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EXHIBIT 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "AGREEMENT") is made as of this day of
, 1999 by and among XXXXXXX.XXX, INC., a Delaware corporation
(the "BUYER"), XXXXX X. XXXXXXXX, a Texas resident, as Attorney-in-Fact as
defined in the Merger Agreement (defined below) as representative of and on
behalf the Company Shareholders, CAFE ODYSSEY, INC., a Minnesota corporation
("BUYER"), CAFE ODYSSEY ACQUISITION SUBSIDIARY, INC., a Delaware corporation
("MERGER SUBSIDIARY"), and XXXXXXXX & KNIGHT, A PROFESSIONAL CORPORATION (the
"ESCROW AGENT").
W I T N E S S E T H
WHEREAS, on , 1999, the Company, the Company
Shareholders, Merger Subsidiary, Xxxxxxx X. Xxxx and Buyer entered into a Merger
Agreement (the "MERGER AGREEMENT"), pursuant to which the Company is to merger
with and into Merger Subsidiary, subject to the terms and conditions of the
Merger Agreement; and
WHEREAS, the Merger Agreement provides, upon the terms and conditions
set forth therein, for the parties to deposit into escrow certain property and
cash (the "ESCROW DEPOSIT"); and
WHEREAS, the Escrow Deposit shall be held by the Escrow Agent subject
to the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. Capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Merger Agreement.
2. The Escrow Agent is hereby appointed and shall have all the rights,
powers, duties and obligations hereinafter provided, and the Escrow Agent
accepts such appointment.
3. The Escrow Deposit may consist of any of the following property and
cash and shall be held and disbursed by Escrow Agent as hereinafter set forth:
(a) To be deposited by Buyer, the Company and Merger
Subsidiary: an executed Certificate of Merger to be filed pursuant to
this Agreement and the Merger Agreement with the Secretary of State of
the State of Delaware.
(b) To be deposited by Buyer: certificates representing each
Company Shareholder's pro rata portion of the aggregate number of Buyer
Preferred Shares issuable pursuant to the Merger Agreement based on the
number of Company Common Shares outstanding on the Closing Date.
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(c) To be deposited by Buyer: the Buyer Warrant.
(d) To be deposited by Buyer or Merger Subsidiary: an amount
in cash necessary to pay all amounts due under the LegacyMaker Note.
(e) To be deposited by each of the Holders: the Company Common
Shares held by such Holder, together with stock powers executed in
blank, an executed Letter of Transmittal and executed Subscription
Documents.
4. The Escrow Agent agrees to accept the Escrow Deposit. The Escrow
Agent shall invest any part of the Escrow Deposit constituting cash (the "CASH
DEPOSIT") in a segregated interest bearing account insured by the Federal
Deposit Insurance Corporation. Notwithstanding anything else in this Agreement
to the contrary, interest and other earnings on any part of the Cash Deposit
shall be distributed by the Escrow Agent to Buyer from time to time upon the
request of Buyer and shall remain the property of Buyer for all purposes.
5. The Escrow Deposit shall be disbursed as follows:
(a) If the Escrow Agent shall receive a certificate in the
form of Exhibit A executed by the Attorney-in-Fact, individually and on
behalf of the Company Shareholders, and an authorized representative of
each of the Company, Buyer and Merger Subsidiary, the Escrow Agent
shall deliver the Escrow Deposit as follows:
(i) The Escrow Agent shall cause the Certificate of
Merger to be filed with the Secretary of State of the State of
Delaware. Any filing fees incurred in connection therewith
shall be for the account of Buyer.
(ii) The Escrow Agent shall deliver the Buyer
Preferred Shares and the Buyer Warrant to the Attorney-in-Fact
for distribution by the Attorney-in-Fact to the Company
Shareholders.
(iii) The Escrow Agent shall deliver the Company
Common Shares, the Subscription Documents, the Letters of
Transmittal and executed stock powers to the Buyer.
(iv) The Escrow Agent shall deliver the principal
balance of the Cash Deposit to the Attorney-in-Fact for
delivery to LegacyMaker and any interest or earnings on the
Cash Deposit to the Buyer.
(b) If the Escrow Agent shall receive a certificate in the
form of Exhibit B executed by the Attorney-in-Fact, individually and on
behalf of the Company Shareholders, and an authorized representative of
each of the Company, Buyer and Merger Subsidiary, or if the Effective
Time shall not have occurred on or before , 1999, the
Escrow Agent shall:
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(i) Destroy the Certificate of Merger.
(ii) Deliver the Buyer Preferred Shares and the
Buyer Warrant to the Buyer.
(iii) Deliver the Company Common Shares, the
Subscription Documents, the Letters of Transmittal and
executed stock powers to the Attorney-in-Fact for distribution
to the Company Shareholders.
(iv) Deliver the principal balance of the Cash
Deposit and any interest or earnings on the Cash Deposit to
the Buyer.
6. If a controversy arises between the parties hereto with respect to
the release of the Escrow Deposit, the Escrow Agent shall not be required to
resolve such controversy or take any action, but shall await final resolution of
the controversy by joint written instructions from the parties hereto or
pursuant to a nonappealable order from a court of competent jurisdiction.
7. (a) Escrow Agent shall have no liability or obligation with respect
to the Escrow Deposit except for Escrow Agent's willful misconduct or
gross negligence. Escrow Agent's sole responsibility shall be for the
safekeeping, investment, and disbursement of the Escrow Deposit in
accordance with the terms of this Agreement. Escrow Agent shall have no
implied duties or obligations and shall not be charged with knowledge
or notice of any fact or circumstance not specifically set forth
herein. Escrow Agent may rely upon any instrument, not only as to its
due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein, which Escrow Agent shall
in good faith believe to be genuine, to have been signed or presented
by the person or parties purporting to sign the same and to conform to
the provisions of this Agreement. In no event shall Escrow Agent be
liable for incidental, indirect, special, consequential or punitive
damages. Escrow Agent shall not be obligated to take any legal action
or commence any proceeding in connection with the Escrow Deposit, any
account in which any part of the Escrow Deposit is deposited, this
Agreement or the Merger Agreement, or to appear in, prosecute or defend
any such legal action or proceeding. Escrow Agent may consult legal
counsel selected by it (which may be an attorney that is an employee of
Escrow Agent) in the event of any dispute or question as to the
construction of any of the provisions hereof or of any other agreement
or of its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully
indemnified from any liability whatsoever in acting in accordance with
the opinion or instruction of such counsel. The parties hereto other
than the Escrow Agent, jointly and severally, shall promptly pay, upon
demand, the reasonable fees and expenses of any such counsel.
(b) The Escrow Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect
to the Escrow Deposit, without determination by the Escrow Agent of
such court's jurisdiction in the matter. If any portion of the Escrow
Deposit is at any time attached, garnished or levied upon under any
court order, or in case the payment, assignment, transfer, conveyance
or delivery of any such
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property shall be stayed or enjoined by any court order, or in case any
order, judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then and in any such
event, the Escrow Agent is authorized, in its sole discretion, to rely
upon and comply with any such order, writ, judgment or decree which it
is advised by legal counsel selected by it (which may be an attorney
that is an employee of the Escrow Agent) is binding upon it without the
need for appeal or other action; and if the Escrow Agent complies with
any such order, writ, judgment or decree, it shall not be liable to any
of the parties hereto or to any other person or entity by reason of
such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
8. From and at all times after the date of this Agreement, the parties
hereto other than the Escrow Agent (the "INDEMNIFYING PARTIES") jointly and
severally, shall, to the fullest extent permitted by law and to the extent
provided herein, indemnify and hold harmless Escrow Agent and each director,
officer, employee, attorney, agent and affiliate of Escrow Agent (collectively,
the "INDEMNIFIED PARTIES") from and against any and all actions, claims (whether
or not valid), losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including without limitation reasonable attorneys' fees,
costs and expenses) incurred by or asserted against any of the Indemnified
Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation any party hereto,
whether threatened or initiated, asserting a claim for any legal or equitable
remedy against any person under any statute or regulation, including, but not
limited to, any federal or state securities laws, or under any common law or
equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Agreement or any transactions contemplated herein, whether or not any such
Indemnified Party is a party to any such action, proceeding, suit or the target
of any such inquiry or investigation; provided, however, that no Indemnified
Party shall have the right to be indemnified hereunder for any liability finally
determined by a court of competent jurisdiction, subject to no further appeal,
to have resulted solely from the gross negligence or willful misconduct of such
Indemnified Party. If any such action or claim shall be brought or asserted
against any Indemnified Party, such Indemnified Party shall promptly notify the
Attorney-in-Fact and Buyer in writing, and the Indemnifying Parties shall assume
the defense thereof including the employment of counsel and the payment of all
expenses. Such Indemnified Party shall, in its sole discretion, have the right
to employ separate counsel (who may be selected by such Indemnified Party in its
sole discretion) in any such action and to participate in the defense thereof,
and the fees and expenses of such counsel shall be paid by such Indemnified
Party, except that the Indemnifying Parties shall be required to pay such fees
and expenses if (a) any of the Indemnifying Parties agrees to pay such fees and
expenses, (b) the Indemnifying Parties shall fail to assume the defense of such
action or proceeding or shall fail, in the sole discretion of such Indemnified
Party, to employ counsel satisfactory to the Indemnified Party in any such
action or proceeding, (c) an Indemnifying Party is the plaintiff in any such
action or proceeding, or (d) the named or potential parties to any such action
or proceeding (including any potentially impleaded parties) include both an
Indemnified Party and an Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
such Indemnifying Party or Parties. The Indemnifying Parties shall be jointly
and severally liable to pay fees and expenses of counsel
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pursuant to the preceding sentence, except that any obligation to pay under
clause (a) shall apply only to the party so agreeing. All such fees and expenses
payable by the Indemnifying Parties pursuant to the foregoing sentence shall be
paid from time to time as incurred, both in advance of and after the final
disposition of such action or claim. All of the foregoing losses, damages, costs
and expenses of the Indemnified Parties shall be payable by the Indemnifying
Parties jointly and severally, upon demand by such Indemnified Party. The
obligations of the Indemnifying Parties under this paragraph 8 shall survive any
termination of this Agreement, and the resignation or removal of Escrow Agent,
and shall be independent of any obligation of the Escrow Agent.
9. The Company, the Company Shareholders and Buyer shall reimburse
Escrow Agent for all of its reasonable out-of-pocket expenses, including
attorneys' fees, travel expenses, telephone and facsimile transmission costs,
postage (including express mail and overnight delivery charges), copying charges
and the like. All of the reimbursement obligations set forth in this paragraph 9
shall be payable by the Company, the Company Shareholders and Buyer, jointly and
severally, upon demand by Escrow Agent. The obligations of the Company, the
Company Shareholders and Buyer under this paragraph 9 shall survive any
termination of this Agreement and the resignation or removal of Escrow Agent.
ESCROW AGENT IS AUTHORIZED TO, AND MAY, DISBURSE TO ITSELF FROM
INTEREST ON THE CASH DEPOSIT, FROM TIME TO TIME, UP TO ONE HALF OF THE TOTAL
AMOUNT OF ANY INDEMNITY OR REIMBURSEMENT OF OUT-OF-POCKET EXPENSES PAYABLE
HEREUNDER (INCLUDING ANY AMOUNT TO WHICH ESCROW AGENT OR ANY INDEMNIFIED PARTY
IS ENTITLED TO SEEK INDEMNIFICATION PURSUANT TO PARAGRAPH 8 HEREOF) THAT IS MORE
THAN 15 DAYS PAST DUE. ESCROW AGENT SHALL NOTIFY THE COMPANY, THE
ATTORNEY-IN-FACT AND BUYER OF ANY DISBURSEMENT FROM THE ESCROW DEPOSIT TO ITSELF
OR ANY INDEMNIFIED PARTY IN RESPECT OF ANY INDEMNIFICATION OR REIMBURSEMENT
HEREUNDER AND SHALL FURNISH TO THE COMPANY, THE ATTORNEY-IN-FACT AND BUYER
COPIES OF ALL RELATED INVOICES AND OTHER STATEMENTS. THE ESCROW AGENT SHALL HAVE
THE RIGHT TO OFFSET UP TO ONE HALF OF ANY AMOUNT DUE TO IT HEREUNDER (INCLUDING
ANY CLAIM FOR INDEMNIFICATION PURSUANT TO PARAGRAPH 8 HEREOF) AGAINST THE
INTEREST ON THE CASH DEPOSIT. IF FOR ANY REASON INTEREST ON THE CASH DEPOSIT IS
INSUFFICIENT TO COVER SUCH AMOUNT, BUYER SHALL PROMPTLY PAY SUCH AMOUNTS TO
ESCROW AGENT UPON RECEIPT OF AN ITEMIZED INVOICE.
10. Except as specified above, the Escrow Agent agrees to serve without
compensation for the services to be rendered hereunder.
11. Escrow Agent may resign at any time by giving written notice
thereof to the other parties hereto, but such resignation shall not become
effective until a successor escrow agent shall have been appointed by the
resigning Escrow Agent and approved by the Company, the Attorney-in- Fact and
Buyer and shall have accepted such appointment in writing. If an instrument of
acceptance by a successor escrow agent shall not have been delivered to the
Escrow Agent within ten (10) days after the giving of such notice of
resignation, the resigning Escrow Agent may at the expense of the other parties
hereto petition any court of competent jurisdiction for the appointment of a
successor escrow agent.
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12. If a controversy arises between the parties hereto with respect to
the release of the Escrow Deposit, any of the Company, the Attorney-in-Fact,
Buyer or Escrow Agent shall, at its option, file an action or xxxx in
interpleader, or similar action for such purpose, in a Dallas, Texas court of
competent jurisdiction and the Escrow Agent shall promptly pay the Escrow
Deposit into said court, in which event the Escrow Agent's duties,
responsibilities and liabilities under this Agreement shall terminate.
13. This Agreement shall be construed in accordance with the laws of
the State of Texas. This Agreement may be executed in several counterparts, each
one of which shall constitute an original, and all collectively shall constitute
but one instrument.
14. Any notice, consent or request to be given in connection with any
of the terms or provisions of this Agreement shall be in writing and shall be
sufficiently given if delivered by overnight delivery service and sent by
registered or certified mail, first class postage prepaid, or by telegram,
facsimile machine or similar written means of communication or electronic mail,
addressed as follows:
(a) if to the Escrow Agent, to:
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
E-mail: xxxxxxx@xxxxx.xxx
if to the Company, the Company Shareholders or the
Attorney-in-Fact, to:
Xxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No: (000) 000-0000
E-mail: xxx@xxxxxxxxxxx.xxx
Copy to:
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No: (000) 000-0000
E-mail: xxxxxxx@xxxxx.xxx
(c) if to Buyer or Merger Subsidiary, to:
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Cafe Odyssey, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxxxx@xxx.xxx
Copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
E-mail: xxxxxx@xxxxxx.xxx
or any such other address with respect to any party hereto as such party may
from time to time notify (as provided above) to the other parties hereto. Any
such notice, demand or communication shall be deemed to have been given (i) if
so mailed, as of the close of the third business day following the date so
mailed, and (ii) if personally delivered or sent by overnight mail or otherwise
sent as provided above, on the date received.
15. This Agreement shall terminate upon valid delivery of the Escrow
Deposit to a party or parties hereto or to a successor escrow agent which
executes an Escrow Agreement substantially similar to this Agreement.
16. Buyer's Federal Taxpayer Identification Number is 00-0000000.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the date first written.
"COMPANY SHAREHOLDERS" "BUYER"
By Xxxxx X. Xxxxxxxx, as Attorney-in-Fact CAFE ODYSSEY, INC.
on behalf of the Company Shareholders
s/ Xxxxx X. Xxxxxxxx By: s/ Xxxxxxx X. Xxxx
------------------------------------------ ------------------------------------------
Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxx, President
"ATTORNEY-IN-FACT" "MERGER SUBSIDIARY"
CAFE ODYSSEY ACQUISITION
s/ Xxxxx X. Xxxxxxxx SUBSIDIARY, INC.
------------------------------------------
Xxxxx X. Xxxxxxxx
"THE COMPANY" By:
------------------------------------------
Name:
----------------------------------------
XXXXXXX.XXX, INC. Title:
---------------------------------------
"THE ESCROW AGENT"
By: s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx, President XXXXXXXX & KNIGHT, P.C.
By: s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx, Attorney
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EXHIBIT A
TO ESCROW AGREEMENT
This Certificate is presented pursuant to Section 5(a) of the Escrow
Agreement, dated , 1999 by and among XXXXXXX.XXX, INC., a
Delaware corporation (the "COMPANY"), XXXXX X. XXXXXXXX, a Texas resident, as
Attorney-in-Fact as defined in the Merger Agreement (defined below) as
representative of and on behalf the Company Shareholders, CAFE ODYSSEY, INC., a
Minnesota corporation ("BUYER"), CAFE ODYSSEY ACQUISITION SUBSIDIARY, INC., a
Delaware corporation ("MERGER SUBSIDIARY"), and XXXXXXXX & KNIGHT, A
PROFESSIONAL CORPORATION (the "ESCROW AGENT").
All capitalized terms used and not otherwise defined shall have their
respective meanings provided in the Escrow Agreement.
Pursuant to Section 5(a) of the Escrow Agreement, the Attorney-in-Fact
and Buyer DO HEREBY CERTIFY that the Closing under the Merger Agreement has
occurred and that the conditions precedent to the occurrence of the Effective
Time have been satisfied; therefore, the Escrow Agent is hereby instructed as
follows:
1. The Escrow Agent shall cause the Certificate of Merger to be filed
with the Secretary of State of the State of Delaware. Any filing fees incurred
in connection therewith shall be for the account of Buyer.
2. The Escrow Agent shall deliver the Buyer Preferred Shares and the
Buyer Warrant to the Attorney-in- Fact for distribution by the Attorney-in-Fact
to the Company Shareholders.
3. The Escrow Agent shall deliver the Company Common Shares, the
Subscription Documents, the Letters of Transmittal and executed stock powers to
the Buyer.
4. The Escrow Agent shall deliver the principal balance of the Cash
Deposit to the Attorney-in-Fact for delivery to LegacyMaker and any interest or
earnings on the Cash Deposit to the Buyer.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of
the date indicated.
Dated: , 1999.
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"THE COMPANY" "BUYER"
XXXXXXX.XXX, INC. CAFE ODYSSEY, INC.
By: By:
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Xxxxx X. Xxxxxxxx, President Xxxxxxx X. Xxxx, President
"THE COMPANY SHAREHOLDERS" "THE MERGER SUBSIDIARY"
By: By:
----------------------------------------------- -----------------------------------------
Xxxxx X. Xxxxxxxx as the Attorney-in-Fact Name:
for and on behalf of the Company ---------------------------------------
Shareholders Title:
--------------------------------------
"THE ATTORNEY-IN-FACT"
--------------------------------------------------
Xxxxx X. Xxxxxxxx
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EXHIBIT B
TO ESCROW AGREEMENT
This Certificate is presented pursuant to Section 5(b) of the Escrow
Agreement, dated , 1999 by and among XXXXXXX.XXX, INC., a
Delaware corporation (the "COMPANY"), XXXXX X. XXXXXXXX, a Texas resident, as
Attorney-in-Fact as defined in the Merger Agreement (defined below) as
representative of and on behalf the Company Shareholders, CAFE ODYSSEY, INC., a
Minnesota corporation ("BUYER"), CAFE ODYSSEY ACQUISITION SUBSIDIARY, INC., a
Delaware corporation ("Merger Subsidiary"), and XXXXXXXX & KNIGHT, A
PROFESSIONAL CORPORATION (the "ESCROW AGENT").
All capitalized terms used and not otherwise defined shall have their
respective meanings provided in the Escrow Agreement.
Pursuant to Section 5(b) of the Escrow Agreement, the Attorney-in-Fact
and Buyer DO HEREBY CERTIFY that the conditions precedent to the occurrence of
the Effective Time have not been satisfied; therefore, the Escrow Agent is
hereby instructed to:
1. Destroy the Certificate of Merger.
2. Deliver the Buyer Preferred Shares and the Buyer Warrant to the
Buyer.
3. Deliver the Company Common Shares, the Subscription Documents, the
Letters of Transmittal and executed stock powers to the Attorney-in-Fact for
distribution to the Company Shareholders.
4. Deliver the principal balance of the Cash Deposit and any interest
or earnings on the Cash Deposit to the Buyer.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of
the date indicated.
Dated: , 1999.
--------------
"THE COMPANY" "BUYER"
XXXXXXX.XXX, INC. CAFE ODYSSEY, INC.
By: By:
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Xxxxx X. Xxxxxxxx, President Xxxxxxx X. Xxxx, President
"THE COMPANY SHAREHOLDERS" "THE MERGER SUBSIDIARY"
By: By:
----------------------------------------------- -----------------------------------------
Xxxxx X. Xxxxxxxx as the Attorney-in-Fact Name:
for and on behalf of the Company ---------------------------------------
Shareholders Title:
--------------------------------------
"THE ATTORNEY-IN-FACT"
--------------------------------------------------
Xxxxx X. Xxxxxxxx
