ESCROW AGREEMENT
Exhibit
10.3
THIS
ESCROW AGREEMENT (the “Escrow Agreement”) is entered into as of May 3, 2010 by
and among the stockholders of Cuming Corporation, a Massachusetts corporation
(the “Company”) listed on the signature pages hereof (collectively the
“Seller”), Deep Down, Inc., a Nevada corporation (the “Buyer”), and Xxxxxx &
Xxxxxxx, LLP, a Massachusetts limited liability partnership (the “Escrow
Agent”).
WHEREAS,
Seller, the Company and Buyer have entered into a Stock Purchase Agreement dated
the date hereof (the “Purchase Agreement”) pursuant to which Seller has agreed
to sell and Buyer has agreed to purchase from Seller the issued and outstanding
common stock, $1.00 par value per share, of the Company, subject to the terms
and conditions of the Purchase Agreement; and
WHEREAS, Buyer has agreed to pay a
portion of the Purchase Price by issuance and delivery to Seller of the Escrowed
Stock, which shall be deposited herewith with the Escrow Agent, to be held
subject to the terms and conditions of this Agreement; and
NOW THEREFORE in consideration of the
mutual covenants herein, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereby agree as
follows:
1. Definitions.
Terms
defined in the Purchase Agreement and not otherwise defined herein are used
herein with the meanings so defined.
2. Escrow.
Upon
execution of this Escrow Agreement (i) Buyer shall deliver to Escrow Agent
original certificates (the “Certificates”) issued to Seller evidencing the
Escrowed Stock, and (ii) Seller shall deliver to Escrow Agent duly executed
stock power instruments (the “Stock Powers” and, together with the Certificates,
collectively the “Escrow Instruments”) conveying and transferring title to the
Escrowed Stock to Buyer.
3. Release of Escrow
Instruments.
3.1 Within
three (3) business days of receipt of notice from Seller and Buyer that the
Closing has occurred, Escrow Agent shall release the Escrow Instruments to
Seller.
3.2 Within
three (3) days of receipt of notice from Seller that the Purchase Agreement has
been terminated and that, pursuant to the provisions of Section 9.4 of the
Purchase Agreement, Seller has the right to retain the Escrowed Stock, Escrow
Agent shall so notify Buyer. If within three (3) business days of
receipt of such notice from Escrow Agent, Buyer delivers notice to Escrow Agent
of Buyer’s objection to release of the Escrow Instruments, Escrow Agent shall
not release the Escrow Instruments without (i) mutual written consent of Seller
and Buyer or (ii) a final court order of a court of competent
jurisdiction. If Buyer fails to deliver notice of objection to Escrow
Agent pursuant to this Section 3.2 within three (3) business days of receipt of
Escrow Agent’s notice to Buyer hereunder, Escrow Agent shall release the Escrow
Instruments to Seller.
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3.3 Within
three (3) business days of receipt of notice from Buyer that the Purchase
Agreement has been terminated and that, pursuant to the provisions of Section
9.4 of the Purchase Agreement, Buyer is entitled to require Seller to make
immediate retransfer of the Escrowed Stock to Buyer, Escrow Agent shall so
notify Seller. If, within three (3) business days of receipt of such
notice from Escrow Agent, Seller delivers notice to Escrow Agent of Seller’s
objection to release of the Escrow Instruments, Escrow Agent shall not release
the Escrow Instruments without (i) mutual written consent of Seller and Buyer or
(ii) a final court order of a court of competent jurisdiction. If
Seller fails to deliver notice of objection to Escrow Agent pursuant to this
Section 3.3 within three (3) business days of receipt of Escrow Agent’s notice
to Seller hereunder, Escrow Agent shall release the Escrow Instruments to
Buyer.
4. Fees and
Expenses.
Escrow Agent shall not charge any fee for services to be rendered hereunder,
provided that any fees and expenses incurred by the Escrow Agent in connection
with court proceedings or informal dispute resolution proceedings relating to
the Escrow Instruments shall be borne in equal part by Seller and
Buyer.
5. Responsibilities of Escrow
Agent; Limitation of Escrow Agent’s Liability.
5.1 The sole responsibility
of Escrow Agent shall be to receive and hold the Escrow Instruments, subject to
release and delivery in accordance with this Escrow Agreement. Escrow
Agent shall not be liable for losses due to acts of God, war, loss of electrical
power or the failure of communication devices.
5.2 Escrow
Agent shall incur no liability whatsoever with respect to any action taken or
suffered by it in reliance upon any notice, direction, instruction, consent,
statement or other documents believed by it to be genuine and duly authorized,
nor for any other action or inaction except for its own gross negligence or
willful misconduct. The Escrow Agent shall not be responsible for the
validity or sufficiency of this Escrow Agreement. In all questions
arising under this Agreement, Escrow Agent may rely on the advice of counsel,
and for anything done, omitted or suffered in good faith by Escrow Agent based
on such advice, Escrow Agent shall not be liable to any person . The
Escrow Agent shall not be required to take any action hereunder involving any
expense unless the payment of such expense is made or provided for in a manner
reasonably satisfactory to it.
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5.3 Seller
and Buyer hereby agree to indemnify Escrow Agent for, and hold it harmless
against, any loss, liability or expenses incurred without gross negligence or
willful misconduct on the part of Escrow Agent arising out of or in connection
with its carrying out of its duties hereunder. The foregoing
indemnities shall survive the resignation or replacement of Escrow Agent or the
termination of this Agreement.
5.4 In
the event of a dispute between Seller and Buyer concerning the release or other
disposition of the Escrow Instruments, the Escrow Agent may commence an action
in interpleader and deposit the Escrow Instruments with the court in which such
action is pending and upon such deposit shall be absolved and released from any
liability with respect to the Escrow Instruments not caused by the gross
negligence or willful misconduct of the Escrow Agent.
6. General.
6.1 Any
notice or other communications required or permitted to be delivered to any
party under this Escrow Agreement shall be in writing, shall be addressed to the
party to which such notice is to be given at the address or facsimile telephone
number set forth beneath the name of such party below (or to such other address
or facsimile telephone number as such party shall have specified in a written
notice given to the other parties in accordance with the provisions of this
Section) and shall be deemed properly delivered, given and received on the date
of delivery when delivered by hand or by facsimile, one day following deposit
with an overnight delivery service, or two days following deposit with the
United States Postal Service, postage prepaid, when delivered by registered
mail.
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To
Seller:
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c/o
Cuming Corporation
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000
Xxxxxxx Xxxxxxxxxxx
Xxxx, XX
00000
Attention:
Xxxx X. Xxxxxx
Facsimile
No. 508/580-0960
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With
copy to Seller’s counsel:
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Xxxxx
X. Xxxxxxxx,
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Xxxxxx
& Xxxxxxx, LLP
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000
Xxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Facsimile
No. 617/426-8810
To
Buyer: Deep Down,
Inc.
0000 X.
Xxx Xxxxxxx Xxxxxxx X., Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx, Executive Chairman
Facsimile
No. 281/517-5001
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With
copy to Buyer’s counsel:
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Xxxxxxx
X. Xxxxxxx
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Xxxxxx,
Xxxx & XxXxxx, P.C.
0000 Xxxx
Xxx Xxxxxxxxx
Xxxxxxx,
Xxxxx 00000
Facsimile
No. 713/986-7100
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To
Escrow Agent:
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Xxxxxx
& Xxxxxxx, LLP
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000
Xxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxxxx
Facsimile
No. 617/426-8810
6.2 This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.
6.3 This
Escrow Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of The Commonwealth of Massachusetts without
giving effect to principles of conflicts of laws.
6.4 This
Agreement shall be binding upon all parties and their respective estates,
successors and assigns.
6.5 Any
term or provision of this Agreement may be amended, and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a writing signed by
the party to be bound thereby. The waiver by a party of any breach
hereof or default in the performance hereof will not be deemed to constitute a
waiver of any other default or any succeeding breach or default. No
failure or delay on the part of any party to exercise any power, right,
privilege or remedy under this Agreement shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy.
6.6 The
Escrow Agent may resign at any time by giving thirty (30) days’ advance written
notice thereof to the other parties hereto, but such resignation shall not
become effective until a successor escrow agent shall have been appointed 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 such thirty (30) day period, the resigning Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
escrow agent.
6.7 This Agreement shall
terminate on the final release of all Escrow Instruments.
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IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
and delivered as a document under seal as of the date first above
written.
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SELLER
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By: /s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X. Xxxxxx, Executive Chairman
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By: /s/ Xxxx X.
Xxxxxx
Xxxx
X. Xxxxxx, as Sellers’ Representative
XXXXXX & XXXXXXX,
LLP
By:
/s/ Xxxxx X.
Xxxxxxxx
Xxxxx
X. Xxxxxxxx
A
Partner
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