ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made and entered into this
_____ day of October, 1996 (the "Effective Date"), by and between Ocurest
Laboratories, Inc., a Florida corporation (the "Company") and Tri-State Bank,
(the "Bank").
WHEREAS, the Company proposes to offer and sell up to 2,300,000 Class A
Common Stock Purchase Warrants (the "Warrant(s)") in connection with a public
offering to be underwritten by RAF Financial Corporation and other underwriters
(the "Underwriters"). The persons purchasing the Warrants are hereinafter
referred to as the "Warrantholders"; and
WHEREAS, the Company desires to appoint the Bank to receive and hold $.50
per Warrant from the sale of up to 2,300,000 Warrants as such monies are
tendered by the Underwriters to the Company (the "Proceeds"); and
WHEREAS, the Company and American Securities Transfer & Trust, Inc. (the
"Warrant Agent") have entered into that certain Warrant Agent Agreement, dated
October __, 1996 (the "Warrant Agreement") relating to the Warrants; and
WHEREAS, the Bank desires to act in the capacity of escrow agent in
connection with the sale of the Warrants and agrees to hold the Proceeds in
escrow upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth in this Agreement, the Company and the Bank agree as follows:
1. DEPOSITS IN ESCROW. The Company will deposit the Proceeds with the Bank
to be held in escrow on the terms and conditions set forth below (the "Escrow").
Within sixty (60) days after the deposit of any Proceeds, the Company will
inform the Bank in writing of the name, address, and amount of Proceeds received
on behalf of each respective Warrantholder.
2. INVESTMENT OF PROCEEDS. To the extent not disbursed in connection with
Section 3 of this Agreement, the Bank will hold the Proceeds in the Escrow and
shall at all times prudently invest the Proceeds in an interest bearing money
market fund or account providing for the highest available daily rate. Subject
to the foregoing, the Bank and the Company agree that pending such investment,
any Proceeds (plus accrued interest thereon) in the Escrow from time to time
shall earn interest from the date of deposit to the date of withdrawal at the
rate of one percent (1%) below the average Federal Funds Rate charged to the
Bank, which shall be calculated on the last business day of each month during
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the term of the Escrow and on the last date of withdrawal of Proceeds from the
Escrow.
3. DISBURSEMENT OF PROCEEDS. The Bank shall only disburse Proceeds upon
joint written instructions of both the Company and the Warrant Agent as follows:
(a) From time to time the Company and the Warrant Agent will provide
the Bank with written notice (the "Notice") of (i) the exercise of all or a
portion of the Warrants; (ii) the expiration of the Warrants; or (iii)
redemption of the Warrants. Upon receipt of such Notice, the Bank will promptly
disburse the Proceeds plus interest relating to the Warrants covered by such
Notice in accordance with the written instructions of the Company and the
Warrant Agent. The amount to be disbursed per Warrant shall be the product of
(a) the fraction the numerator of which shall be the aggregate Proceeds
(including accrued interest) then in the Escrow and the denominator of which
shall be the sum of (i) the total number of the Warrants then outstanding and
(ii) to the extent that the Warrants covered by the Notice are not deemed to be
outstanding, the number of Warrants covered by the Notice and (b) the number of
the Warrants covered by the Notice.
(b) In no event will the Bank be required to take any action under
this Section 3 until it has received proper written instructions from the
Company and the Warrant Agent in a form which is acceptable to the Bank in its
sole discretion.
(c) In no event will the Bank be required to notify or obtain
consent, approval, authorization or an order of any court or governmental body
before taking any action provided for in this Agreement.
(d) In no event will the Bank be required to release any funds which
constitute the proceeds of a check deposited into the Escrow until at least five
business days have elapsed from the day of deposit
4. ACCOUNTS AND RECORDS. The Bank will keep accurate books and records of
all transactions taken pursuant to this Agreement until the Agreement is
terminated. The Company will have reasonable access to such books and records.
The Bank will deliver a complete accounting to the Company upon each
disbursement of Proceeds pursuant to Section 3 hereof.
5. DUTIES AND ADVERSE CLAIMS. The duties and obligations of the Bank will
be determined solely by the provisions of this Agreement. The Bank's duties and
obligations are purely ministerial in nature and nothing in this Agreement will
be construed to give rise to any fiduciary duties or capacities of the Bank in
relation to the Company, the Warrantholders or any other person or entity which
may obtain an interest in this Agreement. In the event of any
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disagreement concerning any aspect of this Agreement or the presentation of any
claim or demand to the Bank, the Bank may take any one or more of the following
steps:
(a) Refuse to comply with any claim or demand until the Bank
receives written notification from the parties to the effect that the dispute
has been resolved, such notification to be in a form which is acceptable to the
Bank in its sole discretion;
(b) Commence an interpleader action in and for the District Court of
the City and County of Denver, Colorado and tender into the registry of the
Court all Proceeds which are the subject of any dispute, the tender of such
Proceeds constituting a complete release of the Bank's liability with respect to
any such Proceeds;
(c) Commence any other action in the District Court of the City and
County of Denver, Colorado which may be necessary to obtain a judicial
declaration or resolution of the rights of the Bank and the parties involved in
the dispute; or
(d) Await an order of any other court having jurisdiction over the
parties and the subject matter of the dispute directing the Bank to proceed in
some manner.
In no event will the Bank become liable to the Company, any Warrantholder, or
any other person or entity which may obtain an interest in this Agreement, for
(i) taking any action authorized by this Section 5, including but not limited
to, following the instructions contained in any written resolution of a dispute
or in an order of any court having appropriate jurisdiction, or (ii) refusing to
follow or comply with any claim or demand made upon the Bank by the Company, any
Warrantholder, or any other person or entity which may obtain an interest in
this Agreement otherwise than as expressly set forth in this Agreement.
6. LIMITED LIABILITY. The Bank will not become liable to any person or
entity for any act or omission whatsoever by reason of any error of judgment, or
for any act done or omitted in good faith, or for any mistake of fact or law, or
for anything it may do or refrain from doing in connection with this Agreement,
unless such act or omission of the Bank is found to constitute willful
misconduct, gross negligence or reckless disregard of the duties of the Bank. In
no event will the Bank be held liable for any special, consequential, or
punitive damages as a result of any such gross negligence, willful misconduct or
reckless disregard. The Company represents to the Bank that it has and will
continue to solicit the advice of its legal counsel regarding compliance with
all state and federal securities laws in connection with the offer and sale of
the Warrants. The Company affirms that is has in the past and will in the future
follow the advice of its legal counsel regarding compliance with all relevant
securities laws regarding such offer
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and sales. The Bank has no responsibility or obligation to ensure compliance
with any securities laws and such responsibility remains solely with the
Company. The Bank has no responsibility concerning and makes no representations
as to the validity, value, or genuineness of the offering or the Warrants.
7. RELIANCE BY BANK ON DOCUMENTS. The Bank will be entitled to rely upon
and will be immune from liability for relying upon instructions or directions
furnished to the Bank in writing by the Company and the Warrant Agent pursuant
to the provisions of this Agreement. The Bank will be entitled to treat as
genuine, and as the document purports to be, any letter, paper, or other
document furnished to it and believed by the Bank to be genuine and signed and
presented by the proper party or parties.
8. INDEMNIFICATION AND LEGAL COUNSEL FOR BANK. The Company agrees to
indemnify, defend and hold the Bank harmless from and against all losses,
damages, costs, charges, payments, liabilities, and expenses, including the cost
of litigation, investigation and reasonable attorney's fees incurred by the Bank
arising directly or indirectly out of its role as escrow agent pursuant to this
Agreement, except as caused by the willful misconduct, gross negligence or
reckless disregard of the of the Bank. The Bank does not assume any
responsibility for the failure of any party or parties to make payments or
comply with the terms of this Agreement or the offering of the Warrants. The
Bank is not responsible for the collection of any of the Proceeds. The Bank may
consult with legal counsel of its choice and will have full and complete
immunity from liability for any action taken or not taken by the Bank in good
faith and in accordance with the opinion of its legal counsel. The provisions of
this section 8 will survive either the closing of the sale of the Warrants or
the termination of the offer of the sale of the Warrants.
9. COMPENSATION. The Company will pay the Bank reasonable compensation for
this Agreement, which compensation will become earned commencing on the date of
execution of this Agreement. Such compensation will include an initial fee of
$1,000 upon the execution of this Agreement, together with such other amounts as
may be agreed upon by the Bank and the Company. The Company will promptly
reimburse the Bank, upon request of the Bank, expenses, disbursements, and
advances, including reasonable attorney's fees, incurred or made by the Bank in
connection with the preparation of this Agreement in an aggregate amount not in
excess of $*________*.
10. LIENS. The Bank will have first lien on all Proceeds and other items
of value held by the Bank to assure payment of its compensation hereunder and
reimbursement for the payment of any costs, liabilities, expenses, fees,
disbursements, and advances, including attorney's fees reasonably incurred by it
hereunder. The Bank will not be required to disburse any of the Proceeds or
deliver or return any other thing of value until and unless the
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Bank has received such payment and reimbursement in full.
11. RESIGNATION. The Bank has the right to resign as escrow agent upon
giving sixty (60) days written notice to the Company and the Warrant Agent at
the addresses set forth below and to the Warrantholders whose names and
addresses are known to the Bank.
12. NOTICE. Any notice required or authorized by this Agreement shall be
in writing and shall be deemed to have been given when received by the parties
at the addresses below:
To the Bank: Tri-State Bank
c/o: Xxxxxx X. Xxxxxx
Executive Vice President
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
To the Company: Ocurest Laboratories, Inc.
0000 XXX Xxxxxxxxx
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
To the Warrant Agent: American Securities Transfer &
Trust, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
13. EFFECT OF AGREEMENT. This Agreement will inure to the benefit of, and
be binding upon, the respective successors and assigns of the Bank and the
Company.
14. HEADINGS. The heading of the Sections are for reference purposes only
and do not in any way affect the meaning or interpretation of this Agreement.
15. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Colorado.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, and which together
constitute a single document. This Agreement may be executed and returned by
facsimile with the original to follow by overnight courier.
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IN WITNESS WHEREOF, this Escrow Agreement has been made and executed as of
the date first above written.
OCUREST LABORATORIES, INC.
BY:________________________________________________
By:________________________________________________
TRI-STATE BANK
___________________________________________________
Xxxxxx X. Xxxxxx, Executive Vice President
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