AMENDED AND RESTATED ESCROW AGREEMENT
AMENDED AND RESTATED ESCROW AGREEMENT dated August 22, 2003 by and
among Valesc Holdings Inc. (the "Company"), Xxxxxxx Xxxxxx ("Seller") and Xxxxx
& Associates, P.C. (the "Escrow Agent").
WHEREAS, the Company and Seller entered into an Escrow Agreement dated
June 25, 2003 pursuant to an Amended and Restated Stock Option Agreement dated
the date thereof, which Option Agreement has now been amended and restated (the
"Option Agreement") to provide for the purchase from time to time of up to
2,176,079 shares of common stock, $.0001 par value per share, of the Company
(the "Common Stock") owned by Xx. Xxxxxx;
WHEREAS, the parties desire to amend and restate the Escrow Agreement
in accordance with the terms of the amended and restated Option Agreement;
WHEREAS, according to the terms of the Option Agreement, Company and
Seller have agreed to have the Escrow Agent hold in escrow from time to time the
option exercise notice, proceeds representing the Purchase Proceeds for shares
(the "Purchase Proceeds") and certificates representing purchased shares (the
"Certificates"); and
WHEREAS, an executed copy of the Option Agreement has been or will be
delivered to Escrow Agent and Escrow Agent is willing to act as escrow agent
hereunder and thereunder.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and undertakings hereinafter set forth, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Escrow Agent will acknowledge receipt of Purchase Proceeds from the
Company payable to the order of the Escrow Agent on behalf of the Seller.
2. Escrow Agent shall deposit the Purchase Proceeds in Escrow Agent's
non-interest bearing XXXX bank account and shall hold the Purchase Proceeds
until such time as its funds clear, whereupon it shall (a) forward the Purchase
Proceeds to the Seller (less any amounts payable hereunder) and (b) deliver the
appropriate Certificates previously delivered by the Seller to the Escrow Agent
to the Company or other purchaser of those securities. In the event the
Purchaser is someone other than the Company, Purchaser or the Company shall be
required to furnish proof of a valid assignment of the Option, or a portion
thereof, and an investment letter as a condition of delivery of Certificate(s)
by the Escrow Agent.
3. If a transaction is not consummated by virtue of either party
asserting, by written notice to Escrow Agent (which notice shall include an
affidavit confirming that a copy of such notice is being simultaneously
delivered to the counter-party), that the counter-party has breached or is in
default of its material obligations under the Option Agreement or that the
counter-party has willfully refused to close the purchase and sale contemplated
by the Option Agreement without the right to do so pursuant to the Option
Agreement, then, unless the counter-party disputes such contention by written
notice to Escrow Agent received by Escrow Agent within 15 days of Escrow Agent's
receipt of the aforementioned notice (a "Notice of Dispute"), Escrow Agent shall
return any Purchase Proceeds to the Company or its rightful designee (less any
amounts payable hereunder) and the Certificates to the Seller as promptly as is
reasonably practicable.
4. In the event Escrow Agent receives a Notice of Dispute pursuant to
Section 3, Escrow Agent shall retain the Purchase Proceeds and Certificate(s)
until the first to occur of (i) receipt by Escrow Agent of a written instruction
signed by Seller and the Company or its rightful designee directing the
disposition of the Purchase Proceeds and Certificates, or (ii) receipt by Escrow
Agent of a final order or judgment of a court of competent jurisdiction from
which no appeal can be taken directing the disposition of the Purchase Proceeds
and Certificates, in either of which events Escrow Agent shall abide by such
instruction or final order or judgment, as the case may be.
5. Escrow Agent shall have the right, in its sole discretion, to
require and receive such written certifications or instructions from the Company
and/or Seller as it deems reasonably necessary or appropriate before taking any
action.
6. It is expressly understood and agreed that if any dispute arises
hereunder, or if Escrow Agent is uncertain as to its obligations hereunder,
Escrow Agent is authorized, in its sole discretion, to refrain from taking any
action other than to continue to hold in escrow the Purchase Proceeds and
Certificate(s) until otherwise directed by a final judgment or a court of
competent jurisdiction from which no appeal can be taken or by a written
instruction signed by Company and Seller.
7. Escrow Agent shall be entitled to consult with counsel of its own
choosing (including any member or associate of such firm), 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 such counsel and shall be fully protected in so
acting or refraining from acting.
8. Escrow Agent, in its sole discretion, may institute legal
proceedings of any kind, including but not limited to, a legal proceeding in any
court of competent jurisdiction, to determine the obligations of Company and
Seller hereunder and to deposit the Purchase Proceeds and Certificate(s) in such
court; and upon such happening, the duties of Escrow Agent shall be fully
terminated and Escrow Agent shall be fully discharged from all such duties.
9. In taking any action hereunder, Escrow Agent shall be protected and
may rely upon any notice, paper or document or signature believed by it to be
genuine or upon any evidence deemed by it to be sufficient. In no event shall
Escrow Agent be liable for any act performed or omitted to be performed by it
hereunder in the absence of gross negligence or willful misconduct, and in no
event shall it be liable or responsible for any failure of any banking
institution in which the Purchase Proceeds is deposited to pay such amount at
Escrow Agent's direction. Escrow Agent shall not be under a duty to give the
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property held hereunder a greater degree of care than it gives its own similar
property.
10. Escrow Agent shall be reimbursed by the party entitled to the
Purchase Proceeds for all expenses incurred by it in connection with the
performance of its duties hereunder, including but not limited to its
out-of-pocket expenses and reasonable attorneys' fees and disbursements and the
fair value of the legal services utilizing the hourly billing rates normally
charged to the Company rendered by it, hereunder. Any such fees, expenses and
disbursements may be deducted by the Escrow Agent from the Purchase Proceeds
upon disposition thereof. This provision shall not be deemed a waiver of any
claim that Xx. Xxxxxx has against the counterparty for reimbursement of such
fees and expenses.
11. The Company and/or its designee and the Seller shall jointly and
severally indemnify and hold Escrow Agent harmless from and against any damage,
cost, liability or expense (including but not limited to, legal fees either paid
to retained attorneys or representing the fair value of legal services rendered
by Escrow Agent, which shall be deemed the hourly rates normally charged to the
Company at the time the claim is made) which Escrow Agent may incur by reason of
its acting hereunder, but without prejudice to any right which the Company or
Seller may have to recover from each other for any such damage, cost, liability
or expense.
12. Seller and any designee of the Company recognize that Xxxxx &
Associates, P.C. has acted and continues to act as counsel to the Company and
has represented and may continue to act as counsel to the Company with respect
to the Option Agreement and the transactions contemplated thereunder, and Seller
expressly consents to the same. In order to induce Xxxxx & Associates, P.C. to
agree to serve as Escrow Agent, Seller and any designee of the Company each
agrees not to assert, as a ground for disqualifying Xxxxx & Associates, P.C.
from continuing to represent the Company, any claim that Xxxxx & Associates,
P.C. acted in such capacity.
13. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered (including by courier), or when mailed, certified, registered mail,
postage prepaid, or when sent by Federal Express to the Company and the Seller
at the address set forth in the Option Agreement, to Escrow Agent at Xxxxx &
Associates, P.C., 00 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attn:
Xxxxxxx X. Xxxxx, Esq., or to such other address as a party may provide by
written notice to the other parties to this Agreement. All notices shall be
deemed effective upon receipt.
14. This Agreement shall be construed and enforced in accordance with
the laws of the State of New York, without giving effect to the choice of law
provisions thereof and the parties hereby submit themselves to the jurisdiction
of the state court for New York, New York County and the federal courts for the
Southern District of New York, the parties agreeing that such courts are courts
of appropriate jurisdiction.
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15. This Agreement sets forth exclusively the duties of Escrow Agent
with respect to any and all matters pertinent hereto and no implied duties or
obligations shall be read into this Agreement against Escrow Agent. This
Agreement sets forth the entire understanding and agreement of the parties and
may only be amended in writing signed by all of the parties hereto.
16. This Agreement may be signed in one or more counterparts each of
which when so executed and delivered shall be deemed an original, and all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.
VALESC HOLDINGS INC.
By:____________________________
Name:
Title:
--------------------------------
XXXXXXX XXXXXX
XXXXX & ASSOCIATES, P.C.
By:______________________________
Name:
Title:
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