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EXHIBIT 2.2
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT (the "Agreement"), dated as of _______ __,
2000, among MUSE Technologies, Inc., a Delaware corporation or
its permitted assigns ("MUSE"), Russell G. Barbour and John
William Poduska, Sr., as representatives of the AVS
Stockholders (the "Stockholder Representatives"), Advanced
Visual Systems Inc., a Delaware corporation (the "Company"),
for purposes of Section 10 of the Agreement and Bank of
Albuquerque, N.A., a New Mexico banking corporation, as escrow
agent (the "Escrow Agent").
INTRODUCTION
The Agreement and Plan of Merger dated as of July __, 2000
(the "Merger Agreement"), among the Company, MUSE and MUSE Merger Sub, Inc., a
Delaware corporation and a wholly owned subsidiary of MUSE, requires as a
condition to the Merger contemplated thereby that MUSE, the Stockholder
Representatives on behalf of the AVS Stockholders and the Escrow Agent enter
into this Agreement and that MUSE and the Stockholder Representatives on behalf
of the AVS Stockholders deliver the Escrow (as defined below) to the Escrow
Agent in order to provide for indemnity payments that the AVS Stockholders may
become obligated to make to MUSE (together with its affiliates, the "Indemnified
Parties") as provided in Article VI and elsewhere in the Merger Agreement.
Capitalized terms used and not otherwise defined herein have the meaning set
forth in the Merger Agreement.
MUSE, the Stockholder Representatives on behalf of the AVS
Stockholders and the Escrow Agent agree as follows:
1. Appointment of the Escrow Agent; Delivery of Escrow. Each
of the AVS Stockholders and MUSE constitute and appoint the Escrow Agent as, and
the Escrow Agent agrees to assume and perform the duties of, the escrow agent
under and pursuant to this Agreement. The Escrow Agent acknowledges receipt (a)
from MUSE of ______ stock certificates (the "Original Share Certificates")
representing 160,000 shares, in the aggregate (the "Indemnity Shares"), of MUSE
common stock, par value $.015 per share ("MUSE Common Stock") which are owned by
the AVS Stockholders, and (b) from the Stockholder Representatives on behalf of
the AVS Stockholders two stock powers executed in blank. The stock powers, the
shares represented by the Original Share Certificates and any dividends or
distributions in stock or other securities with respect to the Indemnity Shares,
shall constitute and be defined as the "Escrow".
2. Acceptance and Undertaking of the Escrow Agent. The Escrow
Agent hereby acknowledges receipt of the foregoing documents and instruments
comprising the Escrow and
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covenants to hold all of the same in escrow, and subsequently to release and
distribute, or return, as the case may be, the Escrow or any part thereof, only
pursuant to and in strict accordance with all of the terms and conditions of
this Agreement.
3. Taxes. All taxes in respect of the Escrow shall be the
obligation of and shall be paid when due by the AVS Stockholders, who shall
indemnify and hold the Indemnified Parties and the Escrow Agent harmless from
and against all such taxes. The Escrow Agent shall have no responsibility for
any tax reporting and, subject to this Agreement, any income on the Escrow shall
be paid to the Stockholder Representatives on behalf of the AVS Stockholders
upon the release of such Escrow.
4. Claims Against the Escrow.
(a) Concurrently with the delivery of a Claim Notice or an
Indemnity Notice to the Stockholder Representatives on behalf of the AVS
Stockholders, or within a reasonable period thereafter, MUSE will deliver to the
Escrow Agent a certificate in substantially the form of Annex I attached to this
Agreement (a "Certificate of Instruction"). No Certificate of Instruction may be
delivered without the prior or simultaneous delivery of a Claim Notice or an
Indemnity Notice. The Escrow Agent shall give written notice to the Stockholder
Representatives of its receipt of a Certificate of Instruction not later than
the second business day next following receipt thereof, together with a copy of
such Certificate of Instruction.
(b) If the Escrow Agent (i) shall not, within 10 calendar days
following its delivery of its written notice with a copy of a Certificate of
Instruction to the Stockholder Representatives (the "Objection Period"), have
received from the Stockholder Representatives a certificate in substantially the
form of Annex II attached to this Agreement (an "Objection Certificate")
disputing the AVS Stockholders' obligation to pay the Owed Amount (as defined
and referred to in such Certificate of Instruction), or (ii) shall have received
such an Objection Certificate within the Objection Period and shall thereafter
have received either (x) a certificate from MUSE and the Stockholder
Representatives substantially in the form of Annex III attached to this
Agreement (a "Resolution Certificate") stating that MUSE and the Stockholder
Representatives on behalf of the AVS Stockholders have agreed that the Owed
Amount referred to in such Certificate of Instruction (or a specified portion
thereof) is payable to one or more of the Indemnified Parties or (y) a copy of a
final, nonappealable order of a court of competent jurisdiction (accompanied by
a certificate of MUSE substantially in the form of Annex IV attached to this
Agreement (a "Litigation Certificate")) stating that the Owed Amount referred to
in such Certificate of Instruction (or a specified portion thereof) is payable
to one or more of the Indemnified Parties by the AVS Stockholders, then the
Escrow Agent shall (1) in the case of (b)(i) or (b)(ii)(x), on the second
business day next following (A) the expiration of the Objection Period or (B)
the Escrow Agent's receipt of a Resolution Certificate, as the case may be (or
as promptly thereafter as practicable if the Original Share Certificates are
required to be transferred into different denominations), or (2) in the case of
(b)(ii)(y), on the fifth business day next following the day on which written
notice of the Escrow Agent's receipt of a Litigation Certificate is given by
Escrow Agent to the Stockholder Representatives (or as promptly thereafter as
practicable if the Original Share Certificates are
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required to be transferred into different denominations), deliver to MUSE a
number of Indemnity Shares with stock powers, in proportion to each AVS
Stockholder's pro rata portion of the total amount of MUSE Common Stock then
held in escrow, having an aggregate value equal to the Owed Amount (or such
specified portion) (based on a price per share of MUSE Common Stock equal to the
market price on the date of consummation of the Merger (the "Share Price")). No
fractional shares shall be issued and any Share Price that is not equally
divided by a whole share shall be rounded up to the nearest whole share. The
Escrow Agent shall be authorized on behalf of each AVS Stockholder to complete
each stock power as necessary to comply with the provisions of this Escrow
Agreement.
(c) In the event that the number of shares of MUSE Common
Stock being delivered pursuant to paragraph (b) above is less than all of the
shares then in the Escrow, then (i) MUSE shall deliver or cause to be delivered
to the Escrow Agent, in exchange for the Original Share Certificates (or
Replacement Share Certificates, as the case may be), new certificates in the
names of the AVS Stockholders representing shares not being delivered pursuant
to paragraph (b) above (the "Replacement Share Certificates") and, (ii) if
requested by the Escrow Agent, the Stockholder Representatives on behalf of the
AVS Stockholders shall deliver additional stock powers executed by the
Stockholder Representatives on behalf of the AVS Stockholders in blank. The
Replacement Share Certificates and corresponding stock powers shall thereafter
be the Escrow.
(d) The Escrow Agent shall give written notice to MUSE of its
receipt of an Objection Certificate not later than the second business day next
following receipt thereof, together with a copy of such Objection Certificate.
The Escrow Agent shall give written notice to the Stockholder Representatives of
its receipt of a Litigation Certificate not later than the second business day
next following receipt thereof, together with a copy of such Litigation
Certificate.
(e) Upon delivery by the Escrow Agent of the Indemnity Shares
with stock powers representing the Owed Amount referred to in a Certificate of
Instruction, such Certificate of Instruction shall be deemed canceled. Upon the
receipt by the Escrow Agent of a Resolution Certificate or a Litigation
Certificate and the distribution by the Escrow Agent of the Indemnity Shares
with stock powers representing the Owed Amount referred to therein, the related
Certificate of Instruction shall be deemed canceled.
(f) Upon MUSE's determination that it has no claim or has
released its claim with respect to an Owed Amount referred to in a Certificate
of Instruction (or a specified portion thereof), MUSE will deliver to the Escrow
Agent prior to the expiration of the applicable Objection Period a certificate
substantially in the form of Annex V attached to this Agreement (a "MUSE
Cancellation Certificate") canceling such Certificate of Instruction (or such
specified portion thereof, as the case maybe), and such Certificate of
Instruction (or portion thereof) shall thereupon be deemed canceled. The Escrow
Agent shall give written notice to the Stockholder Representatives of its
receipt of a MUSE Cancellation Certificate not later than the second business
day next following receipt thereof, together with a copy of such MUSE
Cancellation Certificate.
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(g) Upon receipt of a final, nonappealable order of a court of
competent jurisdiction to the effect that none of the Owed Amount referred to in
a Certificate of Instruction, as to which the Stockholder Representatives
delivered an Objection Certificate within the Objection Period, is payable to
any Indemnified Party by the AVS Stockholders, the Stockholder Representatives
may, provided no Resolution Certificate or Litigation Certificate shall have
previously been received by the Escrow Agent, deliver a copy of such order
(accompanied by a certificate of the Stockholder Representatives on behalf of
the AVS Stockholders substantially in the form of Annex VI attached to this
Agreement (a "Stockholder Representatives' Cancellation Certificate")) canceling
such Certificate of Instruction, and such Certificate of Instruction shall
thereupon be deemed canceled. The Escrow Agent shall give written notice to MUSE
of its receipt of a Stockholder Representatives' Cancellation Certificate not
later than the second business day next following receipt thereof, together with
a copy of such Stockholder Representatives' Cancellation Certificate.
(h) The Escrow Agent shall have no obligation to verify that
the order attached to a Litigation Certificate or Stockholder Representatives'
Cancellation Certificate constitutes a final, nonappealable order of a court of
competent Jurisdiction, and shall be entitled to reasonably rely upon MUSE's or
the Stockholder Representatives' statement to that effect.
5. Release; Expiration Date. At such time on or following the
12 month anniversary of the Closing Date (the "Expiration Date"), when all
Certificates of Instruction received by the Escrow Agent on or prior to the
Expiration Date have been canceled in accordance with paragraph (e), (f,) or (g)
of Section 4, the Escrow Agent shall promptly deliver to the Stockholder
Representatives at a location of the Stockholder Representatives' designation,
the Escrow, as it shall then be constituted after any necessary exchanges of
share certificates have been made in accordance with Sections 4(b), and (c)
hereof, and this Agreement (other than Sections 6, 7 and 8) shall automatically
terminate. In the event all Certificates of Instruction received by the Escrow
Agent on or prior to the Expiration Date shall not have been canceled in
accordance with Section 4 hereof, then this Agreement shall continue in full
force and effect until the cancellation of such Certificate of Instruction in
accordance with Section 4. The Escrow Agent shall be entitled to require payment
of amounts owed to it under Section 8 before distributing the Escrow in
accordance with this Section 5.
6. Duties and Obligations of the Escrow Agent. The duties and
obligations of the Escrow Agent shall be limited to and determined solely by the
provisions of this Agreement and the certificates delivered in accordance with
this Agreement, and the Escrow Agent is not charged with knowledge of or any
duties or responsibilities in respect of any other agreement or document.
In furtherance and not in limitation of the foregoing:
(i) the Escrow Agent shall be fully protected in relying, in
good faith upon any written certification, notice, direction, request, waiver,
consent, receipt or other document that the Escrow Agent reasonably believes to
be genuine and duly authorized, executed and delivered;
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(ii) the Escrow Agent shall not be liable for any error of
judgment, or for any act done or omitted by it, or for any mistake in fact or
law, or for anything that it may do or refrain from doing in connection with
this Agreement; provided, however, that notwithstanding any other provision in
this Agreement, the Escrow Agent shall be liable for its willful misconduct or
gross negligence;
(iii) the Escrow Agent may seek the advice of legal counsel
selected with reasonable care in the event of any dispute or question as to the
construction of any of the provisions of this Agreement or its duties under this
Agreement, which counsel shall not be attorneys of any of the AVS Stockholders
or of the Indemnified Parties or their respective Affiliates, and it shall incur
no liability and shall be fully protected in respect of any action taken,
omitted or suffered by it in good faith in accordance with the opinion of such
counsel;
(iv) in the event that the Escrow Agent shall in any instance,
after seeking the advice of legal counsel pursuant to the immediately preceding
clause, in good faith be uncertain as to its duties or rights under this
Agreement, it shall be entitled to refrain from taking any action in that
instance and its sole obligation, in addition to those of its duties under this
Agreement as to which there is no such uncertainty, shall be to keep safely all
property held in the Escrow until it shall be directed otherwise in writing by
each of the parties to this Agreement or by a final, nonappealable order of a
court of competent jurisdiction; provided, that in the event that the Escrow
Agent has not received such written direction or court order within 180 calendar
days after requesting the same, it may interplead MUSE and the AVS Stockholders
or the Stockholder Representatives on behalf of the AVS Stockholders in any
court of competent jurisdiction and request that such court determine its rights
and duties under this Agreement unless the parties to this Agreement otherwise
agree;
(v) the Escrow Agent may execute any of its powers or
responsibilities under this Agreement and exercise any rights under this
Agreement either directly or by or through agents or attorneys selected with
reasonable care, which shall not be agents or the attorneys of any of the AVS
Stockholders or the Indemnified Parties or their respective Affiliates. Nothing
in this Agreement shall be deemed to impose upon the Escrow Agent any duty to
qualify to do business or to act as fiduciary or otherwise in any jurisdiction
other than the State of New Mexico and the Escrow Agent shall not be responsible
for and shall not be under a duty to examine into or pass upon the validity,
binding effect, execution or sufficiency of any certificates or the shares in
the Escrow, this Agreement, the Merger Agreement or of any agreement amendatory
or supplemental to this Agreement. The Escrow Agent shall not be liable for any
other party's failure to comply with its covenants relating to the Merger
Agreement, including without limitation under applicable securities laws; and
(vi) other than the obligations as specifically set forth
herein, the Escrow Agent shall not be obligated to preserve or protect any
rights with respect to the shares in Escrow or to receive or give any notice
with respect thereto, all of which shall remain the sole responsibility of the
Stockholder Representatives.
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7. Cooperation. MUSE and the Stockholder Representatives on
behalf of the AVS Stockholders shall provide to the Escrow Agent all instruments
and documents within their respective powers to provide that are necessary for
the Escrow Agent to perform its duties and responsibilities under this
Agreement. MUSE has provided the Escrow Agent with a certificate setting forth
the names of officers authorized to deliver instructions hereunder and a sample
of the genuine signature of such officers, and the Escrow Agent shall be
entitled to rely upon such certificates until a substitute certificate is
delivered hereunder. The Stockholder Representatives are authorized to deliver
instructions hereunder on behalf of the AVS Stockholders, and a sample of the
genuine signatures of the Stockholder Representatives has been delivered to the
Escrow Agent in the form provided on the signature page hereto.
8. Fees and Expenses, Indemnity. MUSE shall be liable to the
Escrow Agent for the fees of the Escrow Agent for its services under this
Agreement. Each of MUSE and the AVS Stockholders shall be jointly and severally
liable to reimburse and indemnify the Escrow Agent and its employees, officers,
directors and agents, for, and hold it harmless against, any loss, liabilities,
damages, cost or expense, including but not limited to reasonable attorneys'
fees, reasonably incurred by the Escrow Agent in connection with the Escrow
Agent's performance of its duties and obligations under this Agreement, as well
as the reasonable costs and expenses of defending against any claim or liability
relating to this Agreement; provided that notwithstanding the foregoing, neither
MUSE nor the AVS Stockholders shall be required to indemnify the Escrow Agent
for any such loss, liability, cost or expense arising as a result of the Escrow
Agent's willful misconduct or gross negligence, provided, further, that the
obligations of the AVS Stockholders pursuant to this Section 8 shall be limited
to and satisfied solely from the amount of the Indemnity Shares then held in the
Escrow. Subject to the foregoing, the Escrow Agent shall be entitled to recover
the full amount of such losses, liabilities, damages, costs and expenses from
MUSE or (solely from the Escrow) the AVS Stockholders; provided that in the
event that MUSE or the AVS Stockholders pay any such amount hereunder, MUSE, on
the one hand, and the AVS Stockholders, on the other, shall be entitled to
reimbursement of one-half such amount from the AVS Stockholders (solely from the
Escrow) or MUSE (as the case may be). Escrow Agent shall have a lien on and
right of setoff against the Escrow for unpaid amounts owed to it hereunder.
9. Resignation and Removal of the Escrow Agent.
(a) The Escrow Agent may resign 30 calendar days following the
giving of prior written notice thereof to the Stockholder Representatives and
MUSE. In addition, the Escrow Agent may be removed and replaced on a date
designated in a written instrument signed by the Stockholder Representatives and
MUSE and delivered to the Escrow Agent. Notwithstanding the foregoing, no such
resignation or removal shall be effective until a successor escrow agent has
acknowledged its appointment as such as provided in paragraph (c) below. In
either event, upon the effective date of such resignation or removal, the Escrow
Agent shall deliver the property then comprising the Escrow to such successor
escrow agent, together with such records maintained by the Escrow Agent in
connection with its duties under this Agreement and other information with
respect to the Escrow as such successor may reasonably request.
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(b) If a successor escrow agent shall not have acknowledged
its appointment as such as provided in paragraph (c) below, in the case of a
resignation, prior to the expiration of 30 calendar days following the date of a
notice of resignation or, in the case of a removal, on the date designated for
the Escrow Agent's removal, as the case may be, because the Stockholder
Representatives and MUSE are unable to agree on a successor escrow agent, or for
any other reason, the Escrow Agent may select another successor escrow agent and
any such resulting appointment shall be binding upon all of the parties to this
Agreement.
(c) Upon written acknowledgment by a successor escrow agent
appointed in accordance with the foregoing provisions of this Section 9 of its
agreement to serve as escrow agent under this Agreement and the receipt of the
property then comprising the Escrow, the Escrow Agent shall be fully released
and relieved of all duties, responsibilities and obligations under this
Agreement, subject to the proviso contained in clause (ii) of Section 6 and
subject to survival of Section 8, and such successor escrow agent shall for all
purposes of this Agreement be the Escrow Agent.
10. Stockholder Representatives. The Company hereby represents
and warrants that each AVS Stockholder has previously appointed through due and
valid action the Stockholder Representatives with full power and authority to
act as attorney-in-fact and on behalf of each AVS Stockholder in connection with
any and all matters with respect to this Agreement and the Merger Agreement, and
the Stockholder Representatives have accepted such appointment to act as
representative and on behalf of each AVS Stockholder under this Agreement and
the Merger Agreement. The Stockholder Representatives shall have the authority
to act on behalf of and to bind each AVS Stockholder for purposes of the
provisions of this Agreement and the Merger Agreement. If a Stockholder
Representative dies, resigns or becomes incapacitated, the AVS Stockholders
shall have the authority to appoint a successor to act as Stockholder
Representative hereunder, provided any such successor Stockholder Representative
is reasonably acceptable to MUSE.
11. Notices. All notices, requests and other communications
under this Agreement must be in writing and will be deemed to have been duly
given if delivered personally, by overnight courier or by facsimile transmission
or mailed (first class postage prepaid) to the parties at the following
addresses or facsimile numbers:
If to MUSE, to:
MUSE Technologies, Inc.
1601 Randolph, S.E.
Albuquerque, NM 87106
Telephone: (505) 843-6873
Telecopy: (505) 766-9123
Attention: Brian Clark, President
with a copy to:
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Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Telephone: (212) 969-3208
Telecopy: (212) 969-2900
Attention: Neil S. Belloff, Esq.
If to the AVS Stockholders, to the Stockholder
Representatives:
Russell G. Barbour and John William Poduska, Sr.
Advanced Visual Systems Inc.
300 Fifth Avenue
Waltham, MA 02154
Telephone: (781) 890-4300
Telecopy: (781) 890-8287
with a copy to:
Hill & Barlow
One International Place
Boston, Massachusetts 02110
Telephone: (617) 428-3000
Telecopy: (617) 428-3500
Attention: Thomas C. Chase, Esq.
If to the Escrow Agent, to:
Bank of Albuquerque, N.A.
9520 N. May, Suite 110
Oklahoma City, OK 73120
Telephone: (405) 936-3972
Telecopy: (405) 936-3964
Attention: Rachel Singleton
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or overnight courier in the manner described above to the address as
provided in this Section, be deemed given upon receipt (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties to this Agreement.
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12. Entire Agreement; Amendments, etc. This Agreement
represents and contains the entire understanding among the parties hereto with
respect to the subject matter hereof and supercedes all prior agreements,
understandings and other dealings among the parties hereto with respect to the
subject matter hereof. This Agreement may be amended or modified, and any of the
terms of this Agreement may be waived, only by a written instrument duly
executed by or on behalf of MUSE, the Stockholder Representatives and the Escrow
Agent. No waiver by any party of any term or condition contained of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on any
future occasion.
13. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO A CONTRACT EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. THE PARTIES HERETO EACH
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL
COURT SITTING IN THE CITY AND COUNTY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO EACH
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT SUCH PARTY MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT SUCH PARTY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE OTHER PARTY IN ANY OTHER JURISDICTION.
14. Business Day. For all purposes of this Agreement, the term
"business day" shall mean a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
15. Miscellaneous.
(a) This Agreement is binding upon and will inure to the
benefit of the parties to this Agreement and their respective successors and
permitted assigns. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions of this
Agreement. This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute, one
and the same instrument.
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(b) The parties agree that the shares in Escrow may not be
sold, pledged or otherwise transferred or disposed of during the term of this
Agreement, except as provided in Sections 4(b), 4(c) and 8 hereof.
(c) Voting. While the MUSE Common Stock is in Escrow, the AVS
Stockholders shall have the right to vote such shares. The Escrow Agent shall
have the obligation of forwarding to the Stockholder Representatives any and all
notices to the AVS Stockholders, including notices relating to voting rights,
and the Stockholder Representatives shall be authorized to vote the shares in
Escrow on behalf of the AVS Stockholders.
The parties to this Agreement have caused this Agreement to be
executed as of the date first above written.
MUSE TECHNOLOGIES, INC.
By: ________________________________
Name:
Title:
STOCKHOLDER REPRESENTATIVES:
________________________________
Russell G. Barbour
________________________________
John William Poduska, Sr.
ESCROW AGENT:
Bank of Albuquerque, N.A.,
as Escrow Agent
By: ________________________________
Name:
Title:
The undersigned hereby joins in this Agreement for the
purposes of the first sentence of Section 10:
ADVANCED VISUAL SYSTEMS INC.
By: ________________________________
Name:
Title:
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ANNEX I
CERTIFICATE OF INSTRUCTION
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, MUSE Technologies, Inc. ("MUSE") pursuant to Section
4(a) of the Escrow Agreement, dated as of ________ __, 2000, among MUSE, the
Stockholder Representatives, Advanced Visual Systems Inc. and you (terms defined
in said Escrow Agreement have the same meanings when used herein), hereby:
(a) certifies that (i) MUSE or another Indemnified Party has sent to
the Stockholder Representatives a Claim Notice or an Indemnity Notice, a copy of
which is attached hereto, and (ii) the amount of $ _____ (the "Owed Amount") is
payable to the Indemnified Parties by the AVS Stockholders pursuant to the
Merger Agreement by reason of the matter described in such Claim Notice or
Indemnity Notice; and
(b) instructs you to deliver to MUSE a number of shares of MUSE Common
Stock with stock powers (which you are authorized to complete as necessary)
having an aggregate value equal to the Owed Amount (i) unless you receive an
Objection Certificate from the Stockholder Representatives prior to the
expiration of the Objection Period, within two business days following the
expiration of the Objection Period, or (ii) if you receive an Objection
Certificate within the Objection Period, within two business days following your
receipt of a Resolution Certificate or a Litigation Certificate.
MUSE TECHNOLOGIES, INC.
By: ______________________________________
Name:
Title:
Dated: _______________, ______
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ANNEX II
OBJECTION CERTIFICATE
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, pursuant to Section 4(b) of the Escrow Agreement,
dated as of _______ __, 2000, among MUSE Technologies, Inc. ("MUSE"), the
Stockholder Representatives, Advanced Visual Systems Inc. and you (terms defined
in said Escrow Agreement have the same meanings when used herein), hereby:
(a) disputes that the Owed Amount referred to in the Certificate of Instruction
dated _______________ ___, ______ is payable to the Indemnified Parties by the
AVS Stockholders pursuant to the Merger Agreement;
(b) certifies that the undersigned has sent to MUSE a written statement of the
undersigned dated _______________ ___, ______, a copy of which is attached
hereto, disputing the AVS Stockholders' liability to the Indemnified Parties for
the Owed Amount; and
(c) objects to your delivery to MUSE of the Owed Amount as provided in such
Certificate of Instruction.
____________________________________
STOCKHOLDER REPRESENTATIVE
Dated: _______________, ______
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ANNEX III
RESOLUTION CERTIFICATE
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, MUSE Technologies, Inc. ("MUSE"), and the Stockholder
Representatives, pursuant to Section 4(b) of the Escrow Agreement, dated as of
_______ ___, 2000, among MUSE, the Stockholder Representatives, Advanced Visual
Systems Inc. and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) certify that (i) MUSE and the AVS Stockholders have resolved their
dispute as to the matter described in the Certificate of Instruction dated
_______________, ______ and the related Objection Certificate dated
_______________, ______ and (ii) the final Owed Amount with respect to the
matter described in such Certificates is $__________________;
(b) instruct you to deliver to MUSE a number of shares of MUSE Common
Stock with stock powers (which you are authorized to complete as necessary)
having an aggregate value equal to such final Owed Amount (based on the Share
Price) within two business days following your receipt of this Certificate; and
(c) agree that the Owed Amount designated in such Certificate of
Instruction, to the extent, if any, it exceeds such final Owed Amount referred
to in clause (ii) of paragraph (a) above, shall be deemed not payable to the
Indemnified Parties and such Certificate of Instruction is hereby canceled.
MUSE TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
________________________________________
STOCKHOLDER REPRESENTATIVE
Dated: _______________, ______
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ANNEX IV
LITIGATION CERTIFICATE
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, MUSE Technologies, Inc. ("MUSE"), pursuant to Section
4(b) of the Escrow Agreement, dated as of ________ __, 2000, among MUSE, the
Stockholder Representatives, Advanced Visual Systems Inc. and you (terms defined
in said Escrow Agreement have the same meanings when used herein), hereby:
(a) certifies that (i) attached hereto is a final, nonappealable order
of a court of competent jurisdiction resolving the dispute between MUSE or other
Indemnified Party and the AVS Stockholders as to the matter described in the
Certificate of Instruction dated _______________, ______ and the related
Objection Certificate dated _______________, ______ and (ii) the final Owed
Amount with respect to the matter described in such Certificates, as provided in
such order, is $___________;
(b) instructs you to deliver to MUSE a number of shares of MUSE Common
Stock with stock powers (which you are authorized to complete as necessary)
having an aggregate value equal to such final Owed Amount (based on the Share
Price) within two business days following your receipt of this Certificate; and
(c) agrees that the Owed Amount designated in such Certificate of
Instruction, to the extent, if any, it exceeds such final Owed Amount referred
to in clause (ii) of paragraph (a) above, shall be deemed not payable to the
Indemnified Parties and such Certificate of Instruction is hereby canceled.
MUSE TECHNOLOGIES, INC.
By: ________________________________
Name:
Title:
Dated: _______________, ______
-14-
<PAGE>
ANNEX V
MUSE CANCELLATION CERTIFICATE
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, MUSE Technologies, Inc. ("MUSE"), pursuant to Section
4(f) of the Escrow Agreement, dated as of ________ __, 2000, among MUSE, the
Stockholder Representatives, Advanced Visual Systems Inc. and you (terms defined
in said Escrow Agreement have the same meanings when used herein), hereby:
(a) certifies that (i) it hereby releases its claim against the AVS
Stockholders with respect to [all] [specify portion] of the Owed Amount
designated in the Certificate of Instruction dated _______________, ______ and
(ii) as a result, the final Owed Amount with respect to such Certificate of
Instruction is $____________; and
(b) agrees that such Certificate of Instruction is, to the extent
released as provided in clause (i) of paragraph (a) above, canceled.
MUSE TECHNOLOGIES, INC.
By: ___________________________________
Name:
Title:
Dated: _______________, ______
-15-
<PAGE>
ANNEX VI
STOCKHOLDER REPRESENTATIVES' CANCELLATION CERTIFICATE
to
Bank of Albuquerque, N.A.,
as Escrow Agent
The undersigned, representatives of the AVS Stockholders who are
parties, pursuant to authority granted to the undersigned, to the Escrow
Agreement, dated as of _______ __, 2000, among MUSE Technologies, Inc. ("MUSE"),
the undersigned, Advanced Visual Systems Inc. and you (terms defined in said
Escrow Agreement have the same meanings when used herein), hereby certifies to
you pursuant to Section 4(g) of said Escrow Agreement that (i) attached hereto
is a final, nonappealable order of a court of competent jurisdiction resolving
the dispute between MUSE or other Indemnified Party and the AVS Stockholders as
to the matter described in the Certificate of Instruction dated _______________,
______ and the related Objection Certificate dated __________, ____ and (ii) as
provided in such order, there is [no] [specify amount] Owed Amount with respect
to the matter described in such Certificates.
_____________________________________
STOCKHOLDER REPRESENTATIVE
Dated: _______________, ______
-16-
