EXHIBIT 10.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as
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of June 12, 2001, by MEDIX RESOURCES INC., a Colorado corporation (the
"Company"); CORNELL CAPITAL PARTNERS, L.P., a Delaware limited partnership
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and DUTCHESS PRIVATE EQUITIES, FUND, L.P. a Delaware limited partnership
(the "Investors"); XXXXXX XXXXXXXX LLP, Xxxxxxx Capital Partners, L.P.'s
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counsel (the "Investors Counsel"); and FIRST UNION NATIONAL BANK, a national
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banking association, as Escrow Agent hereunder (the "Escrow Agent").
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BACKGROUND
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WHEREAS, the Company and the Investors have entered into an
Equity Line of (the "Equity Line of Credit Agreement"), dated as of the date
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hereof, pursuant to which the Company proposes to sell the Company's Common
Stock, $0.00 par value per share (the "Common Stock"), at a price per share
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equal to the Purchase Price, as that term is defined in the Equity Line of
Credit Agreement, for an aggregate price of up to $10,000,000. The Equity
Line of Credit Agreement provides that on each Advance Date the Investors
shall deposit the Advance pursuant to the Advance Notice in a segregated
escrow account to be held by Escrow Agent and the Company shall deposit
shares of the Company's Common Stock, which shall be purchased by the
Investors as set forth in the Equity Line of Credit Agreement, with the
Investors Counsel, in order to effectuate a disbursement to the Company of
the Advance by the Escrow Agent and a disbursement to the Investors of the
shares of the Company's Common Stock by Investors Counsel at a closing to be
held as set forth in the Equity Line of Credit Agreement (the "Closing").
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WHEREAS, Escrow Agent has agreed to accept, hold, and disburse
the funds deposited with it in accordance with the terms of this Agreement.
WHEREAS, Investors Counsel has agreed to accept, hold, and
disburse the shares of the Company's Common Stock which have been deposited
with it in accordance with the terms of this Agreement.
WHEREAS, in order to establish the escrow of funds and shares to
effect
the provisions of the Equity Line of Credit Agreement, the parties hereto
have entered into this Agreement.
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:
1. Definitions. The following terms shall have the following meanings when
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used herein:
a. "Escrow Funds" shall mean the Advance funds deposited with the
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Escrow Agent pursuant to this Agreement.
b. "Joint Written Direction" shall mean a written direction executed
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by the Investors and the Company directing Escrow Agent to disburse all or a
portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.
c. "Common Stock Joint Written Direction" shall mean a written
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direction executed by the Investors and the Company directing Investors
Counsel to disburse all or a portion of the shares of the Company's Common
Stock or to refrain from taking any action pursuant to this Agreement.
2. Appointment of and Acceptance by Escrow Agent and Investors's Counsel.
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A. The Investors and the Company hereby appoint Escrow Agent to serve as
Escrow Agent hereunder. Escrow Agent hereby accepts such appointment and,
upon receipt by wire transfer of the Escrow Funds in accordance with Section
3 below, agrees to hold, invest and disburse the Escrow Funds in accordance
with this Agreement.
B. The Investors and the Company hereby appoint Investors Counsel to
serve
as the holder of the shares of the Company's Common Stock which shall be
purchased by the Investors. Investors Counsel hereby accepts such
appointment and, upon receipt via D.W.A.C of the shares of the Company's
Common Stock in accordance with Section 3 below, agrees to hold and disburse
the shares of the Company's Common Stock in accordance with this Agreement.
3. Creation of Escrow Account/Common Stock Account.
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A. On or prior to the date of this Agreement the Escrow Agent shall
establish an
escrow account for the deposit of the Escrow Funds entitled as follows: Medix
Resources Inc./Cornell Capital Partners L.P. The Investors will wire funds
to the account of the Escrow Agent as follows:
Bank: First Union National Bank of New
Jersey
Routing #: 000000000
Account #: 2020000659170
Name on Account: Xxxxxx Xxxxxxxx LLP/First Union as
Escrow Agent
Name on Sub-Account: Medix Resources Inc./Cornell
Capital Partners, L.P. Escrow
account
Reference Sub-Account #: 1530-01
Attn: Xxxxxx Xxxxxxx (000) 000-0000
Xxxxxxx Xxxxxxxxx (000) 000-0000
Note: Only wire transfers shall be
accepted.
B. On or prior to the date of this Agreement Investors Counsel shall
establish an account for the D.W.A.C. of the shares of Common Stock entitled
as follows: Medix Resources Inc. The Company will D.W.A.C. shares of the
Company's Common Stock to the account of Investors Counsel as follows:
Brokerage Firm: The May Xxxxx Group, Inc.
Clearing Firm: Xxxx Xxxxxxxx
Account #: 12H7-16679688
DTC #: 0235
Name on Account: Xxxxxx Xxxxxxxx LLP
4. Deposits into the Escrow Account. The Investors agrees that they
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shall promptly deliver all monies for the payment of the Common Stock to the
Escrow Agent for deposit in the Escrow Account.
5. Disbursements from the Escrow Account.
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(a) At such time as Escrow Agent has collected and deposited
instruments of payment in the total amount of the Advance and the Investors
counsel, Investors Counsel, has received such Common Stock via D.W.A.C from
the Company which are to be issued to the Investors pursuant to the Equity
Line of Credit Agreement, Investors Counsel shall notify the Company and the
Investors. The Escrow Agent will continue to hold such funds until the
Investors and Company execute and deliver a Joint Written Direction
directing the Escrow Agent to disburse the Escrow Funds pursuant to Joint
Written Direction at which time the Escrow Agent shall wire the Escrow Funds
to the Company. In disbursing such funds, Escrow Agent is authorized to
rely upon such Joint Written Direction from Company and may accept any
signatory from the Company listed on the signature page to this Agreement and
any signature from the Investors that Escrow Agent already has on file.
Simultaneous with delivery of the executed Joint Written Direction to the
Escrow Agent the Investors and Company shall execute and deliver a Common
Stock Joint Written Direction to Investors Counsel directing Investors
Counsel to release via D.W.A.C to the Investors the shares of the Company's
Common Stock. In releasing such shares of Common Stock Investors Counsel is
authorized to rely upon such Common Stock Joint Written Direction from
Company and may accept any signatory from the Company listed on the signature
page to this Agreement and any signature from the Investors Counsel has on
file.
In the event the Escrow Agent does not receive the amount of the Advance
from the Investors, the Escrow Agent shall notify the Company and the
Investors. In the event Investors Counsel does not receive the shares of
Common Stock to be purchased by the Investors Counsel shall notify the
Company and the Investors.
In the event that the Escrow Agent is advised by the Investors
Counsel Investors Counsel that the Common Stock has not been received from
the Company, in no event will the Escrow Funds be released to the Company
until such shares are received by the Investors 's Counsel.
6. Collection Procedure. The Escrow Agent is hereby authorized to
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forward each wire for collection and, upon collection of the proceeds of each
wire deposit the collected proceeds in the Escrow Account.
Any wires returned unpaid to the Escrow Agent shall be returned to the
Investors. In such cases, the Escrow Agent will promptly notify the Company
of such return.
7. Suspension of Performance: Disbursement Into Court.
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A. Escrow Agent. If at any time, there shall exist any dispute between the
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Company and the Investors with respect to holding or disposition of any
portion of the Escrow Funds or any other obligations of Escrow Agent
hereunder, or if at any time Escrow Agent is unable to determine, to Escrow
Agent's sole satisfaction, the proper disposition of any portion of the
Escrow Funds or Escrow Agent's proper actions with respect to its obligations
hereunder, or if the parties have not within thirty (30) days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 9
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow
Agent may, in its sole discretion, take either or both of the following
actions:
i. suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this Escrow
Agreement until such dispute or uncertainty shall be resolved to
the sole satisfaction of Escrow Agent or until a successor Escrow
Agent shall be appointed (as the case may be); provided however,
Escrow Agent shall continue to invest the Escrow Funds in
accordance with Section 8 hereof; and/or
ii. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any
venue convenient to Escrow Agent, for instructions with respect to
such dispute or uncertainty, and to the extent required by law,
pay into such court, for holding and disposition in accordance
with the instructions of such court, all funds held by it in the
Escrow Funds, after deduction and payment to Escrow Agent of all
fees and expenses (including court costs and attorneys' fees)
payable to, incurred by, or expected to be incurred by Escrow
Agent in connection with performance of its duties and the
exercise of its rights hereunder.
Escrow Agent shall have no liability to the Company, the Investors, or any
person with respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed liability that
may arise, or be alleged to have arisen, out of or as a result of any delay
in the disbursement of funds held in the Escrow Funds or any delay in with
respect to any other action required or requested of Escrow Agent.
B. Investors Counsel. If at any time, there shall exist any dispute between
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the Company and the Investors with respect to holding or disposition of any
portion of the shares of Common Stock or any other obligations of Investors
Counsel hereunder, or if at any time Investors Counsel is unable to
determine, to Investors Counsel's sole satisfaction, the proper disposition
of any portion of the shares of Common Stock or Investors Counsel's proper
actions with respect to its obligations hereunder, then Investors Counsel
may, in its sole discretion, take either or both of the following actions:
i. suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this Escrow
Agreement until such dispute or uncertainty shall be resolved to
the sole satisfaction of Investors Counsel or until a successor
shall be appointed (as the case may be); and/or
ii. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any
venue convenient to Investors Counsel, for instructions with
respect to such dispute or uncertainty, and to the extent required
by law, pay into such court, for holding and disposition in
accordance with the instructions of such court, all shares of the
Company's Common Stock funds held by it, after deduction and
payment to Investors Counsel of all fees and expenses (including
court costs and attorneys' fees) payable to, incurred by, or
expected to be incurred by Investors Counsel in connection with
performance of its duties and the exercise of its rights hereunder.
Investors Counsel shall have no liability to the Company, the Investors, or
any person with respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed liability that
may arise, or be alleged to have arisen, out of or as a result of any delay
in the release of shares of the Company's Common Stock or any delay in with
respect to any other action required or requested of Xxxxxx Xxxxxxxx, LLP.
8. Investment of Escrow Funds. The Escrow Agent shall deposit the
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Escrow Funds in a non-interest bearing trust/attorney trust account.
If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent shall invest the
Escrow Fund, or such portion thereof, as to which no Joint Written Direction
has been received, in investments described above. The foregoing investments
shall be made by the Escrow Agent. Notwithstanding anything to the
contrary contained, Escrow Agent may, without notice to the parties, sell or
liquidate any of the foregoing investments at any time if the proceeds
thereof are required for any release of funds permitted or required
hereunder, and Escrow Agent shall not be liable or responsible for any loss,
cost or penalty resulting from any such sale or liquidation. With respect to
any funds received by Escrow Agent for deposit into the Escrow Funds after
ten o'clock, a.m., New Jersey time, Escrow Agent shall not be required to
invest such funds or to effect such investment instruction until the next day
upon which banks in New Jersey are open for business.
9. Resignation and Removal of Escrow Agent. Escrow Agent may resign from
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the performance of its duties hereunder at any time by giving thirty (30)
days' prior written notice to the parties or may be removed, with or without
cause, by the parties, acting jointly, by furnishing a Joint Written
Direction to Escrow Agent, at any time by the giving of ten (10) days' prior
written notice to Escrow Agent as provided herein below. Upon any such
notice of resignation or removal, the representatives of the Investors and
the Company identified in Sections 13a.(iv) and 13b.(iv), below, jointly
shall appoint a successor Escrow Agent hereunder, which shall be a commercial
bank, trust company or other financial institution with a combined capital
and surplus in excess of $10,000,000.00. Upon the acceptance in writing of
any appointment of 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 Escrow 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
Escrow 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 Escrow
Agreement. The retiring Escrow Agent shall transmit all records pertaining
to the Escrow Funds and shall pay all funds held by it in the Escrow Funds to
the successor Escrow Agent, after making copies of such records as the
retiring Escrow Agent deems advisable and after deduction and payment to the
retiring Escrow Agent of all fees and expenses (including court costs and
attorneys' fees) payable to, incurred by, or expected to be incurred by the
retiring Escrow Agent in connection with the performance of its duties and
the exercise of its rights hereunder.
10. Liability of Escrow Agent.
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a. Escrow Agent shall have no liability or obligation with respect to the
Escrow Funds except for Escrow Agent's willful misconduct or gross
negligence. Escrow Agent's sole responsibility shall be for the safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms
of this Agreement. Escrow Agent shall have no implied duties or obligations
and shall not be charged with knowledge or notice or any fact or circumstance
not specifically set forth herein. Escrow Agent may rely upon any
instrument, not only as to its due execution, validity and effectiveness, but
also as to the truth and accuracy of any information contained therein, which
Escrow Agent shall in good faith believe to be genuine, to have been signed
or presented by the person or parties purporting to sign the same and conform
to the provisions of this Agreement. In no event shall Escrow Agent be
liable for incidental, indirect, special, and consequential or punitive
damages. Escrow Agent shall not be obligated to take any legal action or
commence any proceeding in connection with the Escrow Funds, any account in
which Escrow Funds are deposited, this Agreement or the Equity Line of Credit
Agreement, or to appear in, prosecute or defend any such legal action or
proceeding. Escrow Agent may consult legal counsel selected by it in any
event of any dispute or question as to construction of any of the provisions
hereof or of any other agreement or its duties hereunder, or relating to any
dispute involving any party hereto, and shall incur no liability and shall be
fully indemnified from any liability whatsoever in acting in accordance with
the opinion or instructions of such counsel. The Company and the Investors
jointly and severally shall promptly pay, upon demand, the reasonable fees
and expenses of any such counsel.
a. The Escrow Agent is hereby authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court's
jurisdiction in the matter. If any portion of the Escrow Funds is at any
time attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property
shall be stayed or enjoined by any court order, or in any case any order
judgment or decree shall be made or entered by any court affecting such
property or any part thereof, then and in any such event, the Escrow Agent is
authorized, in its sole discretion, to rely upon and comply with any such
order, writ judgment or decree which it is advised by legal counsel selected
by it, is binding upon it, without the need for appeal or other action; and
if the Escrow Agent complies with any such order, writ, judgment or decree,
it shall not be liable to any of the parties hereto or to any other person or
entity by reason of such compliance even though such order, writ judgment or
decree may be subsequently reversed, modified, annulled, set aside or
vacated.
11. Liability of Investors Counsel.
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a. Notwithstanding any liability attributable to Investors Counsel as
counsel to the Investors, Investors Counsel shall have no liability or
obligation with respect to the shares of the Company's Common Stock except
for Investors Counsel's willful misconduct or gross negligence. Investors
Counsel's sole responsibility shall be for the safekeeping and release of the
shares of the Company's Common Stock in accordance with the terms of this
Agreement. Investors Counsel shall have no implied duties or obligations and
shall not be charged with knowledge or notice or any fact or circumstance not
specifically set forth herein. Investors Counsel may rely upon any
instrument, not only as to its due execution, validity and effectiveness, but
also as to the truth and accuracy of any information contained therein, which
Investors Counsel shall in good faith believe to be genuine, to have been
signed or presented by the person or parties purporting to sign the same and
conform to the provisions of this Agreement. In no event shall Investors
Counsel be liable for incidental, indirect, special, and consequential or
punitive damages. Investors Counsel shall not be obligated to take any legal
action or commence any proceeding in connection with the shares of the
Company's Common Stock, any account in which shares of Common Stock are
deposited and this Agreement, or to appear in, prosecute or defend any such
legal action or proceeding. Investors Counsel may consult legal counsel
selected by it in any event of any dispute or question as to construction of
any of the provisions hereof or of any other agreement or its duties
hereunder, or relating to any dispute involving any party hereto, and shall
incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instructions of such
counsel. The Company and the Investors jointly and severally shall promptly
pay, upon demand, the reasonable fees and expenses of any such counsel.
b. Investors Counsel is hereby authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
shares of the Company's Common Stock, without determination by Investors
Counsel of such court's jurisdiction in the matter. If any portion of the
shares of the Company's Common Stock are at any time attached, garnished or
levied upon under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in any case any order judgment or decree
shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Investors Counsel is authorized, in
its sole discretion, to rely upon and comply with any such order, writ
judgment or decree which it is advised by legal counsel selected by it,
binding upon it, without the need for appeal or other action; and if
Investors Counsel complies with any such order, writ, judgment or decree, it
shall not be liable to any of the parties hereto or to any other person or
entity by reason of such compliance even though such order, writ judgment or
decree may be subsequently reversed, modified, annulled, set aside or
vacated.
12. Indemnification of Escrow Agent. From and at all times after the date
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of this Agreement, the parties jointly and severally, shall, to the fullest
extent permitted by law and to the extent provided herein, indemnify and hold
harmless Escrow Agent and each director, officer, employee, attorney, agent
and affiliate of Escrow Agent (collectively, the "Indemnified Parties")
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against any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including
without limitation reasonable attorney's fees, costs and expenses) incurred
by or asserted against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect or consequential, as a result of or arising
from or in any way relating to any claim, demand, suit, action, or proceeding
(including any inquiry or investigation) by any person, including without
limitation the parties to this Agreement, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any Indemnified
Party under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable cause
or otherwise, arising from or in connection with the negotiation,
preparation, execution, performance or failure of performance of this
Agreement or any transaction contemplated herein, whether or not any such
Indemnified Party is a party to any such action or proceeding, suit or the
target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for
liability finally determined by a court of competent jurisdiction, subject to
no further appeal, to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim shall be
brought or asserted against any Indemnified Party, such Indemnified Party
shall promptly notify the Company and the Investors hereunder in writing, and
the Investors and the Company shall assume the defense thereof, including
the employment of counsel and the payment of all expenses. Such Indemnified
Party shall, in its sole discretion, have the right to employ separate
counsel (who may be selected by such Indemnified Party in its sole
discretion) in any such action and to participate and to participate in the
defense thereof, and the fees and expenses of such counsel shall be paid by
such Indemnified Party, except that the Investors and/or the Company shall be
required to pay such fees and expense if (a) the Investors or the Company
agree to pay such fees and expenses, or (b) the Investors and/or the Company
shall fail to assume the defense of such action or proceeding or shall fail,
in the sole discretion of such Indemnified Party, to employ counsel
reasonably satisfactory to the Indemnified Party in any such action or
proceeding, (c) the Investors and the Company is the plaintiff in any such
action or proceeding or (d) the named or potential parties to any such action
or proceeding (including any potentially impleaded parties) include both
Indemnified Party the Company and/or the Investors and Indemnified Party
shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company or the Investors. The Investors and the Company
shall be jointly and severally liable to pay fees and expenses of counsel
pursuant to the preceding sentence, except that any obligation to pay under
clause (a) shall apply only to the party so agreeing. All such fees and
expenses payable by the Company and/or the Investors pursuant to the
foregoing sentence shall be paid from time to time as incurred, both in
advance of and after the final disposition of such action or claim. The
obligations of the parties under this section shall survive any termination
of this Agreement, and resignation or removal of the Escrow Agent shall be
independent of any obligation of Escrow Agent.
13. Indemnification of Investors Counsel. From and at all times after the
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date of this Agreement, the parties jointly and severally, shall, to the
fullest extent permitted by law and to the extent provided herein, indemnify
and hold harmless Investors Counsel and each partner, director, officer,
employee, attorney, agent and affiliate of Investors Counsel (collectively,
the "Indemnified Parties") against any and all actions, claims (whether or
not valid), losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including without limitation reasonable attorney's fees,
costs and expenses) incurred by or asserted against any of the Indemnified
Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
claim, demand, suit, action, or proceeding (including any inquiry or
investigation) by any person, including without limitation the parties to
this Agreement, whether threatened or initiated, asserting a claim for any
legal or equitable remedy against any person under any statute or regulation,
including, but not limited to, any federal or state securities laws, or under
any common law or equitable cause or otherwise, arising from or in connection
with the negotiation, preparation, execution, performance or failure of
performance of this Agreement or any transaction contemplated herein, whether
or not any such Indemnified Party is a party to any such action or
proceeding, suit or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right to be
indemnified hereunder for liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted from
the gross negligence or willful misconduct of such Indemnified Party. If any
such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify the Company and the
Investors hereunder in writing, and the Investors and the Company shall
assume the defense thereof, including the employment of counsel and the
payment of all expenses. Such Indemnified Party shall, in its sole
discretion, have the right to employ separate counsel (who may be selected by
such Indemnified Party in its sole discretion) in any such action and to
participate and to participate in the defense thereof, and the fees and
expenses of such counsel shall be paid by such Indemnified Party, except that
the Investors and/or the Company shall be required to pay such fees and
expense if (a) the Investors or the Company agree to pay such fees and
expenses, or (b) the Investors and/or the Company shall fail to assume the
defense of such action or proceeding or shall fail, in the sole discretion of
such Indemnified Party, to employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding, (c) the Investors and the
Company is the plaintiff in any such action or proceeding or (d) the named or
potential parties to any such action or proceeding (including any potentially
impleaded parties) include both Indemnified Party the Company and/or the
Investors and Indemnified Party shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Company or the Investors. The Investors
and the Company shall be jointly and severally liable to pay fees and
expenses of counsel pursuant to the preceding sentence, except that any
obligation to pay under clause (a) shall apply only to the party so
agreeing. All such fees and expenses payable by the Company and/or the
Investors pursuant to the foregoing sentence shall be paid from time to time
as incurred, both in advance of and after the final disposition of such
action or claim. The obligations of the parties under this section shall
survive any termination of this Agreement, and resignation or removal of the
Escrow Agent shall be independent of any obligation of Escrow Agent.
14. Expenses of Escrow Agent. Except as set forth in Section 10 the Company
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shall reimburse Escrow Agent for all of its reasonable out-of-pocket
expenses, including attorneys' fees, travel expenses, telephone and facsimile
transmission costs, postage (including express mail and overnight delivery
charges), copying charges and the like. All of the compensation and
reimbursement obligations set forth in this Section shall be payable by the
Company, upon demand by Escrow Agent. The obligations of the Company under
this Section shall survive any termination of this Agreement and the
resignation or removal of Escrow Agent.
15. Warranties.
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a. Investors makes the following representations and warranties to
Escrow Agent and the Investors Counsel :
(i) Investors have full power and authority to execute
and deliver this Escrow Agreement and to perform its
obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all
necessary corporate action of Investors, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Investors, enforceable in
accordance with its terms.
(iii) The execution, delivery, and performance of the
Investors of this Agreement will not violate, conflict
with, or cause a default under the certificate of
incorporation or bylaws of Investors, any applicable law or
regulation, any court order or administrative ruling or
degree to which the Investors is a party or any of its
property is subject, or any agreement, contract, indenture,
or other binding arrangement.
(iv) Xxxx X. Xxxxxx has been duly appointed to act as the
representative of Cornell Capital Partners, L.P. and
Xxxxxxx Xxxxxxxx has been duly appointed to act as the
representative of Dutchess Private Equities, Fund, L.P.,
hereunder and have full power and authority to execute,
deliver, and perform this Escrow Agreement, to execute and
deliver any Joint Written Direction, to amend, modify, or
waive any provision of this Agreement, and to take any and
all other actions as the Investors' representative under
this Agreement, all without further consent or direction
form, or notice to, the Investors or any other party.
(v) No party other than the parties hereto and the
Investors have, or shall have, any lien, claim or security
interest in the Escrow Funds or any part thereof. No
financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest in or
describing (whether specifically or generally) the Escrow
Funds or any part thereof.
(vi) All of the representations and warranties of the
Investors contained herein are true and complete as of the
date hereof and will be true and complete at the time of
any disbursement from the Escrow Funds.
b. The Company makes the following representations and
warranties to Escrow Agent and Investors Counsel:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State
of Colorado, and has full power and authority to execute
and deliver this Escrow Agreement and to perform its
obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all
necessary corporate action of the Company, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Company, enforceable in
accordance with its terms.
(iii) The execution, delivery, and performance by the
Company of this Escrow Agreement is in accordance with the
Equity Line of Credit Agreement and will not violate,
conflict with, or cause a default under the certificate of
incorporation or bylaws of the Company, any applicable law
or regulation, any court order or administrative ruling or
decree to which the Company is a party or any of its
property is subject, or any agreement, contract, indenture,
or other binding arrangement.
(iv) Xxxx X. Xxxxx or in his absence, either Xxxx Xxxxxxx
or Xxxxxxxx X. Xxxxxxxxx, have been duly appointed to act
as the representative of the Company hereunder and has full
power and authority to execute, deliver, and perform this
Escrow Agreement, to execute and deliver any Joint Written
Direction, to amend, modify or waive any provision of this
Agreement and to take all other actions as the Company's
Representative under this Agreement, all without further
consent or direction from, or notice to, the Company or any
other party.
(v) No party other than the parties hereto shall have,
any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform
Commercial Code is on file in any jurisdiction claiming a
security interest in or describing (whether specifically or
generally) the Escrow Funds or any part thereof.
(vi) All of the representations and warranties of the
Company contained herein are true and complete as of the
date hereof and will be true and complete at the time of
any disbursement from the Escrow Funds.
16. Consent to Jurisdiction and Venue. In the event that any party
-------------------------------------
hereto commences a lawsuit or other proceeding relating to or arising from
this Agreement, the parties hereto agree that the United States District
Court for the District of New Jersey shall have the sole and exclusive
jurisdiction over any such proceeding. If all such courts lack federal
subject matter jurisdiction, the parties agree that the Superior Court
Division of New Jersey, Chancery Division of Essex County shall have sole and
exclusive jurisdiction. Any of these courts shall be proper venue for any
such lawsuit or judicial proceeding and the parties hereto waive any
objection to such venue. The parties hereto consent to and agree to submit
to the jurisdiction of any of the courts specified herein and agree to accept
the service of process to vest personal jurisdiction over them in any of
these courts.
17. Notice. All notices and other communications hereunder shall be
------
in writing
and shall be deemed to have been validly served, given or delivered five (5)
days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
delivered to any nationally recognized overnight courier, or when transmitted
by facsimile transmission and addressed to the party to be notified as
follows:
If to Investors, to: Cornell Capital Partners, L.P.
c/o Yorkville Advisors, LLC
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxx Xxxxxx
With copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0
Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Dutchess Private Equities Fund, L.P.
c/o Dutchess Capital Management, LLC
000 Xxxx Xxxxx Xxxx - 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
With Copy to: Xxxxxx X. LaRoccaa
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
If to Company, to: Medix Resources Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Executive
Vice President and Chief Financial
Officer
Facsimile: (000) 000-0000
With copy to: Xxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxxx, P.C.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Escrow Agent, to: First Union National Bank,
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Or to such other address as each party may designate for itself by like
notice.
18. Amendments or Waiver. This Agreement may be changed, waived,
--------------------
discharged or terminated only by a writing signed by the parties of the
Escrow Agent. No delay or omission by any party in exercising any right with
respect hereto shall operate as waiver. A waiver on any one occasion shall
not be construed as a bar to, or waiver of, any right or remedy on any future
occasion.
19. Severability. To the extent any provision of this Agreement is
------------
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
19. Governing Law. This Agreement shall be construed and
--------------
interpreted in accordance with the internal laws of the State of New Jersey
without giving effect to the conflict of laws principles thereof.
20. Entire Agreement. This Agreement constitutes the entire Agreement between
--------------------
the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the obligations and duties of
the Escrow Agent with respect to the Escrow Funds.
21. Binding Effect. All of the terms of this Agreement, as amended
---------------
from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective heirs, successors and assigns of the parties
hereto.
22. Execution of Counterparts. This Agreement and any Joint Written
--------------------------
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.
23. Termination. Upon the first to occur of (i) Joint Written
-----------
Directions terminating this Escrow Agreement, (ii) twelve (12) months after
the last disbursement of all amounts in the Escrow Funds pursuant to Joint
Written Directions unless a request to maintain the effectiveness of this
Agreement is made by Joint Written Directions, or (iii) the disbursement of
all amounts in the Escrow Funds into court pursuant to Section 7 hereof, this
Agreement shall terminate and Escrow Agent shall have no further obligation
or liability whatsoever with respect to this Agreement or the Escrow Funds.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the parties have hereunto set their hands and seals the
day and year above set forth.
MEDIX RESOURCES INC.
By: /s/Xxxx X. Xxxxx
----------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
Chief Financial Officer
By: /s/Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Operating
Officer
By: /s/Xxxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Executive Vice President of
Operations
FIRST UNION NATIONAL BANK
By: /s/Xxxxxx Xxxxxxx
-----------------
Name: Xxxxxx Xxxxxxx
Title: As the Escrow Agent
CORNELL CAPITAL PARTNERS, L.P.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/Xxxx X. Xxxxxx
-----------------
Name: Xxxx X. Xxxxxx
Title: Fund Manager
DUTCHESS PRIVATE EQUITIES FUND, L.P.
By: Dutchess Capital Management, LLC
Its: General Partner
By: /s/Xxxxxxx Xxxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxxx
Title: Partner
XXXXXX XXXXXXXX LLP
By: /s/Xxxxx Xxxxxxxx
-----------------
Name: Xxxxx Xxxxxxxx
Title: Partner
