Exhibit 7
ESCROW AGREEMENT
ESCROW AGREEMENT (the "Agreement") made and entered into as of this 2nd
day of June, 1997, by and among PUBLIC SERVICE COMPANY OF OKLAHOMA, an Oklahoma
corporation (the "Purchaser"); XX. X. X. XXXXXXXXX, and certain of his Related
Trusts and Family Members listed on Schedule A hereto (collectively and
individually, "Sellers"); and FIRST UNION NATIONAL BANK OF VIRGINIA (the "Escrow
Agent"), regarding the purchase and sale of certain Common Stock of SCIENTECH,
Inc., an Idaho corporation ("the Company").
W I T N E S S E T H:
In consideration of the mutual promises, covenants, and conditions
hereinafter set forth, the parties agree as follows:
1. Recitals.
(a) Purchaser and Sellers have entered into a certain Stock
Purchase Agreement of even date (the "Purchase Agreement"), wherein Purchaser
has agreed to purchase and certain of the Sellers have agreed to sell 70,000
shares of Class A Voting Common Stock and 436,000 shares of Class B Nonvoting
Common Stock for a purchase price of $3,036,000 (the "Purchase Price"), which
shall be paid to Sellers in proportion to their ownership of Common Stock as set
forth in Schedule A.
(b) The purchase, sale and transfer under the Purchase
Agreement is subject to and contingent upon approval by the Securities and
Exchange Commission ("SEC") under the Public Utilities Holding Company Act of
1935, as amended, as provided for in the Purchase Agreement.
(c) Under the terms of the Purchase Agreement, the purchase,
sale and transfer of the subject shares may not be completed until the approval
described in Section 1(b) is obtained.
(d) The parties desire to escrow all such shares of Common
Stock and the Purchase Price with Escrow Agent pending such approval.
(e) The Escrow Agent has agreed to hold such shares and funds
and dispense of the property pursuant to the terms and conditions stated herein.
2. Deposit of Purchase Price. Upon execution and delivery of this
Agreement, Purchaser shall forward to the Escrow Agent copies of the executed
Purchase Agreement and all Related Agreements (as defined in the Purchase
Agreement), and a cashier's check or wire transfer in the amount of the Purchase
Price (i.e., $3,036,000). The Escrow Agent will hold such funds received by it
in a special account (the "Escrow Fund") entitled "Scientech 1997 Purchase
Agreement," and will maintain records of the funds deposited pursuant hereto.
3. Deposit of Escrow Shares. Upon the execution and delivery of this
Agreement, Sellers shall deliver to the Escrow Agent certificates representing
an aggregate of 506,000 shares of Common Stock of the Company (collectively, the
"Escrow Shares"). Such certificates shall be accompanied by stock assignments
separate from the certificates, properly endorsed in favor of Purchaser. Upon
the effectiveness of the amendment to the Company's Articles of Incorporation,
as contemplated by the Purchase Agreement, the Escrow Shares shall become
506,000 shares of Class A Voting Common Stock of the Company. The Sellers shall
also furnish a request to the Company to convert 436,000 of the Escrow Shares
into a like number of shares of Class B Nonvoting Common Stock pursuant to the
terms of Section 7(a). The Escrow Agent shall hold the Escrow Shares and stock
assignments pending receipt of instructions pursuant to Section 7.
4. Deposit of Additional Shares. In the event that the Company shall
issue, whether by way of stock dividend, stock split or otherwise, any
additional common or preferred stock or other securities as a result of or
attributable to the registered ownership of the Escrow Shares, such common or
preferred stock or other securities shall constitute part of the "Escrow Shares"
under this Agreement and, if the same are received by Sellers, they will
immediately upon receipt thereof deposit and deliver the same to Escrow Agent,
together with stock assignments properly signed in favor of Purchaser.
5. Investment of Escrow Fund.
(a) The Escrow Agent will invest the Escrow Fund, and any
interest or income earned from the Escrow Fund, in (i) direct obligations of the
United States of America, and (ii) obligations for which the full faith and
credit of the United States of America is pledged to provide for the payment of
principal and interest, or a money market fund that invests exclusively in said
investments. The Escrow Agent shall not invest any funds in commercial paper.
The maturity date of such investment shall not exceed 30 days from the date of
such investment or reinvestment. All interest or other income earned by virtue
of such investment shall be hereafter referred to as "Escrow Income."
(b) In the event that the Company shall issue any cash
dividends on the Escrow Shares during the term of this Agreement, such dividends
shall be retained by the Escrow Agreement as "Escrow Dividends" under this
Agreement and, if the same is received by Sellers, they will immediately upon
receipt thereof deposit and deliver the same to Escrow Agent.
6. Voting Rights to Escrow Shares. Sellers shall retain all voting
rights with respect to the Escrow Shares during the term of this Agreement.
Purchaser shall have no rights whatsoever with respect to the Escrow Shares
except such rights as may attach, pursuant to Section 7, upon receipt by the
Purchaser of SEC approval of the transactions contemplated by the Purchase
Agreement, as provided in the Purchase Agreement.
7. Payment of Escrow Fund and Delivery of Escrow Shares. Subject to
the conditions set forth below, the Escrow Agent shall liquidate all investments
and pay and disburse the Escrow Fund and the Escrow Shares, as follows:
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(a) Upon receipt of notice by Purchaser that SEC approval of
the transactions contemplated by the Purchase Agreement has been obtained as
provided in the Purchase Agreement, the Escrow Agent shall deliver to the
Company the certificates representing the Escrow Shares, together with the
Sellers' signed stock assignments and request for conversion of 436,000 shares
of Class A Voting Common Stock into a like number of Class B Nonvoting Common
Stock, and upon the Escrow Agent's receipt of certificates representing 70,000
shares of Class A Voting Common Stock, 436,000 shares of Class B Nonvoting
Common stock, and such additional shares or securities that may have been
deposited with the Escrow Agent pursuant to Section 4, each in the name of
Purchaser (the "Purchased Securities"), Escrow Agent shall promptly deliver:
(i) to the Sellers, the Escrow Fund and all Escrow
Income; and
(ii)to the Purchaser, the certificates evidencing
the Purchased Securities and all Escrow Dividends.
(b) Upon receipt of notice by Purchaser that SEC approval has
been denied, or in the event approval is neither obtained nor denied within 75
days from the date hereof (or such later date as may be agreed to in writing by
Purchaser and Xx. X.X. Xxxxxxxxx and communicated to Escrow Agent), the Escrow
Agent shall promptly deliver:
(i) to the Purchaser, the Escrow Fund and all Escrow
Income; and
(ii) to the Sellers, the certificates representing
the Escrow Shares, all accompanying stock assignments and requests for
conversion, and all Escrow Dividends.
8. Delivery Instructions. All deliveries by the Escrow Agent hereunder
shall be made to the recipient's address provided below unless the Escrow Agent
shall receive written instructions from the recipient at least five (5) days
prior to the date delivery is to be made.
9. Allocation of Purchase Price and Escrow Income Among Sellers. In the
event of payment of the Escrow Fund and the Escrow Income pursuant to Section
7(a), the Sellers shall be entitled to their pro rata share of the Escrow Fund
and the Escrow Income based upon their respective share ownership of Escrow
Shares, as set forth in Schedule A. No Seller shall receive any Escrow Income
until each Seller has furnished a duly executed IRS Form W-9 to the Escrow
Agent.
10. Limitation of Liability of the Escrow Agent. The Escrow Agent, as
part of the consideration for acceptance of this escrow agreement, shall not be
liable for any acts or omissions done in good faith or for any claims, demands,
losses or damages made or suffered by any party to this Agreement, excepting
such as may be arrived at through or caused by its willful misconduct or gross
negligence.
11. Expenses of Escrow Agent. The Escrow Agent shall be entitled to
reimbursement of its normal out-of-pocket expenses including, but not by way of
limitation, the fees and costs of attorneys or agents which it may find
necessary to engage in performance of its duties hereunder, all to be paid by
Purchaser; and the Escrow Agent shall have, and is hereby
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granted, a prior lien upon any property, cash or assets held hereunder, with
respect to its unpaid fees and nonreimbursed expenses, superior to the interests
of any other persons or entities.
12. Fee of Escrow Agent. A fee of $2,000.00 will be paid by the
Purchaser to the Escrow Agent as compensation for its services hereunder. It is
further agreed that a reasonable additional compensation will be paid to the
Escrow Agent by Purchaser for any unusual, extraordinary services that may be
required to render hereunder.
13. Protection of Escrow Agent. In consideration of this escrow by
Escrow Agent, Escrow Agent, Purchaser and Sellers agree that:
(a) Purchaser and Sellers may examine the Escrow Fund, the
Escrow Shares, the Escrow Dividends, the Escrow Income, or the accounts or other
records of the Escrow Agent relating thereto, at any time during business hours
at the office of Escrow Agent.
(b) Escrow Agent's duties and responsibilities shall be
limited to those expressly set forth in this Agreement, and Escrow Agent shall
not be subject to, nor obliged to recognize, any other agreement between, or
direction or instruction of, any or all of the parties hereto even though
reference thereto may be made herein; provided, however, this Agreement may be
amended at any time or times in accordance with the provisions below.
(c) No assignment of the interest of either of the Purchaser
or Sellers or their successors shall be binding upon Escrow Agent unless and
until written evidence of such assignment in form satisfactory to Escrow Agent
shall be filed with and accepted by Escrow Agent.
(d) In performing its duties hereunder, Escrow Agent may rely
on statements furnished to it by Purchaser, the Company and Sellers, or any
other evidence deemed by Escrow Agent to be reliable, and shall be entitled to
act on the advice of counsel.
(e) If any property held by Escrow Agent hereunder is
attached, garnished, or levied upon under the order of any court, or the
delivery thereof shall be stayed or enjoined by the order of any court, or if
any other order, judgment or decree shall be made or entered by any court any
part of such property, Escrow Agent is hereby expressly authorized to obey and
comply with all writs, orders or decrees so entered or issued, whether with or
without jurisdiction. Escrow Agent shall not be liable to any of the parties
hereto or their successors by reason of compliance with any such writ, order or
decree notwithstanding such writ, order or decree being subsequently reversed,
modified, annulled, set aside or vacated.
(f) Escrow Agent may, in its sole and absolute discretion,
deposit the Escrow Fund, the Escrow Shares, the Escrow Dividends and the Escrow
Income or so much thereof as remains in its hands with the then chief or
presiding judge of the United States District Court whose jurisdiction includes
either Idaho Falls, Idaho, or Tulsa, Oklahoma, and interplead the parties
hereto, and upon so depositing such property and filing its complaint in
interpleader, it shall be relieved of all liability under the terms hereof as to
the property so deposited and shall be entitled to recover in such interpleader
action, from the other parties hereto, its reasonable attorneys' fees and
related costs and expenses incurred in commencing and prosecuting such
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action and furthermore, the parties hereto for themselves their successors and
assigns, do hereby submit themselves to the jurisdiction of each said Court and
do hereby appoint the then Clerk, or acting Clerk, of each said Court as their
agent for the service of all process in connection with such proceedings.
(g) Notwithstanding anything herein to the contrary, Escrow
Agent shall be under no duty to monitor or enforce compliance by Purchaser or
Sellers with any term or provision of the Purchase Agreement or any other
agreement between the parties. The parties agree to hold Escrow Agent harmless
for actions taken by it in reliance upon statements furnished to it by Purchaser
or Sellers.
14. New Escrow Agent. If Escrow Agent shall decline or cease to act as
escrow agent, the parties shall have a period of 30 days to mutually agree upon
a successor which successor shall be deemed to be Escrow Agent for all purposes
of this Escrow Agreement. If a successor Escrow Agent has not been appointed and
has not accepted such appointment by the end of the 30-day period, Escrow Agent
may apply to a court of competent jurisdiction for the appointment of a
successor Escrow Agent, and the costs, expenses and reasonable attorneys' fees
which Escrow Agent incurs in connection with such a proceeding shall be paid out
of the Escrow Funds.
15. Construction of the Instruments by the Escrow Agent. In accepting
the funds deposited pursuant hereto, it is agreed and understood between the
parties hereto that the Escrow Agent will not be called upon to construe any
contract or instrument in connection herewith and shall be required to act in
respect to deposits herein made only as directed herein.
16. Notices.
(a) All demands, notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be personally delivered or sent by facsimile machine (with a
confirmation copy sent by one of the other methods authorized in this Section),
commercial (including FedEx) or U.S. Postal Service overnight delivery service
or deposited with the U.S. Postal Service mailed first class, registered or
certified mail, postage prepaid, as set forth below:
If to the Purchaser:
Public Service Company of Oklahoma
c/o CSW Business Ventures
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
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Doerner, Saunders, Xxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: H. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Sellers, addressed to them at the addresses set forth on
Schedule A.
with a copy to:
Xxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxx
2300 City Center Bellevue
000 000xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields
000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx, Xxxxx 00000
Attention: Xxxx Street
Tel: 000-000-0000
Fax: 000-000-0000
If to the Escrow Agent:
First Union National Bank of Virginia
Corporate Trust Administration,
000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel: 000-000-0000
Tel: 000-000-0000
(b) Notices shall be deemed given upon the earlier to occur of
(i) receipt by the party to whom such notice is directed; (ii) if sent by
facsimile machine, on the day (other than a Saturday, Sunday or legal holiday in
the jurisdiction to which such notice is directed) such notice is sent if sent
(as evidenced by the facsimile confirmed receipt) prior to 4:00 p.m. Mountain
Time and, if sent after 4:00 p.m. Mountain Time, on the day (other than a
Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) after which such notice is sent; (iii) on the first business day
(other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) following the day the same is deposited with the
commercial carrier if sent by commercial overnight delivery service; or (iv) the
fifth day (other than a Saturday, Sunday or legal holiday in the jurisdiction to
which such notice is
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directed) following deposit thereof with the U..S. Postal Service as aforesaid.
Each party, by notice duly given in accordance therewith may specify a different
address for the giving of any notice hereunder.
17. Governing Law. The internal law, and not the law of conflicts, of
the State of Idaho shall govern all questions concerning the construction,
validity and interpretation of this Agreement, and performance of the
obligations imposed by this Agreement.
18. Jurisdiction and Venue. The parties hereto agree that any action
brought by either party with respect to this Agreement shall be brought within
the jurisdiction and venue of the courts of the United States of America and the
State of Idaho, in Bonneville County, Idaho.
19. Counterparts. This Agreement may be executed in separate
counterparts, by original or facsimile, each of which will be an original and
all of which taken together will constitute one and the same agreement.
20. Successors and Assigns; Binding Effect. This Agreement shall not be
assigned any party without the prior written consent of all other parties,
except that Purchaser may assign its rights to any entity wholly-owned directly
or indirectly by its parent corporation, Central and South West Corporation.
This Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective heirs, personal representatives, successors and
assigns.
21. Specific Performance. The obligations of the parties hereto
(including the Escrow Agent) are unique in that time is of the essence, and any
delay in performance hereunder by any party will result in irreparable harm to
the other party hereto. Accordingly, either party may seek specific performance
and/or injunctive relief before any court of competent jurisdiction in order to
enforce this Agreement or to prevent violations of the provisions hereof, and
neither party shall object to specific performance or injunctive relief as an
appropriate remedy. The Escrow Agent acknowledges its obligations, as well as
the obligations of Purchaser and Sellers hereunder, are subject to the equitable
remedy of specific performance and/or injunctive relief.
22. Amendment, Waiver, etc. This Agreement shall not be amended,
modified, altered or revoked without the prior written consent of both Purchaser
and Sellers; provided that no amendment or modification will be made to Sections
10 through 16 hereof without the written consent of Escrow Agent.
23. Meaning of Terms. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
24. Execution of Supplementary Documents. The parties agree, upon the
request of any other party, to execute any agreements, documents or instruments
consistent with this Escrow Agreement which are necessary to consummate the
transactions contemplated in this Escrow Agreement.
25. Invalid Provision. The invalidity or unenforceability of any
particular provision of this Escrow Agreement shall not affect the other
provisions of this Escrow Agreement, and
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this Escrow Agreement shall be construed as if such invalid or unenforceable
provision was omitted.
26. Entire Agreement. This Escrow Agreement and any documents or
instruments delivered pursuant to this Escrow Agreement constitute the entire
agreement and understanding between the parties and supersede any prior
agreement and understanding relating to the subject matter of this Escrow
Agreement.
27. Construction. All parties hereto having participated actively in
the negotiation and drafting of this Escrow Agreement, and each party having
been represented by counsel, the terms of this Escrow Agreement shall not be
construed against, nor more favorably to, any party, regardless of their
responsibility for its preparation.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
instrument as of the date first written above.
"Purchaser"
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name:
Title:
"Sellers"
XX. X. X. XXXXXXXXX
XXXXXXXXX FAMILY TRUST B
By:
Xx. X. X. Xxxxxxxxx, Trustee
XXXXXXXXX FAMILY TRUST C-1
By:
Xx. X. X. Xxxxxxxxx, Trustee
XXXXXXXXX FAMILY TRUST C-2
By:
Xx. X. X. Xxxxxxxxx, Trustee
XX. XXXXXXX XXXXXXXXX
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XX. XXX-XXXXX XXXXXXXXX
XXXXXX X. XXXXXXXXX
XXXXX X. XXXXXXXXX
"Escrow Agent"
FIRST UNION NATIONAL BANK OF VIRGINIA
By:
Name:
Title:
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SCHEDULE A
List of Sellers
Number of Number of Aggregate
Escrow Purchased Securities Purchase Price
Name and Address Shares To Be Purchased for Purchased Securities
Xx. X. X. Xxxxxxxxx 300,000 70,000 Class A
230,000 Class B
300,000 Class A and B $1,800,000
Xxxxxxxxx Family
Trust B
Xxxxxxxxx Family
Trust C-1
Xxxxxxxxx Family
Trust C-2 206,000 206,000 Class B 1,236,000
Xx. Xxxxxxx Xxxxxxxxx
Xx. Xxx-Xxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
The address for notice purposes for each Seller is:
Xx. X. X. Xxxxxxxxx
c/o SCIENTECH, Inc.
0000 Xxxxxxxxxxxxx Xxx
Xxxxx Xxxxx, Xxxxx 00000
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