Escrow Agreement
SOURCE CODE ESCROW AGREEMENT This Source Code Escrow Agreement (the
"Agreement") is made effective the ___________ day of ________________________,
200___ by and between ______________________________________ (hereinafter
referred to as "Lessee") with its principal place of business located at
________________________________________________, and Charter Escrow, Inc.
(hereinafter referred to as "Escrow Agent") with its principal place of
business located at 3300 Oak Lawn Avenue, Suite 500, LB 20, Dallas, Texas
75219, and InternetCAD.com, Inc. (hereinafter referred to as "Lessor") with its
principal place of business located at 10880 Cassandra Way, Dallas, Texas
75228.
I. RECITALS
WHEREAS, Lessor and Lessee have entered into a Software Lease
Agreement to lease iTools Place and Route Software (hereinafter referred to as
the "Software") from Lessor; and
WHEREAS, Lessee has requested that the Source Code for the
Software be placed in escrow to be released to Lessee for use by Lessee upon
the occurrence of certain events as set forth herein.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties do hereby agree as
follows:
II. APPOINTMENT OF ESCROW AGENT
- Charter Escrow, Inc. is hereby appointed and accepts appointment to
act as Escrow Agent under this Agreement. Any fees and expenses of Escrow Agent
in connection with its duties hereunder shall be paid by Lessor. Escrow Agent's
agreed Schedule of Fees and Services for the term of this Agreement are set
forth on Exhibit "A" attached hereto and incorporated
fully herein.
- All service fees for the initial escrow deposit shall be due in full
upon execution of this Agreement. Annual renewal fees and any other service
fees shall be due in full within thirty (30) days from receipt of invoice. If
invoice fees are not paid within the stated period and Lessor has failed to
cure payment after thirty (30) days' written notice by Escrow Agent, Escrow
Agent may terminate this Agreement. In the event this Agreement terminates due
to non-payment, then the escrowed Source Code shall forthwith be released to
Lessor.
III. DEPOSIT OF ESCROW
- Following the execution of this Agreement and the payment of all
setup and deposit fees to Escrow Agent by Lessor, Escrow Agent shall open a
Deposit Account for Lessor. The opening of the account means that Escrow Agent
shall establish an account ledger in the name of the Lessor and that Lessor
shall receive renewal notices as provided in Paragraph V(1). Unless and until
Lessor makes an initial deposit of escrow with Escrow Agent, Escrow Agent shall
have no obligation to Lessor except as defined in this Section.
- Within fifteen (15) days after execution of the Software Lease
Agreement, Lessor shall deliver to Escrow Agent to be placed in escrow
hereunder one (1) copy of the Source Code for the Software.
- Lessor has the obligation to maintain the escrowed Source Code
current and updated. Within thirty (30) days after Lessor has released a major
revision or upgrade of the Software covered by the Software Lease Agreement,
Lessor shall deliver to the Escrow Agent, to be placed in escrow hereunder, the
Source Code for such revised Software, and Escrow Agent shall release to Lessor
in exchange for such revised Source Code all outdated, obsolete or previously
escrowed Source Code information. The Source Code held in escrow under this
Agreement, as well as all major revisions, shall sometimes hereinafter be
referred to as the "Escrow Materials." Escrow Agent shall notify Lessee of
substitution or replacement of the Escrow Materials within ten (10) days after
receipt of the same by Lessor.
- Either Lessor or Lessee, accompanied by an employee of Escrow Agent,
shall be entitled to inspect the physical status and condition of the Escrow
Materials upon reasonable notice and during reasonable business hours, provided
that Escrow Materials may not be changed by either Lessor or Lessee during such
inspection, except as provided otherwise herein. If Lessee finds that the
Escrow materials are deficient, Lessor will rectify immediately.
IV. RELEASE AND DELIVERY OF ESCROW MATERIALS
- Lessee may request by written notice to Escrow Agent that Escrow
Agent deliver the Escrow Materials to Lessee if, and only if, one or more of
the following conditions have occurred:
(a)InternetCAD, Inc. and namely William Swartz Jr. and Carl Sechen cease to
exist to support and service the ITOOLS Software Products.
- Upon receipt of notice from Lessee pursuant to Section IV above,
accompanied by an appropriate Escrow Release Fee of $150.00, Escrow Agent
shall, within twenty (20) days after receipt of such notice, deliver the Escrow
Materials to Lessee unless within such twenty (20) day period Lessor delivers
to Escrow Agent written denial that any of the conditions set forth above in
Section III have occurred. Lessee must also deliver the notice pursuant to
Section IV to Lessor simultaneously with the delivery to the Escrow Agent in
order for the twenty (20) day period to begin. If Escrow Agent receives such
denial within such twenty (20) day period, Lessee's entitlement to receive the
Escrow Materials under this Agreement shall be resolved by arbitration pursuant
to Section IX herein, and Escrow Agent shall retain possession of the Escrow
Materials subject to a determination by the arbitrator in such arbitration. The
prevailing party in such arbitration shall be entitled to recover from the
other party all arbitration fees, costs, disbursements and reasonable
attorneys' fees.
V. NO WARRANTY
- The Escrow Materials are provided on an "as is" basis. Lessor
disclaims any express or implied warranty of merchantability or fitness for a
particular purpose. Lessor warrants however that the Escrow Materials deposited
with Escrow Agent under the conditions of this Agreement are complete and
accurate copies of the Source Code on a computer magnetic media used by Lessor
in creating and operating the Software covered by the Software Lease Agreement.
VI. TERM
- This Agreement shall remain in effect for a term of one (1) year from
the date of execution and shall be renewable upon mutual agreement of all
parties hereto provided that Escrow Agent receives its specified renewal fee.
In the event the renewal fee is not received within thirty (30) days from the
expiration of this Agreement, Escrow Agent shall so notify Lessor and Lessee in
writing. However, should the Software Lease Agreement terminate for any reason
prior to the expiration of a one (1) year period, or if this Agreement is not
renewed, Lessor shall not be required to make any upgrade or update deposits of
Escrow Materials and Escrow Agent shall forthwith return all Escrow Materials
to Lessor.
VII. RESPONSIBILITIES AND LIABILITIES OF ESCROW AGENT
- Escrow Agent shall not be liable under this Agreement with respect to
the condition or the contents of the Escrow Materials except as set forth in
Section IV above, or for any action taken or omitted in good faith and in the
exercise of Escrow Agent's reasonable good judgment, or in reliance upon the
advice of the Escrow Agent's counsel, or for any other cause except willful
misconduct or conduct found to be negligent, or conduct in disregard of the
terms of this Agreement. Escrow Agent shall be obligated for the performance of
such duties as are specifically set forth in this Agreement, and may rely upon
and shall be protected in relying upon any order or instrument reasonably
believed by it to be genuine and to have signed or represented by the proper
party or parties. Lessor and Lessee shall jointly and separately indemnify and
hold Escrow Agent harmless of and from any claims, actions, suits or damages,
whether in contract or in tort, any loss, liability or expense imposed or
incurred by Escrow Agent, including penalties, attorneys' fees, court costs and
related expenses, as a result of or in connection with the rendering of its
services under this Agreement, provided such Escrow Agent is not adjudged by a
court of competent jurisdiction to have acted grossly negligent, willfully, or
in bad faith.
VIII. NOTICES
- Lessor and Lessee shall designate to Escrow Agent the name of one
individual who shall receive notices from Escrow Agent (or any other notice set
forth herein) and act on behalf of Lessor and Lessee respectively with regard
to the obligations set forth in this Agreement. Lessor and Lessee shall
immediately notify each other and Escrow Agent of any change in designated
individual or address. All notices to Lessor, Lessee or Escrow Agent, required
or permitted hereunder shall be given in writing and shall be deemed
effectively given upon delivery by certified mail, return receipt requested, or
by courier, signature receipt required as stipulated in Exhibit "B" attached hereto and incorporated herein.
- Any party may change its respective address by ten (10) days' written
notice given to the other parties in the manner set forth in this Section.
IX. ARBITRATION
- ANY DISPUTE ARISING OUT OF THIS AGREEMENT SHALL BE RESOLVED AND
DETERMINED BY ARBITRATION UNDER THE THEN CURRENT RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. THE ARBITRATION PROCEEDINGS SHALL BE HELD IN DALLAS
COUNTY, TEXAS. ALL QUESTIONS OF LAW SHALL BE DECIDED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS. TO THE EXTENT POSSIBLE, THE PARTIES SHALL UTILIZE
THE SIMPLIFIED RULES OF ARBITRATION AS SET FORTH BY THE AMERICAN ARBITRATION
ASSOCIATION.
X. MISCELLANEOUS
- Escrow Agent may act in reliance upon any written instruction,
instrument or signature believed to be genuine and may assume that any person
giving any written notice, request, advice or instruction in connection with or
relating to this Agreement has been duly authorized to do so. Escrow Agent is
not responsible for failure to fulfill its obligations under this Agreement due
to causes beyond its control.
- This Agreement has been executed and is performable in Dallas County,
Texas and is to be governed by, and construed in accordance with, the laws of
the State of Texas.
- This Agreement constitutes the entire Agreement between the parties
concerning the subject matter hereof, and will supersede all previous
communications, representatives, understandings and agreements, either oral or
written, between the parties.
- If any provision of this Agreement is held by any court to be invalid
or unenforceable, that provision will be severed from this Agreement and any
remaining provisions will continue in full force.
- This Agreement shall be binding upon and inure to the benefit of the
parties, their respective successors and assigns. This Agreement may be amended
or modified at any time, or from time to time only in writing executed by all
the parties hereto.
- Lessor and Lessee acknowledge that this Agreement is an "agreement
supplementary to" the Lease Agreement as provided in section 365(N) of Title
II, United States code (The "Bankruptcy Code"). Lessor acknowledges that if
Lessor as a debtor in possession or a trustee in bankruptcy in a case under the
bankruptcy code rejects the Lease Agreement of this Escrow Agreement, Lessee
may elect to retain its rights under the Lease Agreement and this Escrow
Agreement as provided in section 365(N) of the bankruptcy code. Upon written
request of Lessee to Lessor or the bankruptcy trustee, Lessor or such
bankruptcy trustee shall not interfere with the rights of Lessee as provided in
the Lease Agreement and this Escrow Agreement, including the right of Lessee to
obtain the Escrow material from the Escrow agent and to use such Escrow
material as set forth herein.
XI. FEES
- All escrow service fees as stipulated herein will be due in full at
the time of the request for service. Renewal Fees as stipulated herein will be
due in full upon the receipt of invoice unless otherwise specified by the
invoice. For the purpose of annual renewal fees, the effective date of this
Agreement will be the anniversary date. Invoice Fees must be paid within sixty
(60) days of receipt of invoice or Escrow Agent may terminate this Agreement.
If payment is not timely received by Escrow Agent, Escrow Agent shall have the
right to accrue and collect interest at the rate of one and a half percent per
month (18% per annum) from the date of invoice for all late payments.
- Escrow Agent's service fees and annual renewal fees are set forth on
the Schedule of Fees attached hereto marked "Exhibit A"
and incorporated fully herein, except as otherwise agreed. For any
increase in Escrow Agent's standard fees, Escrow Agent shall notify Lessor and
Lessee at least ninety (90) days prior to any renewal of this Agreement. For
any service not listed on the Schedule of Fees, Escrow Agent shall provide a
quote prior to rendering such service.
LESSOR:
InternetCAD.com, Inc.
By:________________________________
Its:_________________________________
LESSEE:
By:________________________________
Its:________________________________
ESCROW AGENT:
CHARTER ESCROW, INC.
By:________________________________
Its:________________________________