STOCK ESCROW AGREEMENT
THIS AGREEMENT has been made on ______________, 19__, by and among
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY having its principal office at 0
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Escrow Agent") and LIFE CRITICAL CARE
CORPORATION, a Delaware corporation, having its principal office at 00000 Xxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxx 00000 (the "Company"), and each of the
stockholders of the Company listed on Schedule I annexed hereto (collectively,
the "Stockholders").
In consideration of the mutual covenants and promises hereinafter
contained, the parties agree as follows:
1. Escrow Deposit. Concurrently with the execution of this
Agreement, the Stockholders have delivered to the Escrow Agent, in the
respective numbers of shares set forth on Schedule I annexed hereto,
certificates representing an aggregate of 600,000 shares of the Common Stock,
$.01 par value, of the Company (the "Escrow Shares"). The Escrow Agent
hereby acknowledges receipt of the Escrow Shares and accepts its appointment
by the Stockholders to hold the Escrow Shares in escrow, upon the terms and
conditions set forth in this Agreement.
2. Term. The term of this Agreement and of the escrow provided
hereby (the "Escrow Period") shall commence on the date hereof and end on
December 31, 2004 (the "Termination Date"), unless sooner terminated as
hereinafter provided.
3. Release from Escrow.
(a) If the Company achieves earnings after taxes of at least
$0.30 per share for its fiscal year ending December 31, 1997, then 300,000 of
the Escrow Shares shall be released from escrow and returned to the
Stockholders.
(b) If the Company achieves earnings after taxes of at least
$0.60 per share for any fiscal year ending on or before December 31, 1998, then
all of the Escrow Shares then remaining shall be released from escrow and
returned to the Stockholders.
(c) If at any time prior to the Termination Date the Company
achieves earnings after taxes of at least $1.25 per share, then all of the
Escrow Shares then remaining shall be released from escrow and returned to the
Stockholders.
(d) Whenever any Escrow Shares are required to be released from
escrow by the terms of this Section 3, the Company shall give written notice
thereof to the Escrow Agent and to X.X. Xxxxxx & Co., Inc. If X.X. Xxxxxx & Co.,
Inc. shall not have notified the Escrow Agent, within ten business days after
its actual receipt of such notice, that the requirements of this Section 3 for
the release of such Escrow Shares have not been satisfied, then the Escrow Agent
shall, as soon as reasonably practicable, deliver such Escrow Shares to the
Stockholders on a pro-rata basis in accordance with their respective deposits of
Escrow Shares set forth on Schedule I annexed hereto. Upon such delivery of all
of the Escrow Shares, this Agreement shall terminate.
(e) If all of the Escrow Shares have not been required to be
released from escrow by the terms of this Section 3 prior to the Termination
Date, then on the Termination Date the Escrow Agent shall deliver all of the
Escrow Shares remaining to the Stockholders on a pro-rata basis in accordance
with their respective deposits of Escrow Shares set forth on Schedule I annexed
hereto. Upon such delivery of all of the Escrow Shares remaining, this Agreement
shall terminate.
(f) For purposes of this Agreement, the Company's "earnings
after taxes" shall be determined by the independent certified public accountants
then regularly engaged by the Company, in accordance with generally accepted
accounting principles applied on a consistent basis, and when certified by such
accountants, such determination shall be conclusive and binding upon the
parties. The earnings after taxes and stock price levels required by this
Section 3 for release of the Escrow Shares shall be appropriately adjusted in
the event that the Company shall at any time pay a stock dividend on, or split
up, subdivide, combine or recapitalize, the Common Stock.
4. Disputes. In the event of any disagreement between the Stockholders
and the Company resulting in conflicting instructions to, or adverse claims or
demands upon, the Escrow Agent with respect to the release of the Escrow Shares,
the Escrow Agent shall be entitled to refuse to comply with any such
instruction, claim or demand unless instructed to the contrary by the
Stockholders and the Company jointly, and in so refusing the Escrow Agent shall
not be or become liable in any way to the Stockholders or to the Company for its
failure or refusal to comply with any such conflicting instructions or adverse
claims or demands, and it shall be entitled to continue so to refrain from
acting until such conflicting or adverse demands
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(a) shall have been resolved by agreement and the Escrow Agent shall have been
notified in writing thereof by the Stockholders and the Company, or (b) shall
have been finally determined by a court of competent jurisdiction.
5. Concerning the Escrow Agent. The parties understand and agree as
follows:
(a) The Escrow Agent is not 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 has no responsibility in respect of the
Escrow Shares, or any instruction, certificate or notice delivered to it, other
than faithfully to carry out the obligations undertaken by it in this Agreement
and to follow the directions in such instruction or notice provided in
accordance with the terms hereof.
(c) The Escrow Agent shall not 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 may conclusively rely upon and act in
accordance with any certificate, instruction, notice, letter, facsimile
transmission, telegram, cablegram, or other written instrument believed by it to
be genuine and to have been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent's reasonable
fees and to reimburse it for its reasonable expenses, including attorneys fees,
incurred in connection with its duties hereunder, and (ii) to save harmless,
indemnify and defend the Escrow Agent for, from and against any loss, damage,
liability, judgment, cost and expense whatsoever, including counsel fees
suffered or incurred by it, by reason of, or on account of, any
misrepresentation made to it or its status or activities as Escrow 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. The obligation of the Escrow Agent to deliver the
Escrow Shares to the Stockholders shall be subject to the prior satisfaction,
upon demand of the Escrow Agent, of the Company's obligations so to save
harmless, indemnify and defend the Escrow Agent, and to reimburse the Escrow
Agent or otherwise pay its fees and expenses hereunder.
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(f) The Escrow 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 unless it is (i) requested so to do by the Stockholders or the
Company and (ii) indemnified, to the Escrow Agent's satisfaction, by the party
requesting such defense against the cost and expense of such defense. If any
such legal proceeding is instituted against it, the Escrow Agent agrees promptly
to give notice of such proceeding to the Stockholders and the Company. The
Escrow Agent shall not be required to institute legal proceedings of any kind.
(g) The Escrow 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 is in writing, and no waiver
shall be valid unless it is in writing, signed by the Escrow Agent, and only to
the extent expressly therein set forth. A waiver by the Escrow Agent under the
terms of this Agreement shall not be construed as a bar to, or a waiver of, the
same or any other such right or remedy which it would otherwise have on any
other occasion.
(h) The Escrow Agent may resign as such hereunder by giving 30
days' written notice thereof to the Stockholders and the Company. Within 20 days
after receipt of such notice, the Stockholders and the Company shall furnish to
the Escrow Agent written instructions for the release of the Escrow Shares then
remaining to a substitute Escrow Agent which (whether designated by written
instructions from the Stockholders and the Company jointly, or in the absence
thereof by instructions from a court of competent jurisdiction to the Escrow
Agent) shall be a bank or trust company organized and doing business under the
laws of the United States or of any state thereof with a combined capital and
surplus of at least $5,000,000. Such substitute Escrow Agent shall thereafter
hold the Escrow Shares and otherwise act hereunder as if it were the Escrow
Agent originally named herein. The Escrow Agent's duties and responsibilities
hereunder shall terminate upon the release of all Escrow Shares then held in
escrow according to such written instruction or upon such delivery as herein
provided. This Agreement shall not otherwise be assignable by the Escrow Agent
without the prior written consent of the Stockholders and the Company.
6. Concerning the Escrow Shares. During the Escrow Period and while any
Escrow Shares are being held by the Escrow Agent pursuant to this Agreement: (a)
no Stockholder shall sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any of the Escrow Shares deposited by him; (b) each Stockholder shall
promptly deliver to the Escrow Agent all stock certificates evidencing
additional shares of Common Stock which he
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may receive as the result of a stock dividend, split-up or similar transaction
in respect of the Escrow Shares; and (c) each Stockholder shall have the
sole power to vote the Escrow Shares deposited by him.
7. Notices. Each notice, instruction or other certificate required or
permitted by the terms hereof shall be in writing and shall be communicated by
personal delivery, telecopier, telex or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or at
such other address as any of them may designate by notice to each of the others:
If to the Company: Life Critical Care Corporation
00000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxx 00000
If to the Stockholders: c/o Xxxxxx X. Xxxxx
Life Critical Care Corporation
00000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxx 00000
If to the Escrow Agent: Continental Stock Transfer and Trust
Company
0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xx. Xxxxxxx Xxxxxxxxx
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given hereunder
by the Escrow Agent shall be effective and deemed received upon personal
delivery or transmission by telecommunication or, if mailed, five calendar days
after mailing by the Escrow Agent.
8. Modification. Except as provided by Section 5(h) hereof, this
Agreement may not be modified, altered or amended in any material respect or
canceled or terminated except with the consent of the Company, which consent
shall have been approved by the holders of a majority of the outstanding shares
of the Common Stock (excluding shares held by the Stockholders).
9. In General. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State, and shall be binding upon and
shall inure to the benefit of all parties hereto and their respective successors
in interest and assigns. Wherever used herein, the
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masculine pronoun shall include the feminine and the neuter, as
appropriate in the context. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused it to be executed by their duly authorized officers, on the day and year
first above written.
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
By:________________________________
Name:
Title:
LIFE CRITICAL CARE CORPORATION
By:________________________________
Name:
Title:
___________________________________
Xxxxxx X. Xxxxx
___________________________________
Xxxxxxx X. Xxxxxx
___________________________________
Xxxxxxx X. Xxxxxxxxxx
___________________________________
Xxxxxxx X. Xxxxxx
___________________________________
Xxx X. Xxxxxx
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SCHEDULE I
Name of Number of
Stockholder Escrow Shares
----------- -------------
Xxxxxx X. Xxxxx 305,132
Xxxxxxx X. Xxxxxx 41,368
Xxxxxxx X. Xxxxxxxxxx 51,000
Xxxxxxx X. Xxxxxx 51,000
Xxx X. Xxxxxx 76,500
-------
Total 525,000
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