EXHIBIT 99.3
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of April 1, 2004 (this "Agreement"), by
and among [NAME OF INVESTOR], (the "Investor"), Viragen, Inc., a Delaware
corporation ("Viragen"), and Law Offices of Xxxxx X Xxxxx (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Viragen and the Investor have entered into a Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to
which, among other things, the Investor has agreed to purchase, and Viragen has
agreed to sell and issue, certain securities of Viragen pursuant to the terms
thereof;
WHEREAS, pursuant to the Purchase Agreement, the Investor is depositing
$_____________, representing the full purchase price under the Purchase
Agreement, (the "Purchase Price") into escrow with the Escrow Agent; and
WHEREAS, the parties hereto desire to set forth the terms of such
escrow and the release of the Purchase Price from the escrow and to appoint the
Escrow Agent to act in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS; CONSTRUCTION. Capitalized terms defined in the
introductory paragraph of or recitals to this Agreement shall have the meanings
in this Agreement as defined therein. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to such terms in the Purchase
Agreement. The rules of construction set forth in the Purchase Agreement shall
apply to this Agreement.
2. APPOINTMENT OF ESCROW AGENT. Viragen and the Investor hereby appoint
the Escrow Agent to act as escrow agent in accordance with the terms hereof, and
the Escrow Agent hereby accepts such appointment.
3. DEPOSIT OF ESCROW AMOUNT. On or within two Business Days after the
date hereof, the Investor shall deposit $___________ in immediately available
funds (together with all interest, income and other earnings thereon, the
"Escrow Amount") into an attorney escrow or attorney trust account designated by
the Escrow Agent (the "Escrow Account").
4. INVESTMENT OF ESCROW AMOUNT. Promptly after receipt of the Escrow
Amount, the Escrow Agent shall, pending the disbursement thereof pursuant to
this Agreement, hold the Escrow Amount in an interest-bearing attorney escrow or
attorney trust account at Citibank, N.A. Any interest received by the Escrow
Agent with respect to the Escrow Amount (the "Escrow Interest") shall remain in
the Escrow Account until released from escrow as provided in this Agreement. All
Escrow Interest shall be the property of the Investor.
5. RELEASES FROM ESCROW. The Escrow Agent shall dispose of or
distribute the Escrow Amount only in accordance with this SECTION 5.
Notwithstanding the foregoing, to the extent inconsistent with this Agreement,
the basis for claims for such disbursement, and any limitations thereon, shall
be governed by the Purchase Agreement, which shall be controlling between
Viragen and the Investor, respectively.
(a) RELEASE OF ESCROW AMOUNT PER JOINT INSTRUCTIONS. The
Escrow Agent shall release the Escrow Amount at any time pursuant to the joint
written instructions of the Investor and Viragen (which may be executed and/or
transmitted in counterparts).
(b) RELEASE OF ESCROW AMOUNT TO VIRAGEN. If the Stockholder
Approval Condition is satisfied, then within two Business Days thereafter the
Investor and Viragen shall jointly advise the Escrow Agent of that fact in
writing. The Escrow Agent shall thereafter release the Escrow Amount to Viragen
upon the Closing under the Purchase Agreement promptly after the Investor
notifies the Escrow Agent, with a copy to Viragen, that the conditions precedent
in Section 8.2 of the Purchase Agreement have been satisfied or have been waived
by the Investor.
(c) RELEASE TO THE INVESTOR. If the Investor shall notify the
Escrow Agent, with a copy to Viragen, that (1) the Stockholder Approval
Condition has not been satisfied within 120 days after the Escrow Funding Date
or (2) that the conditions in Section 8.2 of the Purchase Agreement have not
been satisfied or waived by the Investor on or before the date that is three
Business Days after the date on which, by the terms of the Purchase Agreement,
the Closing is required to occur, then in either such case the Escrow Agent
shall release the Escrow Amount to the Investor. The amount of the Escrow Amount
released to Viragen pursuant to this Section 5(b) shall be reduced by the amount
of the Investor's legal fees, but in no event in excess of [$2,500][$32,500].
Such amount for legal fees shall be deemed for all purposes to have been release
by the Escrow agent to Viragen and then deposited by Viragen with the Escrow
Agent for release to the Investor or its legal counsel.
(d) INTEREST. The Escrow Agent shall release any interest or
other earnings on the Escrow Amount to the Investor from time to time at the
Investor's request to the Escrow Agent.
(e) CERTAIN DISPUTES. It is understood and agreed that should
any dispute arise with respect to the delivery and/or ownership or right of
possession of the Escrow Amount held by the Escrow Agent hereunder, the Escrow
Agent is authorized and directed in the Escrow Agent's sole discretion (i) to
retain in the Escrow Agent's possession without liability to anyone all or any
part of the Escrow Amount until such disputes shall have been settled either by
mutual written agreement of the parties concerned by a final order, decree or
judgment of a board of arbitration or a court of competent jurisdiction after
the time for appeal has expired and no appeal has been perfected, but the Escrow
Agent shall be under no duty whatsoever to institute or defend any such
proceedings, or (ii) to deliver the Escrow Amount and any other property and
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documents held by the Escrow Agent hereunder to a state or Federal court having
competent subject matter jurisdiction and located in the State of New York, City
of New York, Borough of Manhattan, in accordance with the applicable procedure
therefor. Upon delivery to such court, Escrow Agent shall be relieved of all
further duties hereunder.
(f) COURT ORDER. Notwithstanding any provision in this
Agreement to the contrary, the Escrow Agent shall disburse the Escrow Amount in
accordance with a final judgment or final court order from a court of competent
jurisdiction directing disposition of the Escrow Amount (a "Court Order"). A
judgment or order under any provision of this Agreement shall not be deemed to
be final until the time within which an appeal may be taken therefrom has
expired and no appeal has been taken, or until the entry of a judgment or order
from which no appeal may be taken. The Escrow Agent shall be entitled to receive
and may conclusively rely on an opinion of counsel to the presenting party to
the effect that a Court Order as referred to in this Section is final and
nonappealable and from a court of competent jurisdiction.
6. TAXES. The Investor shall be deemed to be the owner of the Escrow
Amount for tax purposes and shall be responsible for any tax resulting
therefrom, unless and until it shall be determined that Viragen is entitled to
release of the Escrow Amount. To the extent that the Escrow Agent becomes liable
for the payment of taxes on behalf of another party hereunder, including
withholding taxes, in respect of interest, income and other earnings from the
investment of the Escrow Amount held hereunder or any payment made hereunder,
the Escrow Agent may pay such taxes on behalf of such party from funds on
deposit under this Agreement. The Escrow Agent may withhold from any payment of
monies to the party on whose behalf the taxes were paid, such amount as the
Escrow Agent reasonably estimates to be sufficient to provide for the payment of
such taxes not yet paid, and shall use the sums withheld solely for that
purpose.
7. ESCROW AGENT.
(a) The Escrow Agent undertakes to perform only such duties as
are expressly set forth herein.
(b) The Escrow Agent may rely and shall be protected in acting
or refraining from acting upon any notice, instruction or request furnished to
it in writing hereunder and reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(c) The Escrow Agent shall not be liable for any action taken
by it in good faith without gross negligence, and may consult with counsel of
its own choice (including attorneys at the Escrow Agent's law firm) and shall
have full and complete authorization and protection for any reasonable action
taken or suffered by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) The Escrow Agent may resign and be discharged from its
duties or obligations hereunder by giving notice in writing of such resignation
specifying a date (not less than fifteen (15) days after the giving of such
notice) when such resignation shall take effect, and by transferring all funds
then held by it pursuant to this Agreement to the successor escrow agent.
Promptly after such notice, Viragen and the Investor shall by mutual agreement
appoint a successor escrow agent, such escrow agent to hold the Escrow Amount
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upon the resignation date specified in such notice. If a successor escrow agent
is not appointed within fifteen (15) days, the Escrow Agent shall have the right
to petition any court of competent jurisdiction for the appointment of a
successor escrow agent. Viragen and the Investor may by mutual agreement at any
time substitute a new escrow agent by giving fifteen (15) days' notice thereof
to the Escrow Agent then acting. The Escrow Agent shall continue to serve until
its successor accepts the escrow and receives delivery of the Escrow Amount.
(e) Viragen and the Investor agree, jointly and severally, to
indemnify the Escrow Agent for, and to hold it harmless against, any loss,
liability or expense incurred by it, arising out of or in connection with its
entering into this Agreement and carrying out its duties hereunder, including
the costs and expenses of defending itself against any claim of liability in the
premises, other than as incurred by reason of its willful or reckless misconduct
or bad faith. The provisions of this section shall survive the resignation or
removal of the Escrow Agent and the termination of this Agreement.
(f) The Escrow Agent's duties hereunder may be altered,
amended, modified or revoked only by a writing signed by Viragen, the Investor
and the Escrow Agent.
(g) The Escrow Agent is hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or by any
other person or corporation, excepting only orders or process of courts of law
and is hereby expressly authorized to comply with and obey orders, judgments or
decrees of any court. In case the Escrow Agent obeys or complies with any such
order, judgment or decree, the Escrow Agent shall not be liable to any of the
parties hereto or to any other person, firm or corporation by reason of such
decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction.
(h) The Escrow Agent has acted as legal counsel for Alexandra
Global Master Fund Ltd., an international business company formed under the laws
of the British Virgin Islands ("Alexandra"), and may continue to act as legal
counsel for Alexandra, from time to time, notwithstanding its duties as the
Escrow Agent hereunder. The Investor and Viragen consent to the Escrow Agent
acting in such capacity as legal counsel for Alexandra and waive any claim that
such representation represents a conflict of interest on the part of the Escrow
Agent. The Investor understands that Alexandra and the Escrow Agent are relying
explicitly on the foregoing provision.
8. REPRESENTATIONS. Each of the Escrow Agent, Viragen and the Investor
hereby represents and warrants to the other parties (a) that this Agreement has
been duly executed by it and constitutes the valid and legally binding
obligation of it, enforceable against it in accordance with the terms hereof,
except as may be limited by any bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally and (b) that the execution, delivery and
performance of this Agreement does not and will not violate any law or
regulation applicable to it. The Escrow Agent hereby represents and warrants
that the funds held in the Escrow Account, at all times when held by the Escrow
Agent, will not be subject to any lien, claim or other encumbrance arising from
or through the Escrow Agent.
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9. GENERAL.
(a) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon receipt if delivered
personally or sent by facsimile transmission (receipt of which is confirmed
mechanically, personally or by email), or the day after when sent by courier
service promising overnight delivery (with delivery confirmed the next day) or
three (3) Business Days after deposit in the U.S. mails, first class postage
prepaid. Notices shall be addressed as follows:
(i) if to the Investor:
[NAME]
[ADDRESS]
Attention:
Facsimile: ( )
---
(ii) If to Viragen:
Viragen, Inc.
000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx 000 Xxxxxxxxxx, XX 00000 Attention:
Facsimile: (000) 000-0000
With a copy to the Escrow Agent
(iii) If to Escrow Agent:
Law Offices Of Xxxxx X Xxxxx,
as Escrow Agent
00 Xxxx 00xx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(b) ENTIRE AGREEMENT. This Agreement, the Purchase Agreement,
and the other Transaction Documents entered into in connection herewith and
therewith, constitute the entire agreement between the parties with respect to
the transactions contemplated hereby and thereby and supersede all written
(other than the Transaction Documents) or verbal representations, warranties,
commitments and other understandings prior to the date hereof. No reference
shall be made to any draft of this Agreement, any other document or any Schedule
or Exhibit hereto for purposes of interpretation or resolution of ambiguity or
otherwise.
(c) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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(d) SEVERABILITY. If any provision of this Agreement shall be
held to be unenforceable or invalid by any court of competent jurisdiction or as
a result of future legislative action, such holding or action shall be strictly
construed and shall not alter the enforceability, validity or effect of any
other provision of this Agreement.
(e) ASSIGNABILITY. This Agreement shall be binding upon and
shall inure to the benefit of the successors and permitted assigns of the
parties hereto. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, directly or indirectly, by any party
hereto without the prior written consent of the other parties hereto.
(f) THIRD PARTY BENEFICIARIES. The terms and provisions of
this Agreement are intended solely for the benefit of each of the parties hereto
and their respective successors and permitted assigns, and it is not the
intention of the parties hereto to confer third party beneficiary rights except
as expressly provided in Section 7(h).
(g) CAPTIONS. The descriptive headings herein are inserted for
convenience only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to any principles of conflict of laws.
(i) AMENDMENT AND WAIVER. This Agreement may be amended,
modified, supplemented or waived only by an instrument in writing signed by
Viragen, the Escrow Agent and the Investor.
(j) LIMITED LIABILITY. The Escrow Agent shall have only those
duties as are specifically provided herein, which shall be deemed purely
ministerial in nature, and shall under no circumstance be deemed a fiduciary for
any of the parties to this Agreement. The Escrow Agent shall neither be
responsible for, nor chargeable with, knowledge of the terms and conditions of
any other agreement, instrument or document between the other parties hereto, in
connection herewith, including without limitation the Purchase Agreement. This
Agreement sets forth all matters pertinent to the escrow contemplated hereunder,
and no additional obligations of the Escrow Agent shall be inferred from the
terms of this Agreement or any other agreement. IN NO EVENT SHALL THE ESCROW
AGENT HAVE ANY LIABILITY OTHER THAN FOR ACTUAL (AND NOT CONSTRUCTIVE) FRAUD OR
RECKLESS OR WILLFUL MISCONDUCT AS DETERMINED BY FINAL JUDGMENT (NOT SUBJECT TO
FURTHER APPEAL) OF A COURT OF COMPETENT JURISDICTION. IN NO EVENT SHALL THE
ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING BUT NOT
LIMITED TO LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSSES OR DAMAGES
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[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above written.
ESCROW AGENT INVESTOR
LAW OFFICES OF XXXXX X XXXXX,
as Escrow Agent [NAME]
By: By:
------------------------ ------------------------
Xxxxx X. Xxxxx Name:
Title:
VIRAGEN, INC.
By:
------------------------
Name:
Title:
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