Exhibit 99.2
ESCROW AGREEMENT
ESCROW AGREEMENT dated June 29, 2001, among Xxxxxx & Xxxxxxxxx LLP, as
escrow agent, Glengarry Holdings Limited, a Bermudian company ("Glengarry") and
the individuals named on Schedule 1.1 hereto represented by Rosewood Company
Limited (Equity Services) ("Rosewood").
WHEREAS, Glengarry and Rosewood have entered into a Securities Exchange
Agreement dated June 29, 2001 (the "Agreement"); and
WHEREAS, pursuant to the Agreement, the number of "Purchaser's Shares"
defined therein as shares of Glengarry's common stock is subject to adjustment;
and
NOW, THEREFORE, for good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties do hereby agree as
follows:
1. Definitions. The following capitalized terms, as used in this
Agreement, shall have the following meanings:
(a) The term "Agreement" means that Securities Exchange
Agreement dated as of June 29, 2001 by and between
Glengarry and Rosewood, as representative of the
shareholders of Online Advisory Limited, a U.K.
company ("Online").
(b) The term "Rosewood" shall have the meaning ascribed
thereto in the preamble to this Agreement.
(c) The term "Glengarry" shall have the meaning ascribed
thereto in the preamble to this Agreement.
(d) The term "Escrow Agent" shall mean Xxxxxx & Xxxxxxxxx
LLP in its capacity as escrow agent under this
Agreement.
(e) The term "Escrow Documents" shall mean the
certificate representing the Purchaser Shares and the
Stock Power.
(f) The term "Purchasers Shares" shall mean 40,456,050
shares of Glengarry's common stock.
(g) The term "Xxxxxx & Xxxxxxxxx LLP" shall mean Xxxxxx &
Xxxxxxxxx LLP in any capacity other than as escrow
agent under this Agreement.
(i) The term "Stock Powers" shall mean stock powers in
blank, duly executed by Rosewood, relating to the
Purchaser Shares, with signatures guaranteed by a
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national bank or a member of the National Association
of Securities Dealers.
2. Appointment. The Escrow Agent shall act as the escrow agent as set
forth herein, and as such shall receive, acknowledge receipt, retain, release
and deliver the Escrow Documents on the terms, and subject to the conditions,
set forth herein.
3. Rights, Duties and Immunities.
(a) The duties and obligations of the Escrow Agent shall
be determined solely by the express provisions of
this Agreement. The Escrow Agent shall not be liable
except for the performance of such duties and
obligations as are specifically set out in this
Agreement and the Escrow Agent shall not be deemed to
have any knowledge of, or responsibility for, the
terms of any other agreement, instrument or document.
(b) The Escrow Agent shall not be responsible in any
manner whatsoever for any failure or inability of any
party hereto, or of any one else, to deliver
documents to the Escrow Agent or otherwise to honor
any of the provisions of this Agreement or otherwise.
(c) Except as provided in Section 7(b) below, Glengarry
and Rosewood will jointly indemnify the Escrow Agent
for, and defend and hold it harmless against, any
loss, liability or expense (including but not limited
to attorneys' fees and disbursements) arising out of
or in connection with, its acceptance of or the
performance of its duties and obligations under or
the interpretation of this Agreement; provided,
however, that this Section 3(c) shall not apply to
losses, liabilities and expenses caused by the bad
faith, willful misconduct or gross negligence of the
Escrow Agent.
(d) The Escrow Agent shall be entitled to rely upon any
judgment, certification, demand, notice, instrument
or other writing delivered to it hereunder without
being required to determine the authenticity or the
correctness of any fact stated therein or the
propriety or validity or the service thereof. The
Escrow Agent shall be fully protected in acting on
and relying upon any written notice, direction,
request, waiver, consent, receipt or other paper or
document which the Escrow Agent believes to be
genuine. The Escrow Agent may act in reliance upon
any instrument or signature it reasonably believes to
be genuine and the Escrow Agent may assume that any
person purporting to give any advice or make any
statement in connection with the provisions hereof
has been duly authorized to do so.
(e) The Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or
omitted by it in good faith, or for any mistake of
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fact or law, or for anything which it may do or
refrain from doing in connection herewith, except its
own bad faith, willful misconduct or gross
negligence.
(f) The Escrow Agent may seek the advice of legal counsel
as to any question arising from or relating to the
construction of any of the provisions of this
Agreement or its duties or obligations hereunder or
otherwise, and it shall incur no liability and shall
be fully protected in respect of any action taken,
omitted or suffered by it in good faith in accordance
with the advice of such counsel.
(g) The Escrow Agent does not make and will not be
required or deemed to make any representation as to
the validity or genuineness of any agreement,
document or other instrument held by or delivered to
it.
(h) If a dispute arises between one or more of the
parties hereto, or between any of the parties hereto
and any person not a party hereto, as to whether or
not or to whom the Escrow Agent shall deliver any of
the Escrow Documents or as to any other matter
arising from or relating to the Escrow Documents or
this Agreement, the Escrow Agent shall not be
required to determine such dispute and need not make
any delivery of any of the Escrow Documents, but will
retain the same until the rights of the parties to
the dispute shall have finally been determined by
written agreement among the parties to the dispute or
by final non-appealable order of a court of competent
jurisdiction. In the event that the Escrow Agent has
received notice of such order or any such agreement,
the Escrow Agent shall cause the Escrow Documents to
be released and delivered in accordance with such
agreement or order and, if both Glengarry and
Rosewood are not parties to such agreement, in
accordance with Section 5 below.
(i) The Escrow Agent shall be entitled to assume that no
dispute of the type referred to in Section 3(h) has
arisen unless it has received a written notice that
such a dispute has arisen, which written notice
refers specifically to this Agreement and identifies
by name and address the adverse claimants in such
dispute. Any party delivering written notice of a
dispute pursuant to this Section 3(i) shall
simultaneously therewith deliver a copy of such
notice to all parties hereto in accordance with
Section 10 hereof, with such copies to such persons
as are specified therein. For purposes of this
Section 3(i), the Escrow Agent shall not be deemed to
have received a written notice until all parties to
this Agreement have received such written notice. If
a dispute of the type referred to in Section 3(h)
arises, the Escrow Agent may, in its sole discretion
(but shall not be obligated to), commence
interpleader or similar actions or proceedings for
determination of such dispute.
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4. Delivery to Escrow. Simultaneously herewith, Rosewood will deposit
or will cause to be deposited in escrow with the Escrow Agent, the Purchasers
Shares and the Stock Power.
5. Release of Escrow. The Escrow Agent shall hold, release and deliver
the Escrow Documents as follows:
(a) Subject to the provisions of 5(c) and 5(d) below, if
the Escrow Agent receives an unqualified audit
report, prepared in accordance with generally
accepted accounting principles, audited by a
recognized U.K. based auditor agreed upon by Rosewood
and the Purchaser, on the Closing Balance Sheet
(defined in the "Agreement") which shows Online
having a net worth equal to or exceeding $8,091,212,
the Escrow Agent shall, without further instructions,
deliver the Escrow Documents to Rosewood.
(b) Subject to the provisions of 5(c) and 5(d) below, if
the Closing Balance Sheet shows a net worth less than
$8,091,212 it shall request cancellation of that
portion of the Purchaser Shares determined in
accordance with Section 3.2 of the Agreement and
deliver the balance of the Purchasers Shares to
Rosewood.
(c) If the Escrow Agent receives a final non-appealable
court order from a competent jurisdiction (as
described in paragraph 3(h)), the Escrow Agent shall,
within 15 days after the receipt of such court order,
deliver the Escrow Documents as specified therein.
(d) If the Escrow Agent receives a written instruction
from either Glengarry or Rosewood directing it not to
release the escrow Documents, the Escrow Agent shall
continue to hold the Escrow Documents until it
receives the joint written instruction of Glengarry
and Rosewood (duly executed by each of Glengarry and
Rosewood) directing the Escrow Agent as to whom it
should release and deliver the Escrow Documents as
soon as is practicable thereafter.
(e) Any party delivering written instructions pursuant to
Section 5(d) above to the Escrow Agent shall,
simultaneously therewith, deliver a copy of such
instructions to all other parties at their respective
addresses set forth in Section 10 below, with such
copies to such persons as are specified therein. For
purposes of Section 5(b), written instructions shall
not be deemed to have been received by the Escrow
Agent until such time as a copy thereof has been
received by each party hereto other than the party
delivering such instructions.
(f) The parties hereby agree that any of the Escrow
Documents as are undated or incomplete shall, if
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necessary when and if released from escrow hereunder,
be dated as of the date of such release and delivery
and/or completed by the Escrow Agent, and each of the
parties hereto hereby appoints the Escrow Agent as
its attorney-in-fact for the purpose of dating and
completing such documents.
6. Successor Escrow Agent.
(a) The Escrow Agent may, at any time, resign as such
with or without the prior written consent of all the
parties hereto, in which case the Escrow Agent (and
any successor escrow agent) shall deliver the Escrow
Documents to any successor escrow agent jointly
designated by Glengarry and Rosewood in writing, or
to any court of competent jurisdiction, whereupon the
Escrow Agent shall be discharged of and from any and
all further duties and obligations arising in
connection with this Agreement. The resignation of
the Escrow agent shall take effect on the earlier of
(i) the appointment of a successor escrow agent, or
(ii) the day which is 30 days after the date of the
delivery of the Escrow Documents and a copy of this
Agreement to any court of competent jurisdiction. In
the event that a successor escrow agent has not been
appointed at the expiration of such 30-day period,
the Escrow Agent's sole responsibilities hereunder
shall be: (i) to maintain the safekeeping of the
Escrow Documents and any other documents delivered to
it hereunder, if any, and (ii) to release and deliver
the Escrow Documents and any such documents in
accordance with Section 5 of this Agreement.
(b) If the Escrow Agent receives a written notice signed
by Glengarry and Rosewood stating that they have
selected a successor escrow agent, the Escrow Agent
shall deliver the Escrow Documents (and any other
documents then held by it hereunder, if any) to the
successor escrow agent named in the aforesaid notice
within 15 days after receipt of such written notice.
7. Fees and Costs of the Escrow Agent.
(a) The Escrow agent shall not be entitled to a fee for
its services hereunder. The Escrow agent shall,
however, be entitled to the reimbursement of any
reasonable expenses (including but not limited to
attorneys' fee and disbursements) actually incurred
by it in the performance of its duties hereunder.
Without limiting any other provision of this
Agreement, the amount of such reimbursements will be
borne by the parties as follows: 50% by Glengarry on
the one hand, and 50% by Rosewood on the other hand,
except as provided in paragraph 7(b) below.
(b) Notwithstanding any provision in this Agreement to
the contrary, if Glengarry or Rosewood is determined
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to be in breach of or default under any of the
provisions hereof, or has been determined by a court
of competent jurisdiction to have delivered any
written notice or instructions in bad faith or
containing untrue statements, then such party shall
bear: (i) all the costs and expenses of the Escrow
Agent required to be paid by any party hereunder, and
(ii) all costs and expenses (including but not
limited to attorneys' fees and disbursements)
incurred by each other party as a result of, or in
connection with, such breach, default or dispute, or
written notice or instruction; provided, however,
that the foregoing shall not affect the Escrow
Agent's right to seek payment from any party
hereunder.
8. Voting Rights and/or Dividends. Notwithstanding any provision to the
contrary in this Agreement or elsewhere, during the time that the Purchasers
Shares are held in escrow by the Escrow Agent in accordance with this Agreement,
Glengarry or its designee shall be entitled to exercise any and all voting
and/or other consensual rights accruing to the owner thereof and to receive all
dividends and other distributions made thereupon.
9. Construction. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without regard to
such State's principles of conflicts of law.
10. Notices.
(a) All notices, demands, requests, consents, approvals,
reports or other communications required or permitted
to be given pursuant to this Agreement shall be in
writing and shall be delivered to the following
addresses (or such other address as the recipient
party may hereafter specify in the same manner):
If to the Escrow Agent, to it at:
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
If to Glengarry, to it at:
Xxxxxxxxx Xxxxxxxx Xxxxxxx
X.X. Xxx XX 0000
00 Xxxxx Xxxxxx
Xxxxxxxx, XXXX, Xxxxxxx
Attn: Xxxxxxx Xxxxxxx, Vice President
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If to Rosewood, to it at:
Rosewood Company Limited (Equity Services)
0 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Except as otherwise provided in Sections 3(i) and 5(c) hereof, any such
notice, demand, request, consent, approval, report or other communication shall
be deemed given when received by the party or person to whom or which it is
addressed.
11. Xxxxxx & Xxxxxxxxx LLP.
(a) Each party acknowledges that Xxxxxx & Xxxxxxxxx LLP
has acted as legal counsel to and representative of
Glengarry and Glengarry and their respective
affiliates in the past and is presently doing so
(including, without limitation, in connection with
the Agreement and other related transactions), and
agrees that such counsel and representation do not
and will not constitute a grounds for disqualifying
Xxxxxx & Xxxxxxxxx LLP from acting as Escrow Agent
hereunder, and that Xxxxxx & Xxxxxxxxx LLP may
continue to so act as legal counsel to and
representative to Glengarry, Glengarry and their
respective affiliates in the future in connection
with those and all other matters.
(b) Notwithstanding anything to contrary contained
herein, it is expressly understood by the parties
hereto that the Escrow Agent, in that capacity, at
any time that it is required or permitted to seek
legal counsel under this Agreement, may seek such
legal counsel from Xxxxxx & Xxxxxxxxx LLP, and that
Glengarry and Rosewood will be jointly liable (as
provided in Sections 3(c), 7(a) and 7(b)) to Xxxxxx &
Xxxxxxxxx LLP for any services performed and billed
to the Escrow Agent by Xxxxxxx X. Xxxxxx at its
customary hourly rates and all of Xxxxxx & Xxxxxxxxx
LLP's disbursements in connection with the provision
of such services.
12. Headings. The headings of the sections of this Agreement are
inserted as a matter of convenience and for reference purposes only, are of no
binding effect, and in no respect define, limit or describe the scope of this
Agreement or the instant of any section.
13. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each were upon the
same instrument.
14. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter hereof, supersedes all prior negotiations between the parties, and can be
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amended, modified, supplemented, extended, terminated, discharged or changed
only by an agreement in writing which makes specific reference to this Agreement
and which is signed by all parties.
15. Successors and Assigns. This Agreement shall be binding upon and
inure solely to the benefit of the parties and their respective permitted
successors and assigns and shall not be enforceable by or create or evidence any
right of any third party. This Agreement cannot be assigned without the express
written consent of the other parties. In the event that any party assigns its
rights to any of the Escrow Documents, any assignee shall assume and agree in
writing with the other parties and the Escrow Agent to perform all of such
assigning party's obligations hereunder. Upon any such assignment, references to
the parties herein shall include each such assignee, and no such assignment
shall relieve such assigning party of any obligations hereunder.
16. Severability. Any provision of this Agreement that may be
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is expressly understood, however, that the parties intend
each and every provision of this Agreement to be valid and enforceable and
hereby knowingly waive all rights to object to any provision of this Agreement.
17. Further Assurances. Each of the parties agrees that it shall use
its good faith efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary to consummate and make effective this
Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
XXXXXX & XXXXXXXXX LLP
As Escrow Agent
By: /s/ Xxxxxxx X . Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Partner
GLENGARRY HOLDINGS LIMITED
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx, Vice President
ROSEWOOD COMPANY LIMITED (EQUITY SERVICES)
By: /s/ X. X. Xxxxxx
------------------------------
Name: X. X. XXXXXX, DIRECTOR
Title:
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