ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into and effective as of May _______,
1998, by and among MPEL Holdings Corp. (the "Company"), the Stockholders of the
Company who are listed on Schedule A attached hereto (the "Stockholders") and
American Stock Transfer and Trust Company (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company is conducting an offering of a minimum of 800,000 (the
"Minimum") and a maximum of 1,300,000 (the "Maximum") shares of Common Stock,
$0.01 par value per share (the "Common Stock"), along with an aggregate of up to
1,100,000 shares of Common Stock to be sold by certain stockholders of the
Company (the "Stockholder Shares") at an offering price of $5.00 (the
"Offering"); and
WHEREAS, the Company has filed a Registration Statement on Form SB-2 to
register the Offering under the Securities Act of 1933, as amended (the "Act")
and has made the required "Blue Sky" filing to register the Offering in those
states in which the Offering is being made; and
WHEREAS, the Company proposes to establish an Escrow Account with the
Escrow Agent for the benefit of those persons subscribing for the Common Stock
in the Offering (the "Subscribers") to be designated as the "___________ -
Special Account" (the Escrow Account").
NOW, THEREFORE, in consideration of the mutual obligations hereunder, the
parties hereto agree as follows:
1.0 Appointment of Escrow Agent; Establishment of Account. The Company
hereby appoints the Escrow Agent to act as escrow agent in accordance with and
subject to the terms and conditions of this Agreement for the sole and exclusive
benefit of the Subscribers, and the Escrow Agent hereby accepts such appointment
and agrees to act in accordance with and subject to the terms and conditions
hereof. Escrow Agent further agrees to establish the Escrow Account.
2.0 Deposit of Proceeds. Upon its receipt of an acceptable subscription
for the Common Stock in the form of a duly completed subscription agreement
accompanied by payment in full of the applicable purchase price, the Company
will promptly deliver to the Escrow Agent the subscription amount received and
the name and address of the Subscriber. Upon receipt of any subscription amount
represented by a check, the Escrow Agent shall enter the check for collection
and hold the proceeds thereof in escrow subject to the terms and conditions of
this Agreement. All subscription amounts held by the Escrow Agent shall be
deemed the assets of the Subscribers, and not those of the Company, until
disbursement in accordance with Section 4. Subscription amounts may also be sent
by wire transfer directly to the Escrow Account, which payments the Escrow Agent
shall hold subject to the terms and conditions of this Agreement.
3.0 Investment of Subscription Amounts. The Escrow Agent shall hold all
subscription amounts in the Escrow Account, which shall be a separate bank
account constituting a "deposit" (as that term is defined in Section 3(1) of the
Federal Deposit Insurance Act) established and maintained by the Escrow Agent in
accordance with the terms and conditions of this Agreement. The Escrow Agent
shall establish and maintain books and records indicating the name, address and
interest in the account of each Subscriber and all other records required by
law. All interest earned on the subscription amounts, if any, shall be held in
the Escrow Account until the subscription amounts are released in accordance
with the provisions of Section 4.
4.0 Release of Subscription Amounts and Securities.
4.1 If, on or before May __, 1999 (the "Termination Date"), the Company
has received, pursuant to the Offering, acceptable subscriptions for an
aggregate of not less than 800,000 shares ($4,000,000 in cash), then the Company
will deliver to the Escrow Agent (i) a certificate to that effect in
substantially the form of Exhibit A hereto and (ii) a letter from the Company's
legal counsel confirming the same (the "Letter") (collectively, the
"Disbursement Authorizations"). Upon, and only upon, receipt of the
aforementioned instructions, the Escrow Agent will release from escrow and
deliver to the Company all of the subscription amounts in the form of a check
payable to the order of the Company or by other transfer to or for the account
of the Company, as the Company may designate. Any income earned thereon shall
be retained by the Escrow Agent as set forth in Section 8.0 of this Agreement.
4.2 If, within five (5) business days after the Termination Date, the
Escrow Agent has not received the Disbursement Authorizations, then all
subscription amounts then held in escrow hereunder shall be disbursed by the
Escrow Agent to each Subscriber in the form of a check for such subscription
amount. Any income earned thereon shall be retained by the Escrow Agent as set
forth in Section 8.0 of this Agreement.
4.3 If after the release of funds as set forth in Section 4.1, the Company
has received, pursuant to the Offering, additional acceptable subscriptions for
Units, the Company will deliver to the Escrow Agent the Certificate and the
Letter. Upon receipt of the aforementioned Certificate and Letter, the Escrow
Agent will release from escrow and deliver to the Company at such time as
determined by the Board of Directors of the Company, all of the additional
subscription amounts in the form of a check payable to the order of the Company
or by other transfer to or for the account of the Company, as the Company may
designate.
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5.0 Deposit and Release of Stockholders' Shares of Common Stock
5.1 On the date hereof, the Stockholders are depositing their Stockholder
Shares with the Escrow Agent until such time as the Minimum amount of Common
Stock has been sold. When the Minimum is met and the funds have been released to
the Company pursuant to Section 4.1 hereof, the Escrow Agent shall release and
deliver all Stockholder Shares to the respective Stockholders.
6.0 Limitations of Escrow Agent' s Capacity.
6.1 This Agreement expressly and exclusively sets forth the duties of the
Escrow Agent with respect to any and all matters pertinent hereto and no implied
duties or obligations or any fiduciary relationship shall be read into this
Agreement against the Escrow Agent.
6.2 The Escrow Agent shall act hereunder as a depository only, and is not
responsible or liable in any manner whatsoever for the sufficiency, correctness,
genuineness or validity of the subject matter of this Agreement or any part
thereof, whether in form or substance, or for the form of execution thereof, or
for nay endorsement or lack of endorsement thereon or for any description
therein. It shall be sufficient if a writing purporting to be such instrument,
document, certificate, statement or notice is delivered to the Escrow Agent and
purports on its face to be correct in form and signed or otherwise executed by
the party or parties required to sign or execute the same under this Agreement.
The Escrow Agent shall not be required in any way to determine the identity or
authority of any person executing the same or the genuineness of such signature.
6.3 This Agreement as it presently exists or may hereafter be amended
constitutes the entire agreement between the Escrow Agent and any other parties
hereto in connection with the subject matter hereof, and no other as adopted or
binding, in whole or in part, upon the Escrow Agent notwithstanding that other
agreement may be deposited with the Escrow Agent or the Escrow Agent may have
knowledge thereof.
6.4 The Escrow Agent shall have no liability or obligation to notify any
party hereto or any other party interested in this Agreement of any payment
required or maturity occurring under this Agreement or under the terms of any
instrument deposited herewith unless such notice is explicitly provided for in
this Agreement.
6.5 The Escrow Agent shall not be charged with notice or knowledge of any
fact or information not herein set forth.
7.0 Authority of Escrow Agent.
7.1 The Escrow Agent is hereby authorized and directed by the undersigned
to deliver the subject matter of this Agreement only in accordance with the
provisions of Section 4 above.
7.2 The Escrow Agent, shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization, power of attorney
or other paper or document which the Escrow Agent in good faith believes to be
genuine and what it purports to be, including but not limited to items directing
investment or non-investment of funds, items requesting or authorizing release,
disbursement or retainage of the subject matter of this Agreement and the items
amending the terms of this Agreement.
7.3 The Escrow Agent may consult with legal counsel in the event of any
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dispute or question as to the construction of any of the provisions hereof or
its duties hereunder, and shall incur no liability and shall be fully protected
in act and in accordance with the advise of such counsel.
7.4 In the event of any disagreement between any of the parties to this
Agreement, or between any of them and any other person, resulting in adverse
claims or demands being made in connection with the matters covered by this
Agreement, or in the event that the Escrow Agent, in good faith, shall be in
doubt as to what action it should take, the Escrow Agent may, at its option,
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 to refrain from acting until (I) the rights of all
interested parties shall have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have been adjudged and all
doubt resolved by agreement among all the interested persons, and the Escrow
Agent shall have been notified thereof in writing signed by all such persons.
Notwithstanding the preceding, the Escrow Agent may in its discretion obey the
order or judgment, decree or levy of any court, whether with or without
jurisdiction, and the Escrow Agent is hereby authorized in its sole discretion,
to comply with and obey (and shall have no liability to any person or party so
doing) any such orders, judgments, decrees or levies which the Escrow Agent is
advised by legal counsel of its own choosing is binding upon it. The rights of
the Escrow Agent under this subsection are cumulative with all other rights
which it may have by law or otherwise.
7.5 The Escrow Agent shall have no liability for any loss arising from any
cause beyond its control, including but not limited to the following (I) the
act, failure or negligence of any agent or correspondent selected by the Escrow
Agent for the remittance of funds (ii) any delay, error omission or default of
any mail, telegraph, cable or wireless agency or operator (iii) the acts or
edicts of any government or governmental agency or other group or entity
exercising governmental powers.
7.6 Without in any way limiting any other provision of this Agreement as
expressly understood and agreed that the Escrow Agent shall be under no duty or
obligation to give any notice or to do or to omit the doing of any action or
anything with respect to the subject matter hereof except to receive, hold and
deliver the same in accordance with the terms hereof. The Escrow Agent shall
not be liable for any error in judgment, or act or omission, or any mistake of
law or fact or for doing anything it may do or refrain from doing in connection
herewith, except for its own willful misconduct or gross negligence.
7.7 The Escrow Agent shall be indemnified and held harmless by the Company
from anything which the Escrow Agent may do or refrain from doing in connection
herewith or for any claims, demands or losses or for any damages mad e or
suffered by any party to this Agreement including any legal expenses incurred by
the Escrow Agent in defending any claim of liability in connection herewith
except such as may arise through or be caused by the Escrow Agent's willful
misconduct or gross negligence. The Company's obligation to indemnify the
Escrow Agent as set forth in this section 7.7 shall survive the termination of
this Escrow Agreement.
7.8 In the event that any controversy should arise among the parties with
respect to this Agreement, or should the Escrow Agent resign and the parties
fail to select another escrow agent to act in its stead, the Escrow Agent shall
have the right to institute a xxxx of interpleader in any court of competent
jurisdiction to determine the rights of the parties.
8.0 Compensation. The Escrow Agent shall be entitled to any and all income
earned on
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the subscription amounts held in the Escrow Account as well as reimbursement for
its reasonable costs and expenses incurred in connection with the performance by
it of services under this Agreement (including reasonable fees and expenses of
Escrow Agent's counsel.). The Company binds and obligates itself to pay to the
Escrow Agent on demand compensation to which it is entitled. The Escrow Agent's
compensation hereunder during the term of this Escrow Agreement shall be not
more than the Escrow Agent's normal fee for similar services.
9.0 Resignation. The Escrow Agent may resign at any time by giving written
notice to the parties hereto whereupon the parties hereto will appoint a
successor Escrow Agent within thirty (30) days thereafter. Until a successor
Escrow Agent has been named and accepted its appointment or until another
disposition of the subject matter of this Agreement has been agreed upon by all
the parties hereto, the Escrow Agent shall be discharged of all of its duties
hereunder save to keep the subject matter whole.
10.0 General Provisions.
10.1 Unless this Agreement is terminated earlier by the complete
disbursement of the subject matter of this Agreement, the duties of Escrow Agent
shall terminate December 31, 1998 (unless any party has sent notice to all other
parties that a dispute exists regarding any part of the subject matter hereof)
and upon such termination, the Escrow Agent is hereby directed to deliver any
subscription amounts then held in escrow to the Company.
10.2 The Escrow Agent upon the first to occur of the fixed termination
date set out in subsection 10.1 above, or the release of all of the subject
matter pursuant to the terms of this Agreement, shall be discharged from any
further obligation hereunder.
10.3 Where directions or instructions from more than one of the
undersigned are required, such directions or instructions may be given by
separate instruments of similar tenor. Any of the undersigned may act hereunder
through an agent or attorney-in-fact, provided satisfactory written evidence of
authority is first furnished to any party relying on such authority.
10.4 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 deliver hereof and
any investigations made by any party. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect any of the
terms hereof.
10.5 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 the signatures. This Agreement may be executed via
facsimile.
10.6 Any payment, notice, request for consent, report, or any other
communication required or permitted in this agreement shall be in writing and
shall be deemed to have been given when personally delivered to the party
hereunder specified against receipt therefor or when placed in the United States
Postal Service, registered or certified, with return receipt requested, postage
prepaid or by facsimile transmission (provided a copy is mailed by certified or
registered mail, return receipt requested) and addressed as follows:
American Stock Transfer and Trust Company
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00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to the Company:
MPEL Holdings Corp.
0000 Xxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, President
Fax: (516)
With copy to:
Ruskin Moscou Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Any party may unilaterally designate a different address by giving
notice of each such change in the manner specified above to the other party.
10.7 This Agreement is being made in and is intended to be construed
according to the internal substantive laws of the State of Delaware applicable
to contracts executed, delivered and performed wholly within the State of
Delaware. It shall inure to and be binding upon the parties hereto and their
respective successors, receivers, personal representatives, trustees and
assigns.
10.8 Words used in the singular number may include the plural and the
plural may include the singular. The section headings appearing in this
instrument have been inserted for convenience only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
conditions of this Agreement.
10.9 The terms of this Agreement may be altered, amended, modified or
revoked only by an instrument in writing signed by all the parties hereto and
each of the Purchasers.
10.10 If one or more of the provisions hereof shall for any reason be held
invalid, illegal or unenforceable in any respect under applicable law, such
invalidity, illegality or unenforceability shall not affect any other provisions
hereof and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
The parties below execute this Agreement on this __ day of May, 1998.
MPEL Holdings Corp.
By:_______________________________
Xxxxxx Xxxxxxx, President and
Chief Executive Officer
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AMERICAN STOCK TRANSFER AND
TRUST CO.
By:______________________________
Printed
Name:____________________________
Title:_____________________________
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EXHIBIT A
American Stock Transfer and Trust Company
____________________________________
____________________________________
Re: MPEL Holdings Corp.
Ladies and Gentlemen:
We hereby refer to the Escrow Agreement between MPEL Holdings Corp.
(the "Company") and American Stock Transfer and Trust Company, dated as of
____________, 19__ (the "Agreement"). In accordance with Section 4 of the
Agreement, we hereby certify to you that the Company has received acceptable
subscriptions for an aggregate of not less than 800,000 shares of Common Stock
and you have received cash related thereto of not less than $4,000,000.
Accordingly, you are instructed to deliver the entire amount held by you under
the Agreement to MPEL Holdings Corp., 0000 Xxxxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx,
XX 00000, Attention: Xxxx Xxxxx, for deposit to such accounts as the Company
instructs ___________________.
Very truly yours,
MPEL Holdings Corp.
A New York corporation
By:_____________________________
Xxxxxx Xxxxxxx, President
and Chief Executive Officer
Date:___________________________
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