-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UVi+e+wjGEVZh0W6jdH5LNw6R1kbUBPJM/EadqR4nY//7A7+0Nz6i67pez+y6uFw 5f+k2FBU1EloHd5JkSYDkg== 0001345817-05-000011.txt : 20051212 0001345817-05-000011.hdr.sgml : 20051212 20051209180958 ACCESSION NUMBER: 0001345817-05-000011 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20051212 DATE AS OF CHANGE: 20051209 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EPIQ SYSTEMS INC CENTRAL INDEX KEY: 0001027207 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 481056429 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52999 FILM NUMBER: 051256708 BUSINESS ADDRESS: STREET 1: 501 KANSAS AVENUE CITY: KANSAS CITY STATE: KS ZIP: 66105-1309 BUSINESS PHONE: 9136219500 MAIL ADDRESS: STREET 1: 501 KANSAS AVENUE CITY: KANSAS CITY STATE: MO ZIP: 66105-1309 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONIC PROCESSING INC DATE OF NAME CHANGE: 19961116 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Ajuta International Pty. Ltd. CENTRAL INDEX KEY: 0001345817 IRS NUMBER: 000000000 STATE OF INCORPORATION: C3 FISCAL YEAR END: 1205 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 42 BOW LANE CITY: LONDON STATE: X0 ZIP: EC4M9 BUSINESS PHONE: 646-552-2035 MAIL ADDRESS: STREET 1: 42 BOW LANE CITY: LONDON STATE: X0 ZIP: EC4M9 SC 13D 1 sc13d.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 EPIQ SYSTEMS, INC. (Name of Issuer) Common Stock, $.01 Par Value (Title of Class of Securities) 26882D 109 (CUSIP Number) Keith M. Pinter, Esq. Wormser, Kiely, Galef & Jacobs LLP 825 Third Avenue New York, New York 10022 (212) 687-4900 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 15, 2005 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that; is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.113d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. Note: Schedules filed in paper format include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be 'filed' for the purpose of Section 18 of the Securities Exchange Act of 1934 ('Act') or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 26882D 109 1. Name of Reporting Person: Ajuta International Pty. Ltd. 2. Check the Appropriate Box if a Member of a Group (See Instructions): (a) (b) 3. SEC Use Only: 4. Source of Funds (See Instructions): 00 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 9(e): 6. Citizenship or Place of Organization: Australia 7. Sole Voting Power: 1,228,501 Number of Shares 8. Shared Voting Power: Beneficially 0 Owned by Each Reporting 9. Sole Dispositive Power: Person With 982,801 10. Shared Dispositive Power: 245,700 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,228,501 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): 13. Percent of Class Represented by Amount in Row (11): 6.4% 14. Type of Reporting Person (See Instructions): CO This Schedule 13D relating to shares of common stock $.01 par value (the 'Common Stock'), of EPIQ Systems, Inc., a Missouri corporation (the 'Issuer'), is being filed by Ajuta International Pty. Ltd., an Australian company ('Ajuta') to report an increase in its beneficial ownership of the Securities of the Issuer. Item 1. Security and Issuer The title of the class of equity securities to which this statement relates is the Common Stock of the Issuer owned by Ajuta. The Issuer's principal executive offices are located at 501 Kansas Avenue, Kansas City, Kansas 66105. Item 2. Identity and Background (a) - (c) Ajuta, the entity filing this Schedule 13D, is an Australian company, and its principal business address and principal office is Calico House, 42 Bow Lane, London, England. Ajuta's activities consist of acting as trustee of Hypatia Trust, a trust created under the laws of Victoria, Australia. Other than its sole executive officer and director, there are no persons or corporations controlling or ultimately in control of Ajuta. (d) - (e) Neither Ajuta nor any of its executive officers or directors has, during the last five years, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation of such laws. (f) The sole executive officer and director of Ajuta is Susan M. Lord. Her business address is Calico House, 42 Bow Lane, London, England, and her present principal occupation is acting as director of Ajuta. Item 3. Source and Amount of Funds or Other Consideration Pursuant to the Stock Purchase Agreement dated as of November 15, 2005 (the 'Stock Purchase Agreement') between Ajuta, as trustee of Hypatia Trust, and Epiq Systems Acquisition, Inc., a Delaware corporation ('Epiq Acquisition'), a subsidiary of the Issuer, Ajuta sold and transferred to Epiq Acquisition all of the outstanding shares of nMatrix, Inc., a Delaware corporation, and nMatrix Australia Pty. Ltd., an Australian company (collectively, 'nMatrix') for a consideration consisting of (i) One Hundred Million Dollars ($100,000,000.00) plus (ii) 1,228,501 shares of Common Stock, having a value of Twenty Five Million Dollars ($25,000,000) based on a per share valuation of $20.35, the average NASDAQ closing price of the Issuer's Common Stock for the 40 consecutive trading days ending on November 9, 2005. Item 4. Purpose of Transaction Ajuta's purpose in the sale of nMatrix as described in item 3 above was to realize the maximum value from the sale of the shares of nMatrix. The 1,228,501 shares of Common Stock were offered to Ajuta by Issuer as a portion of the total purchase price of the nMatrix shares. Ajuta is acquiring the 1,228,501 shares of Common Stock for investment with the goal of realizing the maximum value of said Common Stock. Except as set forth in this Statement, Ajuta does not have any plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure, including but not limited to, if the Issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) Any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer (a) Ajuta is now deemed to be the beneficial owner of 1,228,501 shares of the Issues Common Stock, comprising 6.4 percent of the issued and outstanding shares of Common Stock of the Issuer. The calculations in this Section 13D are based upon 18,008,699 shares of Common Stock issued and outstanding as of October 12, 2005 (based on disclosures made by the Issuer in its Form 10-Q for the quarter ended September 30, 2005) together with the 1,228,501 additional shares of Common Stock issued pursuant to the Stock Purchase Agreement. The foregoing calculation is made pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended. (b) Ajuta has the sole power to vote the 1,228,501 shares of Common Stock deemed to be beneficially owned by it. Ajuta has the sole power to dispose of 982,801 shares and the shared power to dispose of 245,700 shares of the Common Stock deemed to be beneficially owned by it. Pursuant to the Escrow Agreement dated as of November 15, 2005 (the 'Escrow Agreement') among the Issuer, Ajuta and Wells Fargo Bank, N.A. (the 'Escrow Agent'), 245,700 shares of the Common Stock deemed to be beneficially owned by Ajuta are held in escrow by the Escrow Agent and may only be disposed of prior to May 14, 2007 pursuant to mutual instructions issued by Ajuta and the Issuer, or to satisfy a successful indemnity claim by Epiq Acquisition under the Stock Purchase Agreement. (c) No other transactions in the Common Stock were effected during the past sixty days by Ajuta. (d) Pursuant to the Escrow Agreement, the Issuer has the right to receive the proceeds from the sale of the Common Stock held under the Escrow Agreement in the event that Epic Acquisition successfully asserts an indemnity claim against Ajuta under the Stock Purchase Agreement. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. The Escrow Agreement, which provides for the voting and disposition of 245,700 shares of the Common Stock deemed beneficially owned by Ajuta, is described in Item 5(b) above. Pursuant to the Stock Purchase Agreement, Issuer entered into a Registration Rights Agreement dated November 15, 2005, between Ajuta and Issuer (the 'Registration Rights Agreement'). The Registration Rights Agreement provides that, subject to receipt of necessary information from Ajuta, Issuer will prepare and file with the SEC, as soon as practicable after March 1, 2006, but not later than April 15, 2006, a registration statement to enable the reoffer and resale by Ajuta of the shares of Issuer Common Stock transferred in connection with the acquisition on a delayed or continuous basis under Rule 415 of the Securities Act, and use its best efforts to cause the registration statement to become effective as soon as reasonably practicable after the filing of the registration statement. Issuer is required to keep the registration statement effective during the registration period, which ends not later than November 15, 2007. If Issuer files a future shelf registration statement in conjunction with an offering of Issuer common stock, the Registration Rights Agreement also includes the right of Ajuta to register its Issuer shares under that shelf registration statement. The Registration Rights Agreement includes a limited price protection provision, which provides that if Ajuta sells any Issuer shares pursuant to the registration statement at a per share price (before commissions and other transaction expenses, the 'Sale Price') lower than $20.35, then Issuer will pay Ajuta an amount in cash equal to the number of Issuer shares sold by Ajuta multiplied by the difference between the $20.35 minus the Sale Price. The limited price protection provisions terminates permanently, and will no longer be effective, as of the close of business on the date that is after any 15 trading days on which Ajuta may lawfully sell shares under the registration statement and the last sale price for Issuer's common stock on the Nasdaq National Market, or any other national securities exchange or automated quotation system on which Issuer common stock is then traded, has been equal to or greater than $20.35. Except as set forth in this Schedule 13D, neither Ajuta nor, to Ajuta's knowledge, any of its directors or executive officers has any other contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Issuer. Item 7. Material to be Filed as Exhibits. Exhibit 1 Registration Rights Agreement dated November 15, 2005 between Ajuta International Pty. Ltd., as trustee of Hypatia Trust, and Epiq Systems, Inc. (filed as Exhibit 10.2 to the Issuer's Current Report on Form 8- K dated November 21, 2005 [File No. 0-22081] and incorporated herein by reference). Exhibit 2 Escrow Agreement dated as of November 15, 2005 among Epiq Systems, Inc., Ajuta International Pty. Ltd. as trustee of Hypatia Trust, and Wells Fargo Bank, N.A., as Escrow Agent. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. November 23, 2005 (Date) AJUTA INTERNATIONAL PTY. LTD. /s/ Ira B. Stechel (Signature) Attorney-in-Fact (Name/Title) EX-99 2 escrow.txt ESCROW AGREEMENT (EXHIBIT 2 TO SCHEDULE 13D) Exhibit 2 ESCROW AGREEMENT This ESCROW AGREEMENT (this 'Agreement') is entered into as of November 15, 2005 (the 'Closing Date'), by and among EPIQ Systems, Inc., a Missouri corporation ('Buyer'), Ajuta International Pty. Ltd., an Australian Company as Trustee of Hypatia Trust, a trust created under the laws of Victoria, Australia ('Indemnifying Shareholder'), and Wells Fargo Bank, N.A. (the 'Escrow Agent'). WHEREAS, the Indemnifying Shareholder is the sole shareholder of nMatrix, Inc., a Delaware corporation ('nMatrix U.S.') and of nMatrix Australia Pty. Ltd., an Australian company ('nMatrix Australia'), and nMatrix Australia is in turn the sole shareholder of nMatrix Ltd., a company registered in England and Wales ('nMatrix U.K.', and together with nMatrix U.S. and nMatrix Australia U.K. are herein collectively called the 'Company'); WHEREAS, the Indemnifying Shareholder desires to sell to Buyer, and Buyer desires to purchase from the Indemnifying Shareholder, all of the issued and outstanding shares of capital stock of nMatrix U.S. and of nMatrix Australia, all on the terms and subject to the conditions set forth in the Stock Purchase Agreement between the Indemnifying Shareholder and Buyer dated the date hereof (as amended from time to time, the 'Stock Purchase Agreement'); WHEREAS, as a condition to the consummation of the acquisition and pursuant to the Stock Purchase Agreement, the Indemnifying Shareholder has agreed that on the date hereof, 245,679 shares of common stock of Buyer that the Indemnifying Shareholder received, consisting of 20% of the Share Consideration (as defined in the Stock Purchase Agreement) shall be placed in escrow for a period of time after the Closing Date, in order to secure the performance of the indemnity obligation of the Indemnifying Shareholder under the Stock Purchase Agreement; and WHEREAS, the parties hereto desire to establish the terms and conditions pursuant to which such escrow account will be established and maintained. NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE I ESCROW SHARES 1.1 Consent of Escrow The Indemnifying Shareholder and Buyer hereby, and by virtue of its approval of the Stock Purchase Agreement, agrees to: (a) the establishment of this escrow to secure the Indemnifying Shareholder's indemnification obligations under the Stock Purchase Agreement in the manner set forth herein and (b) all of the other terms, conditions and limitations contained in this Agreement. 1.2 Delivery; Escrow Fund As soon as practicable after the execution of this Agreement, Buyer shall cause its stock transfer agent to deliver to the Escrow Agent a stock certificate registered in the name of the Escrow Agent representing an aggregate of 245,679 shares of common stock of Buyer, par value $0.01 per share, (the 'Escrow Shares'). The Escrow Agent will acknowledge receipt of the Escrow Shares and the Escrow Agent agrees to hold the Escrow Shares in an escrow account (the 'Escrow Account'), subject to the terms and conditions of this Agreement (the Escrow Shares and any cash, property, securities or other proceeds arising from the sale, conversion or exchange of, the Escrow Shares, including any Escrow Cash, and any non-cash distributions on or with respect to the Escrow Shares are collectively referred to herein as the 'Escrow Fund'). For the purpose of this Agreement, Escrow Cash shall mean the gross proceeds from sales of the Escrow Shares, less all reasonable brokerage commissions and charges and any other fees and expenses arising directly from the sale of such Escrow Shares, but not reduced by any taxes arising from such sale, plus any interest or dividends earned with respect to such Escrow Cash. All cash dividends on the Escrow Shares and all earnings on the Escrow Cash shall be paid over by the Escrow Agent to the Indemnifying Shareholder no less often than once per calendar quarter. 1.3 Receipt; Escrow Account The Escrow Agent hereby agrees (i) to accept delivery of the Escrow Shares and (ii) to hold the Escrow Shares in the Escrow Account in accordance with the terms and conditions of this Agreement and for the uses and purposes stated herein. In no event shall any part of the Escrow Shares be commingled with any other securities held by the Escrow Agent or any of its parents, subsidiaries or affiliates. The Escrow Agent shall, promptly following the end of each calendar month, send to the Indemnifying Shareholder and Buyer with respect to the Escrow Shares a statement of holdings and transactions in form and substance customarily provided to clients. It is the intention of the Indemnifying Shareholder that the Escrow Account shall not be subject to any lien or attachment by any creditor of the Indemnifying Shareholder and shall be used solely for the purposes set forth in this Agreement. The Escrow Shares and any amounts in the Escrow Account shall not be used by the Escrow Agent to offset any obligations that either the Indemnifying Shareholder or Buyer might have to the Escrow Agent or any of its affiliates, whether under this Agreement or under any other agreement or arrangement in any other capacity, nor shall the Escrow Agent have any lien or claim upon the Escrow Fund in any form whatsoever. 1.4 Dividends, Etc. Any securities distributed in respect of or in exchange for any of the Escrow Shares, whether by way of stock dividends, stock splits or otherwise, shall be issued in the name of the Escrow Agent or its nominee, and shall be delivered to the Escrow Agent, who shall hold such securities in the Escrow Account. Such securities shall be considered Escrow Shares for purposes hereof. 1.5 Voting of Shares All voting rights with respect to the Escrow Shares shall be exercised by the Indemnifying Shareholder, by delivering written voting instructions to the Escrow Agent. The Indemnifying Shareholder shall have the authority to instruct the Escrow Agent whether or not to accept any tender or exchange offers with respect to the Escrow Shares. The Escrow Agent shall forward to the Indemnifying Shareholder all proxy statements, reports, and tender and exchange offer materials received by it with respect to the Escrow Shares. The Escrow Agent will then vote or tender the Escrow Shares in accordance with such written instructions. In the absence of such written instructions, the Escrow Agent shall not vote or cause the voting of such shares. 1.6 Transferability; Sale (a) Transferability. The Indemnifying Shareholder shall not sell, pledge, assign, or transfer (including by operation of law) or otherwise dispose of, its interest in the Escrow Fund, directly or indirectly, or subject its interest in the Escrow Fund to a transaction which would have the same effect, or subject its interest in the Escrow Fund to any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Escrow Fund, in cash or otherwise, so long as such Escrow Fund is held by the Escrow Agent hereunder. (b) Sales of Escrow Shares. Subject to Section 1.5 above, the Escrow Agent shall have no authority to sell or dispose of any Escrow Shares unless pursuant to and in accordance with, joint written instructions from Buyer and the Indemnifying Shareholder. 1.7 Manner of Sale The Escrow Agent shall have no responsibility in connection with such sale other than to make delivery of the Escrow Shares to the brokerage firm selected by Buyer and the Indemnifying Shareholder (or, if Buyer and the Indemnifying Shareholder do not designate a brokerage firm, then to the brokerage firm selected by the Escrow Agent), with its delivery instructions and any special instructions provided by the Buyer and the Indemnifying Shareholder, and to receive and deposit the Escrow Cash arising from such sale into the Escrow Account. The Escrow Agent shall have no duty or obligation to determine or accomplish compliance with any applicable transfer restrictions; and it shall be the sole obligation of the party directing such sale to take any remaining actions, and to provide or deliver any necessary instruments or opinions (at its expense) necessary to comply with applicable transfer restrictions or applicable securities laws. The Escrow Agent shall have no liability for any actions or omissions of any such brokerage firm, and shall have no liability for the price or execution achieved. Without limiting the generality of the foregoing, the Indemnifying Shareholder expressly acknowledges that (a) the Escrow Shares that are the subject of a sale may be sent to a transfer agent to be reissued in saleable form, (b) the Escrow Shares may contain or be subject to transfer restrictions that may limit their marketability and impose restrictions upon the number or types of purchasers to whom they can be offered or sold, and (c) the Escrow Agent shall have no liability for any failure or delay (or any price change during any such delay) on the part of Buyer, the Indemnifying Shareholder or any transfer agent, or caused by any necessary registration or delivery procedures, or compliance with any applicable transfer restrictions involved in the transfer of such Escrow Shares. ARTICLE II DISBURSEMENTS 2.1 Disbursements Upon Joint Instructions The Escrow Agent will disburse the Escrow Fund, or any portion thereof only in accordance with (a) a written instrument delivered to the Escrow Agent that is executed by both Buyer and the Indemnifying Shareholder and that instructs the Escrow Agent as to the disbursement of some or all of the Escrow Fund or (b) the provisions of Sections 2.2, 2.3 or 2.4. 2.2 Disbursements upon Receipt of Final Determination If either the Indemnifying Shareholder or Buyer delivers to the Escrow Agent and the other party hereto a final notice of the claim for indemnification and the amount of Losses related thereto (the 'Final Determination Notice'), together with a copy of an order of a court of competent jurisdiction providing for the disbursement of Escrow Fund (each an 'Order') and a certificate, signed by an officer of Buyer or the trustee of the Indemnifying Shareholder (as applicable), stating that such order is not subject to appeal, or that the appeal period with respect to such order has elapsed and no appeal has been taken, together with a written certification that a copy of the Order has been delivered to the parties involved, then the Escrow Agent shall disburse the Escrow Fund, or any portion thereof, in accordance with the Order within the 10 business days following the Escrow Agent's receipt of the Order, such certificate and certification of delivery. The Escrow Agent shall send for overnight delivery a copy of the Order to the non-delivering party at the address set forth in Section 5.7. 2.3 Disbursements Following Termination Date Within 3 business days after May 14, 2007 (the 'Termination Date'), the Escrow Agent shall release to the Indemnifying Shareholder all of the Escrow Fund; provided that, if Buyer has on or before the Termination Date delivered to the Escrow Agent a written notice that (i) Buyer has previously delivered to the Indemnifying Shareholder one or more Claim Notices (as defined in the Stock Purchase Agreement), (ii) the claim or claims covered thereby have not been resolved either by agreement of Buyer and the Indemnifying Shareholder or by a final, non-appealable order of a court of competent jurisdiction, and (iii) specifying the claim amount(s) covered in the unresolved Claim Notice or Notices, then the Escrow Agent shall retain in the Escrow Fund Escrow Cash and such number of Escrow Shares as together have an aggregate Fair Market Value (as defined in Section 3.1(a)) equal to 100% of the claim amount covered by the unresolved Claim Notice or Claim Notices and establish a new Termination Date. If Buyer has delivered to the Escrow Agent a written notice in accordance with the proviso in the preceding sentence, Buyer may direct the Escrow Agent to sell all Escrow Shares retained in the Escrow Account without further consent or action by the Indemnifying Shareholder. 2.4 Method of Disbursement Disbursements to the Indemnifying Shareholder shall be made by courier delivery of stock certificates and/or checks to the Indemnifying Shareholder at its address shown in Section 5.7 (or such other address as may be provided in writing to the Escrow Agent by the Indemnifying Shareholder). ARTICLE III VALUATION; INVESTMENT OF ESCROW CASH 3.1 Valuation; Investment of Escrow Cash (a) Valuation of Escrow Shares. For purposes of this Agreement, the 'Fair Market Value' of any Escrow Shares shall equal the average closing price per share of Buyer's common stock on NASDAQ for the five-day period ending on the day prior to the date on which the indemnification claim was 'finally determined'. For purposes of this Section 3.1(a), the date on which an indemnification claim was 'finally determined' shall mean (i) in the case of Section 2.1, the payment date stated in the joint written instructions, (ii) the case of Section 2.2, the payment date stated in the Final Determination Notice, and (iii) in the case of Section 2.3, the Termination Date. The value of Escrow Cash shall be face value of such Escrow Cash. For the purposes of any disbursement of Escrow Shares, the number of Escrow Shares required to satisfy a claim with respect to the Escrow Account shall be rounded to the nearest whole share of common stock of Buyer. The Buyer and the Indemnifying Shareholder agree that the Escrow Agent shall have no responsibility for determining, or reporting, the Fair Market Value of the Escrow Shares. (b) Permitted Investments of Escrow Cash. Escrow Cash shall be invested by the Escrow Agent, to the extent permitted by law and as directed by the Indemnifying Shareholder, in (i) obligations issued or guaranteed by the United States of America or any agency or instrumentality thereof, (ii) obligations (including certificates of deposit and bankers' acceptances) of domestic commercial banks which at the date of their last public reporting had total assets in excess of $500,000,000, (iii) commercial paper rated at least A-1 or P-1 or, if not rated, issued by companies having outstanding debt rated at least AA or Aa and (iv) money market mutual funds invested exclusively in some or all of the securities described in the foregoing clauses (i), (ii) and (iii). Absent receipt of specific written investment instructions from the Buyer or Indemnifying Shareholder, the Escrow Agent shall have no obligation or duty to invest (or otherwise pay interest on) the Escrow Cash; provided, however, that in the event the Escrow Agent shall not have received such written investment instruction, the Escrow Agent shall be authorized to invest any of the Escrow Cash in the Wells Fargo Advantage Government Money Market Fund until such investment instruction is received. All earnings received from the investment of the Escrow Cash shall be credited to, and shall become a part of, the Escrow Fund (and any losses on such investments shall be debited to the Escrow Fund). The Escrow Agent shall have no liability for any investment losses, including without limitation any market loss on any investment liquidated prior to maturity in order to make a payment required hereunder. The investments in the Wells Fargo Advantage Fund are not obligations of, or endorsed or guaranteed by, the Escrow Agent or its Affiliates and are not insured by the Federal Deposit Insurance Corporation. The Escrow Agent serves as advisor, custodian, and transfer agent for the Wells Fargo Advantage Fund and will be paid, and its affiliates may be paid, fees for services to the Wells Fargo Advantage Fund and those fees may include processing organization fees. The Escrow Agent will have the right to liquidate any investments of the Escrow Fund held by the Escrow Agent hereunder in order to provide funds necessary to make required payments hereunder. (c) Tax Reporting. The parties hereto agree that, for tax reporting purposes, all interest or other income earned from the investment of any Escrow Cash or any portion thereof in any tax year shall be reported as allocated to the Indemnifying Shareholder. ARTICLE IV ESCROW AGENT 4.1 Appointment The Indemnifying Shareholder and Buyer hereby appoint the Escrow Agent to serve as the escrow agent hereunder, and the Escrow Agent hereby accepts such appointment and agrees to perform all duties which are expressly set forth in this Agreement. 4.2 Fees and Expenses of Escrow Agent Buyer and the Indemnifying Shareholder shall each (a) pay one-half of the fees of the Escrow Agent for the services to be rendered by the Escrow Agent hereunder, which are set forth on Attachment A hereto, and (b) reimburse the Escrow Agent for one- half of its reasonable expenses (including reasonable attorneys' fees and expenses) incurred in connection with the preparation and performance of its duties under this Agreement; provided that any fees and expenses relating to any sale of Escrow Shares pursuant to Section 1.6 shall be promptly paid in full by the Indemnifying Shareholder and shall be deducted from the gross proceeds of such sale of Escrow Shares. In the event of any material change in the fees charged by the Escrow Agent, the Escrow Agent shall notify the Indemnifying Shareholder and Buyer in writing of such change as soon as practicable after the Escrow Agent is made aware of the change. The Escrow Agent may withhold its unpaid fees and expenses from any final disbursement from the Escrow Fund. 4.3 Limitation of Escrow Agent's Duties and Liabilities. (a) Limitation on Liability. The Escrow Agent shall not be responsible for determining or compelling compliance with the Stock Purchase Agreement and shall not be bound by or incur any liability with respect to any other agreement or understanding to which the Escrow Agent is not a party, including the Stock Purchase Agreement. The Escrow Agent shall be obligated only for the performance of such duties as are expressly and specifically set forth in this Agreement on its part to be performed, which are ministerial (and shall not be construed to be fiduciary) in nature, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of the Escrow Agent. The Escrow Agent shall incur no liability with respect to any action taken or suffered by it in reliance upon any notice, direction, instruction, consent, statement or other documents believed by it to be genuine and duly authorized, nor for other action or inaction except its own willful misconduct or gross negligence. In all questions arising under the Agreement, the Escrow Agent may rely on the advice of counsel, and the Escrow Agent shall not be liable to anyone for anything done, omitted or suffered in good faith by the Escrow Agent based on such advice. The Escrow Agent shall not be required to take any action hereunder involving any expense unless the payment of such expense is made or provided for in a manner reasonably satisfactory to it. In no event shall the Escrow Agent be liable for indirect, punitive, special or consequential damages. (b) Sales of Escrow Shares. In connection with any sale of Escrow Shares pursuant to Section 1.6 of this Agreement, the Escrow Agent shall be entitled to receive and rely upon, prior to taking action in that regard, written direction from the Buyer and the Indemnifying Shareholder as to the manner and method to be undertaken in carrying out such sale, including, without limitation written direction (1) identifying the number of Escrow Shares to be sold, (2) requesting the Escrow Agent to use a brokerage firm identified by the Buyer and the Indemnifying Shareholder therein, or requesting the Escrow Agent to use its affiliated brokerage service, and (3) setting forth any necessary or special instructions with respect to the sale (including any stop loss or minimum price per share instruction); and the Indemnifying Shareholder shall execute and deliver any instruments reasonably required by the Buyer or the Escrow Agent in order to carry out such sale or liquidation. 4.4 No Security Interest The Indemnifying Shareholder warrants to and agrees with Buyer and the Escrow Agent that, unless otherwise expressly set forth in this Agreement, there is no security interest in the Escrow Fund, Escrow Account or any part thereof created by it or in respect of any of its obligations or liabilities. The Indemnifying Shareholder knows of no financing statement under the Uniform Commercial Code, which is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Fund, the Escrow Account or any part thereof. 4.5 Indemnification Indemnifying Shareholder and Buyer hereby agree to jointly and severally indemnify the Escrow Agent for, and to hold it harmless against any fee, cost, loss, liability or expense arising out of or in connection with this Agreement and carrying out its duties hereunder, including, without limitation, attorneys' fees and expenses and the costs and expenses of investigating or defending itself against any claim of liability, except in those cases where the Escrow Agent has been guilty of gross negligence or willful misconduct; provided, that, without limiting the foregoing, the Indemnifying Shareholder, on the one hand, and Buyer on the other hand, agree between themselves that each shall pay one half of such amounts. This right of indemnification shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent. 4.6 Tax Indemnification The Indemnifying Shareholder shall assume and promptly pay when and as due any and all obligations imposed now or hereafter by any applicable tax law, rule or regulation with respect to any payment or disbursement of the Escrow Fund, each and every sale, exchange or conversion of the Escrow Shares and dividends or distributions with respect to the Escrow Shares, any distribution of the Escrow Shares or performance of any other activity under this Agreement. The Indemnifying Shareholder also agrees to instruct the Escrow Agent in writing with respect to the Escrow Agent's responsibility for withholding and other taxes, assessments or other governmental charges, and to instruct the Escrow Agent with respect to any certifications and governmental reporting that may be required under any laws or regulations that may be applicable in connection with its acting as the Escrow Agent under this Agreement. The foregoing indemnification and agreement to hold harmless shall survive the termination of this Agreement. Indemnifying Shareholder and Buyer will provide a completed IRS Form W-9 or W-8 to the Escrow Agent upon the signing of this Escrow Agreement. The Escrow Agent will report to the Internal Revenue Service, as of each calendar year-end, and to Indemnifying Shareholder all income earned from the investment of any sum held in the Acquisition Fund against Indemnifying Shareholder, whether or not said income has been distributed during such year, as and to the extent required by law under the provisions of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the 'Code'). Any tax returns required to be prepared and filed will be prepared and filed by Indemnifying Shareholder with the Internal Revenue Service in all years income is earned, whether or not income is received or distributed in any particular tax year, and Escrow Agent will have no responsibility for the preparation and/or filing or any tax return with respect to any income earned by the Acquisition Fund. The Indemnifying Shareholder is required to prepare and file any and all income or other tax returns applicable to the Acquisition Fund with the Internal Revenue Service and all required state and local departments of revenue in all years income is earned in any particular tax year as and to the extent required under the provisions of the Code. Any taxes payable on income earned from the investment of any sums held in the Escrow Fund will be the responsibility of Indemnifying Shareholder, whether or not the income was distributed by the Escrow Agent during any particular year as and to the extent required under the provisions of the Code. 4.7 Successor Escrow Agent In the event the Escrow Agent becomes unavailable or unwilling to continue in its capacity herewith, the Escrow Agent may resign and be discharged from its duties or obligations hereunder by delivering a resignation to the parties to this Agreement, not less than 60 days prior to the date when such resignation shall take effect. Buyer may appoint a successor Escrow Agent so long as such successor is a bank with assets of at least $500,000,000, and may appoint any other successor Escrow Agent with the consent of the Indemnifying Shareholder, which shall not be unreasonably withheld or delayed. If, within such notice period, Buyer provides to the Escrow Agent written instructions with respect to the appointment of a successor Escrow Agent and directions for the transfer of any Escrow Shares then held by the Escrow Agent to such successor, the Escrow Agent shall act in accordance with such instructions and promptly transfer such Escrow Shares to such designated successor. If no successor Escrow Agent is named as provided in this Section 4.7 prior to the date on which the resignation of the Escrow Agent is to properly take effect, the Escrow Agent may apply to a court of competent jurisdiction for appointment of a successor Escrow Agent. 4.8 Investment The Escrow Agent is hereby authorized, in making or disposing of any investment permitted by this Agreement, or in carrying out any sale of the Escrow Fund permitted by this Agreement, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as a subagent of the Escrow Agent or for any third person or dealing as principal for its own account. 4.9 Action by Escrow Agent Notwithstanding any term in this Agreement to the contrary, in no instance shall the Escrow Agent be required or obligated to distribute any Escrow Fund (or take other action that may be called for hereunder to be taken by the Escrow Agent) sooner than two (2) business days after (i) it has received the applicable documents required under this Agreement in good form, or (ii) passage of the applicable time period, as the case may be. ARTICLE V OTHER PROVISIONS 5.1 Representation and Warranties of Indemnifying Shareholder and Buyer Each of Indemnifying Shareholder and Buyer hereby represents and warrants (a) that this Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Agreement by each of Indemnifying Shareholder and Buyer does not and will not violate any applicable law or regulation. 5.2 Termination This Agreement shall terminate upon the disbursement by the Escrow Agent of the Escrow Fund in accordance with this Agreement; provided that the provisions of Sections 4.2, 4.5 and 4.6 shall survive such termination. 5.3 Entire Agreement This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, with respect to the subject matter hereof. 5.4 Succession and Assignment This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. 5.5 Counterparts and Facsimile Signature This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature. Signatures by facsimile shall be deemed to be their original signatures for all purposes. 5.6 Headings The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 5.7 Notices All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given or made (i) five business days after being sent by registered or certified mail, return receipt requested, (ii) upon delivery, if hand delivered, (iii) one business day after being sent by prepaid overnight courier with guaranteed delivery, with a record of receipt, or (iv) upon transmission with confirmed delivery if sent by cable, telegram, facsimile or telecopy, to the parties at the following addresses (or at such other addresses as shall be specified by the parties by like notice): If to Buyer: EPIQ Systems, Inc. 501 Kansas Avenue Kansas City, KS 66105 Attention: General Counsel Telephone: (913) 621-9500 Telecopy: (913) 621-7281 E-mail: colofson@epiqsystems.com Copy to: Kirkland & Ellis LLP 200 East Randolph Drive Chicago, Illinois 60602 Attention: Richard W. Porter, P.C. Telephone: (312) 861-2000 Telecopy: (312) 861-2200 E-mail: rportco@kirland.com If to Indemnifying Shareholder: ___________________ ___________________ Attention: ___________ Telephone: ___________ Telecopy: ___________ E-mail: With a Copy to: Wormser, Kiely, Galef & Jacobs LLP 825 Third Avenue New York, NY 10022 Attention: Keith M. Pinter, Esq. Telephone: (212) ___-____ Telecopy: (212) 687-5703 E-mail: If to the Escrow Agent: Wells Fargo Bank, N.A. Escrow Agent Attn: Corporate Trust & Escrow Services One Ward Parkway, Suite 330 Kansas City, Missouri 64112 Attention: Kenneth Dotson Telephone: (816) 931-5746 Telecopy: (816) 753-5311 E-mail: kenneth.dotson@wellsfargo.com and dane.lee@wellsfargo.com Any party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed to have been duly given unless and until it actually is received by the party to whom it is intended. Any party may change the address to which notices, instructions, or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 5.7. 5.8 Amendments and Waivers This Agreement may be amended only with the written consent of Buyer, the Escrow Agent and the Indemnifying Shareholder. No waiver of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the party giving such waiver. No waiver by any party with respect to any condition, default or breach of covenant hereunder shall be deemed to extend to any prior or subsequent condition, default or breach of covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 5.9 Governing Law and Submission to Jurisdiction THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE LAWS THAT MIGHT BE APPLICABLE UNDER CONFLICTS OF LAWS PRINCIPLES. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York state court, or Federal court of the United States of America, sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such New York state court or, to the extent permitted by law, in such Federal court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in any such New York state or Federal court, and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such New York state or Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 5.7. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 5.10 Force Majeure The Escrow Agent shall not be responsible for delays or failures in performance 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. 5.11 Dispute Resolution It is understood and agreed that, should any dispute arise with respect to the delivery, ownership, right of possession, and/or disposition of the Escrow Fund, or should any claim be made upon the Escrow Agent or the Escrow Fund by a third party, the Escrow Agent upon receipt of notice of such dispute or claim is authorized and shall be entitled (at its sole option and election) to retain in its possession without liability to anyone, all or any of said Escrow Fund until such dispute shall have been settled either by the mutual written agreement of the parties involved or by a final order, decree or judgment of a court in the United States of America, the time for perfection of an appeal of such order, decree or judgment having expired. The Escrow Agent may, but shall be under no duty whatsoever to, institute or defend any legal proceedings that relate to the Escrow Fund. * * * * IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. EPIQ SYSTEMS, INC. 'Buyer': By: /s/ Christopher E. Olofson_____________ Title: President & Chief Operating Officer AJUTA INTERNATIONAL PTY. LTD., as Trustee of Hypatia Trust 'Indemnifying Shareholder': By: /s/ Ira B. Stechel___________________ Title: Attorney in Fact WELLS FARGO BANK, N.A. 'Escrow Agent' By: /s/ Dane A. Lee______________________ Dane A. Lee, Vice President ATTACHMENT A Escrow Agent Fees Acceptance Fee $500 Our acceptance fee covers the review, acceptance and assumption of all responsibilities and duties as Escrow Agent, participation in document conferences, establishing records and accounts, receipt of funds, and consultation with counsel. Annual Escrow Agent Fee $5,000 This annual fee includes the normal day-to-day administration of the issue performed in accordance with the Escrow Agreement, maintenance of all administrative records, and the duties and functions associated with the Escrow Agent. Our annual administration fee is billed annually in advance for any year or part thereof. The first annual fee is due at closing. Stock Sale Transactions $500 In the event of the sale of Escrow Shares per 1.6(b) of the Escrow Agreement, this fee will be charged per sale to sale proceeds. Disbursements upon Receipt of Final Determination $1,000 Out-of-Pocket Expenses None Anticipated The Trustee does not typically charge for out-of-pocket expenses but we reserve the right to charge for significant, unanticipated out-of-pocket expenses incurred in connection with the acceptance of the Escrow Agent appointment and annual administration. Any out-of-pocket expenses incurred by us will be billed at cost. These items may include, but are not be limited to, legal costs, travel expenses, courier services, etc. Investments Included Wells Fargo does not charge transaction fees for cash investments nor do we charge sweep fees for investment of funds in the Wells Fargo Money Market Fund family. Guaranteed Investment Contracts or Forward Delivery Agreements (If any) In the event we are asked to administer a guaranteed Investment contract or forward purchase agreement an annual fee of $750 will be charged. This fee includes the set-up, review and maintenance of any STANDARD investment agreement or similar instrument. The investment activities included in this fee assume there will be no more than one (1) draw on the instrument per month. Fees for NON-STANDARD agreements such as repurchase/swap/hedge agreements or for investment funds held outside the bank (such as CAMP or LAIF) will be negotiated separately. Extraordinary Services Fees indicated in this schedule are based upon services rendered in accordance with established procedures and during normal business hours. Unusual or extraordinary services, such as those provided upon an Event of Default, are subject to additional charges based on the duties, responsibilities, and other factors involved. Fees for services not specifically set forth in this schedule will be determined by appraisal. Such services may include, but not be limited to, additional responsibilities and services incurred in connection with amendments or extensions of the governing documents, unusual cash and/or investment transactions, calculations, reports or notices, or in case of litigation. Customized Services Customized services can be provided as needed. Additional fees will be assessed as out-of-pocket expenses for performing non- standard services such as generating specialized reports, arbitrage calculations provided by third parties, default administration, custody services, etc. Additional fees may be assessed for excessive administration time or other duties required as mandated by future laws or regulatory agencies. Fees will be determined commensurate with the type of service and the time and responsibility involved. This Fee Schedule is based upon the assumptions listed below which pertain to the responsibilities and risks involved in Wells Fargo Bank, N.A. undertaking the roles of Escrow Agent. These assumptions are based on information provided to us as of the date of this Fee Schedule. Our fees are subject to review and acceptance of the final documents. Should any of the assumptions, duties or responsibilities change, we reserve the right to affirm, modify or rescind our proposal. PRICING NOTES AND ASSUMPTIONS * All interest and investment earnings will be credited to the Escrow Account, including interest earned on money market funds. No additional fees are debited against earnings. * No investment transaction fees are charged for investing in sweep vehicles or individual securities. Wells Fargo Brokerage Services Inc., a full-service brokerage company, is available for investment purchases, including commercial paper. * There will be no charge for the first twenty-four (24) wires. Additional wires will be $25 each. * Should any transaction fail to close through no fault of Wells Fargo Bank, N.A., all or a portion of our acceptance fee, as well as legal and out-of-pocket expenses incurred by Wells Fargo Bank, N.A., may be due and payable. Billings over 30 days past due are subject to a 1.5 % late fee. Wells Fargo Bank, N.A. By: Dane A. Lee on November 10, 2005 17 EX-24 3 pwr_attorney.txt POWER OF ATTORNEY THIS POWER OF ATTORNEY is made on 11th day of November 2005 by AJUTA INTERNATIONAL PTY. LTD., ACN 062 230 648 of Unit 16, 66 Levanswell Road, Moorabbin, Victoria, Australia in its capacity as Trustee of the Hypatia Trust ('Grantor'). AGREED TERMS: 1 Appointment The Grantor appoints the person whose name is set out in schedule 1 to be the Grantor's true and lawful Attorney-in-fact (the 'Attorney-in-fact'). 2 Powers The Attorney-in-fact is empowered at any time to exercise any of the following powers: (a) to sign, execute (whether under hand or seal) and, if required, seal and deliver or accept, in such manner as may be required each or any one or more of the documents (as the case may be) described in schedule 2 (each a 'Document') to which the Grantor is a party in form and substance as the Attorney-in-fact thinks fit; (b) to sign, execute (whether under hand or seal) and, if required, seal and deliver any other documents which are referred to in any Document or which are ancillary, incidental to or related thereto or contemplated thereby (as conclusively evidenced by the Attorney-in-fact's execution thereof) (each an 'Ancillary Document'); (c) to sign, execute (whether under hand or seal) and, if required, seal and deliver all such other agreements, undertakings, instruments, letters, notices and certificates including (without limitation) negotiable instruments as to the Attorney-in-fact may seem (as conclusively evidenced by the Attorney-in-fact's execution thereof) to be incidental to or necessary to give effect to any Document or any Ancillary Document or the transactions contemplated thereby; (d) to sign, execute (whether under hand or seal) and, if required, seal and deliver any document or perform any act, matter or thing at the absolute discretion of the Attorney-in-fact in any way relating to the Grantor's involvement in the transactions contemplated by any Document; (e) to give effect to the transactions contemplated by any Document and any Ancillary Document; (f) to complete blanks and make alterations, deletions, additions or corrections (whether or not material and whether or not involving changes to the parties) to any Document and to any Ancillary Document including, without limitation, adding and deleting parties and varying the name of any party and/or the title of any Document or any Ancillary Document; (g) to give directions regarding and authorise the distribution of any Document and any Ancillary Document; (h) to do all such other acts, matters and things necessary or incidental to the effective exercise of the above powers in the Attorney-in-fact's absolute and unfettered discretion; and (i) to exercise all or any of the powers referred to in clauses 2(a) to 2(h) (inclusive) either prior to the date of execution of any Document or any Ancillary Document, or at any time thereafter. 3 Use of name The Attorney-in-fact may exercise his powers under this Power of Attorney in the name of the Grantor or in the name of the Attorney-in-fact and as the act of the Grantor. 4 Benefit to Attorney-in-fact The Attorney-in-fact may exercise his powers under this Power of Attorney notwithstanding that the Attorney-in-fact may be in any way interested in any Document, Ancillary Document or thing (whether in whole or in part) or in any way interested in, or connected with, any person who is a party to, or in any way connected with, or otherwise interested in any Document, Ancillary Document or thing (whether in whole or in part). 5 Continued Validity The Attorney-in-fact shall be entitled to assume the continued validity of this Power of Attorney unless and until express notice of the revocation hereof (whether express or by operation of law) has been received by the Attorney-in-fact and that all acts, matters and things done by the Attorney-in-fact in exercising the above powers will be as valid and effectual as if they had been done by the Grantor. 6 Ratification The Grantor agrees to ratify and confirm whatever the Attorney-in-fact does or causes to be done in exercise of the Attorney-in-fact's powers under this Power of Attorney and will, on execution and delivery properly stamp and register this Power of Attorney as required by any applicable law, and in default thereof, authorizes and empowers the Attorney-in-fact to stamp and/or register this Power of Attorney on behalf of the Grantor. 7 Delegation and substitution The Attorney-in-fact may, at any time, appoint or remove any substitute or delegate or sub-Attorney-in-fact. 8 Attorney-in-fact's indemnity The Grantor indemnifies the Attorney-in-fact and agrees to keep the Attorney-in-fact indemnified against all claims, demands, costs, damages, losses and expenses, howsoever arising, consequent upon the lawful exercise of all or any of the powers and authorities contained herein or consequent upon the exercise of the power of Attorney hereby granted. 9 Attorney-in-fact's liability The execution by the Attorney-in-fact under hand or under seal of any of the Documents and any of the Ancillary Documents contemplated by the Power of Attorney shall not connote: (a) any warranty, whether express or implied, on the part of the Attorney-in-fact as to the Attorney-in-fact's authority to act or as to the validity of the Power of Attorney; or (b) any assumption of personal liability by the Attorney- in-fact in executing any of the Documents and any of the Ancillary Documents. SCHEDULE 1 Name and address of Attorney-in-fact/s: IRA B. STECHEL c/- Wormser, Kiely, Galef & Jacobs, 825 Third Avenue, New York, NY, 10022, United States of America SCHEDULE 2 1 Stock Purchase Agreement by and among Ajuta International Pty. Ltd. ACN 062 230 648 as Trustee of the Hypatia Trust ('Seller') and EPIQ Systems, Inc. or a member of the EPIQ Systems, Inc. group of companies ('Buyer'). 2 Registration Rights Agreement by the Seller and the Buyer. 3 Escrow Agreement among the Buyer, the seller and the Escrow Agent (as defined in the Stock Purchase Agreement). 4 Transfer Form from Seller to Buyer in respect of 1,000 Ordinary Shares in the capital of nMatrix Australia Pty. Ltd. (ACN 104 027 410). 5 Transfer Form from Seller to Buyer in respect of all of the issued and outstanding shares of capital stock of nMatrix, Inc. Executed as a Deed Poll Executed by AJUTA INTERNATIONAL PTY. LTD. By its sole director and sole Company secretary Susan Lord Signature of sole director and sole company secretary Susan Penelope Lord Name of sole director and sole company secretary 4 -----END PRIVACY-ENHANCED MESSAGE-----