Exhibit 10.3
THIS ESCROW AGREEMENT is made this 16th day of
October, 2008 between/among Klafter Olsen & Lesser LLP
(“Co-Lead Counsel for Plaintiffs” and “Party
A” herein), and InfoSonics Corp. (“Party B”
herein), and TD Bank., National Association (the “Escrow
Agent” herein).
The above-named parties appoint said Escrow
Agent with the duties and responsibilities and upon the terms and
conditions provided in Schedule A annexed hereto and made a part
hereof.
ARTICLE FIRST : The above-named parties agree that the
following provisions shall control with respect to the rights,
duties, liabilities, privileges and immunities of the Escrow
Agent:
a)
The Escrow Agent shall neither be
responsible for or under, nor chargeable with knowledge of, the
terms and conditions of any other agreement, instrument or document
executed between/among the parties hereto, except as may be
specifically provided in Schedule A annexed hereto. This
Agreement sets forth all of the obligations of the Escrow Agent,
and no additional obligations shall be implied from the terms of
this Agreement or any other agreement, instrument or
document.
b)
The Escrow Agent may act in reliance
upon any instructions, notice, certification, demand, consent,
authorization, receipt, power of attorney or other writing
delivered to it by any other party entitled to provide instructions
without being required to determine the authenticity or validity
thereof or the correctness of any fact stated therein, the
propriety or validity of the service thereof, or the jurisdiction
of the court issuing any judgment or order. The Escrow Agent
may act in reliance upon any signature believed by it to be
genuine, and may assume that such person has been properly
authorized to do so.
c)
Each of the parties, jointly and
severally, agrees to reimburse the Escrow Agent on demand for, and
to indemnify and hold the Escrow Agent harmless against and with
respect to, any and all loss, liability, damage or expense
(including, but without limitation, attorneys’ fees, costs
and disbursements) that the Escrow Agent may suffer or incur in
connection with this Agreement and its performance hereunder or in
connection herewith, except to the extent such loss, liability,
damage or expense arises from its willful misconduct or gross
negligence as adjudicated by a court of competent
jurisdiction. The Escrow Agent shall have the further right
at any time and from time to time to charge, and reimburse itself
from, the property held in escrow hereunder.
d)
The Escrow Agent may consult with
legal counsel of its selection in the event of any dispute or
question as to the meaning or construction of any of the provisions
hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected in acting in accordance with the opinion
and instructions of such counsel. Each of the parties,
jointly and severally, agrees to reimburse the Escrow Agent on
demand for such legal fees, disbursements and expenses and in
addition, the Escrow Agent shall have the right to reimburse itself
for such fees, disbursements and expenses from the property held in
escrow hereunder.
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e)
The Escrow Agent shall be under no
duty to give the property held in escrow by it hereunder any
greater degree of care than it gives its own similar
property.
f)
The Escrow Agent shall invest the
property held in escrow in such a manner as directed in Schedule A
annexed hereto.
g)
The Escrow Agent shall have no
obligation to invest or reinvest the property held in escrow if all
or a portion of such property is deposited with the Escrow Agent
after 11:00 AM Eastern Time on the day of deposit.
Instructions to invest or reinvest that are received after 11:00 AM
Eastern Time will be treated as if received on the following
business day in New York. The Escrow Agent shall have the
power to sell or liquidate the foregoing investments whenever the
Escrow Agent shall be required to distribute amounts from the
escrow property pursuant to the terms of this Agreement.
Requests or instructions received after 11:00 AM Eastern Time by
the Escrow Agent to liquidate all or any portion of the escrowed
property will be treated as if received on the following business
day in New York. The Escrow Agent shall have no
responsibility for any investment losses resulting from the
investment, reinvestment or liquidation of the escrowed property,
as applicable, provided that the Escrow Agent has made such
investment, reinvestment or liquidation of the escrowed property in
accordance with the terms, and subject to the conditions of this
Agreement.
h)
In the event of any disagreement
between/among any of the parties to this agreement, or
between/among them or either or any of them and any other person,
resulting in adverse claims or demands being made in connection
with the subject matter of the Escrow, or in the event that the
Escrow Agent, in good faith, be in doubt as to what action it
should take hereunder, the Escrow Agent may, at its option, refuse
to comply with any claims or demands on it, or refuse to take any
other action hereunder, so long as such disagreement continues or
such doubt exists, and in any such event, the Escrow Agent shall
not become liable in any way or to any person for its failure or
refusal to act, and the Escrow Agent shall be entitled to continue
so to refrain from acting until (i) the rights of all parties
shall have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have
been adjusted and all doubt resolved by agreement among all of the
interested persons, and the Escrow Agent shall have been notified
thereof in writing signed by all such persons. The Escrow
Agent shall have the option, after 30 calendar days’ notice
to the other parties of its intention to do so, to file an action
in interpleader requiring the parties to answer and litigate any
claims and rights among themselves. The rights of the Escrow
Agent under this paragraph are cumulative of all other rights which
it may have by law or otherwise.
i)
The Escrow Agent is authorized, for
any securities at any time held hereunder, to register such
securities in the name of its nominee(s) or the nominees of
any securities depository, and such nominee(s) may sign the
name of any of the parties hereto to whom or to which such
securities belong and guarantee such signature in order to transfer
securities or certify ownership thereof to tax or other
governmental authorities.
j)
Notice to the parties shall be given
as provided in Schedule A annexed hereto.
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ARTICLE SECOND : The Escrow Agent shall make payments of
principal or income earned on the escrowed property as provided in
Schedule A annexed hereto . Each party shall
provide to the Escrow Agent an appropriate W-9 form for tax
identification number certification or a W-8 form for non-resident
alien certification. The Escrow Agent shall be responsible
for income reporting to the Internal Revenue Service with respect
to income earned on the escrowed property and for making tax
payments on interest earned on the escrowed property as directed by
Party A in writing.
ARTICLE THIRD: The Escrow Agent may, in its sole discretion,
resign and terminate its position hereunder at any time following
30 calendar days’ written notice to the parties to the Escrow
Agreement herein. Any such resignation shall terminate all
obligations and duties of the Escrow Agent hereunder. On the
effective date of such resignation, the Escrow Agent shall deliver
this Escrow Agreement together with any and all related instruments
or documents to any successor Escrow Agent agreeable to the
parties, subject to this Escrow Agreement herein. If a successor
Escrow Agent has not been appointed prior to the expiration of 30
calendar days following the date of the notice of such resignation,
the then acting Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor Escrow Agent, or
other appropriate relief. Any such resulting appointment
shall be binding upon all of the parties to this
Agreement.
ARTICLE FOURTH : The Escrow Agent shall receive the fees
provided in Schedule B annexed hereto. In the event that such
fees are not paid to the Escrow Agent within 30 calendar days of
presentment to the party responsible for such fees as set forth in
said Schedule B, then the Escrow Agent may pay itself such fees
from the property held in escrow hereunder. Once fees have
been paid, no recapture or rebate will be made by the Escrow
Agent.
ARTICLE FIFTH: Any modification of th
