FUNDS ESCROW AGREEMENT
This Agreement is dated as of the 13th day of April, 1998 among BCAM
INTERNATIONAL, INC. (the "Company"), BALMORE FUNDS S.A., AUSTOST ANSTALT XXXXXX,
BEESTON INVESTMENTS LTD., MANOR INVESTMENTS, XXXXX ENTERPRISES, and EAST LANE
CORPORATION LTD., ("Subscriber" or "Subscribers"), and GRUSHKO & XXXXXXX (the
"Escrow Agent"):
W I T N E S S E T H:
WHEREAS, the Company and Subscriber have entered into a Subscription
Agreement ("Subscription Agreement") calling for the sale by the Company of
Common Stock ("Company Shares") and 250,000 Common Stock Purchase Warrants for
the aggregate purchase price of up to $2,000,000 to the Subscribers in the
denominations set forth on Schedule A hereto, against payment therefor; and
WHEREAS, the parties hereto require the Company to deliver the Notes
against payment therefor, with such Notes and payment to be delivered to the
Escrow Agent to be held in escrow and released by the Escrow Agent in accordance
with the terms and conditions of this Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;
NOW THEREFORE, the parties agree as follows:
ARTICLE I
INTERPRETATION
1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Agreement" means this Agreement and all amendments made hereto
and thereto by written agreement between the parties;
(b) "Company Shares" means Common Stock, $.01 par value per share,
of the Company issued or to be issued to the Subscribers for the aggregate
consideration of up to $2,000,000, together with such additional common shares
which may be
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deposited pursuant to Section 9(b) of the Subscription Agreement.
(c) "Escrowed Payment" means the sum of up to $2,000,000 to be held
in escrow by the Escrow Agent on behalf of the Company and the Subscribers as
allocated on Schedule A hereto.
(d) "Subscription Agreement" means the Subscription Agreement
entered into or to be entered into by the parties in reference to the Company
Shares and Warrants (including the original legal opinion referenced therein).
(e) "Warrants" means the 250,000 Common Stock Purchase Warrants
issued or to be issued to the Subscribers in the amounts designated on Schedule
A hereto, the form of which Warrant is annexed to the Subscription Agreement as
Exhibit A.
(f) Collectively, this Agreement signed by the Company, Company
Shares, Warrants, and Subscription Agreement are referred to as "Company
Documents."
(g) Collectively, this Agreement, Escrowed Payment and Subscription
Agreement signed by a Subscriber without exhibits thereto are referred to as
"Subscriber Documents."
1.2. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the Company Documents and Subscriber
Documents and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement.
1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a
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written instrument signed by all parties, or, in the case of a waiver, by the
party waiving compliance. Except as expressly stated herein, no delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege hereunder preclude any other or future exercise of
any other right, power or privilege hereunder.
1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
1.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
principles of conflict of laws.
1.7. Consents to Service of Process. The Company and the Subscribers each
hereby irrevocably consent to the exclusive jurisdiction of the courts of the
State of New York and of any Federal Court located in the State of New York,
each as may have competent jurisdiction, in connection with any action, suit or
other proceeding arising out of or relating to this Agreement or any action
taken or omitted hereunder, and waive personal service of any summons, complaint
or other process and agree that the service thereof may be made by certified or
registered mail directed to such person at such person's address for purpose of
notice hereunder.
1.8. Fees. The Company shall pay the Escrow Agent a fee of $5,000 in
connection with the Escrow Agent's service hereunder in addition to the fee
described in Section 6 of the Subscription Agreement. These fees shall be paid
by deduction from the Escrowed Payment, but only if the balance of the Escrowed
Payment is to be released to or on behalf of the Company pursuant to this
Agreement. The Escrow Agent shall be paid an additional fee of $5,000 (without
apportionment) on each anniversary of the date of this Agreement upon which the
Escrow Agent is holding any Company Documents or Subscriber Documents.
ARTICLE II
STOCK TO BE DELIVERED TO THE ESCROW AGENT
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2.1. Delivery of Company Documents to Escrow Agent. On or about the date
hereof, the Company shall deliver to the Escrow Agent the Company Documents.
2.2 Delivery of Subscriber Documents to Escrow Agent. On or about the date
hereof, the Subscriber shall deliver to the Escrow Agent the Subscriber
Documents and the Escrowed Payment pursuant to the following wire transfer
instructions:
Citibank, N.A.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000, XXX
ABA Number: 0210-00089
For Credit to: Grushko & Xxxxxxx
XXXX Trust Account
Account Number: 037-00000000
2.3. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.
2.4. Escrow Agent to Deliver Company Documents and Subscriber Documents.
The Escrow Agent shall hold and release the Company Documents and Subscriber
Documents only in accordance with the terms and conditions of this Agreement.
ARTICLE III
RELEASE OF ESCROWED DOCUMENTS
3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:
(a) Upon receipt by the Escrow Agent of the Company Documents and
the corresponding Subscriber Documents, the Escrow Agent will simultaneously
release the Company Documents to the Subscribers and release the corresponding
Subscriber Documents to the Company except that one-quarter of each Escrowed
Payment shall be retained in escrow and released in accordance with
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Section 3.2 of this Agreement and one-quarter of the Company Shares allocated to
each Subscriber (collectively one-quarter of the Escrowed Payments and
one-quarter of the Company Shares is the "Registration Escrow"). The
Registration Escrow shall be employed to satisfy any monetary obligations of the
Company to each Holder pursuant to the Subscription Agreement including Sections
9 and 10 of the Subscription Agreement. The Company will provide written
facsimile or original written instructions to the Escrow Agent as to the
disposition of all funds releasable to the Company.
(b) In the event the Escrow Agent does not receive Company Documents
and the corresponding Subscriber Documents prior to April 15, 1998, then the
Escrow Agent will return the Company Documents to the Company, and return the
Subscriber Documents to the Subscribers.
3.2. Release of Escrow.
(a) Upon receipt by the Escrow Agent of a notice ("Notice of
Return") signed by a Holder, reciting that a Holder is entitled to receive all
or part of the Registration Escrow designated on Schedule A hereto in accordance
with the terms of the Subscription Agreement, the Escrow Agent shall promptly
deliver a copy of such Notice of Return to the Company. If the Escrow Agent does
not receive from the Company within three (3) business days after notice is
given to the Company by the Escrow Agent, a written notice of objection stating
the reasons for the objection in accordance with the terms of the Subscription
Agreement ("Notice of Objection") signed by the Company, or if the Escrow Agent
shall within such period receive a written consent signed by the Company to such
return, then the Escrow Agent shall deliver to the Holder that amount of the
Registration Escrow as is called for in the Notice of Delivery. If the Escrow
Agent receives Notice of Objection from the Company within such three (3)
business day period, the Escrow Agent shall continue to hold the Registration
Escrow until otherwise authorized and directed to distribute the same pursuant
to the provisions of Sections 3.3(a) or 3.3(b).
(b) Upon receipt by the Escrow Agent of a notice ("Notice of
Delivery") signed by the Company stating that the Company is entitled to receipt
of the Registration Escrow or any portion thereof, in accordance with the
provisions of the Subscription Agreement, and stating the reasons therefor, the
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Escrow Agent shall promptly send a copy of such Notice of Payment to the Holder.
If the Escrow Agent does not receive from the Holder within three (3) business
days after notice is given to the Holder by the Escrow Agent, a written Notice
of Objection stating the reasons for the objection in accordance with the terms
of the Subscription Agreement signed by the Holder, or if the Escrow Agent shall
within such period receive a written consent signed by the Holder, then the
Escrow Agent shall deliver the Registration Escrow or such portion thereof to
the Company in accordance with the Notice of Delivery. If the Escrow Agent
receives a Notice of Objection from the Holder within such three (3) day period,
then the Escrow Agent shall continue to hold the Registration Escrow until
otherwise authorized and directed to distribute the same pursuant to the
provision of Sections 3.3(a) or 3.3(b).
3.3. Joint Instructions.
(a) Upon receipt by the Escrow Agent of joint written instructions
("Joint Instructions") signed by the Company and the Subscriber, it shall
deliver the Company Documents and Subscriber Documents in accordance with the
terms of the Joint Instructions.
(b) Upon receipt by the Escrow Agent of a final and non-appealable
judgment, order, decree or award of a court of competent jurisdiction (a "Court
Order"), the Escrow Agent shall deliver the Company Documents and Subscriber
Documents in accordance with the Court Order. Any Court Order shall be
accompanied by an opinion of counsel for the party presenting the Court Order to
the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to
the effect that the court issuing the Court Order has competent jurisdiction and
that the Court Order is final and non-appealable.
3.4. Acknowledgement of Company and Subscriber; Disputes. The Company and
the Subscriber acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscriber reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Notes and Escrowed Payment. Any dispute with
respect to the release of the Notes and Escrowed Payment shall be resolved
pursuant to Section 4.2 or by agreement between the Company and Subscriber.
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ARTICLE IV
CONCERNING THE ESCROW AGENT
4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent's
duties and responsibilities shall be subject to the following terms and
conditions:
(a) The Subscriber and Company acknowledge and agree that the Escrow
Agent (i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscriber or Company is entitled to receipt of
the Company Documents and Subscriber Documents pursuant to, any other agreement
or otherwise; (ii) shall be obligated only for the performance of such duties as
are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
may rely on and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by the Escrow Agent in good faith to be
genuine and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of any fact
stated therein or the propriety or validity or the service thereof; (iv) may
assume that any person purporting to give notice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so; (v) shall not be under any duty to give the property held
by Escrow Agent hereunder any greater degree of care than Escrow Agent gives its
own similar property; and (vi) may consult counsel satisfactory to Escrow Agent,
the opinion of such counsel to be full and complete authorization and protection
in respect of any action taken, suffered or omitted by Escrow Agent hereunder in
good faith and in accordance with the opinion of such counsel.
(b) The Subscriber and Company acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and that the Escrow Agent shall
not be liable for any action taken by Escrow Agent in good faith and believed by
Escrow Agent to be authorized or within the rights or powers conferred upon
Escrow Agent by this Agreement. The Subscriber and Company, jointly and
severally, agree to indemnify and hold harmless the Escrow Agent and any of
Escrow Agent's partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder, including
the fees of outside counsel and other costs and expenses of
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defending itself against any claim or liability under this Agreement, except in
the case of gross negligence or willful misconduct on Escrow Agent's part
committed in its capacity as Escrow Agent under this Agreement. The Escrow Agent
shall owe a duty only to the Subscriber and Company under this Agreement and to
no other person.
(c) The Subscriber and Company jointly and severally agree to
reimburse the Escrow Agent for its reasonable out-of-pocket expenses (including
counsel fees) incurred in connection with the performance of its duties and
responsibilities hereunder.
(d) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving five (5) days prior written notice of resignation to the
Subscriber and the Company. Prior to the effective date of the resignation as
specified in such notice, the Subscriber and Company will issue to the Escrow
Agent a Joint Instruction authorizing delivery of the Notes and Escrowed Payment
to a substitute Escrow Agent selected by the Subscriber and Company. If no
successor Escrow Agent is named by the Subscriber and Company, the Escrow Agent
may apply to a court of competent jurisdiction in the State of New York for
appointment of a successor Escrow Agent, and to deposit the Notes and Escrowed
Payment with the clerk of any such court.
(e) The Escrow Agent does not have and will not have any interest in
the Company Documents and Subscriber Documents, but is serving only as escrow
Subscriber, having only possession thereof. The Escrow Agent shall not be liable
for any loss resulting from the making or retention of any investment in
accordance with this Escrow Agreement.
(f) This Agreement sets forth exclusively the duties of the Escrow
Agent with respect to any and all matters pertinent thereto and no implied
duties or obligations shall be read into this Agreement.
(g) The Escrow Agent shall be permitted to act as counsel for the
Subscriber or the Company, as the case may be, in any dispute as to the
disposition of the Company Documents and Subscriber Documents, in any other
dispute between the Subscriber and Company, whether or not the Escrow Agent is
then holding the Company Documents and Subscriber Documents and
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continues to act as the Escrow Agent hereunder.
(h) The provisions of this Section 4.1 shall survive the resignation
of the Escrow Agent or the termination of this Agreement.
4.2. Dispute Resolution: Judgments. Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:
(a) If any dispute shall arise with respect to the delivery,
ownership, right of possession or disposition of the Company Documents and
Subscriber Documents, or if the Escrow Agent shall in good faith be uncertain as
to its duties or rights hereunder, the Escrow Agent shall be authorized, without
liability to anyone, to (i) refrain from taking any action other than to
continue to hold the Company Documents and Subscriber Documents pending receipt
of a Joint Instruction from the Subscriber and Company, or (ii) deposit the
Company Documents and Subscriber Documents with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give written notice thereof to the Subscriber and the Company and shall
thereupon be relieved and discharged from all further obligations pursuant to
this Agreement. The Escrow Agent may, but shall be under no duty to, institute
or defend any legal proceedings which relate to the Company Documents and
Subscriber Documents. The Escrow Agent shall have the right to retain counsel if
it becomes involved in any disagreement, dispute or litigation on account of
this Agreement or otherwise determines that it is necessary to consult counsel.
(b) The Escrow Agent is hereby expressly authorized to comply with
and obey any Court Order. In case the Escrow Agent obeys or complies with a
Court Order, the Escrow Agent shall not be liable to the Subscriber and Company
or to any other person, firm, corporation or entity by reason of such
compliance.
ARTICLE V
GENERAL MATTERS
5.1. Termination. This escrow shall terminate upon the release of all of
the Company Documents and Subscriber Documents or at any time upon the agreement
in writing of the Subscriber
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and Company.
5.2. Notices. All notices, request, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given one (1) day after being sent by telecopy (with copy delivered by
overnight courier, regular or certified mail):
(a) If to the Company, to:
BCAM International, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
(000) 000-0000 (Telecopier)
(b) If to the Subscriber, to the addresses and telecopier numbers set forth on
Schedule A hereto.
(c) If to the Escrow Agent, to:
Grushko & Xxxxxxx
Attorneys at Law
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telecopier)
or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.
5.3. Interest. The Escrowed Payment and Registration Escrow shall not be
held in an interest bearing account nor will interest be payable in connection
therewith.
5.4. Assignment; Binding Agreement. Neither this Agreement nor any right
or obligation hereunder shall be assignable by any party without the prior
written consent of the other parties hereto. This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective legal
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representatives, successors and assigns.
5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
5.6. Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile transmission.
5.7. Agreement. Each of the undersigned states that he has read the
foregoing Escrow Agreement and understands and agrees to it.
BCAM INTERNATIONAL, INC.
"Company"
By:
------------------------------
BALMORE FUNDS S.A.
"Subscriber"
By:
------------------------------
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AUSTOST ANSTALT XXXXXX
"Subscriber"
By:
------------------------------
BEESTON INVESTMENTS LTD.
"Subscriber"
By:
------------------------------
MANOR INVESTMENTS
"Subscriber"
By:
------------------------------
XXXXX ENTERPRISES
"Subscriber"
By:
------------------------------
EAST LANE CORPORATION LTD.
"Subscriber"
By:
------------------------------
ESCROW AGENT: GRUSHKO & XXXXXXX
By:
------------------------------
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SCHEDULE A
=============================================================================================
ESCROWED WARRANTS COMMON ALLOC. OF ALLOC. OF
SUBSCRIBERS PAYMENT SHARES $500,000 COMPANY
REGIST. SHARES OF
ESCROW REGIST.
ESCROW
=============================================================================================
=============================================================================================
BALMORE FUNDS S.A. $ 850,000 106,250 631,189 and $212,500 210,395
Francois Morax 210,395
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx
Fax: 000-000-000-0000
---------------------------------------------------------------------------------------------
AUSTOST ANSTALT XXXXXX $ 750,000 93,750 556,931 and $187,500 185,643
7440 Fuerstentum 185,643
Xxxxxxxxxxx
Xxxxxxxxxxx 000
Fax: 000-000-000000000
---------------------------------------------------------------------------------------------
BEESTON INVESTMENTS LTD. $ 200,000 25,000 148,515 and $ 50,000 49,505
000 Xxxxxxxxxx Xxxx. 00,000
Xxx Xxxx, Xxxxxx
Fax: 000-000-00000000
---------------------------------------------------------------------------------------------
MANOR INVESTMENTS $ 100,000 12,500 74,258 and $ 25,000 24,752
c/o X. Xxxxxxxxx 24,752
0 Xxxxxxxxx Xxxxxx
Xxxx-Xxxx, Xxxxxx
Fax:
---------------------------------------------------------------------------------------------
XXXXX ENTERPRISES $ 50,000 6,250 37,129 and $ 12,500 12,376
00X Xxxxxxxx Xxxx 12,376
Xxxxxx, Xxxxxxx
XX0 0XX
Fax: 000-000-000000000
---------------------------------------------------------------------------------------------
EAST LANE CORPORATION LTD. $ 50,000 6,250 37,129 and $ 12,500 12,376
5 Rehov Xxxx 00,000
Xxxxxxxxx, Xxxxxx
Fax: 000-000-0-000-0000
---------------------------------------------------------------------------------------------
=============================================================================================
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=============================================================================================
TOTALS 2,000,000 250,000 1,980,198 $500,000 495,047
=============================================================================================
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