EXHIBIT 10.19
ESCROW AGREEMENT
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AGREEMENT dated this 4th day of April, 1997, by and among Prosoft I-
Net Solutions, Inc., a Nevada corporation ("Prosoft"), the Trustees of General
Electric Pension Trust ("Subscriber") and State Street Bank and Trust Company, a
Massachusetts corporation (the "Escrow Agent").
W I T N E S S T H:
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WHEREAS, Prosoft and Subscriber are parties to a Subscription
Agreement dated April 4, 1997 (the "Subscription Agreement") which provides for
the escrow of $5,000,009.00 with the Escrow Agent (such amount and interest
thereon being sometimes referred to as the "Escrowed Assets") and the deposit of
408,164 shares of common stock of Prosoft (the "Shares"); and
WHEREAS, Prosoft and the Subscriber are desirous of entering into this
Agreement and the Escrow Agent is willing to act as escrow agent on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained and subject to the conditions hereinafter set forth, the parties
hereto agree as follows:
1. Concurrently with the execution hereof, the Subscriber is paying
the sum of $5,000,009.00 referred to above to, and Prosoft is depositing the
Shares with, the Escrow Agent, which shall hold the same, and any interest
earned on the Escrowed Assets, in escrow on the terms and conditions hereinafter
set forth.
2. The Escrow Agent shall make payment of the Escrowed Assets to the
Subscriber as follows: If the Escrow Agent shall have received a written notice
from the Subscriber to the Escrow Agent given after December 31, 1997, which
notice shall (i) certify that the Registration Statement referred to in the
Subscription Agreement did not become effective on or before December 31, 1997
and has not, as of the date of the Subscriber's notice, become effective and
that the Subscriber has given written notice to Prosoft of the rescission of the
transaction referred to in the Subscription Agreement and (ii) direct the Escrow
Agent to pay the Escrowed Assets to the Subscriber, the Escrow Agent shall
transmit a copy of such notice to Prosoft. The Escrow Agent shall act in
accordance with such notice from the Subscriber to the Escrow Agent unless
within ten days from transmittal by the Escrow Agent to Prosoft of the copy of
such notice, Prosoft shall notify the Escrow Agent not to comply with the
payment instruction contained in such notice from the Subscriber to the Escrow
Agent. Simultaneously with any payment of Escrowed Assets to the Subscriber
pursuant hereto, the Escrow Agent shall deliver the Shares to Prosoft.
3. The Escrow Agent shall make payment of the Escrowed Assets to
Prosoft as follows: If the Escrow Agent shall have received a written notice
from Prosoft which
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notice shall certify that the Registration Statement referred to in the
Subscription Agreement has become effective and shall direct the Escrow Agent to
pay the Escrowed Assets to Prosoft, the Escrow Agent shall transmit a copy of
such notice to the Subscriber. The Escrow Agent shall act in accordance with
such notice from Prosoft to the Escrow Agent unless within ten days from
transmittal by the Escrow Agent to the Subscriber of the copy of such notice the
Subscriber shall notify the Escrow Agent not to comply with the payment
instruction contained in such notice from Prosoft to the Escrow Agent.
Simultaneously with any payment of the Escrowed Assets to Prosoft pursuant
hereto, the Escrow Agent shall deliver the Shares to the Subscriber.
4. After Prosoft shall have notified the Escrow Agent not to comply
with the Subscriber's payment instruction (as referred to in Paragraph 2 above)
and after the Subscriber shall have notified the Escrow Agent not to comply with
Prosoft's payment instruction (as referred to in Paragraph 3 above), the Escrow
Agent shall act with respect to the Escrowed Assets and the Shares solely in
accordance with any of the following: (a) a new Instruction signed jointly by
Prosoft and the Subscriber; (b) a certified copy of an arbitrator's award issued
under the rules of the American Arbitration Association as to which the Escrow
Agent shall have received an opinion of counsel, which may include the Escrow
Agent and which is addressed and delivered also to each of Prosoft and the
Subscriber,
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satisfactory to the Escrow Agent in its sole and absolute discretion, that such
award is final beyond appeal or (c) a certified copy of a judgment of a court of
competent jurisdiction as to which the Escrow Agent shall have received an
opinion of counsel, which may include the Escrow Agent and which is addressed
and delivered also to Prosoft and the Subscriber, satisfactory to the Escrow
Agent in its sole and absolute discretion, that such judgment is final beyond
appeal. Anything in the foregoing to the contrary notwithstanding, at the sole
discretion of the Escrow Agent, the Escrow Agent may at any time deposit the
Escrowed Assets and the Shares with a court selected by the Escrow Agent and in
such event all liability and responsibility of the Escrow Agent as to acts or
omissions subsequent to such deposit shall terminate upon such deposit having
been made.
5. Upon any distribution of the Escrowed Assets to the Subscriber
pursuant to paragraph 2 above, or to Prosoft pursuant to paragraph 3 above, the
Escrow Agent shall deliver the Shares to Prosoft, in the case of a delivery of
the Escrowed Assets pursuant to paragraph 2 above, or to the Subscriber, in the
case of a delivery of the Escrowed Assets pursuant to paragraph 3 above. In no
event shall the Escrow Agent deliver the Escrowed Assets without
contemporaneously delivering the Shares to the party not receiving the Escrowed
Assets.
6. The Escrow Agent shall deliver the Escrowed Assets and the Shares
in accordance with any instruction or
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instructions which shall be signed jointly by both Prosoft and the Subscriber.
7. Prosoft shall be liable for any and all fees and expenses of the
Escrow Agent incurred in connection with this Agreement, including counsel fees,
if any, payable in connection with the delivery of the Escrowed Assets and the
Shares hereunder. Prosoft shall pay any such amounts due to the Escrow Agent
promptly upon demand therefor.
8. Prosoft and the Subscriber acknowledge and agree that the Escrow
Agent may consult counsel satisfactory to it, including house counsel, 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.
9. Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to be taken
by it or any of its directors, officers or employees hereunder except in the
case of gross negligence or willful misconduct. Prosoft and Subscriber, jointly
and severally, agree to indemnify the Escrow Agent and to hold it harmless
without limitation from and against any loss, liability or expense of any nature
incurred by the Escrow Agent arising out of or in connection with this Agreement
or with the administration of its duties hereunder, including but not limited to
legal fees and other costs and expenses of defending or preparing to defend
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itself against any claim of liability in the premises, unless such loss,
liability or expense shall be caused by the Escrow Agent's willful misconduct or
gross negligence. In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damages. The provisions of this paragraph 9
shall survive termination of this Agreement.
10. The Escrow Agent shall not be bound in any way by any agreement
or contract (other than this Agreement) between Prosoft and the Subscriber,
whether or not it has knowledge thereof, and the Escrow Agent's only duties and
responsibilities shall be to hold the Escrowed Assets and the Shares as escrow
agent and to dispose of said assets and shares in accordance with the terms of
this Agreement. The Escrow Agent may act upon any instruments or other writings
believed by the Escrow Agent in good faith to be genuine and to be signed or
presented by the proper persons and the Escrow Agent shall not be liable in
connection with the performance of its duties under this Agreement except for
its own willful malfeasance or bad faith.
11. The Escrow Agent may at any time resign as Escrow Agent hereunder
by giving thirty (30) days' prior written notice of resignation to Prosoft and
the Subscriber. Prior to the effective date of the resignation as specified in
such notice, the Subscriber will issue to the Escrow Agent a written instruction
authorizing redelivery of the Escrowed Assets and the Shares to a bank or trust
company
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that it selects, subject to the reasonable consent of Prosoft. Such bank or
trust company shall have a principal office in New York, New York and shall have
capital, surplus and undivided profits in excess of $50,000,000. If, however,
the Subscriber shall fail to name such a successor escrow agent within twenty
(20) days after the notice of resignation from the Escrow Agent, Prosoft shall
be entitled to name such successor escrow agent. If no successor escrow agent
is named by the Subscriber or Prosoft, the Escrow Agent may apply to a court of
competent jurisdiction for appointment of a successor escrow agent.
12. Neither Prosoft nor the Subscriber nor the Escrow Agent shall be
responsible for delays or failures in performance resulting from acts beyond its
control. Such acts shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations superimposed
after the fact, fire, communication line failures, computer viruses, power
failures, earthquakes or other disasters.
13. Any notice, report, demand or instruction required or permitted
by the provisions of this Agreement shall be deemed to have been sufficiently
transmitted, delivered, given or served for all purposes if delivered by hand or
if sent by prepaid registered mail or certified mail, or by responsible
overnight delivery service or telecopy to the parties at their addresses set
forth below,
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or at such other address as a party may hereinafter give by written notice as
herein provided:
If to Prosoft:
Prosoft I-Net Solutions, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: General Counsel
If to the Subscriber:
Trustees of General Electric Pension Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
If to the Escrow Agent:
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Master Trust Services
The date of delivery or transmittal shall be the date of delivery, if
by hand or telecopy, or if mailed shall be deemed to be the date of mailing, or
if sent by overnight delivery service shall be deemed to be the next business
day except that no notice, report, demand or Instruction shall be deemed to have
been delivered or transmitted to the
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Escrow Agent until actual receipt thereof by the Escrow Agent.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York and shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, successors and
assigns. This Agreement may not be changed or amended in any manner whatsoever
except in writing signed by each of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be made and executed the day and year first above written.
PROSOFT I-NET SOLUTIONS, INC.
By:__________________________
Name:
Title:
TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By:__________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
as Escrow Agent
By:__________________________
Name:
Title:
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