EXHIBIT 10.3
ESCROW AGREEMENT
THIS AGREEMENT dated for reference the 7th day of May, 1999 (the "Effective
Date").
AMONG:
KODIAK GRAPHICS COMPANY, a company duly incorporated under the
laws of the State of Nevada, and having an office at 0000 Xxxxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxx, X.X.X., 00000
(the "Kodiak")
OF THE FIRST PART
AND:
XXXXX XXXXXXX, XXXX XXXXXX, XXXXX XXXXX, XXXXXXX XXXXXX, XXXXXXX
XXXXXXX and GANG CONSULTING INC., all c/o Suite 1500 - 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
(collectively the "Principal Vendors")
OF THE SECOND PART
AND:
CLARK, WILSON, Barristers & Solicitors, of Suite 800 - 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
(the "Escrow Agent")
OF THE THIRD PART
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WITNESSES THAT WHEREAS:
A. Pursuant to a Share Exchange Agreement (the "Share Exchange Agreement"),
dated May __, 1999, between Kodiak, the Principal Vendors and the other
shareholders (the "Other Vendors") of Sportsprize Entertainment Inc.
("Sportsprize"), Kodiak has agreed to purchase all of the issued and outstanding
shares in the capital of Sportsprize in consideration of, among other things,
Kodiak issuing an aggregate of 10,000,000 common shares (the "Purchase Shares")
in the capital of Kodiak to the Principal Vendors and the Other Vendors;
B. The Share Exchange Agreement further provides that the Principal Vendors
will deliver to the Escrow Agent and deposit in escrow 2,556,410 of the Purchase
Shares (the "Escrow Shares") to be held by the Escrow Agent;
C. The Escrow Shares will be held in escrow and used to satisfy signing
bonuses and fees which will be paid to certain high level management recruited
and outside consultants retained in the future by Kodiak or Sportsprize;
D. Kodiak and the Principal Vendors desire to appoint the Escrow Agent, and
the Escrow Agent has agreed to act as escrow agent to hold the Escrow Shares in
accordance with the terms and conditions of this Agreement and the Share
Exchange Agreement;
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:
I. INTERPRETATION
1.1 Any capitalized term not defined herein shall have the meaning ascribed
thereto in the Share Exchange Agreement.
1.2 In this Agreement:
(a) the headings have been inserted for convenience of reference only and
in no way define, limit, or enlarge the scope or meaning of the
provisions of this Agreement;
(b) all references to any party, whether a party to this Agreement or not,
will be read with such changes in number and gender as the context or
reference requires; and
(c) when the context hereof makes it possible, the word "person" includes
in its meaning any firm and any body corporate or politic.
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2. DEPOSIT OF ESCROW SHARES
2.1 The Principal Vendors will, on closing of the Share Exchange Agreement,
deliver share certificate(s) representing the Escrow Shares, together with Stock
Powers of Attorney duly endorsed for transfer of all of the Escrow Shares with
signatures duly guaranteed, to the Escrow Agent for deposit in escrow with the
Escrow Agent on the terms of this Agreement and the Share Exchange Agreement.
3. ESCROW PROVISIONS - ESCROW SHARES
3.1 The Principal Vendors hereby direct the Escrow Agent to retain the Escrow
Shares, and not to do or cause anything to be done to release the same from
escrow except in accordance with this Agreement. The Escrow Agent accepts its
responsibilities hereunder and agrees to perform them in accordance with the
terms hereof.
3.2 The Escrow Agent will hold the Escrow Shares in escrow and undelivered
until written confirmation (the "Confirmation") executed by each of the
following:
(a) Xxxxx Xxxxxx or another authorized representative of the Board of
Directors of Sonora Capital Corp., and
(b) Xxxx Xxxxxx or any one of the Principal Vendors (other than Gang
Consulting Inc.),
is received, in which case the Escrow Agent shall deliver certificates
representing the number of Escrow Shares as instructed in the Confirmation.
3.3 If there are any Escrow Shares held by the Escrow Agent on the first
anniversary of the Effective Date, then the Escrow Agent is authorized and
directed to deliver such Escrow Shares as follows:
(a) as to 50% of such Escrow Shares to Sonora Capital Corp.; and
(b) as to 50% of such Escrow Shares to the Principal Vendors pro-rata
based upon the number of Purchase Shares that each of the Principal
Vendors deposited into Escrow.
3.4 The registered owner of any Escrow Shares held by the Escrow Agent is
entitled to exercise all voting rights attached to such Escrow Shares.
3.5 The Escrow Shares will not be sold, assigned, hypothecated, alienated,
released from escrow, transferred within escrow or otherwise in any manner
dealt with except in accordance with this Agreement or as may be required
by reason of the bankruptcy of the
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Principal Vendors, in which case the Escrow Agent will hold the Escrow Shares
subject to this Agreement, for whatever person, firm or corporation shall be
legally entitled to be or become the registered owner thereof.
4. THE ESCROW AGENT
4.1 In exercising the rights, duties and obligations prescribed or confirmed by
this Agreement, the Escrow Agent will act honestly and in good faith and will
exercise that degree of care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances.
4.2 Kodiak and the Principal Vendors jointly and severally covenant and agree
from time to time and at all times hereafter well and truly to save, defend and
keep harmless and fully indemnify the Escrow Agent, its successors, and assigns,
from and against all loss, costs, charges, suits, demands, claims, damages and
expenses which the Escrow Agent, its successors or assigns may at any time or
times hereafter bear, sustain, suffer or be put unto for or by reason or on
account of its acting pursuant to this Agreement or anything in any manner
relating thereto or by reason of the Escrow Agent's compliance in good faith
with the terms hereof.
4.3 In case proceedings should hereafter be taken in any court respecting any
of the Escrow Shares, the Escrow Agent will not be obliged to defend any such
action or submit its rights to the court until it has been indemnified by other
good and sufficient security in addition to the indemnity given in Clause (b)
against its costs of such proceedings.
4.4 The Escrow Agent will have no responsibility in respect of loss of any of
the Escrow Shares except the duty to exercise such care in the safekeeping
thereof as it would exercise if the Escrow Shares belonged to the Escrow Agent.
The Escrow Agent may act on the advice of counsel but will not be responsible
for acting or failing to act on the advice of counsel.
4.5 The Escrow Agent will not be bound in any way by any contract between the
parties hereto whether or not it has notice thereof or of its terms and
conditions and the only duty, liability and responsibility of the Escrow Agent
will be to hold the Escrow Shares as herein directed and to pay and deliver the
same to such persons and other such conditions as are herein set forth. The
Escrow Agent will not be required to pass upon the sufficiency of the Escrow
Shares or to ascertain whether or not the person or persons who have executed,
signed or otherwise issued or authenticated the said documents have authority to
so execute, sign or authorize, issue or authenticate the said documents or any
of them, or that they are the same persons named therein or otherwise to pass
upon any requirement of such instruments that may be essential of their
validity, but it shall be sufficient for all purposes under this Agreement
insofar as the Escrow Agent is concerned that the said documents are deposited
with it as herein specified by the parties executing this Agreement with the
Escrow Agent.
4.6 In no event will the Escrow Agent be deemed to have assumed any liability
or responsibility for the sufficiency, form and manner of making any notice or
demand provided for
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under this Agreement or of the identity of the persons executing the same, but
it shall be sufficient if any writing purporting to be such a notice, demand or
protest is served upon the Escrow Agent in any manner sufficient to bring it to
its attention.
4.7 In the event that any of the Escrow Shares are attached, garnished or
levied upon under any court order, or if the delivery of such property is stayed
or enjoined by any court order or if any court order, judgment or decree is made
or entered affecting such property or affecting any act by the Escrow Agent, the
Escrow Agent may, in its sole discretion, obey and comply with all writs,
orders, judgments or decrees so entered or issued, whether with or without
jurisdiction, notwithstanding any provision of this Agreement to the contrary.
If the Escrow Agent obeys and complies with any such writs, order, judgment or
decrees it will not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, notwithstanding that
such writs, orders, judgments or decrees may be subsequently reversed, modified,
annulled, set aside or vacated.
4.8 Except as herein otherwise provided, the Escrow Agent is authorized and
directed to disregard in its sole discretion any and all notices and warnings
which may be given to it by any of the parties hereto or by any other person,
firm, association or corporation. It will, however, obey the order, judgment or
decree of any court of competent jurisdiction, and it is hereby authorized to
comply with and obey such orders, judgements or decrees and in case of such
compliance, it shall not be liable by reason thereof to any of the parties
hereto or to any other person, firm, association or corporation, even if
thereafter any such order, judgment or decree may be reversed, modified,
annulled, set aside or vacated.
4.9 If the Escrow Agent receives any written instructions contrary to the
instructions contained in this Agreement, the Escrow Agent may continue to hold
the Escrow Shares until the lawful determination of the issue between the
parties hereto.
4.10 If protest is made to any action contemplated by the Escrow Agent under
this Agreement, the Escrow Agent may continue to hold the Escrow Shares until
the right to the documents is legally determined by a court of competent
jurisdiction or otherwise.
4.11 If written notice of protest is made by either Kodiak or the Principal
Vendors to the Escrow Agent to any action contemplated by the Escrow Agent under
this Agreement, and such notice sets out reasons for such protest, the Escrow
Agent will be entitled to continue to hold the Escrow Shares until the right to
the documents is legally determined by a court of competent jurisdiction or
otherwise.
4.12 The Escrow Agent may resign as Escrow Agent by giving not less then ten
(10) days' notice thereof to each of Kodiak and the Principal Vendors. Kodiak
and the Principal Vendors may terminate the Escrow Agent by giving to the Escrow
Agent a notice of termination executed by each of them not less than ten (10)
days' prior to the proposed date of termination. The resignation or termination
of the Escrow Agent will be effective and the Escrow Agent will cease to be
bound by this Agreement on the date that is ten (10) days after the date of
receipt of
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the termination notice given hereunder or on such other date as the Escrow
Agent, Kodiak and the Principal Vendors may agree upon. All indemnities granted
to the Escrow Agent will survive the termination of this Agreement or the
resignation or termination of the Escrow Agent.
4.13 Notwithstanding anything herein to the contrary, the Escrow Agent may act
upon any written instructions given by the Principal Vendors and Kodiak jointly.
4.14 Notwithstanding anything to the contrary contained herein, in the event of
any dispute arising between Kodiak and the Principal Vendors or between any
other persons or between any of them with respect to the Share Exchange
Agreement, this Agreement or any matters arising thereto, or with respect to the
any of the Escrow Shares, the Escrow Agent may in its sole discretion deliver
and interplead the Escrow Shares into court and such delivery and interpleading
will be an effective discharge to the Escrow Agent.
4.15 The Escrow Agent is under no responsibility to take any action whatsoever
unless and until the reasonable fees and disbursements of the Escrow Agent due
or reasonably expected to accrue are paid in full.
5. COUNTERPARTS
5.1 This Agreement may be executed in several counterparts, each of which will
be deemed to be an original and all of which will together constitute one and
the same instrument.
6. GENERAL
6.1 Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Agreement will be binding upon the parties hereto
unless reduced to writing and signed by the parties.
6.2 This Agreement will enure to the benefit of and be binding upon the parties
and their respective heirs, executors, administrators, successors, and assigns.
6.3 The parties will execute and deliver all such further documents, do or
cause to be done all such further acts and things, and give all such further
assurances as may be necessary to give full effect to the provisions and intent
of this Agreement.
6.4 This Agreement will be governed by and construed in accordance with the law
of British Columbia.
6.5 Any notice required or permitted to be given under this Agreement will be
in writing and may be given by delivering, sending by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy, or sending by prepaid registered mail posted in Canada the United
States and Australia, the notice to the addresses set forth on the first page of
this agreement (or to such other address or facsimile number as any
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party may specify by notice in writing to another party). Any notice delivered
or sent by electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy on a business day will be
deemed conclusively to have been effectively given on the day the notice was
delivered, or the transmission was sent successfully, as the case may be. Any
notice sent by prepaid registered mail will be deemed conclusively to have been
effectively given on the third business day after posting; but if at the time of
posting or between the time of posting and the third business day thereafter
there is a strike, lockout, or other labour disturbance affecting postal
service, then the notice will not be effectively given until actually delivered.
6.6 Time is of the essence of this Agreement.
6.7 Delivery of an executed copy of this Agreement by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy will be deemed to be execution and delivery of this Agreement on
the date of such communication by the party so delivering such copy, subject to
delivery of an originally executed copy of this Agreement to the other party
hereto within two weeks of the date of delivery of the copy sent via the
electronic communication.
6.8 It is understood and agreed by the parties to this Agreement that the only
duties and obligations of the Escrow Agent are those specifically stated herein
and no other.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed under
seal and delivered this ____ day of _________, 1999.
XXXXX, XXXXXX
Per: /s/ Xxxxxxx Xxxxxx
------------------------------------
Partner
KODIAK GRAPHICS COMPANY
Per: /s/ Xxxxxxx Xxxxxx, President
------------------------------------
Authorized Signatory
GANG CONSULTING INC.
Per: /s/ Authorized Signatory
------------------------------------
Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
XXXXX XXXXXXX in the presence of: )
)
)
/s/ Xxxx Xxxxxx )
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Name )
-------------------------------------- ) /s/ Xxxxx Xxxxxxx
Address ) ----------------------
-------------------------------------- ) XXXXX XXXXXXX
)
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Occupation )
SIGNED, SEALED AND DELIVERED by )
XXXX XXXXXX in the presence of: )
)
/s/ Xxxxxxx Xxxxxx )
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Signature )
-------------------------------------- ) /s/ Xxxx Xxxxxx
Print Name ) --------------------
-------------------------------------- ) XXXX XXXXXX
Address )
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)
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Occupation )
SIGNED, SEALED AND DELIVERED by )
XXXXX XXXXX in the presence of: )
)
/s/ Xxxx Xxxxxx )
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Name )
-------------------------------------- ) /s/ Xxxxx Xxxxx
Address ) --------------------
-------------------------------------- ) XXXXX XXXXX
)
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Occupation )
SIGNED, SEALED AND DELIVERED by )
XXXXXXX XXXXXX in the presence of: )
)
/s/ Xxxx Xxxxxx )
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Signature )
-------------------------------------- ) /s/ Xxxxxxx Xxxxxx
Print Name ) --------------------
-------------------------------------- ) XXXXXXX XXXXXX
Address )
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Occupation )
SIGNED, SEALED AND DELIVERED by )
XXXXXXX XXXXXXX in the presence of: )
)
/s/ Xxxx Xxxxxx )
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Signature )
-------------------------------------- ) /s/ Xxxxxxx Xxxxxxx
Print Name ) --------------------
-------------------------------------- ) XXXXXXX XXXXXXX
Address )
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)
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Occupation )
