ESCROW AGREEMENT
| Escrow Agent: | XXXX X. XXXXXXXX |
| Escrowing Parties: | XXXXX XXXXXX, an individual residing in the State of Utah |
| XXXXX XXXXXXX, an individual residing in the State of Utah | |
| THE PI FOUNDATION, INC., a Utah nonprofit corporation | |
| KLEANGAS ENERGY TECHNOLOGIES, INC., a Delaware corporation | |
| FIBER RECOVERY, INC., a Wisconsin corporation |
Effective Date: July 22, 2014
1. Establishment of Escrow. Subject to all terms of this Escrow Agreement and in
accordance with separate Escrow Instructions that will be given to Escrow Agent by the
Escrowing Parties, Escrow Agent agrees to hold certain documents and other items and to
perform his obligations in accordance with the terms and provisions of this Escrow Agreement
and the Escrow Instructions. The Escrow Instructions are a part of this Escrow Agreement.
References herein to this Escrow Agreement are references to both this Escrow Agreement and
the Escrow Instructions. The documents, funds or other items from time to time deposited with
Escrow Agent hereunder are referred to herein as the “Escrowed Items”.
2. Responsibility for Performance by Escrowing Parties. Escrow Agent shall not be
responsible for any failure by any Escrowing Party to perform the Escrowing Party’s obligations
in accordance with this Escrow Agreement, the Escrow Instructions, the Stock Purchase
Agreement of even date herewith entered into by the Escrowing Parties (the “Stock Purchase
Agreement”) or any “Transaction Document” contemplated in the Stock Purchase Agreement, or
any related agreement.
3. Instructions to Escrow Agent. Escrow Agent shall be protected in acting upon any
written instruction given him by the Escrowing Parties, not only as to due execution and validity
and the effectiveness of any such instruction’s provisions, but also as to the truth and accuracy of
any information therein contained. Where emailed or other electronic instructions are permitted,
Escrow Agent may rely on the genuineness of messages purportedly coming from an email
address previously used by a party or specified by the party for the giving of notice without
further investigation. Should it be necessary for Escrow Agent to act upon any instructions,
directions, documents or instruments issued or signed by or on behalf of any corporation,
partnership, fiduciary or individual acting on behalf of any Escrowing Party, it shall not be
necessary for Escrow Agent to inquire into such Escrowing Party’s authority. Escrow Agent is
relieved of the necessity of satisfying himself as to the authority of the persons executing this
Escrow Agreement or any Escrow Instructions in a representative capacity on behalf of any of
the Escrowing Parties.
4. Escrow Agent’s Role as Legal Counsel. Escrow Agent and/or Escrow Agent’s
law firm is legal counsel to Xxxxx Xxxxxx, Xxxxx Xxxxxxx and The PI Foundation. Each of the
Escrowing Parties waives any conflict of interest that might be involved in that relationship as it
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may relate to the role of Escrow Agent hereunder. Escrow Agent shall be compensated for his
services by deducting his fees, at his normal hourly rates, from any Escrowed Items or funds
including xxxxxxx money, held by him. Each of the Escrowing Parties hereby waives any conflict
of interest that might otherwise be involved in Escrow Agent’s role under this Escrow
Agreement and Escrow Agent’s or his law firm’s past, present or future representation of Xxxxx
Xxxxxx, Xxxxx Xxxxxxx and The PI Foundation, and/or Escrow Agent’s past or present
representation of Fiber Recovery, Inc., and each Escrowing Party agrees that Escrow Agent and
his law firm shall be entitled to continue to represent Xxxxx Xxxxxx, Xxxxx Xxxxxxx and The PI
Foundation at all times in the future without any conflict of interest, regardless of whether any
dispute arises under this Escrow Agreement or any matter contemplated in this Escrow
Agreement.
5. Liability. Escrow Agent shall not be liable for anything which he may do or
refrain from doing in connection herewith, except for his own gross negligence, bad faith or
willful misconduct.
6. Escrow Agent’s Legal Counsel. Escrow Agent may consult with, and obtain
advice from, legal counsel (which may include other attorneys in Escrow Agent’s law firm at
their standard hourly rate) in the event of any question as to any of the provisions hereof or his
duties hereunder, and he shall incur no liability and shall be fully protected in acting in good
faith in accordance with the opinion and instructions of such counsel. The Escrowing Parties
(other than the PI Foundation) shall share equally, and shall pay upon written demand, the cost
and expense of any such consultation.
7. Limitation of Duties. Escrow Agent in his capacity as such shall have no duties
except those which are expressly set forth herein and in the Escrow Instructions signed by
Escrow Agent, and Escrow Agent shall not be bound by any other agreements of the Escrowing
Parties (whether or not Escrow Agent has any knowledge thereof) nor shall any additional duties
be implied. Escrow Agent shall not be deemed a fiduciary of any Escrowing Party.
Notwithstanding any other provision of this Escrow Agreement, in no event shall Escrow Agent
be liable, directly or indirectly, for any (a) damages or expenses arising out of the services
provided hereunder, or (b) special or consequential damages, even if Escrow Agent has been
advised of the possibility of such damages. Except as specifically set forth in Section 4 of this
Escrow Agreement, neither Escrow Agent nor his law firm is acting as legal counsel to any
Escrowing Party.
8. Resignation or Termination of Escrow Agent. Escrow Agent shall have the right
to resign at any time by giving five days prior written notice of such resignation to the Escrowing
Parties. The Escrowing Parties shall have the right to terminate the services of Escrow Agent
hereunder at any time by giving joint, written notice (with such written notice being signed by
each of the Escrowing Parties) of such termination to Escrow Agent, in each case specifying the
effective date of such resignation or termination. Within five days after receiving or delivering
the aforesaid notice, as the case may be, the Escrowing Parties will appoint a successor escrow
agent to which Escrow Agent shall distribute the property then held hereunder in accordance
with the terms hereof, less any fees and expenses that may be payable to Escrow Agent. If a
successor escrow agent has not been appointed and accepted such appointment by the end of
such five day period, Escrow Agent may interplead the Escrowed Items or otherwise deliver or
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apply to any court of competent jurisdiction for the appointment of a successor escrow agent, and
the reasonable costs and expenses which are incurred in connection with any such proceeding
shall be paid out of the Escrowed Items or by the Escrowing Parties, jointly and severally.
Except as otherwise agreed in writing by the Escrowing Parties, the resignation or termination of
Escrow Agent shall not cause or permit any Escrowed Items to be released from this Escrow
Agreement unless interpleaded with the court or unless and until a successor escrow agent has
been appointed in accordance with this Section 8. Upon interpleader or the appointment of a
successor escrow agent and the delivery of all Escrowed Items held hereunder (other than fees
and expenses payable to Escrow agent) to such successor escrow agent, Escrow Agent shall be
released from any and all liabilities arising hereunder.
9. Discharge of Escrow Agent. Upon delivery of all of the Escrowed Items pursuant
to the terms of Section 8 above or pursuant to the Escrow Instructions, Escrow Agent shall
thereafter be discharged from any further obligations hereunder. Escrow Agent is hereby
authorized, in any and all events, to comply with and obey any and all judgments, orders and
decrees of any court of competent jurisdiction which may be filed, entered or issued, and all final
arbitration awards and, if he shall so comply or obey, he shall not be liable to any other person
by reason of such compliance or obedience.
10. Interpleading of Assets upon Dispute. In the event that (a) any dispute shall arise
between the Escrowing Parties with respect to the disposition or disbursement of any of the
Escrowed Items held hereunder, or (b) Escrow Agent shall be uncertain as to how to proceed in a
situation not explicitly addressed by the terms of this Escrow Agreement whether because of
conflicting demands by the Escrowing Parties hereto or otherwise, or (c) for any other reason in
Escrow Agent’s sole discretion, Escrow Agent shall be entitled to interplead all of the Escrowed
Items held hereunder to a court of competent jurisdiction, and thereafter Escrow Agent shall be
fully relieved from any and all liability or obligation with respect to such interpleaded assets or
compliance with the terms of this Escrow Agreement or any Escrow Instructions. The Escrowing
Parties agree to pursue any redress or recourse in connection with such a dispute, without making
Escrow Agent a party to the same, and agree to waive and hereby waive any potential conflicts
of interest Escrow Agent may have with relation to Escrow Agent’s relationship with any
Escrowing Party hereto, and, provided that Escrow Agent has interplead the assets held
hereunder according to this Section 10, each of the Escrowing Parties hereby specifically waives
any objection to Escrow Agent acting as legal counsel to Xxxxx Xxxxxx, Xxxxx Xxxxxxx or The PI
Foundation with relation to any dispute arising hereunder or to any matters relating to the
Transaction Documents.
11. Agents of Escrow Agent. Escrow Agent shall have the right to perform any of his
duties hereunder through agents, attorneys, custodians or nominees.
12. Garnishment of Escrowed Items. If any of the Escrowed Items shall be attached,
garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined
by an order of a court, or any order, judgment or decree shall be made or entered by any court
order affecting the property deposited under this Escrow Agreement, Escrow Agent is hereby
expressly authorized, in his sole discretion, to obey and comply with all writs, orders or decrees
so entered or issued, which he is advised by legal counsel of his own choosing is binding upon
him, whether with or without jurisdiction, and in the event that Escrow Agent obeys or complies
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with any such writ, order or decree he shall not be liable to any of the Escrowing Parties hereto
or to any other person, firm or corporation, by reason of such compliance notwithstanding such
writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.
13. Indemnification. The Escrowing Parties agree, severally and jointly, to indemnify
Escrow Agent for and to hold him harmless from and against any loss, liability or reasonable
expense (including reasonable attorneys’ fees and expenses, including fees of Escrow Agent’s
law firm) incurred by Escrow Agent arising out of or in connection with his performance under
this Escrow Agreement. Escrow Agent shall have a lien or right of setoff on all funds, monies or
other assets held hereunder to pay all of his fees and reimbursable expenses or fees or any other
item payable to or for Escrow Agent as permitted under this Escrow Agreement. The obligations
of the Escrowing Parties under this Section 13 shall survive the termination of this Escrow
Agreement or the resignation or removal of Escrow Agent for any reason.
14. Escrow Costs. Escrow Agent shall be entitled to be paid fees for his services
under this Escrow Agreement, and in addition to such fee to be reimbursed for his reasonable
costs and expenses incurred in connection with maintaining the Escrowed Items hereunder.
Escrow Agent shall be entitled and is hereby granted the right to set off and deduct from the
Escrowed Items any unpaid fees, non-reimbursed expenses and unsatisfied indemnification
rights from such Escrowed Items, and Escrow Agent may include in any deduction from the
Escrowed Items any bank imposed fee related to the wire-transfer of funds to Escrow Agent’s
account. In the event that Escrow Agent is made a party to litigation with respect to any Escrow
Item or this Escrow Agreement, or brings an action in interpleader or in the event that the
conditions of the Escrow Instructions are not promptly fulfilled, or Escrow Agent is required to
render any service not provided for in this Escrow Agreement, or there is any assignment of the
interest of this escrow or any modification hereof, Escrow Agent shall be entitled to reasonable
compensation for all such services and reimbursement for all fees, costs, liability and expenses,
including reasonable attorneys’ fees.
15. Limitations on Rights to Escrowed Items. None of the Escrowing Parties shall
have any right, title or interest in or to, or possession of, the Escrowed Items and therefore shall
not have the ability to pledge, convey, hypothecate or grant as security all or any portion of the
Escrowed Items unless and until such Escrowed Items have been released pursuant to applicable
provisions of this Escrow Agreement. Accordingly, Escrow Agent shall be in sole possession of
the Escrowed Items and shall not act as custodian or agent of the Escrowing Parties under this
Escrow Agreement for the purposes of perfecting a security interest therein, and no creditor of
any of the Escrowing Parties shall have any right to have or to hold or otherwise attach or seize
all or any portion of the Escrowed Items as collateral for any obligation and shall not be able to
obtain a security interest in any of the Escrowed Items unless and until such Escrowed Items
have been released pursuant to applicable provisions of this Escrow Agreement.
16. Notice. Any notice required or permitted to be given hereunder shall be made in
the same manner as notices under the Stock Purchase Agreement. Notices to any Escrowing
Party shall be delivered to the address of such party specified in the Stock Purchase Agreement.
Notices to Escrow Agent shall be delivered to Xxxx X. Xxxxxxxx, Xxxxxxxxx Xxxxxxx &
XxXxxxxxxx, 2180 S. 0000 Xxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000.
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17. Governing Law, Jurisdiction and Venue. This Escrow Agreement shall be
governed by and interpreted under the laws of the State of Utah. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising from this Escrow
Agreement, the parties hereto agree to the exclusive personal jurisdiction by and exclusive venue
in the state and federal courts in the State of Utah and waive any objection to such jurisdiction or
venue. The parties hereto consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept service of process to vest personal jurisdiction over them in
any of these courts.
IN WITNESS WHEREOF, the Escrowing Parties have executed and delivered this
Agreement on the dates set forth below, to be effective as of the Effective Date.
| Date: | |||
| XXXXX XXXXXX, an individual residing in the State of Utah | |||
| Date: | |||
| XXXXX XXXXXXX, an individual residing in the State of Utah | |||
| THE PI FOUNDATION, INC., a Utah nonprofit corporation | |||
| Date: | By: | ||
| Name: | Xxxxx X. XxXxxxxxxx | ||
| Title: | Executive Director | ||
| KLEANGAS ENERGY TECHNOLOGIES, INC., a Delaware corporation | |||
| Date: | By: | ||
| Name: | |||
| Title: |
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FIBER RECOVERY, INC., a Wisconsin
corporation
| Date: | By: | ||
| Name: | |||
| Title: |
Accepted and agreed to on the date set forth below, to be effective as of the Effective Date.
| Date: | ||
| XXXX X. XXXXXXXX, Escrow Agent |
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