EXHIBIT 2.9
EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of May 24, 2000 by and
among Sand Technology Inc., a corporation incorporated under the Canada Business
Corporations Act (the "Company"), AMRO International, S.A. (the "Investor") and
Xxxxxxx Xxxxxx & Green, P.C., (the "Escrow Agent"). Capitalized terms used but
not defined herein shall have the meanings set forth in the Common Shares and
Warrants Purchase Agreement referred to in the first recital.
W I T N E S S E T H:
WHEREAS, the Investor will purchase from the Company up to One Million Five
Hundred Thousand Dollars ($1,500,000) of Common Shares (the "Common Shares") and
Warrants, which will be issued as per the terms contained herein and pursuant to
the Common Shares and Warrants Purchase Agreement (the "Purchase Agreement")
dated the date hereof between the Investor and the Company; and
WHEREAS, it is intended that the purchase of the securities be consummated
in accordance with the requirements set forth by Sections 4(2) and/or 4(6)
and/or Regulation D promulgated under the Securities Act of 1933, as amended;
and
WHEREAS, the Company and the Investor have requested that the Escrow Agent
hold the Purchase Price with respect to the initial Closing in escrow until the
Escrow Agent has received the certificates representing the Common Shares, the
Warrants, and certain other closing documents specified herein;
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
the $1,500,000 of Common Shares and the Warrant to purchase up to 32,609 Common
Shares at the initial Closing as contemplated by the Purchase Agreement.
1.2. (a) At the initial Closing, upon the Escrow Agent's receipt of the
Purchase Price for the initial Closing into its attorney trustee account from
the Investor, together with executed counterparts of this Agreement, the
Purchase Agreement and the
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Registration Rights Agreement, it shall telephonically advise the Company, or
the Company's designated attorney or agent, of the amount of funds it has
received into its account.
(b) Wire transfers to the Escrow Agent shall be made as follows:
Xxxxxxx Xxxxxx & Green, P.C.
Master Escrow Account
Chase Manhattan Bank
0000 Xxxxxxxx - Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No. 000000000
Account No. 000-0-000000
Attention: L. Borneo
1.3. At the initial Closing, the Company, upon receipt of said notice,
shall deliver to the Escrow Agent the certificates representing the $1,500,000
of Common Shares and the Warrant to purchase up to 32,609 Common Shares to be
issued to the Investor at the initial Closing together with:
(i) the original executed Registration Rights Agreement in the
form of EXHIBIT B to the Purchase Agreement;
(ii) Instructions to Transfer Agent in the form of EXHIBIT E to
the Purchase Agreement;
(iii) the original executed opinion of Xxxxxxxx Xxxxxxxxx,
Professional Corporation and Xxxxxx deBilly, in the form of
EXHIBIT D to the Purchase Agreement;
(iv) a warrant certificate to purchase up to a number of shares
of the Company's Common Stock equal to 32,608 issued to
Ladenburg Xxxxxxxx & Co. Inc. (the "LT Warrant"). The LT
Warrant shall have a three (3) year term from its date of
issuance at an exercise price equal to 115% of the closing
bid price of the Company's Common Stock on the Trading Day
prior to the initial closing date; and
(v) an original counterpart of this Escrow Agreement.
In the event that the foregoing items are not in the Escrow Agent's
possession within three (3) Trading Days of the Escrow Agent notifying the
Company that the Escrow Agent has custody of the Purchase Price, then the
Investor shall have the right to demand the return of said sum.
1.4. At the initial Closing, once Escrow Agent confirms the validity of
the issuance of the Common Shares and the Warrant by means of its receipt of a
Release Notice
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in the form attached hereto as EXHIBIT X executed by the Company and the
Investor, it shall enter the Exercise Price, the Initial Exercise Date and the
Termination Date of LT Warrant on the face of the LT Warrant, as applicable, and
then wire that amount of funds necessary to purchase the Common Shares and the
Warrant per the written instructions of the Company, net of legal and escrow
fees of Five Thousand Dollars ($5,000) to Xxxxxxx Xxxxxx & Green, P.C. and net
of six percent (6%) of the Purchase Price as directed by Ladenburg Xxxxxxxx &
Co. Inc., as payment of their transaction fee. In the event that the Escrow
Agent has not received a Release Notice from the Investor at the initial
Closing, the Escrow Agent shall return to the Company all securities, agreements
and other material deposited by the Company pursuant to Section 1.3 of this
Agreement.
1.5. Once the funds (as set forth above) have been sent per the Company's
instructions, the Escrow Agent shall then arrange to have the Common Shares
certificates, the Warrant, the Registration Rights Agreement and the opinion of
counsel delivered as per instructions from the Investor and to deliver the
Instructions to Transfer Agent to the Transfer Agent and deliver the LT Warrant
to Ladenburg Xxxxxxxx & Co. Inc.
1.6 In the event that the foregoing items are not in the Escrow Agent's
possession within three (3) Trading Days of the Escrow Agent notifying the
Company that the Escrow Agent has custody of the Purchase Price, then the
Investor shall have the right to demand the return of said sum.
ARTICLE 2
MISCELLANEOUS
2.1. No waiver or any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed any extension of the time
for performance of any other obligation or act.
2.2. Except as otherwise set forth above, all notices or other
communications required or permitted hereunder shall be in writing, and shall be
sent as set forth in the Purchase Agreement.
2.3. This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.
2.4. This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be
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waived, except by written instrument signed by the parties to be charged or
by its agent duly authorized in writing or as otherwise expressly permitted
herein.
2.5. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
2.6. The parties hereto expressly agree that this Escrow Agreement shall
be governed by, interpreted under and construed and enforced in accordance with
the laws of the State of New York. Any action to enforce, arising out of, or
relating in any way to, any provisions of this Escrow Agreement shall only be
brought in a state or Federal court sitting in New York City.
2.7. The Escrow Agent's duties hereunder may be altered, amended, modified
or revoked only by a writing signed by the Company, the Investor and the Escrow
Agent.
2.8. The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith, and without gross negligence or willful misconduct.
2.9. The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
2.10. The Escrow Agent shall not be liable in any respect on account of the
identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder.
2.11. The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR THE
INVESTOR, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR
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THE INVESTOR, FROM TIME TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW
AGENT HEREUNDER. THE COMPANY CONSENTS TO THE ESCROW AGENT IN SUCH CAPACITY AS
LEGAL COUNSEL FOR THE INVESTOR AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION
REPRESENTS A CONFLICT OF INTEREST ON THE PART OF THE ESCROW AGENT. IN THE
EVENT OF ANY DISPUTE UNDER THIS ESCROW AGREEMENT IN WHICH XXXXXXX XXXXXX &
GREEN, P.C. ACTS AS COUNSEL FOR THE INVESTOR, IT SHALL RESIGN AND BE REPLACED
BY A SUCCESSOR ESCROW AGENT SELECTED BY THE COMPANY AND REASONABLY
SATISFACTORY TO THE INVESTOR. THE COMPANY UNDERSTANDS THAT THE INVESTOR AND
THE ESCROW AGENT ARE RELYING EXPLICITLY ON THE FOREGOING PROVISION IN
ENTERING INTO THIS ESCROW AGREEMENT.
2.12. The Escrow Agent's responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by written notice to the Company and
the Investor. In the event of any such resignation, the Investor and the Company
shall appoint a successor Escrow Agent.
2.13. If the Escrow Agent reasonably requires other or further instruments
in connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
2.14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (1) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned by a final order,
decree or judgment or a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but the Escrow Agent shall
be under no duty whatsoever to institute or defend any such proceedings or (2)
to deliver the escrow funds and any other property and documents held by the
Escrow Agent hereunder to a state or federal court having competent subject
matter jurisdiction and located in the City of New York in accordance with the
applicable procedure therefor.
2.15. The Company and the Investor agree jointly and severally to indemnify
and hold harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in any
way arising from or relating to the duties or performance of the Escrow Agent
hereunder or the transactions contemplated hereby or by the Purchase Agreement
other than any such claim, liability, cost or expense to the extent the same
shall have been determined by final, unappealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of this 24 May, 2000.
SAND TECHNOLOGY INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, Chairman & Chief
Executive Officer
INVESTOR:
AMRO INTERNATIONAL, S.A.
By: /s/ X.X. Xxxxxxxx
---------------------------------------
X.X. Xxxxxxxx, Director
ESCROW AGENT:
XXXXXXX XXXXXX & GREEN, P.C.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, Authorized Signatory
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EXHIBIT X TO
ESCROW AGREEMENT
RELEASE NOTICE
The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of May 24, 2000
among Sand Technology Inc., the Investor signatory thereto and Xxxxxxx Xxxxxx &
Green, P.C., as Escrow Agent (the "Escrow Agreement"; capitalized terms used
herein and not defined shall have the meaning ascribed to such terms in the
Escrow Agreement), hereby notify the Escrow Agent that each of the conditions
precedent to the purchase and sale of the Common Shares and Warrant set forth in
the Common Shares and Warrants Purchase Agreement have been satisfied. The
Company and the undersigned Investor hereby confirm that all of their respective
representations and warranties contained in the Purchase Agreement remain true
and correct and authorize the release by the Escrow Agent of the funds and
documents to be released at the initial Closing as described in the Escrow
Agreement. This Release Notice shall not be effective until executed by the
Company and the Investor.
This Release Notice may be signed in one or more counterparts, each of
which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be
duly executed and delivered as of this 24 day of May, 2000.
SAND TECHNOLOGY INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx, Chairman & Chief
Executive Officer
INVESTOR:
AMRO INTERNATIONAL, S.A.
By: /s/ X.X. Xxxxxxxx
-----------------------------------
X.X. Xxxxxxxx, Director
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