EXHIBIT 99.3
ESCROW AGREEMENT
ESCROW AGREEMENT (the "Agreement") dated as of this _____ day of
November, 1998 by and between CATHETER TECHNOLOGY GROUP, INC., a Delaware
corporation (the "Corporation"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a
financial institution chartered under the laws of the State of New York (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Corporation is offering (the "Offering") a minimum of
390,245 shares (the "Minimum Offering") and a maximum of 650,000 shares (the
"Maximum Offering") of the Corporation's common stock, par value $.10 per share
(the "Shares"), pursuant to the Corporation's Registration Statement on Form
SB-2, File No. 333-65737 (the "Registration Statement"); and
WHEREAS, the Registration Statement provides that:
(a) The Offering will commence immediately upon the effectiveness of
the Corporation's Prospectus forming a part of the Registration Statement (the
"Prospectus") and will continue until _________, 1998 (30 days from the date of
the Prospectus), unless extended by the Corporation for an additional period of
30 days from such date (the "Offering Period");
(b) Once the Minimum Offering has been sold, the Corporation will
conduct a closing (the "First Closing") on the sale of the Shares comprising the
Minimum Offering. The Corporation will hold a subsequent closing at such time as
subscriptions for up to the Maximum Offering have been accepted by the
Corporation until the expiration of the Offering Period (the "Subsequent
Closing");
(c) Tendered subscriptions for all of the Shares shall be subject to
acceptance by the Corporation, which subscriptions may be rejected by the
Corporation in its sole discretion; and
(d) Proceeds from the sale of the Shares shall be held in escrow by the
Escrow Agent pending the First Closing, and the Subsequent Closing thereafter,
and will be disbursed to the Corporation upon such closing. If the First Closing
or the Subsequent Closing is not conducted, then such funds shall be returned to
the subscribers, without interest or deduction, to the extent obtained by the
Corporation, after the termination of the Offering Period (the "Termination
Date").
NOW, THEREFORE, in consideration of the mutual promises herein
contained and intending to be legally bound, the parties hereby agree as
follows:
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1. APPOINTMENT OF ESCROW AGENT. The Corporation hereby appoints
American Stock Transfer & Trust Company, as escrow agent, in accordance with the
terms and conditions set forth herein, and the Escrow Agent hereby accepts such
appointment.
2. DELIVERY OF SUBSCRIPTION PROCEEDS.
2.1 With respect to sales of Shares by the Corporation (or its
officers and directors) during the Offering Period, all checks, drafts, or other
instruments received from subscribers for the Shares will be delivered by the
Corporation to the Escrow Agent, made payable to "American Stock Transfer &
Trust Company, Escrow Agent for Catheter Technology Group, Inc." together with,
as to each subscriber, his or her name, address, social security number or
employer identification number, the number of Shares subscribed for, and the
amount paid in connection with such subscription. The Escrow Agent is hereby
empowered on behalf of the Corporation to endorse and collect all checks,
drafts, or other instruments received on account of subscriptions for Shares.
2.2 With respect to sales of Shares by independent
broker-dealers during the Offering Period, all monies received from subscribers
for the Shares will be delivered by such broker-dealers to the Escrow Agent by
wire transfer together with, as to each subscriber, his or her name, address,
social security number or employer identification number, the number of Shares
subscribed for, and the amount paid in connection with such subscription.
3. ESCROW AGENT TO HOLD AND DISBURSE FUNDS. The Escrow Agent will hold
and disburse all funds received by it pursuant to the terms of this Escrow
Agreement, as follows:
3.1 All funds received by the Escrow Agent pursuant to the
terms of this Escrow Agreement may be held in a bank money market account or
invested in United States Government instruments (including the U.S.T. Master
Government Fund).
3.2 In the event that prior to the Termination Date the Escrow
Agent has received funds (and such funds are cleared within 10 days of the
Termination Date) aggregating at least $2,390,250.625 from the sale of at least
the Minimum Offering and all of the other Closing Conditions as defined and as
set forth in the Prospectus section entitled "Plan of Distribution" have been
satisfied, the Escrow Agent will, on the date of the First Closing, pursuant to
written instructions signed by the Corporation certifying as to the satisfaction
of said Closing Conditions, pay to the Corporation and/or to any other person
designated in such instructions, the proceeds received by the Escrow Agent from
the sale of such Shares. In the event of the Subsequent Closing, the Escrow
Agent will, pursuant to written instructions signed by the Corporation, pay to
the Corporation and/or to any other person designated in such instructions, the
proceeds received by the Escrow Agent from the sale of shares from subscriptions
for up to the Maximum Offering.
3.3 In the event that by the Termination Date the Escrow Agent
has not received funds (and such funds are cleared within 10 days of the
Termination Date) in the aggregate amount of at least $2,390,250.625 from the
sale of at least the Minimum Offering, then the Escrow
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Agent shall, within 15 business days of the Termination Date, return to the
subscribers for the Shares the respective amounts which such subscribers have
paid, without interest.
4. EXCULPATION AND INDEMNIFICATION OF ESCROW AGENT.
4.1 The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth herein. The 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 enforce any obligation of
any person to perform any act. The Escrow Agent shall be under no liability to
the other party 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 such
document. Except for amendment to this Agreement referred to below, and except
for instructions given to the Escrow Agent by the Corporation relating to the
escrow deposit under this Agreement, the Escrow Agent shall not be obligated to
recognize any agreement between any and all of the persons referred to herein,
notwithstanding that references thereto may be made herein and whether or not it
has knowledge thereof.
4.2 The Escrow Agent shall not be liable to the Corporation or
to anyone else for action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith in the exercise of its own best judgment,
except for actions or omissions arising from the Escrow Agent's gross negligence
or willful misconduct. The Escrow Agent may rely conclusively and shall be
protected in 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. Escrow Agent shall not be bound by any notice or demand, or
any waiver, modification, termination or rescission of this Agreement or any of
the terms thereof, unless evidenced by a writing delivery to the Escrow Agent
signed by the proper party or parties and, if the duties or rights of the Escrow
Agent and affected, unless it shall give its prior written consent thereto.
4.3 The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form of, or 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 party hereto or to anyone else in any
respect on account of the identity, authorizing rights of the persons 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 pursuant to the provisions hereof. The Escrow Agent shall not be
liable to the Corporation or to anyone else for any loss which may be incurred
by reason of any investment of any monies which it holds hereunder provided the
Escrow Agent has complied with the provisions of Section 3.1 hereunder.
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4.4 The 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 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, any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own judgment, in reliance upon such assumption.
4.5 To the extent that the Escrow Agent becomes liable for the
payment of taxes, including withholding taxes, in respect of income derived from
the investment of funds held hereunder or any payment made hereunder, the Escrow
Agent may pay such taxes. The Escrow Agent may withhold from any payment of
monies held by it hereunder such amount as the Escrow Agent estimates to be
sufficient to provide for the payment of such taxes not yet paid, and may use
the sum withheld for that purpose. The Escrow Agent shall be indemnified and
held harmless against any liability for taxes and for any penalties or interest
in respect of taxes, on such investment income or payments in the manner
provided in Section 4.6.
4.6 The Escrow Agent will be indemnified and held harmless by
the Corporation from and against any and all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Escrow Agent in
connection with any action, suit or other 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, the monies or other property held by it hereunder or any income
earned from investment of such monies, except for any such action, suit or other
claim, which in any way, directly or indirectly, arises out of the Escrow
Agent's gross negligence or willful misconduct. The Escrow Agent shall have a
lien for the amount of any such expenses or loss on the monies and other
property held by it hereunder and shall be entitled to reimburse itself from
such monies or property for the amount of any such expense or loss. Promptly
after the receipt by the Escrow Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall, if a
claim in respect thereof is to be made against the Corporation, notify the
Corporation thereof in writing, but the failure by the Escrow Agent to give such
notice shall not relieve the Corporation from any liability which the
Corporation may have to the Escrow Agent hereunder. Notwithstanding any
obligation to make payments and deliveries hereunder, the Escrow Agent may
retain and hold for such time as it deems necessary such amount of monies or
property as it shall, from time to time, in its sole discretion, deem sufficient
to indemnify itself for any such loss or expense and for any amounts due it
under Section 7.
4.7 For the purposes hereof, the term "expense or loss" shall
include all amounts paid or payable to satisfy any claim, demand or liability,
or in settlement of any claim, demand, action, suit or proceeding settled with
the express written consent of the Escrow Agent, and costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements paid or
incurred in investigating or defending against any such claim, demand, action,
suit or proceeding.
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5. TERMINATION OF AGREEMENT AND RESIGNATION OF ESCROW AGENT.
5.1 This Agreement shall terminate on the final disposition of
the monies and property held in escrow hereunder, provided that the rights of
the Escrow Agent and obligations of the other parties hereto under Section 4 and
7 shall survive the termination hereof.
5.2 The Escrow Agent may resign at any time and be discharged
from its duties as Escrow Agent hereunder by giving the Corporation at least 10
days notice thereof. Simultaneous with its resignation, the Escrow Agent shall
turn over to a successor escrow agent appointed by the Corporation all monies
and property held hereunder (less such amount as the Escrow Agent is entitled to
retain pursuant to Section 7) upon presentation of the document appointing the
new escrow agent and its acceptance thereof. If no new agent is so appointed
within the 30-day period following such notice of resignation, the Escrow Agent
may deposit the aforesaid monies and property with any court it deems
appropriate.
6. FORM OF PAYMENT BY ESCROW AGENT.
6.1 Any payments by the Escrow Agent to subscribers or to
persons other than the Corporation pursuant to the terms of this Agreement shall
be made by check, payable to in order of each respective subscriber or other
person, or pursuant to wiring instructions supplied in writing to the Escrow
Agent.
6.2 All amounts referred to herein are expressed in United
States Dollars and all payments by the Escrow Agent shall be made in such
dollars.
7. COMPENSATION OF ESCROW AGENT. For services rendered, the Escrow
Agent shall receive as compensation all interest income earned on the funds
received pursuant to this Agreement. The Escrow Agent shall also be entitled to
reimbursement from the Corporation for all expenses paid or incurred by it in
the administration of its duties hereunder, including, but not limited to, all
counsel, advisory's and agents' fees and disbursements and all reasonable taxes
or other governmental charges. It is anticipated that such disbursement shall
not exceed $500 barring any unforeseen circumstances.
8. NOTICES. All notices, requests, demands and other communications
provided for herein shall be in writing, shall be delivered by hand, by
overnight courier, by facsimile transmission or by first-class mail, shall be
deemed given when received and shall be addressed to the parties hereto at their
respective addresses listed below or to such other persons or addresses as the
relevant party shall designate as to itself from time to time in writing
delivered in like manner.
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if to the Corporation:
Catheter Technology Group, Inc.
0 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx, CEO and President
Telephone number: (000) 000-0000
Fax number: (000) 000-0000
with a copy to:
Xxxxxxxxx Traurig, P.A.
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Telephone number: (000) 000-0000
Fax number: (000) 000-0000
if to the Escrow Agent:
American Stock Transfer & Trust Co.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone number: (000) 000-0000
Fax number: (000) 000-0000
9. FURTHER ASSURANCES. From time to time on and after the date hereof,
the Corporation shall deliver or cause to be delivered to the Escrow Agent such
further documents and instruments and shall do and cause to be done such further
acts as the Escrow Agent shall reasonably request (it being understood that the
Escrow Agent shall have no obligation to make any such request) to carry out
more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.
10. CONSENT TO SERVICE OF PROCESS. The Corporation hereby irrevocably
consents to the jurisdiction of the courts of the State of New York and of any
federal court located in such State 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 waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made, certified or
registered mail directed to the Corporation at its address for purposes of
notices hereunder.
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11. MISCELLANEOUS.
11.1 If for any reason the escrow deposit is not received by
the Escrow Agent contemplated herein, the Corporation shall reimburse the Escrow
Agent for all expenses, including reasonable counsel fees and disbursements,
paid or incurred by it in making preparations for providing the services
contemplated hereby, provided, however, that such sum does not exceed $100.00.
11.2 This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing such
instrument to be drafted. The terms "hereby," "hereof," "hereto," "hereunder"
and any similar terms, as used in this Agreement, refer to the Agreement in its
entirety and not only to the particular portion of this Agreement where the term
is used. The word "person" shall mean any natural person, partnership,
corporation, government and any other from of business or legal entity. All
words or terms used in this Agreement, regardless of the number or gender in
which they are used, may be deemed to include any other number and any other
gender as the context may require. This Agreement shall not be admissible in
evidence to construe the provisions of any prior agreement. The rule of EJUSDEM
GENERIS shall not be applicable herein to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
11.3 This Agreement and the rights and obligations hereunder
of the Corporation may be assigned by the Corporation only to a successor to the
Corporation's entire business. This Agreement and the rights and obligations
hereunder of the Escrow Agent may be assigned by the Escrow Agent only to a
successor to its entire business. This Agreement shall be binding upon and inure
to the benefit of each party's respective successors, heirs and permitted
assigns. No other person shall acquire or have any rights under or by virtue of
this Agreement. This Agreement may not be changed orally or modified, amended or
supplemented without an express written agreement executed by the Escrow Agent
and the Corporation. This Agreement is intended to be for the sole benefit of
the parties hereto, and (subject to the provisions of this Section 11.3) the
respective successors, heirs and assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to be, for the benefit
of any third person.
11.4 This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York. The representations
and warranties contained in this Agreement shall survive the execution and
delivery hereof and any investigations made by any party. The headings in this
Agreement are for purposes of reference only and shall not be or otherwise
affect any of the terms hereof.
12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signature of all of the parties reflected hereon as signatures.
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IN WITNESS WHEREOF, the parties executed and delivered this Escrow
Agreement on the day and year first above written.
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
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Name:
-----------------------------------
Title:
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CATHETER TECHNOLOGY GROUP, INC.
By:
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Xxxx X. Xxxxx, President
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