EXHIBIT 10.4
CLOSING ESCROW AGREEMENT
THIS CLOSING ESCROW AGREEMENT, dated January 25, 2007 ("ESCROW
Agreement"), is entered into by and between Bronze Marketing, Inc., a Nevada
corporation, and its subsidiaries (the "COMPANY"), Xxxx Capital Partners, LLC
("XXXX") and Xxxxxx Xxxx Xxxxx Raysman & Xxxxxxx LLP, as escrow agent (the
"ESCROW AGENT"). The Company and Xxxx are sometimes collectively referred to
herein as the "ESCROW PARTIES".
WHEREAS, concurrently herewith the Company and certain investors (the
"INVESTORS") are entering into a Securities Purchase Agreement, dated as of the
date hereof (the "PURCHASE AGREEMENT"), pursuant to which each Investor (as
defined therein) has agreed to purchase from the Company, and the Company has
agreed to sell to each Investor, the number of Shares identified therein
(capitalized terms used and not otherwise defined herein shall have the meanings
given such terms on Annex A to this Escrow Agreement);
WHEREAS, pursuant to the Purchase Agreement, the Company and the Investors
have agreed to establish an escrow on the terms and conditions set forth in this
Escrow Agreement;
WHEREAS, Xxxx has acted as placement agent in connection with the
transactions contemplated by the Purchase Agreement; and
WHEREAS, the Escrow Agent is willing to accept appointment as Escrow Agent
for only the expressed duties outlined herein.
NOW, THEREFORE, in consideration of the premises set forth above and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. PROCEEDS TO BE ESCROWED. A copy of the Purchase Agreement is attached as
Exhibit A. All amounts provided by the Investors in connection with their
acquisition of the Shares as set forth in the Purchase Agreement shall be
deposited directly with the Escrow Agent in immediately available funds by
federal wire transfer, such funds being referred to herein as the "ESCROW
FUNDS." The Escrow Funds shall be retained in escrow by the Escrow Agent in a
separate account and invested as stated below.
2. IDENTITY OF INVESTORS. Concurrent with the execution of the Escrow Agreement,
the Company shall furnish to the Escrow Agent the information comprising the
identity of the Investors in the format set forth in the "LIST OF INVESTORS"
attached as Exhibit B, or in an electronic spreadsheet format with the same
information. All Escrow Funds shall remain the property of the Investors and
shall not be subject to any liens or charges by the Company or the Escrow Agent
or judgments or creditors' claims against the Company, until released to the
Company as hereinafter provided. Escrow Agent will not use the information
provided to it by the Company for any purpose other than to fulfill its
obligations as Escrow Agent. The Company and the Escrow Agent will treat all
Investor information as confidential.
3. DISBURSEMENT OF FUNDS.
(a) The Escrow Agent shall continue to hold the Escrow Funds delivered for
deposit hereunder by an Investor until the earlier of: (1) receipt of a joint
written notice from the Company and the Investors evidencing termination under
Section 6.5(a) of the Purchase Agreement, (2) receipt of a written notice from
the Company or such Investor evidencing termination under Section 6.5(b) of the
Purchase Agreement (each of (1) and (2), a "TERMINATION ELECTION") and (3)
receipt of both (x) written notice from the Company that the conditions to
closing under Section 5.1 of the Purchase Agreement have been satisfied and (y)
joint written notice from the Company and Xxxx to effect the Closing.
(b) If the Escrow Agent receives a Termination Election prior to its
receipt of the notices contemplated under Section 3(a)(3), then the Escrow Agent
shall return the Escrow Funds delivered by such Investor as directed by such
Investor. If the Escrow Agent receives the notices contemplated under Section
3(a)(3) prior to a Termination Election, then the Escrow Agent shall disburse
the portion of the Escrow Funds for which the foregoing is the case in
accordance with Exhibit C to this Escrow Agreement.
4. DUTY AND LIMITATION ON LIABILITY OF THE ESCROW AGENT. The sole duty of the
Escrow Agent shall be to receive the Escrow Funds and to hold them subject to
release, in accordance herewith, and the Escrow Agent shall be under no duty to
determine whether the Company is complying with requirements of the Escrow
Agreement or the Purchase Agreement. The Escrow Agent may conclusively rely upon
and shall be protected in acting upon any statement, certificate, notice,
request, consent, order or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties. The Escrow Agent
shall have no duty or liability to verify any such statement, certificate,
notice, request, consent, order or other document, and its sole responsibility
shall be to act only as expressly set forth in the Escrow Agreement. The Escrow
Agent shall be under no obligation to institute or defend any action, suit or
proceeding in connection with the Escrow Agreement unless first indemnified to
its satisfaction. The Escrow Agent may consult counsel of its own choice with
respect to any question arising under the Escrow Agreement and the Escrow Agent
shall not be liable for any action taken or omitted in good faith upon advice of
such counsel.
In no event shall the Escrow Agent be liable, directly or indirectly, for any
(a) damages or expenses arising out of the services provided hereunder, other
than damages which result from the Escrow Agent's gross negligence or willful
misconduct or (b) special or consequential damages, even if the Escrow Agent has
been advised of the possibility of such damages.
The Escrow Agent shall be obligated only to perform the duties specifically set
forth in this Escrow Agreement, which shall be deemed purely ministerial in
nature, and shall under no circumstances be deemed to be a fiduciary to the
Company, Xxxx, any Investor or any other person. The Escrow Agent shall not
assume any responsibility for the failure of the Company or Xxxx to perform in
accordance with this Escrow Agreement. This Escrow Agreement sets forth all
matters pertinent to the escrow contemplated hereunder, and no additional
obligations of the Escrow Agent shall be implied by nor inferred from the terms
of any other agreement, including, without limitation, the Purchase Agreement.
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Under no circumstances shall the Escrow Agent be expected or required to use,
risk or advance its own funds in the performance of its duties or exercise of
its rights hereunder.
5. ESCROW AGENT'S FEE. The Escrow Agent shall not be entitled to compensation
for its services; provided, however, that in the event that the conditions for
the disbursement of funds under the Escrow Agreement are not fulfilled, or the
Escrow Agent renders any material service not contemplated in the Escrow
Agreement, or there is any assignment of interest in the subject matter of the
Escrow Agreement, or any material modification hereof, or if any material
controversy arises hereunder, or the Escrow Agent is made a party to any
litigation pertaining to the Escrow Agreement, or the subject matter hereof,
then the Escrow Agent shall be reasonably compensated by the Company for such
extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney's fees, occasioned by any delay, controversy, litigation or
event, and the same shall be recoverable from the Company.
6. INTERPLEADER. The Escrow Agent may at any time commence an action in the
nature of interpleader or other legal proceedings and may deposit the Escrow
Funds with the clerk of the court. In the event of any dispute regarding who is
entitled to the Escrow Funds at any time, the Escrow Agent may determine not to
release the Escrow Funds to either any Investor or the Company and may commence
an interpleader action as aforesaid or may cause the Escrow Funds to be
deposited with a court of competent jurisdiction whereupon it shall cease to
have any further obligation hereunder. Upon any delivery or deposit of the
Escrow Funds as provided in this Section 5, the Escrow Agent shall be released
and discharged from any further obligation under this Agreement.
7. INVESTMENT OF PROCEEDS. The Escrow Funds shall be credited by Escrow Agent
and recorded in a non-interest bearing escrow account. The Company agrees to
indemnify and hold Escrow Agent harmless from and against any taxes, additions
for late payment, interest, penalties and other expenses that may be assessed
against Escrow Agent on or with respect to any payment or other activities under
this Escrow Agreement unless any such tax, addition for late payment, interest,
penalties and other expenses shall arise out of or be caused by the gross
negligence or willful misconduct of the Escrow Agent.
The Company acknowledges that Escrow Agent is not providing investment
supervision, recommendations or advice.
8. NOTICES. All notices, requests, demands and other communications under the
Escrow Agreement shall be in writing and shall be deemed to have been duly given
(a) on the date of service if served personally on the party to whom notice is
to be given, (b) on the day of transmission if sent by facsimile/email
transmission to the facsimile number/email address given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(c) on the day after delivery to Federal Express or similar overnight courier or
the Express Mail service maintained by the United States Postal Service or (d)
on the fifth day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed, return receipt requested, to the party as follows:
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If to the Company: Bronze Marketing, Inc.
Xx 0, Xxxxx Xxxx, Xxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxx, 000000
Attn: Chairman
Facsimile: 00-000-00000000
If to Escrow Agent: Xxxxxx Xxxx Xxxxx Raysman & Xxxxxxx LLP
000 0xx Xxxxxx XX
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxxx X. Xxxxx, Xx., Esq.
Facsimile: (000) 000-0000
Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.
9. INDEMNIFICATION OF ESCROW AGENT. The Escrow Parties hereby indemnify and hold
harmless the Escrow Agent from and against any and all loss, liability, cost,
damage and expense, including, without limitation, reasonable counsel fees,
which the Escrow Agent may suffer or incur by reason of any action, claim or
proceeding brought against the Escrow Agent arising out of or relating in any
way to the Escrow Agreement or any transaction to which the Escrow Agreement
relates unless such action, claim or proceeding is the result of the willful
misconduct or gross negligence of the Escrow Agent.
10. SUCCESSORS AND ASSIGNS. Except as otherwise provided in the Escrow
Agreement, no party hereto shall assign the Escrow Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto, each Investor and Xxxx and any such attempted assignment without such
prior written consent shall be void and of no force and effect. The Escrow
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties hereto.
11. GOVERNING LAW; JURISDICTION. The Escrow Agreement shall be construed,
performed and enforced in accordance with, and governed by the internal laws of
the State of New York, without giving effect to the principles of conflicts of
laws thereof.
12. SEVERABILITY. In the event that any part of the Escrow Agreement is declared
by any court or other judicial or administrative body to be null, void, or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of the Escrow Agreement shall remain in full
force and effect.
13. AMENDMENTS; WAIVERS. The Escrow Agreement may be amended or modified, and
any of the terms, covenants, representations, warranties or conditions hereof
may be waived, only by a written instrument executed by each of the Company, the
Escrow Agent, Xxxx and each Investor. Any waiver by any party of any condition
or of the breach of any provision, term, covenant, representation or warranty
contained in the Escrow Agreement, in any one or more instances, shall not be
deemed to be nor construed as further or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation or warranty of the Escrow Agreement.
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14. ENTIRE AGREEMENT. The Escrow Agreement contains the entire understanding
among the parties hereto with respect to the escrow contemplated hereby and
supersedes and replaces all prior and contemporaneous agreements and
understandings, oral or written, with regard to such escrow.
15. SECTION HEADINGS. The section headings in the Escrow Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
the Escrow Agreement.
16. COUNTERPARTS. The Escrow Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
17. RESIGNATION. Escrow Agent may resign upon 30 days advance written notice to
the Company. If a successor escrow agent is not appointed within the 30-day
period following such notice, Escrow Agent may petition any court of competent
jurisdiction to name a successor escrow agent or interplead the Escrow Funds
with such court, whereupon Escrow Agent's duties hereunder shall terminate.
18. THIRD-PARTY BENEFICIARIES. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person or entity, except for the Investors and Xxxx.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused the Escrow Agreement to
be executed the day and year first set forth above.
BRONZE MARKETING, INC.
/s/Xxxxxxx X. Xxxxxx
--------------------
By: Xxxxxxx X. Xxxxxx
Its: President
XXXXXX XXXX XXXXX RAYSMAN & XXXXXXX LLP
By: /s/Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx, Esq.
Title: Partner
XXXX CAPITAL PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director, Equity Capital Markets
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Annex A
DEFINED TERMS
"BUSINESS DAY" means any day except Saturday, Sunday and any day which is a
federal legal holiday or a day on which banking institutions in the State of New
York or the State of Utah are authorized or required by law or other
governmental action to close.
"CLOSING" means the closing of the purchase and sale of the Shares pursuant to
Article II of the Purchase Agreement.
"CLOSING DATE" means the Business Day on which all of the conditions set forth
in Sections 5.1 and 5.2 of the Purchase Agreement are satisfied, or such other
date as the parties thereto may agree.
"INVESTMENT AMOUNTS" means, with respect to each Investor, the Investment Amount
indicated on such Investor's signature page to the Purchase Agreement.
"INVESTORS" means the investors identified on the signature pages to the
Purchase Agreement.
"SHARES" means the shares of Series B Voting Convertible Preferred Stock
issuable to the Investors pursuant to this Agreement, having the rights,
preferences and privileges set forth in the Certificate of Designation.
