EXHIBIT 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "ESCROW AGREEMENT"), is entered
into as of _______________, 2002, by and among Pashleth Investments Ltd., a
company formed under the laws of British Columbia, Canada, acting as the agent
(the "SUBSCRIPTION AGENT") of a publicly traded company (the "COMPANY"),
______________________, an individual residing at __________________________
(the "SUBSCRIBER") and Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. (the "ESCROW
AGENT"). The Subscription Agent and the Subscriber are sometimes referred to
herein individually as a "PARTY" and collectively as the "PARTIES."
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Subscription Agreement (defined
below).
RECITALS
WHEREAS, the Subscription Agent and the Subscriber have
entered into a Subscription Agreement of even date herewith (the "SUBSCRIPTION
AGREEMENT") for the purchase by the Subscriber of the Shares;
WHEREAS, pursuant to Section 1.2 of the Subscription
Agreement, the Subscriber is required to deliver the Aggregate Purchase Price
for the Shares (the "ESCROWED FUNDS") to the Escrow Agent, to be held and
distributed by the Escrow Agent in accordance with the terms of this Escrow
Agreement;
WHEREAS, the Escrow Agent is willing to serve as escrow agent
pursuant to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties and the Escrow Agent hereby agree as follows:
1. DEPOSIT AND RELEASE OF ESCROWED DOCUMENTS
1.1. RECEIPT OF TOTAL PURCHASE PRICE AND SECURITIES. On the terms and
subject to the conditions of this Escrow Agreement, the Escrow Agent agrees to
receive, deposit and hold the funds representing payment of the Aggregate
Purchase Price (the "PAYMENT") in a non interest-bearing account (the "ESCROW
ACCOUNT") upon delivery thereof by the Subscriber to the Escrow Agent. The date
that a Payment is received into escrow is referred to herein as a "PAYMENT
DATE". The Subscription Agent shall instruct the Subscriber to remit the Payment
in the form of a check (which check must be certified if remitted during the
five (5) Business Days prior to the Closing Date) or wire transfers to the
Escrow Agent for receipt by the Escrow Agent at least two (2) Business Days
before the Closing Date. All such checks and wire transfers forwarded to the
Escrow Agent shall be accompanied by information identifying the Subscriber and
the Subscriber's social security or tax identification number and address. Wire
transfers of Payment to the Escrow Account shall be made in U.S. federal funds
transferred as follows:
Transfer to: The Chase Manhattan Private Bank
1211 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Account Name: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Account no.: 967-087457
ABA Number: 000000000
1.2. RELEASE OF ESCROW FUNDS AND DELIVERY OF SECURITIES.
(a) In the event that Subscriber exercises its right to revoke the
subscription pursuant to Section 2.1(a) of the Subscription Agreement, the
Subscription Agent shall provide the Escrow Agent with written notice of such
revocation (the "REVOCATION NOTICE") and, within ten (10) Business Days of
receipt of the Revocation Notice, the Escrow Agent shall (i) terminate the
escrow and (ii) distribute the Escrowed Funds to the Subscriber by check
directly to the Subscriber in accordance with the amounts deposited into escrow
by such Subscriber.
(b) The Subscription Agent shall provide the Escrow Agent with written
notice of the effectiveness of the Merger (the "NOTICE OF MERGER") within one
(1) Business Day of the date of such effectiveness. In the event that the Merger
is effective on or before the date which is sixty (60) days after the date of
the Subscription Agreement (the "MERGER DEADLINE"), no later than the fifth
(5th) Business Day following the Escrow Agent's receipt of the Notice of Merger,
(i) the Escrow Agent shall distribute the Escrowed Funds to the Company or as
designated by the Company in writing, and (ii) the Company shall direct the
transfer agent of the Company to issue and deliver certificates representing the
Shares in the name of the Subscriber thereof to the address specified by the
Subscriber in the Subscription Agreement.
(c) In the event that the Merger is not effective on or before the Merger
Deadline, no later than the tenth (10th) Business Day after the Merger Deadline
the Escrow Agent shall (i) terminate the escrow and (ii) distribute the Escrowed
Funds to the Subscriber by check directly to the Subscriber in accordance with
the amounts deposited into escrow by such Subscriber.
2. DUTIES AND RESPONSIBILITIES OF ESCROW AGENT
2.1. ACCEPTANCE. The Escrow Agent hereby accepts its appointment and
agrees to act as escrow agent in accordance with and subject to the terms and
conditions of this Escrow Agreement.
2.2. LIMITED DUTIES. The Parties acknowledge and agree that the Escrow
Agent: (i) shall not be responsible for or bound by, and shall not be required
to inquire into whether any Party or other person is entitled to receive the
Escrowed Funds or any portion thereof pursuant to the Subscription Agreement,
but shall be obligated only for the performance of such duties as are
specifically set forth in this Escrow Agreement; (ii) 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 in good faith 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 (iii) may
consult counsel satisfactory to it, 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. The Escrow Agent shall not be required to inquire into
the propriety of the Escrowed Funds deposited hereunder nor shall the Escrow
Agent be required to investigate any other matter or arrangement by and among
the Parties or any other person.
2.3. INDEMNITY. The Parties, jointly and severally, hereby agree to
indemnify and hold harmless the Escrow Agent and any of its employees or agents
against and in respect of any and all claims, suits, actions, proceedings
(formal and informal), investigations, judgments, deficiencies, damages,
settlements, liabilities, and legal and other expenses (including reasonable
legal fees and expenses of attorneys chosen by Escrow Agent) as and when
incurred arising out of or based upon any act, omission, alleged act, or alleged
omission by the Escrow Agent, or its agents, or any other cause, in any case in
connection with the acceptance of, or the performance or non-performance by
Escrow Agent, or its agents, of any of the Escrow Agent's duties under this
Escrow Agreement. The Escrow Agent shall not be liable for any mistake of fact
or of law or any error of judgment, or for any act or any omission or act of
negligence, other than bad faith, gross negligence or willful misconduct
(including fraud), and the Parties waive any such claim against Escrow Agent.
The Escrow Agent's duty is only to the Company or the Parties to this Escrow
Agreement and to no other person whomsoever.
2.4. EXPENSES. The Subscription Agent or the Company, as the case may be,
agrees to reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including reasonable counsel fees) incurred in connection with the performance
of its duties and responsibilities under this Escrow Agreement.
2.5. RESIGNATION. If the Escrow Agent shall be unable to act or shall
resign as Escrow Agent hereunder, the successor escrow agent shall be a proper
entity chosen by Escrow Agent in its sole discretion (the "SUCCESSOR"). Escrow
Agent may at any time give written notice of its resignation (the "RESIGNATION
NOTICE") to the other parties hereto. Such resignation shall take effect when
the Successor accepts in writing its appointment as Successor and receives from
Escrow Agent, the Escrowed Funds. If no Successor has been appointed and has
accepted the Escrowed Funds within five (5) days after the Resignation Notice is
sent, the Subscription Agent and the Subscriber may petition any court of
competent jurisdiction for the appointment of a Successor. Such court may
thereupon appoint a Successor after Escrow Agent deposits the Escrowed Funds
into such court and after such notice, if any, to the other parties hereto as
the court may deem proper and prescribe. This Escrow Agreement shall not
otherwise be assignable without the prior written consent of the other parties
hereto.
2.6. NO INTEREST. The Escrow Agent does not have and will not have any
interest in the Escrowed Funds, but is serving only as stakeholder, having only
possession thereof.
2.7. EXCLUSIVE DUTIES. 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.
2.8. COUNSEL. The Parties acknowledge that the Escrow Agent (i) is acting
as counsel to the Subscription Agent and (ii) will be acting as counsel to the
Company in connection with the transactions contemplated by the Subscription
Agreement, and the Parties agree that neither this Escrow Agreement nor the
Escrow Agent's duties or actions as escrow agent hereunder shall prohibit the
Escrow Agent from acting or continuing to act as legal counsel for the
Subscription Agent or the Company, as the case may be, in connection with the
transactions contemplated by the Subscription Agreement and/or in connection
with any dispute which may arise out of this Escrow Agreement.
3. DISPUTE RESOLUTION
It is understood and agreed that if any dispute shall arise with respect
to the delivery, ownership, right of possession or disposition of the Escrowed
Funds, or any portion thereof, or if the Escrow Agent shall in good faith be
uncertain as to its duties or rights hereunder, the Escrow Agent shall be
authorized, without liability to anyone, to (i) refrain from taking any action
other than to continue to hold the Escrowed Funds pending receipt of joint
written instruction signed by each of the Parties, or (ii) deposit the Escrowed
Funds with any court of competent jurisdiction located in the State of New York
or any Federal Court located in the State of New York, in which event the Escrow
Agent shall give written notice thereof to each of the Parties and thereupon the
Escrow Agent shall be relieved and discharged from all further obligations
pursuant to this Escrow Agreement. The Escrow Agent may, but shall be under no
duty whatsoever to, institute or defend any legal proceedings which relate to
the Escrowed Funds. The Escrow Agent shall have the right to retain counsel if
it becomes involved in any disagreement, dispute or litigation on account of
this Escrow Agreement or otherwise determines that it is necessary to consult
counsel.
4. NOTICES
Unless otherwise provided, any notice, consent, approval, authorization,
waiver or other communication required or permitted under this Escrow Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified, on the next business day after delivery to
a nationally recognized overnight courier service, upon confirmation of receipt
of a facsimile transmission or five (5) days after deposit with the United
States Post Office, by registered or certified mail, postage prepaid, and
addressed to the party to be notified at the address or facsimile number
indicated below for such party, or at such other address as such party may
designate upon written notice to the other parties (except that notice of change
of address shall be deemed given upon receipt). A copy of any notice given by
the Subscription Agent or the Subscriber to the Escrow Agent pursuant to this
Escrow Agreement shall be given simultaneously to the other Party. A copy of any
notice given by the Escrow Agent pursuant to this Escrow Agreement to any Party
shall be given simultaneously to each other Party.
(a) In the case of the Subscription Agent:
Pashleth Investment Ltd.
#0 - 0000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxx
and with a copy (which shall not constitute notice)
to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
(b) In the case of the Subscriber, at the address set
forth on the signature page hereto,
(c) In the case of the Escrow Agent to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
5. MISCELLANEOUS
5.1. ENTIRE AGREEMENT. This Escrow Agreement and the Subscription
Agreement between the Subscription Agent and the Subscriber constitute the
entire agreement among the parties with respect to the subject matter hereof,
and supersede all prior and contemporaneous arrangements or understandings with
respect thereto, whether written or oral.
5.2. AMENDMENTS AND WAIVERS. Any term of this Escrow Agreement may be
amended and the observance of any term of this Escrow Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only by an instrument in writing and signed by the Party against
whom such amendment or waiver is sought to be enforced. The duties of the Escrow
Agent under this Escrow Agreement may not be
altered, amended, modified or revoked except by an instrument in writing
executed by the Escrow Agent and each of the Parties.
5.3. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the terms and conditions of this Escrow Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Escrow Agreement, express or implied, is intended to
confer upon any person or entity other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Escrow Agreement, except as may be
expressly provided in this Escrow Agreement.
5.4. GOVERNING LAW. This Escrow Agreement, including the validity hereof
and the rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the domestic substantive laws of the State of
New York without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
5.5. SEVERABILITY. If any provision of this Escrow Agreement shall be
adjudged by a court to be invalid or unenforceable, the same shall in no way
affect any other provision of this Escrow Agreement, the application of such
provision in any other circumstances or to any other party, or the validity or
enforceability of this Escrow Agreement.
5.6. CAPTIONS. The headings and captions used in this Escrow Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Escrow Agreement.
5.7. COUNTERPARTS. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Subscription
Agent and the Subscriber hereby irrevocably consent to the jurisdiction of the
courts of the State of New York and of any Federal Court located in the State of
New York, each as may have competent jurisdiction, in connection with any
action, suit or other proceeding arising out of or relating to this Escrow
Agreement or any action taken or omitted hereunder, waive personal service of
any summons, complaint or other process and agree that the service thereof may
be made by certified or registered mail directed to such person at such person's
address for purpose of notice hereunder.
5.9. JUDGMENTS. The Escrow Agent is hereby expressly authorized to comply
with and obey any order, judgment or decree of a court of competent
jurisdiction. 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
or to any other person, firm, corporation or entity by reason of such
compliance, notwithstanding that any such order, judgment or decree may be
subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
into without jurisdiction.
5.10. TERMINATION OF ESCROW AGREEMENT. This Escrow Agreement shall
terminate and the Escrow Agent shall have no further duties hereunder upon the
earlier to occur of (a) the termination of the Subscription Agreement or (b) the
distribution of all of the Escrowed Funds pursuant to the terms and conditions
hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of
the date first above written.
SUBSCRIPTION AGENT:
PASHLETH INVESTMENTS LTD., on behalf of the Company
By: _____________________________________________
Name:____________________________________________
Title:___________________________________________
ESCROW AGENT
Akin, Gump, Strauss, Xxxxx & Xxxx, LLP
By:
_____________________________________
Name:
___________________________________
SUBSCRIBER:
________________________________________________
Name:
Address:
