ESCROW AGREEMENT
EXHIBIT
10.5
ESCROW AGREEMENT (this “Agreement”), dated as
of October 1, 2009 by and between Xxxxxxxxxxx X. Xxxxxx, a licensed attorney in
the State of California (State Bar No. 130770) (“Escrow Agent”), and each
of Vivakor, Inc., a Nevada corporation (“Vivakor”)
and Newport Capital Management, LLC (“Newport”). Newport
and Vivakor are collectively referred to as the “Parties.”
R
E C I T A L S
A. Newport entered into
that certain Stock Purchase Agreement dated August 19, 2009 to purchase
3,185,000 shares of Common Stock of Vivakor at a purchase price of $0.23 per
share.
B. Vivakor has delivered
to Escrow Agent stock certificates representing the shares purchased by
Newport. Newport desires to deliver payment of the purchase price to
Escrow Agent in exchange for issuance of the stock certificates representing the
shares purchased, and Vivakor desires Escrow Agent to deliver the stock
certificates upon receipt of the purchase price of the shares by Escrow Agent
for and in its behalf.
C. Vivakor and Newport
desire to engage Escrow Agent for the sole purpose of receiving the funds and
disbursing the funds and the stock certificates in accordance with their mutual
instructions set forth below.
NOW,
THEREFORE, IT IS AGREED:
1. Deposit
into Escrow. Newport shall arrange for deposit of
the purchase price of the shares of Vivakor common stock pursuant to the
Subscription Agreement (the “Escrow Funds”) into Escrow Agent’s account
maintained at City National Bank (the “Escrow Account”) set forth
below:
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Bank:
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City
National Bank
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00000
Xxx Xxxxxx Xxxxxx, Xxxxx 000
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Xxxxxx,
XX 00000
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ABA:
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xxxxxxxxxxxx
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Account:
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xxxxxxxxxxxx
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Account
Name:
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Xxxxxxxxxxx
X. Xxxxxx Attorney Client Trust Account
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FBO:
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SWIFT
Code:
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xxxxxxxxxxxxx
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Bank
Contact:
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Xxxxxxxxx
Xxxxxxxxxxx (000) 000-0000
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1
The
Escrow Agent shall hold the Escrow Funds in escrow when
delivered. The Escrow Account shall not be interest
bearing.
2. Terms of
Escrow. Escrow Agent shall maintain the Escrow Funds in the
Escrow Account for the benefit of Newport and Vivakor. The Escrow
Agent shall disburse the Escrow Funds only as follows:
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(a)
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Escrow
Agent shall release the Escrow Funds to Vivakor within two (2) business
days of receipt of written instructions (via email or otherwise) from
Newport to release the Escrow Funds to
Vivakor.
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(b)
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If
Escrow Agent has not received written instructions to release the Escrow
Funds to Vivakor within 30 days after the date of this Agreement, then
either :
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1.
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Newport
shall return to Escrow Agent all stock certificates representing the
shares of Vivakor common stock, or
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2.
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If
such stock certificates have not been returned to Escrow Agent within 30
days after the date of this Agreement, then all Escrow Funds shall be
immediately released to Vivakor.
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Such
instructions may not be modified except by unanimous written agreement of
Vivakor and Newport. Unless otherwise instructed, any Escrow Funds
remaining in the Escrow Account at the end of the Term shall automatically and
without further action shall be distributed to Vivakor; provided, however if the
Escrow Funds are being maintained by Escrow Agent pending resolution of any
conflicting instructions or conflicting claims, then the Term shall
automatically be extended until resolution of such conflicting instructions or
claims.
3. Not
Acting as Counsel. The Parties acknowledge that Escrow Agent
is a licensed and practicing attorney in the State of California, and has
represented and continues to represent Vivakor. However, in
connection with this Escrow Agreement, Escrow Agent shall act only as instructed
pursuant to the Escrow Agreement, and not pursuant to any attorney client
relationship with Vivakor. Newport agrees that Escrow Agent is not
acting as legal counsel for Newport. Escrow Agent does not now and
has not in the past acted as legal counsel and is under no obligation to provide
legal advice or counsel to Newport, except pursuant to a written engagement
agreement. No communication pursuant to this Escrow Agreement between
the Escrow Agent and either Party shall be deemed to be legal
advice. Each of
the Parties has had the right and opportunity to obtain independent legal
advice.
4. Fees. The
Parties shall pay Escrow Agent a fixed transaction fee equal to $500.00 due and
payable at the time such amounts are disbursed to any of the parties, plus all
costs of wire transfers, bank fees and similar or related charges incurred by
Escrow Agent. Such amounts are collectively referred to as the
“Escrow Fees.”
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5. Duties
and Obligations of the Escrow Agent.
(a) The parties hereto agree that
the duties and obligations of the Escrow Agent shall be only those obligations
herein specifically provided and no other. The Escrow Agent’s duties
are those of a depositary only, and the Escrow Agent shall incur no liability
whatsoever, except as a direct result of its willful misconduct or gross
negligence in the performance of its duties hereunder;
(b) The Escrow Agent may consult
with counsel of its choice, and shall not be liable for any action taken,
suffered or omitted to be taken by it in accordance with the advice of such
counsel;
(c) The Escrow Agent shall not be
bound in any way by the terms of any other agreement to which any of the Parties
are a party, whether or not the Escrow Agent has knowledge thereof, and the
Escrow Agent shall not in any way be required to determine whether or not any
other agreement has been complied with by the Parties or any other parties
thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing agreed to in writing by the Escrow
Agent;
(d) If the Escrow Agent shall be
uncertain as to its duties or rights hereunder or shall receive instructions,
claims or demands which, in its opinion, are in conflict with any of the
provisions of this Agreement, the Escrow Agent shall be entitled to refrain from
taking any action other than keeping safely the Escrow Funds or taking certain
action until the Escrow Agent is directed otherwise in writing jointly by the
Parties, as well as any party making a claim of competing interest or by a final
judgment of a court of competent jurisdiction;
(e) The Escrow Agent shall be
fully protected in relying upon any written notice, demand, certificate or
document which the Escrow Agent, in good faith, believes to be
genuine. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement;
(f) The Escrow Agent shall not be
required to institute legal proceedings of any kind and shall not be required to
defend any legal proceedings which may be instituted against it or in respect of
the Escrow Funds;
(g) If the Escrow Agent at any
time, in its sole discretion, deems it necessary or advisable to relinquish
custody of any of the Escrow Funds, it may do so by delivering the Escrow Funds
to the Parties in accordance with the disbursement procedure set forth in
Section 2(a). Upon such delivery, the Escrow Agent shall be
discharged from any and all responsibility or liability with respect to the
Escrow Funds and this Agreement, and Parties and consultants shall promptly pay
all monies they may owe to the Escrow Agent for its services hereunder,
including, but not limited to, reimbursement of its out-of-pocket
expenses;
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(h) This Agreement shall not
create any fiduciary duty on the Escrow Agent’s part to any of the Parties, nor
disqualify the Escrow Agent from representing either any party in any dispute
with any other; provided, however, that in the
event of such dispute, the Escrow Agent shall have the right to commence an
interpleader action in any court of competent jurisdiction of the State of
California or of the United States located in the State of California, County of
Orange, and deposit the Escrow Funds with such court; and
(i) Upon the full performance of
this Agreement, the Escrow Agent shall be deemed released and discharged of any
further obligations hereunder.
6. Indemnification.
(a) Each of Parties hereby
indemnifies and holds free and harmless the Escrow Agent from any and all
losses, expenses, liabilities and damages (including but not limited to
reasonable attorney’s fees, and amounts paid in settlement) resulting from
claims asserted by any party against the Escrow Agent with respect to the
performance of any of the provisions of this Agreement;
(b) Each of the Parties hereby
indemnifies and holds the Escrow Agent harmless from and against any and all
losses, damages, taxes, liabilities and expenses that may be incurred by the
Escrow Agent, arising out of or in connection with its acceptance of appointment
as the Escrow Agent hereunder and/or the performance of its duties pursuant to
this Agreement, including, but not limited to, all legal costs and expenses of
the Escrow Agent incurred defending itself against any claim or liability in
connection with its performance hereunder, provided that the Escrow Agent shall
not be entitled to any indemnity for any losses, damages, taxes, liabilities or
expenses that directly result from its willful misconduct or gross negligence in
its performance as Escrow Agent hereunder
(c) In the event of any legal
action or Proceeding involving any of the parties to this Agreement which is
brought to enforce or otherwise adjudicate any of the rights or obligations of
the parties hereunder, the non-prevailing party or parties shall pay the legal
fees of the prevailing party or parties and the legal fees, if any, of the
Escrow Agent.
7. Miscellaneous.
(a) All notices, objections,
requests, demands and other communications sent to any party hereunder shall be
deemed duly given if (x) in writing and sent by facsimile transmission to the
Person for whom intended if addressed to such Person at its facsimile number set
forth below or such other facsimile number as such Person may designate by
notice given pursuant to the terms of this Section 6 and (y) the sender has
confirmation of transmission:
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(i)
If
to any Party:
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As
specified in Attachment A
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(ii)
If
to the Escrow Agent:
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Xxxxxxxxxxx
X. Xxxxxx, Esq.
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0000
Xxxxxx Xxxxxx Xxxxx
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Xxxxxx,
XX 00000
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Tel: (000)
000-0000
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Fax: (000)
000-0000
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(b) This Agreement has been
prepared, negotiated and delivered in the State of California and shall be
governed by and construed and enforced in accordance with the laws of the State
of California applicable to contracts entered into and performed entirely within
California, without giving effect to the principles of California law relating
to the conflict of laws.
(c) This Agreement may be executed
in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
(d) This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The assignment by a party of this Agreement or any
rights hereunder shall not affect the obligations of such party under this
Agreement.
7. Termination
of Escrow. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until terminated upon the earlier to
occur of (i) the Escrow Funds are fully distributed or (ii) the written
agreement of the parties to terminate this Agreement, or (iii) the date that is
one year after the execution hereof.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the
parties hereto have affixed their hands and seal to this Agreement on the day
and year first above written. Attachment A is hereby incorporated by
reference to this Agreement.
/s/ Xxxxxxxxxxx X.
Xxxxxx
Xxxxxxxxxxx
X. Xxxxxx, as Escrow Agent
Newport
Capital Management, LLC
By: /s/ Xxxx Xxxxxxx
Title:
Managing
Member
By: /s/ MattNicosia
Title:
Executive
Chairman
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ATTACHMENT
A
PARTIES
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Name:
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Contact
person:
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MattNicosia
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Address:
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Tel:
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Fax:
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Name:
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Newport
Capital Management
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Contact
Person:
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Address:
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Tel:
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Fax:
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Name:
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Address:
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Tel:
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Fax:
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