ESCROW AGREEMENT
Dated as of September 30, 2022
among
NORTHGATE WIRELESS AMERICAS INC.
a Delaware corporation
("Buyer")
RIDGELINE WIRELESS HOLDINGS LLC
a Nevada limited liability company
("Seller")
and
MERIDIAN NATIONAL BANK, N.A.
a national banking association
("Escrow Agent")
________________________________________
Reference is made to that certain Asset Purchase Agreement, dated as of September 22, 2022 (the "APA" or "Purchase Agreement"), by and between Northgate Wireless Americas Inc. and Ridgeline Wireless Holdings LLC, providing for the purchase and assignment of 14 FCC Wireless Radio Service licenses (Meridian Technologies-3 / Band 66), bearing call signs WQAB201 through WQAB214.
TABLE OF CONTENTS
Right-click to update Table of Contents
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of September 30, 2022, by and among Northgate Wireless Americas Inc., a Delaware corporation ("Buyer"), Ridgeline Wireless Holdings LLC, a Nevada limited liability company ("Seller"), and Meridian National Bank, N.A., a national banking association ("Escrow Agent").
RECITALS
WHEREAS, Buyer and Seller entered into that certain Asset Purchase Agreement dated as of September 22, 2022 (the "Purchase Agreement"), pursuant to which Seller agreed to assign and Buyer agreed to acquire 14 FCC Wireless Radio Service licenses (Meridian Technologies-3 / Band 66) covering portions of Nevada, eastern California, and southern Oregon, for a total purchase price of One Hundred Twenty-Six Million Five Hundred Thousand Dollars ($126,500,000), as set forth in Section 3.1 of the Purchase Agreement;
WHEREAS, the FCC Licenses subject to the Purchase Agreement consist of licenses bearing call signs WQAB201 through WQAB214, each authorized under Part 27 of the rules of the Federal Communications Commission (the "FCC"), and the assignment thereof from Seller to Buyer is subject to the prior consent of the FCC;
WHEREAS, pursuant to Section 3.2 of the Purchase Agreement, Buyer is required to deposit earnest money in the amount of Four Million Five Hundred Thousand Dollars ($4,500,000) (the "Deposit" or "Escrow Deposit") with a mutually agreed-upon escrow agent, to be held and disbursed in accordance with the terms and conditions of a definitive escrow agreement;
WHEREAS, the Deposit represents approximately 3.56% of the Purchase Price and is intended to evidence Buyer's good-faith commitment to consummate the transactions contemplated by the Purchase Agreement;
WHEREAS, Meridian National Bank, N.A., a national banking association with offices located at 333 South Hope Street, Suite 4800, Los Angeles, California 90071, has agreed to serve as Escrow Agent upon the terms and conditions set forth herein, and Sandra Okonkwo shall serve as the designated Escrow Officer for the Escrow Agent; and
WHEREAS, Buyer, Seller, and the Escrow Agent desire to set forth their respective rights and obligations with respect to the establishment, maintenance, investment, and disbursement of the Escrow Deposit.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"APA" or "Purchase Agreement" means the Asset Purchase Agreement dated as of September 22, 2022, by and between Buyer and Seller, as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms.
"Buyer" means Northgate Wireless Americas Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (Delaware Secretary of State File No. 7284619), with its principal office at 2200 Wilson Boulevard, Suite 1450, Arlington, Virginia 22201, and its successors and permitted assigns.
"Closing" has the meaning ascribed to such term in the Purchase Agreement; provided that, for purposes of this Agreement, "Closing" shall mean the consummation of the transactions contemplated by the Purchase Agreement, including the effective assignment of the FCC Licenses from Seller to Buyer and the payment of the Purchase Price.
"Closing Date" means the date on which the Closing occurs under the Purchase Agreement, as determined in accordance with Section 4.1 thereof.
"Deposit" or "Escrow Deposit" means the sum of Four Million Five Hundred Thousand Dollars ($4,500,000) deposited by Buyer with the Escrow Agent pursuant to Section 2.1 hereof, together with all interest, earnings, and other amounts accrued thereon while held in the Escrow Account, unless the context requires reference solely to the principal amount.
"Dispute Notice" means a written notice delivered by Buyer or Seller to the Escrow Agent within the applicable objection period set forth in Section 3.2(b) or Section 3.3(b), as applicable, objecting to a unilateral disbursement demand submitted by the other party.
"Escrow Account" means the segregated, interest-bearing escrow account established and maintained by the Escrow Agent at Meridian National Bank, N.A. for the sole purpose of holding and investing the Deposit in accordance with this Agreement.
"Escrow Agent" means Meridian National Bank, N.A., a national banking association duly organized and existing under the laws of the United States, acting in its capacity as escrow agent hereunder through its designated Escrow Officer, and any successor escrow agent appointed in accordance with Section 4.5.
"Escrow Fee" means the annual fee of Twelve Thousand Five Hundred Dollars ($12,500) payable by Buyer to the Escrow Agent for the Escrow Agent's services hereunder, as more particularly described in Section 5.1.
"Escrow Officer" means Sandra Okonkwo, or such successor individual as may be designated by the Escrow Agent from time to time by written notice to Buyer and Seller.
"FCC" means the Federal Communications Commission of the United States, or any successor governmental authority having jurisdiction over the matters addressed by the Purchase Agreement.
"FCC Consent" means the grant by the FCC of its consent to the assignment of the FCC Licenses from Seller to Buyer, as contemplated by the application filed under FCC File No. 0010287-EX, including any conditions imposed in connection therewith that are acceptable to Buyer and Seller.
"FCC Licenses" means the fourteen (14) FCC Wireless Radio Service licenses (Meridian Technologies-3 / Band 66), authorized under Part 27 of the FCC Rules (47 C.F.R. Part 27), bearing call signs WQAB201 through WQAB214, as more particularly described in Schedule A hereto.
"Joint Written Instructions" means a written instrument signed by both Buyer and Seller (or their respective authorized representatives identified in Section 8.1 or as otherwise designated in writing to the Escrow Agent) directing the Escrow Agent to disburse all or any portion of the Escrow Deposit in accordance with the terms of this Agreement. A form of Joint Written Instructions is attached hereto as Exhibit B.
"Long-Stop Date" has the meaning ascribed to such term in the Purchase Agreement; provided that, as of the date hereof, the Long-Stop Date is initially March 15, 2023, subject to extension by mutual written agreement of Buyer and Seller in accordance with Section 11.3 of the Purchase Agreement.
"Purchase Price" means One Hundred Twenty-Six Million Five Hundred Thousand Dollars ($126,500,000), as set forth in Section 3.1 of the Purchase Agreement, subject to any adjustments provided for therein.
"Seller" means Ridgeline Wireless Holdings LLC, a limited liability company duly organized and validly existing under the laws of the State of Nevada (Nevada Secretary of State Entity No. E0428716302), with its principal office at 450 South Virginia Street, Suite 800, Reno, Nevada 89501, and its successors and permitted assigns.
"Termination" means the termination of the Purchase Agreement in accordance with its terms, whether by mutual agreement, by either party's exercise of a termination right, or by expiration of the Long-Stop Date.
Section 1.2 — Rules of Construction
(a) Unless the context otherwise requires, all capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement.
(b) The headings and captions of the Articles, Sections, and other subdivisions of this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of any provision hereof.
(c) Wherever the context requires, the singular shall include the plural, and the plural shall include the singular. The masculine gender shall include the feminine and neuter genders, and vice versa.
(d) References in this Agreement to "Sections," "Articles," "Exhibits," and "Schedules" are references to Sections and Articles of, and Exhibits and Schedules to, this Agreement, unless otherwise specified.
(e) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(f) References to "hereof," "herein," "hereby," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision hereof.
(g) References to any statute, rule, or regulation shall be deemed to include any successor statute, rule, or regulation and any rules, regulations, and guidance promulgated thereunder.
(h) References to "dollars" or "$" shall mean the lawful currency of the United States of America.
(i) References to "business days" shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in Los Angeles, California are authorized or required by law to close.
ARTICLE II — DEPOSIT AND ESTABLISHMENT OF ESCROW
Section 2.1 — Delivery of Deposit
(a) Within two (2) business days following the execution and delivery of this Agreement by all parties hereto, Buyer shall deposit, or cause to be deposited, with the Escrow Agent, by wire transfer of immediately available funds to the Escrow Account, the sum of Four Million Five Hundred Thousand Dollars ($4,500,000). Wire transfer instructions for the Escrow Account are set forth in Exhibit A hereto.
(b) Promptly upon receipt of the Deposit into the Escrow Account (and in any event within one (1) business day of such receipt), the Escrow Agent shall acknowledge receipt of the Deposit in writing (which may be by email to the addresses set forth in Article VIII) to both Buyer and Seller, specifying the amount received and the date of receipt.
(c) In the event that the Escrow Agent does not receive the Deposit within five (5) business days following the execution of this Agreement, the Escrow Agent shall promptly notify Seller of such non-receipt in writing. The failure of Buyer to timely deposit the Deposit shall not impose any liability upon the Escrow Agent.
Section 2.2 — Establishment of Escrow Account
(a) The Escrow Agent shall establish a segregated, interest-bearing escrow account (the "Escrow Account") at Meridian National Bank, N.A. for the sole purpose of holding and investing the Deposit in accordance with this Agreement.
(b) The Escrow Account shall be titled as follows: "Meridian National Bank, N.A. as Escrow Agent for Northgate Wireless Americas Inc. / Ridgeline Wireless Holdings LLC — Escrow Account."
(c) The Escrow Agent shall hold the Deposit in the Escrow Account and shall not commingle the Deposit with any other funds held by or on behalf of the Escrow Agent, whether for its own account or for the account of any other person. The Deposit shall at all times be maintained in a segregated account separate and apart from the general assets and funds of the Escrow Agent.
(d) The Escrow Agent shall maintain accurate books and records reflecting all transactions relating to the Escrow Account, including all deposits, withdrawals, investment transactions, and accrued interest and earnings. Upon the reasonable written request of Buyer or Seller, the Escrow Agent shall provide a written statement of the Escrow Account balance, including a summary of investment activity and accrued interest.
Section 2.3 — Investment of Deposit
(a) The Escrow Agent shall invest and reinvest the Deposit (and any interest and earnings thereon) in one or more of the following Permitted Investments, as directed in writing by Buyer (or, absent written direction from Buyer, in the Default Investment specified in subsection (b) below):
(i) Direct obligations of the United States of America, or obligations the full and timely payment of principal and interest on which are unconditionally guaranteed by the United States of America;
(ii) Money market deposit accounts or certificates of deposit issued by Meridian National Bank, N.A. or any other depository institution organized under the laws of the United States or any state thereof, the deposits of which are insured by the Federal Deposit Insurance Corporation, and which institution has a short-term credit rating of at least A-1 from Standard & Poor's Rating Services or P-1 from Moody's Investors Service, Inc.;
(iii) Money market mutual funds that are registered under the Investment Company Act of 1940, as amended, and that invest exclusively in obligations described in clause (i) above; and
(iv) Such other investments as Buyer and Seller may jointly direct in writing to the Escrow Agent from time to time.
(b) In the absence of written investment instructions from Buyer, the Escrow Agent shall invest the Deposit in an interest-bearing money market deposit account at Meridian National Bank, N.A. (the "Default Investment"). The Escrow Agent shall have no liability for any loss resulting from liquidating any investment to make a disbursement required hereunder.
(c) All interest and earnings on the Deposit shall become part of the Escrow Deposit and shall be held in the Escrow Account and disbursed together with, and in the same manner as, the principal amount of the Deposit.
(d) The Escrow Agent shall not be liable for any loss or diminution in the value of the Deposit resulting from any investment made in accordance with this Section 2.3 or from any market fluctuation or negative interest rate environment affecting any Permitted Investment.
(e) Tax Reporting. For federal, state, and local income tax purposes, all interest and other income earned on the Deposit shall be allocated to, reported to, and taxable to Buyer. Buyer shall provide the Escrow Agent with a completed Internal Revenue Service Form W-9 (or applicable successor form) promptly following execution of this Agreement, including Buyer's correct Taxpayer Identification Number. The Escrow Agent shall issue an Internal Revenue Service Form 1099-INT (or such other applicable information return) to Buyer for any calendar year in which interest or other income is earned on the Deposit. Neither the Escrow Agent nor Seller shall have any liability for any tax consequences resulting from the investment or reinvestment of the Deposit.
ARTICLE III — DISBURSEMENT OF ESCROW DEPOSIT
Section 3.1 — Release to Seller Upon Closing
(a) Upon the Closing of the transactions contemplated by the Purchase Agreement, the Escrow Agent shall disburse the entire Deposit (together with all accrued and unpaid interest and earnings thereon) to Seller, or to such other person or account as may be specified in Joint Written Instructions, in accordance with Joint Written Instructions delivered to the Escrow Agent by both Buyer and Seller confirming that the Closing has occurred and specifying the wire transfer instructions for disbursement.
(b) The Deposit disbursed to Seller at Closing shall be credited against the Purchase Price of One Hundred Twenty-Six Million Five Hundred Thousand Dollars ($126,500,000), such that the remaining balance of the Purchase Price payable by Buyer at Closing shall be reduced dollar-for-dollar by the amount of the Deposit (including all interest and earnings thereon), in accordance with the terms of the Purchase Agreement.
(c) Disbursement under this Section 3.1 shall be made by wire transfer of immediately available funds to the account designated by Seller (or as otherwise specified in the Joint Written Instructions) within two (2) business days following the Escrow Agent's receipt of such Joint Written Instructions.
Section 3.2 — Return to Buyer Upon Termination
(a) Upon termination of the Purchase Agreement by Buyer in accordance with the terms thereof, including, without limitation, (i) termination by Buyer for the failure of one or more conditions to Closing set forth in Article VII of the Purchase Agreement, (ii) termination by Buyer upon expiration of the Long-Stop Date where Seller is in material breach of its obligations under the Purchase Agreement, (iii) termination by Buyer due to a material adverse effect on the FCC Licenses, or (iv) termination by mutual written agreement of Buyer and Seller, the Escrow Agent shall disburse the Deposit (together with all accrued and unpaid interest and earnings thereon) to Buyer, in accordance with either of the following:
(i) Joint Written Instructions signed by both Buyer and Seller directing the return of the Deposit to Buyer; or
(ii) A written demand from Buyer (substantially in the form attached hereto as Exhibit C), delivered to the Escrow Agent and accompanied by (A) a copy of the termination notice delivered by Buyer to Seller under the Purchase Agreement, and (B) a certification by an authorized officer of Buyer that the Purchase Agreement has been terminated in accordance with its terms and that Buyer is entitled to the return of the Deposit under the applicable provisions of the Purchase Agreement (a "Buyer Unilateral Demand").
(b) If the Escrow Agent receives a Buyer Unilateral Demand under clause (a)(ii) above, the Escrow Agent shall promptly (and in any event within two (2) business days) deliver a copy of such demand and all accompanying materials to Seller at the address set forth in Article VIII. Seller shall have a period of fifteen (15) business days following the date of Seller's receipt of such copy (the "Seller Objection Period") in which to deliver a written objection (a "Dispute Notice") to the Escrow Agent. If no Dispute Notice is received by the Escrow Agent from Seller within the Seller Objection Period, the Escrow Agent shall disburse the Deposit to Buyer within two (2) business days following the expiration of the Seller Objection Period.
(c) If the Escrow Agent receives a Dispute Notice from Seller within the Seller Objection Period, the Escrow Agent shall continue to hold the Deposit in the Escrow Account pending resolution in accordance with Section 3.5.
Section 3.3 — Release to Seller Upon Buyer Default
(a) If the Purchase Agreement is terminated by Seller due to a material breach or default by Buyer (as defined in the Purchase Agreement), or if Buyer fails to consummate the Closing when all conditions precedent to Buyer's obligation to close have been satisfied or waived, the Escrow Agent shall disburse the Deposit (together with all accrued and unpaid interest and earnings thereon) to Seller, in accordance with either of the following:
(i) Joint Written Instructions signed by both Buyer and Seller directing the release of the Deposit to Seller; or
(ii) A written demand from Seller (substantially in the form attached hereto as Exhibit C), delivered to the Escrow Agent and accompanied by (A) a copy of the termination notice delivered by Seller to Buyer under the Purchase Agreement, (B) a certification by an authorized representative of Seller that the Purchase Agreement has been terminated due to Buyer's material breach or default in accordance with the applicable provisions of the Purchase Agreement, and (C) a statement identifying the nature of such material breach or default with reasonable specificity (a "Seller Unilateral Demand").
(b) If the Escrow Agent receives a Seller Unilateral Demand under clause (a)(ii) above, the Escrow Agent shall promptly (and in any event within two (2) business days) deliver a copy of such demand and all accompanying materials to Buyer at the address set forth in Article VIII. Buyer shall have a period of fifteen (15) business days following the date of Buyer's receipt of such copy (the "Buyer Objection Period") in which to deliver a Dispute Notice to the Escrow Agent. If no Dispute Notice is received by the Escrow Agent from Buyer within the Buyer Objection Period, the Escrow Agent shall disburse the Deposit to Seller within two (2) business days following the expiration of the Buyer Objection Period.
(c) If the Escrow Agent receives a Dispute Notice from Buyer within the Buyer Objection Period, the Escrow Agent shall continue to hold the Deposit in the Escrow Account pending resolution in accordance with Section 3.5.
Section 3.4 — Release Upon Joint Written Instructions
At any time during the term of this Agreement, regardless of whether the Purchase Agreement has been terminated or the Closing has occurred, the Escrow Agent shall disburse all or any portion of the Deposit (together with accrued interest and earnings thereon, as applicable) in accordance with Joint Written Instructions signed by both Buyer and Seller. The Escrow Agent shall be entitled to rely conclusively on such Joint Written Instructions as to the identity of the payee, the amount to be disbursed, and the method and manner of disbursement, without further inquiry into the underlying facts or circumstances giving rise to such instructions. A form of Joint Written Instructions is attached hereto as Exhibit B.
Section 3.5 — Disputes Regarding Disbursement
(a) If the Escrow Agent receives conflicting or disputed instructions regarding the disbursement of the Deposit, or receives a Dispute Notice from Buyer under Section 3.3(b) or from Seller under Section 3.2(b), the Escrow Agent shall:
(i) Promptly notify both Buyer and Seller in writing (which may be by email to the addresses set forth in Article VIII) that a dispute exists with respect to the disbursement of the Deposit and that the Escrow Agent will continue to hold the Deposit pending resolution of such dispute;
(ii) Continue to hold the Deposit (together with all accrued and unpaid interest and earnings thereon) in the Escrow Account, invested in accordance with Section 2.3, pending the earliest to occur of:
(A) Receipt by the Escrow Agent of Joint Written Instructions signed by both Buyer and Seller resolving the dispute and directing the Escrow Agent as to the disbursement of the Deposit;
(B) Receipt by the Escrow Agent of a final, non-appealable order or judgment of a court of competent jurisdiction directing the disbursement or other disposition of the Deposit; or
(C) Such other resolution as Buyer and Seller may mutually agree upon in writing and communicate to the Escrow Agent.
(b) Notwithstanding the foregoing, the Escrow Agent shall have the right (but not the obligation), at any time following its receipt of conflicting instructions or a Dispute Notice, to deposit or tender the Deposit (together with all accrued interest and earnings thereon) with the clerk of any court of competent jurisdiction (including, without limitation, the United States District Court for the Central District of California or the Superior Court of the State of California for the County of Los Angeles) by way of interpleader or similar action. Upon the making of such deposit or tender, the Escrow Agent shall thereupon be relieved and discharged of all further obligations and liability under this Agreement with respect to the Deposit, and Buyer and Seller shall each bear their own costs and expenses in connection with such interpleader proceeding, except as set forth in subsection (c) below.
(c) All costs, fees, and expenses incurred by the Escrow Agent in connection with any interpleader action or other judicial proceeding arising out of a dispute regarding the Deposit, including the Escrow Agent's reasonable attorneys' fees and court costs, shall be borne equally by Buyer and Seller (one-half by each), or as otherwise directed by the court in such proceeding. Such costs and expenses may, at the election of the Escrow Agent, be deducted from the Deposit prior to its deposit with the court or may be billed directly to Buyer and Seller.
Section 3.6 — No Disbursement Without Authorization
(a) The Escrow Agent shall not disburse any portion of the Deposit except as expressly provided in this Article III. No disbursement shall be made based solely upon oral instructions, regardless of the source of such instructions.
(b) The Escrow Agent shall have no duty to inquire into or determine the merits of any claim, dispute, demand, or assertion made by either Buyer or Seller with respect to the Deposit. The Escrow Agent's sole obligation shall be to hold and disburse the Deposit in accordance with the express terms and conditions of this Agreement.
(c) Pending disbursement of the Deposit in accordance with this Article III, the Escrow Agent shall not honor any levy, garnishment, attachment, or similar process served upon it with respect to the Deposit, except as required by applicable law or the order of a court of competent jurisdiction.
ARTICLE IV — DUTIES AND OBLIGATIONS OF ESCROW AGENT
Section 4.1 — Standard of Care
(a) The Escrow Agent shall act solely as a stakeholder and depository with respect to the Deposit and shall have no duties or obligations other than those expressly set forth in this Agreement. The Escrow Agent shall not be deemed to be a trustee, fiduciary, or agent of either Buyer or Seller for any purpose, except to the limited extent expressly provided herein.
(b) The Escrow Agent shall not be required to take any action that, in its sole and absolute judgment, may expose it to liability, penalty, or expense, or that the Escrow Agent reasonably believes to be contrary to applicable law, regulation, or court order. In the event of any ambiguity or uncertainty as to the Escrow Agent's duties or obligations hereunder, the Escrow Agent may refrain from taking any action until such ambiguity or uncertainty is resolved to its reasonable satisfaction.
(c) The Escrow Agent shall not be obligated to take any legal action or institute any proceeding in connection with this Agreement or the Deposit, and shall not be obligated to appear in, prosecute, or defend any action or proceeding that, in its sole judgment, may involve it in expense or liability, unless indemnified to its reasonable satisfaction by one or both of the other parties hereto.
Section 4.2 — Reliance on Documents
(a) The Escrow Agent shall be entitled to rely upon, and shall be fully protected in acting or refraining from acting in reliance upon, any written notice, instruction, certificate, statement, request, consent, agreement, or other document (collectively, "Documents") furnished to it hereunder and reasonably believed by it to be genuine and to have been signed, presented, or delivered by the proper party or parties.
(b) The Escrow Agent shall have no obligation to verify the authority of any person signing or delivering any Document to the Escrow Agent, the authenticity of any signature, or the truth, accuracy, or completeness of the statements or information set forth in any Document. The Escrow Agent may assume that any person purporting to give any notice, instruction, or direction on behalf of a party in accordance with the notice provisions hereof has been duly authorized to do so.
(c) The Escrow Agent may rely upon, and shall not be liable for acting or refraining from acting in accordance with, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
Section 4.3 — Limitation of Liability
(a) The Escrow Agent shall not be liable for any action taken or omitted to be taken by it in good faith and in the exercise of its own reasonable judgment in accordance with the terms of this Agreement, except to the extent that a court of competent jurisdiction determines by final, non-appealable judgment that any loss, liability, or expense incurred by Buyer or Seller was caused by the Escrow Agent's gross negligence, willful misconduct, or material breach of this Agreement.
(b) The Escrow Agent shall not be liable for any loss or diminution in the value of the Deposit resulting from the investment or reinvestment of the Deposit in accordance with Section 2.3, including any loss resulting from market fluctuation, negative interest rates, default by an issuer of any investment, or the insolvency of any depository institution (other than the Escrow Agent itself).
(c) In no event shall the Escrow Agent be liable to Buyer, Seller, or any other person for any indirect, incidental, consequential, special, exemplary, or punitive damages of any kind whatsoever (including, without limitation, lost profits, lost revenues, or loss of business opportunity), regardless of whether such damages are based on contract, tort, strict liability, or any other theory, and regardless of whether the Escrow Agent was advised of the possibility of such damages.
(d) The Escrow Agent shall not be liable for any delay in performing its obligations hereunder to the extent caused by circumstances beyond its reasonable control, including, without limitation, acts of God, terrorism, war, epidemics, pandemics, strikes, lockouts, power failures, telecommunications failures, governmental actions, or the failure of any wire transfer system.
Section 4.4 — Right to Counsel
The Escrow Agent may, at any time and from time to time, consult with and obtain advice from legal counsel of its own choosing (which counsel may, but need not, be counsel to any party hereto) in connection with any question, dispute, or matter arising under or in connection with this Agreement. The Escrow Agent shall not be liable for any action taken, suffered, or omitted by it in good faith in accordance with the advice or opinion of such counsel. The reasonable fees and expenses of such legal counsel shall be paid or reimbursed in accordance with Section 5.2 hereof.
Section 4.5 — Resignation and Removal
(a) Resignation. The Escrow Agent may resign from its duties and obligations under this Agreement at any time by giving not less than thirty (30) days' prior written notice of such resignation to both Buyer and Seller. Such resignation shall become effective upon the earlier of (i) the appointment of a successor escrow agent and the transfer of the Deposit to such successor, or (ii) the expiration of such thirty (30) day notice period, whichever first occurs.
(b) Removal. Buyer and Seller may jointly remove the Escrow Agent at any time, with or without cause, by giving not less than thirty (30) days' prior written notice to the Escrow Agent, signed by both Buyer and Seller.
(c) Appointment of Successor. Upon the resignation or removal of the Escrow Agent, Buyer and Seller shall appoint a successor escrow agent by Joint Written Instructions delivered to the resigning or removed Escrow Agent within thirty (30) days following the effective date of such resignation or removal. Such successor escrow agent shall be a national banking association, a state-chartered bank, or a trust company having combined capital and surplus of not less than Five Hundred Million Dollars ($500,000,000). If Buyer and Seller fail to appoint a successor escrow agent within such thirty (30) day period, the resigning or removed Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or may deposit the Deposit (together with all accrued interest and earnings thereon) with the clerk of such court, and upon such deposit, the Escrow Agent shall be relieved and discharged of all further obligations and liability under this Agreement.
(d) Transfer of Deposit. Upon the appointment of a successor escrow agent, the resigning or removed Escrow Agent shall promptly transfer the Deposit (together with all accrued interest and earnings thereon) to such successor escrow agent and shall deliver to such successor copies of all records and documents in the Escrow Agent's possession relating to the Escrow Account and this Agreement.
(e) Termination of Obligations. The obligations and liabilities of the Escrow Agent under this Agreement shall terminate upon the transfer of the Deposit to a successor escrow agent or the deposit of the Deposit with the clerk of a court of competent jurisdiction in accordance with this Section 4.5, subject to the survival provisions set forth in Section 9.2.
Section 4.6 — Compliance with Court Orders
The Escrow Agent is authorized and directed to comply with any and all final, non-appealable orders, judgments, or decrees issued by any court of competent jurisdiction regarding the disposition of the Deposit or any portion thereof, without regard to whether such order, judgment, or decree is consistent with the instructions of Buyer or Seller. Upon compliance with any such order, judgment, or decree, the Escrow Agent shall not be liable to Buyer, Seller, or any other person by reason of such compliance, regardless of whether such order, judgment, or decree is subsequently reversed, modified, or vacated on appeal.
ARTICLE V — COMPENSATION AND EXPENSES
Section 5.1 — Escrow Fee
(a) Buyer shall pay to the Escrow Agent an annual escrow fee of Twelve Thousand Five Hundred Dollars ($12,500) (the "Escrow Fee") for the Escrow Agent's services rendered hereunder.
(b) The initial annual Escrow Fee shall be due and payable in full upon execution of this Agreement. Thereafter, subsequent annual Escrow Fees shall be due and payable on each anniversary of the date hereof for so long as this Agreement remains in effect and the Escrow Agent continues to hold any portion of the Deposit in the Escrow Account.
(c) The Escrow Fee shall be non-refundable and shall not be prorated in the event that this Agreement is terminated or the Deposit is fully disbursed prior to the end of any annual period. For the avoidance of doubt, the Escrow Fee shall be payable by Buyer directly to the Escrow Agent and shall not be deducted from the Deposit or the Escrow Account.
Section 5.2 — Reimbursement of Expenses
(a) In addition to the Escrow Fee, Buyer shall reimburse the Escrow Agent for all reasonable and documented out-of-pocket expenses incurred by the Escrow Agent in connection with the performance of its duties hereunder, including, without limitation:
(i) Wire transfer fees and bank charges;
(ii) Courier, delivery, and postage charges;
(iii) Costs of preparing and filing tax information returns (including IRS Forms 1099);
(iv) Costs of reproducing, copying, and storing documents and records;
(v) Reasonable attorneys' fees and expenses incurred by the Escrow Agent in connection with any dispute, interpleader action, or other legal proceeding arising under or in connection with this Agreement; and
(vi) Such other reasonable out-of-pocket costs and expenses as may be incurred in the ordinary course of performing the Escrow Agent's duties hereunder.
(b) In the event of a dispute between Buyer and Seller with respect to the Deposit, including any dispute giving rise to an interpleader action or other judicial proceeding, the costs and expenses of the Escrow Agent (including its reasonable attorneys' fees and court costs) attributable to such dispute shall be borne equally by Buyer and Seller (one-half by each), unless otherwise directed by a court of competent jurisdiction or by Joint Written Instructions of Buyer and Seller.
(c) The Escrow Agent shall submit invoices for reimbursable expenses to Buyer (or, in the case of expenses shared equally, to both Buyer and Seller) on a quarterly basis, and such invoices shall be payable within thirty (30) days following receipt. The Escrow Agent shall provide reasonable supporting documentation for any reimbursable expenses upon request.
ARTICLE VI — INDEMNIFICATION
Section 6.1 — Indemnification of Escrow Agent
(a) Buyer and Seller, jointly and severally, hereby agree to indemnify, defend, and hold harmless the Escrow Agent and its officers, directors, employees, agents, successors, and affiliates (collectively, the "Indemnified Parties") from and against any and all losses, liabilities, damages, claims, actions, suits, proceedings, demands, assessments, judgments, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements, court costs, and expert witness fees) (collectively, "Losses") arising out of, relating to, or in connection with the Escrow Agent's acceptance of, or performance of its duties and obligations under, this Agreement, including, without limitation, any Losses arising from or relating to:
(i) Any act or omission of the Escrow Agent taken or suffered in good faith in accordance with the terms of this Agreement;
(ii) Any dispute between Buyer and Seller with respect to the Deposit or the interpretation or application of this Agreement;
(iii) Any interpleader action or other legal proceeding commenced by or against the Escrow Agent in connection with the Deposit;
(iv) The Escrow Agent's compliance with any court order, legal process, or governmental directive relating to the Deposit; and
(v) Any claim made by any third party against the Escrow Agent in connection with the Deposit or the transactions contemplated by this Agreement or the Purchase Agreement;
provided, however, that no Indemnified Party shall be entitled to indemnification hereunder to the extent that such Losses are finally determined by a court of competent jurisdiction, by final, non-appealable judgment, to have resulted from the gross negligence, willful misconduct, or material breach of this Agreement by such Indemnified Party.
(b) The Escrow Agent shall give prompt written notice to Buyer and Seller of any claim or demand for which indemnification may be sought hereunder; provided, however, that the failure to give such notice shall not relieve Buyer or Seller of their indemnification obligations hereunder except to the extent that such failure actually and materially prejudices the rights of Buyer or Seller.
(c) The indemnification obligations of Buyer and Seller under this Section 6.1 shall be satisfied first from any amounts that are otherwise due and payable by the indemnifying party under this Agreement (including the Escrow Fee and reimbursable expenses), and any remaining indemnification obligations shall be paid directly by Buyer and Seller, jointly and severally, to the Indemnified Parties upon demand.
Section 6.2 — Survival
The indemnification obligations of Buyer and Seller under this Article VI shall survive the termination of this Agreement, the resignation or removal of the Escrow Agent, the appointment of a successor escrow agent, and the disbursement of the Deposit, and shall continue in full force and effect until the expiration of the applicable statute of limitations with respect to any claim for which indemnification may be sought.
ARTICLE VII — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller and the Escrow Agent as of the date hereof as follows:
(a) Organization. Northgate Wireless Americas Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File No. 7284619), and has all requisite corporate power and authority to own its properties and to carry on its business as presently conducted.
(b) Authority. Buyer has full corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Buyer have been duly authorized by all necessary corporate action on the part of Buyer, including any requisite approval of its board of directors, and no further corporate proceedings on the part of Buyer are necessary to authorize this Agreement or the transactions contemplated hereby.
(c) Binding Obligation. This Agreement has been duly executed and delivered by Buyer and constitutes a legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) No Conflicts. The execution, delivery, and performance of this Agreement by Buyer do not and will not (i) violate any provision of the certificate of incorporation or bylaws of Buyer, (ii) violate, conflict with, or result in a breach of or default under any material agreement, contract, or instrument to which Buyer is a party or by which it is bound, or (iii) violate any law, rule, regulation, order, judgment, or decree applicable to Buyer.
(e) Source of Funds. The funds constituting the Deposit are lawfully obtained, are free and clear of all liens, pledges, security interests, claims, and encumbrances of any kind whatsoever, and the deposit of such funds with the Escrow Agent does not violate any applicable law, including any anti-money laundering laws or regulations.
Section 7.2 — Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer and the Escrow Agent as of the date hereof as follows:
(a) Organization. Ridgeline Wireless Holdings LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Nevada (Nevada Secretary of State Entity No. E0428716302), and has all requisite limited liability company power and authority to own its properties and to carry on its business as presently conducted.
(b) Authority. Seller has full limited liability company power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Seller have been duly authorized by all necessary limited liability company action on the part of Seller, including the consent of its members to the extent required under the Limited Liability Company Agreement of Ridgeline Wireless Holdings LLC (the "Ridgeline LLC Agreement"), and no further limited liability company proceedings on the part of Seller are necessary to authorize this Agreement or the transactions contemplated hereby.
(c) Binding Obligation. This Agreement has been duly executed and delivered by Seller and constitutes a legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) No Conflicts. The execution, delivery, and performance of this Agreement by Seller do not and will not (i) violate any provision of the Ridgeline LLC Agreement or the articles of organization of Seller, (ii) violate, conflict with, or result in a breach of or default under any material agreement, contract, or instrument to which Seller is a party or by which it is bound, or (iii) violate any law, rule, regulation, order, judgment, or decree applicable to Seller.
Section 7.3 — Representations and Warranties of Escrow Agent
Escrow Agent hereby represents and warrants to Buyer and Seller as of the date hereof as follows:
(a) Organization. Meridian National Bank, N.A. is a national banking association duly organized, validly existing, and in good standing under the laws of the United States, with full power and authority to accept and perform its duties as escrow agent under this Agreement.
(b) Authority. The Escrow Agent has full power and authority to execute, deliver, and perform this Agreement and to carry out its duties hereunder. The execution, delivery, and performance of this Agreement by the Escrow Agent have been duly authorized by all necessary corporate and banking action.
(c) No Conflicts. The execution, delivery, and performance of this Agreement by the Escrow Agent do not and will not conflict with, violate, or result in a breach of (i) any provision of the articles of association or bylaws of the Escrow Agent, (ii) any law, rule, regulation, order, or directive applicable to the Escrow Agent, or (iii) any agreement or instrument to which the Escrow Agent is a party or by which it is bound.
(d) Binding Obligation. This Agreement has been duly executed and delivered by the Escrow Agent and constitutes a legal, valid, and binding obligation of the Escrow Agent, enforceable against the Escrow Agent in accordance with its terms.
ARTICLE VIII — NOTICES
Section 8.1 — Notice Provisions
All notices, demands, requests, consents, approvals, waivers, or other communications required or permitted to be given hereunder (each, a "Notice") shall be in writing and shall be deemed duly given and received:
(a) When delivered personally to the individual designated below or to an officer of the receiving party;
(b) Upon receipt when sent by a nationally recognized overnight courier service (such as Sundial Data Systems, UPS, or Tarrant & Co.), with delivery charges prepaid or billed to the sender, and addressed to the party at the address set forth below;
(c) Upon receipt when sent by United States certified mail, return receipt requested, postage prepaid, and addressed to the party at the address set forth below; or
(d) Upon confirmation of receipt (including by return email, read receipt, or other written confirmation) when sent by email to the email address set forth below, provided that a copy of such Notice is also sent by one of the methods described in clauses (a), (b), or (c) above within two (2) business days following such email transmission.
Notices shall be addressed as follows:
If to Buyer:
Northgate Wireless Americas Inc. 2200 Wilson Boulevard, Suite 1450 Arlington, Virginia 22201
Attention: Claire Matsuda, Vice President, U.S. Operations
Email: cmatsuda@northgatewireless.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 375 Park Avenue, 40th Floor New York, New York 10152
Attention: Sylvia Hartwell, Esq.
Email: shartwell@calderwoodharkness.com
If to Seller:
Ridgeline Wireless Holdings LLC 450 South Virginia Street, Suite 800 Reno, Nevada 89501