EXHIBIT 10.3
ESCROW AGREEMENT
This Escrow Agreement (hereinafter the "Escrow Agreement") is made and
entered into this 19th day of July, 2001, by and among ▇▇▇▇▇▇ Industries, Inc.,
a Nevada corporation ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ Partnership, LTD., a Texas limited
partnership that is a control person of ▇▇▇▇▇▇ ("▇▇▇▇▇▇" or the "Shareholder"),
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C., as the Escrow Agent ("Escrow Agent").
WHEREAS, ▇▇▇▇▇▇ is a control person of ▇▇▇▇▇▇ and desires to facilitate
▇▇▇▇▇▇' acquisition of the capital stock of ▇▇▇▇▇ Communications Corporation,
a Texas corporation, ("▇▇▇▇▇") because such a stock acquisition will benefit
▇▇▇▇▇▇ directly and ▇▇▇▇▇▇ indirectly.
WHEREAS, ▇▇▇▇▇▇ has entered into that certain Stock Exchange Agreement
dated as of July 19, 2001, by and among ▇▇▇▇▇▇, and the stockholders of ▇▇▇▇▇,
and ▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ who is a control person of ▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇"), to
which this Escrow Agreement is Exhibit "D" (the "Stock Exchange Agreement").
WHEREAS, the Stock Exchange Agreement requires that ▇▇▇▇▇▇ deposits into
escrow 2,000,000 shares of ▇▇▇▇▇▇ common stock (the "Escrow Stock" or "Escrow
Shares") and that this Escrow Agreement be executed, delivered and performed
prior to the execution of the Stock Exchange Agreement.
WHEREAS, in connection with the execution of the Stock Exchange Agreement
it is necessary to establish an escrow for the Escrow Stock.
WHEREAS, the Parties desire that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C. serve as the
Escrow Agent in connection with this Escrow Agreement.
The defined terms herein have the same meaning as the defined terms in the
Stock Exchange Agreement of even date herewith by and among the Parties.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and obligations herein contained, the Parties agree hereto as follows:
1. Escrow of Escrow Stock. At the time of executing this Escrow
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Agreement, the Shareholder shall deliver to the Escrow Agent the following:
a. Certificates representing the Escrow Stock which is 2,000,000
shares of common stock of ▇▇▇▇▇▇;
b. Stock powers for the Escrow Shares, fully executed by the
Shareholder covering the certificates delivered in escrow (the "Stock Powers").
The Stock Powers, along with the Escrow Stock, shall hereinafter be collectively
referred to as the "Escrowed Documents."
c. The Shareholder, by the delivery of the 2,000,000 Escrow Shares to
the Escrow Agent, does hereby acknowledge and represent that the Escrow
Shares are owned, beneficially and of record, by the Shareholder, free and
clear of any liens, claims, equities, charges, options, rights of first
refusal or encumbrances and, further, acknowledges and represents that it
has the unrestricted right and power to transfer, convey and deliver full
ownership of the Escrow Shares without the consent, agreement or joinder of
any other person and without any designation, declaration or filing with
any governmental authority.
2. Conditions for Release from Escrow. The Escrow Agent is hereby
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instructed to receive and hold the Escrow Shares in escrow until January 10,
2002, unless extended thereafter for 30 days pursuant to Section 2(c) below.
(a) On January 10, 2002, the Chief Financial Officer of ▇▇▇▇▇▇ shall send
written notice (the "Escrow Notice") to the Escrow Agent and the
Shareholder, informing them of the amount of funds, if any, that has
been received by ▇▇▇▇▇▇ from debt financings, equity financings, or
net proceeds from litigation received by Berens in connection with
litigation that was initiated by Berens prior to the Closing Date,
excluding (i) any litigation initiated by ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., and
(ii) any funds received from ▇▇▇▇▇▇ Speaks.
(b) If the Escrow Notice sets forth that ▇▇▇▇▇▇ has received greater
than $150,000 by January 10, 2002 in connection with the sources of
funds listed in Section 2(a), then the Escrow Agent shall release,
within five (5) business day of the Escrow notice, the Escrow
Documents to the Shareholder.
(c) If ▇▇▇▇▇▇ receives less than $150,000 by January 10, 2002
pursuant to sources listed in Section 2(a), the Escrow Agent shall
release within five (5) business days of the Escrow Notice, the number
of Escrow Shares equal to 2,000,000 times a fraction, the numerator of
which is the amount received pursuant to sources provided in Section
2(a) and the denominator of which is $150,000. In addition, the
Shareholder shall have thirty (30) days from January 10, 2002 to make
up the difference between the amount received pursuant to Section 2(a)
and $150,000 ("Differential Amount"). Shareholder shall have the right
to pay the Differential Amount or any portion thereof in cash at the
price of the greater of five cents ($.05) per share of Common Stock or
the average of the current closing price of the shares of common stock
of ▇▇▇▇▇▇ for the 10 days prior to January 10, 2002. Notwithstanding
the foregoing, the Differential Amount or any portion thereof may be
paid at terms no less favorable than the terms under which ▇▇▇▇▇▇
raised capital, if any, pursuant to Section 2(a).
(d) Upon receipt of the Differential Amount or any portion thereof,
the CFO shall instruct the Escrow Agent to release the number of
Escrow Shares equal to 2,000,000 times a fraction, the numerator of
which is the amount of Differential Amount paid by the Shareholder and
the denominator of which is $150,000.
3. Escrow Period and Delivery. The escrow period shall commence on the
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date of the execution of this Escrow Agreement, which shall be the same date as
the date of the Closing of the Stock Exchange Agreement, and shall continue
until the final disposition of the Escrowed Documents in accordance with the
terms of this Escrow Agreement (the "Termination"). Once the Escrow Agent has
delivered the Escrowed Documents in accordance with the terms of this Escrow
Agreement, its duties pursuant to this Escrow Agreement shall be completed and
it shall have no further responsibility whatsoever hereunder.
4. The Shareholder hereby agrees that as long as the Escrow Stock is
held in escrow pursuant to this Escrow Agreement, it will not take any action to
cancel, sell, pledge, assign, dispose of or otherwise transfer the Escrow Stock,
except as otherwise provided by this Escrow Agreement. If ▇▇▇▇▇▇ declares a
cash dividend or stock dividend or if ▇▇▇▇▇▇ splits or subdivides its shares of
common stock or issues any shares of its common stock in a reclassification,
then any cash dividend or stock dividend to which the Shareholder would be
entitled shall be issued directly to the Escrow Agent to hold in escrow in
accordance with the terms and conditions of this Escrow Agreement.
5. The Escrow Agent is hereby authorized to exchange the share
certificates delivered to it for any number and any denomination of share
certificates that the Escrow Agent, in its sole discretion, requires to enable
it to release the Escrow Stock from time to time, as required pursuant to this
Escrow Agreement.
6. The Escrow Agent shall have no duties or obligations other than
those specifically set forth herein or required by law. The acceptance by the
Escrow Agent of its duties under this Escrow Agreement is subject to the terms
and conditions hereof, which shall govern and control with respect to its
rights, duties, liabilities and immunities.
7. ▇▇▇▇▇▇ and the Shareholder understand and agree that the Escrow
Agent is not a principal, participant, or beneficiary of the underlying
transactions which necessitate this Escrow Agreement. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically set forth
herein and may rely and shall be protected in acting or refraining from acting
on any instrument reasonably believed by it to be genuine and to have been
signed or presented by the proper Party or Parties, their officers,
representatives or agents. As long as the Escrow Agent has acted in good faith
or on the advice of counsel or has not been guilty of willful misconduct, the
Escrow Agent shall have no liability under, or duty to inquire beyond the terms
and provisions of this Escrow Agreement, and it is agreed that its duties are
purely ministerial in nature. The Escrow Agent shall in no event be liable for
any exemplary or consequential damages, the Parties understanding that this
limitation is provided for in view of the fact that Escrow Agent will receive no
compensation (other than reimbursement for expenses), for its services
hereunder.
8. The Escrow Agent shall not be obligated to take any legal actions
hereunder against any third party who is not a party to this Escrow Agreement
which might, in the Escrow Agent's judgment, involve any expense or liability,
unless the Escrow Agent shall have been furnished with reasonable indemnity.
9. The Escrow Agent is not bound in any way by any other contract or
agreement between or among the Parties hereto whether or not the Escrow Agent
has knowledge thereof of its terms and conditions and the Escrow Agent's only
duty, liability and responsibility shall be to hold and deal with the Escrowed
Documents as herein directed.
10. The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this Escrow Agreement
unless the same shall be in writing and signed by all of the other Parties
hereto and, if its duties as Escrow Agent hereunder are affected thereby, unless
it shall have given prior written consent thereto.
11. The Parties hereto each jointly and severally agree to indemnify
the Escrow Agent against and hold the Escrow Agent harmless from anything which
the Escrow Agent may do or refrain from doing in connection with its performance
or non-performance as Escrow Agent under this Escrow Agreement and any and all
losses, costs, damages, expenses, claims and reasonable attorneys' fees suffered
or incurred by the Escrow Agent as a result of, in connection with or arising
from or out of the acts of omissions of the Escrow Agent in performance of or
pursuant to this Escrow Agreement, except such acts or omissions as may result
from the Escrow Agent's willful misconduct.
12. In the event of any disagreement between ▇▇▇▇▇▇ and the Shareholder
or any or either of them concerning this Escrow Agreement or between them, or
demands being made in connection with the Escrow Stock, or in the event that the
Escrow Agent is in doubt as to what action the Escrow Agent should take
hereunder, the Escrow Agent may, at its option, refuse to comply with any claims
or demands on it, or refuse to take any other action hereunder, as long as such
disagreement continues or such doubt exists, and in any such event, the Escrow
Agent shall not be or become liable in any way or to any person for its failure
or refusal to act, and the Escrow Agent shall be entitled to continue so to
refrain from acting until:
a. the rights of ▇▇▇▇▇▇ and the Shareholder shall have been fully and
finally adjudicated by a court of competent jurisdiction; or
b. all differences shall have been adjusted and all doubt resolved by
agreement between ▇▇▇▇▇▇ and the Shareholder, and the Escrow Agent shall
have been notified thereof in writing signed by all Parties.
13. Should the Escrow Agent become involved in litigation in any manner
whatsoever on account of this Escrow Agreement or the Escrow Stock, the Parties
hereto (other than Escrow Agent), hereby bind and obligate themselves, their
heirs, personal representatives, successors, assigns to pay Escrow Agent, in
addition to any charge made hereunder for acting as Escrow Agent, reasonable
attorneys' fees incurred by Escrow Agent, and any other disbursements, expenses,
losses, costs and damages in connection with or resulting from such actions,
unless such litigation is the direct result of the Escrow Agent's own willful
misconduct.
14. The terms of these instructions are irrevocable by the undersigned
unless such revocation is consented to in writing by each of ▇▇▇▇▇▇ and the
Shareholder.
15. The terms herein shall be binding upon the Escrow Agent and its
successors, and upon ▇▇▇▇▇▇ and the Shareholder.
16. The Escrow Agent may resign as escrow agent in respect of the
Escrow Stock by giving written notice to ▇▇▇▇▇▇ and the Shareholder. The
resignation of the Escrow Agent shall be effective, and the Escrow Agent shall
cease to be bound by this Escrow Agreement, thirty (30) days following the date
such notice of resignation is given.
▇▇▇▇▇▇ and the Shareholder shall, before the effective date of the
resignation of the Escrow Agent, appoint another escrow holder who shall be
acceptable to them and that such an appointment, when made, shall be binding on
them. Upon appointment by the new escrow holder, the Escrow Agent shall deliver
the Escrowed Documents to the new escrow holder whereupon the Escrow Agent shall
not be liable for the completion of any further acts pursuant to this Escrow
Agreement. In the event that ▇▇▇▇▇▇ and the Shareholder do not appoint a new
escrow holder prior to the expiration of the thirty (30) day period, the Escrow
Agent shall be entitled to make application to a court of competent jurisdiction
in the State of Texas to be relieved of the obligations upon it and/or to
interplead the Escrowed Documents into such court and for directions with
respect to the delivery of the Escrowed Documents. The Escrow Agent shall be
entitled to act in accordance with the direction of the court without any
further liability whatsoever to any other Party.
17. The Escrow Agent will not receive any compensation for the
performance of its services in connection with this Escrow Agreement except for
the reimbursement of any and all out-of-pocket expenses incurred by the Escrow
Agent in connection with the performance of its services hereunder.
18. All notices and other communications provided for herein shall be
in writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid, or overnight air courier
guaranteeing next day delivery:
(a) If to ▇▇▇▇▇▇:
▇▇▇▇▇▇ Industries, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to ▇▇▇▇▇▇ Partnership, Ltd.
▇▇▇▇▇▇ Partnership, Ltd.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
With copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to Escrow Agent to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
c/o Axelrod, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; three days after being
deposited in the mail, postage prepaid, sent certified mail, return receipt
requested, if mailed; and the next day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.
19. The Shareholders' voting rights for the Escrowed Shares shall not
be affected while the Escrowed Shares are held in escrow pursuant to this Escrow
Agreement.
20. This Escrow Agreement shall be construed according to the laws of
the State of Texas and the Parties submit themselves to the exclusive
jurisdiction of the courts of the State of Texas in the event of any dispute.
21. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same.
22. The Escrow Agent and any stockholder, director, officer, partner or
employee of the Escrow Agent may have a pecuniary interest in any transaction in
which the Parties may be interested, or contract with or lend money to a party
or otherwise act as fully and freely with a party as though it were not Escrow
Agent under this Agreement. In other words, this Escrow Agreement shall not
prevent the Escrow Agent from performing any other activity which it would
normally perform. Additionally, nothing herein shall preclude the Escrow Agent
from acting in any other capacity for either of the Parties. SPECIFICALLY, THE
PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE ESCROW AGENT AND EMPLOYEES OF
THE ESCROW AGENT SERVE AS LEGAL COUNSEL TO ▇▇▇▇▇, TO THE STOCKHOLDERS OF ▇▇▇▇▇
IN CONNECTION WITH THE STOCK EXCHANGE AGREEMENT AND MAY ACT IN THE FUTURE AS
LEGAL COUNSEL TO ▇▇▇▇▇▇. THE PARTIES EXPRESSLY WAIVE ANY CONFLICT OF INTEREST
WHICH MAY ARISE FROM SUCH LEGAL REPRESENTATION AND SERVING AS ESCROW AGENT
HEREUNDER. FURTHER, THE SHAREHOLDER EXPRESSLY AGREES THAT SERVING AS ESCROW
AGENT WILL IN NO WAY PRECLUDE ESCROW AGENT OR ANY EMPLOYEE OR PARTNER OF ESCROW
AGENT FROM CONTINUING TO SERVE AS LEGAL COUNSEL TO THE STOCKHOLDERS OF ▇▇▇▇▇,
▇▇▇▇▇ OR IN THE FUTURE TO SERVE AS LEGAL COUNSEL TO ▇▇▇▇▇▇.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Parties hereto have executed this Escrow Agreement
effective as of the day and year first above written.
▇▇▇▇▇▇ INDUSTRIES, INC.
By:
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/s/ Marc ▇▇▇▇ ▇▇▇▇▇▇, President
SHAREHOLDER:
▇▇▇▇▇▇ PARTNERSHIP, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Simkova, L.L.C., General Partner of
▇▇▇▇▇▇ Partnership, Ltd.
By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President of Simkova, L.L.C.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C., AS THE ESCROW AGENT
By:
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
