ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Escrow Agreement") is entered
into as of August 11, 1999 by and between Lakota Technologies, Inc.,
a Colorado corporation f/k/a Lakota Energy, Inc. ("Lakota"), Rapid
Release Research, LLC ("Rapid"), and MRC LEGAL SERVICES CORPORATION,
a California corporation, as escrow agent ("Escrow Agent").
R E C I T A L S
A. Lakota and Rapid have entered into that certain
Consulting Agreement effective August 9, 1999, a copy of which has
been attached hereto as Exhibit A (the "Agreement").
B. As a condition of the Agreement, Lakota has agreed to
deposit with the Escrow Agent two (2) common stock certificates,
each bearing a Rule 144 restrictive legend, one in the amount of
428,000 shares (the "First Certificate") and the other in the amount
of 857,000 shares (the "Second Certificate"), to be released in
accordance with the terms and conditions of this Escrow Agreement.
C. Escrow Agent has agreed to act as the escrow agent
hereunder, in accordance with the terms and conditions set forth in
this Escrow Agreement.
NOW THEREFORE, for and in consideration of the foregoing and
of the mutual covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Parties hereby mutually appoint
and designate the Escrow Agent to receive, hold and release, as escrow
agent, the First Certificate and the Second Certificate and the Escrow
Agent hereby accepts such appointment and designation.
2. ESCROW DELIVERY. Within five (5) days of the date of
this Escrow Agreement, Lakota shall deliver or cause to be delivered
the First Certificate and the Second Certificate, each issued in the
name of Jacob International, Inc. and otherwise in form and
substance satisfactory to Rapid.
3. CONDITIONS OF ESCROW.
3.1 The Escrow Deposit. Escrow Agent shall hold and
release the First Certificate and the Second Certificate as follows:
a. Release of the First Certificate From Escrow. The Escrow
Agent shall release and distribute the First Certificate as follows:
i. to Rapid if, prior to February 9, 2000, the closing bid price
for the common stock of Lakota, as quoted on the Over the Counter
Bulletin Board or other recognized exchange, is $0.50 or higher for
a period of five (5) consecutive trading days.
ii. to Lakota either (a) on February 10, 2000 if the condition set
forth in Section 3.1(a)(i) hereof has not been satisfied by that
date, or (b) in the event of a breach of the Agreement by Rapid.
iii. to Lakota or Rapid, as the case may be, pursuant to (a)
written instructions executed by both Lakota and Rapid, or (b) any
"final order" of a court of competent jurisdiction, any such order
being deemed to be "final" if (i) such order has not been reserved,
stayed, enjoined, set aside, annulled or suspended, (ii) no request
for a stay, suspension or an injunction, petition for
reconsideration or appeal, or sua sponte action with comparable
effect is pending with respect to the order, and (iii) the time for
filing any such request, petition or appeal or further taking of any
such sua sponte action has expired.
b. Release of the Second Certificate From Escrow. The Escrow Agent
shall release and distribute the Second Certificate as follows:
i. to Rapid if, prior to February 9, 2000, the closing bid price
for the common stock of Lakota, as quoted on the over the Counter
Bulletin Board or other recognized exchange, is $1.00 or higher for
a period of five (5) consecutive trading days.
ii. to Lakota either (a) on February 10, 2000 if the condition set
forth in Section 3.1(b)(i) hereof has not been satisfied by that
date, or (b) in the event of a breach of the Agreement by Rapid.
iii. to Lakota or Rapid, as the case may be, pursuant to (a)
written instructions executed by both Lakota and Rapid, or (b) any
"final order" of a court of competent jurisdiction, any such order
being deemed to be "final" if (i) such order has not been reserved,
stayed, enjoined, set aside, annulled or suspended, (ii) no request
for a stay, suspension or an injunction, petition for
reconsideration or appeal, or sua sponte action with comparable
effect is pending with respect to the order, and (iii) the time for
filing any such request, petition or appeal or further taking of any
such sua sponte action has expired.
3.2 Conflicting Instructions. If a controversy arises between the
Parties concerning the release of the First Certificate or the
Second Certificate hereunder, they shall notify the Escrow Agent.
In that event (or, in the absence of such notification, if in the
good faith judgment of the Escrow Agent such controversy
exists), the 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 instructions from the Parties. The Escrow
Agent may institute an interpleader action in state or federal court
in the State of California to resolve such controversy. If a suit
is commenced against the Escrow Agent, it may answer by way of
interpleader and name Lakota and Rapid as additional parties to such
action, and the Escrow Agent may tender the First Certificate and/or
the Second Certificate into such court for determination of the
respective rights, titles and interests of the Parties. Upon such
tender, the 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. As between Lakota and Rapid, such fees, expenses and other
sums shall be paid by the party which fails to prevail in the
proceedings brought to determine the appropriate distribution of the
First Certificate and/or the Second Certificate. If and when the
Escrow Agent shall so interplead such Parties, or either of them,
and deliver the First Certificate and/or the Second Certificate to
the clerk of such court, all of its duties hereunder shall cease,
and it shall have no further obligation in this regard. Nothing
herein shall prejudice any right or remedy of the Escrow Agent.
4. CONCERNING ESCROW AGENT
4.1 Duties. Escrow Agent undertakes to perform all duties which
are expressly set forth herein; provided, however, that the Escrow
Agent shall not be required to make or be liable in any manner of
its failure to make any determination under the Agreement or any
other agreement, including whether Lakota or Rapid is entitled to
delivery of the First Certificate and the Second Certificate under
the Agreement.
4.2 Indemnification.
a. Escrow Agent may rely upon and shall be protected in acting or
refraining from acting upon any written notice, instructions or
request furnished to it hereunder and believed by it to be genuine
and authorized.
b. Escrow Agent shall not be liable for any action taken by it in
good faith and without gross negligence or wilful misconduct, and
believed by it to be authorized or within the rights or powers
conferred upon it by this Escrow Agreement, and may consult with
counsel of its own choice and shall have full and complete
authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such
counsel.
c. Seller hereby agrees to indemnify the Escrow Agent for, and hold
the Escrow Agent harmless against, any loss, liability or expense
incurred without gross negligence or wilful misconduct or bad faith
on the part of the Escrow Agent, arising out of or in connection
with the Escrow Agent's entering into this Escrow Agreement and
carrying out the Escrow Agent's duties hereunder, including, without
limitation,
costs and expenses of defending the Escrow Agent against
any claim or liability with respect thereto.
d. Escrow Agent shall have no implied obligations or
responsibilities hereunder, nor shall it have any obligation or
responsibility to collect funds or seek the deposit of money or
property, nor is the Escrow Agent a party to any other agreement
entered into among Purchaser and Seller.
4.3 Other Matters. Escrow Agent (and any successor escrow agent or
agents) reserves the right to resign as the Escrow Agent at any
time, provided fifteen (15) days' prior written notice is given to
the other parties hereto, and provided further that a mutually
acceptable successor Escrow Agent(s) within such fifteen (15) day
period, the Escrow Agent may petition any court in the State of
California having jurisdiction to designate a successor Escrow
Agent. The resignation of the Escrow Agent (and any successor
escrow agent or agents) shall be effective only upon delivery of the
Shares and/or the Purchase Price to the successor escrow agent(s).
The Parties reserve the right to jointly remove the Escrow Agent at
any time, provided fifteen (15) days' prior written notice is given
to the Escrow Agent. In the event of litigation or dispute by the
Parties in which the performance of the duties of the Escrow Agent
is at issue, the Escrow Agent shall take no action until such action
is agreed in writing by the Parties, or until receipt of any order
pursuant to 3.1(a)iii or 3.1(b)iii above directing the Escrow Agent
with respect to the action which is the subject of such litigation
or dispute.
5. Termination. This Escrow Agreement shall be terminated upon the
release of the First Certificate and the Second Certificate in
accordance with the terms and conditions of Section 3 hereof, or
otherwise by written mutual consent signed by all parties hereto.
6. Notice. All notices, demands, requests, or other communications
which may be or are required to be given, served or sent by any
party to any other party pursuant to this Escrow Agreement shall be
in writing and shall be hand delivered (including delivery by
courier), sent by facsimile, or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
IF TO LAKOTA:
Lakota Technologies, Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx, President
Facsimile (000) 000-0000
IF TO RAPID:
Rapid Release Research, LLC
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
Facsimile ( )
IF TO THE ESCROW AGENT:
MRC Legal Services Corporation
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile (000) 000-0000
or such other address as the addressee may indicate by written
notice to the other parties. Each notice, demand, request or
communication which shall be given or made in the manner described
above shall be deemed sufficiently given or made for all purposes at
such time as it 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. This Escrow 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 hereto is or shall be entitled to
bring any action to enforce any provision in this Escrow Agreement
against any of the parties hereto, and the covenants and agreements
set forth in this Escrow Agreement shall be solely for the benefit
of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns this Escrow Agreement or any
rights hereunder without the prior written consent of the parties
hereto.
8. Entire Agreement; Amendment. This Escrow Agreement and the
Consulting Agreement executed simultaneously herewith contain 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
Escrow 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.
9. Headings. The headings of the sections and subsections
contained in this Escrow 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 Escrow Agreement shall be governed
and constructed under and in accordance with the laws of the State
of California (but not including the conflicts of laws and rules
thereof). For purposes of any action or proceeding involving this
Escrow Agreement
each of the parties to this Escrow Agreement expressly submits to the
jurisdiction of the federal and state courts located in the State of
California and consents to the service of any process or paper by
registered mail or by personal service within or without the State
of California in accordance with applicable law, provided a reasonable
time for appearance is allowed.
11. Signature in Counterparts. This Escrow 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
Escrow 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 the
parties to this Agreement concerning the matters set forth in this
Agreement or the right and duties of either 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.
IN WITNESS WHEREOF, each of the parties has caused this
Escrow Agreement to be duly executed and delivered in its name and
on its behalf, all as of the date and year first above written.
"LAKOTA" "RAPID"
Lakota Technologies, Inc. Rapid Release Research, LLC
/s/Xxx Xxxxxxxx /s/Xxxxxx X. Xxxxxx
By: Xxx Xxxxxxxx By: Xxxxxx X. Xxxxxx
Its: President Its: President
"ESCROW AGENT"
MRC Legal Services Corporation
/s/M. Xxxxxxx Xxxxxx
By: M. Xxxxxxx Xxxxxx
Its: President
