ESCROW AGREEMENT
This Escrow Agreement (the " Escrow Agreement") is made and entered into as
a deed as of this 1st day of September 2003, by and among Trinity Learning
Corporation, a Utah corporation under Entity Number 5118314-0142
("Trinity"), Great Owl Limited ( a company incorporated in accordance with
the laws of the British Virgin Islands ("BVI") under Registration Number
541543) ("Great Owl") and ▇▇▇▇ ▇▇▇▇▇ of London ("▇▇▇▇ ▇▇▇▇▇"), as escrow
agent (the "Escrow Agent").
A. WHEREAS, Trinity and the Great Owl have executed the Definitive
Agreement ("the Definitive Agreement") pursuant to which:
I. Trinity has agreed to deposit 510 (five hundred and ten)
ordinary shares of a nominal value of US$1.00 (one United States
Dollar) in the issued share capital of Ayrshire Trading Limited
(a company incorporated in accordance with the laws of the BVI
under Registration Number 500829) ("Ayrshire");
II. Great Owl has agreed to deposit 490 (four hundred and ninety)
ordinary shares of a nominal value of US$1.00 (one United States
Dollar) in the issued share capital of Ayrshire; and
III. If the option as defined in the Definitive Agreement is duly
exercised, Great Owl has agreed to deposit 300 000 (three
hundred thousand) fully paid ordinary shares in the issued share
capital of Trinity issued to Great Owl at their fair market value
as defined in the Definitive Agreement,
in negotiable form (as that term is defined in clause 1.3.14 of the
Definitive Agreement into an escrow account with the Escrow Agent
(collectively "the Escrow Shares") pursuant to the terms of this
Escrow Agreement; and
B. WHEREAS, ▇▇▇▇ ▇▇▇▇▇ is willing to serve as Escrow Agent pursuant to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and agreements contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party hereto, it is
hereby agreed by and among Trinity, Great Owl and the Escrow Agent as
follows:
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1. Escrow Deposit
Trinity and Great Owl will deliver to the Escrow Agent the Escrow
Shares pursuant to the Definitive Agreement. The Escrow Agent shall
not be required to inquire into the propriety of the Escrow Shares
deposited hereunder nor shall the Escrow Agent be required to
investigate any other matter or arrangement between Trinity and Great
Owl.
2. Escrow Shares
2.1 The Escrow Shares shall be available to distribute to Trinity or
Great Owl, as the case may be, pursuant to the Definitive
Agreement. In the event that Trinity or Ayrshire issues any
Additional Escrow Shares (as defined below), such shares will be
issued and delivered to the Escrow Agent in the same manner as
the Escrow Shares to be delivered in terms of this Escrow
Agreement. In the event that Trinity and/or Great Owl receive
such Additional Escrow Shares, they agree to deliver such
Additional Escrow Shares to the Escrow Agent.
2.2 Except for dividends paid in stock declared with respect to the
Escrow Shares ("Additional Escrow Shares"), which shall be
treated as Escrow Shares hereunder, dividends payable in
securities or other distributions of any kind (including cash)
made in respect of the Escrow Shares will be delivered to Trinity
or Great Owl, as their interests appear. The term "Escrow Shares"
as used herein shall also be deemed to include Additional Escrow
Shares. Trinity and Great Owl will have all voting rights with
respect to their respective Escrow Shares so long as such Escrow
Shares are held in escrow, and Trinity and Great Owl will take
all reasonable steps necessary to allow the exercise of such
rights. While the Escrow Shares remain in the Escrow Agent's
possession pursuant to this Escrow Agreement, Trinity and Great
Owl will retain and will be able to exercise all other incidents
of ownership of their respective Escrow Shares that are not
inconsistent with the terms and conditions of this Escrow
Agreement and/or the Definitive Agreement.
2.3 Escrow Period and Release from Escrow
2.3.1 The Escrow Agent may not release the Escrow Shares unless
and until:
2.3.1.1 a written notice, signed by Trinity and Great Owl addressed
to the Escrow Agent, directs the Escrow Agent to release the
Escrow Shares to the person specified in the notice;
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2.3.1.2 delivery is required to give effect to the terms of the
Definitive Agreement, in which event Trinity and Great Owl
shall be obliged to give the notice contemplated in 2.3.1.1,
or unless an order from a court of competent jurisdiction or
award from an arbitral authority instructs the Escrow Agent
as to how the Escrow Shares should be disbursed.
Promptly following Escrow Agent's receipt of either of the
foregoing, Escrow Agent shall make the disbursement
specified therein.
2.3.2 Trinity and Great Owl hereby irrevocably nominate,
constitute and appoint The Escrow Agent as their attorney
and agent to sign and execute all such documents and to do
all such things as it in its sole and absolute discretion
may consider necessary to effect any transfer of Escrow
Shares contemplated by this Escrow Agreement.
3. Duties and Responsibilities of Escrow Agent
3.1 Trinity and Great Owl acknowledge and agree that the Escrow Agent:
3.1.1 shall not be responsible for any of the agreements referred to
herein but shall be obligated only for the performance of such
duties as are specifically set forth in this Escrow Agreement;
3.1.2 shall not be obligated to take any legal or other action
hereunder which might in its judgment involve any expense or
liability unless it shall have been furnished with acceptable
indemnification;
3.1.3. may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument,
statement, request or document furnished to it hereunder and
believed by it to be genuine and to have been signed or presented
by the proper person, and shall have no responsibility for
determining the accuracy thereof; and
3.1.4. may consult counsel satisfactory to it, including house counsel,
and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with the opinion of such counsel.
3.2 Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to
be taken by it or any of its directors, officers or employees
hereunder except in the case of negligence or willful misconduct.
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3.3 Great Owl, on the one hand, and Trinity, on the other hand, each agree
to pay one half of the fees which shall be subject to a minimum of
approximately GBP 1,000 per annum of, and to reimburse all expenses
(including the reasonable fees and expenses of counsel) incurred by,
the Escrow Agent in performing its duties and responsibilities
hereunder, including the Escrow Agent's reasonable compensation for
its normal services hereunder. The Escrow Agent shall be entitled to
reimbursement on demand for all expenses incurred in connection with
the administration of the escrow created hereby which are in excess of
its compensation for normal services here under, including without
limitation, payment of any legal fees incurred by the Escrow Agent in
connection with resolution of any claim by any party hereunder. In
addition, Great Owl and Trinity shall be jointly and severally liable
for all fees and expenses contemplated in this clause 3.3.
3.4 The Escrow Agent may at any time resign as Escrow Agent hereunder by
giving thirty (30) days prior written notice of resignation to Trinity
and Great Owl. Prior to the effective date of the resignation as
specified in such notice, Trinity and Great Owl will issue to the
Escrow Agent a written instruction authorizing redelivery of the
Escrow Shares to a bank or trust company that they select. Such bank
or trust company shall have a principal office in the United States of
America, shall have capital, surplus and undivided profits in excess
of US$25 000 000,00 (twenty five million United States Dollars), and
shall have agreed to act as Escrow Agent hereunder and upon such
additional terms and conditions as it, Trinity and Great Owl shall
have agreed, if any, provided that the original Escrow Agent shall
have no responsibility therefor nor any responsibility for the
compensation of such successor Escrow Agent. If, however, Trinity and
Great Owl shall fail to name such a successor escrow agent within
twenty (20) days after the notice of resignation from the Escrow
Agent, then Trinity shall be entitled to name such successor escrow
agent. If no successor escrow agent is named pursuant to the foregoing
provisions by the effective date of the Escrow Agent's resignation,
then the Escrow Agent shall deliver the Escrow Shares to Trinity for
the benefit of Trinity and/or Great Owl, as provided herein, whereupon
all obligations of the Escrow Agent shall be deemed fulfilled, and the
Escrow Agreement shall terminate, provided that the provisions of
paragraphs 3.2 and 3.3 shall survive the termination of this Escrow
Agreement.
3.5 This Escrow Agreement sets forth exclusively the duties of the Escrow
Agent with respect to any and all matters pertinent thereto and no
implied duties or obligations shall be read into this Escrow Agreement
against the Escrow Agent.
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4. Dispute Resolution
It is understood and agreed that should any dispute arise with respect
to the delivery, ownership, right of possession, and/or disposition of
the Escrow Shares, or should any claim be made upon such Escrow Shares
by a third party, the Escrow Agent upon receipt of written notice of
such dispute or claim by the parties hereto or by a third party, is
authorized and directed to retain in its possession without liability
to anyone, all or any of the Escrow Shares until such dispute shall
have been settled either by the mutual agreement of the parties
involved or by a final order, decree judgment of a court in England or
an arbitrator, the time for perfection of an appeal of such order,
decree judgment or arbitration award having expired. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any
legal proceedings which relate to the Escrow Shares. The Escrow Agent
shall have the right to retain counsel of its choice in case it
becomes involved in any disagreement, dispute or litigation related to
the Escrow Agreement, the Escrow Shares or otherwise determines that
it is necessary or desirable to consult counsel, and the reasonable
fees and expenses of such counsel shall be reimbursed to the Escrow
Agent as provided in 3 hereof.
5. Jurisdiction and Applicable Law
Trinity, Great Owl and the Escrow Agent agree that this agreement
shall be governed by the laws of England and consent to the exclusive
jurisdiction of the courts of England.
6. Force Majeure
Neither Trinity, Great Owl nor the Escrow Agent shall be responsible
for delays or failures in performance resulting from acts beyond their
control. Such acts shall include but not be limited to acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental
regulations superimposed after the fact, fire, communication line
failures, power failures, computer viruses, earthquakes or other
disasters.
7. Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing, shall be delivered by hand or overnight
courier service, or by telefacsimile, and will be deemed given upon
delivery, if delivered personally, will be deemed given one (1)
business day after deposit with a national courier service for
overnight delivery, or will be deemed given one (1) business day after
transmission by telefacsimile with confirmation of receipt to the
following addresses:
If to Trinity: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telefacsimile Number: 1 510 540 9313
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If to Great Owl: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇, ▇'▇▇▇▇▇▇▇,
Avenue Princess Grace, Monte Carlo, MONACO
If to Escrow Agent: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
For the attention of: The Market Managing Partner
Telefacsimile Number: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
or to such other address as may have been furnished by any party to
the others in writing except that notices of change of address shall
only be effective upon receipt.
8. Binding Effect
This Escrow Agreement shall be binding upon the respective parties
hereto and their heirs, executors, successors and assigns.
9. Modifications
This Escrow Agreement may not be altered or modified without the
express written consent of the parties hereto. No course of conduct
shall constitute a waiver of any of the terms and conditions of this
Escrow Agreement, unless such waiver is specified in writing, and then
only to the extent so specified. A waiver of any of the terms and
conditions of this Escrow Agreement on one occasion shall not
constitute a waiver of the other terms of this Escrow Agreement, or of
such terms and conditions on any other occasion.
10. Judgments
The Escrow Agent is hereby expressly authorized to comply with and
obey orders, judgments or decrees of any court in England. In case the
Escrow Agent obeys or complies with any such order, judgment or decree
of any court of England, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person, firm, corporation or
entity by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction.
11. Counterparts and Cancellation
This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. The Escrow Agent, Trinity and
Great Owl specifically record and agree that this Escrow Agreement
substitutes and replaces both the Escrow Agreement concluded by and
between them and signed by the Escrow Agent on or about 11 July 2003
and by both Great Owl and Trinity on or about 9 July 2003 as well as
the Escrow Agreement concluded by and between them and signed by them
on or about 1 August 2003.
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12. Termination of Escrow
This Escrow Agreement shall terminate and the Escrow Agent shall have
no further duties hereunder upon the distribution of all of the Escrow
Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed as a deed as of the day and year first above written.
Executed as a deed by ▇▇▇▇ ________________________________
▇▇▇▇▇ acting by: Partner
________________________________
Partner
Executed as a deed by TRINITY
LEARNING CORPORATION acting by
___________ who in accordance
with the laws of the territory
in which Trinity Learning
Corporation is incorporated
in acting under the authority
of Trinity Learning Corporation
________________________________
Executed as a deed by GREAT OWL
LIMITED acting by ______________
who in accordance with the laws of
the territory in which GREAT OWL
Limited in incorporated in acting
the authority of Great Owl Limited
________________________________
