EXHIBIT 10.22
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made as of the 27th day of
February, 2002, by and among AURA SYSTEMS, INC. ("Aura"), XXXXXXXX, DIAMANT &
XXXXXXXXX, A Professional Corporation, by Xxxxxxxx X. Xxxxxxx ("Diamant" or the
"Escrow Agent") and the purchasers identified on the signature pages attached
hereto or on counterparts hereof ("Purchasers") with reference to the following
facts:
WITNESSETH
A. WHEREAS, Purchasers have agreed to acquire the indebtedness owed by
Aura to GSS Array Technologies, Inc. ("GSS") and that group of entities formally
known as INFINITY INVESTORS LIMITED, a Nevis West Indies corporation ("IIL"),
GLACIER CAPITAL LIMITED, a Nevis West Indies corporation ("Glacier"), SUMMIT
CAPITAL LIMITED, a Nevis West Indies corporation ("Summit") and GLOBAL GROWTH
LIMITED, a Nevis West Indies corporation ("Global") and hereinafter referred to
as Xxxx or Infinity and for consideration to Aura, forgive a portion of the
indebtedness and convert the remaining Xxxx indebtedness to free trading,
non-legended Aura common stock in the amounts set forth on the signature pages
attached hereto (the "Shares"); and
B. WHEREAS, the transactions stated above require an escrow account or
trust account maintained by Escrow Agent in which Purchasers' funds shall be
deposited and from which they shall be paid on the following conditions:
1. That the purchase prices be exchanged for assignments by Xxxx and GSS of
the respective indebtednesses and related rights to Purchasers or their agent on
their behalf along with releases to Aura of possible GSS or Infinity claims
other than the indebtednesses (the "Assignments"); and
2. On receipt by Escrow Agent as agent for Purchasers ("Agent") of the
Assignments, to deliver the same and other consideration to Aura in exchange for
Aura's agreement to allow conversion of the remaining Xxxx indebtedness to
Shares and the delivery of instructions by Aura to its transfer agent to issue
the Shares to Purchasers.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Paragraphs A and B are incorporated herein by reference as though
fully set forth.
2. Purchasers and Aura hereby appoint the Escrow Agent as escrow agent
and Agent for Purchasers as hereinabove described and the Escrow Agent and Agent
hereby accepts such appointment for the purposes and on the terms and conditions
set forth in this Escrow Agreement.
3. The Escrow Agent will accept from Purchasers, by wire transfer, the
Escrow Funds representing the full amount required to consummate the
transactions stated in paragraphs A and B above (the "Purchase Price"), which
Purchase Price is the sum total of the amounts designated by each Purchaser's
name on the signature pages attached hereto.
4. Purchasers and Aura hereby instruct the Escrow Agent that on the
first Closing Date the Escrow Agent shall release payment to GSS ($1,600,000.00)
and to Xxxx ($5,500,000.00 plus interest) in exchange for the Assignments.
5. The First Closing Date shall be deemed to occur upon satisfaction or
waiver of the following conditions: The Escrow Agent shall have received the
Assignments or facsimile copies thereof showing the same to have been fully
executed along with written representations that originals have been dispatched,
at which time Escrow Agent shall have wire transferred payment for the
indebtednesses to Xxxx and GSS or their agents, respectively.
6. The Second Closing Date shall occur on receipt by Escrow Agent of a
communication from general counsel for Aura in writing by facsimile representing
to Escrow Agent that Aura has instructed its stock transfer agent to issue free
trading Shares free and clear of any restrictive legends, in the names of
Purchasers and in the amounts set forth on the signature pages attached hereto,
along with a copy of the written instructions so instructing the stock transfer
agent. The communication shall represent that the Shares are acquired at thirty
cents ($.30) per Share and that they shall be delivered by Aura to the
Purchasers immediately upon receipt thereof from the stock transfer agent or
delivered directly to the Purchasers by the stock transfer agent (the "Aura
Communication"). On receipt by the Escrow Agent of the Aura Communication, the
Escrow Agent shall wire transfer the remaining funds held in escrow (the sum of
at least $1,280,000.00) to Aura, which wire transfer shall evidence (with no
further writing required) the agreement of purchasers as follows:
a. That the GSS indebtedness, $3,200,000.00 is forgiven and that the
sum of $1,000,000.00 of the Xxxx indebtedness is forgiven.
b. That the funds wire transferred by Escrow Agent to Aura are
consideration to Aura for its agreement to allow the Purchasers to convert
the remaining Xxxx indebtedness to Aura shares.
c. That on receipt by Escrow Agent of the Aura Communication, the
remaining Xxxx indebtedness shall be fully satisfied with the understanding
that if the Shares are not delivered to Purchasers within 14 days of the
date of the Aura Communication, then the indebtednesses and each of them
shall be reinstated in full.
d. That Agent, on behalf of Purchasers, shall be authorized to
forthwith execute such documents as may reasonably be required to evidence
satisfaction of the indebtednesses and termination of Uniform Commercial
Code filings and all other of Purchasers rights.
7. WAIVER OF CONFLICTS OF INTEREST
Purchasers and Aura acknowledge that Escrow Agent and Agent
has and continues to perform legal services as counsel for Aura. Aura hereby
consents to the performance by Escrow Agent and Agent of the services and in the
capacities provided for herein and Aura waives any right that it may have to
claim that the performance of services by Escrow Agent and Agent herein
constitute a conflict of interest for Escrow Agent and Agent. Aura knowingly and
willingly agrees to and authorizes the performance by Escrow Agent and Agent of
the services and in the capacities provided for herein.
With full knowledge of the attorney-client relationship
existing between Xxxxxxxx X. Xxxxxxx and the Law Firm of Xxxxxxxx, Diamant &
Xxxxxxxxx (the "Law Firm"), on the one hand, and Aura, on the other, Purchasers
agree to the performance by the Law Firm as Escrow Agent and Agent of the
services and in the capacities provided for in this Escrow Agreement.
8. It is understood and agreed by the parties to this Agreement as
follows:
(a) The Escrow Agent and Agent is not and shall not be deemed to be a
trustee for any party for any purpose and is merely acting as a depository
and in a ministerial capacity hereunder with the limited duties herein
prescribed.
(b) The Escrow Agent and Agent does not have and shall not be deemed
to have any responsibility in respect of any instruction, certificate or
notice delivered to it other than faithfully to carry out the obligations
undertaken in this Agreement and to follow the directions in such
instruction or notice provided in accordance with the terms hereof.
(c) The Escrow Agent and Agent is not and shall not be deemed to be
liable for any action taken or omitted by it in good faith and may rely
upon, and act in accordance with, the advice of its counsel without
liability on its part for any action taken or omitted in accordance with
such advice. In any event, its liability hereunder shall be limited to
liability for gross negligence, willful misconduct or bad faith on its
part.
(d) The Escrow Agent and Agent may conclusively rely upon and act in
accordance with any certificate, instruction notice, letter, telegram,
cablegram, fax transmission or other written instrument believed by it to
be genuine and signed by the Purchasers and Aura.
(e) Purchasers and Aura agree to save harmless, indemnify and defend
the Escrow Agent and Agent for, from and against any loss, damage,
liability, judgment, cost and expense whatsoever, including attorney's
fees, suffered or incurred by it by reason of, or on account of, any
misrepresentation made to it or as to its status for activities as Escrow
Agent or Agent under this Agreement except for any loss, damage, liability,
judgment, cost or expense resulting from gross negligence, willful
misconduct or bad faith on the part of the Escrow Agent or Agent. (f) The
Escrow Agent and Agent shall not be required to defend any legal proceeding
which may be instituted against it in respect of the subject matter of this
Agreement. If any such legal proceeding is instituted against it, the
Escrow Agent and Agent agree promptly to give notice of such proceeding to
the Purchasers and Aura. The Escrow Agent and Agent shall not be required
to institute legal proceedings of any kind. Any legal proceedings arising
out of or relating to the subject matter of this Agreement shall be brought
in a court of competent jurisdiction in Los Angeles County, California,
U.S.A.
(g) The Escrow Agent and Agent shall not, by act, delay, omission or
otherwise, be deemed to have waived any right or remedy it may have either
under this Agreement or generally, unless such waiver be in writing, and no
waiver shall be valid unless it is in writing, signed by the Escrow Agent
and Agent, and only to the extent expressly therein set forth. A waiver by
the Escrow Agent or Agent under the terms of this Agreement shall not be
construed as a bar to, or waiver of, the same or any other such right or
remedy which it would otherwise have on any other occasion.
(h) The Escrow Agent and Agent may refrain from taking any action
other than keeping all property held by it in Escrow if it is uncertain
concerning its duties or rights under this Escrow Agreement or receives
claims or demands from any person or entity or receives a final judgment by
a court of competent jurisdiction if it deems that necessary or advisable.
9. Communication to and from the Escrow Agent shall be delivered by
messenger or forwarded by facsimile transmission, regular, or certified
mail, and shall be effective when received. The addresses for
communications shall be those set forth on the signature pages attached
hereto.
10. The Escrow Agent's and the Agent's obligations under this Escrow
Agreement shall terminate on the date it shall no longer hold any of the
funds or instruments delivered in escrow pursuant to the terms of this
Agreement.
11. This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of California.
12. This Escrow Agreement may be executed in several counterparts by
facsimile signature, each of which shall be original, and such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first written above.
THE ORBITER FUND, LTD.*(1,000,000 Shares)
By:______________________________________
Capacity:________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first written above.
THE XXXXXX FUND, LTD. * (1,000,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first written above.
XXXXXX X. XXXXXX* (1,000,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
LANCER PARTNERS, LP* (4,000,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
LANCER OFFSHORE, INC. * (8,000,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
XXXXX X. XXXXX* (1,600,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
STERLING TECHNOLOGY PARTNERS*
(1,328,000 Shares)
By:______________________________________
Capacity:_________________________________
Address:_________________________________
Fax No. _________________________________
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
XXX XX (833,333 Shares) *
By:______________________________________
Capacity:_________________________________
Address: 0000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
XXXXX XXXXXXXX (166,667 Shares) *
By:______________________________________
Capacity:_________________________________
Address: 000 Xxxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No. (000) 000-0000
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
AURA SYSTEMS, INC.
By:______________________________________
Xxxxx Xxxxxxxx, Chief Executive Officer
Address: 0000 Xxxxxx Xxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement effective as of the date and year first written above.
XXXXXXXX, DIAMANT & XXXXXXXXX
A Professional Corporation
By:______________________________________
Xxxxxxxx X. Xxxxxxx, Secretary
Address: 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
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* The sum total of $4,980,000.00 is to be paid into escrow on behalf of these
parties, who are to receive the shares listed by their names. * The sum total of
$4,980,000.00 is to be paid into escrow on behalf of these parties, who are to
receive the shares listed by their names.
* The sum total of $4,980,000.00 is to be paid into escrow on behalf of these
parties, who are to receive the shares listed by their names. * The sum total of
$4,980,000.00 is to be paid into escrow on behalf of these parties, who are to
receive the shares listed by their names.
* The sum total of $4,980,000.00 is to be paid into escrow on behalf of these
parties, who are to receive the shares listed by their names. * The sum total of
$4,980,000.00 is to be paid into escrow on behalf of these parties, who are to
receive the shares listed by their names.
* The sum total of $4,980,000.00 is to be paid into escrow on behalf of these
parties, who are to receive the shares listed by their names. * The sum total of
$4,980,000.00 is to be paid into escrow on behalf of these parties, who are to
receive the shares listed by their names.
* The sum total of $4,980,000.00 is to be paid into escrow on behalf of these
parties, who are to receive the shares listed by their names.
