ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of June 1st, 2000 (this "Agreement")
among Bank of ALBUQUERQUE, N.A., as escrow agent (in such capacity, the "Escrow
Agent"), MUSE TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and
KINGSBRIDGE CAPITAL LIMITED, a British Virgin Islands entity ("Investor"). Any
capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Private Equity Line Agreement, dated as of June 1, 2000, by and
between the Company and the Investor (the "Equity Line Agreement").
WHEREAS, Investor and the Company have entered into the Equity
Line Agreement whereby Investor agreed to purchase capital stock of the Company
upon certain Puts made by the Company, upon the terms and subject to the
conditions set forth in the Equity Line Agreement; and
WHEREAS, pursuant to Section 7.2(n) of the Equity Line Agreement,
Investor and the Company agreed to enter into this Agreement with Escrow Agent
in order for Escrow Agent to hold the Investment Amount with respect to a Put
(as delivered to Escrow Agent by Investor) and the certificates representing the
Put Shares with respect to such Put (as delivered to Escrow Agent by the
Company) for release to the Company and Investor, respectively, in accordance
with this Agreement;
NOW, THEREFORE, the Investor, the Company and the Escrow Agent
hereby agree as follows:
1. Appointment of the Escrow Agent; Deposit of Escrow Amount and
Share Certificate. The Company and Investor hereby constitute and appoint the
Escrow Agent as, and the Escrow Agent hereby agrees to assume and perform the
duties of, the escrow agent under and pursuant to this Agreement. The Escrow
Agent acknowledges that it will, with respect to any Put made by the Company in
accordance with the Equity Line Agreement, (i) receive from the Investor the
Investment Amount (less any retention in respect of insurance pursuant to
Section 2.3 of the Equity Line Agreement) with respect to such Put (the "Escrow
Fund") as provided in Article II of the Equity Line Agreement and (ii) receive
from the Company the applicable Put Notice (or other notice giving reasonable
detail with respect to such Put) certificate(s) representing all the Put Shares
corresponding to such Investment Amount and Put (collectively, the "Share
Certificate"), as provided in Article II of the Equity Line Agreement.
2. Escrow Fund; Share Certificate. The Escrow Fund shall be held
by the Escrow Agent in a separate account maintained for the purpose of
effecting the Closings, on the terms and subject to the conditions of this
Agreement. The Escrow Agent shall hold in escrow the Share Certificate
separately from the Escrow Fund and agrees that the Share Certificate shall be
held on the terms and subject to the conditions set forth herein. The Share
Certificate and the Escrow Fund shall not be subject to lien or attachment by
any creditor of any party hereto and shall be used solely for the purpose set
forth in this Agreement. The Share Certificate and the Escrow Fund shall not be
available to, and shall not be used by, the Escrow Agent to set off any
obligations of either Investor or the Company owing to the Escrow Agent in any
capacity.
3. Deliveries to Effect Closing. Upon the receipt by the Escrow
Agent of a certificate in substantially the form of Annex I attached hereto
("Mutual Closing Certificate"), jointly executed by the Company and Investor,
Investor and the Company irrevocably instruct the Escrow Agent (i) to release
the Share Certificate to Investor, and simultaneously (ii) to pay over to the
Company the Escrow Fund, in immediately available funds to a bank account of the
Company's designation.
4. Release of Escrow Fund and Share Certificate upon Failure to
Close. If, upon the expiration of two (2) Trading Days after any Closing Date,
the Escrow Agent has not received a Mutual Closing Certificate with respect to
such Closing Date, the Investor and the Company irrevocably instruct
the Escrow Agent to release the Share Certificate to the Company and to pay over
to Investor all amounts of the Escrow Fund, in immediately available funds, to a
bank account of Investor's designation.
5. Duties and Obligations of the Escrow Agent. The duties and
obligations of the Escrow Agent are purely ministerial and shall be limited to
and determined solely by the provisions of this Agreement. The Escrow Agent is
not charged with knowledge of or any duties or responsibilities in respect of
any other agreement or document. In furtherance and not in limitation of the
foregoing:
(i) the Escrow Agent shall not be liable for any loss of
interest sustained as a result of investments made hereunder in
accordance with the terms hereof, including any liquidation of any
investment of the Escrow Fund prior to its maturity effected in order to
make a payment required by the terms of this Agreement;
(ii) the Escrow Agent shall be fully protected in relying in
good faith upon any written certification, notice, direction, request,
waiver, consent, receipt or other document that the Escrow Agent
reasonably believes to be genuine and duly authorized, executed and
delivered;
(iii) the Escrow Agent shall not be liable for any error of
judgment, or for any act done or omitted by it, or for any mistake in
fact or law, or for anything that it may do or refrain from doing in
connection herewith; provided, however, that notwithstanding any other
provision in this Agreement, the Escrow Agent shall be liable for its
willful misconduct or gross negligence or breach of this Agreement;
(iv) the Escrow Agent may seek the advice of legal counsel
selected with reasonable care in the event of any dispute or question as
to the construction of any of the provisions of this Agreement or its
duties hereunder, and it shall incur no liability and shall be fully
protected in respect of any action taken, omitted or suffered by it in
good faith in accordance with the opinion of such counsel;
(v) in the event that the Escrow Agent shall in any instance,
after seeking the advice of legal counsel pursuant to the immediately
preceding clause, in good faith be uncertain as to its duties or rights
hereunder, it shall be entitled to refrain from taking any action in
that instance and its sole obligation, in addition to those of its
duties hereunder as to which there is no such uncertainty, shall be to
keep safely all property held in the Escrow Fund until it shall be
directed otherwise in writing by each of the parties hereto or by a
final, nonappealable order of a court of competent jurisdiction;
provided, however, in the event that the Escrow Agent has not received
such written direction or court order within one hundred eighty (180)
calendar days after requesting the same, it shall have the right to
interplead Investor and the Company in any court of competent
jurisdiction and request that such court determine its rights and duties
hereunder; and
(vi) the Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either
directly or by or through agents or attorneys selected with reasonable
care, nothing in this Agreement shall be deemed to impose upon the
Escrow Agent any duty to qualify to do business or to act as fiduciary
or otherwise in any jurisdiction other than the State of New Mexico and
the Escrow Agent shall not be responsible for and shall not be under a
duty to examine into or pass upon the validity, binding effect,
execution or sufficiency of this Agreement or of any agreement
amendatory or supplemental hereto.
6. Cooperation. Investor and the Company shall provide to the
Escrow Agent all instruments and documents within their respective powers to
provide that are necessary for the Escrow Agent to perform its duties and
responsibilities hereunder.
7. Expenses; Indemnity. The Company hereby agrees to pay or
reimburse the Escrow Agent upon request for all expenses, disbursement and
advances, including reasonable attorney's fees,
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incurred or made by it in connection with the preparation, execution,
performance, delivery, modification and termination of this Agreement; provided
that Investor shall bear all expenses of the investment and reinvestment of the
Escrow Fund. Each of the Company and the Investor hereby agrees to indemnify the
Escrow Agent for, and to hold it harmless against, any loss, liability or
expense arising out of or in connection with this Agreement and carrying out its
duties hereunder, including the costs and expenses of defending itself against
any claim of liability, except in those cases where the Escrow Agent has been
guilty of gross negligence, willful misconduct or in breach of this Agreement.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Escrow Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action. The provisions of this Section shall survive
any termination of this Agreement, whether by disbursement of the collateral
held, resignation of the Escrow Agent, or otherwise.
8. Resignation and Removal of the Escrow Agent.
(a) The Escrow Agent may resign as such thirty (30) calendar days
following the giving of prior written notice thereof to the Company and
Investor. In addition, the Escrow Agent may be removed and replaced on a date
designated in a written instrument signed by the Company and Investor and
delivered to the Escrow Agent. Notwithstanding the foregoing, no such
resignation or removal shall be effective until a successor escrow agent has
acknowledged its appointment as such as provided in paragraph (c) below. In
either event, upon the effective date of such resignation or removal, the Escrow
Agent shall deliver the property comprising the Escrow Fund and the Stock
Certificate to such successor escrow agent, together with such records
maintained by the Escrow Agent in connection with its duties hereunder and other
information with respect to the Escrow Fund as such successor may reasonably
request.
(b) If a successor escrow agent shall not have acknowledged its
appointment as such as provided in paragraph (c) below, in the case of a
resignation, prior to the expiration of thirty (30) calendar days following the
date of a notice of resignation or, in the case of a removal, on the date
designated for the Escrow Agent's removal, as the case may be, because the
Company and Investor are unable to agree on a successor escrow agent, or for any
other reason, the Escrow Agent may select a successor escrow agent and any such
resulting appointment shall be binding upon all of the parties to this
Agreement, provided that any such successor selected by the Escrow Agent shall
be a depository institution or trust company that is designated in writing by
the Investor and is incorporated under the laws of the United States of America,
any State thereof or the District of Columbia and has total assets in excess of
U.S. $500 million.
(c) Upon written acknowledgment by a successor escrow agent
appointed in accordance with the foregoing provisions of this Section of its
agreement to serve as escrow agent hereunder and the receipt of the property
then comprising the Escrow Fund and the Stock Certificate, the Escrow Agent
shall be fully released and relieved of all duties, responsibilities and
obligations under this Agreement, subject to the proviso contained in clause
(iii) of Section 5, and such successor escrow agent shall for all purposes
hereof be the Escrow Agent.
9. Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given if
delivered personally or by facsimile transmission (with confirmation generated
by the sending machine) or mailed (first class postage prepaid) to the parties
at the following addresses or facsimile numbers:
If to the Company:
Muse Technologies, Inc.
0000 Xxxxxxxx, XX, Xxxxx 000
0
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxx, President
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000)-000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
if to the Investor:
Kingsbridge Capital Limited
c/o Kingsbridge Corporate Services Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Telephone: 000-000-00-000-000
Facsimile: 011-353-45-482-003
Attention: Xx. Xxxx Xxxxxx
with a copy (which shall not constitute notice) to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
and if to the Escrow Agent:
Bank of Albuquerque, N.A.
000 Xxxxx Xx. XX, 00xx Xxxxx
X.X. Xxx 00000
Xxxxxxxxxxx, XX 00000-0000
Telephone:
Facsimile:
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to
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time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other parties hereto.
10. Amendments, etc.. This Agreement may be amended or modified,
and any of the terms hereof may be waived, only by a written instrument duly
executed by or on behalf of Investor and the Company and, with respect to any
amendment that would adversely affect the Escrow Agent, the Escrow Agent. No
waiver by any party of any term or condition contained of this Agreement, in any
one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion.
11. Governing Law. This Agreement shall be construed under the
laws of the State of New Mexico.
12. Business Day. For all purposes of this Agreement, the term
"business day" shall mean a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
13. Entire Agreement. It is understood and agreed that this
Escrow Agreement supersedes all understandings and agreements heretofore had
between the parties hereto with respect to the subject matter hereof, and
contains the sole and entire agreement between the parties with respect to the
subject matter hereof.
14. Assignment. Neither this Agreement nor any right, interest or
obligation hereunder may be assigned by any party without the prior written
consent of the other parties and any attempt to do so will be void, except that
Investor may assign all of its rights, interests and obligations hereunder at
any time, in whole or in part, to any other person or entity (including any
affiliate of the Investor) upon the prior written consent of the Company, which
consent shall not to be unreasonably withheld. Investor and the Company shall
provide to the Escrow Agent written notice of such an assignment by Investor.
15. Miscellaneous. This Agreement is binding upon and will inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
This Escrow Agreement may be signed by facsimile copy (followed by originals)
and, in addition, may be executed in several counterparts, each of which shall
be deemed an original but all of which shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
KINGSBRIDGE CAPITAL LIMITED:
By: /s/ X. X'Xxxxxxxx
---------------------------------
Valentine X'Xxxxxxxx
Director
MUSE TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
President
BANK OF ALBUQUERQUE, N.A., as Escrow Agent
By: /s/ Xxxxxxx Xxxx
----------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
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ANNEX I
MUTUAL CLOSING CERTIFICATE
to
BANK OF ALBUQUERQUE, N.A.
as Escrow Agent
The undersigned, KINGSBRIDGE CAPITAL LIMITED, a British Virgin
Islands entity ("Investor"), and MUSE TECHNOLOGIES, INC., a Delaware corporation
("the Company"), pursuant to Section 3 of the Escrow Agreement dated as of June
__, 2000 among Investor, the Company and you (terms defined in said Escrow
Agreement have the same meanings when used herein), hereby instruct you:
(i) to deliver to Investor the Share Certificate, and
(ii) to pay to the Company the Escrow Fund by wire transfer of immediately
available funds to the Company's account at __________________, _________,
_________ (Account No.:_________),
KINGSBRIDGE CAPITAL LIMITED
By:
--------------------------------
Xxxx Xxxxxx
Director
MUSE TECHNOLOGIES, INC.
By:
--------------------------------
Name:
Title:
Dated: ____________, ____
