ESCROW AGREEMENT
This
ESCROW
AGREEMENT
(the
“Agreement”)
is
made and entered into on March 28, 2008, by and among INTREPID
TECHNOLOGY AND RESOURCES, INC.
(the
"Company"),
YA
GLOBAL INVESTMENTS, L.P.,
(the
“Buyer”),
YORKVILLE
ADVISORS, LLC
(“Investment
Manager”),
and
XXXXX
XXXXXXXX, ESQ.,
as
escrow agent (the “Escrow
Agent”).
The
Company, the Buyer, and Yorkville may be referred to individually as a
“Party”
or
collectively as the “Parties”.
All
capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in that certain Securities Purchase Agreement dated March
28,
2008 entered into by and between the Company and the Buyer (the “Securities
Purchase Agreement”).
R
E C I T A L S
WHEREAS,
the
Company and the Buyer have entered into the Securities Purchase Agreement
pursuant to which the Company shall issue and sell to the Buyer, and the Buyer
shall purchase from the Company, certain securities (the “Securities”);
WHEREAS,
at all
times while the Buyer holds any of the Securities, the Investment Manager shall
perform monitoring and managing services for the Buyer in connection with the
Buyer’s purchase and investment in the Securities and the Buyer’s rights and
obligations under the Securities Purchase Agreement and other related documents
and agreements, and during such time, the Investment Manager shall be paid
on a
monthly basis, a fee from the Buyer for services performed;
WHEREAS,
pursuant to the Securities Purchase Agreement, the Parties desire that the
Monitoring Fees (as defined in the Securities Purchase Agreement) be deposited
into a segregated escrow account to be held by the Escrow Agent and disbursed
to
the Investment Manager on a monthly basis as set forth in this Agreement as
it
performs its monitoring and managing services for the Buyer;
WHEREAS,
Escrow
Agent has agreed to accept, hold, and disburse the Monitoring Fees deposited
with it hereunder in accordance with the terms of this Agreement.
A
G R E E M E N T
NOW
THEREFORE,
for and
in consideration of the foregoing, the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
1. Appointment
of Escrow Agent.
The
Company, the Buyer, and the Investment Manager hereby mutually appoint and
designate the Escrow Agent to receive, hold and release, as escrow agent, the
Escrow Funds (as defined below) and Escrow Agent hereby accepts such appointment
and designation, all in accordance with the terms hereof.
2. Escrow
Delivery.
2.1.
Escrow
Funds.
Escrow
Agent is hereby authorized and directed to use its bank account as an escrow
account for purposes of this Agreement. The Company shall deposit into the
Escrow Account all of the Monitoring Fees in accordance with the terms and
conditions of Section 4(g)(ii) of the Securities Purchase Agreement (such
Monitoring Fee funds actually deposited into the Escrow Account shall be
referred to as the "Escrow
Funds").
Such
Escrow Funds shall be wired to the following account in accordance with the
wire
instructions below and shall be held by Escrow Agent and released only in
accordance with the terms of this Agreement.
|
Bank:
|
Wachovia,
N.A. of New Jersey
|
|
Routing
#:
|
|
|
Account
#:
|
|
|
Name
on Account:
|
Xxxxx
Xxxxxxxx Attorney Trust Account
|
|
Name
on Sub-Account:
|
Intrepid/Monitoring
Fee
|
3. Conditions
of Escrow.
3.1.
The
Escrow Deposit.
Escrow
Agent shall hold the Escrow Funds until all funds have been disbursed in
accordance with this Agreement (the “Term”)
for
the benefit of the Buyer. The Escrow Funds shall be deposited into the Escrow
Account by the Company and the Buyer as set forth in the Securities Purchase
Agreement. Upon each deposit into the Escrow Account, the Buyer shall provide
to
the Escrow Agent a completed Monitoring Fee Schedule in the form attached hereto
as Exhibit A (a “Monitoring
Fee Schedule”)
with
respect to such deposit into escrow setting forth the date and amount of such
deposit and the schedule of disbursements to be made from escrow.
3.2.
Release
of Escrow Funds.
The
Escrow Agent shall disburse the Escrow Funds in accordance with the following
procedures:
(i) The
Escrow Agent shall disburse the designated portion of the Escrow Funds to the
Investment Manager in the amounts and at the times set forth on the Monitoring
Fee Schedules promptly upon receipt from the Buyer of a signed written
instruction directing the Escrow Agent to make such disbursement. In disbursing
Escrow Funds, the Escrow Agent is authorized to rely upon such written
instruction from the Buyer and may accept any signatory from the Buyer that
Escrow Agent has on file.
(ii)
In
the
event that the Securities are Fully Retired (as defined in the Securities
Purchase Agreement) prior to the full disbursement of all the Escrow Funds,
the
Buyer and the Company shall execute a joint written instruction directing the
Escrow Agent to disburse the remaining Escrow Funds to the Company, or to such
other Person as set forth in such joint written direction, provided however,
the
Buyer may instruct, by delivery of a signed written instruction, which the
Buyer, in its sole determination may provide, the Escrow Agent to disburse
all
or a portion of the remaining Escrow Funds to the Buyer, which amount shall
be
credited to any fees, costs, expenses, or other amounts owed to the Buyer from
the Company pursuant to the Securities, the Securities Purchase Agreement,
or
any related documents after the Securities are Fully Retired, so long as the
Buyer first provides the Company with advanced written notice of such amounts
owed to it and provides the Company with five business days to directly pay
such
amounts to the Buyer.
3.3.
Conflict.
If a
controversy arises between the Parties concerning the release of the Escrow
Funds hereunder, they shall notify Escrow Agent. In that event (or, in the
absence of such notification, if in the good faith judgment of Escrow Agent
such
controversy exists), Escrow Agent shall not be required to resolve such
controversy or take an action but shall be entitled to await resolution of
the
controversy by joint written instructions from the Parties or may immediately
return the Escrow Funds to the respective Parties, in which event Escrow Agent
shall have no further liability hereunder. If a suit is commenced against Escrow
Agent, it may answer by way of interpleader and name the Parties as additional
parties to such action, and Escrow Agent may tender the Escrow Funds into such
court for determination of the respective rights, titles and interests of the
Parties. Upon such tender, Escrow Agent shall be entitled to receive from the
Parties its reasonable attorneys’ fees and expenses incurred in connection with
said interpleader action or in any related action or suit. If and when Escrow
Agent shall so interplead such Parties, or either of them, and deliver the
Escrow Funds to the clerk of such court, all of its duties hereunder shall
cease, and it shall have no further obligation in this regard.
2
3.4.
Cause
of Action. The
Company agrees and acknowledges that in no event shall it have any cause of
action, standing, claim, or any other rights against the Buyer or the Investment
Manager with respect written instructions provided by the Buyer or disbursements
made to the Investment Manager in accordance with Section 3.2. hereunder.
4. Escrow
Agent.
4.1.
Liability
of Escrow Agent.
The
Parties acknowledge, understand and agree that Escrow Agent has accepted Escrow
Agent’s appointment under this Agreement and shall perform and satisfy Escrow
Agent’s duties, liabilities and obligations under this Agreement only as an
accommodation to the Parties. The Parties, jointly and severally, hereby
indemnify Escrow Agent and each representative of Escrow Agent and hereby agree
to hold Escrow Agent and each such representative free and harmless from and
to
defend and protect Escrow Agent and such representative against any claim made,
asserted or threatened against Escrow Agent or such representative (including
any such claim made, asserted or threatened by the Parties), and any claim
incurred by Escrow Agent or such representative, excluding, however, any claim
arising from the gross negligence, willful misconduct, criminal conduct or
intentionally tortuous conduct of Escrow Agent or such representative.
4.2.
Proceeding.
Escrow
Agent, in Escrow Agent’s sole discretion, may commence any judicial proceeding
necessary or appropriate to determining the respective rights of the Parties
under this Agreement or to interpreting or enforcing any term, condition or
other provision of this Agreement. The Parties shall jointly and severally
be
liable for any and all costs and expenses (including attorneys fees, expert
witness fees, accounting fees and related costs) incurred by Escrow Agent in
connection with such proceeding.
5. Termination. This
Agreement shall be terminated upon the occurrence of any one of the following:
(i) the release of all the Escrow Funds in accordance with the terms and
conditions of Section 3
hereof;
or (ii) otherwise by written mutual consent signed by the Parties.
6. Notice.
All
notices, demands, requests, or other communications which may be or are required
to be given, served or sent by any of the Parties or the Escrow Agent to any
other party pursuant to this Agreement shall be in writing and shall be hand
delivered (including delivery by courier), sent by facsimile, sent by a
nationally recognized overnight delivery service, or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid,
addressed to the parties last known address or such other address as the
addressee may indicate by written notice to the other Parties or the Escrow
Agent. Each notice, demand, request or communication that is given or made
in
the manner described above shall be deemed sufficiently given or made for all
purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt or the affidavit of messenger being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
7. Benefit
and Assignment.
None of
the Parties may assign this Agreement without the prior written consent of
all
Parties and the Escrow Agent. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and
assigns as permitted hereunder. No person or entity other than the Parties
and
their respective successors and assigns is or shall be entitled to bring any
action to enforce any provision in this Agreement against any of the Parties,
and the covenants and agreements set forth in this Agreement shall be solely
for
the benefit of, and shall be enforceable only by, the Parties or their
respective successors and assigns.
8. Entire
Agreement; Amendment.
This
Agreement, along with the Purchase Agreement and any other agreement executed
on
the date hereof between the Parties, contains the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
oral
or written agreements, commitments or understandings with respect to such
matters. This Agreement may not be changed orally, but only by an instrument
in
writing signed by the Party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
3
9. Headings.The
headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect
the
meaning, construction or scope thereof.
10. Governing
Law; Venue.
This
Agreement shall be governed and constructed under and in accordance with the
laws of the State of New Jersey (but not including the conflicts of laws and
rules thereof). For purposes of any action or proceeding involving this
Agreement each of the parties to this Agreement expressly submits to the
jurisdiction of the federal and state courts located in the State of New Jersey
and consents to the service of any process or paper by registered mail or by
personal service within or without the State of New Jersey in accordance with
applicable law, provided a reasonable time for appearance is allowed. Each
Party
hereby acknowledges that Xxxxxx County, New Jersey is the proper venue for
any
action brought hereunder.
11. Signature
in Counterparts.
This
Agreement may be executed in separate counterparts, none of which need contain
the signature of all parties, each of which shall be deemed to be an original
and all of which taken together constitute one and the same instrument. It
shall
not be necessary in making proof of this Agreement to produce or account for
more than the number of counterparts containing the respective signatures of,
or
on behalf of, all of the parties hereto.
12. Attorney’s
Fees.
Should
any action be commenced between any of the Parties concerning the matters set
forth in this Agreement or the right and duties of any other Party in relation
thereto, the prevailing Party in such action shall be entitled, in addition
to
such other relief as may be granted, to a reasonable sum as and for its
attorney's fees and costs; except that Escrow Agent’s attorney’s fees and costs
incurred in connection with disputes arising hereunder between Company, the
Buyer, and the Investment Manager shall be paid by Company, the Buyer and the
Investment Manager as otherwise provided herein.
13. Conflict
Waiver.
The
Company hereby acknowledge that the Escrow Agent is general counsel to the
Buyer, a partner of the Investment Manager and counsel to both the Buyer and
the
Investment Manager in connection with the transactions contemplated and referred
herein. The Company agrees that in the event of any dispute arising in
connection with this Agreement or otherwise in connection with any transaction
or agreement contemplated and referred herein, the Escrow Agent shall be
permitted to continue to represent the Buyer and the Investment Manager and
the
Company will not seek to disqualify such counsel. The Company waives any right
to seek the disqualification of Escrow Agent to act as legal counsel to the
Buyer or the Investment Manager as a result of Escrow Agent’s duties hereunder.
The Buyer and the Investment Manager hereby consents to Escrow Agent acting
as
escrow agent pursuant to the terms of this Agreement and hereby acknowledge
that
in so acting, Escrow Agent shall be bound to act in accordance with this
Agreement and not in the best interest of the Buyer or the Investment Manager
and may be required to enforce its rights under this Agreement against the
Buyer
or the Investment Manager. The Buyer or the Investment Manager further
acknowledges and agrees that all communication delivered to Escrow Agent in
furtherance of this Agreement or Escrow Agent’s duties hereunder may not be kept
confidential by Escrow Agent and may not be protected by the attorney-client
privilege. The Buyer or the Investment Manager hereby waive the conflict of
interest and any potential conflict of interest that may arise as a result
of
Escrow Agent’s performance of its duties or exercise of its rights under this
Agreement.
[Remainder
of Page Intentionally Left Blank]
4
IN
WITNESS WHEREOF,
each of
the parties has caused this Agreement to be duly executed and delivered in
its
name and on its behalf, all as of the date and year first above
written.
“Company”
Intrepid
Technology and Resources, Inc.
By: /s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X.
Xxxxxx
Title:
President
“Buyer”
YA
Global Investments, L.P.
By:
Yorkville Advisors, LLC
Its:
Investment Manager
By:
/s/
Xxxx Xxxxxx
Name:
Xxxx Xxxxxx
Title:
Portfolio Manager
“Investment
Manager”
Yorkville
Advisors, LLC
By:
/s/
Xxxx Xxxxxx
Name:
Xxxx Xxxxxx
Title:
Portfolio Manager
“Escrow
Agent”
By: /s/
Xxxxx Xxxxxxxx, Esq.
Name:
Xxxxx
Xxxxxxxx, Esq.
5
EXHIBIT
A
MONITORING
FEE SCHEDULE
To: Escrow
Agent
In
accordance with the Agreement, upon each deposit into the Escrow Account, the
Buyer shall provide to the Escrow Agent a completed Monitoring Fee Schedule
with
respect to such deposit into escrow setting forth the date and amount of such
deposit and the Schedule of Disbursements to be made to the Investment Manager
from the Escrow Account. Below please find the Monitoring Fee Schedule in
connection with the Monitoring Fee to be deposited into the Escrow Account
pursuant to a Closing under the Securities Purchase Agreement:
Part
I. Deposits of Monitoring Fee Into Escrow Account
|
Deposit
Into Escrow Account
|
$55,000.00
|
Date
of Deposit
|
|
Part
II. Schedule of Disbursements to Investment Manager From Escrow
Account
|
Disbursement
Date
|
Disbursement
Amount
|
Remaining
Escrow
Funds
|
|
$30,000
|
$25,000
|
|
|
$1,086.96
|
$23,913.04
|
|
|
$1,086.96
|
$22,826.08
|
|
|
$1,086.96
|
$21,739.12
|
|
|
$1,086.96
|
$20,652.16
|
|
|
$1,086.96
|
$19,565.20
|
|
|
$1,086.96
|
$18,478.24
|
|
|
$1,086.96
|
$17,391.28
|
|
|
$1,086.96
|
$16,304.32
|
|
|
$1,086.96
|
$15,217.36
|
|
|
$1,086.96
|
$14,130.40
|
|
|
$1,086.96
|
$13,043.44
|
|
|
$1,086.96
|
$11,956.48
|
|
|
$1,086.96
|
$10,869.52
|
|
|
$1,086.96
|
$9,782.56
|
|
|
$1,086.96
|
$8,695.60
|
|
|
$1,086.96
|
$7,608.64
|
|
|
$1,086.96
|
$6,521.68
|
|
|
$1,086.96
|
$5,434.72
|
|
|
$1,086.96
|
$4,347.76
|
|
|
$1,086.96
|
$3,260.80
|
|
|
$1,086.96
|
$2,173.84
|
|
|
$1,086.96
|
$1,086.88
|
|
|
$1,086.88
|
$0.00
|
6
