ESCROW AGREEMENT
Exhibit 10.1
This Escrow Agreement made and entered into August 29, 2008, by and among Chicago Title
Company (the “Escrow Agent”), xxxxxXxxxxxx.xxx, Inc., a Delaware corporation (“CNS”), and Xxxxxx X.
Xxxxxx, M.D. and Xxxxxxx Xxxxxxxxxx (the “Members’ Representatives”) .
W I T N E S S E T H:
WHEREAS, each of CNS, Cardo Medical, LLC, a California limited liability company (“Cardo”),
and Cardo Acquisition, LLC, a California limited liability company that is a wholly owned
subsidiary of CNS (“Merger Sub”), have entered into a Merger Agreement and Plan of Reorganization,
dated as of June 18, 2008 (the “Merger Agreement”), that provides, upon the terms and subject to
the conditions thereof, for the merger of Merger Sub with and into Cardo, with Cardo being the
surviving entity and becoming a wholly owned subsidiary of CNS (the “Merger”).
WHEREAS, at the effective time of the Merger, all equity interests of Cardo beneficially owned
by each Cardo Member shall be converted into the right to receive and shall be exchanged for shares
of Parent Common Stock (as defined in the Merger Agreement) as set forth in the Merger Agreement.
WHEREAS, the Members’ Representatives have been appointed to act on behalf of all Historical
Cardo Members in connection with the Merger Agreement and this Agreement.
WHEREAS, this Escrow Agreement is entered into pursuant to Section 9.3 of the Merger
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the
parties hereto agree as follows:
1. Unless otherwise specifically defined herein, capitalized terms used in this Escrow
Agreement shall have the meanings ascribed to them in the Merger Agreement. Notwithstanding
anything in this Agreement to the contrary, the provisions of this Agreement shall not in any event
be construed so as to enlarge or diminish the rights of CNS or Cardo under the Merger Agreement and
in the event of a conflict between the provisions of this Agreement and the provisions of the
Merger Agreement, the provisions of the Merger Agreement shall govern.
2. CNS and the Members’ Representatives hereby appoint Chicago Title Company to act as the
Escrow Agent hereunder, and the Escrow Agent hereby agrees to accept the duties of Escrow Agent in
accordance with the terms and conditions of this Escrow Agreement. Pursuant to the appointment of
the Members’ Representatives by the Historical Cardo Members, Escrow Agent is authorized to accept,
act upon and rely upon any written notice, certificate, instrument, request, waiver, consent, paper
or other document executed by the Members’ Representatives, as properly signed and delivered on
behalf of all or any one of the Historical Cardo Members.
3. On the Closing Date, (a) CNS shall deposit with the Escrow Agent, simultaneously with the
execution and delivery of this Escrow Agreement, stock certificates registered in the names
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of the
Historical Cardo Members evidencing the Cardo Escrowed Securities as set forth on Exhibit A
attached hereto, which Exhibit A also lists the pro-rata share of the total number of Cardo
Escrowed Securities deemed deposited by each Historical Cardo Member (“Pro-Rata Share”) and (b)
each of the Historical Cardo Members shall deposit with the Escrow Agent an undated stock power
separate from the stock certificates representing the Cardo Escrowed Securities deposited by each
such Historical Cardo Member, endorsed in blank (“Cardo Member Stock Power”). During the Claim
Period, CNS also shall deposit with the Escrow Agent: (i) all distributions of stock or other
property or securities of CNS that may be issued with respect to the Cardo Escrowed Securities,
including but not limited to any shares of CNS stock issued as the result of any stock split,
reverse stock split, stock dividend, combination, recapitalization or similar transaction effected
by CNS; (ii) any other earnings or interest paid with respect to the Cardo Escrowed Securities; and
(iii) concurrently with the deposit of such property or funds, a list of the allocation of such
property or funds among the Historical Cardo Members in the same format as Exhibit A
hereto. CNS shall give each Historical Cardo Member notice of any such deliveries made to the
Escrow Agent, and the Members’ Representatives shall cause each Historical Cardo Member to deposit
with the Escrow Agent within ten (10) business days of such notice, an undated stock power
representing any new distributions of stock or securities of CNS deposited with the Escrow Agent.
Hereinafter, when the context so requires, the term “Cardo Escrowed Securities” shall include any
additional shares of CNS stock deposited pursuant to subpart (i) of this Section 3, and all Cardo
Escrowed Securities with any property or funds deposited pursuant to subpart (ii) of this Section
3, including without limitation any interest earned thereon, shall collectively be referred to as
the “Escrowed Property”. The Escrowed Property shall provide security for the payment of any
Damages incurred by any Parent Indemnified Party as finally determined in accordance with Cardo’s
indemnification obligations set forth in Section 9.2(b) of the Merger Agreement (“Cardo
Indemnification Obligations”).
4. Upon CNS’s delivery of the Cardo Escrowed Securities to Escrow Agent, Escrow Agent shall
deliver written confirmation and acknowledgement of receipt of the Cardo Escrowed Securities to CNS
and the Members’ Representative and Escrow Agent agrees to thereafter hold and disburse the
Escrowed Property in accordance with the terms hereof. Escrow Agent shall maintain records and an
account for each Historical Cardo Member showing the number of Cardo Escrowed Securities of each
Historical Cardo Member held by the Escrow Agent from time to time. Upon the reasonable request of
CNS or the Members’ Representatives, the Escrow Agent shall make such records available for
inspection and copying by CNS, the Members’ Representatives or their authorized representatives.
5. The Escrowed Property will be held for the benefit of the parties hereto and will not be
subject to any lien or attachment of any other creditor of any party hereto and will be used solely
for the purposes and subject to the conditions set forth herein.
6. The Members’ Representatives, on behalf of the Historical Cardo Members, hereby grant
(effective as of the date hereof) CNS a first priority security interest in, and hereby pledge and
assign to CNS all of the Historical Cardo Members’ right, title and interest in and to the Escrowed
Property to secure the Cardo Indemnification Obligations to the Parent Indemnified Parties.
The Escrow Agent hereby agrees to act as bailee and possessory agent on behalf of CNS in respect of
its security interest in the Historical Cardo Members’ rights in and to the Escrowed Property. The
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Escrow Agent shall, upon receipt of indemnification satisfactory to it from CNS for its fees and
expenses incurred in connection with taking such actions, take all actions as may be reasonably
requested in writing of it by CNS to further perfect or maintain the security interest created by
the Historical Cardo Members hereunder in and to the Escrowed Property. Such security interest
shall automatically be released with respect to any Escrowed Property distributed pursuant to the
terms of this Escrow Agreement. The parties hereto agree and acknowledge that the establishment
and maintenance of the escrow hereunder (“Escrow”) is intended to constitute possession of the
Escrowed Property for the purposes of perfecting the security interest therein created by this
Section 6.
7. Notwithstanding anything in Section 3 to the contrary, while any Escrowed Property is held
in Escrow: (a) the Historical Cardo Members will be entitled to receive all cash dividends
declared in connection with any Cardo Escrowed Securities, and CNS shall deliver any such cash
dividends directly to the Historical Cardo Members and not to or through the Escrow Agent; and (b)
the Historical Cardo Members will be entitled to vote the Cardo Escrowed Securities so held and to
give consents, waivers and ratifications in respect of such shares; provided, however, that no vote
shall be cast or consent, waiver or ratification given, or action taken which would be inconsistent
with or violate any provision of this Escrow Agreement, the Merger Agreement or any of the
transactions contemplated by the Merger Agreement.
8. The Escrow Agent shall hold the Escrowed Property in Escrow until authorized hereunder to
deliver the same or any portion thereof as follows:
(a) At any time within one (1) year from the date hereof (the “Claim Period”), CNS , on behalf
of a Parent Indemnified Party, may give written notice to the Escrow Agent and the Members’
Representatives that it is asserting a claim against the Escrowed Property pursuant to Section
9.2(b) of the Merger Agreement (a “Claim”). In each notice of such a Claim (“Claim Notice”), CNS
shall provide to the Escrow Agent and the Members’ Representative: (i) a statement of the amount
of Escrowed Property CNS has estimated, in accordance with Section 9 of the Merger Agreement and
Section 10 hereof, is reasonably required to secure payment of the Claim; and (ii) the basis for
such Claim in sufficient detail for the Members’ Representatives to understand the nature of the
Claim and the alleged facts upon which the Claim is based.
(b) The Members’ Representatives shall have 30 days from receipt of a Claim Notice (“Notice
Period”) to approve or object to a Claim, in whole or in part, by delivering written notice of such
approval or objection to the Escrow Agent and CNS. If at any time the Members’ Representatives
deliver written notice of approval of a Claim or any portion thereof, the full amount of the Claim
as provided in the Claim Notice, or such portion approved by the Members’ Representatives, shall be
deemed conclusively and irrevocably approved and the Escrow Agent shall be authorized to release
and deliver to CNS, subject to the provisions of and in the manner provided in Section 9 hereof,
the Escrowed Property or such portion thereof sufficient to satisfy the Claim as provided in the
Claim Notice or such portion approved by the Members’ Representatives. If within the Notice Period
the Members’ Representatives deliver written notice of objection to a Claim
(“Objection”), or fail to deliver notice of either an approval of or an Objection to a Claim,
such Claim shall be deemed to be contested.
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(c) All contested Claims or portions thereof shall remain pending, the Escrow Agent shall
maintain in Escrow the Escrowed Property or such portion thereof as is estimated in the Claim
Notice as necessary to satisfy the Claim, and the Escrow Agent, without concerning itself as to the
grounds for any Objection, shall not disburse the Escrowed Property or any portion thereof to
satisfy any contested Claim or portion thereof, until there has been a “Determination” of the Claim
in accordance with the provisions of Section 9 hereof, notwithstanding the expiration of
the Claim Period.
(d) Within three business days after the Determination of a Claim in favor of a Parent
Indemnified Party in accordance with the provisions of Section 9(a) hereof, the Escrow
Agent shall deliver to CNS, on behalf of the applicable Parent Indemnified Party, Escrowed Property
having a value (as determined in accordance with Section 10 hereof) equal to the amount of
such Determination, as follows.
(i) If the value of the Claim so payable is equal to or greater than the Escrowed Property
then held by the Escrow Agent, the Escrow Agent shall deliver to CNS all of the Escrowed Property
then held by it, by: (A) completing each Cardo Member Stock Power for the full number of Cardo
Escrowed Securities then held by the Escrow Agent for each Historical Cardo Member; (B) delivering
each such completed Cardo Member Stock Power and all of the certificates for the Cardo Escrowed
Securities then held by the Escrow Agent to CNS; and (C) delivering any remaining Escrowed Property
to CNS.
(ii) If the value of the Claim so payable is less than the Escrowed Property then held by the
Escrow Agent, the Escrow Agent shall deliver to CNS Escrowed Property having a value equal to the
Determination, as follows, and in the following order.
(A) The Escrow Agent shall deliver any Escrowed Property other than the Cardo Escrowed
Securities to CNS.
(B) The Escrow Agent shall calculate (“Disbursement Calculation”) (I) the total number of
Cardo Escrowed Securities required to satisfy the balance of the Claim as provided in the
Determination of Claim, (II) the Pro-Rata Share of such balance of each Historical Cardo Member and
(III) the number of Cardo Escrowed Securities that will remain on deposit in Escrow for each
Historical Cardo Member after subtracting each such Pro-Rata Share (“Pro-Rata Balance”). Upon
request by Escrow Agent to CNS and the Members’ Representative, CNS and/or the Members’
Representative shall provide to Escrow Agent the average closing price per share of the Parent
Common Stock on the OTCBB or Eligible Market, as applicable, for the 10-day period ending on the
day prior to the date of Determination of the Claim, for Escrow Agent’s use in calculating the
Disbursement Calculation. Upon finalizing the Disbursement Calculation, Escrow Agent shall give CNS
and the Members’ Representatives written notice of the Disbursement Calculation, which notice shall
include (1) the date of Determination of the Claim, (2) the resulting value of the Cardo Escrowed
Securities used for the Disbursement Calculation pursuant to Section 10 hereof, and (3) the results
of the calculations set forth in subparts (I), (II) and (III) of this Section 8(d)(ii)(B). CNS
and the Members’ Representatives shall have ten days following receipt of such notice to verify the
accuracy of each of the items set forth in the notice and the Disbursement Calculation and to
deliver written notice to the Escrow Agent and the other party of any perceived
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errors or
inaccuracies therein (“Error Notice”). If neither CNS nor the Members’ Representatives deliver an
Error Notice within such ten days, CNS and the Members’ Representatives shall be deemed to have
approved the Disbursement Calculation. If either CNS or the Members’ Representatives deliver an
Error Notice within such ten days, the Escrow Agent shall not make any further disbursements with
respect to the Claim until it has corrected such errors or inaccuracies and/or each of the Escrow
Agent, CNS and the Members’ Representatives have agreed to and accepted the Disbursement
Calculation or CNS or the Members’ Representatives have delivered a certified copy of a final
arbitration award or a certified copy of a judgment or order of a court of competent jurisdiction
determining the Disbursement Calculation.
(C) Following the deemed approval or mutual approval of the Disbursement Calculation: (I)
CNS shall deposit with the Escrow Agent new stock certificates registered in the name of each
Historical Cardo Member for the number of Cardo Escrowed Securities equal to each such Historical
Cardo Member’s Pro-Rata Balance (“New Stock Certificates”); and (II) the Members’ Representatives
shall cause each Historical Cardo Member to deposit with the Escrow Agent new undated stock powers,
with respect to the New Stock Certificates, endorsed in blank (“New Stock Powers”).
(D) When the Escrow Agent has received all of the New Stock Certificates, the Escrow Agent
shall complete each original Cardo Member Stock Power for the number of Cardo Escrowed Securities
equal to each Historical Cardo Member’s Pro-Rata Share and deliver each such completed Cardo Member
Stock Power and all of the stock certificates for the Cardo Escrowed Securitas then held by the
Escrow Agent, other than the New Stock Certificates, to CNS.
(E) Following such deliveries, the Escrow Agent shall hold the New Stock Certificates and the
New Stock Powers, and any additional Escrowed Property subsequently received, in Escrow until the
expiration of the Claim Period or, in the event there are Claims which have not yet been Determined
as of the expiration of the Claim Period, until the final Determination of all such Claims (such
date, as applicable, the “Escrow Release Date”); provided, however, that if the aggregate amount of
any such pending Claims as provided in the corresponding Claim Notices is less than the value of
the Escrowed Property on the date of the expiration of the Claim Period, or if there is more than
one such pending Claim and following Determination and (if required) payment of any one Claim the
value of the remaining Escrowed Property is more than the aggregate amount of the remaining pending
Claim(s), all Escrowed Property in excess of such aggregate amount shall be distributed to the
Historical Cardo Members within three (3) business days after the expiration of the Claim Period or
the date of Determination of the resolved Claim, as applicable, based upon their respective
Pro-Rata Shares.
(e) In the event of the Determination of a Claim in favor of the Historical Cardo Members in
accordance with Section 9(b), the Escrow Agent shall continue to hold the Escrowed Property
in connection with such Determination in Escrow until the Escrow Release Date.
(f) The Escrow Agent shall deliver to the Historical Cardo Members all Escrowed Property (if
any) remaining in Escrow hereunder within three (3) business days after the Escrow Release Date.
Such deliveries to the Historical Cardo Members shall be based upon their respective Pro-Rata
Shares.
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9. The “Determination” of a Claim asserted hereunder pursuant to Section 8(d) hereof
shall be made as follows (and the correlative term “Determined” shall have a correlative meaning):
(a) The Claim (or a portion thereof) shall be deemed to have resulted in a Determination in
favor of a Parent Indemnified Party upon delivery to the Escrow Agent of: (i) the written consent
of the Members’ Representatives to the disbursement by Escrow Agent to CNS of the amount provided
in a Claim Notice; (ii) the delivery by the Members’ Representatives and CNS to the Escrow Agent of
a joint written notice revising the amount provided in a Claim Notice and instructing the Escrow
Agent to disburse such revised amount; or (iii) the receipt of a certified copy of a final
arbitration award or a certified copy of a judgment or order of a court of competent jurisdiction
determining that a Parent Indemnified Party is entitled to Damages with respect to a Claim, and
setting forth the amount of such Damages, together with a certificate executed by CNS that such
award, judgment or order is final and non-appealable (a copy of which also shall be provided to the
Members’ Representatives at the time sent to the Escrow Agent).
(b) The Claim (or a portion thereof) shall be deemed to have resulted in a Determination in
favor of the Historical Cardo Members upon delivery to the Escrow Agent of: (i) a joint written
notice from CNS and the Members’ Representatives that CNS is withdrawing a Claim or any specified
portion thereof; or (ii) a certified copy of a final arbitration award or a certified copy of a
judgment or order of a court of competent jurisdiction denying the Claim or any specified portion
thereof together with a certificate executed by the Members’ Representatives that such award,
judgment or order is final and non-appealable (a copy of which shall also be provided to CNS at the
time sent to the Escrow Agent).
10. Escrowed Property being delivered to CNS pursuant to Section 8(d) hereof in
respect of a Claim shall be valued on the basis of current market value at the date of
Determination of the Claim. If the Escrowed Property being delivered consists in whole or in part
of shares of Parent Common Stock, the per share current market value of any such shares shall be
deemed to be the average closing price per share of the Parent Common Stock on the OTCBB or
Eligible Market, as applicable, for the 10-day period ending on the day prior to such
Determination. To the extent the Escrowed Property consists of a mixture of Parent Common Stock,
funds or other property, the Escrow Agent shall make all determinations as to the form in which the
Escrowed Property is to be disbursed, which determinations shall be conclusive and binding on the
parties
11. The term of this Escrow Agreement shall commence on the date the Cardo Escrowed Securities
and Cardo Member Stock Powers are deposited with the Escrow Agent and shall remain in full force
and effect until the Escrow Agent has delivered all the Escrowed Property in its possession in
accordance with the terms hereof.
12. The Escrow Agent may act in reliance upon any writing, notice, documentation, instrument
or signature which it believes to be genuine; may assume the validity and accuracy of any
statements or assertions contained in such writing, notice, documentation or instrument; and
may assume that any person purporting to give any writing, notice, advice or instruction in
connection with the provisions hereof has been duly authorized to do so. The Escrow Agent makes no
representation as to the validity, value, genuineness or collectibility of any security or other
document or instrument held by or delivered to it and shall not be liable in any manner for the
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sufficiency or correctness as to form, manner of execution, or validity of any written instructions
delivered to it; nor as to the identity, authority, or rights of any person executing the same.
The duties of the Escrow Agent are only as herein specifically provided, and are purely ministerial
in nature. 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 in connection
herewith, including, without limitation, the Merger Agreement and shall be required to act in
respect of the Escrowed Property only as provided in this Escrow Agreement. This Escrow Agreement
sets forth all the obligations of the Escrow Agent with respect to any and all matters pertinent to
the escrow contemplated hereunder and no additional obligations of the Escrow Agent shall be
implied from the terms of this Escrow Agreement or any other agreement. The Escrow Agent shall
incur no liability in connection with the discharge of its obligations under this Escrow Agreement
or otherwise in connection therewith, except such liability as may arise from the willful
misconduct of the Escrow Agent.
13. The Escrow Agent may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it hereunder in
accordance with the opinion of such counsel.
14. The Escrow Agent is acting as a stakeholder only with respect to the Escrowed Property.
If any dispute arises as to whether the Escrow Agent is obligated to deliver the Escrowed Property
or as to whom the Escrowed Property is to be delivered or the amount thereof, the Escrow Agent
shall not be required to make any delivery, but in such event, the Escrow Agent may hold the
Escrowed Property until receipt by the Escrow Agent of instructions in writing, signed by all
parties which have, or claim to have, an interest in the Escrowed Property, directing the
disposition of the Escrowed Property, or in the absence of such authorization, the Escrow Agent may
hold the Escrowed Property until receipt of a certified copy of a final judgment of a court of
competent jurisdiction providing for the disposition of the Escrowed Property. The Escrow Agent
may require, as a condition to the disposition of the Escrowed Property pursuant to written
instructions, indemnification and/or opinions of counsel, in form and substance satisfactory to the
Escrow Agent, from each party providing such instructions. If such written instructions,
indemnification and opinions are not received, or proceedings for such determination are not
commenced, within thirty (30) days after receipt by the Escrow Agent of notice of any such dispute
and diligently continued, or if the Escrow Agent is uncertain as to which party or parties are
entitled to the Escrowed Property, Escrow Agent may either (i) hold the Escrowed Property until
receipt of (X) such written instructions and indemnification or (Y) a certified copy of a final
judgment of a court of competent jurisdiction providing for the disposition of the Escrowed
Property, or (ii) deposit the Escrowed Property in the registry of a court of competent
jurisdiction; provided, however, that notwithstanding the foregoing, Escrow Agent may, but shall
not be required to, institute legal proceedings of any kind. The Escrow Agent shall be indemnified
pursuant to the provisions of Section 16 hereof for all costs and reasonable attorneys’
fees incurred by it in its capacity as escrow agent in connection with any such
action and shall be fully protected in suspending all or any part of its activities under this
Escrow Agreement until a final judgment in such action is resolved.
15. The Escrow Agent may resign at any time upon the giving of thirty (30) days written notice
to the other parties of this Escrow Agreement. Upon such resignation, CNS and the Members’
Representatives shall jointly appoint a successor escrow agent, who shall assume the
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duties of
Escrow Agent hereunder by supplement hereto. If a successor escrow agent is not appointed within
ten (10) days after notice of resignation, the Escrow Agent may petition any court of competent
jurisdiction to name a successor escrow agent. CNS and the Members’ Representatives may, at any
time, appoint a successor escrow agent upon fifteen (15) days prior written notice to the Escrow
Agent executed by CNS and the Members’ Representatives.
16. The parties shall pay escrow fees, and provide indemnification and defense, as follows.
(a) Concurrently with the delivery of this Agreement and the Cardo Escrowed Securities to the
Escrow Agent, CNS and Cardo shall pay to the Escrow Agent $750.00 as the Escrow fee for the first
year of the Escrow, 50% of which each of CNS and Cardo shall pay.
(b) If the Escrow continues for more than one year after its opening date, on the first
anniversary of the opening of Escrow and the first day of each month thereafter until the Escrow
Release Date, CNS shall pay to the Escrow Agent $50.00 as the monthly Escrow fee, upon receipt from
the Escrow Agent of an invoice for such amount.
(c) For each Claim Notice that CNS delivers to the Escrow Agent, the Escrow Agent shall be
entitled to a fee of $500 for processing such Claim, which CNS shall pay to Escrow Agent
concurrently with delivery of the Claim Notice; provided, however, that if the Escrow Agent
ultimately delivers Escrowed Property to CNS in satisfaction of such Claim, the Escrow Agent shall
add $500 to the value of the Claim to determine the amount of Escrowed Property to disburse to CNS,
to thereby reimburse CNS for such $500.
(d) CNS shall indemnify and hold the Escrow Agent harmless from any and all claims,
liabilities, losses, actions, suits, proceedings at law or in equity, or any other expenses, fees
or charges of any nature whatsoever, which it may incur or with which it may be threatened by
reason of its acting as Escrow Agent under this Escrow Agreement; and in connection therewith CNS
shall indemnify the Escrow Agent against any and all expenses including reasonable attorneys’ fees
and the costs of defending any action, suit or proceedings or resisting any claim in such capacity;
provided, however, that in the event of a dispute between CNS and the Members’ Representatives, the
nonprevailing party shall indemnify and hold the prevailing party harmless against any and all
costs and expenses incurred by the prevailing party pursuant to the provisions hereof, including
without limitation attorneys fees and costs and all cost incurred in connection with indemnifying
and defending Escrow Agent under this Section 16 in connection with such dispute.
17. This Escrow Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Delaware without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Delaware.
18. This Escrow Agreement represents the entire agreement between the Escrow Agent, on the one
hand, and CNS and the Members’ Representatives, on the other hand, with respect to the subject
matter hereof and shall be binding upon the parties, their respective successors and permitted
assigns. This Escrow Agreement shall not be modified or amended except by an instrument in writing
signed by or on behalf of the parties hereto.
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19. Any notice pertaining to this Escrow Agreement shall be in writing and shall be deemed to
have been duly given or made as of the date delivered or sent if delivered personally or sent by
cable, telegram, telecopier or telex or sent by prepaid overnight carrier, to the respective
parties at the following address:
If to CNS:
xxxxxXxxxxxx.xxx, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Associates, P.A.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
and
Akerman Senterfitt
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Members’ Representatives:
Xxxxxx X. Xxxxxx, M.D.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
and
Xxxxxxx Xxxxxxxxxx
0000 XX Xxxxxxx 00 Xxxx
Xxxxx X000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
0000 XX Xxxxxxx 00 Xxxx
Xxxxx X000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
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Xxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to the Escrow Agent:
Chicago Title Company
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, CSEO
Fax: (000) 000-0000
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, CSEO
Fax: (000) 000-0000
or to such other address or addresses as any party hereto may designate in writing to the other
parties.
20. Except as otherwise specifically provided herein, nothing contained in this Agreement
shall limit or impair any right or remedy to which any of the parties hereto may be entitled under
the Merger Agreement or otherwise.
21. This Escrow Agreement may be executed in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the same instrument.
22. The parties hereto hereby agree to take any and all actions and to execute and deliver at
any time and from time to time such other documents and instruments as may reasonably be required
to effectuate the transactions contemplated hereby.
23. Neither this Escrow Agreement nor any rights, interests or obligations hereunder shall be
assigned by any party hereto without the prior written consent of the other parties hereto.
24. Nothing contained in this Escrow Agreement is intended or shall be construed to give any
person, corporation or other entity, other than the parties hereto and the Parent Indemnified
Parties and their respective successors and permitted assigns, any legal, equitable right, remedy
or claim under or in respect to this Escrow Agreement or any provision herein contained, this
Escrow
Agreement being intended to be and being for the sole and exclusive benefit of the parties
hereto and the Parent Indemnified Parties and their respective successors and permitted assigns.
[Signatures Appear on Following Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed
as of the date first above written.
| XXXXXXXXXXXX.XXX, INC. | ||
| By: /s/ Xxxxx X. Xxxxxxx | ||
| Name: Xxxxx X. Xxxxxxx | ||
| Title: President | ||
| MEMBERS’ REPRESENTATIVES: | ||
| By: /s/ Xxxxxx X. Xxxxxx, M.D. | ||
| Name: Xxxxxx X. Xxxxxx, M.D. | ||
| By: /s/ Xxxxxxx Xxxxxxxxxx | ||
| Name: Xxxxxxx Xxxxxxxxxx | ||
| ESCROW AGENT: | ||
| Chicago Title Company | ||
| By: /s/ Xxxxxx Xxxxxxx | ||
| Name: Xxxxxx Xxxxxxx | ||
| Title: Senior Escrow Officer |
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EXHIBIT A
HISTORICAL CARDO MEMBERS,
CARDO ESCROWED SECURITIES
AND PRO-RATA SHARES
CARDO ESCROWED SECURITIES
AND PRO-RATA SHARES
| Names and Addresses of | Cardo Escrowed | |||||||
| Historical Cardo Members | Securities | Pro-rata Shares | ||||||
Xxxxxx X. Xxxxxx, M.D., F.A.C.S. AAB Capital, Inc. 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000 Xxx Xxxxxxx, XX 00000 |
6,182,319 | 46.33 | % | |||||
Xxxxxxx Xxxxxxxxxx 00 Xxxxxxxxx Xxxxxx Xxxxxxx, XX 00000 |
2,891,665 | 21.67 | % | |||||
Xxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx Xxxxxxx Xxxxxxxxx, XX 00000 |
66,721 | 0.50 | % | |||||
CP Cardio, LLC Attn: Xxxxxx Xxxxxxx Centre Partners Management, LLC 00 Xxxxxxxxxxx Xxxxx Xxxxx 0000 Xxx Xxxx, XX 00000 |
200,162 | 1.50 | % | |||||
Xxxx Xxxxx and Xxxxx Xxx Xxxxx 0000 Xxxxxxx Xxxxx Xxxxxxx Xxxxxxxxx, XX 00000 |
200,162 | 1.50 | % | |||||
Xxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
733,926 | 5.50 | % | |||||
Xxxx Xxxxxx 0000 Xxxxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
100,081 | 0.75 | % | |||||
1
| Names and Addresses of | Cardo Escrowed | |||||||
| Historical Cardo Members | Securities | Pro-rata Shares | ||||||
Xxxxxxxx Xxxxxx and Xxxxxx Xxxxxx, Trustees, JSB Living Trust dated November 29, 2007 0000 Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
533,764 | 4.00 | % | |||||
X. Xxxx Xxxxxx XXX c/o Epic Medical Management 0000 Xxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx Xxxxx, XX 00000 |
200,162 | 1.50 | % | |||||
Xxxxxxx Xxxxx 00000 Xxxxxxxxx Xxxx, #000 Xxxxxxxxx, XX 00000 |
66,721 | 0.50 | % | |||||
Xxxxxxx Haddidi 0000 Xxxxxx xx xxx Xxxxx Xxxxx 0000 Xxx Xxxxxxx, XX 00000 |
133,441 | 1.00 | % | |||||
Xxxxx Xxxxxx c/o River Run Management 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 |
266,882 | 2.00 | % | |||||
Xxxxx X. Xxxxx 000 Xxxxxx Xxxxxx Xxx Xxxxxxx, XX 00000 |
133,441 | 1.00 | % | |||||
Xxxxxx Xxxxxx 00000 Xxxx Xxxxxx Xxxx Xxxxxx Xxxxx, XX 00000 |
66,721 | 0.50 | % | |||||
Xxxxxx Consulting, LLC Attn: Xxxx Xxxxxxxxx, MD 000 Xxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
600,485 | 4.50 | % | |||||
2
| Names and Addresses of | Cardo Escrowed | |||||||
| Historical Cardo Members | Securities | Pro-rata Shares | ||||||
Xxxxxx X. Xxxxxx 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX 80 110 |
333,602 | 2.50 | % | |||||
Xxxxx Xxxxxxx, Trustee, Xxxxxxx Family Trust 00000 Xxxxxxxx Xxxxxxxxx Xxxxx 0000 Xxx Xxxxxxx, XX 00000 |
133,441 | 1.00 | % | |||||
Xxxxxx Xxxxxxxx, Esq. For FedEx deliveries only: 0000 Xxxxxx Xxxx, #0000 Xxxx Xxxxxxxxx, XX 00000 For non-FedEx deliveries only: X.X. Xxx 00000 Xxxxxxx Xxxxx, XX 00000 |
66,721 | 0.50 | % | |||||
AB-Cardo ATM, LLC c/o Cambra Realty Attn: Xxxxxxx Xxxxxxxxxxx 0000 Xxxxxxxx Xxxxxxxxx, 00xx Xx. Xxxxxxx Xxxxx, XX 00000 |
333,602 | 2.50 | % | |||||
Xxxxx Xxxxx, Trustee, Xxxx and Xxxxx Xxxxx Family Trust 0000 X. Xxxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
100,081 | 0.75 | % | |||||
Total
|
13,344,100 | 100.00 | % | |||||
3
