ESCROW AGREEMENT
This
Escrow Agreement (the “Agreement”) is made and entered into as of the ___ day of
February, 2006, by and among Axion Battery Products, Inc. ("Axion") and National
City Bank of Pennsylvania ("Bank", and together with Axion, the "Parties")
and
Xxxxxxx X. Xxxxxxxx, Xx. and Xxxxx X. Xxxxxx (collectively, "Agents").
Background
A. The
Bank,
as Seller, and Axion, as Buyer, are parties to that certain Asset Purchase
Agreement ("APA") of even date herewith, pursuant to which Seller has agreed
to
transfer to Buyer free and clear title to the Assets (as such term is defined,
and as other capitalized terms used in this Agreement that are not otherwise
defined herein are defined, in the APA) for the total Purchase Price of
$800,000.
B. Certain
of the Assets, specifically three (3) molds (the "Molds") in the possession
of
Xxxxxxxxxx Moulding, Inc. ("Xxxxxxxxxx"), are the subject of a pre-judgment
attachment or other encumbrance asserted by Xxxxxxxxxx (the "Xxxxxxxxxx Claim")
in connection with the action brought by Xxxxxxxxxx against New Castle Battery
Manufacturing Company that is pending in the Chancery Court of Neshoba County,
Mississippi at Cause No. 2005-343 (the "Action").
C. Notwithstanding
the Xxxxxxxxxx Claim, Seller will convey to Buyer title to the Molds, but the
Parties have agreed to escrow a portion of the Purchase Price pending resolution
of the Xxxxxxxxxx Claim, subject to and in accordance with the terms of this
Agreement.
Provisions
The
Parties, for good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, agree as
follows:
1. Appointment
of Escrow Agent. The
Parties appoint Agents to act, jointly, as escrow agent ("Escrow Agent") under
this Agreement and Agents agree to serve as Escrow Agent under this Agreement.
2. Escrowed
Funds.“Escrowed
Funds” shall mean and refer to the sum of $90,000 to be deposited by Axion with
Escrow Agent, who shall maintain such funds in a joint (two signature)
depository account ("Escrow Account") at a mutually acceptable bank (other
than
Bank) with offices in Pittsburgh until disbursed in accordance with this
Agreement. To the extent required by any income tax, withholding or other
applicable law, Axion will provide its Federal Employer Identification Number
to
Agents and the Escrowed Funds will be maintained or reported under such number;
provided, however, that the ultimate liability or responsibility for any income
or other taxes payable or reportable with respect to the Escrowed Funds or
any
interest earned thereon shall be determined by applicable law and not by this
Agreement.
3. Operation
of Escrow. The
Escrow Agent is specifically and irrevocably authorized and directed by the
Parties to maintain the Escrowed Funds in the Escrow Account to be disbursed
consistent with the terms of this Agreement.
4. Disbursement
of Funds. The
Escrow Agent shall disburse the Escrow Funds (including any interest earned
thereon, but less any maintenance, account fees or other charges imposed by
the
bank): (a) to Bank, upon receipt of a written certification from Bank, together
with satisfactory written evidence from Xxxxxxxxxx or the Court having
jurisdiction over the Action that either (i) Xxxxxxxxxx has voluntarily
relinquished and irrevocably released the Xxxxxxxxxx Claim as it relates to
the
Molds, or (ii) the Action has been resolved, in whole or in part, whether by
stipulation, withdrawal, dismissal or judicial determination, in a manner that
removes and releases, finally and without subject to any appeal, the Xxxxxxxxxx
Claim as it relates to the Molds, or (iii) Xxxxxxxxxx has relinquished and
irrevocably released any and all rights, claims and interests in the Molds
that
accrued prior to the date of this Agreement; (b) to Bank, upon written
certification from Bank or Axion that actual possession of the Molds has been
delivered to Axion at its facility in New Castle, Pennsylvania or to some other
location designated by Axion; (c) to Bank, upon written certification from
Axion
that Xxxxxxxxxx has agreed to produce products for Axion from the Molds on
terms
(including without limitation price, quantity, quality, shipping, and delivery
time) deemed commercially reasonable and satisfactory to Axion and that at
the
expiration of such agreement with Xxxxxxxxxx, the Molds will be returned to
Axion; or (d) to Axion, if Escrow Agent has not received a written certification
that one of the events in subsection (a) through (c) above has occurred prior
to
the expiration of the Escrow Period (as defined below). Disbursement of the
Escrowed Funds in accordance with this Section 4 shall constitute full
satisfaction of Axion's obligation to pay the balance of the Purchase Price
under the APA.
5. Duration
of Escrow.
Unless
extended by a written agreement signed by all parties hereto, under no
circumstances shall the Escrow Agent maintain the Escrowed Funds for more than
180 days from the date of execution of this Agreement ("Escrow
Period").
6. Escrow
Agent's Duties.
The
duties of Escrow Agent under this Agreement are purely ministerial in nature
and
shall be expressly limited to the safekeeping of the Escrowed Funds and for
disbursement of the Escrowed Funds in accordance with the terms of this
Agreement. The Escrow Agent undertakes to perform only the duties expressly
contained in this Agreement, and no implied duties or obligations not identified
in this Agreement.
7. Liability
of Escrow Agent.
Escrow
Agent shall have no liability or obligation with respect to the Escrowed Funds
except for Escrow Agent's willful misconduct or gross negligence. Escrow Agent's
sole responsibility shall be for the safekeeping and disbursement of the
Escrowed Funds in accordance with the terms of this Agreement. Escrow Agent
may
rely upon any writing or instrument, including any electronic communication,
not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein, which Escrow Agent
shall in good faith believe to be genuine, to have been signed or presented
by
the person or parties purporting to sign the same and which conforms to the
provisions of this Escrow Agreement.
8. Resignation.
Escrow
Agent may resign at any time upon the giving of not less than thirty (30) days'
written notice to the Parties. In such an event, the Escrow Agent shall deliver
the Escrowed Funds and any and all documents relating thereto to the successor
Escrow Agent mutually appointed by the Parties, who shall upon receipt of the
Escrowed Funds become vested with all the rights, powers, privileges and duties
of the retiring Escrow Agent. The retiring Escrow Agent shall be discharged
from
any duties and obligations under this Escrow Agreement, but shall not be
discharged from any liability for actions taken as Escrow Agent hereunder prior
to such succession. After retiring Escrow Agent's resignation or removal, the
provisions of this Escrow Agreement shall inure to the retiring Escrow Agent's
benefit as to any actions taken or omitted to be taken by the retiring Escrow
Agent while acting as Escrow Agent under this Escrow Agreement.
9. Miscellaneous
Provisions.
9.1 Binding
Effect.
All of
the terms and provisions of this Agreement shall be binding upon, inure to
the
benefit of, and be enforceable by, the signatories to this Agreement and their
respective heirs, successors, legal representatives, and permitted
assigns.
9.2 Severability.
If any
provision of this Agreement or the application of a provision to any person
or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
of
this Agreement and the application of the invalid or unenforceable provision
to
persons or circumstances other than those as to which it is invalid or
unenforceable shall not be affected, and the remainder of this Agreement shall
otherwise remain in full force and effect. Moreover, the invalid or
unenforceable provision shall be reformed, if possible, so as to accomplish
most
closely the intent of the Parties consistent with applicable law.
9.3 Waiver.
Except
as otherwise expressly provided in this Agreement, no waiver of any rights
or
obligations under this Agreement shall be deemed to have occurred unless the
purported waiver is contained in a writing signed by the party against whom
the
waiver is asserted. Further, the failure or delay of any party at any time
to
require performance by another party of any provision of this Agreement shall
not affect the right of that party at a later date to require performance of
the
provision or to exercise any right, power, or remedy provided for under this
Agreement. The waiver by any party of any breach of any provision of this
Agreement shall not be construed as continuing or as a bar to or waiver of
any
right or remedy as to any subsequent event. No notice to or demand on any party,
in any case, shall of itself entitle that party to any other or further notice
or demand in similar or other circumstances.
9.4 Third
Parties.
Nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies on any person or entity not a signatory to this Agreement (other
than the parties' respective heirs, successors, legal representatives, and
permitted assigns), nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person or entity to any
party
to this Agreement.
9.5 Governing
Law.
This
Agreement and all transactions contemplated by this Agreement shall be governed
by the laws of the Commonwealth of Pennsylvania.
9.6 Entire
Agreement.
This
Agreement shall constitute the entire agreement of the Parties with respect
to
the transactions contemplated in this Agreement. All prior understandings and
agreements between the Parties with respect to such matters are merged into
this
Agreement, which alone fully and completely expresses their
understanding.
9.7 Amendments.
This
Agreement may not be amended, modified, altered, or changed in any respect,
except by a further agreement in writing duly executed by each of the
signatories to this Agreement.
9.8 Counterparts.
This
Agreement may be executed in counterparts or in multiple originals, and separate
signature pages may be attached to this Agreement containing the original
signatures of one or more of the signatories to this Agreement. In any of the
foregoing events, each counterpart or original shall be deemed an original
of
this Agreement but all such counterparts or originals together shall comprise
one and the same agreement which shall be binding on all of the parties to
this
Agreement, notwithstanding that all of the parties are not signatories to the
original or the same counterpart of this Agreement. For purposes of this
Agreement, facsimile signatures are considered original signatures.
9.9 Assignability.
This
Agreement is personal to the Parties to this Agreement. This Agreement may
not
be assigned without the prior written consent of the Parties and Escrow
Agent.
9.10 Notices.
Any
notice, demand, request, election, certification or other communication (any
“Communication”) required or permitted to be given or made to or by any party to
this Agreement or otherwise under this Agreement shall be in writing. Any
Communication so required or permitted and any other Communication shall be
deemed to have been delivered and received on the earlier of the day actually
received (by whatever means sent) if received on a business day (or, if not
received on a business day, on the first business day after the day of receipt)
or, regardless of whether or not received after the dates hereinafter specified,
(i) on the date of transmittal by telecopier if transmitted by telecopier
prior to 5:00 p.m. on a day which is a business day; if transmitted by
telecopier after 5:00 p.m. or on a day other than a business day, the
Communication shall be deemed to have been delivered and received on the next
business day, (ii) on the date of delivery or refusal of delivery, if by
hand delivery, (iii) on the first business day after having been delivered
to a nationally recognized overnight air courier service, such as Federal
Express, (iv) on the second business day after having been deposited with
the United States Postal Service, Express Mail, return receipt requested, in
each case addressed to the respective party at the several addresses indicated
below or to any other addresses that may hereafter be indicated by notice
delivered in accordance with the terms of this Section to the other
party:
If
to
Bank: With
a
copy to:
National
City Bank of Pennsylvania Xxxxx
Xxxxxx Xxxxxx & Xxxxxxxxx
00
Xxxxxxx Xxxxxx 00xx
Xxxxx,
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000 Xxxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxx Kitchen Attention:
Xxxxx X. Xxxxxx
If
to
Axion: With
a
copy to:
Xxxxxx
X.
Xxxxxxxxx, CEO Xxxxxxx
X. Xxxxxxxx, Xx., Esq.
Axion
Battery Products, Inc.
Xxxxx
& Xxxxxxx, P.C.
c/o
Xxxxxxx X. Xxxxxxxx, Xx., Esq. 00
Xxxxxxx Xxxxxx, Xxxxxxxxx Floor
Xxxxx
& Xxxxxxx, P.C.
Xxxxxxxxxx,
XX 00000
00
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxx,
XX 00000
If
to
Escrow Agent:
Xxxxxxx
X. Xxxxxxxx, Xx. Esq.
Xxxxx
& Xxxxxxx, P.C.
00
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxx,
XX 00000
AND
Xxxxx
X.
Xxxxxx
Xxxxx
Xxxxxx Xxxxxx & Xxxxxxxxx
00xx
Xxxxx,
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
The
respective attorneys for the Parties are authorized to give any Communication
pursuant to this Agreement on behalf of their respective clients. Any
Communication so given by an attorney shall be deemed to have been given by
that
attorney's client. If the addressee refuses delivery of the notice or if the
notice is returned to the addressor unopened by the addressee, effective notice
shall still be deemed to have been given. For purposes of this Agreement, the
term “business day” shall mean any day other than a Saturday, Sunday, or legal
holiday.
9.11. Advice
of Counsel.
Each of
the Parties has reviewed this Agreement and all of its terms with legal counsel,
or has had an opportunity to review this Agreement with legal counsel, and
is
not relying on any representations made to him by any other person concerning
the effect of this Agreement. This Agreement shall be interpreted without regard
to any presumption or rule requiring construction against the party causing
this
Agreement to be drafted.
9.12 Jurisdiction
and Venue.
The
Parties irrevocably agree and consent that any legal action or proceeding
arising out of or in any way connected with this Agreement shall be instituted
or brought exclusively in the State or Federal Courts of the Commonwealth of
Pennsylvania, and irrevocably submit to the jurisdiction of those Courts in
any
such legal action or proceeding. In addition, the Parties irrevocably and
unconditionally waive any objection which they may now or hereafter have to
the
laying of venue of any of these actions or proceedings in any such Court and.
further irrevocably and unconditionally waive the right to plead or claim that
any such action or proceeding brought in any such Court has been brought in
an
inconvenient forum.
9.13 Use
of Singular.
Unless
the context clearly requires otherwise, the use of the singular shall include
the plural, and vice versa. Without limiting the generality of the foregoing,
the term "Escrow Agent" as used in this Agreement shall mean and refer to each
Escrow Agent individually and to both Escrow Agents collectively.
IN
WITNESS WHEREOF, this Agreement has been duly executed on behalf of the Parties
and shall be effective as of the date first set forth above.
NATIONAL
CITY BANK OF PENNSYLVANIA
By:
Name:
Title:
AXION
BATTERY PRODUCTS, INC.
By:
Name:
Title:
ESCROW
AGENT
____________________________________
Xxxxxxx
X. Xxxxxxxx
____________________________________
Xxxxx
X.
Xxxxxx
1047781_2
