Exhibit 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "AGREEMENT") is made as of August 23,
2002, by and among StemCells, Inc. (the "SELLER"), the buyers of the Seller's
securities as set forth on the signature page hereto (collectively, the
"BUYERS"), and Xxxxxxx Xxxxxxxxx LLP, having an address at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "ESCROW AGENT"). Capitalized terms used but
not defined herein shall have the meanings set forth in the Subscription
Agreement referred to in the first recital.
WHEREAS, the Buyers will purchase, severally and not jointly, up to
$1,100,000 of the Common Stock (the "SHARES") from the Seller pursuant to the
Common Stock Purchase Agreements (the "SUBSCRIPTION Agreement") to be entered
into between each Buyer and the Seller, which Shares shall be issued pursuant to
the terms and conditions contained herein and in the Subscription Agreements;
and
WHEREAS, the Seller and the Buyers have requested that the Escrow Agent
hold in escrow the applicable purchase price pending receipt by the Buyers of
the Shares issuable pursuant to the Subscription Agreement;
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE I
TERMS OF THE ESCROW
1.1. On or prior to the date that the Seller and each Buyer enters into
the Subscription Agreements, each Buyer shall send its portion of the purchase
price of the Shares, as set forth on the signature pages hereto (collectively,
the "PURCHASE PRICE"), to the Escrow Agent. Upon receipt of the Purchase Price,
the Escrow Agent shall advise the Seller that it has received the Purchase
Price. The Seller shall promptly, but no later than one (1) Trading Day after
receipt of such funding notice from the Escrow Agent:
(i) cause its transfer agent to issue the Shares applicable to
each Buyer via DTC's DWAC system to the account specified by
such Buyer; and
(ii) deliver a Form 424(b)(2) supplemental prospectus (the
"PROSPECTUS") disclosing said purchase to the Buyers.
1.2. Upon receipt of written confirmation from the Buyers that the
Shares have been so deposited and the Prospectus has been delivered, the Escrow
Agent shall, within one (1) Trading Day, wire the Purchase Price per the wiring
instructions of the Seller as set forth on the signature page hereto.
1.3. In the event that, within two (2) Trading Days of the date of the
Escrow Agent's notice, the applicable Shares are not in a Buyer's DTC account
via the DWAC system or the supplemental prospectus is not delivered to a Buyer,
then such Buyer shall have the right to demand, by notice to the Escrow Agent
and the Seller, the return of the Purchase Price, and, at the election of the
Buyer, the Subscription Agreement with such Buyer shall be deemed null and void.
1.4. The Seller understands and acknowledges that delivery of the
Shares into the Buyers' DTC accounts via the DWAC system is a material term of
the Subscription Agreements with each Buyer and this Agreement, that time is of
the essence and that a delay in the delivery of the Shares into a Buyer's DTC
account via the DWAC system beyond 3 business days after the dates set forth
herein or in the Escrow Agreement, as may be applicable, could result in
economic loss to such Buyer.
1.5 Wire transfers to the Escrow Agent shall be made as follows:
Chase Manhattan Bank, NA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000 XXX
ABA Routing Number: [ ]
Account Number: [ ]
Name of Account: Xxxxxxx Xxxxxxxxx LLP Master Escrow Account
Remark: STEM
ARTICLE II
MISCELLANEOUS
2.1. No waiver or any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.
2.2. All notices or other communications required or permitted
hereunder shall be in writing, and shall be sent by fax, overnight courier,
registered or certified mail, postage prepaid, return receipt requested, and
shall be deemed received upon receipt thereof, as set forth in the Subscription
Agreement.
2.3. This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.
2.4. This Escrow Agreement is the final expression of, and contains the
entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior
2
understandings with respect thereto. This Escrow Agreement may not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be
waived, except by written instrument signed by the parties to be charged or by
their respective agents duly authorized in writing or as otherwise expressly
permitted herein.
2.5. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
2.6. The parties hereto expressly agree that this Escrow Agreement
shall be governed by, interpreted under and construed and enforced in accordance
with the laws of the State of New York. Except as expressly set forth herein,
any action to enforce, arising out of, or relating in any way to, any provisions
of this Escrow Agreement shall be brought in the Federal or state courts of New
York, New York as is more fully set forth in the Subscription Agreement.
2.7. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Seller, Buyers and the
Escrow Agent.
2.8. The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall not be personally liable
for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith, excepting only its own gross negligence or willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law (other than Escrow Agent itself)
shall be conclusive evidence of such good faith.
2.9. The Escrow Agent is hereby expressly authorized to disregard any
and all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
2.10. The Escrow Agent shall not be liable in any respect on account of
the identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Subscription Agreement or any documents or
papers deposited or called for thereunder or hereunder.
2.11. The Escrow Agent shall be entitled to employ such legal counsel
and other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. The Escrow Agent acted as legal
3
counsel for the Buyers, and may continue to act as legal counsel for the Buyers,
from time to time, notwithstanding his duties as an officer of the Escrow Agent
hereunder. The Seller consents to the Escrow Agent in such capacity as legal
counsel for the Buyers and waives any claim that such representation represents
a conflict of interest on the part of the Escrow Agent. The Seller understands
that the Buyers and the Escrow Agent are relying explicitly on the foregoing
provision in entering into this Escrow Agreement.
2.12. The Escrow Agent's responsibilities as escrow agent hereunder
shall terminate if the Escrow Agent shall resign by written notice to the Seller
and the Buyers. In the event of any such resignation, the Buyers and the Seller
shall appoint a successor Escrow Agent.
2.13. If the Escrow Agent reasonably requires other or further
instruments in connection with this Escrow Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
2.14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (1) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned by a final order,
decree or judgment of a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but the Escrow Agent shall
be under no duty whatsoever to institute or defend any such proceedings or (2)
to deliver the escrow funds and any other property and documents held by the
Escrow Agent hereunder to a state or Federal court having competent subject
matter jurisdiction and located in the State and City of New York in accordance
with the applicable procedure therefor.
2.15. The Seller and the Buyers agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Subscription
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
**********************
4
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of this 23rd day of August, 2002.
ESCROW AGENT:
STEMCELLS, INC.
XXXXXXX XXXXXXXXX LLP
By: /s/ XXXX XXXXX By:
-------------------------- --------------------------
Name: Xxxx Xxxxx Name:
Title: General Counsel Title:
BUYERS:
TRITON WEST GROUP, INC.
($1,100,000)
By: /s/ XXXX XXXX
--------------------------
Name: Xxxx Xxxx
WIRING INSTRUCTIONS OF THE SELLER:
---------------------------------
[ ]
