ESCROW AGREEMENT
EXECUTION
COPY
THIS
ESCROW AGREEMENT (this “Agreement”)
is
made as of April 6, 2007, by and among Vistula Communications Services, Inc.,
a
Delaware corporation (the “Company”),
Oceana Partners, LLC, a Delaware limited liability company (“Oceana”)
the
purchasers signatory hereto (each a “Purchaser”
and
together the “Purchasers”),
and
Xxxxx Xxxx LLP, with an address at 000 Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (the “Escrow
Agent”).
Capitalized
terms used but not defined herein shall have the meanings set forth in the
Securities Purchase Agreement referred to in the first
recital.
WITNESSETH:
WHEREAS,
the Purchasers will be purchasing from the Company, severally and not jointly
with the other Purchasers, in the aggregate, up to $2,500,000 in the aggregate,
principal amount of 12% Convertible Notes (the “Notes”)
on the
Closing Date and Warrants as set forth in the Securities Purchase Agreement
(the
“Purchase
Agreement”)
dated
the date hereof between the Purchasers and the Company, which securities
will be
issued under the terms contained herein and in the Purchase Agreement;
and
WHEREAS,
it is intended that the purchase of the securities be consummated in accordance
with the requirements set forth in Regulation D promulgated under the Securities
Act of 1933, as amended; and
WHEREAS,
the Company and the Purchasers have requested that the Escrow Agent hold
the
Subscription Amounts in escrow until the Escrow Agent has received the Release
Notice in the form attached hereto from the Company and Oceana;
NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally
bound
hereby, the parties agree as follows:
ARTICLE
1
TERMS
OF
THE ESCROW
1.1. The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the funds for the purchase of up to
$2,500,000 in the aggregate of Notes and Warrants as contemplated by the
Purchase Agreement.
1.2. Upon
the
Escrow Agent’s receipt of the aggregate Subscription Amounts for the Closing
into its master escrow account, together with executed counterparts of this
Agreement, the Purchase Agreement and the Registration Rights Agreement,
it
shall telephonically advise the Company, or the Company’s designated attorney or
agent and Oceana, of the amount of funds it has received into its master
escrow
account.
1.3. Wire
transfers to the Escrow Agent shall be made as follows:
CITIZENS
BANK
0
XXXXXXXX XXXXX
XXXXXXXXXX,
XX 00000
ACCOUNT
NAME: XXXXX XXXX LLP CLIENT FUNDS ACCOUNT
ABA
ROUTING NO: 000000000
ACCT
NO:
1133945985
SWIFT
CODE (FOR INTERNATIONAL WIRES): XXXXXX00
REMARK:
VISTULA/24979-9
1.4 The
Company, promptly following being advised by the Escrow Agent that the Escrow
Agent has received the Subscription Amounts for the Closing along with facsimile
copies of counterpart signature pages of the Purchase Agreement, Registration
Rights Agreement and this Agreement from each Purchaser, shall deliver to
the
Escrow Agent the certificates or instrument evidencing the Securities to
be
issued to each Purchaser at the Closing together with:
(a) the
Company’s executed counterpart of the Purchase Agreement;
(b) the
Company’s executed counterpart of the Registration Rights
Agreement;
(c) the
executed opinion of Company Counsel, in the form of Exhibit
E
to the
Purchase Agreement; and
(d) the
Company’s original executed counterpart of this Escrow Agreement.
1.5 In
the
event that the foregoing items are not in the Escrow Agent’s possession within
five (5) Trading Days of the Escrow Agent notifying the Company that the
Escrow
Agent has custody of the Subscription Amount for the Closing, then each
Purchaser shall have the right to demand the return of their portion of the
Subscription Amount.
1.6 Once
the
Escrow Agent receives a Release Notice in the form attached hereto as
Exhibit
X
(the
“Release
Notice”)
executed by the Company and Oceana it shall wire the aggregate Subscription
Amounts per the written instructions of the Company and Oceana contained
in the
Release Notice.
1.7 Wire
transfers to the Company shall be made pursuant to written instructions from
the
Company provided to the Escrow Agent on the date of the Purchase
Agreement.
1.8 Once
the
funds (as set forth above) have been sent per the Release Notice instructions,
the Escrow Agent shall then arrange to have the Purchase Agreement, the Notes,
the Registration Rights Agreement, the Escrow Agreement, the Warrants, and
the
opinion of counsel delivered to the appropriate parties.
2
ARTICLE
II
MISCELLANEOUS
2.1 No
waiver
or any breach of any covenant or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
2.2
All
notices or other communications required or permitted hereunder shall be
in
writing, and shall be sent as set forth in the Purchase Agreement.
2.3
This
Escrow Agreement shall be binding upon and shall inure to the benefit of
the
permitted successors and permitted assigns of the parties hereto.
2.4
This
Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Escrow Agreement may
not be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged
or
by its agent duly authorized in writing or as otherwise expressly permitted
herein.
2.5
Whenever
required by the context of this Escrow Agreement, the singular shall include
the
plural and masculine shall include the feminine. This Escrow Agreement shall
not
be construed as if it had been prepared by one of the parties, but rather
as if
all parties had prepared the same. Unless otherwise indicated, all references
to
Articles are to this Escrow Agreement.
2.6
The
parties hereto expressly agree that this Escrow Agreement shall be governed
by,
interpreted under and construed and enforced in accordance with the laws
of the
State of New York. Any action to enforce, arising out of, or relating in
any way
to, any provisions of this Escrow Agreement shall only be brought in a state
or
Federal court sitting in New York City.
2.7
The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, each Purchaser and the Escrow
Agent.
2.8
The
Escrow Agent shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the Escrow
Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the
Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in
good
faith and in the absence of gross negligence, fraud or willful misconduct,
and
any act done or omitted by the Escrow Agent pursuant to the advice of the
Escrow
Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
absence of gross negligence, fraud and willful misconduct.
2.9
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.
3
2.10 The
Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver the Purchase Agreement or any documents or papers deposited
or called for thereunder in the absence of gross negligence, fraud and willful
misconduct.
2.11 The
Escrow Agent shall be entitled to employ such legal counsel and other experts
as
the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation; provided
that
the costs of such compensation shall be borne by the Escrow Agent. The
Escrow Agent has acted as legal counsel for the Company,
and
may continue to act as legal counsel for the Company from time to time,
notwithstanding its duties as the Escrow Agent hereunder. Oceana and the
Purchasers consent to the Escrow Agent serving as Escrow Agent hereunder
and as
legal counsel for the Company and waives any claim that such representation
represents a conflict of interest on the part of the Escrow Agent. Oceana
and
the Purchasers understand that the Company and the Escrow Agent are relying
explicitly on the foregoing provision in entering into this Escrow
Agreement.
2.12 The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by giving written notice to the Company and the
Purchasers. In the event of any such resignation, the Purchasers and the
Company
shall appoint a successor Escrow Agent and the Escrow Agent shall deliver
to
such successor Escrow Agent any escrow funds and other documents held by
the
Escrow Agent.
2.13 If
the
Escrow Agent reasonably requires other or further instruments in connection
with
this Escrow Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
2.14 It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the documents or the escrow funds
held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed
in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s
possession without liability to anyone all or any part of said documents
or the
escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment 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 (2) to deliver
the escrow funds and any other property and documents held by the Escrow
Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York in accordance with the
applicable procedure therefore
4
2.15 The
Company and each Purchaser agree jointly and severally to indemnify and hold
harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in
any
way arising from or relating to the duties or performance of the Escrow Agent
hereunder or the transactions contemplated hereby or by the Purchase Agreement
other than any such claim, liability, cost or expense to the extent the same
shall have been determined by final, unappealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence, fraud
or
willful misconduct of the Escrow Agent.
************************
5
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of
date first written above.
| By: /s/ Xxxxxx Xxxxxxxx-Xxxxx | |||
|
Name:
Xxxxxx Xxxxxxxx-Xxxxx
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|
Title:
President and Chief Executive Officer
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Oceana
Partners LLC
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| By: /s/ Xxxxxxxxxx X. Xxxxxx | |||
|
Name:
Xxxxxxxxxx X. Xxxxxx
|
|||
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Title:
Senior
Managing Director
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ESCROW
AGENT:
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XXXXX
XXXX LLP
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| By: /s/ Xxxx Xxxx | |||
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Name:
Xxxx Xxxx
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Title:
Partner
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: JMG
Capital Partners, LP
Signature
of Authorized Signatory of Holder:
/s/
Xxxxxxxx Xxxxxx
Name
of
Authorized Signatory: Xxxxxxxx
Xxxxxx
Title
of
Authorized Signatory: Member
Manager of the General Partner
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: JMG
Triton Offshore Fund, Ltd.
Signature
of Authorized Signatory of Holder:
/s/
Xxxxxxxx Xxxxxx
Name
of
Authorized Signatory: Xxxxxxxx
Xxxxxx
Title
of
Authorized Signatory: Member
Manager of the Investment Manager
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: Bushido
Capital Master Fund, LP
Signature
of Authorized Signatory of Holder:
/s/
Xxxxxx X. Xxxxx
Name
of
Authorized Signatory: Xxxxxx
X.
Xxxxx
Title
of
Authorized Signatory: Director
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: XXXX
Piranha Master Fund, Ltd.
Signature
of Authorized Signatory of Holder:
/s/
Xxxx
Xxxxxxx
Name
of
Authorized Signatory: Xxxx
Xxxxxxx
Title
of
Authorized Signatory: Partner,
XXXX Partners LLC
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: Little
Wing LP
Signature
of Authorized Signatory of Holder:
/s/
Xxxxxx X. Xxxxxxx
Name
of
Authorized Signatory: Xxxxxx
X.
Xxxxxxx
Title
of
Authorized Signatory: Sole
Managing Member, Quilcap Mgmt., LLC,
Quilcap
Mgmt. LLC as Investment Manager
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: Tradewinds
Fund Ltd.
Signature
of Authorized Signatory of Holder:
/s/
Xxxxxx X. Xxxxxxx
Name
of
Authorized Signatory: Xxxxxx
X.
Xxxxxxx
Title
of
Authorized Signatory: Sole
Managing Member, Quilcap Mgmt., LLC
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: Xxxxx
X.
Xxxxx
Signature
of Authorized Signatory of Holder:
/s/
Xxxxx
X. Xxxxx by Xxxxxxx X. Xxxxxxx her
attorney in fact
Name
of
Authorized Signatory: Xxxxxxx
X. Xxxxxxx
Title
of
Authorized Signatory: Power
of
Attorney (attorney in fact)
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: GSSF
Master Fund, LP
Signature
of Authorized Signatory of Holder:
:
/s/
X. X.
Xxxx XX
Name
of
Authorized Signatory: X.
X.
Xxxx XX
Title
of
Authorized Signatory: Authorized
Agent
[SIGNATURE
PAGE OF PURCHASERS TO VISTULA ESCROW AGREEMENT]
Name
of
Holder: Stratford
Partners, LP
Signature
of Authorized Signatory of Holder:
/s/
Xxxx
Xxxxxxxx
Name
of
Authorized Signatory: Xxxx
Xxxxxxxx
Title
of
Authorized Signatory: General
Partner
Exhibit
X
to
Escrow
Agreement
RELEASE
NOTICE
The
UNDERSIGNED, pursuant to the Escrow Agreement, dated as of April 6, 2007,
among
Vistula Communications Services, Inc., a Delaware corporation, Oceana Partners,
LLC, a Delaware limited liability company and the Purchasers signatory thereto
and Xxxxx Xxxx LLP, as Escrow Agent (the “Escrow
Agreement”;
capitalized terms used herein and not defined shall have the meaning ascribed
to
such terms in the Escrow Agreement), hereby notify the Escrow Agent that
each of
the conditions precedent to the purchase and sale of the Securities set forth
in
the Securities Purchase Agreement have been satisfied. The Company and Oceana
(on behalf of Purchasers) hereby confirm that all of their respective
representations and warranties contained in the Purchase Agreement remain
true
and correct and authorize the release by the Escrow Agent of the funds and
documents to be released at the Closing as described in the Escrow Agreement.
This Release Notice shall not be effective until executed by the Company
and
Oceana.
Please
release the funds in the form if wire transfers as follows:
Xxxxxxx
Xxxxxxxxx $7,500
BANK
-
Signature Bank
ABA
NO -
000000000
ACCT
NO.
- 1500629025
ADDRESS
-
00 Xxxx 00xx Xxxxxx
XX,
XX
00000
ACCT
NAME
- XXXXXXX XXXXXXXXX & XXXXX OPERATING C
000
Xxxxxxxxx Xxxxxx
XX,
XX 00000
Oceana
Partners LLC $52,000
Acct
#
000-0000000-00
ABA
#
000000000
Chase
Bank
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Contact:
Xxxxx Xxxxxxx
Tel:
000
000-0000
Vistula
Communications Services, Inc. $2,440,500
CITIZENS
BANK
FIVE
CORNERS BRAINTREE
000
XXXXXXX XXXXXX
XXXXXXXXX,
XX 00000
CONTACT:
XXXXXXX X. XXXXX, BUSINESS BANKING OFFICER
BUSINESS
BANKING GROUP
x0-000-000-0000
ACCOUNT
NUMBER 1133784604
ROUTING
NUMBER FOR ACH TRANSACTION 000000000
ROUTING
NUMBER FOR WIRE TRANSACTION 000000000
SWIFT
CODE: XXXXXX00
This
Release Notice may be signed in one or more counterparts, each of which shall
be
deemed an original.
IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of this 6th day of April, 2007.
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| By: | /s/Xxxxx X. Xxxxxx | |
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Name:
Xxxxx X. Xxxxxx
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Title:
Chief Financial Officer
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OCEANA
PARTNERS, LLC,
on
behalf of Purchasers
|
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| By: | /s/ Xxxxxxxxxx X. Xxxxxx | |
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Name:
Xxxxxxxxxx X. Xxxxxx
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Title:
Senior
Managing Director
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