EXHIBIT 2
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SELLERS (AS DEFINED
BELOW) THAT SUCH REGISTRATION IS NOT REQUIRED.
PUT OPTION AGREEMENT, dated as of October 16, 2007 (this
"AGREEMENT"), by and between Xxxxx Xxxxx, an individual,
Xxxxxx Xxxxx, an individual, and Xxxxx Xxxxx, as life
tenant, and Xxxxxx Xxxxx, as remainderman (collectively, and
jointly and severally, the "SELLERS") and XXXXXX BAY FUND,
LP, a Delaware limited partnership, and XXXXXX BAY OVERSEAS
FUND, LTD., a Cayman Island company (collectively, and
together with any designated affiliate as provided in
Section 12 below, the "INVESTOR").
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Paramount Acquisition Corp., a Delaware corporation ("PARAMOUNT"), the
Sellers, and the other stockholders of B.J.K. Inc. d/b/a Chem Rx ("CHEM RX") are
parties to a Stock Purchase Agreement, dated as of June 1, 2007 (as may be
amended from time to time, the "STOCK PURCHASE AGREEMENT"), pursuant to which
Paramount will acquire all of the issued and outstanding shares of capital stock
of Chem Rx from the Sellers and the other stockholders of Chem Rx on the terms
and subject to the conditions set forth therein (the "TRANSACTION"). The
consummation of the Transaction is subject to, among other things, (1) the
approval of the proposal approving the Transaction (the "TRANSACTION PROPOSAL")
set forth in Paramount's definitive proxy statement dated October 2, 2007 by the
affirmative vote of a majority of the shares of Paramount's common stock issued
in its initial public offering (the "IPO") voting on such proposal at the
special meeting of the stockholders of Paramount (including any postponement or
adjournment thereof, the "SPECIAL MEETING"); and (2) less than 20% of the shares
of Paramount's common stock issued in the IPO voting against the Transaction
Proposal and electing a cash conversion of their shares.
The Investor intends to acquire shares of Paramount's common stock,
par value $.0001 per share (the "COMMON STOCK") in either open-market purchases
or by means of individually negotiated transactions and the Sellers wish to
enter into this Agreement to provide the Investor with the option to require the
Sellers to purchase such shares of Common Stock from the Investor on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of $100.00 duly paid by or on behalf
of Investor to the Sellers and in consideration of other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following defined
terms shall have the following meanings:
"ACQUIRED SHARES" means the number of shares of Common Stock that the
Investor (i) acquires in either open-market purchases or by means of
individually negotiated
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transactions on or following the time that is at least twenty-four hours after
the filing by Paramount of a Current Report or Form 8-K disclosing this
Agreement and prior to the time that the Special Meeting (or, if later, any
adjournment or postponement thereof) is called to order; and (ii) beneficially
owns as the close of business on the date of the Special Meeting. For the
avoidance of doubt, (A) "Acquired Shares" shall not include any shares of Common
Stock that were acquired by the Investor prior to the beginning of such period,
and (B) any Acquired Shares that are subsequently Transferred by the Investor
prior to the Exercise Date shall cease to be Acquired Shares. For purposes
hereof, any Common Stock Transferred by the Investor shall be deemed to have
been made out of non-Acquired Shares until all non-Acquired Shares have been
Transferred, and then out of Acquired Shares.
"AFFILIATE" means, with respect to any Person, a Person who is an
"affiliate" of such first Person within the meaning of Rule 405 under the
Securities Act.
"BUSINESS DAY" means any trading day on the exchange or quotation
system on which the Common Stock is listed for trading or quotation other than
any day on which such exchange or quotation system is scheduled to close prior
to its regular weekday closing time.
"COMMENCEMENT DATE" means the first Business Day following the date
that is 270 days from the closing date of the Transaction.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPIRATION DATE" means the first anniversary of the closing date of
the Transaction, or if such day is not a Business Day, the first Business Day
following such day.
"ECONOMIC HEDGE" means any hedging or similar transaction, including a
short sale, designed to transfer the economic risk of some or all of an
investment in the Common Stock away from the Investor.
"LIEN" means any lien, pledge, claim, charge, mortgage, security
interest or other encumbrance of any kind, whether arising by contract or by
operation of law.
"PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, charitable or not-for-profit institution or organization or other
entity or any governmental entity.
"PUT PRICE" means the aggregate amount payable by the Sellers pursuant
to the exercise of the Put Option, calculated as the product of the Strike Price
MULTIPLIED BY the number of Put Shares, subject to adjustment as set forth in
Section 2(e) hereof.
"SECURITIES" means the Acquired Shares and the Put Option.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SETTLEMENT PRICE" means the average per-share price at which the
Investor sells the Put Shares subject to the optional cash settlement provisions
pursuant to Section 4 hereof (if the Sellers have exercised such optional cash
settlement).
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"STRIKE PRICE" means a price per share equal to the lesser of (i)
$6.00 and (ii) the aggregate purchase price paid by the Investor for the
Acquired Shares (inclusive of all reasonable fees and documented brokers' fees,
commissions or similar transaction costs) DIVIDED BY the total number of
Acquired Shares.
"TRANSFER" shall have the meaning given to such term in Section 8(b)
hereof.
2. PUT OPTION.
(a) GRANT OF PUT OPTION. Subject to the terms and conditions of this
Agreement, the Sellers hereby jointly and severally grant to the Investor the
right but not the obligation, at any time, and from time to time, during the
Exercise Period (as defined below) (the "PUT OPTION") to require the Sellers to
purchase from the Investor any or all of the Acquired Shares owned by the
Investor on any applicable Exercise Date (the "PUT SHARES") at a price per Put
Share equal to the Strike Price; PROVIDED that the number of Put Shares shall
not exceed 1,439,999.
(b) FULL EXERCISE; TIME OF EXERCISE. The Put Option may be exercised,
in whole or in part, for any or all of the Put Shares owned by the Investor on
the Exercise Date. The Put Option may only be exercised on a Business Day from
and including the Commencement Date through and including 4 p.m. New York time
on the Expiration Date (such period, the "EXERCISE PERIOD").
(c) PROCEDURE FOR EXERCISE. Investor must give irrevocable notice
(which shall be written notice given by overnight, delivery service, facsimile
or by personal delivery in accordance with Section 13(a) hereof) during the
Exercise Period to Sellers of its exercise of the Put Option and the number of
Put Shares. If notice is given after 4 p.m. New York time on any day, other than
the last day of the Exercise Period, then such notice shall be deemed given on
the next Business Day during the Exercise Period. The date such notice is given,
or deemed given, is referred to as an "EXERCISE DATE."
(d) CONDITIONS. This Agreement and the Put Option shall automatically
terminate and become null and void if (i) the Investor does not utilize its
reasonable best efforts to acquire at least 1,000,000Acquired Shares for a price
not to exceed $6 per share on or prior to the close of business on the first
Business Day prior to the Special Meeting, (ii) Paramount does not receive the
requisite stockholder approval at the Special Meeting (or any adjournment
thereof) to consummate the Transaction, (iii) Paramount does not consummate the
Transaction, (iv) Investor does not fulfill in all material respects its
obligations set forth in Section 8 below or (v) Investor breaches in any
material respect the representations and warranties contained in Section 7
below.
(e) ADJUSTMENT OF PUT AND STRIKE PRICE. In the event of changes in the
outstanding Common Stock of Paramount by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, mergers, recapitalizations or other
similar events, the Put Price and the Strike Price shall be correspondingly
adjusted to give the Investor, upon exercise of the Put Shares, the same
aggregate payment as the Investor would have been entitled to had the Put
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Option been exercise immediately prior to such event. This Agreement need not be
changed or amended because of any adjustment in the number, class, and kind of
the Common Stock.
(f) OTHER PURCHASE OPTION AGREEMENTS. If prior to the date of the
Special Meeting, Sellers enter into with any other person a purchase option, put
option or other agreement that is substantially similar to this Agreement, and
that includes material economic terms that are more favorable to that person
than those set forth in Section 2 hereof, Sellers shall within one business day
after entering into such agreement disclose the terms of such agreement to
Investor, and shall promptly deliver to Investor an executed amendment to this
Agreement, reasonably satisfactory to Investor in form and substance,
incorporating such material economic terms herein.
(g) For the avoidance of doubt, and assuming by way of example only
that the Strike Price is $5.75 and the Settlement Price is $4.75, the parties
agree that (i) the maximum aggregate purchase price the Sellers could be
required to pay for the purchase of all of the Put Shares at a Put Closing
pursuant to Section 3 hereunder is $8,279,994.25 (i.e., $5.75 times the maximum
number of Put Shares of 1,439,999); and (ii) the maximum aggregate payment the
Sellers could be required to pay in the event the Sellers elect to pay the
optional cash settlement pursuant to Section 4 hereunder is $1,439,999 (i.e.,
the excess of $5.75 over $4.75 (or $1.00) times the maximum number of Put Shares
of 1,439,999).
(h) Anything to the contrary notwithstanding, if and to the extent the
Sellers are in breach of their obligations to pay the purchase price under
Section 3 hereof or (as applicable) the optional cash settlement payment under
Section 4 hereof, the Investor shall be entitled to sell Acquired Shares in
market transactions (or, if no trading market exists, in privately negotiated
transactions) during such period of breach and the Sellers shall be required to
pay to the Investor the amount, if any, by which the Strike Price exceeds the
Settlement Price with respect to such shares. The Sellers shall not be entitled
to any payment or credit in the event that the sale price exceeds the Strike
Price.
3. SETTLEMENT. The closing of the sale and purchase of the Put Shares
following the exercise of the Put Option shall take place no later than the
second Business Day following the Exercise Date (the "PUT CLOSING"). At the
closing of such transaction and upon payment of the Put Price, the Investor
shall, subject to Section 4 hereof, (x) if Paramount's transfer agent, if any,
is participating in the Depository Trust Company's ("DTC") Fast Automated
Securities Transfer Program, credit the aggregate number of Put Shares to the
Sellers' or their designee's balance accounts with DTC, if any, through its
Deposit/Withdrawal at Custodian system or (y) if Paramount's transfer agent is
not participating in the DTC Fast Automated Securities Transfer Program or if
the foregoing is not applicable, deliver to the Sellers or to one or more
assignees or substitute purchasers designated by the Sellers, at the principal
office of Paramount, certificates representing all the Put Shares free and clear
of all Liens, which certificates shall have affixed thereto stock powers in the
appropriate form for transfer. The Put Price for the Put Shares shall be payable
to the Investor in cash in U.S. dollars by delivery to the Investor of the
amount thereof by wire transfer of immediately available funds to an account or
accounts, designated in writing by the Investor prior to the Put Closing.
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4. OPTIONAL CASH SETTLEMENT. Provided that the Common Stock is traded
on the Nasdaq Capital Market, the Nasdaq Global Market, or any registered
national stock exchange, then at the option of the Sellers (which option may be
exercised by the Sellers by written notice to the Investor at any time prior to
the Put Closing), in lieu of the Sellers paying the Put Price and accepting
physical delivery of the Put Shares from the Investor, as contemplated in
Section 3 hereof, at the Put Closing pursuant to Section 3 hereof, Sellers may
in full satisfaction of their obligations under Section 3 hereof, pay to the
Investor an amount in cash equal to the product of number of Put Shares
multiplied by the greater of (i) the excess of the Strike Price over the
Settlement Price and (ii) zero. If the Sellers exercise such option, the
Investor may delay settlement for such period of time as may be necessary to
sell the Put Shares and establish the Settlement Price.
5. REPRESENTATIONS AND COVENANTS OF SELLERS. Sellers hereby jointly
represent, warrant and covenant to the Investor, as follows:
(a) POWER; DUE AUTHORIZATION; BINDING AGREEMENT. Sellers have full
legal capacity, power and authority to execute and deliver this Agreement, to
perform their obligations hereunder, and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Sellers and constitutes a valid and binding agreement of Sellers,
enforceable against Sellers in accordance with its terms, except that
enforceability may be subject to the effect of (a) any applicable bankruptcy,
reorganization, receivership, conservatorship, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and to general principles of equity and (b) any laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, regardless of whether considered in a proceeding in law or equity.
(b) NO CONFLICTS. The execution and delivery of this Agreement by
Sellers does not, and the performance of the terms of this Agreement by Sellers
will not, (a) require Sellers to obtain the consent or approval of, or make any
filing with or notification to, any governmental or regulatory authority,
domestic or foreign (other than the Securities and Exchange Commission (the
"SEC")), (b) require the consent or approval of any other Person pursuant to any
agreement, obligation or instrument binding on Sellers or their properties and
assets, (c) conflict with or violate any organizational document or law, rule,
regulation, order, judgment or decree applicable to Sellers or by which any
property or asset of Sellers is bound, or (d) violate any other agreement to
which the Sellers are a party, including, without limitation, any voting
agreement, stockholders agreement, irrevocable proxy, voting trust, or the Stock
Purchase Agreement.
(c) OTHER PURCHASE OPTION AGREEMENTS. To the extent other investors
are entering into arrangements similar to those contained in this Agreement,
such other investors are executing agreements identical to this Agreement (other
than references to the amounts of investments to be made by the other investors
and the corresponding put rights, and the names, addresses and contact
information of the other investors).
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6. CERTAIN ADDITIONAL COVENANTS OF SELLERS.
(a) SECURITY. As security for Sellers' obligations to Investor under
Sections 3 and 4 hereof, on or prior to the date of the closing of the
Transaction, the Sellers shall establish, and, for so long as the Investor holds
any Acquired Shares, the Sellers shall maintain, with JPMorgan Chase Bank,
National Association or such other financial institution as is reasonably
acceptable to the Investor, an escrow account funded with cash in an amount no
less than the then-applicable Put Price (the "ESCROW"). On or prior to the date
hereof, Sellers have executed an irrevocable instruction directing Paramount to
pay, out of the purchase price payable to the Sellers upon the consummation of
the Transaction, $8,279,994.25 to such escrow account, or, if less, such amount
as shall be equal to the product of $6.00 times the number of Acquired Shares.
The Escrow shall be administered in accordance with an escrow agreement among
the Investor, the Sellers and the Escrow Agent, substantially in the form of
EXHIBIT A hereto. Notwithstanding the foregoing, the Sellers shall be entitled
at any time prior to the Expiration Date to replace all or any portion of the
funds held in the Escrow with a letter of credit, drawn on Bank of America, or
such other financial institution as is reasonably acceptable to the Investor,
with a face amount no less than the then-applicable Put Price and in form and
substance reasonably satisfactory to the Investor.
(b) FURTHER ASSURANCES. Subject to the terms and conditions set forth
in this Agreement Sellers will use their best efforts, as promptly as is
practicable, to take or cause to be taken all actions, and to do or cause to be
done all other things, as are necessary, proper or advisable and consistent with
the terms and conditions of this Agreement, to consummate and make effective the
transactions contemplated by this Agreement and to refrain from taking any
actions that are contrary to, inconsistent with or against, or would frustrate
the essential purposes of, the transactions contemplated by this Agreement.
(c) DISCLOSURE. Sellers will advise Paramount of the material terms
and conditions of this Agreement (and any similar agreements entered into with
any other Person) within one business day after the execution of this Agreement
such that Paramount can publicly disclose the terms hereof (if Paramount
determines that such disclosure is appropriate) on one or more Current Reports
on From 8-K; PROVIDED, HOWEVER that Sellers shall request that the identity of
Investor, its affiliates, and/or their principals, officers, directors,
shareholders, agents, attorneys, consultants, and the like not be disclosed
(unless Paramount determines that such disclosure is required).
7. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby
represents and warrants to the Sellers as follows.
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Investor is duly
organized and validly existing under the laws of the state or other jurisdiction
of its organization. Investor has all requisite power and authority to execute
and deliver this Agreement.
(b) OWNERSHIP OF SECURITIES. As of the date of the Put Closing: (i)
the Put Shares will be beneficially owned by the Investor and (ii) the Investor
shall have voting power and dispositive power with respect to all of the Put
Shares. On the date of the Put Closing, the Investor shall transfer valid title
to all of the Put Shares to Sellers free from all Liens, and the Put
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Shares shall be freely transferable except for restrictions on transfer pursuant
to state and/or federal securities laws.
(c) AUTHORIZATION; BINDING OBLIGATIONS; GOVERNMENTAL CONSENTS. All
actions on the part of Investor, its officers, directors and equity owners
necessary for the authorization of this Agreement and the performance of all
obligations of Investor hereunder have been taken prior to the date hereof. This
Agreement is a valid and binding obligation of Investor, enforceable in
accordance with its terms, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights generally; and (ii) general
principles of equity that restrict the availability of equitable remedies. No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of Investor is required in connection with
the consummation of the transactions contemplated by this Agreement (other than
Form 3 and/or Form 4 filings or other SEC filings).
(d) INVESTMENT PURPOSE. The Investor is acquiring the Put Option and
will acquire the Acquired Shares for its own account and not with a view toward
the public sale or distribution thereof and has no intention of selling or
distributing any of such Securities or any arrangement or understanding with any
other Person regarding the sale or distribution of such Securities except in
accordance with the provisions of the terms of this Agreement. The Investor
understands that the Put Option has not been and is not being registered under
the Securities Act or any applicable state securities laws and may not be sold,
pledged, transferred or otherwise disposed of except to Affiliates of the
Investor as permitted hereby. The Investor will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any Securities except in
accordance with the provisions of this Agreement and pursuant to and in
accordance with the Securities Act.
(e) ACCREDITED INVESTOR. The Investor is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3), (7) or (8) promulgated under the Securities
Act.
(f) NO ECONOMIC XXXXXX. Between Wednesday, October 10, 2007 and the
date hereof, the Investor has not engaged, directly or indirectly, in any
Economic Hedge with respect to the Common Stock.
8. CONDITIONS TO EXERCISEABILITY OF THE PUT OPTION. Investor agrees
that the following shall be conditions to its ability to exercise the Put Option
granted hereunder:
(a) At the Special Meeting or any meeting of the stockholders of
Paramount, however called, or any postponement or adjournment thereof, or in
connection with any solicitation of votes of the stockholders of Paramount by
written consent, Investor shall have been present (in person or by proxy) and
voted (or cause to be voted), or shall have executed a written consent in
respect of, all of the shares of Common Stock owned by it as of the date of such
meeting that were entitled to be voted by the Investor at such meeting or in
connection with such solicitation in favor of (i) the approval or re-approval of
the Transaction and the Stock Purchase Agreement, (ii) any other proposals where
approval of such proposal was a condition to the consummation of the
Transaction, and (iii) if recommended by the Board of Directors of
7
Paramount, to amend Paramount's certificate of incorporation to extend for a
period of not more than 90 days the period of time in which Paramount is
required to consummate a business combination beyond October 27, 2007, and
against any action or agreement that would have prevented or materially delayed
the consummation of the Transaction or any other transactions contemplated by
this Agreement or the Stock Purchase Agreement, or that would have been contrary
to or inconsistent with, or result in a breach by the Sellers of, or would have
frustrated the essential purposes of this Agreement or the Stock Purchase
Agreement. The Investor shall have used its reasonable best efforts, and the
Sellers shall have requested that Paramount use its reasonable best efforts, to
obtain due authorization from any Person from whom the Investor acquired the
Acquired Shares (the "RECORD DATE SELLER") for the Investor to vote such shares
at the Special Meeting, or, in the alternative, shall have obtained a proxy card
or other evidence from the Record Date Seller that the shares owned by the
Record Date Seller have been voted in favor of the Transaction Proposal and the
Stock Purchase Agreement and all other proposals submitted by Paramount for vote
of its stockholders relating to the Transaction, and the Investor shall not have
consented to the revocation or rescission of such authorization, proxies or
votes by the Record Date Seller.
(b) Prior to the date that is 45 days following the date of this
Agreement, Investor shall not, directly or indirectly, have sold, transferred,
pledged, assigned or otherwise disposed, including by means of an Economic Hedge
(a "TRANSFER"), of any of the Acquired Shares; PROVIDED that neither a
"Transfer" nor an "Economic Hedge" shall be deemed to include pledges of the
Acquired Shares to its prime brokers to secure its obligations under prime
brokerage agreements or rehypothecations of Acquired Shares permitted under the
terms of such prime brokerage agreements or an investor substitution as
described in Section 12 herein; PROVIDED that nothing shall prohibit the
Investor's prime broker from lending such pledged or rehypothecated Acquired
Shares to third parties; AND PROVIDED FURTHER that, anything to the contrary
notwithstanding, no such pledges or rehypothecations shall encumber any of the
Put Shares at the time of the Put Closing.
(c) Between the date hereof and the Expiration Date, the Investor
shall not have engaged, directly or indirectly, in any Economic Hedge with
respect to the Acquired Shares.
9. CERTAIN COVENANTS OF INVESTOR.
(a) The Investor agrees that any acquisition of Securities will be
made in accordance with the provisions of this Agreement.
(b) If requested by Sellers, the Investor will provide any information
reasonably necessary to prepare and timely file a Schedule 13D disclosing this
Agreement and any transaction effected hereunder and will provide signatures as
needed to effect such a timely filing.
(c) The Investor shall give the Sellers written notice (which may be
by email) of any Transfers of Acquired Shares within five (5) Business Days of
such Transfer.
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(d) Subject to the terms and conditions set forth in this Agreement,
Investor will use its commercially reasonable efforts, as promptly as is
practicable, to take or cause to be taken all actions, and to do or cause to be
done all other things, as are necessary, proper or advisable and consistent with
the terms and conditions of this Agreement, to consummate and make effective the
transactions contemplated by this Agreement and to refrain from taking any
actions that are contrary to, inconsistent with or against, or would frustrate
the essential purposes of, the transactions contemplated by this Agreement.
10. AMENDMENTS. This Agreement may be amended from time to time by a
written instrument executed and delivered by the parties.
11. REMEDIES. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the parties will have the right to injunctive relief, in
addition to all of its rights and remedies at law or in equity, to enforce the
provisions of this Agreement. Nothing contained in this Agreement will be
construed to confer upon any person who is not a signatory hereto or any
successor or permitted assign of a signatory hereto any rights or benefits, as a
third party beneficiary or otherwise.
12. INVESTOR SUBSTITUTION. Investor shall have the right to substitute
any of its Affiliates as a purchaser or holder of the Acquired Shares hereunder,
by written notice to the Sellers, which notice shall be signed by both the
Investor and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representation and warranties set forth
in Section 7. Upon receipt of such notice, any reference to Investor in this
Agreement (other than in this Section 12), shall be deemed to refer to such
Affiliate in addition to or in lieu of the Investor (as applicable).
13. GENERAL PROVISIONS.
(a) NOTICES. Except as otherwise provided herein, any offer,
acceptance, notice or communication required or permitted to be given pursuant
to this Agreement shall be deemed to have been duly and sufficiently given for
all purposes by a party if given by the party, or an officer, trustee, or other
personal or legal representative of such party, or by any other person
authorized to act for such party, if in writing and delivered personally to the
party or to an officer, trustee or other personal or legal representative of the
party, or any other person authorized to act for such party to whom such notice
shall be directed, or sent by overnight delivery service, or certified or
registered mail, postage and registration prepaid, return receipt requested, or
by facsimile to such party's home or business address as reflected on the
signature pages hereto or other address as such party may designate to each of
the other parties hereto by a notice complying with the requirements of this
Section 13(a). Any such notice shall be deemed to have been given on the date on
which the same was delivered in the case of personal delivery, post-marked in
the case of certified or registered mail or overnight delivery service, or dated
in the case of a facsimile.
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(b) ASSIGNMENTS AND TRANSFERS. Other than as contemplated in Section
12, the parties hereto shall have no right to assign or transfer this Agreement
or any of their respective rights hereunder (including, without limitation, the
Put Option).
(c) BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the successors, assigns, personal representative, estates, heirs
and legatees of the parties hereto.
(d) MISCELLANEOUS. This Agreement sets forth the entire understanding
of the parties hereto with respect to the transactions contemplated hereby. The
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of any other term or provision hereof. The
headings in this Agreement are for convenience of reference only and shall not
alter or otherwise affect the meaning hereof. This Agreement may be executed in
any number of counterparts which together shall constitute one instrument and
shall be governed by and construed in accordance with the domestic substantive
laws of the State of New York, without regard to principles of conflicts of
laws. Delivery of an executed signature page by facsimile or other electronic
transmission shall be effective as delivery of a manually signed counterpart of
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first set forth above.
/s/ Xxxxx Xxxxx
---------------------------------- XXXXXX BAY FUND, LP
Xxxxx Xxxxx
/s/ Xxxxxx Xxxxx Address for Notices:
----------------------------------
Xxxxxx Xxxxx By: /s/ Xxxx Xxxx
-----------------------------------
Title: Principal and Portfolio Manager
XXXXX XXXXX, AS LIFE TENANT, AND
XXXXXX XXXXX, AS REMAINDERMAN Address for Notices:
000 Xxxxxxxx, 00xx Xxxxx
/s/ Xxxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
---------------------------------- Attention: Xxxx Xxxx, May Xxx
Xxxxx Xxxxx, as Life Tentant Telephone: (000) 000-0000
/s/ Xxxxxx Xxxxx
---------------------------------- with a copy to:
Xxxxxx Xxxxx, as Remainderman Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Address for Notices to the Sellers Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
c/o Chem RX Attn: Xxxxxxx X. Xxxxx, Esq.
000 Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
with a copy to: XXXXXX BAY OVERSEAS FUND, LTD.
Xxxxxxxx Xxxxxxx LLP By: /s/ Xxxx Xxxx
The Chrysler Building ------------------------------------
000 Xxxxxxxxx Xxxxxx Name:
Xxx Xxxx, Xxx Xxxx 00000 Title: Principal and Portfolio Manager
Attn: Xxxxxxx Xxxxxxxx, Esq.
Address for Notices:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx, May Xxx
Telephone: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
[Signature Page to Put Option Agreement]
EXHIBIT A
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (as the same may be amended or modified from
time to time pursuant hereto, this "Escrow Agreement") is made and entered into
as of October __, 2007, by and among Xxxxx Xxxxx, an individual, Xxxxxx Xxxxx an
individual, and Xxxxx Xxxxx as life tenant and Xxxxxx Xxxxx as remainderman
(collectively, (the "DEPOSITORS"), XXXXXX BAY FUND, LP, a Delaware limited
partnership, and XXXXXX BAY OVERSEAS FUND, LTD., a Cayman Islands company
(collectively, "XXXXXX BAY", and together with the Depositor, sometimes referred
to individually as a "PARTY" or collectively as the "PARTIES"), and JPMorgan
Chase Bank, National Association (the "ESCROW AGENT").
WHEREAS, the Parties have agreed to deposit in escrow certain funds
and wish such deposit to be subject to the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT. The Parties hereby appoint the Escrow Agent as their
escrow agent for the purposes set forth herein, and the Escrow Agent hereby
accepts such appointment under the terms and conditions set forth herein.
2. FUND. The Depositors hereby deposit with the Escrow Agent the sum
of $8,639,994 (the "ESCROW DEPOSIT") and the Escrow Agent hereby acknowledges
receipt of the Escrow Deposit. The Escrow Agent shall hold the Escrow Deposit
and, subject to the terms and conditions hereof, invest and reinvest the Escrow
Deposit and the earnings and other proceeds thereof (the "FUND") as directed in
Section 3, and shall not release any part of the Escrow Deposit except in
accordance with Section 4 hereof, or the other express provisions of this
Agreement.
3. INVESTMENT OF FUND. (a) During the term of this Escrow Agreement,
the Fund shall be invested in a JPMorgan Chase Bank, N.A. money market deposit
account ("MMDA") or a successor or similar investment offered by the Escrow
Agent, unless otherwise instructed in writing by the Parties and as shall be
acceptable to the Escrow Agent(1). The Escrow Agent will provide compensation on
balances in the Fund at a rate determined by the Escrow Agent from time to time
in accordance with its normal policies for customer deposits of that kind.
Written investment instructions, if any, shall require the signature of all of
the Parties hereto and shall specify the type and identity of the investments to
be purchased and/or sold. The Escrow Agent is hereby authorized to execute
purchases and sales of investments through the facilities of its own trading or
-----------------------
(1) U.S. law permits the parties to make up to six (6) pre-authorized
withdrawals or telephonic transfers from an MMDA per calendar month or statement
cycle or similar period. If the MMDA can be accessed by checks, drafts, bills of
exchange, notes and other financial instruments ("Items"), then no more than
three (3) of these six (6) transfers may be made by an Item. The Escrow Agent is
required by U.S. law to reserve the right to require at least seven (7) days
notice prior to a withdrawal from an MMDA. The Escrow Agent does not presently
exercise this right.
1
capital markets operations or those of any affiliated entity. The Escrow Agent
or any of its affiliates may receive compensation with respect to any investment
directed hereunder including without limitation charging an agency fee in
connection with each transaction. The Parties recognize and agree that the
Escrow Agent will not provide supervision, recommendations or advice relating to
either the investment of moneys held in the Fund or the purchase, sale,
retention or other disposition of any investment described herein. The Escrow
Agent shall not have any liability for any loss sustained as a result of any
investment in an investment made pursuant to the terms of this Escrow Agreement
or as a result of any liquidation of any investment prior to its maturity or for
the failure of the Parties to give the Escrow Agent instructions to invest or
reinvest the Escrow Fund. The Escrow Agent shall have the right to liquidate any
investments held in order to provide funds necessary to make required payments
under this Escrow Agreement.
(b) Receipt, investment and reinvestment of the Escrow Deposit shall
be confirmed by Escrow Agent as soon as practicable by account statement, and
any discrepancies in any such account statement shall be noted by Parties to
Escrow Agent within thirty (30) calendar days after receipt thereof. Failure to
inform Escrow Agent in writing of any discrepancies in any such account
statement within said thirty (30) day period shall conclusively be deemed
confirmation of such account statement in its entirety.
4. DISPOSITION AND TERMINATION.
(a) The Depositors and Xxxxxx Bay are parties to a Put Option
Agreement dated October 16, 2007 (the "PUT OPTION AGREEMENT"), and the Escrow
Deposit has been deposited by the Depositors with the Escrow Agent pursuant to
the Put Option Agreement for the benefit of Xxxxxx Bay in the event of a default
by the Depositors in respect of their obligations under Section 3 or Section 4
(as applicable) under the Put Option Agreement. The provisions of the Put Option
Agreement are hereby incorporated herein by reference, but only as the context
of this Escrow Agreement may require. The Escrow Agent is not a party to the Put
Option Agreement and shall, therefore, act only in accordance with the terms and
conditions contained herein.
(b) If the Depositors breach any of their obligations to pay the
purchase price pursuant to Section 3 of the Put Option Agreement or the optional
cash settlement pursuant to Section 4 of the Put Option Agreement, as
applicable, then Xxxxxx Bay shall have the right to deliver an Escrow Demand as
described in Section 4(c) hereof. Xxxxxx Bay shall not deliver an Escrow Demand
except in the circumstances described in the preceding sentence. Xxxxxx Bay
shall deliver to the Depositors any Escrow Demand that it delivers to the Escrow
Agent not later than the date such Escrow Demand is delivered to the Escrow
Agent.
(c) Upon receipt by the Escrow Agent of a written demand from Xxxxxx
Bay (an "ESCROW DEMAND"), certifying:
2
(i) that Xxxxxx Bay duly exercised its Put Option (as
defined in the Put Option Agreement);
(ii) the Dollar amount that the Depositors were required to
pay to Xxxxxx Bay at the Put Closing (as defined in the Put Option
Agreement) or, if applicable, the Dollar amount the Depositors were
required to pay to Xxxxxx Bay pursuant to an optional cash settlement
pursuant to Section 4 of the Put Option Agreement;
(iii) the Dollar amount that the Depositors actually paid to
Xxxxxx Bay at the Put Closing or, if applicable, pursuant to an
optional cash settlement pursuant to Section 4 of the Put Option
Agreement;
(iv) the Dollar amount the Depositors failed to pay in
breach of its obligations under Section 3 or Section 4 of the Put
Option Agreement the "BREACH AMOUNT");
(v) that, in accordance with the Put Option Agreement,
Xxxxxx Bay is entitled to the Breach Amount;
and demanding that the Escrow Agent release to Xxxxxx Bay an amount equal to the
Breach Amount from the Fund, the Escrow Agent shall promptly pay to Xxxxxx Bay
from the Fund an amount equal to the Breach Amount.
(e) If the Escrow Agent has not received an Escrow Demand by March 31,
2009, then the Escrow Agent shall promptly pay the Fund to the Depositors;
PROVIDED, HOWEVER, that if by an earlier date all of the remaining portion of
the Fund shall cease to be subject to the Put Option Agreement, then Xxxxxx Bay
shall cooperate promptly with the Depositors to direct the Escrow Agent to
release such amount of the Fund to the Depositors.
(f) The Depositors shall have the right to substitute a letter of
credit in the amount of $8,639,994, in form and substance, and issued by a bank
that is, reasonably satisfactory to Xxxxxx Bay, for the Fund hereunder and
Xxxxxx Bay shall cooperate (at no cost to Xxxxxx Bay) with the Depositors to
permit the use of such letter of credit in lieu of the escrow arrangement
established hereby, and to permit the Depositors to use the Fund to secure such
letter of credit. The Parties contemplate that such letter of credit would
permit Xxxxxx Bay to draw an amount under the letter of credit using a sight
draft and with dispute procedures similar to those set forth in this Section 4.
(g) Upon delivery of the Fund by the Escrow Agent, this Escrow
Agreement shall terminate, subject to the provisions of Sections 7 and 8.
3
5. ESCROW AGENT. (a) The Escrow Agent shall have only those duties as
are specifically and expressly provided herein, which shall be deemed purely
ministerial in nature, and no other duties shall be implied. The Escrow Agent
shall neither be responsible for, nor chargeable with, knowledge of, nor have
any requirements to comply with, the terms and conditions of any other
agreement, instrument or document between the Parties, in connection herewith,
if any, including without limitation the Put Option Agreement, nor shall the
Escrow Agent be required to determine if any person or entity has complied with
any such agreements, nor shall any additional obligations of the Escrow Agent be
inferred from the terms of such agreements, even though reference thereto may be
made in this Escrow Agreement. In the event of any conflict between the terms
and provisions of this Escrow Agreement, those of the Put Option Agreement, any
schedule or exhibit attached to the Escrow Agreement, or any other agreement
among the Parties, the terms and conditions of this Escrow Agreement shall
control. The Escrow Agent may rely upon and shall not be liable for acting or
refraining from acting upon any written notice, document, instruction or request
furnished to it hereunder and believed by it to be genuine and to have been
signed or presented by the proper Party or Parties without inquiry and without
requiring substantiating evidence of any kind. The Escrow Agent shall be under
no duty to inquire into or investigate the validity, accuracy or content of any
such document, notice, instruction or request. The Escrow Agent shall have no
duty to solicit any payments which may be due it or the Fund, including, without
limitation, the Escrow DEPOSIT nor shall the Escrow Agent have any duty or
obligation to confirm or verify the accuracy or correctness of any amounts
deposited with it hereunder. The Escrow Agent shall have no duty or obligation
to make any calculations of any kind hereunder.
(b) The Escrow Agent shall not be liable for any action taken,
suffered or omitted to be taken by it except to the extent that a final
adjudication of a court of competent jurisdiction determines that the Escrow
Agent's gross negligence or willful misconduct was the primary cause of any loss
to either Party. The Escrow Agent may execute any of its powers and perform any
of its duties hereunder directly or through agents or attorneys, and shall be
liable only for its gross negligence or willful misconduct (as finally
adjudicated in a court of competent jurisdiction) in the selection of any such
agent or attorney. The Escrow Agent may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow Agent shall
not be liable for any action taken, suffered or omitted to be taken by it in
accordance with, or in reliance upon, the advice or opinion of any such counsel,
accountants or other skilled persons. In the event that the Escrow Agent shall
be uncertain or believe there is some ambiguity as to its duties or rights
hereunder or shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this Escrow
Agreement, it shall be entitled to refrain from taking any action and its sole
obligation shall be to keep safely all property held in escrow until it shall be
given a direction in writing by the Parties which eliminates such ambiguity or
uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable
order or judgment of a court of competent jurisdiction. To the extent
practicable, the Parties agree to pursue any redress or recourse in connection
with any dispute without making the Escrow Agent a party to the same. Anything
in this Escrow Agreement to the contrary notwithstanding, in no
4
event shall the Escrow Agent be liable for special, incidental, punitive,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
6. SUCCESSION. (a) The Escrow Agent may resign and be discharged from
its duties or obligations hereunder by giving thirty (30) days advance notice in
writing of such resignation to the Parties specifying a date when such
resignation shall take effect. If the Parties have failed to appoint a successor
escrow agent prior to the expiration of thirty (30) days following receipt of
the notice of resignation, the Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor escrow agent or for other
appropriate relief, and any such resulting appointment shall be binding upon all
of the parties hereto. Escrow Agent's sole responsibility after such thirty (30)
day notice period expires shall be to hold the Fund (without any obligation to
reinvest the same) and to deliver the same to a designated substitute escrow
agent, if any, or in accordance with the directions of a final order or judgment
of a court of competent jurisdiction, at which time of delivery Escrow Agent's
obligations hereunder shall cease and terminate, subject to the provisions of
Sections 7 and 8 hereunder. The Escrow Agent shall have the right to withhold an
amount equal to any amount due and owing to the Escrow Agent, plus any costs and
expenses the Escrow Agent shall reasonably believe will be incurred by the
Escrow Agent in connection with the termination of the Escrow Agreement.
(b) Any entity into which the Escrow Agent may be merged or converted
or with which it may be consolidated, or any entity to which all or
substantially all the escrow business may be transferred, shall be the Escrow
Agent under this Escrow Agreement without further act.
7. COMPENSATION AND REIMBURSEMENT. The Depositors shall (a) pay the
Escrow Agent upon execution of this Escrow Agreement and from time to time
thereafter reasonable compensation for the services to be rendered hereunder,
which unless otherwise agreed in writing shall be as described in Schedule 2
attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all
expenses, disbursements and advances, including, without limitation reasonable
attorney's fees and expenses, incurred or made by it in connection with the
preparation, negotiation, execution, performance, delivery, modification and
termination of this Escrow Agreement. The Parties hereby grant the Escrow Agent
a lien on, right of set-off against and security interest in, the Fund for the
payment of any claim for compensation, expenses and amounts due hereunder. In
furtherance of the foregoing, the Escrow Agent is expressly authorized and
directed, but shall not be obligated, to charge against and withdraw from the
Fund for its own account any amounts due to the Escrow Agent under this Section
7. The obligations contained in this Section 7 shall survive the termination of
this Escrow Agreement and the resignation, replacement or removal of the Escrow
Agent. The Depositors shall be responsible for all of the fees and expenses that
are due and payable to the Escrow Agent hereunder. To the extent that the Escrow
Agent shall charge against or withdraw from the Fund for its own account
pursuant to any provision of this
5
Agreement (including, without limitation, pursuant to Section 6, this Section 7
or Section 8 hereof) and the Fund shall be less than the Escrow Deposit (the
"DEFICIENCY"), the Depositors shall, jointly and severally, be obligated to
promptly, but in no event later than three (3) Business Days after such charge
or withdrawal, deposit an amount in cash equal to the Deficiency so that the
Fund shall be at least equal to the amount of the Escrow Deposit.
8. INDEMNITY. The Parties shall jointly and severally indemnify,
defend and save harmless the Escrow Agent and its affiliates and their
respective successors, assigns, directors, officers, managers, attorneys,
accountants, experts, agents and employees (the "indemnitees") from and against
any and all losses, damages, claims, liabilities, penalties, judgments,
settlements, actions, suits, proceedings, litigation, investigations, costs or
expenses (including, without limitation, the fees and expenses of in house or
outside counsel and experts and their staffs and all expense of document
location, duplication and shipment) (collectively "Losses") arising out of or in
connection with (a) the Escrow Agent's execution and performance of this Escrow
Agreement, tax reporting or withholding, the enforcement of any rights or
remedies under or in connection with this Escrow Agreement, or as may arise by
reason of any act, omission or error of the indemnitee, except in the case of
any indemnitee to the extent that such Losses are finally adjudicated by a court
of competent jurisdiction to have been primarily caused by the gross negligence
or willful misconduct of such indemnitee, or (b) its following any instructions
or other directions, whether joint or singular, from the Parties, except to the
extent that its following any such instruction or direction is expressly
forbidden by or in violation of the terms hereof. The Parties hereto acknowledge
that the foregoing indemnities shall survive the resignation, replacement or
removal of the Escrow Agent or the termination of this Escrow Agreement. The
Parties hereby grant the Escrow Agent a lien on, right of set-off against and
security interest in, the Fund for the payment of any claim for indemnification,
expenses and amounts due hereunder. In furtherance of the foregoing, the Escrow
Agent is expressly authorized and directed, but shall not be obligated, to
charge against and withdraw from the Fund for its own account or for the account
of an indemnitee any amounts due to the Escrow Agent or to an indemnitee under
this Section 8. The obligations contained in this Section 8 shall survive the
termination of this Escrow Agreement and the resignation, replacement or removal
of the Escrow Agent.
9. PATRIOT ACT DISCLOSURE/TAXPAYER IDENTIFICATION NUMBERS/TAX
REPORTING.
(a) PATRIOT ACT DISCLOSURE. Section 326 of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 ("USA PATRIOT Act") requires the Escrow Agent to
implement reasonable procedures to verify the identity of any person that opens
a new account with it. Accordingly, the Parties acknowledge that Section 326 of
the USA PATRIOT Act and the Escrow Agent's identity verification procedures
require the Escrow Agent to obtain information which may be used to confirm the
Parties' identity including without limitation name, address and organizational
documents ("identifying information"). The
6
Parties agree to provide the Escrow Agent with and consent to the Escrow Agent
obtaining from third parties any such identifying information required as a
condition of opening an account with or using any service provided by the Escrow
Agent.
(b) TAXPAYER IDENTIFICATION NUMBERS ("TIN")
The Parties have provided the Escrow Agent with their respective fully
executed Internal Revenue Service ("IRS") Form W-8, or W-9 and/or other required
documentation. The Parties each represent that its correct TIN assigned by the
IRS, or any other taxing authority, is set forth in the delivered forms, as well
as in the Substitute IRS Form W-9 set forth on the signature page of this
Agreement.
(c) TAX REPORTING
All interest or other income earned under the Escrow Agreement shall
be allocated to the Depositors and reported, as and to the extent required by
law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form
1099 or 1042S (or other appropriate form) as income earned from the Escrow
Deposit by the Depositors whether or not said income has been distributed during
such year. On or before March 31, 2008, the Escrow Agent shall distribute to
Xxxxx Xxxxx, on behalf of the Depositors, all of the cash interest generated by
the Fund through December 31, 2007. Any other tax returns required to be filed
will be prepared and filed by the Depositors and Xxxxxx Bay, as applicable, with
the IRS and any other taxing authority as required by law. The Parties
acknowledge and agree that Escrow Agent shall have no responsibility for the
preparation and/or filing of any income, franchise or any other tax return with
respect to the Fund or any income earned by the Escrow Deposit. The Parties
further acknowledge and agree that any taxes payable from the income earned on
the investment of any sums held in the Escrow Deposit shall be paid by the
Depositors. In the absence of written direction from the Parties, all proceeds
of the Fund shall be retained in the Fund and reinvested from time to time by
the Escrow Agent as provided in this Agreement. Escrow Agent shall withhold any
taxes it deems appropriate, including but not limited to required withholding in
the absence of proper tax documentation, and shall remit such taxes to the
appropriate authorities.
10. NOTICES AND FUNDS TRANSFER INFORMATION. All communications
hereunder shall be in writing and shall be deemed to be duly given and received:
(a) upon delivery, if delivered personally, or upon confirmed
transmittal, if by facsimile, if received prior to 5:00 p.m.;
(b) on the next Business Day (as hereinafter defined) if sent by
overnight courier; or
(c) four (4) Business Days after mailing if mailed by prepaid
registered mail, return receipt requested, to the appropriate notice address set
forth below or at such
7
other address as any party hereto may have furnished to the other parties in
writing by registered mail, return receipt requested.
Fund transfers made to either the Depositors or Xxxxxx Bay pursuant to
this Agreement will be made in accordance with the banking account information
shown below:
If to the Depositors: 000 Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Tel No.: (516) 889 - 8770
Fax No.: (516) 889 - 8322
Bank account information Account name:
Account number:
Bank name:
ABA number:
With a copy to: Xxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Tel No: (212) 704 - 6000
Fax No: (212) 704 - 6288
If to Xxxxxx Bay: 000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, May Xxx
Tel No.: (212) 571 - 1244
Fax No.: (212) 571 - 1279
With a copy to: Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Email: xxxxxxx.xxxxx@xxx.xxx
Bank account information Account name:
Account number:
Bank name:
ABA number:
If to the Escrow Agents: JPMorgan Chase Bank, N.A.
8
Escrow Services
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Fax No.: (000) 000-0000
Notwithstanding the above, in the case of communications delivered to the Escrow
Agent pursuant to (a), (b) and (c) of this Section 10, such communications shall
be deemed to have been given on the date received by an officer of the Escrow
Agent or any employee of the Escrow Agent who reports directly to any such
officer at the above-referenced office. In the event that the Escrow Agent, in
its sole discretion, shall determine that an emergency exists, the Escrow Agent
may use such other means of communication as the Escrow Agent deems appropriate.
"Business Day" shall mean any day other than a Saturday, Sunday or any other day
on which the Escrow Agent located at the notice address set forth above is
authorized or required by law or executive order to remain closed.
11. SECURITY PROCEDURES. In the event funds transfer instructions are
given (other than in writing at the time of execution of this Escrow Agreement,
as indicated in Section 10 above), whether in writing, by facsimile or
otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons designated on
schedule 1 hereto ("Schedule 1"), and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated. The
persons and telephone numbers for call-backs may be changed only in a writing
actually received and acknowledged by the Escrow Agent. If the Escrow Agent is
unable to contact any of the authorized representatives identified in Schedule
1, the Escrow Agent is hereby authorized to seek confirmation of such
instructions by telephone call-back to any one or more of the Parties' executive
officers ("Executive Officers"), as the case may be, which shall include the
titles of President or Vice President, as the Escrow Agent may select. Such
"Executive Officer" shall deliver to the Escrow Agent a fully executed
incumbency certificate, and the Escrow Agent may rely upon the confirmation of
anyone purporting to be any such officer. The Escrow Agent and the beneficiary's
bank in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by a party to identify (a) the beneficiary, (b) the
beneficiary's bank, or (c) an intermediary bank. The Escrow Agent may apply any
of the escrowed funds for any payment order it executes using any such
identifying number, even when its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank designated. The Parties acknowledge
that these security procedures are commercially reasonable.
12. COMPLIANCE WITH COURT ORDERS. In the event that any escrow
property 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, the Escrow Agent is hereby
expressly authorized, in its sole
9
discretion, to obey and comply with all writs, orders or decrees so entered or
issued, which it is advised by legal counsel of its own choosing is binding upon
it, whether with or without jurisdiction, and in the event that the Escrow Agent
obeys or complies with any such writ, order or decree it shall not be liable to
any of the Parties hereto or to any other person, entity, firm or corporation,
by reason of such compliance notwithstanding such writ, order or decree be
subsequently reversed, modified, annulled, set aside or vacated.
13. MISCELLANEOUS. The provisions of this Escrow Agreement may be
waived, altered, amended or supplemented, in whole or in part, only by a writing
signed by the Escrow Agent and the Parties. Neither this Escrow Agreement nor
any right or interest hereunder may be assigned in whole or in part by the
Escrow Agent or any Party, except as provided in Section 6, without the prior
consent of the Escrow Agent and the Parties. This Escrow Agreement shall be
governed by and construed under the laws of the State of New York. Each Party
irrevocably waives any objection on the grounds of venue, forum non-conveniens
or any similar grounds and irrevocably consents to service of process by mail or
in any other manner permitted by applicable law and consents to the jurisdiction
of the courts located in the State of New York. The Parties further hereby waive
any right to a trial by jury with respect to any lawsuit or judicial proceeding
arising or relating to this Escrow Agreement. No party to this Escrow Agreement
is liable to any other party for losses due to, or if it is unable to perform
its obligations under the terms of this Escrow Agreement because of, acts of
God, fire, war, terrorism, floods, strikes, electrical outages, equipment or
transmission failure, or other causes reasonably beyond its control. This Escrow
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. All signatures of the parties to this Escrow Agreement may be
transmitted by facsimile, and such facsimile will, for all purposes, be deemed
to be the original signature of such party whose signature it reproduces, and
will be binding upon such party. If any provision of this Escrow Agreement is
determined by a court of competent jurisdiction to be prohibited or
unenforceable by reason of any applicable law of a jurisdiction, then such
provision shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof, and any such prohibition or unenforceability in such jurisdiction shall
not invalidate or render unenforceable such provisions in any other
jurisdiction. The Parties represent, warrant and covenant that each document,
notice, instruction or request provided by such Party to Escrow Agent shall
comply with applicable laws and regulations. Where, however, the conflicting
provisions of any such applicable law may be waived, they are hereby irrevocably
waived by the parties hereto to the fullest extent permitted by law, to the end
that this Escrow Agreement shall be enforced as written. Except as expressly
provided in Section 8 above, nothing in this Escrow Agreement, whether express
or implied, shall be construed to give to any person or entity other than the
Escrow Agent and the Parties any legal or equitable right, remedy, interest or
claim under or in respect of this Escrow Agreement or any funds escrowed
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date set forth above.
10
--------------------------------------------------------------------------------
TAX CERTIFICATION: Taxpayer Identification Number (TIN): _________ Date: ____
NAME & ADDRESS: ___________________________________
___________________________________
___________________________________
Customer is a (check one):
___ Corporation ___ Partnership
___ Individual/sole proprietor ___ Trust ___ Other _________________
Taxpayer is (check if applicable):
___ Exempt from backup withholding
UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT:
(1) THE NUMBER SHOWN ABOVE IS ITS CORRECT TAXPAYER IDENTIFICATION NUMBER (OR IT
IS WAITING FOR A NUMBER TO BE ISSUED TO IT);
(2) IT IS NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) IT IS EXEMPT FROM
BACKUP WITHHOLDING OR (B) IT HAS NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (IRS) THAT IT IS SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED IT
THAT IT IS NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND
(3) THE ENTITY IS A U.S. PERSON (INCLUDING A U.S. RESIDENT ALIEN).
(IF THE ENTITY IS SUBJECT TO BACKUP WITHHOLDING, CROSS OUT THE WORDS AFTER THE
(2) ABOVE.)
INVESTORS WHO DO NOT SUPPLY A TAX IDENTIFICATION NUMBER WILL BE SUBJECT TO
BACKUP WITHHOLDING IN ACCORDANCE WITH IRS REGULATIONS.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
--------------------------------------------------------------------------------
SIGNATURE: _________________________________
PRINTED NAME: XXXXX XXXXX
11
--------------------------------------------------------------------------------
TAX CERTIFICATION: Taxpayer Identification Number (TIN): _________ Date: ____
NAME & ADDRESS: ___________________________________
___________________________________
___________________________________
Customer is a (check one):
___ Corporation ___ Partnership
___ Individual/sole proprietor ___ Trust ___ Other _________________
Taxpayer is (check if applicable):
___ Exempt from backup withholding
UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT:
(1) THE NUMBER SHOWN ABOVE IS ITS CORRECT TAXPAYER IDENTIFICATION NUMBER (OR IT
IS WAITING FOR A NUMBER TO BE ISSUED TO IT);
(2) IT IS NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) IT IS EXEMPT FROM
BACKUP WITHHOLDING OR (B) IT HAS NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (IRS) THAT IT IS SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED IT
THAT IT IS NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND
(3) THE ENTITY IS A U.S. PERSON (INCLUDING A U.S. RESIDENT ALIEN).
(IF THE ENTITY IS SUBJECT TO BACKUP WITHHOLDING, CROSS OUT THE WORDS AFTER THE
(2) ABOVE.)
INVESTORS WHO DO NOT SUPPLY A TAX IDENTIFICATION NUMBER WILL BE SUBJECT TO
BACKUP WITHHOLDING IN ACCORDANCE WITH IRS REGULATIONS.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
--------------------------------------------------------------------------------
SIGNATURE: _________________________________
PRINTED NAME: XXXXXX XXXXX
12
--------------------------------------------------------------------------------
TAX CERTIFICATION: Taxpayer Identification Number (TIN): _________ Date: ____
NAME & ADDRESS: ___________________________________
___________________________________
___________________________________
Customer is a (check one):
___ Corporation ___ Partnership
___ Individual/sole proprietor ___ Trust ___ Other _________________
Taxpayer is (check if applicable):
___ Exempt from backup withholding
UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT:
(1) THE NUMBER SHOWN ABOVE IS ITS CORRECT TAXPAYER IDENTIFICATION NUMBER (OR IT
IS WAITING FOR A NUMBER TO BE ISSUED TO IT);
(2) IT IS NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) IT IS EXEMPT FROM
BACKUP WITHHOLDING OR (B) IT HAS NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (IRS) THAT IT IS SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED IT
THAT IT IS NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND
(3) THE ENTITY IS A U.S. PERSON (INCLUDING A U.S. RESIDENT ALIEN).
(IF THE ENTITY IS SUBJECT TO BACKUP WITHHOLDING, CROSS OUT THE WORDS AFTER THE
(2) ABOVE.)
INVESTORS WHO DO NOT SUPPLY A TAX IDENTIFICATION NUMBER WILL BE SUBJECT TO
BACKUP WITHHOLDING IN ACCORDANCE WITH IRS REGULATIONS.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
--------------------------------------------------------------------------------
XXXXX XXXXX, AS LIFE TENANT, AND XXXXXX XXXXX, AS REMAINDERMAN
SIGNATURE: _________________________________
PRINTED NAME: XXXXX XXXXX, AS LIFE TENANT
SIGNATURE: _________________________________
PRINTED NAME: XXXXXX XXXXX, AS REMAINDERMAN
13
--------------------------------------------------------------------------------
TAX CERTIFICATION: Taxpayer Identification Number (TIN): _________ Date: ____
NAME & ADDRESS: Xxxxxx Bay Fund LP
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Customer is a (check one):
___ Corporation ___ Partnership
___ Individual/sole proprietor ___ Trust [X] Other: limited partnership
Taxpayer is (check if applicable):
___ Exempt from backup withholding
UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT:
(1) THE NUMBER SHOWN ABOVE IS ITS CORRECT TAXPAYER IDENTIFICATION NUMBER (OR IT
IS WAITING FOR A NUMBER TO BE ISSUED TO IT);
(2) IT IS NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) IT IS EXEMPT FROM
BACKUP WITHHOLDING OR (B) IT HAS NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (IRS) THAT IT IS SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED IT
THAT IT IS NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND
(3) THE ENTITY IS A U.S. PERSON (INCLUDING A U.S. RESIDENT ALIEN).
(IF THE ENTITY IS SUBJECT TO BACKUP WITHHOLDING, CROSS OUT THE WORDS AFTER THE
(2) ABOVE.)
INVESTORS WHO DO NOT SUPPLY A TAX IDENTIFICATION NUMBER WILL BE SUBJECT TO
BACKUP WITHHOLDING IN ACCORDANCE WITH IRS REGULATIONS.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
--------------------------------------------------------------------------------
XXXXXX BAY FUND, L.P.
SIGNATURE:__________________________________
PRINTED NAME:_______________________________
14
--------------------------------------------------------------------------------
TAX CERTIFICATION: Taxpayer Identification Number (TIN): _________ Date: _____
NAME & ADDRESS: Xxxxxx Bay Overseas Fund, LTD.
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Customer is a (check one):
___ Corporation ___ Partnership
___ Individual/sole proprietor ___ Trust [X] Other: Cayman Island Company
Taxpayer is (check if applicable):
___ Exempt from backup withholding
UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT:
(1) THE NUMBER SHOWN ABOVE IS ITS CORRECT TAXPAYER IDENTIFICATION NUMBER (OR IT
IS WAITING FOR A NUMBER TO BE ISSUED TO IT);
(2) IT IS NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) IT IS EXEMPT FROM
BACKUP WITHHOLDING OR (B) IT HAS NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (IRS) THAT IT IS SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED IT
THAT IT IS NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND
(3) THE ENTITY IS A U.S. PERSON (INCLUDING A U.S. RESIDENT ALIEN).
(IF THE ENTITY IS SUBJECT TO BACKUP WITHHOLDING, CROSS OUT THE WORDS AFTER THE
(2) ABOVE.)
INVESTORS WHO DO NOT SUPPLY A TAX IDENTIFICATION NUMBER WILL BE SUBJECT TO
BACKUP WITHHOLDING IN ACCORDANCE WITH IRS REGULATIONS.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
--------------------------------------------------------------------------------
XXXXXX BAY OVERSEAS, LTD.
SIGNATURE:__________________________________
PRINTED NAME:_______________________________
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
AS ESCROW AGENT
By:__________________________________
15
SCHEDULE 1
TELEPHONE NUMBER(S) AND AUTHORIZED SIGNATURE(S) FOR
PERSON(S) DESIGNATED TO GIVE FUNDS TRANSFER INSTRUCTIONS
If to any of the Depositors:
NAME TELEPHONE NUMBER SIGNATURE
1. Xxxxx Xxxxx (000) 000-0000 x000 __________________
2. Xxxxxx Xxxxx (000) 000-0000 x000 __________________
3. ______________________ ___________________ __________________
If to Xxxxxx Bay:
NAME TELEPHONE NUMBER SIGNATURE
1. ______________________ ___________________ __________________
2. ______________________ ___________________ __________________
3. ______________________ ___________________ __________________
TELEPHONE NUMBER(S) FOR CALL-BACKS AND
PERSON(S) DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS
If to any of the Depositors:
NAME TELEPHONE NUMBER
1. Xxxxx Xxxxx (000) 000-0000 x000
2. Xxxxxx Xxxxx (000) 000-0000 x000
3. ______________________ ___________________
If to Xxxxxx Bay:
NAME TELEPHONE NUMBER
1. ______________________ ___________________
2. ______________________ ___________________
3. ______________________ ___________________
Telephone call backs shall be made to both Parties if joint instructions are
required pursuant to the agreement. All funds transfer instructions must include
the signature of the person(s) authorizing said funds transfer and must not be
the same person confirming said transfer.
16
SCHEDULE 2
ESCROW AGENT'S COMPENSATION:
The escrow agent fees are $3,500 annually. The fees are paid each year in
advance, with the first year's payment made upon execution of this agreement.
Upon termination of this agreement prior to any anniversary hereof, the fee for
that year will not be pro-rated.
17
