Exhibit 10.8
FUNDS ESCROW AGREEMENT
This Agreement (this "Agreement") is dated as of the 25th day of June,
2004 among DATALOGIC INTERNATIONAL, INC., a Delaware corporation (the
"Company"), Laurus Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP
(the "Escrow Agent"):
W I T N E S S E T H:
WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company
and the Purchaser have entered into a Securities Purchase Agreement (the
"Purchase Agreement") for the sale by the Company to the Purchaser of a
secured convertible term note (the "Term Note"), (b) the Company has issued to
the Purchaser a common stock purchase warrant (the "Term Note Warrant") in
connection with the issuance of the Term Note, and (c) the Company and the
Purchaser have entered into a Registration Rights Agreement covering the
registration of the Company's common stock underlying the Term Note and the
Term Note Warrant (the "Term Note Registration Rights Agreement");
WHEREAS, the Company and the Purchaser wish the Purchaser to deliver to
the Escrow Agent copies of the Documents (as hereafter defined) and the
Escrowed Payment (as hereafter defined) to be held and released by Escrow
Agent in accordance with the terms and conditions of this Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;
NOW THEREFORE, the parties agree as follows:
ARTICLE I
INTERPRETATION
1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the meanings set forth below.
(a) "Agreement" means this Agreement, as amended, modified
and/or supplemented from time to time by written agreement among the parties
hereto.
(b) "Closing Payment" means the closing payment to be paid to
Laurus Capital Management, LLC, the fund manager, as set forth on Schedule A
hereto.
(c) "Disbursement Letter" means that certain letter delivered to
the Escrow Agent by each of the Purchaser and the Company setting forth wire
instructions and amounts to be funded at the Closing.
(d) "Documents" means copies of the Disbursement Letter, the
Purchase Agreement, the Term Note, the Term Note Warrant, and the Term Note
Registration Rights Agreement.
(e) "Escrowed Payment" means $3,000,000.
1.2. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the matters contained herein and
supersedes all prior agreements, understandings, negotiations and discussions
of the parties, whether oral or written. There are no warranties,
representations and other agreements made by the parties in connection with
the subject matter hereof except as specifically set forth in this Agreement.
1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions
hereof may be waived, in each case only by a written instrument signed by all
parties hereto, or, in the case of a waiver, by the party waiving compliance.
Except as expressly stated herein, no delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder preclude any other or future exercise of any other right,
power or privilege hereunder.
1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement.
1.6. Law Governing this Agreement; Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the laws of
the State of New York without regard to principles of conflicts of laws. With
respect to any suit, action or proceeding relating to this Agreement or to the
transactions contemplated hereby ("Proceedings"), each party hereto
irrevocably submits to the exclusive jurisdiction of the courts of the County
of New York, State of New York and the United States District court located in
the county of New York in the State of New York. Each party hereto hereby
irrevocably and unconditionally (a) waives trial by jury in any Proceeding
relating to this Agreement and for any related counterclaim and (b) waives any
objection which it may have at any time to the laying of venue of any
Proceeding brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have
jurisdiction over such party. As between the Company and the Purchaser, the
prevailing party shall be entitled to recover from the other party its
reasonable attorneys' fees and costs. In the event that any provision of this
Agreement is determined by a court of competent jurisdiction to be invalid or
unenforceable, then the remainder of this Agreement shall not be affected and
shall remain in full force and effect.
1.7. Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement and, therefore, stipulates
that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Agreement to
favor any party against the other.
ARTICLE II
APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT
2.1. Appointment. The Company and the Purchaser hereby irrevocably
designate and appoint the Escrow Agent as their escrow agent for the purposes
set forth herein, and the Escrow Agent by its execution and delivery of this
Agreement hereby accepts such appointment under the terms and conditions set
forth herein.
2.2. Copies of Documents to Escrow Agent. On or about the date hereof,
the Purchaser shall deliver to the Escrow Agent copies of the Documents
executed by the Company to the extent it is a party thereto.
2.3. Delivery of Escrowed Payment to Escrow Agent. On or about the
date hereof, the Purchaser shall deliver to the Escrow Agent the Escrowed
Payment.
2.4. Intention to Create Escrow Over the Escrowed Payment. The
Purchaser and the Company intend that the Escrowed Payment shall be held in
escrow by the Escrow Agent and released from escrow by the Escrow Agent only
in accordance with the terms and conditions of this Agreement.
ARTICLE III
RELEASE OF ESCROW
3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Escrowed Payment from escrow as follows:
(a) Promptly following receipt by the Escrow Agent of (i) copies
of the fully executed Documents and this Agreement, (ii) the Escrowed Payment
in immediately available funds, (iii) joint written instructions ("Joint
Instructions") executed by the Company and the Purchaser setting forth the
payment direction instructions with respect to the Escrowed Payment and (iv)
Escrow Agent's verbal instructions from Xxxxx Grin and/or Xxxxxx Grin (each of
whom is a director of the Purchaser) indicating that all closing conditions
relating to the Documents have been satisfied and directing that the Escrowed
Payment be disbursed by the Escrow Agent in accordance with the Joint
Instructions, then the Escrowed Payment shall be deemed released from escrow
and shall be promptly disbursed in accordance with the Joint Instructions.
The Joint Instructions shall include, without limitation, Escrow Agent's
authorization to retain from the Escrowed Payment Escrow Agent's fee for
acting as Escrow Agent hereunder and the Closing Payment for delivery to
Laurus Capital Management, LLC in accordance with the Joint Instructions.
(b) Upon receipt by the Escrow Agent of a final and
non-appealable judgment, order, decree or award of a court of competent
jurisdiction (a "Court Order") relating to the Escrowed Payment, the Escrow
Agent shall remit the Escrowed Payment in accordance with the Court Order.
Any Court Order shall be accompanied by an opinion of counsel for the party
presenting the Court Order to the Escrow Agent (which opinion shall be
satisfactory to the Escrow Agent) to the effect that the court issuing the
Court Order is a court of competent jurisdiction and that the Court Order is
final and non-appealable.
3.2. Acknowledgement of Company and Purchaser; Disputes. The Company
and the Purchaser acknowledge that the only terms and conditions upon which
the Escrowed Payment are to be released from escrow are as set forth in
Sections 3 and 4 of this Agreement. The Company and the Purchaser reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Escrowed Payment. Any dispute with respect to
the release of the Escrowed Payment shall be resolved pursuant to Section 4.2
or by written agreement between the Company and Purchaser.
ARTICLE IV
CONCERNING THE ESCROW AGENT
4.1. Duties and Responsibilities of the Escrow Agent. The Escrow
Agent's duties and responsibilities shall be subject to the following terms
and conditions:
(a) The Purchaser and the Company acknowledge and agree that the
Escrow Agent (i) shall not be required to inquire into whether the Purchaser,
the Company or any other party is entitled to receipt of any Document or all
or any portion of the Escrowed Payment; (ii) shall not be called upon to
construe or review any Document or any other document, instrument or agreement
entered into in connection therewith; (iii) shall be obligated only for the
performance of such duties as are specifically assumed by the Escrow Agent
pursuant to this Agreement; (iv) may rely on and shall be protected in acting
or refraining from acting upon any written notice, instruction, instrument,
statement, request or document furnished to it hereunder and believed by the
Escrow Agent in good faith to be genuine and to have been signed or presented
by the proper person or party, without being required to determine the
authenticity or correctness of any fact stated therein or the propriety or
validity or the service thereof; (v) may assume that any person purporting to
give notice or make any statement or execute any document in connection with
the provisions hereof has been duly authorized to do so; (vi) shall not be
responsible for the identity, authority or rights of any person, firm or
company executing or delivering or purporting to execute or deliver this
Agreement or any Document or any funds deposited hereunder or any endorsement
thereon or assignment thereof; (vii) shall not be under any duty to give the
property held by Escrow Agent hereunder any greater degree of care than Escrow
Agent gives its own similar property; and (viii) may consult counsel
satisfactory to Escrow Agent (including, without limitation, Loeb & Loeb, LLP
or such other counsel of Escrow Agent's choosing), the opinion of such counsel
to be full and complete authorization and protection in respect of any action
taken, suffered or omitted by Escrow Agent hereunder in good faith and in
accordance with the opinion of such counsel.
(b) The Purchaser and the Company acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and that the Escrow
Agent shall not be liable for any action taken by Escrow Agent in good faith
and believed by Escrow Agent to be authorized or within the rights or powers
conferred upon Escrow Agent by this Agreement. The Purchaser and the Company
hereby, jointly and severally, indemnify and hold harmless the Escrow Agent
and any of Escrow Agent's partners, employees, agents and representatives from
and against any and all actions taken or omitted to be taken by Escrow Agent
or any of them hereunder and any and all claims, losses, liabilities, costs,
damages and expenses suffered and/or incurred by the Escrow Agent arising in
any manner whatsoever out of the transactions contemplated by this Agreement
and/or any transaction related in any way hereto, including the fees of
outside counsel and other costs and expenses of defending itself against any
claims, losses, liabilities, costs, damages and expenses arising in any manner
whatsoever out the transactions contemplated by this Agreement and/or any
transaction related in any way hereto, except for such claims, losses,
liabilities, costs, damages and expenses incurred by reason of the Escrow
Agent's gross negligence or willful misconduct. The Escrow Agent shall owe a
duty only to the Purchaser and Company under this Agreement and to no other
person.
(c) The Purchaser and the Company shall jointly and severally
reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including counsel fees (which counsel may be Loeb & Loeb LLP or such other
counsel of the Escrow Agent's choosing) incurred in connection with the
performance of its duties and responsibilities hereunder, which shall not
(subject to Section 4.1(b)) exceed $1,500.
(d) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving five (5) business days prior written notice of resignation
to the Purchaser and the Company. Prior to the effective date of resignation
as specified in such notice, the Purchaser and Company will issue to the
Escrow Agent a Joint Instruction authorizing delivery of the Documents and the
Escrowed Payment to a substitute Escrow Agent selected by the Purchaser and
the Company. If no successor Escrow Agent is named by the Purchaser and the
Company, the Escrow Agent may apply to a court of competent jurisdiction in
the State of New York for appointment of a successor Escrow Agent, and deposit
the Documents and the Escrowed Payment with the clerk of any such court and/or
otherwise commence an interpleader or similar action for a determination of
where to deposit the same.
(e) The Escrow Agent does not have and will not have any
interest in the Documents and the Escrowed Payment, but is serving only as
escrow agent, having only possession thereof.
(f) The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized
hereby or within the rights or powers conferred upon it hereunder, nor for
action taken or omitted by it in good faith, and in accordance with advice of
counsel (which counsel may be Loeb & Loeb, LLP or such other counsel of the
Escrow Agent's choosing), and shall not be liable for any mistake of fact or
error of judgment or for any acts or omissions of any kind except to the
extent any such liability arose from its own willful misconduct or gross
negligence.
(g) This Agreement sets forth exclusively the duties of the
Escrow Agent with respect to any and all matters pertinent thereto and no
implied duties or obligations shall be read into this Agreement.
(h) The Escrow Agent shall be permitted to act as counsel for
the Purchaser or the Company, as the case may be, in any dispute as to the
disposition of the Documents and the Escrowed Payment, in any other dispute
between the Purchaser and the Company, whether or not the Escrow Agent is then
holding the Documents and/or the Escrowed Payment and continues to act as the
Escrow Agent hereunder.
(i) The provisions of this Section 4.1 shall survive the
resignation of the Escrow Agent or the termination of this Agreement.
4.2. Dispute Resolution; Judgments. Resolution of disputes arising
under this Agreement shall be subject to the following terms and conditions:
(a) If any dispute shall arise with respect to the delivery,
ownership, right of possession or disposition of the Documents and/or the
Escrowed Payment, or if the Escrow Agent shall in good faith be uncertain as
to its duties or rights hereunder, the Escrow Agent shall be authorized,
without liability to anyone, to (i) refrain from taking any action other than
to continue to hold the Documents and the Escrowed Payment pending receipt of
a Joint Instruction from the Purchaser and Company, (ii) commence an
interpleader or similar action, suit or proceeding for the resolution of any
such dispute; and/or (iii) deposit the Documents and the Escrowed Payment with
any court of competent jurisdiction in the State of New York, in which event
the Escrow Agent shall give written notice thereof to the Purchaser and the
Company and shall thereupon be relieved and discharged from all further
obligations pursuant to this Agreement. The Escrow Agent may, but shall be
under no duty to, institute or defend any legal proceedings which relate to
the Documents and the Escrowed Payment. The Escrow Agent shall have the right
to retain counsel if it becomes involved in any disagreement, dispute or
litigation on account of this Agreement or otherwise determines that it is
necessary to consult counsel which such counsel may be Loeb & Loeb LLP or such
other counsel of the Escrow Agent's choosing.
(b) The Escrow Agent is hereby expressly authorized to comply
with and obey any Court Order. In case the Escrow Agent obeys or complies
with a Court Order, the Escrow Agent shall not be liable to the Purchaser and
Company or to any other person, firm, company or entity by reason of such
compliance.
ARTICLE V
GENERAL MATTERS
5.1. Termination. This escrow shall terminate upon disbursement of the
Escrowed Payment in accordance with the terms of this Agreement or earlier
upon the agreement in writing of the Purchaser and Company or resignation of
the Escrow Agent in accordance with the terms hereof.
5.2. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given one (1) day after being sent by telecopy (with copy
delivered by overnight courier, regular or certified mail):
If to the Company, to: DataLogic International, Inc.
00000 Xxx Xxxxxx, Xxxxx 000,
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxx, Esq.
Weed & Co. LLP
0000 XxxXxxxxx Xx., Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
(b) If to the Purchaser, to: LAURUS MASTER FUND, LTD.
c/o Ironshore Corporate Services Ltd.
X.X. Xxx 0000 G.T., Queensgate House,
South Church Street
Grand Cayman, Cayman Islands
Fax: 000-000-0000
Attention: Xxxx Xxxxxx, Esq.
(c) If to the Escrow Agent, to: Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
or to such other address as any of them shall give to the others by notice
made pursuant to this Section 5.2.
5.3. Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith.
5.4. Assignment; Binding Agreement. Neither this Agreement nor any
right or obligation hereunder shall be assignable by any party without the
prior written consent of the other parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
legal representatives, successors and assigns.
5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights and privileges
of the parties hereto shall be enforceable to the fullest extent permitted by
law.
5.6. Counterparts/Execution. This Agreement may be executed in any
number of counterparts and by different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original,
but all such counterparts shall constitute but one and the same agreement.
This Agreement may be executed by facsimile transmission.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
COMPANY:
DATALOGIC INTERNATIONAL, INC.
/s/ Xxxxx Xxxxxx
By:_________________________________
Name: Xxxxx Xxxxxx
Title: CFO
PURCHASER:
LAURUS MASTER FUND, LTD.
/s/ Xxxxx Grin
By:_________________________________
Name: Xxxxx Grin
Title: President
ESCROW AGENT:
LOEB & LOEB LLP
By:_________________________________
Name:
Title:
SCHEDULE A TO FUNDS ESCROW AGREEMENT
______________________________________________________________________________
PURCHASER PRINCIPAL NOTE AMOUNT
______________________________________________________________________________
LAURUS MASTER FUND, LTD., Term Note in an aggregate
c/o Ironshore Corporate Services Ltd., principal amount of $3,000,000
X.X. Xxx 0000 G.T., Queensgate House,
South Church Street, Grand Cayman,
Cayman Islands
Fax: 000-000-0000
_____________________________________________________________________________
TOTAL $3,000,000
_____________________________________________________________________________
_____________________________________________________________________________
FUND MANAGER CLOSING PAYMENT
_____________________________________________________________________________
LAURUS CAPITAL MANAGEMENT, L.L.C. Closing payment payable in
000 Xxxxx Xxxxxx, 00xx Xxxxx connection with investment by
Xxx Xxxx, Xxx Xxxx 00000 Laurus Master Fund, Ltd. for
Fax: 000-000-0000 which Laurus Capital
Management, L.L.C. is the
Manager.
______________________________________________________________________________
TOTAL $117,000
______________________________________________________________________________
WARRANTS
______________________________________________________________________________
WARRANT RECIPIENT WARRANTS IN CONNECTION WITH
OFFERING
______________________________________________________________________________
LAURUS MASTER FUND, LTD. Term Note Warrant exercisable
A Cayman Island corporation into 705,000 shares of common
c/o Ironshore Corporate Services Ltd. stock of the Company issuable
X.X. Xxx 0000 G.T. in connection with the Term
Xxxxxxxxxx Xxxxx, Xxxxx Xxxxxx Xxxxxx Note.
Grand Cayman, Cayman Islands
Fax: 000-000-0000
______________________________________________________________________________
TOTAL Warrants exercisable into
705,000 shares of common stock
of the Company
_____________________________________________________________________________
