ESCROW AGREEMENT
This
ESCROW AGREEMENT is made and entered in on August 10, 2007 (this
“Escrow
Agreement”)
by
SOLOMON TECHNOLOGIES, INC. (the “Company”),
the
PURCHASERS (as defined below) and XXXXX
& XXXXXXX LLP,
as
escrow agent (“Escrow
Agent”).
WHEREAS,
reference is made to that certain Securities Purchase Agreement, dated as of
even date herewith (the “Purchase
Agreement”),
by and
among the Company and the purchasers identified therein and signatory thereto;
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement; and
WHEREAS,
the parties desire to establish an escrow account and the Escrow Agent is
willing to establish and maintain such Escrow Account, and to disburse the
funds
deposited therein, as set forth in the Purchase Agreement, subject to the terms
and conditions of this Escrow Agreement; and
NOW,
THEREFORE, in consideration of the covenants and agreements herein set forth
and
other good and lawful consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intend to be legally bound, agree
as
follows:
1. ESCROW.
(a) Escrow
Agent has established a special, segregated, non-interest bearing bank account
at City National Bank, in which each Purchaser participating in the Closing
(each, a “Purchaser”)
shall
deposit, by check or wire transfer of immediately available funds in accordance
with the instructions provided below,
the
aggregate Subscription Amount for the Debentures and Warrants to be purchased
by
such Purchaser in the Closing. Amounts so deposited into such bank account
shall
be hereinafter referred to as the “Escrowed
Funds”.
|
ACCOUNT
NAME:
|
Xxxxx
& Xxxxxxx LLP Escrow Account
|
|
THE
BANK:
|
City
National Bank
|
|
000
Xxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
ACCOUNT
NUMBER:
|
665057925
|
|
ABA
NUMBER:
|
0260
1395 8
|
|
MANDATORY
REFERENCE:
|
20911/0007-000/Solomon/ref.
Norton
|
(b) Upon
request, Escrow Agent shall advise the Company and any Purchaser (or his, her
or
its representative or legal counsel) of the aggregate amount of Escrowed Funds.
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As
soon
as reasonably practicable after a minimum of $500,000 of Escrowed Funds have
been received into escrow (the “Escrow
Condition”),
Escrow
Agent shall advise the Company and each Purchaser (or his, her or its
representative) of the same.
2. RELEASE
OF ESCROWED FUNDS.
(a) Following
satisfaction of the Escrow Condition and the other conditions precedent to
the
Closing, the Company shall deliver to Escrow Agent written instructions
regarding the disbursement of the Escrowed Funds, which instructions shall
include the amounts to be disbursed along with delivery instructions. As soon
as
practicable following receipt of said instructions, Escrow Agent shall disburse
the Escrowed Funds in accordance therewith.
(b) In
the
event that the Escrow Condition shall not be satisfied or, for any reason,
the
Closing shall not occur on or before August 24, 2007, unless otherwise
instructed in writing by the Company, Escrow Agent shall return to each
Purchaser such portion of the Escrowed Funds as such Purchaser had deposited,
without interest.
3. COVENANTS
AND AGREEMENTS.
(a) Escrow
Agent agrees to hold and disburse the Escrowed Funds subject to the terms and
conditions contained in this Escrow Agreement and the Purchase Agreement. The
provisions of this Escrow Agreement shall control in the event of any conflict
between the provisions hereof and the provisions of the Purchase
Agreement.
(b) Unless
otherwise provided for in this Escrow Agreement or any addendum thereto, Escrow
Agent shall disburse the Escrowed Funds without interest or other accumulation
in value.
(c) Escrow
Agent shall not be deemed to have knowledge of any matter or thing unless and
until Escrow Agent has actually received written notice of such matter or thing
and Escrow Agent shall not be charged with any constructive notice
whatsoever.
(d) The
fees
and expenses of the Escrow Agent or otherwise relating to the Escrow Account
shall be borne by the Company.
(e) The
Company and the Purchasers acknowledge and agree that nothing in this Escrow
Agreement shall prohibit Escrow Agent from (i) serving in a similar capacity
on
behalf of others, or (ii) acting in the capacity of attorneys for the Company.
(f) The
Escrow Agent shall be entitled to rely upon the accuracy, act in reliance upon
the contents, and assume the genuineness of any notice, instruction,
certificate, signature, instrument or other document that is given to the Escrow
Agent pursuant to this Agreement without the necessity of the Escrow Agent
verifying the truth or accuracy thereof. The Escrow Agent shall not be obligated
to make any inquiry as to the authority, capacity, existence or identity of
any
person purporting to give any such notice or instructions or to execute any
such
certificate, instrument or other document.
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(g) In
the
event Escrow Agent shall be uncertain as to its duties or rights hereunder
or
shall receive instructions, claims or demands from the Company and/or Purchasers
or from third persons with respect to the Escrowed Funds, which, in its sole
opinion, are in conflict with any provisions of this Escrow Agreement and/or
the
Purchase Agreement, or which are in conflict with any other instructions, claims
or demands from another party, the Escrow Agent shall be entitled to refrain
from taking any action until it shall be directed otherwise in writing by the
Company or by a final order or judgment of a court of competent
jurisdiction.
4. LIABILITY
OF ESCROW AGENT. It
is
agreed that the duties of Escrow Agent are purely ministerial in nature and
shall be expressly limited to safekeeping of the Escrowed Funds and for the
disposition of same in accordance with the Purchase Agreement and this Escrow
Agreement. The Escrow Agent shall not be liable for any action taken or omitted
hereunder, or for the misconduct of any employee, agent or attorney appointed
by
it, except in the case of willful misconduct or gross negligence. The Escrow
Agent shall be entitled to consult with counsel of its own choosing and shall
not be liable for any action taken, suffered or omitted by it in accordance
with
the advice of such counsel. The
Escrow Agent shall not be responsible for the performance by the Company of
its
obligations under this Escrow Agreement. The
Company hereby agrees to indemnify Escrow Agent and hold it harmless from and
against any and all claims, liabilities, damages, costs, penalties, losses,
actions, suits or proceedings at law or in equity, or any other expenses, fees,
or charges of any character or nature, which it may incur or with which it
may
be threatened directly or indirectly arising from or in any way connected with
this Escrow Agreement or which may result from Escrow Agent’s following of
instructions from the Company, and in connection therewith, to indemnify Escrow
Agent against any and all expenses, including attorneys’ fees and the costs of
defending any action, suit, or proceeding or resisting any claim, whether or
not
litigation is instituted.
5. DISPUTES.
In
the
event Escrow Agent is joined as a party to a lawsuit by virtue of the fact
that
it is holding the Escrowed Funds, Escrow Agent shall, at its option, either
(i)
tender the Escrowed Funds to the registry of the appropriate court, or (ii)
disburse the Escrowed Funds in accordance with the court’s ultimate disposition
of the case, and the Company agrees to indemnify and hold Escrow Agent harmless
from and against any damages or losses in connection therewith including, but
not limited to, reasonable attorneys’ fees and court costs at all trial and
appellate levels.
6. TERM
OF AGREEMENT. This
Escrow Agreement shall remain in effect unless and until it is canceled in
any
of the following manners:
(a) Upon
written notice given by the Company of cancellation of designation of Escrow
Agent to act and serve in said capacity; or
(b) Escrow
Agent may resign as Escrow Agent at any time upon giving notice to the parties
of its desire to so resign; provided, however, that resignation of Escrow Agent
shall take effect no earlier than ten (10) days after the giving of notice
of
resignation; or
(c) Upon
compliance with all escrow provisions as set forth in this Escrow Agreement
and
in the Purchase Agreement, if any.
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Upon
any
cancellation described above, subject to the provisions of Sections 3(f), Escrow
Agent shall promptly pay over to the successor escrow agent any Escrowed Funds
then held in escrow or, in the event the parties fail to agree to a successor
escrow agent within the period described hereinabove, Escrow Agent shall have
the right to deposit all of the Escrowed Funds held hereunder into the registry
of an appropriate court and request judicial determination of the rights between
the parties, by interpleader or other appropriate action and Company agrees
to
indemnify and hold Escrow Agent harmless from and against any damages or losses
in connection therewith including, but not limited, to reasonable attorneys’
fees and court costs at all trial and appellate levels.
7. NOTICES.
Unless
otherwise expressly provided in this Escrow Agreement, all notices and other
communications provided for in this Escrow Agreement shall be in writing and
shall be deemed delivered (a) when received, if delivered by hand delivery,
(b)
three Business Days after being sent, certified or registered mail, return
receipt requested, first class postage prepaid, or (c) one Business Day after
being sent by nationally recognized overnight courier, addressed (i) if to
the
Company, to it at 0000 X&X Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx, XX 00000,
marked for the attention of the Chief Executive Officer, (ii) if to one or
more
Purchasers, at their respective addresses as set forth on Schedule 1 to the
Purchase Agreement, (iii) if to Escrow Agent, to Xxxxx & Xxxxxxx LLP, 0000
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxx, Esq. All written notices
delivered by means other than as set forth above shall be deemed effective
upon
receipt. Any party may change the address to which notices, requests, consents
or other communications hereunder are to be delivered by giving the other
parties notice in the manner set forth in this Section 7.
8. CHOICE
OF LAW AND VENUE. This
Escrow Agreement shall be governed by and construed in accordance with the
laws
of the State of New York, without giving effect to conflict of laws principles.
In the event any action, suit or proceeding is instituted as a result of any
matter or thing affecting this Escrow Agreement, the parties hereto hereby
designate New York County, New York as the proper jurisdiction and the venue
in
which same is to be instituted.
9. MISCELLANEOUS.
This
Escrow Agreement shall be binding upon the Company, the Purchasers and Escrow
Agent and their respective successors and permitted assigns. This Escrow
Agreement may be altered or amended only in writing signed by the Company,
Escrow Agent and the Purchasers. If any provision of this Escrow Agreement
or
the application thereof to any person or circumstance shall be determined to
be
invalid or unenforceable, the remaining provisions of this Escrow Agreement
or
the application of such provision to persons or circumstances other than those
to which it is held invalid or unenforceable shall not be affected thereby
and
shall be valid and enforceable to the fullest extent permitted by law. This
Escrow Agreement may be executed in several counterparts or by separate
instruments, and all of such counterparts and instruments shall constitute
one
agreement, binding on all of the parties hereto. Facsimile signatures shall
be
deemed originals for all purposes hereunder.
{Remainder
of this page left intentionally blank. Signature page(s) to
follow.)
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COMPANY
AND ESCROW AGENT COUNTERPART SIGNATURE PAGE TO
ESCROW
AGREEMENT
IN
WITNESS WHEREOF, the undersigned has executed this Escrow Agreement as of the
date first written above.
SOLOMON
TECHNOLOGIES, INC.
By:
Name:
Title:
XXXXX
& XXXXXXX LLP
By:
Name:
Title:
PURCHASER
COUNTERPART SIGNATURE PAGE TO
ESCROW
AGREEMENT
IN
WITNESS WHEREOF, the undersigned has executed this Escrow Agreement as of the
date first written above.
FOR
INDIVIDUAL PURCHASER:
[Print
Name of Purchaser]
[Signature]
FOR
ENTITY PURCHASER:
[Print
Name of Purchaser]
By:
[Signature]
[Print
Name and Title of Signatory]
