EXHIBIT C
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement"), dated as of January 9, 1998, is made by and
among:
Cathay Global Investments, Inc. ("Cathay"), a Nevada corporation, and
certain of its affiliates, including (without limitation) Georgia
Resources, Inc. ("Georgia"), a Nevada corporation, and C.I.S. Resources
Limited Liability Company ("CIS"), a Colorado limited liability company
(Cathay, Georgia and CIS being collectively referred to herein as "the CGI
Parties") whose addresses are 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
XX 00000 (tel: 000-000-0000; fax: 000-000-0000);
Capital Aggregate Partners, LLC ("CAP"), a Colorado limited liability
company, with its principal offices at 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000 (tel: 303-732- 0414; fax 000-000-0000)
Amereco, Inc. ("Amereco"), a Utah corporation, whose address is 000
Xxxxxxxx Xxx #000 Xxxxxx Xxxx, Xxxxxxxx, 00000 (tel: 000-000-0000; fax:
000-000-0000); and
Law Offices of Xxxxx X. Xxxxxx, Esq., ("Escrow Agent"), whose address is
0000 X. Xxxxxx Xx., Xxxxx 000, Xxxxxx, XX 00000 (tel: 000-000-0000; fax:
000-000-0000).
RECITALS
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The CGI Parties, CAP and Amereco are parties to an agreement dated January
9, 1998 (the "Purchase Agreement") pursuant to which agreement CAP will purchase
from the CGI Parties the debt and equity interests in Amereco on the terms
described in the Purchase Agreement.
This Agreement forms a part of a transaction being completed pursuant to
the Purchase Agreement. It is the intention of the parties that this Agreement
and the other agreements be interpreted consistently to accomplish the intent of
the parties as expressed in the Purchase Agreement.
The CGI Parties, CAP, and Amereco desire that the Escrow Agent serve as
escrow agent hereunder, and the Escrow Agent has agreed to serve in that
capacity under this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Purchase Agreement, the parties hereby agree as
follows:
1. Definitions. Any terms not otherwise defined herein shall have the
meaning ascribed to them in the Purchase Agreement.
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2. Appointment of Escrow Agent. The Law Offices of Xxxxx X. Xxxxxx, Esq.
are hereby appointed as Escrow Agent to accept, retain and release the documents
described herein to be held in escrow (collectively referred to as the
"Transaction Documents") in accordance with the provisions of this Agreement.
The Escrow Agent hereby accepts such appointment and acknowledges receipt of
various envelopes containing the Transaction Documents as follows:
Envelope C-1: All documents related to the Shares and Options and the
assignment thereof to CAP from the CGI Parties.
Envelope C-2: All documents related to the Secured Cathay/Amereco Note and the
assignment thereof to CAP from the CGI Parties.
Envelope C-3: All documents related to the Secured Congress Note and the
assignment thereof to CAP from the CGI Parties.
Envelope C-4: Release by CAP of any interest in the Shares and Options and
related documents contained in Envelope C-1, executed by CAP and
notarized.
Envelope C-5: Release by CAP of any interest in the Secured Cathay/Amereco Note
and related documents contained in Envelope C-2, executed by CAP
and notarized.
Envelope C-6: Release by CAP of any interest in the Secured Congress Note and
related documents contained in Envelope C-3, executed by CAP and
notarized.
From the CGI Parties, the Transaction Documents in the envelopes marked "C-1,"
"C-2," and "C-3."
From CAP, the Transaction Documents in the envelopes marked "C-4," "C-5," and
"C-6."
Xxxxxxxx X-0, X-0, X-0, X-0, X-0, and C-6 which describe the documents contained
in the similarly numbered envelopes (collectively the "Transaction Documents")
attached hereto and incorporated herein by this reference, more fully describe
the above documents to be deposited in Escrow. The Purchase Agreement and its
exhibits are also attached hereto for the Escrow Agent's reference. The Escrow
Agent agrees to accept, retain, release and deliver the Transaction Documents in
accordance with the provisions of this Escrow Agreement.
3. Completion/Non-Completion Certification and Escrow Release.
a. Completion. Upon the completion of the transactions described in
the Purchase Agreement, Escrow Agent shall proceed as follows:
i. Upon receipt by the Escrow Agent of either certified funds or
verified bank wire in the amount of $331,092 made payable to Cathay for the
Shares and Options and reimbursement as described in Sections 3(a) and 3.4 of
the Purchase Agreement, Escrow Agent shall deliver to CAP the envelopes marked
C-1 and C-4, and forward said funds to Cathay.
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ii. Upon receipt by the Escrow Agent of certified funds or
verified bank wire made payable to Cathay in the amount of:
(1) $1,000,000 on or before June 15, 1998; or
(2) $1,300,000 on or before September 15, 1998 (but after
June 15, 1998); or
(3) $1,600,000 on or before December 15, 1998 (but after
September 15, 1998); or
(4) $1,900,000 on or before March 15, 1999 (but after
December 15, 1998)
for payment of both the New 3-Year Note and the New 5-Year Note as provided for
in said Notes, Escrow Agent shall deliver to CAP the envelopes marked C-2, C-3,
C-5, and C-6.
iii. Upon receipt by the Escrow Agent of either certified funds
or verified bank wire for payment in full for the New 3-Year Note (other than as
set forth above but prior to default), Escrow Agent shall deliver to CAP the
envelopes marked C-2 and C-5, and forward said funds to Cathay.
iv. Upon receipt by the Escrow Agent of either certified funds or
verified bank wire for payment in full for the New 5-Year Note (other than as
set forth above but prior to default), Escrow Agent shall deliver to CAP the
envelopes marked C-3 and C-6, and forward said funds to Cathay.
b. Non-Completion -- CGI Shares and Options. If CAP fails to make the
payments required in Section 3(a) and 3.4 of the Purchase Agreement, Cathay may
(not earlier than two business days after such default) advise the Escrow Agent
as to such default. The Escrow Agent shall, not later than the business day
following the receipt of such notification by hand delivery or by fax, provide
CAP a copy of Cathay's notification. If CAP does not submit a written statement
to the Escrow Agent disputing the facts set forth within Cathay's notification
(which must include a reasonable evidence of payment) within two business days
following the date Cathay's notification was received by the Escrow Agent, the
Escrow Agent will:
Deliver to Cathay the envelopes marked X-0, X-0, X-0, X-0, X-0, X-0
c. Non-Completion --New 3-Year Note. If CAP fails to make the payments
required pursuant to the New 3-Year Note, Cathay may advise the Escrow Agent as
to such default. The Escrow Agent shall, not later than the business day
following receipt of such notification by hand delivery or by fax, provide CAP a
copy of Cathay's notification. If CAP does not submit a written statement to the
Escrow Agent disputing the facts set forth within Cathay's notification (which
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must include reasonable evidence of payment) within two business days following
the date Cathay's notification was received by the Escrow Agent, the Escrow
Agent will:
Deliver to Cathay the envelopes marked X-0, X-0, X-0, X-0
x. Xxx-Xxxxxxxxxx -- New 5-Year Note. If CAP fails to make the
payments required pursuant to the New 5-Year Note, Cathay may advise the Escrow
Agent as to such default. The Escrow Agent shall, not later than the business
day following receipt of such notification by hand delivery or by fax, provide
CAP a copy of Cathay's notification. If CAP does not submit a written statement
to the Escrow Agent disputing the facts set forth within Cathay's notification
(which must include reasonable evidence of payment) within two business days
following the date Cathay's notification was received by the Escrow Agent, the
Escrow Agent will:
Deliver to Cathay the envelopes marked C-3, and C-6
4. Receipt of Notifications and Payments.
a. If the Escrow Agent receives from any person any notifications or
other documentation with respect to any of the CGI Securities or the CGI Notes,
the Escrow Agent will, not later than the next business day, send a copy of such
notification or other documentation to both Cathay and CAP by facsimile and by
courier.
b. If the Escrow Agent receives from any person any payment of
dividends or distributions with respect to the CGI Securities or any payment of
any principal, interest, or other charge with respect to the CGI Notes, the
Escrow Agent will hold such payment for appropriate distribution upon payment or
non payment under the terms of the Purchase Agreement as described above.
5. Terms and Conditions to Escrow Agent's Acceptance. Acceptance by the
Escrow Agent of Escrow Agent's duties under this Agreement is subject to the
following terms and conditions, which the parties to this Agreement hereby agree
shall govern and control the rights, duties and immunities of the Escrow Agent:
a. Amereco agrees to pay the fees and expenses of the Escrow Agent in
accordance with their existing fee agreement. The Escrow Agent shall not be
liable for any act or omission to act under this Agreement, including any and
all claims made against the Escrow Agent as a result of Escrow Agent's holding
the Transaction Documents, except for Escrow Agent's own gross negligence or
willful misconduct. CAP, the CGI Parties, and Amereco jointly and severally,
agree to indemnify the Escrow Agent and hold Escrow Agent harmless from and
against any and all claims, losses, costs, liabilities, damages, suits, demands,
judgments or expenses (including but not limited to reasonable attorney's fees)
claimed against or incurred by the Escrow Agent arising out of or related,
directly or indirectly, to this Agreement, except acts of gross negligence or
willful misconduct by the Escrow Agent. The Escrow Agent may decline to act and
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shall not be liable for failure to act if the Escrow Agent determines in good
faith that Escrow Agent is in doubt as to Escrow Agent's duties under this
Agreement.
b. The Escrow Agent is not a party to any of the Transaction Documents
nor does Escrow Agent make any judgment on the content, completeness or validity
of said documents. The Escrow Agent's only responsibility is to keep safely the
Transaction Documents and release them in accordance with the terms of this
Agreement. The Escrow Agent's duties shall be determined only with reference to
this Agreement and applicable laws, and the Escrow Agent is not charged with
knowledge of or any duties or responsibilities in connection with any other
document or agreement, including, but not limited to, the Purchase Agreement. In
the event that the Escrow Agent determines in good faith that Escrow Agent is
uncertain as to Escrow Agent's duties or rights hereunder, the Escrow Agent
shall be entitled to refrain from taking any action other than to keep safely
the Transaction Documents until Escrow Agent shall (i) receive written
instructions signed by Cathay and CAP, or (ii) is directed otherwise by a court
of competent jurisdiction.
c. The Escrow Agent may act in reliance upon any instructions signed
on signature believed by Escrow Agent to be genuine, and may assume that any
person who has been designated by CAP and Cathay to give any written
instructions, notice or receipt, or make any statements in connection with the
provisions hereof, has been duly authorized to do so. The Escrow Agent shall
have no duty to make inquiry as to the genuineness, accuracy or validity of any
statements or instructions or any signatures on statements or instructions. The
name and true signatures of each individual authorized to act on behalf of
Cathay and CAP are stated in the signature area below.
d. In the event that the Escrow Agent should at any time be confronted
with inconsistent or conflicting claims or demands by the parties hereto, the
Escrow Agent shall have the right to interplead said parties in any Colorado
court of competent jurisdiction and request that such court determine the
respective rights of such parties with respect to this Agreement and, upon doing
so, the Escrow Agent shall be released from any obligations or liabilities to
either party as a consequence of any such claims or demands.
e. The Escrow Agent may execute any of Escrow Agent's powers or
responsibilities hereunder and exercise any rights hereunder, either directly or
by or through Escrow Agent's agents or attorneys. The Escrow Agent shall not be
responsible for and shall not be under a duty to examine, inquire into or pass
upon the validity, binding effect, execution or sufficiency of this Agreement or
of any amendment or supplement hereto.
f. During the period of Escrow Agent's tenure hereunder, Escrow Agent
may be unavailable or absent from time to time due to vacation or unavoidable
circumstances. Escrow Agent will, whenever possible, notify all parties in
advance of the anticipated length of Escrow Agent's unavailability or absence,
and make alternative arrangements for implementation of Escrow Agent's duties
hereunder if necessary, and any advisements or notification periods provided for
in this Escrow Agreement may be tolled accordingly as imposed by the
circumstances.
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6. Resignation of Escrow Agent.
a. The Escrow Agent shall have the right at any time to resign
hereunder by giving written notice of Escrow Agent's resignation to the parties
hereto, at the addresses set forth herein or at such other address as the
parties shall provide, at least thirty (30) days prior to the date specified for
such resignation to take effect. If after sixty (60) days from the date of
delivery of Escrow Agent's written notice of intent to resign the Escrow Agent
has not received a written designation of a successor escrow agent, the Escrow
Agent's sole responsibility shall be, in Escrow Agent's sole discretion, either
to retain custody of the Transaction Documents until Escrow Agent receives such
designation, or to apply to a Colorado court of competent jurisdiction for
appointment of a successor escrow agent, and after such appointment to have no
further duties or responsibilities in connection herewith, and the Escrow Agent
shall be relieved of all liability hereunder, except for any liability arising
out of the Escrow Agent's gross negligence or willful misconduct.
7. Notices. Any notices or other communications required or permitted to be
given hereunder shall be in writing and shall be deemed given and received when
so delivered personally, by overnight courier, by facsimile transmission (with
receipt confirmed by telephone or by automatic transmission report) or by
registered or certified mail, postage prepaid and return receipt requested, to
the addresses and at the facsimile numbers set forth below:
Cathay Global Investments, Inc.
Georgia Resources, Inc.
C.I.S. Resources Limited Liability Company
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(tel: 000-000-0000; fax: 000-000-0000)
Capital Aggregate Partners, LLC, 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000 (tel: 000-000-0000; fax 000-000-0000)
Amereco, Inc., 000 Xxxxxxxx Xxx #000
Xxxxxx Xxxx, Xxxxxxxx, 00000 (tel: 000-000-0000; fax: 000-000-0000)
Xxxxx X. Xxxxxx, Esq., 0000 X. Xxxxxx Xx., Xxxxx 000,
Xxxxxx, XX 00000 (tel: 000-000-0000; fax: 000-000-0000).
Xxxxxxx X. Xxxxxxxx, Xx., Esq., Friedlob, Sanderson,
Raskin, Xxxxxxx & Xxxxxxxxxxx, LLC
0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000 fax: 000-000-0000
Addresses (or the person to whose attention notices are to be given) may be
changed by giving written notice pursuant to this Section. Any notice hereunder
may be given on behalf of any party by its counsel or other authorized
representative.
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8. Governing Law. This Agreement is governed by the laws of the State of
Colorado without regard to its conflict of law provisions, and shall inure to
the benefit of and be binding upon the successors, assigns, heirs and personal
representatives of the parties hereto.
9. Amendment and Nonwaiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms or conditions hereof may be waived,
only by a written instrument executed by each party hereto, or in the case of a
waiver, by the party waiving compliance. The failure of any party at any time or
times to require performance of any provisions hereof shall in no manner affect
its right at a later time to enforce the same. No waiver of any party or
condition, or of the breach of any term contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement. No party may assign any rights, duties or obligations hereunder
unless all other parties have given their prior written consent.
10. Headings. The headings in this Agreement are for convenience of
reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts; each such executed counterpart shall be deemed an original land
all such counterpart together shall constitute one and the same instrument.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and the date first above written.
CATHAY GLOBAL INVESTMENTS, INC. C.I.S. RESOURCES LIMITED LIABILITY
COMPANY
By Continental Integrated Services,
Inc., its sole Member
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Vice President
By: /s/ Xxxx-Xxx Xx
--------------------------------
Xxxx-Xxx Xx, Secretary/Treasurer
GEORGIA RESOURCES, INC.
By: /s/ Xxxx-Xxx Xx
---------------------------------
Xxxx-Xxx Xx, Secretary/Treasurer
CAPITAL AGGREGATE PARTNERS, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Manager
AMERECO, INC. LAW OFFICES OF
XXXXX X. XXXXXX, ESQ.
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
---------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
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EXHIBIT C-1
Documents to be Deposited by the CGI Parties: All documents related to the
Shares and Options and the assignment thereof to CAP from the CGI Parties.
Document Description
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1. One or more certificates representing an aggregate of 3,635,165 shares of
Amereco common stock in transferable form indorsed to CAP with signatures
medallion guaranteed, and/or assignments, stock powers, and/or other
legally acceptable documentation, with the records of Amereco reflecting
the address of the Escrow Agent as the record address for Cathay (such
address not to be changed without the written consent of CAP and Cathay).
2. Option agreements representing the right to acquire 1,563,994 shares of
Amereco common stock on various terms and conditions, together with
executed assignments thereof from the optionees to CAP.
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EXHIBIT C-2
Documents to be Deposited by Cathay: All documents related to the Secured
Cathay/Amereco Note and the assignment thereof to CAP from the CGI Parties.
Document Description
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1. Secured Loan Agreement effective as of April 18, 1997, between Amereco,
Inc. and Cathay Global Investments, Inc.
2. Promissory Note dated as of April 18, 1997, from Amereco, Inc. ("Amereco")
to Cathay Global Investments, Inc. ("Cathay") in the principal amount of
$947,618.81, together with executed assignment thereof from Cathay to
Capital Aggregate Partners, LLC.
3.
4. Registration Rights Agreement effective as of April 18, 1997, between
Amereco and Cathay.
5. Pledge Agreement dated June 20, 1997, between Amereco and Cathay pledging
all of the shares of the issued and outstanding common stock of Omnivest
Resources, Inc., wholly-owned subsidiary of Amereco, which shares are
evidenced by Certificate 14 (for 4,501,801 shares), together with blank
stock powers executed by Amereco in form for transfer by delivery.
6. Pledge Agreement dated June 20, 1997, between Xxxxxx X. Xxxxxx and Cathay
pledging all of the shares of the issued and outstanding common stock and
preferred stock of Amereco held by Xxxxxx X. Xxxxxx as of January 31, 1997,
which shares are evidenced by Certificates 3054 (for 671,245 shares), 2548
(for 822,200 shares) and 2790 (for 450,000 shares) (collectively being
38,869 shares following a reverse stock split previously accomplished by
Amereco), and options to acquire 350,000 shares pursuant to option
agreements dated November 10, 1992, and October 10, 1995, together with
blank stock powers executed by Xx. Xxxxxx in form for transfer by delivery.
7. Pledge Agreement dated June 20, 1997, between Xxxxxxx X. Xxxxxxx and Cathay
pledging all of the shares of the issued and outstanding common stock and
preferred stock of Amereco held by Xxxxxxx X. Xxxxxxx as of January 31,
1997, which shares are evidenced by Certificates 2549 (for 800,000 shares),
2791 (for 450,000 shares) and 3055 (for 671,245 shares) (collectively being
38,425 shares following a reverse stock split previously accomplished by
Amereco), and options to acquire 350,000 shares pursuant to option
agreements dated November 10, 1992, and October 10, 1995, together with
blank stock powers executed by Xx. Xxxxxxx in form for transfer by
delivery.
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EXHIBIT C-3
Secured Congress Note Documents: All documents related to the Secured Congress
Note and the assignment thereof to CAP from the CGI Parties.
1. The First Amended and Restated Loan and Security Agreement between Omnivest
Resources, Inc. ("ORI") and Congress Financial Corporation (Western)
("Congress") dated August 1, 1996, as amended by the First Amendment to
First Amended and Restated Loan and Security Agreement and Related
Documents dated August 2, 1996, the Second Amendment to First Amended and
Restated Loan and Security Agreement and Related Documents dated March 17,
1997, and the Third Amendment to First Amended and Restated Loan and
Security Agreement and Related Documents dated April 18, 1997.
2. First Amended and Restated Term Promissory Note dated August 1, 1996, from
ORI to Congress in the principal amount of $2,375,000, together with
executed assignment thereof from Cathay to Capital Aggregate Partners, LLC.
3. The UCC financing statements filed against ORI by Congress with the
Colorado Central Indexing System, the Georgia Central Indexing System, the
Utah Secretary of State and Xxxxxxx County, Colorado, subject to the
releases described in the other Loan Documents.
4. The Guaranty from Amereco, Inc. to Congress dated August 1, 1996.
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EXHIBIT C-4
RELEASE AND ASSIGNMENT
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Capital Aggregate Partners, LLC, a Colorado limited liability company whose
address is 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("CAP"),
hereby releases, remises, assigns, and quitclaims to Cathay Global Investments,
Inc., C.I.S. Resources Limited Liability Company, and Georgia Resources, Inc.
(in such amounts as such interests were held prior to January 9, 1998) all of
CAP's right, title and interest in and to the documents, instruments, and assets
described on EXHIBIT C-1 (the "C-1 Assets") which exhibit is attached hereto and
by this reference incorporated herein. This Release and Assignment is effective
for all purposes as of January 9, 1998, the date as of which the C-1 Assets ere
placed into escrow.
Dated: January 14, 1998
to be effective as of January 9, 1998.
CAPITAL AGGREGATE PARTNERS, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Manager and
Authorized Representative
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EXHIBIT C-5
RELEASE AND ASSIGNMENT
----------------------
Capital Aggregate Partners, LLC, a Colorado limited liability company whose
address is 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("CAP"),
hereby releases, remises, assigns, and quitclaims to Cathay Global Investments,
Inc., C.I.S. Resources Limited Liability Company, and Georgia Resources, Inc.
(in such amounts as such interests were held prior to January 9, 1998) all of
CAP's right, title and interest in and to the documents, instruments, and assets
described on EXHIBIT C-2 (the "C-2 Assets") which exhibit is attached hereto and
by this reference incorporated herein. This Release and Assignment is effective
for all purposes as of January 9, 1998, the date as of which the C-2 Assets ere
placed into escrow.
Dated: January 14, 1998
to be effective as of January 9, 1998.
CAPITAL AGGREGATE PARTNERS, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Manager and
Authorized Representative
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EXHIBIT C-6
RELEASE AND ASSIGNMENT
----------------------
Capital Aggregate Partners, LLC, a Colorado limited liability company whose
address is 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("CAP"),
hereby releases, remises, assigns, and quitclaims to Cathay Global Investments,
Inc., C.I.S. Resources Limited Liability Company, and Georgia Resources, Inc.
(in such amounts as such interests were held prior to January 9, 1998) all of
CAP's right, title and interest in and to the documents, instruments, and assets
described on EXHIBIT C-3 (the "C-3 Assets") which exhibit is attached hereto and
by this reference incorporated herein. This Release and Assignment is effective
for all purposes as of January 9, 1998, the date as of which the C-3 Assets ere
placed into escrow.
Dated: January 14, 1998
to be effective as of January 9, 1998.
CAPITAL AGGREGATE PARTNERS, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Manager and
Authorized Representative
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