ESCROW AGREEMENT
Exhibit 10.2
THIS AGREEMENT made this 11th
day of April 2008 (“Escrow Agreement”) by and among Xxxxxx International, Ltd.,
a Delaware corporation (“CIL”) having an office located at 0000 Xxxxxxx 00 and
Ridgewood Road, Wall Township, New Jersey, and Well to Wire Energy, Inc.
(“W2W”), having its
office located at Suite 17, 0000 Xxxxxxx Xxxxxxx Xxxxx XX, Xxxxxxx, Xxxxxxx,
Xxxxxx, X0X 0X0 and Bathgate, Xxxxxxx and Wolf, P.C. (“Escrow Agent” or
“BWW”).
WHEREAS, CIL is in the
business of designing and manufacturing engines.
WHEREAS, CIL is the owner of
various patents for engine technology (“Patents”).
WHEREAS, the Patents encompass
the spherical rotary valve assembly as well as other related components
including the valve seal, the exhaust system and the cooling system, and the
engine designs themselves, which together have various applications including
the use of these designs and patents for the production of engines fueled by
natural gas to be used for the generation of electricity.
WHEREAS, W2W is the licensee
and CIL is the licensor under a license agreement relating to Canada (“Canadian
License Agreement”).
WHEREAS, W2W desires to
purchase another license from CIL to enable W2W, under certain specified
circumstances, to use the engine technology associated with the Patents in the
United States of America as set forth in the License Agreement attached hereto
as Exhibit A (the “U.S. License Agreement”).
WHEREAS, CIL wishes to enter
into the U.S. License Agreement with W2W.
WHEREAS, W2W wishes to enter
into the U.S. License Agreement with CIL.
1
WHEREAS, both CIL and W2W
agree that the U.S. License Agreement shall remain in escrow and, although
executed, shall not be released to W2W until it has fulfilled the terms set
forth herein.
NOW, THEREFORE, in
consideration of the promises contained herein, the parties agree as
follows:
LICENSE
IN ESCROW
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1.
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The
U.S. License Agreement that has been signed by CIL and W2W shall be
delivered in escrow to Bathgate, Xxxxxxx and Xxxx, P.C. (“Escrow Agent”
and/or “BWW”) and shall be released to W2W upon payment of the monies
specified herein.
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RELEASE
PAYMENT
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2.
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In
order for the U.S. License Agreement to be released from escrow W2W must
pay to CIL $9,500,000.00 (“Release Payment”) by June 30, 2008 (“Payment
Period”). The Release Payment consists of the following
components: (a) $8,500,000.00 owed by W2W to CIL as partial payment for
the Canadian License Agreement and (b) $1,000,000.00 as the initial
payment required by the U.S. License Agreement. It is
contemplated by CIL and W2W that during the Payment Period money in
unspecified amounts will be delivered to CIL periodically as partial
payment of the Release Payment until the Release Payment has been paid in
full. All money paid by W2W under this paragraph shall be
nonrefundable when received by CIL.
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3.
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The
failure of W2W to pay the Release Payment to CIL within the Payment Period
shall cause the Canadian License Agreement to automatically be amended,
without the necessity of any further writing signed by the parties, so
that it shall be non-exclusive, subject to reinstatement as an exclusive
license pursuant to paragraph 4.
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4.
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Provided
that W2W shall have paid $500,000.00 on account of the Release Payment to
CIL within the Payment Period, W2W shall have until September 30, 2008
(“Extended Payment Period”), to pay the balance of the Release
Payment. If W2W pays the entire Release Payment to CIL within
the Extended Payment Period the exclusivity of the Canadian License
Agreement shall be reinstated.
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5.
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The
failure of W2W to pay the Release Payment to CIL within the Payment Period
or, if extended by paragraph 4, within the Extended Payment Period, shall
constitute a breach of this Escrow Agreement, the Canadian License
Agreement and the U.S. License Agreement and shall entitle CIL to retain
all money paid by W2W pursuant to Paragraph 2 and paragraph 3 of this
Escrow Agreement and immediately, without notice to W2W, to cancel this
Escrow Agreement, the Canadian License Agreement and the U.S. License
Agreement without W2W having any right of redemption or
reinstatement.
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6.
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All
amounts payable under this Escrow Agreement shall be paid in U.S. Dollars
in immediately available federal
funds.
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7.
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All
payments under this Escrow Agreement shall be remitted to CIL at its
offices located at 0000 Xxxxxxx 00 and Ridgewood Road, Wall Township, New
Jersey.
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2
NO
LICENSE
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8.
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W2W
acknowledges and agrees that the execution of this Escrow Agreement by CIL
shall not grant a license to W2W and that only the subsequent release of
the U.S. License Agreement from Escrow upon the payment in full of the
Release Payment by W2W shall result in a license being granted to W2W
pursuant to the terms of the U.S. License
Agreement.
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WAIVER
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9.
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No
provision of this Escrow Agreement shall be deemed to have been modified
by any act of CIL, its agents or employees, or by the failure of CIL to
object to any act of W2W which may be inconsistent herewith, or otherwise,
except by a subsequent agreement in writing signed by both
parties. No waiver of a breach committed by either party in one
instance shall constitute a waiver or a license to commit or continue
breaches in other or like
instances.
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3
LIMITATIONS OF RIGHTS AND
AUTHORITY
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10.
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No
right or title whatsoever in the patent rights, licensed products,
Technical Specifications or Technical Information (as defined in the U.S.
License Agreement) is granted by CIL to W2W under this Escrow Agreement,
or shall be taken or assumed by W2W, except as is specifically set forth
or granted in the U.S. License Agreement and no such rights are granted by
this Escrow Agreement.
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11.
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Neither
party shall in any respect whatsoever be taken to be the partner, agent or
representative of the other party and neither party shall have any
authority to assume any obligation for the other party or to commit the
other party in any way.
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12.
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Neither
party shall at any time heretofore or hereafter publicly state nor imply
that the terms and conditions specified herein, or the relationships
between CIL and W2W, are in any way different from those specifically set
forth in this Escrow Agreement or in the Canadian License
Agreement. If requested by one party, the other party shall
promptly supply the first party with copies of all public statements and
of all promotional material relating to this Agreement, the Canadian
License Agreement or the U.S. License
Agreement.
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INJUNCTIVE
RELIEF FOR BREACH,
SEVERABILITY AND
ENFORCEABLITY
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13.
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W2W
agrees that CIL may not be adequately compensated by damages at law for a
breach or threatened breach by W2W of any of the provisions of this Escrow
Agreement, and that CIL shall be entitled to injunctive relief and
specific performance in connection therewith, in addition to all other
remedies.
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14.
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Each
of the covenants contained in this Escrow Agreement shall be construed as
separate covenants and if any court of last resort shall determine that
any such covenant is too abroad that covenant shall be deemed reduced to
whatever extent the court deems reasonable and such covenant shall be
enforced without limiting the scope or enforceability of the remaining
provisions of those sections.
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15.
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If
any provision of this Escrow Agreement is declared invalid by a court of
last resort or by any court form the decision of which an appeal is not
taken within the time provided by law, then, and in such an event, this
Escrow Agreement will be deemed to have been terminated only as to the
portion thereof which relates to the provision invalidated by that
judicial decision, but this Agreement, in all other respects, will remain
in force.
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16.
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It
is specifically agreed that no provision of this Escrow Agreement shall be
in any manner violative of the laws of the United Sates of America or
other governmental authority within the United States of America and each
such law is intended to be, and will be considered to be, incorporated
into this Escrow Agreement and will be binding upon the
parties.
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4
LIMITATION OF ASSIGNMENT BY
W2W
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17.
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The
rights, duties and privileges of W2W hereunder shall not be transferred or
assigned by it, either in part or in whole, without the prior written
consent of CIL, which may be denied, withheld or conditioned by CIL in its
sole discretion.
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GOVERNING
LAW
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18.
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This
Escrow Agreement shall be governed by, construed and enforced in
accordance with the laws of the Sate of New Jersey and each party herby
submits to the exclusive jurisdiction of any state or federal court
located in the State of New Jersey in the event of any claims arising
under this Escrow Agreement.
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ENTIRE
AGREEMENT
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19.
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This
Escrow Agreement sets forth the entire agreement and understanding by and
between CIL and W2W as to the subject matter hereof and has priority over
all documents, verbal consents and understandings made before the
execution of this Escrow Agreement, and none of the terms of this Escrow
Agreement shall be amended or modified except in a written document signed
by CIL and W2W.
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20.
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In
the event of any inconsistency between any of the terms of this Escrow
Agreement and any translation thereof into another language, the English
language version shall control.
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5
NOTICES
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21.
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Any
notice, consent or approval required under this Escrow Agreement shall be
in English and in writing, and shall be delivered to the following
addresses (a) personally by hand, (b) by certified mail, postage prepaid,
with return receipt requested, (c) by overnight delivery service, or (d)
by telefax, confirmed by such certified
mail:
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| If to CIL: | Xxxxxx International, Ltd. | ||
| Xxxxxxx 00 & Xxxxxxxxx Xxxx | |||
| Xxxx Xxxxxxxx, XX 00000-0000 | |||
| Telephone: (000) 000-0000 | |||
| Telefax: (000) 000-0000 | |||
| If W2W: | Well To Wire Energy, Inc. | ||
| Xxxxx 00 | |||
| 0000 Xxxxxxx Xxxxxxx Xxxxx XX | |||
| Xxxxxxx | |||
| Xxxxxxx, Xxxxxx, X0X 0X0 | |||
| Telephone: (000) 000-0000 | |||
| Telefax:(000) 000-0000 | |||
| If BWW | Bathgate, Xxxxxxx and Wolf, P.C. | ||
| 0 Xxxxxxx Xxxx | |||
| Xxxxxxxx, XX 00000 | |||
| Telephone: (000) 000-0000 | |||
| Telefax: (000) 0000000 |
All
notices shall be deemed effective upon the date delivered if by hand or
overnight delivery service and three days after being mailed. If
either party desires to change the address to which notice is sent to such
party, it shall so notify the other party in writing in accordance with the
foregoing.
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MISCELLANEOUS
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22.
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Headings and
References. Headings in this Escrow Agreement are
included herein for ease of reference only and have no legal
effect. References herein to Sections or Attachments are to
Sections and Attachments to this Escrow Agreement, unless expressly stated
otherwise.
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23.
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Restriction on
Disclosure of Terms and
Provisions.
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a.
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This
Escrow Agreement shall be distributed solely
to:
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i.
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those
personnel of CIL and W2W who shall have a need to know its
contents;
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ii.
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those
persons whose knowledge of its contents will facilitate performance of the
obligations of the parties under this Escrow
Agreement;
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iii.
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those
persons, if any, whose knowledge of its contents is essential in order to
permit W2W or CIL to place or maintain or secure benefits under policies
of insurance; or
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iv.
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as
may be required by law, regulation or judicial
order.
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b.
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In
the event disclosure is required by law, regulation or judicial order, the
disclosing party shall request that any disclosure be kept secret and
shall attempt to minimize disclosure of the financial terms of this Escrow
Agreement. Any party may publicly announce the existence of
this Escrow Agreement, the manner in which the parties shall operate, and
the areas of responsibility of each party. Except as legally
required, no party may disclose the financial terms of this Escrow
Agreement, the Canadian License Agreement or the U.S. License Agreement
without the consent of the other party. The parties will
consult with each other prior to any press release relating to this Escrow
Agreement.
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24.
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Definitions. Any
word not specifically defined herein shall have the meaning ascribed to it
in the U.S. License Agreement.
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25.
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Binding
Effect. This Escrow Agreement shall accrue to the
benefit of, and shall be binding upon, the parties hereto and their
respective successors and assigns.
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NO LIMIT ON
LIABILITY
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26.
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This
Escrow Agreement does not limit the obligation of W2W under either the
Canadian License Agreement or the U.S. License Agreement; instead, W2W
shall be required to comply with each of the provisions of each of those
agreements and this Escrow
Agreement.
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7
ROLE OF ESCROW
AGENT
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27.
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Upon
receipt of a written demand for the U.S. License Agreement made by W2W
pursuant to this Escrow Agreement, the Escrow Agent shall promptly mail a
copy thereof (by registered or certified mail, return receipt requested)
to CIL which shall have the right to object to the release of the U.S.
License Agreement, by delivery to the Escrow Agent of written notice of
objection within ten (10) days after the date of the Escrow Agent’s
mailing of such notion to CIL, but not thereafter. Upon receipt
of such notice of objection, the Escrow Agent shall promptly mail a copy
thereof (by registered or certified mail, return receipt requested) to
W2W.
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28.
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In
the event that (a) the Escrow Agent shall have received a notice of
objection as provided for in paragraph 27 above within the time therein
prescribed, or (b) any disagreement or dispute shall arise between or
among any of the parties thereto resulting in adverse claims and demands
being made for the U.S. License Agreement, whether or not litigation has
been instituted, then, in any such event, at the Escrow Agent’s option,
(i) the Escrow Agent may refuse to comply with any claims or demands on it
and continue to hold the U.S. License Agreement until the Escrow Agent
receives written notice signed by W2W and CIL, directing the release of
the U.S. License Agreement, in which case the Escrow Agent may then
release the U.S. License Agreement in accordance with said direction, and
the Escrow Agent shall not be or become liable in any way or to any person
for its refusal to comply with such claims or demand; or (ii) in the event
the Escrow Agent shall receive a written notice advising that litigation
over the release of the U.S. License Agreement has been commenced, the
Escrow Agent may deposit the U.S. License Agreement with the clerk of the
court in which said litigation is pending , or (iii) the Escrow Agent may
(but shall not be required to) take such affirmative steps as it may, at
its option, elect in order to substitute another impartial party to hold
the U.S. License Agreement or to deposit the U.S. License Agreement with a
court of competent jurisdiction and /or to commence an action for
interpleader, the costs thereof to be borne by whichever of W2W or CIL is
deemed, by the court, to be entitled to the U.S. License Agreement and
thereupon the Escrow Agent shall be released of any and all liability
thereunder. W2W and CIL jointly and severally agree to
reimburse the Escrow Agent for any and all expenses incurred by it in
relation to its duties hereunder, including, but not limited too,
attorneys fees (either paid to retained attorneys or amounts representing
the fair value of legal services rendered to
itself).
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29.
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It
is expressly understood that the Escrow Agent acts hereunder as an
accommodation to W2W and CIL and as a depository only and is not
responsible or liable in any manner whatever for the sufficiency,
correctness, genuineness or validity of any instrument deposited with it,
or for the form or execution of such instruments or for the identity,
authority or right of any person executing or depositing the same or for
the terms and conditions of any instrument pursuant to which the Escrow
Agent or the parties may act.
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30.
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The
Escrow Agent shall not have any duties or responsibilities except those
set forth herein and shall not incur any liability in acting upon any
signature, notice, request, waiver, consent, receipt or other paper or
document believed by the Escrow Agent to be genuine, and the Escrow Agent
may assume that any person purporting to give it any notice on behalf of
any party in accordance with the provisions hereof has been duly
authorized to do so.
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31.
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The
Escrow Agent may act or refrain from acting in respect of any matter
referred to herein in full reliance upon and by and with the advice of
counsel which may be selected by it (including any member of its firm) and
shall be fully protected in so acting or refraining from acting upon the
advice of such counsel.
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32.
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W2W
and CIL hereby jointly and severally indemnify, and they shall defend and
save the Escrow Agent harmless from any and all loss, damage, claims,
liabilities, judgments, and other cost and expense of every kind and
nature which may be incurred by the Escrow Agent by reason of its
acceptance of its role as Escrow Agent, and its performance under this
Escrow Agreement (including, without limitation, attorneys’ fees either
paid to retained attorneys or amounts representing the fair value of legal
services rendered to itself).
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33.
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The
Escrow Agent shall not be responsible for any mistake of fact, error of
judgment or any act or failure to act on its part except in the case of
its own willful default or gross negligence. The Escrow Agent
shall be automatically released form all responsibility and liability
under this Escrow Agreement upon the Escrow Agent’s delivery or deposit of
the U.S. License Agreement in accordance with the provisions of this
Escrow Agreement.
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34.
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W2W
agrees that if it shall, pursuant to paragraph 27 above, deliver to the
Escrow agent a written demand for the U.S. License Agreement that,
promptly after delivery such demand to the Escrow Agent, it shall deliver
a copy of such demand to CIL, together with a statement of the facts and
circumstances underlying the demand, provided, however, that nothing in
this paragraph 34 shall have any effect whatsoever upon the Escrow Agent’s
rights, duties and obligations under the preceding provisions of this
Escrow Agreement.
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35.
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The
Escrow Agent may resign upon thirty (30) days’ written notice to the
parties to this Escrow Agreement. If a successor escrow agent
is not appointed within a thirty (30) day period following such
resignation by mutual written agreement of the parties, the Escrow Agent
my petition a court of competent jurisdiction to name a
successor. The costs and legal fees related to such action that
are incurred by the Escrow Agent shall be paid by W2W and CIL on an equal
basis.
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36.
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This
Escrow Agreement shall terminate and the Escrow Agent shall be discharged
of all responsibility hereunder at such time as the Escrow Agent shall
have completed its duties hereunder or as otherwise provided
herein.
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37.
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The
escrow Agent or any member of its firm shall be permitted to act as
counsel for CIL in any dispute or other matter between CIL and W2W
including but not limited to any dispute as to the release of the U.S.
License Agreement or otherwise whether or not the Escrow Agent is in
possession of the U.S. License
Agreement.
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8
IN WITNESS WHEREOF, the
parties hereto have caused this Escrow Agreement to be executed as of the date
first above written above in duplicate by their duly authorized
representatives.
| ATTEST: | XXXXXX INTERNATIONAL, LTD. | ||
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By:
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/s/ Xxxxxx X. Xxxxxx | |
| XXXXXX X. XXXXXX | |||
| PRESIDENT, Secretary | |||
| ATTEST: | WELL TO WIRE ENERGY, INC. | ||
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By:
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/s/ Xxxxx Xxxxxxxx | |
| XXXXX XXXXXXXX | |||
| PRESIDENT | |||
| ATTEST: | WELL TO WIRE ENERGY, INC. | ||
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By:
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/s/ Xxx Xxxxx | |
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XXX
XXXXX
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| SVP | |||
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Business
and Development
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| ATTEST: | ESCROW AGENT | ||
| BATHGATE, XXXXXXX AND WOLF, P.C. | |||
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By:
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/s/ Xxxxxxx X. Xxxx, Esq | |
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XXXXXXX
X. XXXX, ESQ.
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