EXHIBIT 10.14
THE
BANK OF
NEW
YORK
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ESCROW AGREEMENT
between
SORRENTO NETWORKS CORPORATION
and
THE BANK OF NEW YORK
Dated as of August 1, 2001
ACCOUNT NUMBER: ▇▇▇▇▇▇▇▇
SHORT TITLE OF ACCOUNT: SORRENTO DEBENTURE ESCROW
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ESCROW AGREEMENT made this 1st day of August by and between THE BANK OF NEW YORK
("Escrow Agent") and the undersigned (the "Depositor").
WHEREAS, pursuant to the Securities Purchase Agreement dated the date hereof
among the Buyers identified on Exhibit A (the "Buyers") and the Depositor (the
"Purchase Agreement"), the Buyers have agreed to purchase from the Depositor (i)
$32.2 million in aggregate principal amount of the Company's 9.75% Senior
Convertible Debentures due August 2, 2004 (the "Debentures") and (ii) warrants
dated the date hereof (the "Warrants") to purchase shares of the Depositor's
common stock, par value $.30 per share, or Series F Preferred Stock, par value
$0.01 per share, for the purchase price specified therein (the "Purchase
Price");
WHEREAS, pursuant to the Purchase Agreement, a portion of the Purchase Price
will be deposited in escrow with the Escrow Agent to be held and distributed by
the Escrow Agent on terms and conditions set forth herein;
Depositor and Escrow Agent hereby agree that, in consideration of the mutual
promises and covenants contained herein, Escrow Agent shall hold in escrow and
shall distribute Escrow Property (as defined herein) in accordance with and
subject to the following Instructions and Terms and Conditions:
Capitalized terms used herein but not otherwise defined shall have the meaning
attributed to such terms in the Purchase Agreement.
I. INSTRUCTIONS:
1. Escrow Property
The property and/or funds deposited or to be deposited with Escrow Agent by
Depositor shall be $10,244,635.87 in cash. The foregoing property and/or
funds, plus all interest, dividends and other distributions and payments
thereon (collectively the "Distributions") received by Escrow Agent, less
any property and/or funds distributed or paid in accordance with this
Escrow Agreement, are collectively referred to herein as "Escrow Property."
2. Investment of Escrow Property Escrow Agent shall invest or reinvest Escrow
Property, without distinction between principal and income, in accordance
with the following:
Until the release of the Escrow Property pursuant to Section 3 hereof, the
Escrow Agent shall invest and reinvest the Escrow Property solely in (a)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than three months from the date of acquisition, and
(b) U.S. Money Market Funds (as defined below). As used herein, the term
"U.S. Money Market Funds" means interests in any open-end or
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closed-end management type investment company or investment trust
registered under the Investment Company Act of 1940, (as from time to time
amended, the "Investment Company Act"), the portfolio of which is limited
to obligations of, or obligations guaranteed by, the United States or any
agency thereof ("Federal Obligations") and to agreements to repurchase
Federal Obligations that are at least 100% collateralized by Federal
Obligations marked to market on a daily basis.
Escrow Agent shall have no liability for any loss arising from or related
to any such investment other than in accordance with paragraph 4 of the
Terms and Conditions.
3. Distribution of Escrow Property
Escrow Agent is directed to hold and distribute the Escrow Property in the
following manner:
(a) Release of Escrow Property.
(i) If (1) the Depositor has not obtained NASD Approval (as
defined in the Depositor's Certificate of Designations of its Series
F Preferred Stock ("Certificate of Designations") or Shareholder
Approval (as defined in the Certificate of Designations) and (2) a
Buyer has elected to redeem up to that amount of Debentures held by
such holder of which the Outstanding Principal Amount (as defined in
the Debentures) is equal to (i) the Original Escrow Amount multiplied
by (ii) a fraction (x) the numerator of which is the aggregate
Outstanding Principal Amount of the Debentures held by such holder
and (y) the denominator of which is equal to the aggregate
Outstanding Principal Amount of all of the Debentures (the
"Redemption") pursuant to Section 11(g) of the Debentures, the Buyer
electing such Redemption will deliver to the Escrow Agent a written
notice in the form of Exhibit B signed by the Buyer (a "Buyer
Distribution Notice") setting forth the amount to be distributed to
the Buyer determined as provided above and directing the distribution
of all or a portion of its Pro-Rata Allocation together with all
interest or fees earned thereon. Within five Business Days after
receipt of a Buyer Distribution Notice, the Escrow Agent shall pay to
the Buyer requesting such distribution, the amount of the Escrow
Property specified in such Buyer Distribution Notice. The Escrow
Agent shall, to the extent the Depositor has not certified to the
Escrow Agent and Buyers that it has otherwise satisfied its
obligation to pay accrued interest (or, in the case of Crescent,
accrued fees) on the Debentures in accordance with their terms (the
interest or, in the case of Crescent, fees, earned pursuant to the
Debentures is collectively referred to herein as the "Debenture
Escrow Interest"), also distribute to such Buyer the Buyer's Pro-Rata
Allocation of such interest or fees in partial satisfaction of
accrued interest (or, in the case of Crescent, accrued fees) owed
under the Debentures.
(ii) If the Depositor has obtained NASD Approval or Shareholder
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Approval, the Company and all Buyers shall deliver to the Escrow
Agent a written notice in the form of Exhibit C signed by Depositor
and all Buyers (the "Depositor's Distribution Notice") directing the
distribution of the entire amount of the Escrow Property to the
Depositor plus all interest and fees accrued thereon. All Escrow
Property remaining after distribution to Buyers requesting Redemption
and expiration of the time periods specified for election of
Redemption pursuant to Section 11(g) of the Debentures shall be
distributed to the Depositor.
(iii) The Escrow Agent will not distribute any of the Escrow
Property or interest payments (or, in the case of Crescent, fee
payments) thereon until it receives a Buyer Distribution Notice or
Depositor Distribution Notice.
(iv) Notwithstanding paragraph 11(b) of the Terms and
Conditions, the Escrow Agent shall give effect to each Buyer
Distribution Notice regardless of any instruction to the contrary
from Depositor.
(b) Liquidation of Investments. If necessary to satisfy any
distributions under this Agreement, the Escrow Agent may sell or liquidate,
in its reasonable discretion, any one or more investments prior to maturity
and the Escrow Agent shall not be liable to the Depositor or to the Buyers
for any loss or penalties resulting from or relating to such sale or
liquidation, however the persons entitled to such distribution hereunder
may extend any payment period in paragraph (a) above in order to avoid any
loss of income or principal from a premature liquidation of an escrow
investment. All releases of Escrow Property shall be made by wire transfer
of immediately available funds to the appropriate party at the account
specified in the applicable distribution notice, or in such other manner as
agreed to between the appropriate party and the Escrow Agent.
4. Addresses
Notices, instructions and other communications shall be sent to Escrow
Agent, in care of United States Trust Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and to Depositor and Buyers as set forth
in Exhibit A hereto:
5. Compensation
(a) At the time of execution of this Escrow Agreement, Depositor shall
pay Escrow Agent a fee of $ .
(b) Depositor shall pay an investment transaction fee of $ for
each purchase or sale of a security made by Escrow Agent hereunder.
(c) Depositor shall be responsible for and shall reimburse Escrow Agent
upon demand for all expenses, disbursements and advances incurred or
made by Escrow Agent in connection with this Agreement.
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(d) The Escrow Agent shall not have any claim against any Buyer for any
fee or expense arising in connection with the performance of its
duties hereunder.
II. TERMS AND CONDITIONS:
1. The duties, responsibilities and obligations of Escrow Agent shall be
limited to those expressly set forth herein and no duties, responsibilities
or obligations shall be inferred or implied. Escrow Agent shall not be
subject to, nor required to comply with, any other agreement to which the
Depositor is a party, even though reference thereto may be made herein, or
to comply with any direction or instruction (other than those contained
herein or delivered in accordance with this Escrow Agreement) from the
Depositor or any entity acting on its behalf. Escrow Agent shall not be
required to, and shall not, expend or risk any of its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder.
2. This Agreement is for the exclusive benefit of the parties hereto and their
respective successors hereunder, and shall not be deemed to give, either
express or implied, any legal or equitable right, remedy, or claim to any
other entity or person whatsoever other than the Buyers.
3. If at any time Escrow Agent is served with any judicial or administrative
order, judgment, decree, writ or other form of judicial or administrative
process which in any way affects Escrow Property (including but not limited
to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Escrow Property), Escrow
Agent is authorized to comply therewith in any manner as it or its legal
counsel of its own choosing deems appropriate; and if Escrow Agent complies
with any such judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process, Escrow Agent shall not be
liable to any of the parties hereto or to any other person or entity even
though such order, judgment, decree, writ or process may be subsequently
modified or vacated or otherwise determined to have been without legal
force or effect.
4. (a) Escrow Agent shall not be liable for any action taken or omitted or for
any loss or injury resulting from its actions or its performance or lack of
performance of its duties hereunder in the absence of gross negligence or
willful misconduct on its part. In no event shall Escrow Agent be liable
(i) for acting in accordance with or relying upon any instruction, notice,
demand, certificate or document from Depositor or any entity acting on
behalf of Depositor, (ii) for any consequential, punitive or special
damages, (iii) for the acts or omissions of its nominees, correspondents,
designees, subagents or subcustodians, or (iv) for an amount in excess of
the value of the Escrow Property, valued as of the date of deposit.
(b) If any fees, expenses or costs incurred by, or any obligations owed to,
Escrow Agent hereunder are not promptly paid when due, Escrow Agent may
reimburse itself therefor from the Escrow Property and may sell, convey or
otherwise dispose of any Escrow Property for such purpose.
(c) As security for the due and punctual performance of any and all of
Depositor's obligations to Escrow Agent hereunder, now or hereafter
arising, Depositors, individually and collectively, hereby pledge, assign
and grant to Escrow Agent a continuing security interest in, and a lien on,
the Escrow Property and all Distributions
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thereon or additions thereto (whether such additions are the result of
deposits by Depositor or the investment of Escrow Property). The security
interest of Escrow Agent shall at all times be valid, perfected and
enforceable by Escrow Agent against Depositor and all third parties in
accordance with the terms of this Escrow Agreement.
(d) Escrow Agent may consult with legal counsel at the expense of the
Depositor as to any matter relating to this Escrow Agreement, and Escrow
Agent shall not incur any liability in acting in good faith in accordance
with any advice from such counsel.
(e) Escrow Agent shall not incur any liability for not performing any act
or fulfilling any duty, obligation or responsibility hereunder by reason of
any occurrence beyond the control of Escrow Agent (including but not
limited to any act or provision of any present or future law or regulation
or governmental authority, any act of God or war, or the unavailability of
the Federal Reserve Bank wire or telex or other wire or communication
facility).
5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed
as soon as practicable to collect any checks or other collection items at
any time deposited hereunder. All such collections shall be subject to
Escrow Agent's usual collection practices or terms regarding items received
by Escrow Agent for deposit or collection. Escrow Agent shall not be
required, or have any duty, to notify anyone of any payment or maturity
under the terms of any instrument deposited hereunder, nor to take any
legal action to enforce payment of any check, note or security deposited
hereunder or to exercise any right or privilege which may be afforded to
the holder of any such security.
6. Escrow Agent shall provide to Depositor and each Buyer monthly statements
identifying transactions, transfers or holdings of Escrow Property and each
such statement shall be deemed to be correct and final upon receipt thereof
by the Depositor unless Escrow Agent is notified in writing to the contrary
within thirty (30) business days of the date of such statement.
7. Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to
execute or deliver any such document, security or endorsement.
8. Notices, instructions or other communications shall be in writing and shall
be given to the address set forth in the "Addresses" provision herein (or
to such other address as may be substituted therefor by written
notification to Escrow Agent or Depositors). Notices to Escrow Agent shall
be deemed to be given when actually received by Escrow Agent's Corporate
Trust Department. Escrow Agent is authorized to comply with and rely upon
any notices, instructions or other communications believed by it to have
been sent or given by Depositor or by a person or persons authorized by
Depositor. Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday, or banking holiday, such
time shall be extended to the next day on which Escrow Agent is open for
business.
9. Depositor, shall be liable for and shall reimburse and indemnify Escrow
Agent and hold Escrow Agent harmless from and against any and all claims,
losses, liabilities, costs, damages or expenses (including reasonable
attorneys' fees and expenses) (collectively,
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"Losses") arising from or in connection with or related to this Escrow
Agreement or being Escrow Agent hereunder (including but not limited to
Losses incurred by Escrow Agent in connection with its successful defense,
in whole or in part, of any claim of gross negligence or willful misconduct
on its part), provided, however, that nothing contained herein shall
require Escrow Agent to be indemnified for Losses caused by its gross
negligence or willful misconduct.
10. (a) Depositor may remove Escrow Agent at any time by giving to Escrow Agent
and Buyers thirty (30) calendar days' prior notice in writing signed by
Depositor. Escrow Agent may resign at any time by giving to Depositors
fifteen (15) calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of
removal to Escrow Agent or receiving the foregoing notice of resignation
from Escrow Agent, Depositor shall appoint a successor Escrow Agent. If a
successor Escrow Agent has not accepted such appointment by the end of such
10-day period, Escrow Agent may, in its sole discretion, may apply to a
court of competent jurisdiction for the appointment of a successor Escrow
Agent or for other appropriate relief. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Escrow Agent in
connection with such proceeding shall be paid by the Depositor.
(c) Upon receipt of the identity of the successor Escrow Agent, Escrow
Agent shall either deliver the Escrow Property then held hereunder to the
successor Escrow Agent, less Escrow Agent's fees, costs and expenses or
other obligations owed to Escrow Agent, or hold such Escrow Property (or
any portion thereof), pending distribution, until all such fees, costs and
expenses or other obligations are paid.
(d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow
Agent shall have no further duties, responsibilities or obligations
hereunder.
11. (a) In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by Escrow Agent
hereunder, Escrow Agent may, in its sole discretion, refrain from taking
any action other than retain possession of the Escrow Property, unless
Escrow Agent receives written instructions, signed by all Depositors, which
eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by Depositor
and any other person or entity with respect to any Escrow Property, Escrow
Agent shall be entitled, in its sole discretion, to refuse to comply with
any and all claims, demands or instructions with respect to such Escrow
Property so long as such dispute or conflict shall continue, and Escrow
Agent shall not be or become liable in any way to the Depositor for failure
or refusal to comply with such conflicting claims, demands or instructions.
Escrow Agent shall be entitled to refuse to act until, in its sole
discretion, either (i) such conflicting or adverse claims or demands shall
have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to
appeal, or settled by agreement between the conflicting parties as
evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent
shall have received security or an indemnity satisfactory to it sufficient
to hold it harmless from and against any and all Losses which it may incur
by reason of so acting. Escrow Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial
relief or orders as it may deem, in its sole
7
discretion, necessary. The costs and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such proceeding
shall be paid by the Depositor.
12. This Agreement shall be interpreted, construed, enforced and administered
in accordance with the internal substantive laws (and not the choice of law
rules) of the State of New York. The Depositor hereby submits to the
personal jurisdiction of and each agrees that all proceedings relating
hereto shall be brought in courts located within the City and State of New
York or elsewhere as Escrow Agent may select. The Depositors hereby waives
the right to trial by jury and to assert counterclaims in any such
proceedings. To the extent that in any jurisdiction Depositor may be
entitled to claim, for itself or its assets, immunity from suit, execution,
attachment (whether before or after judgment) or other legal process, each
hereby irrevocably agrees not to claim, and hereby waives, such immunity.
Depositor waives personal service of process and consents to service of
process by certified or registered mail, return receipt requested, directed
to it at the address last specified for notices hereunder, and such service
shall be deemed completed ten (10) calendar days after the same is so
mailed.
13. Except as otherwise permitted herein, this Escrow Agreement may be modified
only by a written amendment signed by all the parties hereto, and no waiver
of any provision hereof shall be effective unless expressed in a writing
signed by the party to be charged. The Escrow Agreement may not be amended
by Depositor or Escrow Agent without the written consent of the Buyers.
14. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall
not preclude or inhibit the exercise of any additional rights or remedies.
The waiver of any right or remedy hereunder shall not preclude the
subsequent exercise of such right or remedy.
15. The Depositor hereby represents and warrants (a) that this Escrow Agreement
has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Agreement by Depositor
do not and will not violate any applicable law or regulation.
16. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability
of any other provision; and if any provision is held to be enforceable as a
matter of law, the other provisions shall not be affected thereby and shall
remain in full force and effect.
17. This Agreement shall constitute the entire agreement of the parties with
respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.
18. This Agreement shall terminate upon the distribution of all Escrow Property
from the Account. The provisions of these Terms and Conditions shall
survive termination of this Escrow Agreement and/or the resignation or
removal of the Escrow Agent.
19. No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions "The Bank of New
York" by name or the rights, powers, or duties of the Escrow Agent under
this Agreement shall be issued by any other parties hereto, or on such
party's behalf, without the prior written consent of Escrow Agent.
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20. The headings contained in this Agreement are for convenience of reference
only and shall have no effect on the interpretation or operation hereof.
21. This Escrow Agreement may be executed by each of the parties hereto in any
number of counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all such counterparts
shall together constitute one and the same agreement.
22. The Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Depositor shall pay or reimburse the Escrow Agent upon
request for any transfer taxes or other taxes relating to the Escrow
Property incurred in connection herewith and shall indemnify and hold
harmless the Escrow Agent any amounts that it is obligated to pay in the
way of such taxes. Any payments of income from this Escrow Account shall be
subject to withholding regulations then in force with respect to United
States taxes. The parties hereto will provide the Escrow Agent with
appropriate W-9 forms for tax I.D., number certifications, or W-8 forms for
non-resident alien certifications. It is understood that the Escrow Agent
shall be responsible for income reporting only with respect to income
earned on investment of funds which are a part of the Escrow Property and
is not responsible for any other reporting. This paragraph and paragraph
(9) shall survive notwithstanding any termination of this Escrow Agreement
or the resignation of the Escrow Agent.
IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to
be executed by a duly authorized officer as of the day and year first written
above.
THE BANK OF NEW YORK, as Escrow Agent
By:
---------------------------------
Name:
Title:
SORRENTO NETWORKS CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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EXHIBIT A
Principal
Investor Address Amount Escrow Number of Investor's Representatives'
Investor Name and Facsimile Number Debentures Amount Warrants Address and Facsimile Number
------------------ -------------------------------- ----------- ------------ --------- ----------------------------
Deutsche Bank AG, C/o Deutsche Banc Alex. ▇▇▇▇▇. 7,500,000 2,386,172.95 780,708 C/o Deutsche Banc Alex.
London Branch Inc. ▇▇▇▇▇. Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
Attn: ▇▇▇▇▇▇ ▇▇▇▇/ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇/
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇
▇▇▇-▇▇▇-▇▇▇▇
Gryphon Master Fund* ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3,000,000 954,469.18 312,283 ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ 212-332-5050
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ 5,000,000 1,590,781.97 520,472 ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Partners ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
1221 Avenue of the Americas
Societe Generale 1221 Avenue of the Americas 4,000,000 1,272,625.57 416,378 ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Vertical Ventures* ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 3,000,000 954,469.18 312,283 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇/ Attn: ▇▇▇▇▇ ▇▇▇▇▇/
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
Crescent c/o Greenlight 1,200,000 381,787.67 124,913 c/o Greenlight
International, Ltd. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ Cointrin ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
011-4122-791-72-98 011-4122-791-72-98
River View LLC C/o Millenium Partners 2,000,000 636,312.79 208,189 ▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Associates, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,000,000 317,765.18 104,094 45 Rockefeller ▇▇▇▇▇
▇.▇.* ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Partners, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3,000,000 954,469.18 312,283 45 Rockefeller ▇▇▇▇▇
▇.▇.* ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 2,500,000 795,782.28 260,236 ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Investments Ltd.* ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
* With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
1290 Avenue of the Anericas
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇-▇▇▇-▇▇▇▇
EXHIBIT B
BUYER'S DISTRIBUTION NOTICE
Bank of New York
c/o United States Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Trust Company
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇
Re: Sorrento Networks Corporation ("Depositor")
Account No. ▇▇▇▇▇▇▇▇
Gentlemen:
The undersigned, a Buyer as defined in the Escrow Agreement dated as of
August 1, 2001 between Bank of New York and Depositor (the "Escrow Agreement"),
hereby directs you pursuant to Section 3(a)(i) of the Escrow Agreement to
distribute to the account of the undersigned set forth below from the Escrow
Property $______________, represents [_____%] [all] of its Pro-Rata Allocation,
together with its proportionate share of the earnings thereon as provided in the
Escrow Agreement.
Very truly yours,
[NAME OF BUYER]
By:
---------------------------------
Name:
Title:
Account Information:
[Bank]:
ABA No.:
Account Name:
Account No.:
Attention:
1
EXHIBIT C
DEPOSITOR'S DISTRIBUTION NOTICE
Bank of New York
c/o United States Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇
Re: Sorrento Networks Corporation ("Depositor")
Account No. ▇▇▇▇▇▇▇▇
Gentlemen:
The undersigned, the Depositor and Buyers identified in that Escrow
Agreement, dated as of August 1, 2001, between Bank of New York and Depositor
(the "Escrow Agreement"), hereby direct you pursuant to Section 3(a)ii) of the
Escrow Agreement to distribute the Escrow Property to the Depositor at the
account set forth below.
Very truly yours,
SORRENTO NETWORKS CORPORATION
By:
---------------------------------
Name:
Title:
Account Information:
[Bank]:
ABA No.:
Account Name:
Account No.:
Attention:
1
BUYERS:
DEUTSCHE BANC ALEX. ▇▇▇▇▇ INC., as
agent for DEUTSCHE BANK AG, LONDON
BRANCH
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
SOCIETE GENERALE
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
ZLP MASTER FUND, LTD.
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
ZLP MASTER TECHNOLOGY FUND, LTD.
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
STEELHEAD INVESTMENTS LTD.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
2
CRESCENT INTERNATIONAL, LTD.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
RIVERVIEW, LLC
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
VERTICAL INTERNATIONAL LIMITED
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
GRYPHON MASTER FUND, L.P.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇▇▇▇▇▇ PARTNERS, L.P.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇▇▇▇▇▇ ASSOCIATES, L.P.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
3