Prepared by MERRILL CORPORATION





Exhibit
4.4


Escrow Agreement


 


 


                This ESCROW
AGREEMENT (this “Agreement”) is dated as of ________, 2001, by and among
ADVANCED POWER TECHNOLOGY, INC., a Delaware corporation (“APT”), GHz
TECHNOLOGY, INC., a Delaware corporation (“GHz”), Frank Schneider, solely in
his capacity as Shareholder Representative (“Shareholder Representative”), and
Silicon Valley Bank, a _____________ banking corporation (the “Escrow Agent”).


RECITALS:


                A.            APT and GHz have
entered into an Agreement and Plan of Merger, dated as of ____________, 2001
(the “Merger Agreement”), pursuant to which GHz will be merged into GHz
Acquisitions, Inc., a Delaware corporation wholly owned by APT (“Sub”), with
the Sub as the surviving corporation of the merger (the “Merger”).


                B.            Pursuant to Section 2.5 of the
Merger Agreement, APT will deliver $1,500,000 to the Escrow Agent to be held
and disbursed in accordance with the terms of the Merger Agreement and this
Agreement.


                C.            Capitalized terms used herein but
not otherwise defined shall have the meanings ascribed to them in the Merger
Agreement.


                Now,
therefore, for and in consideration of the promises, covenants and mutual
agreements contained in the Merger Agreement and this Agreement, the parties
agree as follows:


AGREEMENTS:


ESCROW FUNDS


Delivery.  At or before
the Effective Time, APT will deliver $1,500,000 (the “Escrow Funds”) to the
Escrow Agent.  The portion of the Escrow
Funds contributed on behalf of each stockholder of the GHz shall be as set
forth on Schedule A.


Receipt.  The Escrow
Agent shall acknowledge receipt of the Escrow Funds from APT promptly upon
receipt thereof.


Investment of Escrow Funds. The Escrow Agent shall invest the
Escrow Funds in: (a) interest bearing bank account(s) of federally-insured
banks, or (b) such other investments as APT and the Shareholder Representative
may jointly authorize the Escrow Agent to make from time to time. All interest
or other accretion derived from the Escrow Funds shall become part of the
Escrow Funds and subject to the terms hereof. GHz covenant to pay all taxes
attributable to interest or other accretion derived from property held in the
Escrow Funds.


DISBURSEMENT OF ESCROW FUNDS


                The Escrow
Agent shall dispose of or distribute the Escrow Funds only in accordance with
this Section 2.


Procedure for Claims. 
The following procedure shall govern the application of the Escrow Funds
to satisfy any claims by the APT Indemnified Parties, which may be brought
pursuant to Article VIII of the Merger Agreement.  Notwithstanding the foregoing, the basis for claims against the
Escrow Funds and any limitations thereon, shall be governed by the Merger


 















 


Agreement,
which shall be controlling between APT, GHz and Shareholder Representative for
all purposes of this Agreement and shall be applicable between APT, GHz and
Shareholder Representative to the extent inconsistent with any provision of
this Agreement.


APT shall promptly give written notice to Shareholder
Representative and the Escrow Agent of any claim against the Escrow Funds.  The written notice shall specify (i) in
reasonable detail, the factual basis for such claim and (ii) in good faith, the
estimated portion of the Escrow Funds to be reserved against the claim.


Upon receipt of a claim, the Escrow Agent shall set
aside the amount of cash included in the Escrow Funds equal to the lessor of
the aggregate amount of such claim, as set forth in such written notice, or the
entire Escrow Agreement to be held or disbursed (the “Set Aside Amount”) only
(i) pursuant to joint instructions in writing from APT and Shareholder
Representative or (ii) pursuant to a final judgement or final court order from
a court of competent jurisdiction directing disposition thereof, after all
appeals or applicable appeal periods have been exhausted (“Court Order”).


All claims shall be resolved by APT and Shareholder
Representative in accordance with the Merger Agreement.


Distribution of Escrow Funds.


On the nine (9) month
anniversary of the date of this Agreement or, if such date is not a business
day, on the next succeeding business day, the Escrow Agent shall transfer to
the persons identified on Schedule A the Escrow Funds less the Set Aside
Amount previously set aside by the Escrow Agent pursuant to Section 2.1(b).  The portion of the Escrow Funds delivered to
each person on Schedule A shall be as set forth therein.


With respect to the Set Aside Amount set aside and
held by the Escrow Agent as of such date in accordance with Section 2.1(b),
the Set Aside Amount shall continue to be held and not released to any party
except upon the resolution of the applicable claim(s) in accordance with the
procedures of this Agreement and the Merger Agreement.


Joint Instructions.  In the event
that the Escrow Agent receives joint instructions in writing from APT and
Shareholder Representative, such instructions may be revoked only (i) if Escrow
Agent has not already acted upon such joint instructions and (ii) pursuant to
further joint instructions in writing of APT and Shareholder Representative or
a Court Order.


Purpose.  None of the
Escrow Funds will be available for any purpose, other than as described herein.


ESCROW AGENT


Appointment and Duties.  APT and
Shareholder Representative hereby appoint Escrow Agent to serve hereunder, and
the Escrow Agent hereby accepts such appointment and agrees to perform all
duties, which are expressly set forth in this Agreement.


 















 


Compensation.  Compensation
will be paid to the Escrow Agent by APT as specified in Schedule B
hereto.  In the event the activities of
the Escrow Agent or the term of this Agreement are restricted or extended as a
result of any dispute or court action, pending or otherwise, the fees of the
Escrow Agent will continue to accrue pursuant to Schedule B hereto, and
the parties hereto agree to pay all such fees promptly when due, regardless of
the status of the dispute and/or any court action, pending or otherwise, unless
the dispute is occasioned by the Escrow Agent’s gross negligence or willful
misconduct in performing its specified duties.


Indemnification. 
The Escrow Agent and its officers, directors, agents and employees shall
be indemnified for and held harmless from any and all claims, regardless of
nature, arising out of or because of this Agreement, except as such may arise
because of the Escrow Agent’s gross negligence or willful misconduct in
performing its specified duties as Escrow Agent hereunder.  Promptly after the receipt by the Escrow
Agent of notice of any claim, the Escrow Agent shall, if a claim in respect
thereof is to be made against any of the other parties hereto or against the
Escrow Funds, notify APT and the Shareholder Representative in writing.  Notwithstanding the foregoing, but provided
that such notice shall have been given, the failure by the Escrow Agent to give
such notice promptly shall not relieve the parties from any liability which
such parties may have to the Escrow Agent hereunder except to the extent the
defense of such action is prejudiced thereby. 
The parties hereto acknowledge and agree that any payment to the Escrow
Agent pursuant to this Section 3.3 shall be borne by APT; provided,
however, that the provisions of this Agreement shall not in any way
limit the rights of the parties under Article VIII of the Merger Agreement.


Resignation.  The Escrow
Agent may resign at any time upon giving the parties hereto sixty (60) days’
prior written notice of such resignation to that effect.  In such event, the successor shall be such
person, firm or corporation as shall be mutually selected by APT and the
Shareholder Representative.  It is
understood and agreed that such resignation shall not be effective until a
successor accepts its appointment and agrees to act hereunder; provided,
however, if no successor is appointed and acting hereunder within sixty
(60) days after such notice is given, the Escrow Agent may, but need not,
deliver the Escrow Funds then in escrow into a court of competent
jurisdiction.  Upon the acceptance in
writing of any appointment as Escrow Agent hereunder by a successor Escrow
Agent, such successor Escrow Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Escrow
Agent, and the retiring Escrow Agent shall be discharged from its duties and
obligations under this Agreement, but shall not be discharged from any
liability for actions taken as Escrow Agent hereunder prior to such
succession.  After any retiring Escrow
Agent’s resignation or removal, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Escrow Agent under this Agreement.


Counsel.  The Escrow
Agent may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in reliance upon the advice of such counsel.


Legal Actions. 
The Escrow Agent shall not be required to institute or defend any action
or legal process involving any matter referred to herein which in any manner
affects it or its duties or liabilities hereunder unless or until requested to
do so by the other parties to this


 















 


Agreement,
and then only upon receiving full indemnity in an amount of such character as
it shall reasonably require, against any and all claims, liabilities, judgment,
reasonable attorney’s fees and other reasonable expenses of every kind in
relation thereto, except in the case of its own willful misconduct or gross
negligence.


LIABILITIES OF ESCROW AGENT


Limitations. 
The Escrow Agent shall be liable only to accept, hold and deliver the
Escrow Funds in accordance with the provisions of this Agreement and amendments
thereto; provided, however, that the Escrow Agent shall not incur
any liability with respect to (a) any action taken or omitted in good faith
upon the advice of its counsel given with respect to any questions relating to
its duties and responsibilities as Escrow Agent under this Agreement, so long
as such action is consistent with the terms of this Agreement, or (b) any
action taken or omitted in reliance upon any instrument which the Escrow Agent
shall in good faith believe to be genuine (including the execution, the
identity or authority of any person executing such instrument, its validity and
effectiveness, and the truth and accuracy of any information contained
therein), to have been signed by a proper person or persons, and to conform to
the provisions of this Agreement.  The
Escrow Agent shall exercise the same degree of care toward the Escrow Funds as
it would exercise toward its own similar property.


Collateral Agreements.  The Escrow
Agent shall not be bound in any way by any contract or agreement between other
parties hereto, whether or not it has knowledge of any such contract or
agreement or of its terms or conditions.


TERMINATION


                This
Agreement shall be terminated (a) upon disbursement or release of the entire or
remaining Escrow Funds by the Escrow Agent in accordance with the provisions
hereof, (b) by written mutual consent signed by all parties or (c) upon
delivery of the Escrow Funds then in escrow into a court of competent
jurisdiction in accordance with Section 3.4 hereof.  This Agreement shall not be otherwise
terminated.


OTHER PROVISIONS


Notices.  All notices,
requests, claims, demands and other communications under this Agreement shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier (providing proof of delivery)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):


	
  To APT:

  	
   

  	
  405 S.W. Columbia Street

  
	
   

  	
   

  	
  Bend, Oregon
  97702

  
	
   

  	
   

  	
  Attention:
  Patrick Sireta

  
	
   

  	
   

  	
  Telephone:
  541-382-8028

  
	
   

  	
   

  	
  Fax:  541-388-0371

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Davis Wright
  Tremaine LLP

  
	
  (which shall not

  	
   

  	
  1300 SW
  Fifth Avenue

  
	
  constitute notice)

  	
   

  	
  Portland,
  Oregon 97201

  
	
  to:

  	
   

  	
  Attention: Dave Baca, Esq.

  
	
   

  	
   

  	
  Telephone:
  503-778-5306

  
	
   

  	
   

  	
  Fax:
  503-778-5299

  



 















 


	
  To GHz:

  	
   

  	
  3350 Scott
  Boulevard, Building No. 27

  
	
   

  	
   

  	
  Santa Clara,
  California 95054

  
	
   

  	
   

  	
  Attention:
  Frank Schnieder

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  McCutchen,
  Doyle, Brown & Enersen, LLP

  
	
  (which should not

  	
   

  	
  1900
  University Avenue

  
	
  constitute notice)

  	
   

  	
  East Palo
  Alto, California 94303

  
	
   

  	
   

  	
  Attention:
  Bartley C. Deamer, Esq.

  
	
   

  	
   

  	
  Telephone:
  650-849-4400

  
	
   

  	
   

  	
  Fax:
  650-849-4800

  
	
   

  	
   

  	
   

  
	
  To Shareholder Representative:

  	
  c/o  GHz

  
	
   

  	
   

  	
  3350 Scott
  Boulevard, Building No. 27

  
	
   

  	
   

  	
  Santa Clara,
  California 95054

  
	
   

  	
   

  	
  Attention:
  Frank Schnieder

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
  To Escrow Agent:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Fax:

  	
   

  
					



 


Benefit and Assignment.  The rights
and obligations of each party under this Agreement may not be assigned without
the prior written consent of all other parties.  Subject to the foregoing sentence, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  This Agreement
is not intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.


Entire Agreement; Amendment. 
This Agreement and the Merger Agreement contain all the terms agreed
upon by the parties with respect to the subject matter hereof.  This Agreement may be amended or modified
only by written agreement executed by APT and Shareholder Representative, and
if the amendment in any way affects the compensation, duties and/or responsibilities
of the Escrow Agent, by a duly authorized representative of the Escrow
Agent.  No waiver of any provision
hereof or rights hereunder shall be binding upon a party unless evidenced by a
writing signed by such party.


Headings.  The headings
of the sections and subsections of this Agreement are for ease of reference
only and do not evidence the intentions of the parties.


Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF DELAWARE (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).


Waiver of Jury Trial.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR


 















 


COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.


Counterparts. 
This Agreement may be signed upon any number of counterparts with the
same effect as if the signatures on all counterparts are upon the same
instrument.


                IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be signed by their respective duly authorized officers
as of the date first above written.


 




	
   

  	
  ADVANCED POWER
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GHz TECHNOLOGY,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Frank Schneider, solely in
  his capacity as Shareholder Representative

  






 


 















 


SCHEDULE A


 


Stockholder List


 


 


 















 


SCHEDULE B


 


Compensation


 


The annual fee of $____________
for administering this Escrow Agreement is payable in advance at the time of
closing and if applicable, will be invoiced each year to the appropriate
party(ies) on the anniversary date of the closing of the Escrow Agreement.


 


Out-of-pocket expenses such as, but not limited to postage, courier,
overnight mail, insurance, money wire transfer, long distance telephone
charges, facsimile, stationery, travel, legal or accounting, etc., will be
billed at cost.


 


These fees do not include extraordinary services which will be priced
according to time and scope of duties. 
The fees shall be deemed earned in full upon receipt by the Escrow
Agent, and no portion shall be refundable for any reason, including without
limitation, termination of the Escrow Agreement.


 


It is acknowledged that the
schedule of fees shown above are acceptable for the services mutually agreed
upon.