EXHIBIT 4.6
FORM OF PROMOTIONAL SHARES ESCROW AGREEMENT
CLASS A ISSUER
This Promotional Shares Escrow Agreement ("Agreement"), which was entered
into on the ____ day of January, 1999, by and between U. S. Laboratories Inc.
("Issuer"), whose principal place of business is located in San Diego,
California, and Xxxxxxxxx Xxxxxx, Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxxx,
Xxxxxx X. Xxxxxx, Xxxx Xxxxx and Xxxxxx X. Xxxxxxx (the "Depositors"), and
________________ (the "Escrow Agent"), whose principal place of business is
located in ____________________________________, and which is domiciled in
___________________________; (all of whom are herein collectively referred to
as "Signatories"), witnesses that:
A. The Issuer has filed an application with the securities
administrators of the states of Alabama, Arkansas, Arizona,
California, Colorado, Connecticut, Florida, Georgia, Iowa,
Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, New
Jersey, Nevada, Oregon, Pennsylvania, South Carolina, Texas, Utah,
Virginia, Washington, Wisconsin and Wyoming ("Administrators") to
register certain of its Equity Securities for sale to public
investors who are residents of such states;
B. The Depositors are the owners of the shares of common stock or
similar securities and/or possess convertible securities, warrants,
options or rights which may be converted into, or exercised to
purchase shares of common stock or similar securities ("Equity
Securities") listed opposite their names on Exhibit A;
C. As a condition to registering the Issuer's Equity Securities, the
Depositors, who are security holders of the Issuer and who, for the
purposes of this Agreement, are deemed to be Promoters of the
Issuer, have agreed to deposit the Equity Securities listed
opposite their names on Exhibit A ("Promotional Shares"), which is
attached hereto and made a part hereof, with the Escrow Agent; and
D. The Signatories have agreed to be bound by the terms of this
Agreement.
THEREFORE, the Signatories agree as follows:
1. DEPOSIT OF PROMOTIONAL SHARES. The Depositors' Promotional Shares
have been deposited into an Escrow Account ("Escrow") with the
Escrow Agent, and the Escrow Agent hereby acknowledges the receipt
thereof.
2. EXERCISE OR CONVERSION OF PROMOTIONAL SHARES. If the Promotional
Shares have exercise rights or conversion rights, the Escrow Agent
shall, upon receipt of the Issuer's written request, provide the
documents that evidence and/or which are necessary to execute the
exercise rights or
conversion rights. The exercised or converted Promotional Shares
shall remain in escrow subject to the terms of this Agreement.
3. TERM. The Term of this Agreement and the escrow shall begin on the
date that the public securities offering relating thereto ("public
offering") is declared effective by the Administrators. The
Promotional Shares shall be held by the Escrow Agent until they are
released in accordance with paragraph 4, below.
4. RELEASE OF PROMOTIONAL SHARES.
a. Subject to the documentation requirements in paragraph 5, below,
the Escrow Agent shall release the Promotional Shares in the
following manner.
(1) Beginning one year from the completion date of the public
offering, two and one-half percent (21/2%) of
Promotional Shares held in escrow may be released each
quarter pro rata among the Depositors. All remaining
Promotional Shares shall be released from escrow on the
anniversary of the second year from the completion date
of the public offering.
(2) One hundred percent (100%) of the Promotional Shares
shall be released from escrow if:
(a) The public offering has been terminated, and no
securities were sold pursuant thereto; or
(b) The public offering has been terminated, and all of
the gross proceeds that were derived therefrom have
been returned to the public investors.
b. In the event of a dissolution, liquidation, merger,
consolidation, reorganization, sale or exchange of the
Issuer's assets or securities (including by way of tender
offer), or any transaction or proceeding with a person who is
not a Promoter, which results in the distribution of the
Issuer's assets or securities ("Distribution"), while this
Agreement remains in effect, the Depositors agree that:
(1) All holders of the Issuer's Equity Securities will
initially share on a pro rata, per share basis in the
Distribution, in proportion to the amount of cash or
other consideration that they paid per share for their
Equity Securities (provided that the Administrators have
accepted the value of the other consideration), until the
shareholders who purchase the Issuer's Equity Securities
pursuant to the public offering ("Public Shareholders")
have received, or have had irrevocably set aside for
them, an amount that is equal to one hundred percent
(100%) of the public
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offering's price per share times the number of shares of
Equity Securities that they purchased pursuant to the
public offering and which they still hold at the time of
the Distribution, adjusted for stock splits, stock
dividends, recapitalizations and the like; and
(2) All holders of the Issuer's Equity Securities shall
thereafter participate on an equal, per share basis times
the number of shares of Equity Securities they hold at
the time of the Distribution, adjusted for stock splits,
stock dividends, recapitalizations and the like.
c. The Distribution may proceed on lesser terms and conditions
than the terms and conditions stated in paragraph 4.b, above,
if a majority of the Equity Securities that are not held by
Depositors, officers, directors, or Promoters of the Issuer,
or their associates or affiliates vote, or consent by consent
procedure, to approve the lesser terms and conditions.
d. In the event of a dissolution, liquidation, merger,
consolidation, reorganization, sale or exchange of the
Issuer's assets or securities (including by way of tender
offer), or any other transaction or proceeding with a person
who is a Promoter, which results in a Distribution while this
Agreement remains in effect, the Depositors' Promotional
Shares shall remain in escrow subject to the terms of this
Agreement.
e. In the event securities in the escrow become "Covered
Securities," as defined by the National Securities Markets
Improvement Act of 1996, all securities held in escrow shall
be released.
5. DOCUMENTATION REGARDING THE RELEASE OF PROMOTIONAL SHARES.
a. A written request for release of the Promotional Shares
("request for release"), based upon paragraph 4, above, shall
be forwarded to the Escrow Agent.
(1) A request for release based upon paragraph 4.a(2)(a) or
(b), above, shall be accompanied by a certification from
the underwriter (if applicable) and the Issuer's Chief
Executive Officer or Chief Financial Officer which states
that the public offering has been terminated and that the
conditions of paragraph 4.a(2)(a) or (b), above, have
been met.
6. RESTRICTION ON THE TRANSFER, SALE OR DISPOSAL OF PROMOTIONAL
SHARES. While this Agreement is in effect, no Promotional Shares,
any interest therein or any right or title thereto, may be sold,
transferred, hypothecated or otherwise disposed of ("transfer" or
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"transferred"), except as noted below, and the Escrow Agent shall
not recognize any transfer that violates the terms of this
Agreement. The Promotional Shares may not be transferred until the
Escrow Agent has received a written statement, signed by the
proposed transferee ("transferee"), which states that the
transferee has full knowledge of the terms of this Agreement, the
transferee accepts the Promotional Shares subject to the terms of
this Agreement, and the transferee realizes that the Promotional
Shares shall remain subject to the terms of the Agreement until
they are released pursuant to paragraph 4, above.
a. Promotional Shares may be transferred by will, the laws of
descent and distribution, the operation of law, or by order of
any court of competent jurisdiction and proper venue.
b. Promotional Shares of a deceased Depositor may be hypothecated
to pay the expenses of the deceased Depositor's estate. The
hypothecated promotional Shares shall remain subject to the
terms of this Agreement. Promotional Shares may not be
pledged to secure any other debt.
7. VOTING POWER. With the exception of paragraphs 4.b and c above,
the Promotional Shares shall have the same voting rights as
similar, non-escrowed Equity Securities. If the Promotional Shares
are registered in the Escrow Agent's name, the Escrow Agent shall
vote those Promotional Shares in accordance with the Depositors'
written instructions.
8. DIVIDENDS, STOCK SPLITS AND RECAPITALIZATIONS. All certificates
representing stock dividends and shares resulting from stock splits
of escrowed shares, recapitalizations and the like, that are
granted to or received by Depositors while their Promotional Shares
are held in Escrow shall be deposited with and held by the Escrow
Agent subject to the terms of this Agreement. Any cash dividends
that are granted to or received by the Depositors while their
Promotional Shares are held in escrow, shall be promptly deposited
with and held by the Escrow Agent subject to the terms of this
Agreement unless such cash dividends are approved by a majority of
the independent directors of the Issuer. The Escrow Agent shall
invest cash dividends as directed by the Depositors.
9. ADDITIONAL SHARES. With respect to Equity Securities received by
the Depositors as the result of the conversion of the Depositors'
convertible securities and/or the exercise of Depositors' options,
warrants or rights listed on Exhibit A, while their Promotional
Shares are held in escrow, shall be promptly deposited with the
Escrow Agent as Promotional Shares subject to the terms of this
Agreement. These Promotional Shares shall be distributed to the
Depositors when their Promotional Shares are released from escrow
pursuant to paragraph 4, above.
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10. RELIANCE BY ESCROW AGENT. The Escrow Agent shall be protected if it
acts in good faith upon any statement, certificate, notice,
request, consent, order or other document which it believes to be
genuine, conforms with the provisions of the Agreement and is
signed by the proper party. The Escrow Agent's sole responsibility
shall be to act in accordance with the terms expressly set forth in
this Agreement. The Escrow Agent shall be under no obligation to
institute or defend any action, suit or proceeding in connection
with this Agreement unless it receives reasonable indemnification
and advancement of fees and costs. The Escrow Agent may consult
counsel with respect to any question arising under this Agreement.
The Escrow Agent shall not be liable for any action taken or
omitted, in good faith, upon the advice of counsel. In performing
its duties hereunder, the Escrow Agent shall not be liable to
anyone for any damage, loss, expense or liability other than for
that which arises from the Escrow Agent's failure to abide by the
terms of this Agreement.
11. ESCROW AGENT'S COMPENSATION. The Escrow Agent shall be entitled to
receive reasonable compensation from the Issuer for its services as
set forth in Exhibit B, which is attached hereto and made a part
hereof. If the Escrow Agent is required to render additional
services that are not expressly set forth therein, or if it is made
a party to or intervenes in any action, suit or proceedings
pertaining to this Agreement ("Additional Services"), it shall be
entitled to receive reasonable compensation from the Issuer and the
Depositors. If Additional Services are provided, the Escrow Agent,
after giving written notice to the Depositors and the Issuer, may
deduct reasonable compensation from the cash dividends, interest
and proceeds being held for distribution pursuant to paragraphs
4.b, c and d, or 8, above.
12. ESCROW AGENT'S INDEMNIFICATION. The Issuer and the Depositors agree
to hold the Escrow Agent harmless from, and indemnify the Escrow
Agent for, any cost or liability regarding any administrative
proceeding, investigation, litigation, interpretation,
implementation or interpleading relating to this Agreement,
including the release of Promotional Shares, the Distribution, and
the disbursement of dividends, interest or proceeds, unless the
cost or liability arises from the Escrow Agent's failure to abide
by the terms of this Agreement.
13. INDEPENDENCE OF THE ESCROW AGENT. The Issuer hereby represents that
all of its officers, directors and Promoters are listed on Exhibit
C, which is attached hereto and made a part hereof. The Escrow
Agent hereby represents that it is not affiliated with the Issuer,
the Depositors, or the Issuer's officers, directors or Promoters
who are named in Exhibit A or Exhibit C.
14. SCOPE. This Agreement shall inure to the benefit of and be binding
upon the Depositors, their heirs and assignees, and upon the
Issuer, Escrow Agent, and their successors.
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15. SUBSTITUTE ESCROW AGENT. The Escrow Agent may, upon not less than
sixty (60) days prior written notice to the Issuer, the Depositors,
and the Administrator, resign as the Escrow Agent. The Issuer and
the Depositors shall, before the effective date of the Escrow
Agent's resignation, enter into a new identical Escrow Agreement
with a substitute Escrow Agent. The successor Escrow Agent must be
satisfactory to the Administrator. If the Issuer and the
Depositors fail to enter into a new Escrow Agreement and appoint a
successor Escrow Agent within sixty (60) days after the Escrow
Agent has given notice of its resignation, the Escrow Agent then
serving under this Agreement shall retain the Promotional Shares in
escrow until a new, identical Escrow Agreement has been executed
and a successor Escrow Agent has been appointed. The Escrow Agent
shall not be liable for retaining the Promotional Shares in escrow
for a reasonable time to determine the proper disposition of those
shares.
16. TERMINATION. Except for the compensation and indemnification
provisions of paragraphs 11 and 12 above, which shall survive until
they are satisfied, this Agreement shall terminate in its entirety
when all of the Promotional Shares have been released, or the
Issuer's Equity Securities and/or assets have been distributed
pursuant to paragraph 4, above.
17. Pursuant to the requirements of this Agreement, the Signatories
have entered into this Agreement, which may be written in multiple
counterparts and each of which shall be considered an original.
The Signatories have signed the Agreement in the capacities, and on
the dates, indicated.
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
Xxxxxxxxx Xxxxxx Date
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(Signature)
Xxxx X. Xxxxxxx Date
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(Signature)
Xxxxxx X. Xxxxxx Date
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(Signature)
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Xxxxxx X. Xxxxxx Date
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(Signature)
Xxxx Xxxxx Date
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(Signature)
Xxxxxx X. Xxxxxxx Date
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(Signature)
Issuer
By
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President
By
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Secretary
Escrow Agent
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By
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Title
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EXHIBIT A
Name of Depositor Equity Securities To Be Deposited
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Xxxxxxxxx Xxxxxx 1,503,895
Xxxx X. Xxxxxxx 233,213
Xxxxxx X. Xxxxxxxxx 40,973
Xxxxxx X. Xxxxxx 37,314
Xxxx Xxxxx 24,913
Xxxxxx X. Xxxxxxx 17,786
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EXHIBIT B - ESCROW AGENT COMPENSATION
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EXHIBIT C
List of Issuer's Officers, Directors, Other Promoters
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Xxxxxxxxx Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxx Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Wait
Xxxxxx X. Xxxxxxx
Xxxxx X. XxXxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxx
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