EXHIBIT 10.9
EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is made and entered into
this 30th day of January, 1996, by and between Xxxx, Xxxxxx & Associates, Inc.
having a principal place of business of 0000 Xxxxxxx Xxxxx Xxxxxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 ("Pledgee") and DLJ Capital Corporation, Sprout Growth II,
L.P., and Sprout CEO Fund, L.P. ("Sprout") and Xxxx Xxxxxx of 00 Xxxxx
Xxxxxxxxx, Xx Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Pledgor"; collectively with Sprout
and Pledgee, the "Interested Parties"), and the Secretary of Xxxx, Xxxxxx &
Associates, Inc. of 0000 Xxxxxxx Xxxxx Xxxxxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
("Escrow Agent"). Interested Parties and Escrow Agent recite and agree as
follows:
RECITALS:
WHEREAS, Pledgor has issued and delivered a secured promissory note in
the principal amount of $2,000,000 dated January 30, 1996 ("Secured Promissory
Note") to Pledgee;
WHEREAS, under the Secured Promissory Note, all payments to be made by
Pledgor are to be secured by up to 800,000 shares of Common Stock of Pledgee
("Stock"), currently registered in Pledgor's name, pursuant to a Pledge
Agreement ("Pledge Agreement") dated January 30, 1996 between the Interested
Parties; and
WHEREAS, Interested Parties desire to establish an escrow account with
an escrow agent in which the Stock will be held in escrow under the terms and
conditions contained herein.
NOW THEREFOR, for good and valuable consideration, the Interested
Parties and the Escrow Agent agree as follows:
1. Delivery. Pursuant to the terms of the Pledge Agreement, Pledgor
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has delivered to the Escrow Agent Certificate No. 47 representing the Stock
and accompanied by stock powers endorsed in blank. The Stock shall be held and
disposed of by Escrow Agent only in accordance with the terms of this Escrow
Agreement and the Pledge Agreement. To the extent any of the terms of the
Pledge Agreement are inconsistent with the terms of this Escrow Agreement with
respect to the rights and obligations of the Escrow Agent, the terms of this
Escrow Agreement shall prevail; otherwise the terms of the Pledge Agreement
shall prevail.
2. Release of Stock. Upon Escrow Agent's receipt from Interested
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Parties of joint written notice that all of the payments under the Secured
Promissory Note have been made (or that otherwise the Stock shall be
released), Escrow Agent shall surrender to Pledgor the Stock evidenced by
Certificate No. 47, together with stock powers endorsed on blank. In addition,
in any event (i) on July 30, 1996 160,000 Shares shall be released to Pledgor
and (ii) on January 30, 1997 an additional 160,000 Shares shall be released to
the Pledgor.
3. Escrow Agent's Terms and Conditions. The acceptance by Escrow
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Agent of its duties as escrow holder under this Escrow Agreement is subject
to the following terms and conditions, which all parties to this Agreement
hereby agree shall govern any control with respect to the rights, duties,
liabilities and immunities of the Escrow Agent.
The Escrow Agent is not a party to, and is not bound by, any agreement
which may be evidenced by, or arise out of, any of the instructions
hereinbefore mentioned, other than as expressly therein set forth.
The Escrow Agent shall be entitled to rely upon, and shall be
protected in acting upon, any written notice, request, waiver, consent, receipt
or other paper or document which the Escrow Agent in good faith believes to
be genuine and to be signed by the proper person.
The Escrow Agent shall not be liable for any error of judgment, or for
any act done or step taken or admitted by him in good faith, or for any
mistake of fact or law, or for anything which he may do or refrain from doing
in connection herewith, except for his own willful default or gross negligence,
and the Escrow Agent shall have no duties hereunder to anyone except the
Interested Parties.
The Escrow Agent may at any time resign hereunder by giving notice of
his resignation to the Interested Parties at least thirty (30) days prior to
the day such resignation is to take effect as specified in such notice. Upon
the date so specified, all obligations of the Escrow Agent hereunder shall
cease, and the Escrow Agent shall deliver the Stock and the stock powers then
held by him hereunder to such bank, trust company or other person, having a
principal office in San Francisco, California, as Interested Parties shall
have designated a successor escrow agent in a notice given to such escrow
agent and to the Interested Parties at least five (5) days prior to the
effective date of such resignation.
4. Disposition of Stock. Upon the occurrence of an event of
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default specified under Section 3 of the Pledge Agreement which continues
unremedied for the period set forth in Section 4 of the Pledge Agreement,
Pledgee shall provide the Escrow Agent with written notice (with a copy to
Pledgor) that an event of default has occurred that has not been timely
remedied, and that such notice is true and correct of Pledgee's own knowledge,
and that the Escrow Agent should deliver the Stock to Pledgee for its exercise
of its rights under the terms of the Pledge
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Agreement with respect to the Stock. If, within thirty (30) calendar days
after the Escrow Agent's receipt of the foregoing notice, the Escrow Agent has
received written notice and supporting evidence in the form of canceled
checks, or a sworn declaration from a bank officer that the bank records
dispute the alleged default set forth in Pledgee's written notice to the
Escrow Agent, or similar evidence, then the Escrow Agent shall comply with
Section 6 hereunder with respect to the conflicting demands. However, it shall
be the duty of the Escrow Agent to conduct a reasonable inquiry into whether
or not a payment was made to Pledgee. If the Escrow Agent is unable to
determine that a payment was timely tendered to Pledgee, then the Escrow Agent
shall deliver the Stock to Pledgee forthwith, irrespective of any claim or
contention by Pledgor to the contrary. If the Escrow Agent determines that
there is a bona fide dispute between the parties, then the Escrow Agent shall
comply with Section 6 hereunder with respect to such conflicting demands. If
the Escrow Agent has not received such conflicting notice and supporting
evidence from Pledgor within the foregoing thirty (30) calendar days, the
Escrow Agent shall immediately deliver the Stock to Pledgee and Pledgee shall
be entitled to exercise his rights under the Pledge Agreement with respect to
the Stock.
5. Limitation of Liability. The parties hereto expressly recognize
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that the Escrow Agent shall not be liable for the legality or validity of the
Stock. Interested Parties hereby agree to hold harmless and to indemnify the
Escrow Agent against all costs, damages, judgments, attorneys' fees,
obligations and liabilities of every kind or nature, which, in good faith, the
Escrow Agent may incur or sustain in connection with or arising out of this
Escrow Agreement. The Interested Parties' obligations with respect to each
other in connection with the foregoing indemnification provision shall be as
set forth in Section 7 hereunder.
6. Conflicting Demands. In the event conflicting demands are made upon
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the Escrow Agent in respect to this Escrow Agreement, the Interested Parties
acknowledge and agree that the Escrow Agent shall have the absolute right to
elect to do either or both of the following: (1) withhold and stop all further
proceedings and performances of this Escrow Agreement; or (2) file a suit in
interpleader and obtain an order from a court with jurisdiction over such
matter which requires the parties to interplead and litigate in such court
their several claims and rights against each other. In the event an
interpleader suit is brought, the Escrow Agent, at its election, shall be
fully released and discharged from all obligations to further perform any and
all duties or obligations imposed under this Escrow Agreement, and the
Interested Parties agree to pay and reimburse the Escrow Agent for all costs,
expenses and attorneys' fees expended or incurred by it in the defense or
prosecution of such interpleader suit as such amounts shall be fixed and
deemed reasonable by the court.
7. Responsibilities Between Interested Parties for Fees and Expenses.
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Pledgee shall bear all of the charges of the Escrow Agent or any successor
escrow holder for the services contemplated by this Escrow Agreement and the
Pledge Agreement prior to default.
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8. Relationship Between Interested Parties and Escrow Agent. The
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parties hereto expressly recognize that this Escrow Agreement only creates an
escrow account between the Interested Parties and Escrow Agent and that
otherwise this Agreement does not create any legal relationship implied or
actual whatsoever between the Interested Parties and Escrow Agent.
9. Termination. This Escrow Agreement shall terminate effective
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upon the release of all of the Stock as set forth in Section 2 hereof, unless
earlier terminated pursuant to the terms hereof.
10. Miscellaneous.
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(a) Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally or sent
by courier or sent by certified or registered mail, postage prepaid, and shall
be deemed given when so delivered personally or sent by courier or, if mailed,
upon receipt thereof, at the addresses as indicated in the first paragraph of
this Agreement, or at such other address as may be designated by notice given
to the other parties hereto in the foregoing manner.
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(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors, assigns and
personal representatives. Upon the death or incapacity of Pledgor or
dissolution or liquidation of Pledgee, the successor, assign, personal
representative, executor or conservator of such party, as appropriate, shall
notify the Escrow Agent of such occurrence. The Escrow Agent shall accept or
be entitled to rely on any instructions from such successor, assign, personal
representative, executor or conservator as if it were instructions from
Pledgor or Pledgee, as the case may be. This Agreement shall be governed by and
construed in accordance with the laws of the State of California excluding
that body of law pertaining to conflicts of law.
(c) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date first written above.
"PLEDGEE"
XXXX, XXXXXX & ASSOCIATES, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Its: CFO
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"PLEDGOR"
/s/ Xxxx Xxxxxx
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(Signature)
XXXX XXXXXX
"ESCROW AGENT"
SECRETARY OF XXXX, XXXXXX &
ASSOCIATES, INC.
/s/ Xxxx Xxxxxx
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Name:
DLJ CAPITAL CORPORATION
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Attorney in Fact
SPROUT GROWTH II, L.P.
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Attorney in Fact
SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation,
General Partner
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Attorney in Fact
