Exhibit 4.14
Amended April 1, 2005 Omnibus Agreement
---------------------------------------
re
Series 1 Convertible Subordinated Promissory Notes
--------------------------------------------------
This Amended April 1, 2005 Omnibus Agreement re Series 1 Convertible
Subordinated Promissory Notes (this "Amended Agreement") is entered into as of
April 11, 2005 by and between BrightStar Information Technology Group, Inc., a
Delaware corporation ("BrightStar"), BrightStar Information Technology Services,
Inc., a Delaware corporation (the "Company"), Stellar XxXxx LLC ("Stellar") a
Delaware limited liability company and each of the holders of the Notes (as
defined below) (each a "Holder" and, collectively, the "Holders").
P R E A M B L E
Whereas, the Company initially issued to the Holders its Series 1 Convertible
Subordinated Promissory Notes dated July 26, 2001 (as amended by amendments
dated as of October 14, 2003, June 30, 2004 and September 1, 2004 by and between
the Company and holders of Series 1 Convertible Subordinated Promissory Notes
representing in aggregate outstanding principal amount not less than
seventy-five percent (75%) of the aggregate outstanding principal amount of all
Series 1 Convertible Subordinated Promissory Notes then outstanding, and
including those Series 1 Convertible Subordinated Promissory Notes issued to
Holders as payment in kind for interest, the "Notes"); and
Whereas, the Notes are secured pursuant to that certain Security Agreement dated
as of July 26, 2001, made by BrightStar and others; and
Whereas BrightStar and Stellar have entered into that certain Offer to Purchase
dated March 25, 2005, the form of which is set forth in Exhibit A (the "Purchase
Offer") which is subject to the execution of a definitive agreement (the
"Definitive Agreement"); and
Whereas BrightStar and Stellar have agreed to modify the terms of Exhibit A to
eliminate paragraph 7 thereof pertaining to dilution protection in exchange for
increasing to $860,000 the cash to be paid to the Holders for their Notes and
increasing by one-half percent the number of fully diluted common shares of
BrightStar to be retained by the current holders of BrightStar's common stock,
options and warrants (excluding the Holder's warrants) at April 14, 2005; and
Whereas, BrightStar proposes to issue approximately 13.869 million shares to the
Holders as consideration for their sale of the Notes and for their surrender of
all warrants issued in respect of the Notes, all as provided in the Purchase
Offer; and
Whereas the Holders have received information regarding the financial condition
of BrightStar and the Company and have had the opportunity to request such
additional information regarding BrightStar and the Company as may be material
to them in connection with the transactions contemplated by this Amended
Agreement and, on the basis of such information received, wish to carry out such
transactions;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, BrightStar, the Company, the Holders
and Stellar hereby agree as follows:
1. Agreements of Holders Effective Time. Effective upon the satisfaction
of the conditions set forth in Section 2 hereof (the "Effective
Time"), on or before April 29, 2005 (the "Termination Date," which may
be extended from time to time by the written consent of Holders of
Notes representing in aggregate outstanding principal amount more than
fifty percent (50%) of the aggregate outstanding principal amount of
all Notes), each of the Holders hereby:
a. agrees to sell their Notes to Stellar which shall pay an
aggregate of $860,000 in cash for all of the Notes which shall be
distributed to the Holders in proportion to the principal balance
of their Notes.
b. agrees that all warrants issued to such Holder in connection with
the Notes are cancelled and of no further force or effect.
c. releases BrightStar, the Company, Stellar, and their respective
members, officers, directors, agents, affiliates, successors and
assigns from any and all liability or obligation whatsoever in
respect of any of the Notes, the Security Agreement or any other
document or agreement related thereto, or in respect of any other
claim or matter of any nature arising on or prior to the
Effective Time (except for obligations arising under this Amended
Agreement);
Each of the Holders agrees to deliver the original Notes, endorsed
payable to the order of Stellar, for sale as above provided and
surrender to BrightStar the original warrants issued to such
Holder in connection with the Notes as above provided, all at such
time as is requested by BrightStar in connection with the closing
of the transactions contemplated by the Purchase Offer. In
addition, upon request by BrightStar, the Company or Stellar, each
Holder, at no expense to such Holder, agrees to execute and
deliver any and all further documents necessary or appropriate to
further confirm and assure the effectiveness and completion of the
actions described in clauses a, b, and c above and otherwise to
carry out the intent and purposes of this Amended Agreement,
including, without limitation, the execution of assignments of
financing statements under the Uniform Commercial Code
2. Conditions to Effectiveness. The agreements of the Holders set forth
in Section 1 above shall be effective only upon the prior or
contemporaneous satisfaction of the following conditions on or before
the Termination Date:
a. BrightStar, the Company, Stellar and all of the Holders shall
have executed this Amended Agreement;
b. Stellar shall have acquired at least a majority of the voting
stock of BrightStar, or securities convertible into, or
exchangeable for, a majority of the voting stock of BrightStar;
and
c. The Holders shall have had issued to them by BrightStar
approximately 13.869 million shares of BrightStar common stock in
proportion to the principal balance of their Notes
3. Representations and Warranties of BrightStar and the Holders.
a. BrightStar and the Company each represents and warrants to each
of the Holders and Stellar as follows:
i. It is a corporation validly existing under the laws of
the State of Delaware and has the corporate power to own its
assets and to conduct its business as presently conducted.
ii. The transactions contemplated by this Amended Agreement
have been duly authorized on the part of BrightStar.
iii. BrightStar's Form 10-K and Form 10-Q reports filed
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since December 31, 2002, are substantially in
compliance with the requirements of the Exchange Act, and no
statement contained therein contains any untrue statement of a
material fact or omits to state any material fact known to
BrightStar necessary to make the statements contained therein and
therein not misleading.
b. The Holders each represent and warrant to Stellar, the Company
and BrightStar as follows:
i. the Holders have received information regarding Stellar
and its operations and have had the opportunity to request such
additional information regarding Stellar as may be material to
them in connection with the transactions contemplated by this
Amended Agreement and, on the basis of such information received,
wish to carry out such transactions
4. Representations, Warranties and Agreements of Stellar. Stellar
represents and warrants to each of the Holders, BrightStar and the
Company as follows:
a. It is a limited liability company validly existing under the laws
of the State of Delaware and has the power to own its assets and
to conduct its business as presently conducted.
b. The transactions contemplated by this Amended Agreement,
including the purchase of the Notes by Stellar, have been duly
authorized, and the person signing this Amended Agreement on
behalf of Stellar is duly authorized to enter into this Amended
Agreement and bind Stellar to carry out the transactions
contemplated by this Amended Agreement; and
c. Stellar has the financial resources to complete the transactions
contemplated by this Amended Agreement independent of the
approval or financial support of any third party.
5. Disclaimers. Each Holder executing this Amended Agreement is doing so
based solely on the representations and warranties set forth in
Sections 3 and 4 above and the independent determination of such
Holder. Except for the representations and warranties set forth in
Sections 3 and 4 above, no Holder is relying in any way on statements
made by or on behalf of BrightStar, the Company or Stellar, whether
made by directors, officers or members of any of them, by members of
the Company's Ad Hoc Committee of Note Holders, or by any party acting
as a consultant, advisor or attorney for BrightStar, the Company or
Stellar. Each Holder recognizes that any and all projections of
financial performance of the Company in future periods which may have
been furnished to Holders are predictions of future events and thus
inherently uncertain, and actual financial performance will differ
from such projections. In no event shall any individual have any
obligation or liability to any Holder associated with the Notes, the
obligations of BrightStar or the Company under the Notes, or the
transaction contemplated by this Amended Agreement. Stellar
acknowledges that it is not relying on any representation or warranty
made by any Holder and that it is purchasing the Notes without
recourse to any Holder.
6. Effectiveness. This Amended Agreement shall become effective upon
execution hereof by BrightStar, the Company, Stellar and by Holders
whose Notes represent in total one-hundred percent (100%) of the
aggregate outstanding principal amount of the Notes. This Amended
Agreement, when effective, supersedes and completely replaces the
April 1, 2005 Omnibus Agreement re Series 1 Convertible Subordinated
Promissory Notes by and among BrightStar, the Company, Stellar and the
Holders.
7. Acknowledgement and Consent of Company. BrightStar and the Company
acknowledge the continuation of their obligations under the Notes and
the Security Agreement. BrightStar and the Company consent to the
transactions contemplated by this Amended Agreement.
8. Notes Closing. The closing of the sale of the Notes by each Holder to
Stellar shall occur not later than the later of the Termination Date
or five business days after the closing of the transactions described
in the Purchase Offer.
9. Notes Escrow. BrightStar, Stellar and Guzov Ofsink, LLC (the "Escrow
Agent"), counsel to Stellar, intend to enter into a Stock Purchase Agreement
relating to the sale of common and preferred stock of BrightStar to Stellar (the
"Purchase Agreement"). Pursuant to the Purchase Agreement, the Escrow Agent
shall act as escrow agent for the Notes, warrants to purchase common stock of
BrightStar held by the Holders, common stock to be issued to the Holders
pursuant to this Agreement and the cash purchase price to be paid by Stellar to
the Holders for the purchase of their Notes. The Holders authorize BrightStar to
enter into and perform the escrow provisions of the Stock Purchase Agreement
substantially upon the terms set forth in the draft of Section 8 of such
agreement set forth as Exhibit B attached hereto.
IN WITNESS WHEREOF, the Parties have executed this Amended Agreement as of the
date first written above.
Name of Holder BrightStar Information Technology Group, Inc.
_______________________ By_____________________
Name of Holder Xxxxxx X. Xxxxx
Chief Executive Officer
BrightStar Information Technology Services, Inc.
By_____________________
Xxxxxx X. Xxxxx
Chief Executive Officer
Consent of Other Debtors under Security Agreement
-------------------------------------------------
Each of the undersigned consents to the completion of each of the transactions
contemplated by the foregoing Amended April 1, 2005 Omnibus Agreement re Series
1 Convertible Subordinated Promissory Notes, and acknowledges that property
belonging to each of the undersigned will remain subject to liens and security
interests to the extent set forth in the Security Agreement (as defined in the
foregoing Agreement).
IN WITNESS WHEREOF, each of the undersigned has executed this Amended Agreement
as of the date and year first above written.
INTEGRATED CONTROLS, INC.
By:
____________________________________________
Print Name:_______________________________
Title:____________________________________
"DEBTOR"
SOFTWARE CONSULTING SERVICES AMERICA, INC.
By:
____________________________________________
Print Name:_______________________________
Title:____________________________________
"DEBTOR"
SOFTWARE INNOVATORS, INC.
By:
____________________________________________
Print Name:_______________________________
Title:____________________________________
EXHIBIT A
OFFER TO PURCHASE
Stellar XxXxx LLC ("SMK") hereby offers to purchase certain securities of
BrightStar Information Technology Group, Inc., including its affiliates and
subsidiaries, with its principal offices located at 0000 Xxxxx Xxxxx - Xxxxx
000, Xxxxxxxxxx, XX 00000 ("BrightStar" or the "Company"), under the following
terms and conditions:
1. Acquisition
-----------
SMK proposes to purchase from BrightStar newly issued Convertible Preferred
Stock of BrightStar and as a result will acquire control of the Company (on an
as converted basis) and all of its assets including, but not limited to, the
following:
a) All rights, title and exclusive interest to all patents, trademarks,
licenses, trade names, technical processes, know-how or other
intellectual property or rights thereto associated with the business
of the Company, whether registered or not;
b) All tangible and intangible property related to the business of the
Company including customer lists, business development data, records,
goodwill and other intangible assets;
c) All contracts, letters of intent and other supporting information
related to purchases from suppliers, deliveries or other commitments
to customers and beneficial partnership or corporate alliances of the
Company; and
d) Any and all other assets of any nature whatsoever that are related to
or used in connection with the business of the Company and its
goodwill.
2. Consideration
-------------
The total consideration paid by SMK to BrightStar and noteholders shall include
the following elements:
a) a Cash Purchase Price of $680,000 to acquire from the holders (the
"Noteholders") all of the outstanding Series 1 Convertible
Subordinated Promissory Notes (the "Notes") of BrightStar Information
Technology Services, Inc. ("Services"). Upon closing of the purchase
of the Notes, SMK agrees to extend the maturity of the Notes until
December 31, 2007. In addition, in consideration of the cancellation
of the warrants and conversion rights related to the Notes, BrightStar
at closing will issue to the Noteholders an amount of stock (estimated
in the aggregate to be approximately 16.7 million shares) which is
equal to the number shares of common stock currently outstanding plus
the shares underlying the outstanding non-Noteholder warrants and
options;
b) a Cash Purchase Price of $350,000 in exchange for the Series A and
Series B preferred stock of the Company as described below, the
proceeds of which shall be used to resolve and settle Legacy
Liabilities, which include the Company's outstanding credit line,
accrued payables, contingent liabilities, legal and accounting fees;
in the event that $350,000 exceeds the total legacy liabilities, the
remaining cash balance will remain in the Company as working capital;
c) Upon SMK's cash purchase of the Notes and Preferred Stock, SMK will be
entitled to receive from BrightStar: (a) in exchange for $197,762.66
in total consideration, Series A Convertible Preferred Stock
convertible into 38,648,278 shares equal to approximately 53.7% of the
currently authorized common stock of BrightStar; and (b) in exchange
for $152,238.34 in total consideration, Series B Convertible Preferred
Stock convertible, upon shareholder approval, into 595,034,440 shares,
said shares being equal to an amount of the common stock of
BrightStar, such that, upon conversion of the Series A and B Preferred
Stock, SMK shall own 95% of the fully diluted stock of BrightStar. The
holders at closing of the outstanding common stock (including the
shares to be issued to the Noteholders), options and non-Noteholder
warrants (together the "Legacy Shares") shall hold the remaining 5% of
common shares of BrightStar on a fully diluted, pro-rata basis,
subject to the anti-dilution adjustment described below.
d) SMK will deposit a non-refundable, good faith payment of $50,000 to
BrightStar, with such amount to be offset from the $350,000 payment
outlined in above, upon the execution of this Offer to Purchase.
1
3. Voting Rights
-------------
Upon SMK's purchasing of the Series A & B Convertible Preferred Stock, the
respective preferred classes will be entitled to vote as shareholders based on
the respective ownership percentages on an "as converted" basis pursuant to the
purchase of the Series A & B preferred classes.
4. Board of Directors
------------------
Upon SMK's purchase of the Series A & B Convertible Preferred Stock, SMK will be
entitled to appoint dependent and independent representatives to BrightStar's
board to reflect SMK's percentage ownership in BrightStar on an "as converted"
basis.
5. Closing Date
------------
The transaction described in this Offer to Purchase shall close no later than
10:00 a.m. EST on the 29th of April, 2005, (the "Closing Date") at the offices
of SMK and shall be immediately effective. Both parties agree that the defined
Closing Date can be scheduled at an earlier date, upon mutual agreement of both
parties.
6. Due Diligence
-------------
To the extent reasonably required for the purpose of this Offer to Purchase, and
subject to the provisions thereof, and SMK's compliance with that certain
Confidentiality Agreement dated effective March 16, 2005 between the Company and
Stellar Financial, the Company will cause SMK, its counsel, accountants,
investors, lenders, advisors and all other reasonable representatives of SMK
("Representatives") to receive access, during normal business hours, between the
date of this offer and the Closing Date, to all of the properties, books,
contracts, and records of the Company, and will cause to be furnished to SMK,
and its Representatives all such information concerning the affairs of the
Company as SMK, or such Representatives may reasonably request. SMK, and its
Representatives shall have access to customers and suppliers of the Company for
the purpose of gaining information subject to the condition that at least one
officer of the Company shall participate in such discussions.
At all reasonable times during normal business hours, SMK, and its
Representatives shall have access, prior to the Expiration Date, to discuss the
Company's business and affairs with any employee of the Company and the
Company's designated advisors.
If, for any reason and at any time prior to the Closing Date, SMK determines
that the results of its due diligence are unsatisfactory, in the sole judgment
of SMK, it may terminate this Offer to Purchase.
7. Purchase Price Adjustments/Anti dilution protection
---------------------------------------------------
The Legacy Shares will represent an aggregate of 5% of the fully diluted common
shares of BrightStar (if necessary, through an adjustment to the conversion
price of the Series A and/or Series B Preferred Stock) until the Market Value of
the Legacy Shares is at least $400,000 after an Adjustment Event, which is
defined as the earlier of a merger or acquisition with a private operating
company to be identified or when BrightStar has raised at least $2 million of
equity pursuant to a merger or acquisition transaction. Market Value shall mean
the weighted average trading prices of BrightStar's common stock during the 20
consecutive trading-day period commencing 30 Calendar days after the Adjustment
Event.
8. Conditions Precedent
--------------------
The obligation of SMK to complete the purchase of BrightStar shall be subject to
the fulfillment or satisfaction of, on or before the Closing Date, each of the
following conditions precedent:
a) Governmental Approvals - All required governmental approvals, if any,
necessary for the Closing, for the operations of SMK and the full
application of rights in respect to material licenses and agreements in
the manner that the Company operated prior to the Transaction shall
have been obtained. Affirmation of the continuance of all license
rights post-acquisition shall be obtained from BrightStar in writing
prior to Closing.
b) Authorization - BrightStar shall have obtained the approval of a
sufficient proportion of its officers and directors with authorization
to complete the Transaction and execute related documentation.
c) Material Adverse Change - There shall have been no material adverse
change in the business, assets, operations, or prospects of the Company
prior to the Close, relative to the state of the Company as of the date
of this Offer to Purchase, and the Company shall notify SMK of any
material changes discovered prior to Closing.
d) Due Diligence - SMK, its investors and lenders shall have concluded its
due diligence and found the results acceptable.
e) Documentation - SMK shall consider acceptable the documentation
necessary for Closing the Transaction.
f) Approval Process - Successful completion of the approval processes of
SMK's management and directors.
g) Audit - Receipt of the audit for the fiscal years ended December 31st
of 2004 and 2003, in a form satisfactory to SMK.
h) Consulting Agreements - Acceptance and execution of existing
consulting agreements in order to maintain the normal course of
operations of the Company.
9. Securities Purchase and Sale Agreement
--------------------------------------
The terms and provisions governing this transaction of purchase and sale shall
be contained in a definitive Purchase and Sale Agreement containing such terms
and provisions as may be appropriate under the circumstances, including
representations and warranties, indemnities, covenants and conditions (including
conditions as to any required governmental approvals or consents), such
agreement to be subject to the mutual approval of SMK and BrightStar which
agreement shall also include, without limitation, the following terms:
a) Upon execution of this agreement, SMK and BrightStar shall make joint
announcements of this transaction to all interested persons, unless
both parties consent to single announcement by either party, and
BrightStar shall file a Form 8-K in accordance with applicable rules;
b) The representations and warranties contained in the agreement shall
incorporate and re-state those key facts and representations contained
in the Confidentiality Agreement dated effective March 16, 2005;.
10. Exclusivity
-----------
After acceptance of the terms of this Offer to Purchase, the Company shall not
directly or indirectly through any director, officer, employee, agent,
representative (including, without limitation, investment bankers, attorneys and
accountants) or otherwise, (i) solicit, initiate or encourage submission of
proposals or offers from any third party, relating to any acquisition or
purchase of all or a material portion of the Company's assets, or any equity
interest in it, or any transaction, consolidation or business combination with
it, or (ii) participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage, any effort or
attempt by any person to do or seek any of the foregoing.
11. Other Provisions
----------------
The Company shall be precluded from making changes to current levels of
compensation and from declaring or paying dividends prior to the Close. The
Company shall conduct its business only in the ordinary course and shall not
acquire or agree to acquire as part of the business of the Company all or any
substantial portion of the assets or business of any other business organization
by merger or consolidation, stock purchase or asset purchase without the written
approval of SMK.
12. Legal and Other Costs
---------------------
Each of the parties shall bear their own respective legal and other costs
arising in connection with this transaction. It is agreed that SMK will cause
its counsel to draft the agreements provided for in this Offer to Purchase.
SMK hereby represents that it currently has the liquid assets to complete the
transactions contemplated by this offer without the approval or financial
assistance of any third party. This offer will remain open for acceptance by
BrightStar 7:00 pm EST on the 25th day of March, 2005.
Stellar XxXxx LLC
By: ____________________________
Xxxxx X. Xxxxxx, Managing Member
ACCEPTANCE
BrightStar Information Technology Group, Inc. hereby accepts the foregoing offer
this _____day of March, 2005.
BrightStar Information Technology Group, Inc.
By: ______________________________
Xxxxxx X. Xxxxx, Chairman & CEO
Exhibit B
to
Amended April 1, 2005 Omnibus Agreement
---------------------------------------
8. Escrow Provisions.
------------------
8.1 The Company and Investor hereby appoint Escrow Agent as
escrow agent for the Notes being sold by the Noteholders to the Investor
pursuant to the Omnibus Agreement, warrant certificates being delivered by the
Noteholders for cancellation by the Company (the "Noteholder Warrants") in
connection with the sale to the Investor of the Notes, certificates for the
Common Stock being issued to the Noteholders in connection with the sale of the
Notes (the "Noteholder Stock Certificates") and the purchase price for the Notes
(the "Notes Purchase Price") to be paid by the Investor in accordance with the
terms and conditions set forth in the Omnibus Agreement and herein, and the
Escrow Agent hereby accepts such appointment.
8.2 Upon receipt of all of the Notes, Noteholder Warrants (or
other instruments which the investor shall have given written notice to the
Escrow Agent are acceptable to the Investor) and Noteholder Stock Certificates
in connection with the sale of the Notes to the Investor, the Escrow Agent shall
promptly deliver to each of the Noteholders, by check or wire transfer, the
amount of the Notes Purchase Price to which such Noteholder shall be entitled as
set forth in Exhibit G. In the event that the Company fails to deliver to the
Escrow Agent prior to June 30, 2005 any one or more of the Notes, the Noteholder
Warrants or the Noteholder Stock Certificates, upon receipt of written notice
from the Investor, the Escrow Agent shall return the Notes Purchase Price to the
Investor, the appropriate Notes and Noteholders Warrant to each Noteholder to
the address set forth on Exhibit G and the Noteholders Stock to the transfer
agent of the Company for cancellation. Alternatively, at the option of the
Investor, the Investor may direct the Escrow Agent by written notice prior to
June 30, 2005 to deliver to the Investor the appropriate Notes, to deliver to
the Company for cancellation the appropriate Noteholder Warrants and to deliver
to each Noteholder the appropriate Noteholder Stock Certificate and the
appropriate portion of the Notes Purchase Price as set forth on Exhibit G in
order to effectuate the sale to the Investor of some, but less than all of the
Notes. In such event, the Escrow Agent shall return only the unpaid Notes
Purchase Price to the Investor, the unsold Notes and uncancelled Noteholders
Warrants to each Noteholder who has not sold his Note to the address set forth
on Exhibit G for such Noteholder and the Noteholders Stock Certificates that
were to be delivered to the Noteholders upon sale of their Notes to the transfer
agent of the Company for cancellation.
8.3 Escrow Agent shall have no duties or responsibilities
other than those expressly set forth herein. Escrow Agent shall have no duty to
enforce any obligation of any person to make any payment or delivery, or to
direct or cause any payment or delivery to be made, or to enforce any obligation
of any person to perform any other act. Escrow Agent shall be under no liability
to the other parties hereto, or to anyone else, by reason of any failure, on the
part of any party hereto or any maker, guarantor, endorser or other signatory of
any document or any other person, to perform such person's obligations under any
such document. Except for amendments to this Agreement relating to escrowed
funds or documents or instruments, the Escrow Agent shall not be obligated to
recognize any agreement between any and all of the persons referred to herein,
notwithstanding that references hereto may be made herein and whether or not it
has knowledge thereof.
8.4 Escrow Agent shall not be liable to any party or anyone
else for any action taken, or omitted to be taken by it, or any action suffered
by it to be taken or omitted, in good faith and acting upon any order, notice,
demand, certificate, opinion or advice of counsel (including counsel chosen by
the Escrow Agent) statement, instrument, report, or other paper or document (not
only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information
therein contained), which is believed by the Escrow Agent to be genuine and to
be signed or presented by the proper person or persons. The Escrow Agent shall
not be bound by any of the terms thereof, unless evidenced by a writing
delivered to the Escrow Agent signed by the proper party or parties and, if the
duties or rights of the Escrow Agent are affected, unless it shall give its
prior written consent thereto.
8.5 Escrow Agent shall not be responsible for the sufficiency
or accuracy of the form, or of the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights, of the person executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent to the
Company, the Investor or the Noteholders pursuant to the provisions hereof.
8.6 Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or persons,
that a fact or an event, by reason of which an action would or might be taken by
the Escrow Agent, does not exist or has not occurred, without incurring
liability to the other parties hereto or to anyone else for any action taken or
omitted, or any action suffered by it to betaken or omitted, in good faith and
in the exercise of its own best judgment, in reliance upon such assumption.
8.7 Escrow Agent will be indemnified and held harmless by the
Investor and the Company from and against all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Escrow Agent in
connection with any action, suit or proceeding involving any claim, or in
connection with any claim or demand, which in any way, directly or indirectly,
arises out of or relates to this Agreement, the services of the Escrow Agent
hereunder, except for claims relating to willful misconduct or gross negligence
by Escrow Agent or breach of this Agreement by Escrow Agent, or the monies or
other property held by it hereunder.
