FUNDS ESCROW AGREEMENT
Exhibit 10.3
This
Agreement is dated as of the ____ day of May, 2008 among Airtrax,
Inc., a New Jersey corporation (the “Company”), the Subscribers identified
on Schedule A hereto (each a “Subscriber” and collectively “Subscribers”), and
Grushko & Xxxxxxx, P.C. (the “Escrow Agent”):
W I T N E S S E T H:
WHEREAS,
the Company and Subscribers have entered into a Subscription Agreement calling
for the sale by the Company to the Subscriber of secured promissory notes
(“Notes”) for an aggregate purchase price of up to $100,000 (the “Escrowed
Funds”); and
WHEREAS,
the parties hereto require the Company to deliver the Notes against payment
therefor, with such Notes and the Escrowed Funds to be delivered to the Escrow
Agent, along with the other documents, instruments and payments hereinafter
described, to be held in escrow and released by the Escrow Agent in accordance
with the terms and conditions of this Agreement; and
WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms and
conditions of this Agreement;
NOW
THEREFORE, the parties agree as follows:
ARTICLE
I
INTERPRETATION
1.1. Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Subscription
Agreement shall have the meanings given to such terms in the Subscription
Agreement. Whenever used in this Agreement, the following terms shall
have the following respective meanings:
§ “Agreement”
means this Agreement and all amendments made hereto and thereto by written
agreement between the parties;
§ “Closing
Date” shall have the meaning set forth in Section 1 of the Subscription
Agreement;
§ “Escrowed
Payment” means an aggregate cash payment of up to $100,000 which is the Purchase
Price;
§ “Legal
Fees” shall have the meaning set forth in Section 8 of the Subscription
Agreement;
§ “Legal
Opinion” means the original signed legal opinion referred to in Section 6 of the
Subscription Agreement;
§ “Notes”
shall have the meaning set forth in the Subscription Agreement;
§ “Purchase
Price” shall mean up to $100,000;
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§ “Subscription
Agreement” means the Subscription Agreement (and the exhibits and schedules
thereto) entered into or to be entered into by the Company and Subscribers in
reference to the sale and purchase of the Notes;
§ Collectively,
the executed Subscription Agreement, Notes and Legal Opinion, are referred
to as “Company Documents”; and
§ Collectively,
the Escrowed Payment and the Subscriber executed Subscription Agreement are
referred to as “Subscriber Documents”.
1.2. Entire
Agreement. This Agreement along with the Company Documents and
the Subscriber Documents constitute the entire agreement between the parties
hereto pertaining to the Company Documents and Subscriber Documents and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement, the
Company Documents and the Subscriber Documents.
1.3. Extended
Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word “person” includes
an individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and
Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as
expressly stated herein, no delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or privilege
hereunder.
1.5. Headings. The
division of this Agreement into articles, sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
1.6. Law Governing this
Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to conflicts
of laws principles that would result in the application of the substantive laws
of another jurisdiction. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state and Federal courts located in the the state and county
of New York. Both parties and the individuals executing this
Agreement and other agreements on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing
party (which shall be the party which receives an award most closely resembling
the remedy or action sought) shall be entitled to recover from the other party
its reasonable attorney's fees and costs. In the event that any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.
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1.7. Specific Enforcement,
Consent to Jurisdiction. The Company and Subscriber
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injuction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity. Subject
to Section 1.6 hereof, each of the Company and Subscriber hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Nothing in this Section
shall affect or limit any right to serve process in any other manner permitted
by law.
ARTICLE
II
DELIVERIES
TO THE ESCROW AGENT
2.1. Company
Deliveries. On or before the Closing Date, the Company shall
deliver the Company Documents to the Escrow Agent.
2.2. Subscriber
Deliveries. On or before the Closing Date, each Subscriber
shall deliver to the Escrow Agent such Subscriber’s portion of the Purchase
Price and the Subscriber Documents. The Escrowed Payment will be
delivered pursuant to the following wire transfer instructions:
Citibank,
N.A.
0000
0xx
Xxxxxx
Xxx Xxxx,
XX 00000, XXX
ABA
Number: 0210-00089
For
Credit to: Grushko & Xxxxxxx, XXXX Trust Account
Account
Number: 00000000
2.3. Intention to Create Escrow
Over Company Documents and Subscriber Documents. The
Subscriber and Company intend that the Company Documents and Subscriber
Documents shall be held in escrow by the Escrow Agent pursuant to this Agreement
for their benefit as set forth herein.
2.4. Escrow Agent to Deliver
Company Documents and Subscriber Documents. The Escrow Agent
shall hold and release the Company Documents and Subscriber Documents only in
accordance with the terms and conditions of this Agreement.
ARTICLE
III
RELEASE
OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS
3.1. Release of
Escrow. Subject to the provisions of Section 4.2, the Escrow
Agent shall release the Company Documents and Subscriber Documents as
follows:
(a) On
the Closing Date, the Escrow Agent will simultaneously release the Company
Documents to the Subscriber and release the Subscriber Documents to the Company
except that the Legal Fees will be released to the Subscriber’s
attorneys.
(b) All
funds to be delivered on behalf of Company shall be delivered pursuant to the
wire instructions to be provided in writing by the Company to the Escrow
Agent. The balance of $39,995.28, will be held in you XXXX accoutn to
be disbursed pursuant to the instruction of Xxxxx Onn on behaldf of the
Company.
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(c) Notwithstanding
the above, upon receipt by the Escrow Agent of joint written instructions
(“Joint Instructions”) signed by the Company and the Subscriber, it shall
deliver the Company Documents and Subscriber Documents in accordance with the
terms of the Joint Instructions.
(d) Notwithstanding
the above, upon receipt by the Escrow Agent of a final and non-appealable
judgment, order, decree or award of a court of competent jurisdiction (a “Court
Order”), the Escrow Agent shall deliver the Company Documents and Subscriber
Documents in accordance with the Court Order. Any Court Order shall
be accompanied by an opinion of counsel for the party presenting the Court Order
to the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to
the effect that the court issuing the Court Order has competent jurisdiction and
that the Court Order is final and non-appealable.
3.2. Acknowledgement of Company
and Subscriber; Disputes. The Company and the Subscriber
acknowledge that the only terms and conditions upon which the Company Documents
and Subscriber Documents are to be released are set forth in Sections 3 and 4 of
this Agreement. The Company and the Subscriber reaffirm their
agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber
Documents. Any dispute with respect to the release of the Company
Documents and Subscriber Documents shall be resolved pursuant to Section 4.2 or
by agreement between the Company and Subscriber.
ARTICLE
IV
CONCERNING
THE ESCROW AGENT
4.1. Duties and Responsibilities
of the Escrow Agent. The Escrow Agent's duties and
responsibilities shall be subject to the following terms and
conditions:
(a) The
Subscriber and Company acknowledge and agree that the Escrow Agent (i) shall not
be responsible for or bound by, and shall not be required to inquire into
whether either the Subscriber or Company is entitled to receipt of the Company
Documents and Subscriber Documents pursuant to, any other agreement or
otherwise; (ii) shall be obligated only for the performance of such duties as
are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
may rely on and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by the Escrow Agent in good faith to be
genuine and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of any fact
stated therein or the propriety or validity or the service thereof; (iv) may
assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.
(b) The
Subscriber and Company acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and that the Escrow Agent shall not be liable for
any action taken by Escrow Agent in good faith and believed by Escrow Agent to
be authorized or within the rights or powers conferred upon Escrow Agent by this
Agreement. The Subscriber and Company, jointly and severally, agree
to indemnify and hold harmless the Escrow Agent and any of Escrow Agent's
partners, employees, agents and representatives for any action taken or omitted
to be taken by Escrow Agent or any of them hereunder, including the fees of
outside counsel and other costs and expenses of defending itself against any
claim or liability under this Agreement, except in the case of gross negligence
or willful misconduct on Escrow Agent's part committed in its capacity as Escrow
Agent under this Agreement. The Escrow Agent shall owe a duty only to
the Subscriber and Company under this Agreement and to no other
person.
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(c) The
Subscriber and Company jointly and severally agree to reimburse the Escrow Agent
for outside counsel fees, to the extent authorized hereunder and incurred in
connection with the performance of its duties and responsibilities
hereunder.
(d) The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving five (5)
days prior written notice of resignation to the Subscriber and the
Company. Prior to the effective date of the resignation as specified
in such notice, the Subscriber and Company will issue to the Escrow Agent a
Joint Instruction authorizing delivery of the Company Documents and Subscriber
Documents to a substitute Escrow Agent selected by the Subscriber and
Company. If no successor Escrow Agent is named by the Subscriber and
Company, the Escrow Agent may apply to a court of competent jurisdiction in the
State of New York for appointment of a successor Escrow Agent, and to deposit
the Company Documents and Subscriber Documents with the clerk of any such
court.
(e) The
Escrow Agent does not have and will not have any interest in the Company
Documents and Subscriber Documents, but is serving only as escrow agent, having
only possession thereof. The Escrow Agent shall not be liable for any
loss resulting from the making or retention of any investment in accordance with
this Escrow Agreement.
(f) This
Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations shall
be read into this Agreement.
(g) The
Escrow Agent shall be permitted to act as counsel for the Subscriber in any
dispute as to the disposition of the Company Documents and Subscriber Documents,
in any other dispute between the Subscriber and Company, whether or not the
Escrow Agent is then holding the Company Documents and Subscriber Documents and
continues to act as the Escrow Agent hereunder.
(h) The
provisions of this Section 4.1 shall survive the resignation of the Escrow Agent
or the termination of this Agreement.
4.2. Dispute Resolution:
Judgments. Resolution of disputes arising under this Agreement
shall be subject to the following terms and conditions:
(a) If
any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Company Documents and Subscriber Documents, or
if the Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the Company
Documents and Subscriber Documents pending receipt of a Joint Instruction from
the Subscriber and Company, or (ii) deposit the Company Documents and Subscriber
Documents with any court of competent jurisdiction in the State of New York, in
which event the Escrow Agent shall give written notice thereof to the Subscriber
and the Company and shall thereupon be relieved and discharged from all further
obligations pursuant to this Agreement. The Escrow Agent may, but
shall be under no duty to, institute or defend any legal proceedings which
relate to the Company Documents and Subscriber Documents. The Escrow
Agent shall have the right to retain counsel if it becomes involved in any
disagreement, dispute or litigation on account of this Agreement or
otherwise determines that it is necessary to consult counsel.
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(b) The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order. In case the Escrow Agent obeys or complies with a Court Order,
the Escrow Agent shall not be liable to the Subscriber and Company or to any
other person, firm, corporation or entity by reason of such
compliance.
ARTICLE
V
GENERAL
MATTERS
5.1. Termination. This
escrow shall terminate upon the release of all of the Company Documents and
Subscriber Documents or at any time upon the agreement in writing of the
Subscriber and Company.
5.2. Notices. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
(a) If
to the Company, to:
000x
Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attn:
_______________
Fax:
(___) __________
With a
copy by telecopier only to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx
LLP
00 Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx, XX 00000
Att:
Xxxxxxx X. Xxxxxxxx, Esq.
Fax:
(000) 000-0000
(b) If
to the Subscribers, to: the addresses and fax numbers listed on Schedule A
hereto
(c) If
to the Escrow Agent, to:
Grushko
& Xxxxxxx, P.C.
000 Xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
Xxx Xxxx 00000
Fax:
000-000-0000
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or to
such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.
5.3. Interest. The
Escrowed Payment shall not be held in an interest bearing account nor will
interest be payable in connection therewith. In the event the
Escrowed Payment is deposited in an interest bearing account, each Subscriber
shall be entitled to receive its pro rata portion of any
accrued interest thereon, but only if the Escrow Agent receives from such
Subscriber the Subscriber’s United States taxpayer identification number and
other requested information and forms.
5.4. Assignment; Binding
Agreement. Neither this Agreement nor any right or obligation
hereunder shall be assignable by any party without the prior written consent of
the other parties hereto. This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.
5.5. Invalidity. In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
5.6. Counterparts/Execution. This
Agreement may be executed in any number of counterparts and by different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument. This Agreement may be executed by facsimile
transmission and delivered by facsimile transmission.
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5.7. Agreement. Each
of the undersigned states that he has read the foregoing Funds Escrow Agreement
and understands and agrees to it.
AIRTRAX,
INC.
the
“Company”
By:_______________________________________
Name of Subscriber
(Print):
__________________________________________
By:_______________________________________
Print Name of
Signator:_______________________
ESCROW
AGENT:
______________________________________
GRUSHKO
& XXXXXXX, P.C.
8
SCHEDULE A TO FUNDS
ESCROW
AGREEMENT
|
SUBSCRIBER
|
ESCROWED
PAYMENT
|
|
Platinum
Partners Long Term Growth V
000
Xxxx 00xx
Xxxxxx,
Xxx
Xxxx, XX 00000
|
$23,411.76
|
|
Xxxxxx
Xxxxxxxxxxx
000
Xxxxxx Xx
Xxxxxxxx
XX 00000
(866)
651–8475
|
$11,760.00
|
|
Xxxxx
International Ltd.
00xx
Xxxxxx Xxxxxxxxxxxx Xxxxxxx,
Xxxxx
Tower, 16th
Floor,
Panama,
Republic of Panama
(516)
887–8990
|
$20,705.88
|
|
Alpha
Capital Xxxxxxx
Xxxxxxxxx
0, 0000 Xxxxxxxxxxx,
Xxxxx,
Lichtenstein
000-00-00000000
|
$23,411.76
|
|
Whalehaven
Capital Fund Limited
c/o
FWS Capital Ltd.
0xx
Xxxxx, 00 Xxx-Xxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxx XX00
(441)
295–5262
|
$20,705.88
|
|
Total
|
$99,995.29
|
9
