ESCROW AGREEMENT
This Escrow Agreement, dated as of March 9, 2005 by and among Blank
Rome LLP, as escrow agent (the "Escrow Agent"); Maverick Oil and Gas, Inc., a
Nevada corporation with a principal place of business at 00 Xxxx Xxxxxxxx,
Xxxxxx, Xxxxxx Xxxxxxx X0X 0XX ("Maverick"), the 11 individuals whose names
appear on the signature page hereto (the "Members") and V. Xxx Xxxxxx, as the
Members' Agent (the "Members' Agent").
R E C I T A L S
WHEREAS, Maverick and the members of Hurricane Energy LLC, a Delaware
limited liability company ("Hurricane") have entered into an LLC Interest
Purchase Agreement dated as of March 9, 2005 (the "Purchase Agreement") pursuant
to which Maverick will acquire all of the Membership Interests of Hurricane.
WHEREAS, under the terms of the Purchase Agreement, the Escrowed Shares
(as such term is defined below) are to be delivered to the Escrow Agent and
deposited into the Escrow Account established hereunder to secure payment of the
Founders' indemnification obligations pursuant to Article VII of the Purchase
Agreement; and
WHEREAS, the Founders have entered into employment agreements with
Maverick as of the date hereof and the Founders have agreed with Maverick that
their receipt of their respective portion of the Escrowed Shares is conditioned
upon their continued employment with Maverick, subject to the limitations set
forth in Section 4C herein.
NOW THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
2. Appointment of Escrow Agent. Maverick and the Members hereby appoint
the Escrow Agent to act as escrow agent hereunder and the Escrow Agent hereby
accepts such appointment for the purpose of receiving, safeguarding and
distributing the Escrowed Shares (as such term is defined below) in accordance
with the terms and conditions set forth herein.
3. Deposit of Escrowed Shares. Maverick shall deliver, as of the date
hereof, 3,375,000 shares of its common stock, par value $.001, to be held by the
Escrow Agent in accordance with the terms of this Agreement (the "Escrowed
Shares").
4. Release of Escrowed Shares.
A. If Maverick gives a written Indemnification Notice (a "Damage
Notice") to the Members' Agent and the Escrow Agent certifying that it has
incurred Damages and specifying with particularity the amount of Damages and the
basis therefore and the number of Maverick Shares for which release from escrow
is requested out of the Escrowed Shares otherwise attributable to the Founders
(being the number of Maverick Shares valued at the greater of (x) the closing
price on the Closing Date; or (y) the closing price on the business day
proceeding the date of the Damage Notice, with an aggregate value equal to the
amount of Damages specified in such Damage Notice) to the Founders and the
Escrow Agent, then, unless the Escrow Agent receives, by no later than 10 days
after the Escrow Agent receives the applicable Damage Notice, a written notice
(an "Objection Notice") from the Members' Agent objecting to such Damage Notice,
the Escrow Agent will deliver instructions to the transfer agent for the
Maverick Shares (the "Transfer Agent") requesting the transfer to Maverick of
the number of escrowed Maverick Shares otherwise attributable to the Founders
requested in the Damage Notice. The Members' Agent may not object to a Damage
Notice unless he or she believes in good faith that the party giving the Damage
Notice is not entitled to receive the amount of Damages requested. If the Escrow
Agent receives an Objection Notice objecting to disbursement within the 10 day
period, then the Escrow Agent will not instruct the transfer agent to transfer
the Maverick Shares as requested in the Damage Notice, but will continue to
retain the Maverick Shares requested in the Damage Notice until directed to
cause the transfer of such Maverick Shares either by (i) a joint written notice
to the Escrow Agent from Maverick and the Members' Agent (which may be provided
by separately signed counterparts), or (ii) a final and non-appealable order of
the applicable mediator or arbitrator, as provided in Section 7.5 of the
Purchase Agreement.
B. On the first anniversary of the date of the Purchase Agreement,
subject to the condition set forth in Xxxxxxx 0X xxxxx, the Escrow Agent will
deliver to the Members, all Maverick Shares then held by the Escrow Agent in
accordance with Schedule 4.3 of the Purchase Agreement; provided that (i) the
Maverick Shares to be delivered to the Founders may be adjusted as provided in
Section 4A above and (ii) any Maverick Shares to be delivered to the Founders
requested in any unresolved Damage Notices shall be retained by the Escrow Agent
and disbursed as described in Section 4A above. When all such Damage Notices
have been resolved, the Escrow Agent will deliver, subject to the condition set
forth in Section 4C below, all remaining Maverick Shares then held by the Escrow
Agent to, or as directed by, the Members' Agent.
C. With respect to the Founders, in addition to the limitations on
release of the Escrowed Shares set forth above, each Founder shall only be
entitled to his respective portion of the Escrowed Shares if he remains employed
with Maverick as of the first anniversary of the Purchase Agreement; provided,
however, that each Founders right to his respective portion of the Escrowed
Shares shall not be effected in any manner if such employment was terminated
prior to the one year anniversary of the Purchase Agreement due to the death of
the Founder, the disability of the Founder, or by Maverick without Cause, all as
defined in the Employment Agreement between Maverick and the Founder of even
date herewith.
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D. Notwithstanding anything contained herein, Damages may only be
assessed by the Escrow Agent against Maverick Shares beneficially owned by the
Founders.
5. Voting of Escrowed Shares. The Escrow Agent shall vote the Escrowed
Shares that it holds in the Escrow Account as directed by the written
instructions of the Members'Agent in connection with any matter to be voted on
by Maverick's stockholders.
6. Duties, etc., of Escrow Agent.
A. The Escrow Agent will be entitled to rely conclusively upon any
written statement, instrument or other document received by it not only as to
its due execution, genuineness and effectiveness but also as to the truth and
accuracy of any information contained therein and of all signatures thereon
which the Escrow Agent will in good faith believe to be genuine. The undersigned
agrees that the Escrow Agent will have no liability except for willful
misconduct in the performance of its duties hereunder and will not have any
liability for any action taken (or failure to act) in good faith or taken on the
advice of counsel. In the event any question arises concerning the Escrow
Agent's duties hereunder, the Escrow Agent may consult its counsel and it may
rely upon the written opinion of such counsel, which counsel may include members
of its firm.
B. The duties of the Escrow Agent under this agreement will be
entirely administrative and not discretionary. The Escrow Agent will not be
liable to any third party as a result of any acts or omissions taken or made by
the Escrow Agent. No rights are herein intended to be granted to any third party
beneficiary. The undersigned (jointly and severally) will indemnify, defend and
hold harmless the Escrow Agent and reimburse the Escrow Agent from and for any
and all liabilities, costs or expenses (including reasonable attorneys fees and
costs of investigation) the Escrow Agent may suffer or incur by reason of the
Escrow Agent's performance under this agreement including a suit in interpleader
brought by the Escrow Agent (which costs and expenses may be deducted from the
Escrowed Shares).
C. The undersigned agrees that by the Escrow Agent fulfilling its
duties hereunder or if, as a consequence of fulfilling its duties hereunder, any
member or employee of the Escrow Agent becomes a party or witness in any
proceeding, that fact will not disqualify the Escrow Agent or any member thereof
from serving as attorney for any of its clients in that or any other proceeding
or matter.
D. This agreement will terminate when all of the Escrowed Shares
will have been distributed, and on termination hereof, the undersigned hereby
releases the Escrow Agent from any and all obligations and liabilities arising
out of its performance under this agreement.
E. In the event of any disagreement between any of the parties to
this Escrow Agreement, or between them or any of them and any other person
resulting in adverse claims or demands being made in connection with the subject
matter of the Escrow, or in the event that the Escrow Agent, in good faith, is
in doubt as to what action it should take hereunder, the Escrow Agent at its
option, may refuse to comply with any claims or demands on it, or refuse to take
any other action hereunder, so long as such disagreement continues or such doubt
exists, and in any such event, the Escrow Agent shall not be or become liable in
any way or to any person for its failure or refusal to act, and the Escrow Agent
shall be entitled to continue so to refrain from acting until (i) the rights of
all parties shall have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have been adjusted and all
doubt resolved by agreement among all of the interested persons, and the Escrow
Agent shall have been notified thereof in writing signed by all such persons.
The rights of the Escrow Agent under this Section 6(E) are cumulative of all
other rights which it may have by law or otherwise.
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7. Resignation; Successor Escrow Agent.
A. Resignation. The Escrow Agent will have the right to resign at
any time upon turning over to Maverick and the Members' Agent all of the
Escrowed Shares then under its control and, thereafter, it will have no further
obligations and/or liabilities under this agreement.
B. Successor Escrow Agent. Maverick and the Members' Agent
together shall have the right to terminate the appointment of the Escrow Agent
hereunder by giving notice in writing of such termination to the Escrow Agent,
specifying the date upon which such termination shall take effect. In the event
of such termination, Maverick and the Members' Agent agree that they will
jointly appoint a successor Escrow Agent at or before the time such notice
becomes effective, and the Escrow Agent hereby agrees that it shall turn over
and deliver to such successor Escrow Agent the Escrow Account and any other
amounts held by it pursuant to this Escrow Agreement. Upon delivery of such
sums, the Escrow Agent shall be discharged of any further duties under this
Agreement.
8. Fees and Expenses. Maverick shall reimburse the Escrow Agent for all
necessary expenses, to be rendered by it, disbursements and advances (including
reasonable attorneys' fees) incurred or made by it in connection with carrying
out its duties hereunder.
9. Modifications; Governing Law. The provisions of this agreement will
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective legal representatives. This agreement constitutes
the entire agreement between the undersigned and the Escrow Agent. No rights
herein may be assigned by the undersigned without the prior written consent of
the Escrow Agent and no modification hereof will be binding or enforceable
against Blank unless in writing and signed by the Escrow Agent. This agreement
will be governed and construed in accordance to the laws of the Commonwealth of
Pennsylvania, applicable to agreements made, delivered and to be performed
entirely in such Commonwealth. No delay in exercising any right, power or remedy
hereunder will operate as a waiver thereof; nor will any single or partial
exercise of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
certified, registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally or, if mailed by certified or
registered mail, 10 days after the date of deposit in the United States mail,
postage prepaid, if addressed:
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If to Maverick:
in the case of Maverick the address for notices shall be:
Maverick Oil and Gas, Inc.
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX. 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
General Counsel
with a copy to:
Xxxxxx & Xxxxx LLP
00 Xxxxxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn : Xxxx Xxxxxx, Esq.
in the case of the Members' Agent the address for notices
shall be:
V. Xxx Xxxxxx
0000 X. Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxx Xxxxxxx, Esq.
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to the Escrow Agent:
Xxxxx Xxxxxxx, Esq.
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
10. No Assignment. This Escrow Agreement shall be binding upon the
successors and permitted assigns of the parties hereof. No assignment of any
rights or delegation of any obligations provided for herein may be made by any
party hereto without the express written consent of all other parties hereto,
except for the provisions of Section 6 respecting successor Escrow Agents.
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11. Entire Agreement. This Escrow Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof,
and there are no representations, warranties, understandings or agreements other
than those expressly set forth herein.
12. Further Assurances. If at any time any party hereto shall consider
or be advised that any further agreements, assurances or other documents are
reasonably necessary or desirable to carry out the provisions hereof and the
transactions contemplated hereby, the parties hereto shall execute and deliver
any and all such agreements or other documents, and do all things necessary or
appropriate to carry out fully the provisions hereof.
13. Jurisdiction; Service of Process. The undersigned irrevocably
consents to the exclusive jurisdiction of the Courts of Common Pleas of
Philadelphia, Pennsylvania and/or the United States District Court for the
Eastern District of Pennsylvania in any action or proceeding pursuant to this
agreement and agrees to service of process by first class, certified mail,
return receipt requested, to the address set forth herein.
14. Counterparts. This Escrow Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
15. Section Headings. The section headings contained in this Escrow
Agreement are inserted for purposes of convenience of reference only and shall
not affect the meaning or interpretation hereof.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Escrow
Agreement on the date first above written.
MAVERICK OIL AND GAS, INC. MEMBERS:
By: /s/ Xxxxxxx Xxxxxxx /s/ V. Xxx Xxxxxx
------------------------ -----------------------
Signature V. Xxx Xxxxxx
/s/ Xxxx Xxxxx
AS THE MEMBERS' AGENT -----------------------
Xxxx Xxxxx
By: /s/ V. Xxx Xxxxxx
------------------------ /s/ Xxxxx Xxxxxxx
Signature -----------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------
Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx X. XxXxxx
-----------------------
Xxxxx X. XxXxxx
/s/ Xxxxx Xxxxxxxxx
-----------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxxxx Xxxxx' II
-----------------------
Xxxxxxxxx Xxxxx' II
/s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxx
-----------------------
Xxxx X. Xxxxxx
The undersigned hereby accepts the Escrow Shares and agrees to hold the
same in accordance with the provisions of this Escrow Agreement.
---------------------------,
as Escrow Agent
By: -----------------------
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