EXHIBIT 4.3
ESCROW AGREEMENT
ESCROW AGREEMENT ("Escrow Agreement") dated as of December 10, 1999 by
and among XxxxxxXxxx.Xxx, Inc., a Nevada corporation, with a principal executive
office at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000-0000 ("BSC") and
Rim Capital Group, L.L.C. ("Purchaser") and Xxxxxx X. Xxxxxxxx, Esq., having a
principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Escrow Agent")
WHEREAS:
A. The Purchaser and BSC entered into a Securities Subscription Agreement
dated as of December 10,1999 ("Agreement"), in which, inter alia. the Purchaser
agreed to purchase BSCs 8% Series A Senior Subordinated Convertible Debenture
("Debentures");
B. Pursuant to the Agreement, the Debenture is to be delivered to the
Escrow Agent to hold and administer in accordance with the terms and conditions
of this Escrow Agreement.
NOW THEREFORE, in consideration of the respective premises, mutual
covenants and agreements of the parties hereto, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Appointment of Escrow Agent. Escrow Agent is hereby appointed as escrow
agent and the Escrow Agent hereby accepts such appointment. The Escrow Agent
shall act in accordance with the instructions set forth in this Escrow Agreement
and any further instructions given to it by written instrument signed by BSC and
Purchaser.
2. Initial Funding. On the date hereof, the Purchaser shall transfer to BSC
the sum of USD$ 100,000 by wire transfer, less any fees which BSC has agreed to
pay by virtue of a separate agreement.
3. Issuance and Delivery of the Debenture,
Security Stock and Resolution to the Escrow Agent
(a) (i) On the date hereof, BSC shall issue in the name of the Purchaser
and deposit with the Escrow Agent the Debenture in the face amount of $750,000
as provided in the Agreement. If BSC is not paid the full Purchase Price for the
Debenture, as provided in this Escrow Agreement, then the Debenture, or any
portion of the Debenture which is not paid for at the time when payment is due
to be made, may be canceled by BSC, and the Escrow Agent, upon written notice of
such cancellation from BSC, shall promptly return the Debenture and any Security
Stock which the Escrow Agent is holding to BSC. Upon such cancellation and
return of the Debenture and the return of any Security Stock which the Escrow
Agent is holding, the parties shall have no further obligations or liabilities
each to the other under this Escrow Agreement, the Agreement or the Debenture.
(ii) Either BSC or the Purchaser shall have the right to cancel the
Debenture prior to January 19, 2000 by written notice given to the other party.
Notwithstanding such cancellation Purchaser shall have the right to receive
shares of common stock in accordance with all Notices of Conversion given by
Purchaser to BSC prior to January 19, 2000 for that portion of the Debenture
paid for by Purchaser prior to January 19, 2000, and shall retain all rights and
remedies available to Purchaser under this Escrow Agreement, the Agreement and
the Debenture in order to obtain such shares, including but not limited to
exercising his rights available through the Resolution and in the Security
Stock, as described and defined below, in the event BSC fails to honor any
Notices of Conversion. Upon such written notice of cancellation, and return of
the Security Stock and Debenture to BSC by the Escrow Agent; subject to
Purchaser's rights hereunder, neither the Escrow Agent, BSC nor Purchaser shall
have any further obligations or
liabilities to the other. In the event no written notice of cancellation is
given, then the terms and conditions of this Escrow Agreement, the Agreement and
the Debenture shall remain in full force and effect.
(b) On the date hereof, BSC shall deliver to the Escrow Agent a
resolution in the form annexed hereto as Exhibit A ("Resolution"), instructing
BSC's transfer agent Alexis Stock Transfer, 422450 Xxx Xxxx Xxxxx, Xxxxx 000.
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000 ("Transfer Agent") to issue to Purchaser shares
of BSC's common stock registered in the name of the Purchaser, free trading and
without restrictive legend as provided in Section 5(b) of the Agreement, in an
amount up to $750,000, or at some lesser amount as the Escrow Agent, in his sole
discretion may direct the transfer agent, at a price per share which is 75% of
the lowest closing bid price of BSC's common stock as reported on the National
Association of Securities Dealers Electronic Bulletin Board for the 3
consecutive trading days immediately preceding the date of receipt of the
Resolution by transfer agent, and providing that BSC shall not change its
transfer agent from the Transfer Agent, without the express written consent and
directive of the Escrow Agent. The Resolution may be delivered by the Escrow
Agent to the Transfer Agent in the event that, for any reason whatsoever, BSC
fails to honor any Notice of Conversion as provided in the Debentures and this
Escrow Agreement, or BSC commits a material breach at the Agreement, the
Debentures, or this Escrow Agreement, or in the event that BSC changes or
attempts to change its transfer agent from the Transfer Agent without to express
written consent of the Purchaser. Upon written demand from the Purchaser, Escrow
Agent shall deliver the resolution to the Transfer Agent as provided in this
Section 3(b). Delivery of the Resolution to the Transfer Agent and the issuance
of shares by the Transfer Agent in accordance with the Resolution shall not
preclude the Purchaser from exercising any and all other remedies available to
the Purchaser against BSC for a breach of the Agreement, the Debentures, or this
Escrow Agreement. Escrow Agent shall be entitled to honor any such written
demand from the Purchaser and shall ignore any demand or instructions to the
contrary from BSC.
(c) On the date hereof, BSC shall deliver to the Escrow Agent 500,000
shares of its publicly traded common stock, symbol "PGPG", which shall be freely
tradeable and without restrictive legend of any nature, and shall be deposited
in a securities trust account for the benefit of Purchaser or its agent
("Security Stock"). Escrow Agent acknowledges the receipt from BSC of 50,000
shares of BSC' s common stock which shall be included in the definition of
Security Stock. In the event of a Default, or if, for any reason, BSC is unable
to deliver Conversion Shares to the Purchaser as required under the Agreement,
the Debenture and this Escrow Agreement, then upon written notice to the Escrow
Agent, the Security Stock shall be delivered to the Purchaser to enable
Purchaser to continue conversions of the Debenture in accordance with the terms
of the Debenture, or to satisfy any other obligations of BSC to the Purchaser
pursuant to the Agreement, the Debenture or this Escrow Agreement. Upon Maturity
and payment of the Debenture, or upon conversion of the entire Debenture into
Conversion Shares, or upon transfer of Security Stock to the Purchaser in
accordance with this Section 3(c) and performance by BSC of its obligations
asset forth herein, or upon cancellation fo the Debenture pursuant to Section
3(a)(ii) of this Escrow Agreement, any remaining Security Stock and the
Debenture shall be delivered by the Escrow Agent to BSC, and upon such delivery,
none of the parties to this Escrow Agreement shall have any further obligations
to the other. Transfer to the Purchaser of the Security Stock and the Debenture
shall not preclude the Purchaser from exercising any and all other remedies
available to the Purchaser against BSC for a breach of the Agreement, the
Debenture or this Escrow Agreement.
4. Custody and Disposition of the Debenture and Security Stock. The
Escrow Agent shall hold and dispose of the Debenture and Security Stock only in
accordance with the terms of this Escrow Agreement. The Escrow Agent shall not
transfer, assign or dispose of the Debenture without the prior written consent
of BSC. Any permitted transferee or assignee shall take the Debenture to the
terms of this Escrow Agreement. In the event of a conflict between the terms of
this Escrow Agreement, the Agreement and the Debenture, the terms of this Escrow
Agreement shall prevail.
5. Conversion of Debentures.
(a) As provided in paragraph 4 of the Debentures, Purchaser may give Notice of
Conversion of the Debentures to BSC by facsimile to the number set forth in
Section 10 below. Conversion of Debentures may take place at any time until the
Maturity Date of the Debentures, as defined in the Debentures, except that
Purchaser must convert the entire principal amount of the Debenture funded by
the Purchaser pursuant to this Escrow Agreement and the Agreement on or before
January 19, 2000. As provided in paragraph 4 of the Debentures, within 5
business days of receipt of the Notice of Conversion, BSC shall deliver to the
Purchaser, or to an account designated by Purchaser in the Notice of Conversion,
certificates representing the shares of common stock to which the Purchaser
shall be entitled by reason of the conversion ("Certificate"). Notwithstanding
anything to the contrary contained in paragraph 4 of the Debenture, BSC may
demand, in writing, that the Purchaser pay outstanding principal amounts of the
Debenture ("Demand") even though Purchaser has not converted all or any amount
of the Debenture into shares of common stock. The Demand is a provision for
payment of the Debenture only. Conversions of the Debenture into shares of
common stock shall be done in accordance with paragraph 4 of the Debenture, and
may be in an amount which is no less than $10,000 but not necessarily as much as
the Demand. However, the first Demand in the amount of $50,000 may be xxxx
within 7 days from the date of this Escrow Agreement. Additional Demands may
only be made beginning on February 1, 2000 in increments of $75,000. After
February 1, 2000 each Demand may be made no less than 30 business days from last
Demand, and provided that the closing bid price of BSC's common stock for the
previous 5 consecutive trading days has not fallen below $.50 per share.
Notwithstanding the foregoing, at BSC's request in writing, Purchaser may, at
its sole option, make discretionary fundings of the Debenture at any time.
(b) If BSC fails to timely deliver Certificates, as provided in Section
5(a) above, then BSC shall pay Purchaser $150 per day for each day late in
delivering Certificates up to and including the 10th late day, and $500 per day
for each day late in delivering the Certificates after the 10th late day
("Liquidated Damages"). Any Liquidated Damages incurred by BSC shall be payable
immediately and in cash upon demand in writing by Purchaser, or its agent, to
BSC. However, such Liquidated Damages may be deducted from any amounts owed to
BSC by Purchaser pursuant to this Section 5. Notwithstanding anything contained
in the Agreement to the contrary, including but not limited to the provisions of
Section 6 regarding the registration of restricted Conversion Shares, BSC shall
be required to pay the Liquidated Damages set forth in this Section 5(c).
6. Bankruptcy. In the event any proceeding under the Bankruptcy Laws of
the United States or any proceedings under any state laws for the protection of
debtors or creditors, arc filed, voluntarily or involuntarily, by or on behalf
of BSC, then the Purchaser shall not be required to make any further payment
under the Debenture or to honor any Demand, and any and all further obligations
of the Purchaser shall be abrogated at the election of Purchaser.
7. Indemnification. Purchaser and BSC agree, jointly and severally to
indemnify, defend and hold harmless the Escrow Agent from and against any and
all costs (including, without limitation, legal fees and expenses), liabilities,
claims and losses arising out of or in connection with this Escrow Agreement or
any action or failure to act by the Escrow Agent under this Escrow Agreement,
except as provided in paragraph 8 below.
8. Concerning the Escrow Agent. To induce the Escrow Agent to act
hereunder, it is further agreed by the undersigned that:
(a) This Escrow Agreement expressly sets forth all the duties of the
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations on the part of the Escrow Agent shall be read into this
Escrow Agreement The Escrow Agent shall not be bound by the provisions of any
agreement among the other parties hereto except this Escrow Agreement.
(b) The Escrow Agent shall not be liable for any action or failure to
act in its capacity as Escrow Agent hereunder unless such action or failure to
act shall constitute willful misconduct or gross negligence on the part of the
Escrow Agent, in which case there shall be no indemnification obligations.
(c) The Escrow Agent shall be entitled to rely upon any order; judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine
the authenticity or the correctness of any fact stated therein or the propriety
or validity of the service thereof . The Escrow Agent may act in reliance upon
any instrument or signature believed by it to be genuine and may assume, unless
he has actual knowledge to the contrary, that any person purporting to give
notice or receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
(d) The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Escrow Agreement and shall not be liable
for any action taken or omitted in accordance with such advice, except as
provided in paragraph 8(b) above.
(e) The Escrow Agent does nor have any interest in the Debentures or
Conversion Shares or any other property deposited hereunder but is serving as
escrow holder only and having only possession thereof, and is not charged with
any duty or responsibility to determine the validity or enforceability of any
such documents.
(f) The Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Debentures to any successor Escrow Agent,
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon the Escrow Agent shall be discharged of and
from any and all further obligations arising in connection with this Escrow
Agreement thereafter. The resignation of the Escrow Agent will take effect on
the earlier of (a) the appointment of a successor (including a court of
competent jurisdiction) or (b) the day which is 30 days after the date of
delivery of its written notice of resignation to the other parties hereto. If at
that time the Escrow Agent has not received a designation of a successor Escrow
Agent, the Escrow Agent's sole responsibility after that time shall be to
safekeep the Debentures and not make delivery or disposition thereof until
receipt of a designation of successor Escrow Agent or a joint written
disposition instruction by the other parties hereto or a final order of a court
of competent jurisdiction.
(g) In the event of any disagreement among the parties hereto resulting
in adverse claims or demands being made in connection with the Debentures, or in
the event that the Escrow Agent otherwise determines that the Debentures should
be retained, then the Escrow Agent may retain the Debentures until the Escrow
Agent shall have received (i) a final nonappealable order of a court of
competent jurisdiction directing delivery of the Debentures, or (ii) a written
agreement executed by the other parties hereto directing delivery of the
Debentures, in which case the Escrow Agent shall promptly deliver the Debentures
in accordance with such order or agreement. Any court order referred to in (i)
above shall be accompanied by a legal opinion by counsel for the presenting
party reasonably satisfactory to the Escrow Agent to the effect that said court
order is final and nonappealable. The Escrow Agent shall act on such court order
and legal opinion without further question.
(h) This Escrow Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors (including
successors by way of merger) and assigns, heirs, administrators and
representatives and shall not be enforceable by or inure to the benefit of any
third parry except as provided in paragraph (g) with respect to a resignation by
the Escrow Agent
(i) This Escrow Agreement may be modified by a writing signed by all the
parties hereto, and no waiver hereunder shall be effective unless in a writing
signed by the party to be charged.
(j) BSC acknowledges and agrees that in any dispute involving this
Escrow Agreement, the Agreement or the Debentures, that Escrow Agent may also
act as counsel to the Purchaser, and BSC shall not assert in such circumstances
that Escrow Agent's representation of the Purchaser shall constitute a conflict
of interest.
9. Governing Law. This Escrow Agreement shall be governed in all
respects by the internal laws of the State of Texas. The parties agree to submit
to the jurisdiction and venue of any state or federal court in
Dallas having subject matter jurisdiction over the matter. Service may be made
by certified mail, return receipt requested, to the parties at the addresses set
forth in paragraph 10 below, but the parties shall not be precluded from making
service in any other manner permitted by law.
10. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered by band or sent by U.S.
Express Mail, Fedex or some other reliable overnight courier service for next
day delivery. Each such notice or other communication shall for all purposes of
this Escrow Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by overnight express mail
service, 1 day after the same has been deposited with the U.S. Postal Service,
Fedex or the overnight courier. All such notices must also be sent by facsimile
on the same day to the parties as follows:
If to BSC:
XxxxxxXxxx.Xxx, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Att'n: Xxxx X. Xxxxx
Fax: 000-000-0000
With a. copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxx Xxxxxx & Darko, LLP
000 Xxxxxxxx Xxxxxx #0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
If to Purchaser:
Rim Capital Group, L.L.C.
RIM Capital, L.L.C.
000 Xxxxxxxx Xxxx Xxxxxxxxx Xxxx, #000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
If to Escrow Agent:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxx Xxxxxx Xxxxxxxx & Xxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx. Xxx Xxxx 00000
Fax: 000-000-0000
11. Counterparts. This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12. Escrow Agent Fees. BSC shall pay the fees and expenses of the Escrow
Agent in performing its obligations and in connection with the preparation of
the transaction documents which shall be $22,500. The Escrow Agent Fee of
$22,500 may be deducted from the Debenture purchase proceeds and shall be
payable upon execution of the Agreement and this Escrow Agreement as follows:
$3,000 on the date hereof and $8,250 upon payment of the first Demand and
$11,250 upon the payment of the second Demand, or upon the first and second
discretionary funding, if any and if made earlier than the First Demand and
Second Demand, all pursuant to this Escrow Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
duly executed and delivered, as of the day and year first above written.
XXXXXXXXXX.XXX, INC.
By: /S/
--------------------------
Xxxx X. Xxxxx
President
RIM CAPITAL GROUP, L.L.C.
By: /S/
--------------------------
(Illegible)
As to Escrow Only:
ESCROW AGENT
XXXXXX X. XXXXXXXX, ESQ.
By: /S/
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