EXHIBIT 10.6
ESCROW AGREEMENT
United Heritage Corporation, a Utah corporation ("Issuer") Lothian Oil,
Inc., a Delaware corporation ("Purchaser"), Almac Financial Corporation
("Almac") and Community Bank ("Escrow Agent") together agree as follows:
RECITALS
A. On August 10, 2005, the Issuer and the Purchaser signed a letter of
intent pursuant to which the Issuer agreed to sell to the Purchaser 3,280,000
shares of its common stock, $0.0001 par value (the "Common Stock"), at a price
of $1.05 per share for a total purchase price of $3,444,000.
B. The Issuer, the Purchaser and Almac wish to appoint the Escrow Agent as
their agent to assist with the purchase and sale of the Common Stock in
accordance with the terms of this Escrow Agreement.
Therefore, the Issuer, the Purchaser, Almac and the Escrow Agent agree as
follows:
AGREEMENT
1. APPOINTMENT. The Issuer, Almac and the Purchaser hereby appoint the
Escrow Agent to serve as Escrow Agent for the purposes set forth herein and the
Escrow Agent hereby accepts the appointment.
2. DEPOSITS BY THE PURCHASER FOR THE BENEFIT OF THE ISSUER. Within three
business days from the execution of this Agreement, the Purchaser shall deposit
with the Escrow Agent good and immediately available funds totaling $3,444,000
(the "Purchase Price"). Escrow Agent will place the Purchase Price into an
interest bearing account.
3. DEPOSITS BY THE ISSUER FOR THE BENEFIT OF THE PURCHASER. Within three
business days from the execution of this Agreement, the Issuer shall deposit
with the Escrow Agent (i) a certificate for 3,280,000 shares of the Issuer's
Common Stock; (ii) a duly executed Warrant for the purchase by the Purchaser of
2,860,000 shares of the Issuer's Common Stock at a purchase price of $1.05 per
share; (iii) a duly executed Warrant for the purchase by the Purchaser of
3,000,000 shares of the Issuer's Common Stock at a purchase price of $1.12 per
share; and (iv) a duly executed Warrant for the purchase by the Purchaser of
2,860,000 shares of the Issuer's Common Stock at a purchase price of $1.25 per
share (collectively, the Warrants described in sub-sections (ii), (iii) and (iv)
will be referred to as the "Warrants").
4. DEPOSITS BY ALMAC. Within three days from the execution of this
Agreement, Almac shall deposit with the Escrow Agent (i) a demand for repayment
of a currently outstanding loan from Almac to the Issuer (the "Demand for
Payment") and (ii) any and all documents necessary to release and/or extinguish
the liens granted by the Issuer in favor of Almac to secure said loan (the
"Almac Lien Releases").
5. CLOSE OF ESCROW. Upon receipt of a written instruction authorizing the
Escrow Agent to close the escrow, which written instruction must be executed by
the Issuer, Almac and the Purchaser, the Escrow Agent shall:
(a) transfer to the Issuer the Almac Lien Releases; and
(b) transfer to the Purchaser
(i) the interest earned on the Purchase Price;
(ii) the certificate for 3,280,000 shares of the Issuer's Common
Stock;
(iii) the Warrants; and
(c) transfer to Almac the Purchase Price ($3,444,000) in payment of the
Demand for Payment.
6. TERM. The term of this Agreement shall continue until the Escrow Agent
makes the transfers required by paragraph 5 above, provided, however, that this
Agreement shall terminate no later than January 31, 2006 unless the Escrow Agent
receives a written instruction executed by the Issuer, Almac and the Purchaser
extending the term of this Agreement and the Escrow Agent's duties hereunder to
another date.
7. ESCROW AGENT'S COSTS AND FEES. Costs incurred and fees charged by the
Escrow Agent shall be paid one-half by the Issuer and one-half by the Purchaser.
The Escrow Agent shall provide, in writing, a good-faith estimate of its costs
and fees to the Issuer and the Purchaser upon the execution of this Agreement.
8. ESCROW AGENT'S RESPONSIBILITY. The parties agree to provide to the
Escrow Agent all information necessary to facilitate the administration of this
Agreement and the Escrow Agent may rely upon any representation so made. Nothing
contained in this Agreement shall be construed to impose on the Escrow Agent the
duties of trustee for any party hereto or to impose on the Escrow Agent any
duties or obligations other than those for which there is an express provision
herein. For all purposes connected herewith the Escrow Agent shall be entitled
to assume that the parties hereto are fully authorized and empowered, without
affecting the rights of any third parties, to appoint the Escrow Agent as the
Escrow Agent in accordance with the terms and provisions hereof.
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9. LIMITATIONS ON LIABILITY. It is understood that the Escrow Agent shall
incur no liability, except for acts of gross negligence or willful misconduct.
None of the provisions hereof shall be construed so as to require the Escrow
Agent to expend or risk any of its own funds or otherwise incur any liability in
the performance of its duties under this Agreement. The Escrow Agent shall incur
no liability if it becomes illegal or impossible to carry out any of the
provisions herein. The Escrow Agent shall not be required to take or be bound by
notice of default of any person, or to take any action with respect to such
default involving any expense or liability, unless written notice of such
default is given to the Escrow Agent by the undersigned or any of them, and
unless the Escrow Agent is indemnified in a manner satisfactory to it against
such expense or liability. The Escrow Agent shall not be liable to any party
hereto in acting upon any written notice, request, waiver, consent, receipt or
other paper or document believed by the Escrow Agent to be signed by the proper
party or parties. The Escrow Agent will be entitled to treat as genuine and as
the document it purports to be any letter, paper, fax or other document
furnished or caused to be furnished to the Escrow Agent. The Escrow Agent shall
have no liability with respect to any good faith action taken or allowed by it
hereunder, except for acts of gross negligence or willful misconduct. The Escrow
Agent shall not be liable for any error of judgment or for any act done or step
taken or omitted by it in good faith or for any mistake of fact or law, except
for acts of gross negligence or willful misconduct, or for anything which it may
do or refrain from doing in connection herewith, and the Escrow Agent shall have
no duties to anyone except those signing this Agreement. The Escrow Agent may
consult with legal counsel in the event of any dispute or questions as to the
interpretation or construction of this Agreement or the Escrow Agent's duties
hereunder. In addition, the Escrow Agent shall incur no liability and shall be
fully protected in acting in accordance with the opinion and instructions of
counsel, except for acts of gross negligence or willful misconduct. In the event
of any disagreement between the undersigned or any person or persons named in
this Agreement, and any other person, resulting in adverse claims and demands
being made in connection with or for any money involved herein or effected
hereby, the Escrow Agent shall be entitled at its option to refuse to comply
with any such claims or demands, so long as such disagreement shall continue,
and in so doing the Escrow Agent shall not be or become liable for damages or
interest to the undersigned or any of them, or to any person named in this
Agreement, for its refusal to comply with such conflicting or adverse demands
and the Escrow Agent shall be entitled to continue so to refrain and refuse so
to act until (i) the rights of the adverse claimants have been finally
adjudicated in a court or by arbitration as set forth below assuming and having
jurisdiction of the parties and the property involved herein and affected
hereby; or (ii) all differences have been adjudicated by agreement and the
Escrow Agent has been notified thereof in writing by all of the persons
interested.
10. INDEMNIFICATION. In consideration of Escrow Agent agreeing to act as
an escrow agent pursuant to the terms and conditions of the Escrow Agreement,
all parties to this Agreement do hereby agree to indemnify Escrow Agent, its
officers, directors, agents, and employees, defend and hold the same harmless
for and against any and all claims, liability, actions, losses, costs, damages
or expenses, including attorneys' fees and expenses, which Escrow Agent may
sustain or incur, directly or indirectly, by reason of, or in consequence of,
Escrow Agent's acting or failing to act as escrow agent.
11. RESIGNATION OF THE ESCROW AGENT. The Escrow Agent reserves the right
to resign as the Escrow Agent at any time by giving 30 business days written
notice thereof to all parties at the last known address. Upon notice or
resignation by the Escrow Agent, the undersigned agree that the Escrow Agent may
deliver any property or documents that it holds to the replacement escrow agent.
If no notice is promptly received from the undersigned and the replacement
Escrow Agent, the Escrow Agent may petition any court of competent jurisdiction
for disposition of the property or documents and the Escrow Agent shall thereby
be released from any and all responsibility and liability to the parties hereto.
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12. DISPUTES. If at any time a dispute shall exist as to the duty of the
Escrow Agent under the terms hereof or if the property or documents deposited
hereunder are not withdrawn on or before the termination or expiration of this
Agreement, the Escrow Agent may deposit the property or documents with the Clerk
of the State District Court in Xxxxxxx County, Texas and may interplead the
parties hereto. Upon so depositing such property or documents and filing its
complaint in interpleader, the Escrow Agent shall be released from all liability
under the terms hereof as to the property or documents so deposited and
reimbursed for all expenses, including attorney fees. The parties hereto for
themselves consent and agree to the jurisdiction of said Court, and do hereby
appoint the Clerk of the said Court as their agent for the service of all
process in connection with the proceedings mentioned in this paragraph.
13. GOVERNING LAW AND CAPTIONS. This Agreement shall be governed and
interpreted by the laws of the State of Texas. The captions in this Agreement
are included for convenience of reference only and in no way define or limit any
of the provisions hereof or otherwise affect the construction or effect of this
Agreement.
14. COUNTERPARTS. 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.
15. AMENDMENTS, MODIFICATIONS, ETC. This Agreement may be amended,
modified, superseded or canceled only by a written instrument executed by the
Issuer, the Selling Shareholders and the Purchaser and consented to in writing
by the Escrow Agent. Any of the terms and conditions hereof may be waived only
by a written instrument executed by the party waiving compliance therewith. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect such party's right at a later time to
enforce the same. No waiver by any party of any condition or of the breach of
any terms of this Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach or a waiver of any other condition or breach of
any other term of this Agreement.
16. NOTICES. All notices hereunder shall be made in writing to the parties
at the addresses listed below (or at such other address as shall be provided
pursuant to a written notice given in compliance with this paragraph 16) by mail
with postage paid and certified or registered or by facsimile or delivery via
courier to the respective parties. Mailed notices shall be deemed to be
delivered three days following the date of such mailing. Facsimile transmissions
shall be deemed to be delivered on the date of the transmission, so long as a
receipt confirming that the transmission was successful is received. Notices
delivered by courier shall be deemed to be received on the date of delivery by
the courier service.
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Issuer:
United Heritage Corporation
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attn.: Xxxxxx Xxxx, President
Facsimile: (000) 000-0000
Purchaser:
Lothian Oil Inc.
000 0xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxx Xxxx, President
Facsimile: (000) 000-0000
17. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter hereof and contains all of the covenants and agreements
between the parties. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.
SIGNATURES APPEAR ON FOLLOWING PAGES
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Dated: October 7, 2005
COMMUNITY BANK
(Escrow Agent)
By:
-------------------------------------
UNITED HERITAGE CORPORATION
(Issuer)
By:
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LOTHIAN OIL INC.
(Purchaser)
By:
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ALMAC
Almac Financial Corporation
By:
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