the Designated Closing Date, the Purchaser shall make or cause to be made
available to the Escrow Agent the Purchase Price, by wire transfer in immediately available funds
to a bank account in the name of the Escrow Agent, the details of which shall be provided by the
Escrow Agent in advance. Should the Company fail to timely and duly deliver the Estimated Closing
Adjustments Certificate, the Purchase Price shall be delivered in full, without adjustments (and
without derogating from any rights or remedies under this Agreement, including, without limitation,
under Section 9 of the Purchase Agreement). Should the Company timely deliver the Estimated
Closing Adjustments Certificate, the Purchase Price to be delivered shall be in an amount taking
into account the adjustments set forth in Section 1.2.2 of the Purchase Agreement. The Escrow
Agent agrees to accept delivery of the Purchase Price and to hold it in trust subject to the terms
and conditions of this Agreement and the Purchase Agreement.

          (d) Upon receipt by the Escrow Agent of the Purchase Price and the Escrow Cash, the Escrow
Agent shall, automatically, and without any further action required by either party (and the
parties hereby irrevocably instruct the Escrow Agent to): (i) distribute and deliver the Purchase
Price, in accordance with the provisions of the Purchase Agreement and clause (e) below; and (ii)
date the Escrow Documents as of the Closing Date and deliver them to the Purchaser, as soon as
practicable thereafter. All transactions set forth in this clause (d) shall be deemed to take
place simultaneously, and shall be deemed to have been completed upon the time and date of transfer
by the Purchaser of the Purchaser Price to the Escrow Agent, which date shall be the “Closing Date”
of the Purchase Agreement.

          (e) Upon receipt by the Escrow Agent of the Purchase Price in accordance with clause (d)
above, the Escrow Agent shall distribute and transfer the Purchase Price as follows: (i) an amount
of US$10,000,000 shall constitute the Escrow Amount and be held by the Escrow Agent in a separate
bank account in the name of the Escrow Agent pursuant to the Indemnity Escrow Agreement of even
date hereof; and (ii) the balance of the Purchase Price (net of the Escrow Amount), shall be
transferred by the Escrow Agent to each of the Sellers, in accordance with each such Seller’s pro
rata share, as set forth in Exhibit A-1, by wire transfer to such bank accounts as shall be
designated in writing by each such Seller prior to Closing.

          (f) Should the Purchase Agreement terminate in accordance with Section 8 of the Purchase
Agreement, Sellers’ Representative may then request the Escrow Agent in writing (with a duplicate
copy to the Purchaser) to deliver the Escrow Documents to the Sellers’ Representative, as soon as
practicably thereafter.

     7. Distributions from Escrow Fund.

          (a) As promptly as practicable after each of the following: (i) the Closing Date; (ii) the
first anniversary of the Closing Date; and (iii) the second anniversary of the Closing Date, the
Escrow Agent shall deliver to the Company the respective aggregate gross amount to be paid on each
such date, as set forth on Exhibit A-2, including interest accrued thereon (if any). Purchaser
shall deliver or cause to be delivered to the Escrow Agent a written notice informing it of the
distribution to be made pursuant to this sub-section (ii) and (iii) above. The aggregate gross
amounts to be paid on the first and second anniversaries of the Closing are subject to
distributions to be made, from time to time, pursuant to clause (c) below. The Company shall pay
each Participant the amounts to which such Participant is then entitled to receive, as set forth on
Exhibit A-2, including interest accrued thereon (if any), and shall remit the employer Taxes
associated with such payments. Such payments shall be made on the next regular

- 4 -

 

payroll date of the Company following receipt of the amounts from the Escrow Agent, but in no
event more than thirty days following receipt of such amounts from the Escrow Agent.

          (b) The Company shall deliver a written notice to the Escrow Agent (with a duplicate copy to
the Sellers’ Representative) as soon as practicable after each of the following events: (i) the
occurrence of an event giving rise to the acceleration of a Participant’s entitlement to receive
any of the amounts set forth in Exhibit A-2, in accordance with the terms of the Employee Bonus
Plan (an “Acceleration Notice”); and (ii) the occurrence of an event giving rise to the forfeiture
of any amounts which a Participant would otherwise be entitled to receive, in accordance with the
terms of the Employee Bonus Plan (a “Forfeiture Notice”). An Acceleration Notice or a Forfeiture
Notice delivered pursuant to this clause (b) shall include the amounts so accelerated or forfeited,
as the case may be.

          (c) Notwithstanding clause (a) above:

               (i) As promptly as practicable after the receipt of an Acceleration Notice, the Escrow
Agent shall deliver to the Company the amounts indicated in such notice, including interest
accrued thereon, and the Company shall pay such amounts to the applicable Participant on the
next regular payroll date of the Company immediately thereafter, and in any event, no later
than thirty days thereafter.

               (ii) In the event that during any 6 month period following the Closing Date and until
the second anniversary of the Closing Date, the Escrow Agent shall receive a Forfeiture
Notice, then as promptly as practicable after the end of each such 6 month period, the
Escrow Agent shall deliver to each Seller such Seller’s Pro-Rata Share of the aggregate
amounts with respect to which Forfeiture Notices were delivered during such period,
including interest accrued thereon. Purchaser shall deliver or cause to be delivered to the
Escrow Agent a written notice informing it of each distribution to be made pursuant to this
sub-section (ii).

     8. Withholding Rights; Tax Reporting Matters.

          (a) The Escrow Agent shall be entitled to deduct and withhold from the Escrow Cash and from
any other payments otherwise required pursuant to this Agreement to any recipient such amounts in
cash as the Escrow Agent is required to deduct and withhold with respect to any such deliveries and
payments under the Internal Revenue Code of 1986, as may be amended from time to time, or any
provision of federal, state, local, provincial or foreign Tax law and to request any necessary Tax
forms, including IRS Form W-9 or the appropriate series of Form W-8, as applicable, or any other
proof of exemption from withholding or any similar information, from any such recipient of
payments. To the extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes of this Agreement as having been delivered and paid to such recipients in respect of
which such deduction and withholding was made.

          (b) Without derogating from clause (a) above, Purchaser agrees to provide the Escrow Agent
with a certified tax identification number for Purchaser and the Company, and the Sellers’
Representative (on behalf of each of the Sellers) agrees to provide the Escrow Agent with certified
tax identification numbers for the Sellers’ Representative and each of the Sellers, by furnishing
appropriate Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents
that the Escrow Agent may reasonably request (collectively, “Tax Reporting Documentation”) to the
Escrow Agent within 30 days after the Closing Date. The parties hereto understand that, if such
Tax Reporting Documentation is not so certified to the Escrow Agent, the Escrow Agent may be
required by the Internal Revenue Code of 1986, as may be amended from time to time, or any
provision of federal,

- 5 -

 

state, local, provincial or foreign Tax law, to withhold a portion of any payments made to the
Indemnified Persons pursuant to this Agreement.

     9. Investment of Escrow Cash, Distributions Made or Received by Escrow Agent; Other
Adjustments; Etc.

          (a) The Escrow Agent shall not invest the Purchase Price and shall not be permitted to deduct
any fees from the Purchase Price.

          (b) The Escrow Agent shall hold the Escrow Cash in escrow and shall invest the Escrow Cash,
together with any interest or other income thereon, only in money market funds of JPMorgan Chase
Bank or Wachovia Bank through its Evergreen Investments subsidiary.

          (c) All interest and other income attributable to the Escrow Cash originally deposited in
escrow shall be added to and be part of the Escrow Fund for all purposes hereunder. At the time of
delivery to each recipient of the amounts of the Escrow Cash due hereunder, the Escrow Agent shall
deliver to each such recipient her/his/its respective pro rata share of any interest and other
income earned on such amount of the Escrow Cash, after deducting from such amounts all commissions
or fees due in connection with the investment of the Escrow Cash.

          (d) The parties acknowledge that for tax reporting purposes each Participant shall be the
owner of the amounts such Participant may be entitled to receive, as set forth on Exhibit A-2 of
the Escrow Fund then remaining for distribution and all income attributable to such portion of the
Escrow Cash, and interest thereon held in the Escrow Fund by the Escrow Agent pursuant to this
Agreement shall be allocable to such Participant.

     10. Exculpatory Provisions.

          (a) The Escrow Agent shall be obligated only for the performance of its Duties and may rely
and shall be protected in relying or refraining from acting on any instrument reasonably believed
to be genuine and to have been signed or presented by the proper party or parties. The Escrow
Agent shall not be liable for forgeries or false impersonations. The Escrow Agent shall not be
liable for any act done or omitted in good faith hereunder as escrow agent, except for fraud, gross
negligence or willful misconduct. The Escrow Agent shall in no case or event be liable for any
representations or warranties of the Sellers, Company or Purchaser or for punitive, incidental or
consequential damages. Any act done or omitted pursuant to the advice or opinion of counsel shall
be conclusive evidence of the good faith of the Escrow Agent.

          (b) In the event of a dispute between the parties hereto, the Escrow Agent is hereby expressly
authorized to disregard any and all notifications given by any of the parties hereto or by any
other person, excepting awards of arbitration or orders or process of courts of law, to which
Escrow Agent shall be entitled to conclusively rely and shall distribute the Escrow Fund in
accordance with the terms thereof, and is hereby expressly authorized to comply with and obey
orders, judgments or decrees of any court and arbitration awards. In case the Escrow Agent obeys
or complies with any such order, judgment or decree of any court or arbitration award, the Escrow
Agent shall not be liable to any of the parties hereto or to any other person by reason of such
compliance, notwithstanding any such order, judgment, decree or award being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

          (c) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or
other communication received by the Escrow Agent hereunder, the Escrow Agent will

- 6 -

 

promptly notify Purchaser and the Sellers’ Representative of such ambiguity and may, in its
sole discretion, refrain from taking any action other than retaining possession of the Escrow Fund,
unless the Escrow Agent receives written instructions, signed by Purchaser and the Sellers’
Representative, which eliminates such ambiguity or uncertainty.

          (d) The Escrow Agent shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or deliver the Purchase
Agreement, this Agreement or any documents or papers deposited or called for thereunder or
hereunder.

     11. Resignation and Removal of the Escrow Agent. The Escrow Agent may resign as
escrow agent at any time, with or without cause, with respect to the Escrow Fund by giving at least
30 days’ prior written notice to each of Purchaser and the Sellers’ Representative, such
resignation to be effective 30 days following the date such notice is given. In addition,
Purchaser and the Sellers’ Representative may jointly remove the Escrow Agent as escrow agent at
any time, with or without cause, by an instrument executed by Purchaser and the Sellers’
Representative (which may be executed in counterparts) given to the Escrow Agent, which instrument
shall designate the effective date of such removal. In the event of any such resignation or
removal, a successor escrow agent, which shall be a bank or trust company organized in the United
States of America having (or if such bank or trust company is a member of a bank company, its bank
holding company shall have) a combined capital and surplus of not less than $50,000,000, shall be
appointed by Purchaser on the terms of this Agreement with the written approval of the Sellers’
Representative, which approval shall not be unreasonably withheld or delayed. In the event that a
successor escrow agent has not been appointed within 30 days after notice of the Escrow Agent’s
resignation or removal, the Escrow Agent shall be entitled to petition a court of competent
jurisdiction to have a successor escrow agent appointed. Any such successor escrow agent shall
deliver to Purchaser and the Sellers’ Representative, a written instrument accepting such
appointment, and thereupon it shall succeed to all the rights and duties of the Escrow Agent
hereunder and shall be entitled to receive possession of the Escrow Fund. Upon receipt of the
identity of the successor Escrow Agent, the Escrow Agent shall deliver the Escrow Fund then held
hereunder to the successor Escrow Agent.

     12. Further Instruments. If the Escrow Agent reasonably requires other or further
instruments in connection with its performance of the Duties, the necessary parties hereto shall
join in furnishing such instruments.

     13. Disputes. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the cash held by the Escrow Agent
hereunder, the Escrow Agent is authorized and directed to act in accordance with, and in reliance
upon, the provisions of this Agreement and the Purchase Agreement.

     14. Escrow Fees and Expenses. The Escrow Agent shall be paid such fees as are
established by the Fee Schedule attached hereto as Exhibit C, to be borne and paid (or
cause to be paid) 50% by the Purchaser and 50% by the Sellers.

     15. Indemnification. In consideration of the Escrow Agent’s acceptance of this
appointment, Purchaser and the Sellers’ Representative (on behalf of the Sellers and not
individually) hereby jointly and severally, agree to indemnify and hold the Escrow Agent harmless
as to any liability actually incurred by it to any person, firm or corporation by reason of its
having accepted such appointment or in carrying out the provisions of this Agreement and the
Purchase Agreement, and to reimburse the Escrow Agent for its costs and expenses (including,
without limitation, counsel fees and expenses) reasonably incurred by reason of any matter as to
which such indemnity is paid pursuant to this

- 7 -

 

Section 15; provided, however, that no indemnity need be paid in case of the Escrow Agent’s
fraud, gross negligence or willful misconduct.

     16. General.

          (a) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given as follows: (a) if sent by registered or certified mail return receipt
requested, upon receipt; (b) if sent designated for overnight delivery by nationally recognized
overnight air courier (such as DHL or Federal Express), three business days after delivery to such
courier; (c) if sent by facsimile transmission on a business day before 5:00 p.m. in the time zone
of the recipient, when transmitted and full receipt is electronically confirmed; (d) if sent by
facsimile transmission on a business day after 5:00 p.m. in the time zone of the recipient or on a
non-business day and full receipt is electronically confirmed, on the following business day; and
(e) if otherwise actually personally delivered, when delivered, provided that such notices,
requests, demands and other communications are delivered to the address set forth below, or to such
other address as any party shall provide by like notice to the other parties to this Agreement. If
any Officer’s Certificate, any objection thereto or any other document of any kind is required to
be delivered to the Escrow Agent and any other person, the Escrow Agent may assume without inquiry
that such Officer’s Certificate, objection or other document was received by such other person on
the date on which it was received by the Escrow Agent.

               (i) If to Purchaser, to:

Answers Corporation

237 West 35th Street

Suite 1101

New York, NY 10001

Attention: Robert S. Rosenschein, Chief Executive Officer

Facsimile No.: 646-502-4778

Telephone No.: 646-502-4777

With a copy (which shall not constitute notice) to:

Meitar, Liquornik, Geva & Leshem, Brandwein – Law Offices

16 Abba Hillel Silver Rd.

Ramat Gan 52506, Israel

Attention: Clifford Felig and David Glatt

Facsimile: +972-3-610-3111

               (ii) If to the Sellers or Sellers’ Representative, to:

Brian Kariger

3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.: (562) 439-4301

Telephone No.: (310) 738-3777

with a copy (which shall not constitute notice) to:

- 8 -

 

Eric Adler, Magee & Adler, APC

400 Oceangate, Suite 1030

Long Beach, CA 90803

Attention: Eric R. Adler, Esq.

Facsimile No.: 562-432-1060

Telephone No.: 562-432-1154

               (iii) If to the Escrow Agent, to:

American Stock transfer & Trust Co.

123 Broad St.-11th Floor

Philadelphia, PA 19109

Attn. Alan Finn

Tel: 267-515-5496

Fax: 718-765 8758

          (b) Captions. The captions in this Agreement are for convenience only and shall not
be considered a part of or affect the construction or interpretation of any provision of this
Agreement.

          (c) Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties hereto and delivered to the other parties
hereto; if being understood that all parties hereto need not sign the same counterpart and that
signatures may be provided by facsimile transmission.

          (d) Assignment. Neither this Agreement, nor any of the rights, interests or
obligations under this Agreement, may be assigned or delegated, in whole or in part, by operation
of law or otherwise by any of the parties hereto without the prior written consent of the other
parties hereto, and any such assignment without such prior written consent shall be null and void,
except that Purchaser may assign this Agreement to any of Purchaser’s Affiliates without the prior
consent of the other parties hereof; provided, however, that Purchaser shall remain liable for all
of its obligations under this Agreement. Subject to the preceding sentence, this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.

          (e) Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction to be illegal,
void or unenforceable, the remainder of this Agreement shall continue in full force and effect and
shall be interpreted so as reasonably to effect the intent of the parties hereto. The parties
hereto shall use all reasonable efforts to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

          (f) Governing Law; Arbitration;
Jurisdiction.

               (i) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York without reference to such state’s principles of conflicts of law,
provided, however, that any matter involving the internal corporate affairs of the any party
hereto shall be governed by the provisions of the jurisdictions of its incorporation.

               (ii) Any controversy or claim arising out of or relating to this Agreement, including,
without limitation, the breach or termination thereof, shall be settled by arbitration by a
single arbitrator administered by the American Arbitration Association in

- 9 -

 

accordance with its Commercial Arbitration Rules, including the Optional Rules for
Emergency Measures of Protection, to be held in New York, New York, USA. The award rendered
by the arbitrator shall be final and binding upon the parties. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction thereof. The
existence and resolution of the arbitration shall be kept confidential by the parties and by
the arbitrator. The award of the arbitrator shall be accompanied by a reasoned opinion. Each
party shall bear its own costs and expenses and an equal share of the arbitrator’s and
administrative fees of arbitration, unless otherwise determined by the arbitrator.
Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or conservatory
relief, as necessary.

               (iii) Subject to sub-section (f)(ii) above, the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of the courts of the New York, New York in connection
with any matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by the laws of
such jurisdiction for such persons and waives and covenants not to assert or plead any
objection which they might otherwise have to such jurisdiction, venue and such process.

          (g) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT,
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

     17. Patriot Act Compliance. To help the government fight the funding of terrorism and
money laundering activities, federal law requires all financial institutions to obtain, verify and
record information that identifies each person who opens an account. For a non-individual person
such as a business entity, a charity, a trust or other legal entity the Escrow Agent will ask for
documentation to verify its formation and existence as a legal entity. The Escrow Agent may also
ask to see financial statements, licenses, identification and authorization documents from
individuals claiming authority to represent the entity or other relevant documentation. Purchaser
and the Sellers’ Representative each agree to provide all such information and documentation as to
themselves (and in the case of the Sellers’ Representative, as to each of the Seller) as requested
by Escrow Agent to ensure compliance with federal law.

- Signature Pages Follow -

- 10 -

 

     In witness whereof, each of the parties hereto has executed this Bonus
Plan/Documents Escrow Agreement as of the date first above written.

	 	 	 	 	 
	 	American Stock transfer & Trust Co.

as Escrow Agent

 	 
	 	By:  	/s/ Herbert J. Lemmer
 	 
	 	 	Name:  	Herbert J. Lemmer 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Bonus Plan/Documents Escrow Agreement

 

 

     In witness whereof, each of the parties hereto has executed this Bonus
Plan/Documents Escrow Agreement as of the date first above written.

	 	 	 	 	 
	 	Answers Corporation

as Purchaser

 	 
	 	By:  	/s/ Robert S. Rosenschein
 	 
	 	 	Name:  	Robert S, Rosenschein 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

Signature Page to Bonus Plan/Documents Escrow Agreement

 

 

     In witness whereof, each of the parties hereto has executed this Bonus
Plan/Documents Escrow Agreement as of the date first above written.

	 	 	 	 	 
	 	Brian Kariger, as trustee of the Brian Patrick Kariger
Charitable Remainder Unitrust Trust dated April 9, 2007

 	 
	 	/s/ Brian Kariger
 	 
	 	 	 
	 	 	 
	 
	 	Brian Kariger as trustee of the Brian Patrick Kariger
Revocable Trust dated February 9, 2007

 	 
	 	/s/ Brian Kariger
 	 
	 	 	 
	 	 	 
	 
	 	Daniel Fierro 

 	 
	 	/s/ Daniel Fierro
 	 
	 	 	 
	 	 	 
	 
	 	Brian Kariger, Esq.

as Sellers’ Representative

 	 
	 	/s/ Brian Kariger
 	 
	 	 	 
	 	 	 
	 
	 	Lexico Publishing Group, LLC

the Company

 	 
	 	By:  	/s/ Brian Kariger and /s/ Daniel Fierro
 	 
	 	 	Name:  	Brian Kariger and Daniel Fierro	 
	 	 	Title:  	Authorized Signatories and Members 	 
	 

Signature Page to Bonus Plan/Documents Escrow Agreement

 

 

Exhibit A-1

Schedule of Sellers

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Taxpayer	 	 
	 	 	 	 	Identification	 	Pro Rata
	Name	 	Address	 	Number	 	Share
	Brian Kariger as
trustee of the
Brian Patrick
Kariger Charitable
Remainder Unitrust
Trust dated April
9, 2007

	 	3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.: (562) 439-4301

Telephone No.: (310) 738-3777
	 	 	 	 	5	%
	 
	 	 	 	 	 	 	 	 
	Brian Kariger as
trustee of the
Brian Patrick
Kariger Revocable
Trust dated
February 9, 2007

	 	3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.: (562) 439-4301

Telephone No.: (310)
738-3777
	 	 	 	 	70	%
	 
	 	 	 	 	 	 	 	 
	Daniel Fierro

	 	312 E. Mandalay Drive

Olmos Park

TX 78212

Facsimile No.: (___)___

Telephone No.: (___)___
	 	 	 	 	25	%

 

 

Exhibit A-2

Form of Schedule of Participants

[Note: Schedule to be attached at Closing]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Amount to be paid on	 	Amount to be paid on
	 	 	 	 	 	 	Amount to be paid at	 	1st Anniversary of	 	2nd Anniversary of
	 	 	 	 	Participant’s	 	Closing	 	Closing	 	Closing
	 	 	 	 	Taxpayer	 	Gross	 	 	 	Gross	 	 	 	Gross	 	 
	Participant’s	 	Participant’s	 	Identification	 	amount to	 	Employer	 	amount to	 	Employer	 	amount to	 	Employer
	Name	 	Address	 	Number	 	Employee	 	taxes	 	Employee	 	taxes	 	Employee	 	taxes
	[Employees subject
to 1 year
retention]
	 	 	 	 	 	[20%]	 	 	 	[80%]	 	 	 	—	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[Employee subject
to 2 years
retention]
	 	 	 	 	 	[20%]	 	 	 	[30%]	 	 	 	[50%]	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

Exhibit B

Purchase Agreement

 

 

Exhibit C

Fee Schedule

The fees of the Escrow Agent: $5,000 (Five Thousand United States Dollars).EX-10.3

 

EXHIBIT 10.3

Execution
Copy

INDEMNITY ESCROW AGREEMENT

     This Indemnity Escrow Agreement (this “Agreement”) is made as of this 13th
day of July 2007, by and among the Persons listed on Exhibit A attached hereto (each, a
“Seller,” and collectively, the “Sellers”), Answers Corporation, a Delaware corporation (the
“Purchaser”), Brian Kariger, as representative for and on behalf of the Sellers (the “Sellers’
Representative”) and American Stock Transfer & Trust Co. (“Escrow Agent”).

     Capitalized terms used but not defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement (as defined below). If the terms of this Agreement conflict in any
way with the provisions of the Purchase Agreement, then the provisions of the Purchase Agreement
shall control. This Agreement shall become effective as of the Closing Date.

RECITALS

     A. Purchaser, Sellers, Sellers’ Representative and Lexico Publishing Group, LLC, a California
limited liability company (the “Company”), have entered into that certain Purchase Agreement, of
even date herewith (the “Purchase Agreement”), a copy of which is attached hereto as Exhibit
B, pursuant to which Purchaser will purchase 100% of the membership interests of the Company.

     B. Pursuant to Sections 1.3 and 9 of the Purchase Agreement, an aggregate amount of
US$10,000,000 (the “Escrow Cash”) is to be delivered to and deposited with the Escrow Agent and
held in an escrow fund (the Escrow Cash together with any interest and other income earned on the
Escrow Cash, shall be referred to as the “Escrow Fund”). The Escrow Fund is held to secure the
performance of the indemnification obligations under the Purchase Agreement. The Escrow Fund shall
be governed by the provisions set forth herein and in the Purchase Agreement.

     C. The Sellers’ Representative has been appointed as agent for, and to act on behalf of, the
Sellers to undertake certain obligations specified in the Purchase Agreement.

     D. The parties hereto desire to set forth additional terms and conditions relating to the
operation of the Escrow Fund.

     NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     1. Escrow Fund.

          (a) Pursuant to Sections 1.3 and 9 of the Purchase Agreement, on the Closing Date, Purchaser
shall make or cause to be made available to the Escrow Agent, the Escrow Cash. Exhibit A
attached hereto sets forth (i) the name, address and taxpayer identification number of each Seller,
and (ii) the pro rata share of each Seller in the Escrow Fund (each, the “Seller’s Pro Rata
Share”). The Escrow Agent agrees to accept delivery of the Escrow Cash and to hold such Escrow
Cash in escrow subject to the terms and conditions of this Agreement and the Purchase Agreement.

          (b) As of any particular time, the Escrow Agent may assume, without inquiry, that the Escrow
Cash that shall have been or caused to be deposited with the Escrow Agent by Purchaser is all of
the Escrow Cash required to be held in the Escrow Fund by the Escrow Agent and that Exhibit
A remains correct and in full force and effect. The Escrow Cash shall be held and distributed
by

1

 

the Escrow Agent in accordance with the provisions of the Purchase Agreement and this
Agreement. Neither the Escrow Cash nor any beneficial interest therein may be pledged, encumbered,
sold, assigned or transferred (including any transfer by operation of law), by the Escrow Agent,
Purchaser or any Seller or be taken or reached by any legal or equitable process in satisfaction of
any debt or other liability of the Escrow Agent, Purchaser or any Seller, in case of the Sellers,
prior to the distribution to such Seller of such Seller’s Pro Rata Share (or a portion thereof) of
such Escrow Cash by the Escrow Agent in accordance with this Agreement, if any.

     2. Rights and Obligations of the Parties. The Escrow Agent shall be entitled to such
rights and shall perform such duties in its capacity as the escrow agent, as set forth herein and
as set forth in the Purchase Agreement (collectively, the “Duties”), in accordance with the
provisions of this Agreement and the Purchase Agreement. Purchaser and the Sellers’ Representative
shall be entitled to their respective rights and shall perform their respective duties and
obligations as set forth herein and in the Purchase Agreement, in accordance with the provisions of
this Agreement and the Purchase Agreement.

     3. Effectiveness; Escrow Period.

          (a) This Agreement shall be effective only as of and subject to the Closing of the Purchase
Agreement.

          (b) The period during which indemnification claims under the Purchase Agreement may be
initiated against the Escrow Fund (the “Claims Period”) shall commence at the Closing and terminate
on the date that is 12 months following the Closing Date (the “Escrow Period”). Notwithstanding the
foregoing, all or a portion of the Escrow Fund may be retained beyond the Claims Period as provided
in Section 5 hereof and Section 9.5 of the Purchase Agreement. As soon as practicable after the
Closing Date, Purchaser shall notify the Escrow Agent of the Closing Date (without failure of
delivery of such notice impairing or modifying any of the rights set forth herein or in the
Purchase Agreement).

     4. Duties of Escrow Agent.

          In addition to the Duties set forth in the Purchase Agreement, the Duties of the Escrow Agent
shall include the following:

          (a) The Escrow Agent shall (i) safeguard and treat the Escrow Fund as a trust fund in
accordance with the provisions of this Agreement and not as the property of Purchaser, and shall
hold the Escrow Fund in a separate account, apart from any other funds or accounts of the Escrow
Agent or any other Person, and (ii) hold and dispose of the Escrow Fund only in accordance with the
provisions of this Agreement.

          (b) The Duties of the Escrow Agent with respect to the Escrow Cash may be altered, amended,
modified or revoked only by a writing signed by Purchaser, the Escrow Agent and the Sellers’
Representative.

     5. Distributions from Escrow Fund to Indemnified Parties.

          (a) On or before the last day of the Claims Period, Purchaser (on behalf of itself or any
other Indemnified Person) may deliver to the Escrow Agent a certificate signed by any officer of
Purchaser (in case of an indemnification claim pursuant to Section 9.2 of the Purchase Agreement),
or Sellers’ Representative may deliver to the Escrow Agent a certificate (in case of an

- 2 -

 

indemnification claim pursuant to Section 9.3 of the Purchase Agreement) (in each case, such
certificate to be referred to as an “Officer’s Certificate”):

          (i) stating that an Indemnified Person has incurred, paid, reserved or accrued, or
reasonably anticipates that it may incur, pay, reserve or accrue, Indemnifiable Damages (or
that with respect to Tax matters, that any Tax Authority may reasonably be expected to raise
such matter in an audit of Purchaser or its Affiliates, which could give rise to
Indemnifiable Damages);

          (ii) stating the amount of such Indemnifiable Damages (which, in the case of
Indemnifiable Damages not yet incurred, paid, reserved or accrued, may be the maximum amount
reasonably anticipated by the Indemnified Person to be incurred, paid, reserved or accrued);
and

          (iii) specifying in reasonable detail (based upon the information then possessed by any
Indemnified Person) the individual items of such Indemnifiable Damages included in the
amount so stated and the nature of the claim to which such Indemnifiable Damages are
related.

          No delay in providing such Officer’s Certificate within the Claims Period shall affect an
Indemnified Person’s rights hereunder, unless (and then only to the extent that) the Indemnifying
Person is materially prejudiced thereby. The Escrow Agent may rely on such Officer’s Certificate
without inquiry.

          (b) At the time of delivery of any Officer’s Certificate to the Escrow Agent, a duplicate copy
of such Officer’s Certificate shall be delivered (in case of an indemnification claim pursuant to
Section 9.2 of the Purchase Agreement) to the Sellers’ Representative by or on behalf of Purchaser
(on behalf of itself or any other Indemnified Person), or (in case of an indemnification claim
pursuant to Section 9.3 of the Purchase Agreement) to Purchaser by or on behalf Sellers’
Representative, as the case may be, and for a period of 20 days after such delivery to the Escrow
Agent of such Officer’s Certificate, the Escrow Agent shall make no payment pursuant to this
Agreement or Section 9.6 of the Purchase Agreement, unless the Escrow Agent shall have received
written authorization from the Sellers’ Representative or Purchaser, as the case may be, to make
such delivery. After the expiration of such 20-day period, the Escrow Agent shall make delivery of
cash from the Escrow Fund to Purchaser or Sellers, as the case may be, in accordance with the
instructions set forth in the applicable Officer’s Certificate; provided, however, that no such
delivery may be made if and to the extent the Sellers’ Representative or Purchaser, as the case may
be, shall in good faith object in a written statement to any claim or claims made in the Officer’s
Certificate, and such statement shall have been delivered to the Escrow Agent and to Purchaser or
Sellers’ Representative, as the case may be, prior to the expiration of such 20-day period.

          (c) If the Sellers’ Representative or Purchaser, as the case may be, in good faith objects in
writing to any claim or claims by Purchaser or Sellers, as the case may be, made in any Officer’s
Certificate within such 20-day period, Purchaser and the Sellers’ Representative shall attempt in
good faith for 20 days after receipt by Purchaser or Seller’s Representative, as the case may be of
such written objection to resolve such objection. If Purchaser and the Sellers’ Representative
shall so agree, a memorandum setting forth such agreement shall be prepared and signed by both
parties and delivered to the Escrow Agent. The Escrow Agent shall be entitled to conclusively rely
on any such memorandum and the Escrow Agent shall distribute Escrow Cash from the Escrow Fund in
accordance with the terms of such memorandum.

- 3 -

 

          (d) If no such agreement can be reached during such 20-day period following good faith
negotiation, but in any event upon the expiration of such 20-day period, either Purchaser (or any
of its Affiliates) or the Sellers’ Representative may refer the matter to arbitration in accordance
with Section 10.10 of the Purchase Agreement to resolve the matter. The decision of the arbitrator
as to the validity and amount of any claim in such Officer’s Certificate shall be non-appealable,
binding and conclusive upon the parties to this Agreement, and the Escrow Agent shall be entitled
to act in accordance with such decision and the Escrow Agent shall distribute cash from the Escrow
Fund in accordance therewith. Payment of the expenses and fees of the parties in connection with
any suit brought hereunder shall be made in accordance with Section 9.7.4 of the Purchase
Agreement.

          (e) Such portion of the Escrow Fund at the conclusion of the Escrow Period as may be necessary
to satisfy any unresolved or unsatisfied claims for Indemnifiable Damages specified in any
Officer’s Certificate(s) delivered to the Escrow Agent prior to expiration of the Escrow Period
(the “Reserve Amount”) shall remain in the Escrow Fund until such claims for Indemnifiable Damages
have been resolved or satisfied. For purposes of determining the Reserve Amount at the conclusion
of the Escrow Period, the Indemnified Persons shall be assumed to be entitled to the full amount of
Indemnifiable Damages stated in such Officer’s Certificate(s). Any Reserve Amount shall be
available to the Indemnified Persons only for the specific claim or claims for Indemnifiable
Damages for which such Reserve Amount was retained upon the expiration of the Escrow Period.

          (f) As promptly as practicable after the expiration of the Escrow Period, Sellers’
Representative shall deliver to the Escrow Agent a written notice requesting that such portion of
the then remaining Escrow Fund in excess of the Reserve Amount shall be paid to the Sellers at
their respective addresses as reflected in Exhibit A in accordance with each such Seller’s
Pro Rata Share.

          (g) Promptly following the resolution or satisfaction of any claim for Indemnifiable Damages
relating to any portion of the Reserve Amount (and in any event no later than 20 days after such
resolution or satisfaction), such portion of the Reserve Amount which shall have been retained
following the expiration of the Escrow Period with respect to such claim and that has not been
distributed to an Indemnified Person in satisfaction of such claim, shall be paid to the Sellers at
their respective addresses as reflected in the Exhibit A in accordance with each such
Seller’s Pro Rata Share if and only to the extent that such portion of the Reserve Amount is not
required to be retained in escrow to satisfy any other unresolved or unsatisfied claims for
Indemnifiable Damages specified in any Officer’s Certificate(s). No Reserve Amount shall be
subject to any claim or right of offset, except with respect to any claim or claims for
Indemnifiable Damages for which such Reserve Amount was retained upon expiration of the Escrow
Period.

     6. Withholding Rights; Tax Reporting Matters.

          (a) The Escrow Agent shall be entitled to deduct and withhold from the Escrow Cash and from
any other payments otherwise required pursuant to this Agreement to any Indemnified Person such
amounts in cash as the Escrow Agent is required to deduct and withhold with respect to any such
deliveries and payments under the Internal Revenue Code of 1986, as may be amended from time to
time, or any provision of federal, state, local, provincial or foreign Tax law and to request any
necessary Tax forms, including IRS Form W-9 or the appropriate series of Form W-8, as applicable,
or any other proof of exemption from withholding or any similar information, from any such
recipient of payments. To the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Agreement as having been delivered and paid to such recipients in
respect of which such deduction and withholding was made.

- 4 -

 

          (b) Without derogating from clause (a) above, Purchaser agrees to provide the Escrow Agent
with a certified tax identification number for Purchaser, and the Sellers’ Representative (on
behalf of each of the Sellers) agrees to provide the Escrow Agent with certified tax identification
numbers for the Sellers’ Representative and each of the Sellers, by furnishing appropriate Forms
W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Escrow
Agent may reasonably request (collectively, “Tax Reporting Documentation”) to the Escrow Agent
within 30 days after the Closing Date. The parties hereto understand that, if such Tax Reporting
Documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the
Internal Revenue Code of 1986, as may be amended from time to time, or any provision of federal,
state, local, provincial or foreign Tax law, to withhold a portion of any payments made to the
Indemnified Persons pursuant to this Agreement.

     7. Investment of Escrow Cash, Distributions Made or Received by Escrow Agent; Other
Adjustments; Etc.

          (a) The Escrow Agent shall hold the Escrow Cash in escrow and shall invest the Escrow Cash,
together with any interest or other income thereon, only in money market funds of JPMorgan Chase
Bank or Wachovia Bank through its Evergreen Investments subsidiary.

          (b) All interest and other income attributable to the Escrow Cash originally deposited in
escrow shall be added to and be part of the Escrow Fund for all purposes hereunder. At the time of
delivery to each recipient of any Escrow Cash amount due hereunder, the Escrow Agent shall deliver
to such recipient her/his/its respective pro rata share of any interest and other income earned on
such amount of the Escrow Cash after deducting such amounts the commissions or fees due in
connection with the investment of the Escrow Cash. The parties acknowledge that for tax reporting
purposes each Seller shall be the owner of its Seller’s Pro Rata Share of the Escrow Fund and all
income attributable to such portion of the Escrow Cash, and interest thereon, held in the Escrow
Fund by the Escrow Agent pursuant to this Agreement shall be allocable to such Seller. Any payment
to be made by the Escrow Agent pursuant to this Agreement, may be made by wire transfer to a bank
account, the details of which shall be provided by the recipient to the Escrow Agent in advance of
such payment.

     8. Exculpatory Provisions.

          (a) The Escrow Agent shall be obligated only for the performance of its Duties and may rely
and shall be protected in relying or refraining from acting on any instrument reasonably believed
to be genuine and to have been signed or presented by the proper party or parties. The Escrow
Agent shall not be liable for forgeries or false impersonations. The Escrow Agent shall not be
liable for any act done or omitted in good faith hereunder as escrow agent, except for fraud, gross
negligence or willful misconduct. The Escrow Agent shall in no case or event be liable for any
representations or warranties of the Sellers, Company or Purchaser or for punitive, incidental or
consequential damages. Any act done or omitted pursuant to the advice or opinion of counsel shall
be conclusive evidence of the good faith of the Escrow Agent.

          (b) In the event of a dispute between the parties hereto, the Escrow Agent is hereby expressly
authorized to disregard any and all notifications given by any of the parties hereto or by any
other person, excepting only memoranda of agreement as provided in Section 5(c) hereof, awards of
arbitration as provided in Section 5(d) or orders or process of courts of law, to which Escrow
Agent shall be entitled to conclusively rely and shall distribute the Escrow Fund in accordance
with the terms thereof, and is hereby expressly authorized to comply with and obey orders,
judgments or decrees of any court and arbitration awards. In case the Escrow Agent obeys or
complies with any such order, judgment or decree of any court or arbitration award, the Escrow
Agent shall not be liable to any of the parties hereto or to any other person by reason of such
compliance, notwithstanding any such order, judgment, decree or

- 5 -

 

award being subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.

          (c) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or
other communication received by the Escrow Agent hereunder, the Escrow Agent will promptly notify
Purchaser and the Sellers’ Representative of such ambiguity and may, in its sole discretion,
refrain from taking any action other than retaining possession of the Escrow Fund, unless the
Escrow Agent receives written instructions, signed by Purchaser and the Sellers’ Representative,
which eliminates such ambiguity or uncertainty.

          (d) The Escrow Agent shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or deliver the Purchase
Agreement, this Agreement or any documents or papers deposited or called for thereunder or
hereunder.

     9. Resignation and Removal of the Escrow Agent. The Escrow Agent may resign as escrow
agent at any time, with or without cause, with respect to the Escrow Fund by giving at least 30
days’ prior written notice to each of Purchaser and the Sellers’ Representative, such resignation
to be effective 30 days following the date such notice is given. In addition, Purchaser and the
Sellers’ Representative may jointly remove the Escrow Agent as escrow agent at any time, with or
without cause, by an instrument executed by Purchaser and the Sellers’ Representative (which may be
executed in counterparts) given to the Escrow Agent, which instrument shall designate the effective
date of such removal. In the event of any such resignation or removal, a successor escrow agent,
which shall be a bank or trust company organized in the United States of America having (or if such
bank or trust company is a member of a bank company, its bank holding company shall have) a
combined capital and surplus of not less than $50,000,000, shall be appointed by Purchaser on the
terms of this Agreement with the written approval of the Sellers’ Representative, which approval
shall not be unreasonably withheld or delayed. In the event that a successor escrow agent has not
been appointed within 30 days after notice of the Escrow Agent’s resignation or removal, the Escrow
Agent shall be entitled to petition a court of competent jurisdiction to have a successor escrow
agent appointed. Any such successor escrow agent shall deliver to Purchaser and the Sellers’
Representative, a written instrument accepting such appointment, and thereupon it shall succeed to
all the rights and duties of the Escrow Agent hereunder and shall be entitled to receive possession
of the Escrow Fund. Upon receipt of the identity of the successor Escrow Agent, the Escrow Agent
shall deliver the Escrow Fund then held hereunder to the successor Escrow Agent.

     10. Further Instruments. If the Escrow Agent reasonably requires other or further
instruments in connection with its performance of the Duties, the necessary parties hereto shall
join in furnishing such instruments.

     11. Disputes. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the cash held by the Escrow Agent
hereunder, the Escrow Agent is authorized and directed to act in accordance with, and in reliance
upon, the provisions of this Agreement and the Purchase Agreement.

     12. Escrow Fees and Expenses. The Escrow Agent shall be paid such fees as are
established by the Fee Schedule attached hereto as Exhibit C, to be borne and paid (or
cause to be paid) 50% by the Purchaser and 50% by the Sellers.

     13. Indemnification. In consideration of the Escrow Agent’s acceptance of this
appointment, Purchaser and the Sellers’ Representative (on behalf of the Sellers and not
individually)

- 6 -

 

hereby jointly and severally, agree to indemnify and hold the Escrow Agent harmless as to any
liability actually incurred by it to any person, firm or corporation by reason of its having
accepted such appointment or in carrying out the provisions of this Agreement and the Purchase
Agreement, and to reimburse the Escrow Agent for its costs and expenses (including, without
limitation, counsel fees and expenses) reasonably incurred by reason of any matter as to which such
indemnity is paid pursuant to this Section 13; provided, however, that no indemnity need be paid in
case of the Escrow Agent’s fraud, gross negligence or willful misconduct.

     14. General.

          (a) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given as follows: (a) if sent by registered or certified mail return receipt
requested, upon receipt; (b) if sent designated for overnight delivery by nationally recognized
overnight air courier (such as DHL or Federal Express), three business days after delivery to such
courier; (c) if sent by facsimile transmission on a business day before 5:00 p.m. in the time zone
of the recipient, when transmitted and full receipt is electronically confirmed; (d) if sent by
facsimile transmission on a business day after 5:00 p.m. in the time zone of the recipient or on a
non-business day and full receipt is electronically confirmed, on the following business day; and
(e) if otherwise actually personally delivered, when delivered, provided that such notices,
requests, demands and other communications are delivered to the address set forth below, or to such
other address as any party shall provide by like notice to the other parties to this Agreement. If
any Officer’s Certificate, any objection thereto or any other document of any kind is required to
be delivered to the Escrow Agent and any other person, the Escrow Agent may assume without inquiry
that such Officer’s Certificate, objection or other document was received by such other person on
the date on which it was received by the Escrow Agent.

	 	 	 	 	 
	 

	 	(i)
	 	If to Purchaser, to:
	 
	 	 	 	 
	 

	 	 	 	Answers Corporation
	 

	 	 	 	237 West 35th Street
	 

	 	 	 	Suite 1101
	 

	 	 	 	New York, NY 10001
	 

	 	 	 	Attention: Robert S. Rosenschein, Chief Executive Officer
	 

	 	 	 	Facsimile No.: 646-502-4778
	 

	 	 	 	Telephone No.: 646-502-4777
	 
	 	 	 	 
	 

	 	 	 	With a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 

	 	 	 	Meitar, Liquornik, Geva & Leshem, Brandwein – Law Offices
	 

	 	 	 	16 Abba Hillel Silver Rd.
	 

	 	 	 	Ramat Gan 52506, Israel
	 

	 	 	 	Attention: Clifford Felig and David Glatt
	 

	 	 	 	Facsimile: +972-3-610-3111
	 
	 	 	 	 
	 

	 	(ii)
	 	If to the Sellers or Sellers’ Representative, to:
	 
	 	 	 	 
	 

	 	 	 	Brian Kariger
	 

	 	 	 	3120 E. 2nd Street
	 

	 	 	 	Long Beach
	 

	 	 	 	California 90803
	 

	 	 	 	Facsimile No.: (562) 439-4301
	 

	 	 	 	Telephone No.: (310) 738-3777

- 7 -

 

	 	 	 	 	 
	 

	 	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 

	 	 	 	Eric Adler, Magee & Adler, APC
	 

	 	 	 	400 Oceangate, Suite 1030
	 

	 	 	 	Long Beach, CA 90803
	 

	 	 	 	Attention: Eric R. Adler, Esq.
	 

	 	 	 	Facsimile No.: 562-432-1060
	 

	 	 	 	Telephone No.: 562-432-1154
	 
	 	 	 	 
	 

	 	(iii)
	 	If to the Escrow Agent, to:
	 
	 	 	 	 
	 

	 	 	 	American Stock Transfer & Trust Co.
	 

	 	 	 	123 Broad St.-11th Floor
	 

	 	 	 	Philadelphia, PA 19109
	 

	 	 	 	Attn. Alan Finn
	 

	 	 	 	Tel: 267-515-5496
	 

	 	 	 	Fax: 718-765 8758

          (b) Captions. The captions in this Agreement are for convenience only and shall not
be considered a part of or affect the construction or interpretation of any provision of this
Agreement.

          (c) Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties hereto and delivered to the other parties
hereto; if being understood that all parties hereto need not sign the same counterpart and that
signatures may be provided by facsimile transmission.

          (d) Assignment. Neither this Agreement, nor any of the rights, interests or
obligations under this Agreement, may be assigned or delegated, in whole or in part, by operation
of law or otherwise by any of the parties hereto without the prior written consent of the other
parties hereto, and any such assignment without such prior written consent shall be null and void,
except that Purchaser may assign this Agreement to any of Purchaser’s Affiliates without the prior
consent of the other parties hereof; provided, however, that Purchaser shall remain liable for all
of its obligations under this Agreement. Subject to the preceding sentence, this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.

          (e) Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction to be illegal,
void or unenforceable, the remainder of this Agreement shall continue in full force and effect and
shall be interpreted so as reasonably to effect the intent of the parties hereto. The parties
hereto shall use all reasonable efforts to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

          (f) Governing Law; Arbitration;
Jurisdiction.

     (i) This Agreement shall be governed by and construed in accordance

- 8 -

 

with the laws of the State of New York without reference to such state’s principles of
conflicts of law, provided, however, that any matter involving the internal corporate
affairs of the any party hereto shall be governed by the provisions of the jurisdictions of
its incorporation.

     (ii) Any controversy or claim arising out of or relating to this Agreement, including,
without limitation, the breach or termination thereof, shall be settled by arbitration by a
single arbitrator administered by the American Arbitration Association in accordance with
its Commercial Arbitration Rules, including the Optional Rules for Emergency Measures of
Protection, to be held in New York, New York, USA. The award rendered by the arbitrator
shall be final and binding upon the parties. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The existence and
resolution of the arbitration shall be kept confidential by the parties and by the
arbitrator. The award of the arbitrator shall be accompanied by a reasoned opinion. Each
party shall bear its own costs and expenses and an equal share of the arbitrator’s and
administrative fees of arbitration, unless otherwise determined by the arbitrator.
Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or conservatory
relief, as necessary.

     (iii) Subject to sub-section (f)(ii) above, the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of the courts of the New York, New York in connection
with any matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by the laws of
such jurisdiction for such persons and waives and covenants not to assert or plead any
objection which they might otherwise have to such jurisdiction, venue and such process.

          (g) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT,
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

     15. Patriot Act Compliance. To help the government fight the funding of terrorism and
money laundering activities, federal law requires all financial institutions to obtain, verify and
record information that identifies each person who opens an account. For a non-individual person
such as a business entity, a charity, a trust or other legal entity the Escrow Agent will ask for
documentation to verify its formation and existence as a legal entity. The Escrow Agent may also
ask to see financial statements, licenses, identification and authorization documents from
individuals claiming authority to represent the entity or other relevant documentation. Purchaser
and the Sellers’ Representative each agree to provide all such information and documentation as to
themselves (and in the case of the Sellers’ Representative, as to each of the Seller) as requested
by Escrow Agent to ensure compliance with federal law.

- Signature Page Follows -

- 9 -

 

         In witness whereof, each of the parties hereto has executed this Indemnity
Escrow Agreement as of the date first above written.

	 	 	 	 	 
	 	American Stock Transfer & Trust Co.

as Escrow Agent

 	 
	 	By:  	 /s/
Herbert J. Lemmer	 
	 	 	Name:  	 Herbert J. Lemmer	 
	 	 	Title:  	 Vice President	 
	 

Signature Page to Indemnity Escrow Agreement

 

 

         In witness whereof, each of the parties hereto has executed this Indemnity Escrow
Agreement as of the date first above written.

	 	 	 	 	 
	 	Answers Corporation

as Purchaser

 	 
	 	By:  	/s/ Robert S. Rosenschein
 	 
	 	 	Name:  	Robert S. Rosenschein 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

Signature Page to Indemnity Escrow Agreement

 

 

         In witness whereof, each of the parties hereto has executed this Indemnity Escrow
Agreement as of the date first above written.

	 	 	 
	 

	 	Brian Kariger, as trustee of the Brian Patrick Kariger
Charitable Remainder Unitrust Trust dated April 9, 2007
	 
	 	 
	 

	 	/s/ Brian Kariger
	 

	 	 
	 
	 	 
	 

	 	Brian Kariger as trustee of the Brian Patrick Kariger
Revocable Trust dated February 9, 2007
	 
	 	 
	 

	 	/s/ Brian Kariger
	 

	 	 
	 
	 	 
	 

	 	Daniel Fierro 
	 
	 	 
	 

	 	/s/ Daniel Fierro
	 

	 	 
	 
	 	 
	 

	 	Brian Kariger
	 

	 	as Sellers’ Representative
	 
	 	 
	 

	 	/s/ Brian Kariger
	 

	 	 

Signature Page to Indemnity Escrow Agreement

 

 

Exhibit A

Schedule of Sellers

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Taxpayer	 	 
	 	 	 	 	Identification	 	Pro Rata
	Name	 	Address	 	Number	 	Share
	Brian Kariger as
trustee of the
Brian Patrick
Kariger Charitable
Remainder Unitrust
Trust dated April
9, 2007

	 	3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.: (562) 439-4301

Telephone No.: (310) 738-3777
	 	 	 	 	5	%
	 
	 	 	 	 	 	 	 	 
	Brian Kariger as
trustee of the
Brian Patrick
Kariger Revocable
Trust dated
February 9, 2007

	 	3120 E. 2nd Street

Long Beach

California 90803

Facsimile No.: (562) 439-4301

Telephone No.: (310) 738-3777
	 	 	 	 	70	%
	 
	 	 	 	 	 	 	 	 
	Daniel Fierro

	 	312 E. Mandalay Drive

Olmos Park

TX 78212

Facsimile No.: (___)__________

Telephone No.: (___)_________
	 	 	 	 	25	%

 

 

Exhibit B

Purchase Agreement

 

 

Exhibit C

Fee Schedule

The fees of the Escrow Agent: $2,500 (Two Thousand Five Hundred United States Dollars).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]