EXHIBIT 10.6
ESCROW AGREEMENT
This Escrow Agreement, dated as of May 31, 2005 ("Escrow Agreement"),
is entered into by and among Cogent Capital Corp., a Utah corporation
("Cogent"), Xstream Beverage Network, Inc., a Nevada corporation ("Xstream"),
[list investors] and Investors Bank & Trust Company, a Massachusetts trust
company ("Escrow Agent").
Whereas, [investor] and Xstream are parties to a Subscription
Agreement, dated May 31, 2005; and
Whereas, [investor] and Xstream are parties to a Subscription
Agreement, dated May 31, 2005; and
Whereas, [investor] and Xstream are parties to a Subscription
Agreement, dated May 31, 2005; and
Whereas, [investor] and Xstream are parties to a Subscription
Agreement, dated May 31, 2005; and
Whereas, [investor] and Xstream are parties to a Subscription
Agreement, dated May 31, 2005; and
Whereas, Cogent and Xstream are parties to the ISDA Master Agreement,
Equity Swap Confirmation, Call Option Confirmation and ISDA Credit Support
Annex, dated May 31, 2005 (collectively the "Swap Agreements"); and
Whereas, each Subscription Agreement provides for the delivery of
certain consideration and property to effect the transactions contemplated
thereby; and
Whereas, the Swap Agreements provide for the delivery of certain
consideration and property to effect the transactions contemplated thereby; and
Whereas, Escrow Agent has agreed to serve as Escrow Agent pursuant to
the terms set forth herein.
Now, therefore, the parties hereto agree to the following terms:
1. DELIVERIES IN ESCROW. On or before May 31, 2005 (the "Delivery Date") Cogent,
[investors] and Xstream shall deliver or deposit with the Escrow Agent according
to the delivery instructions as outlined in Exhibit "B" the following
(collectively the "Deliveries"):
(a) By [investor], US Treasury Notes and Strips with a market value on the
date immediately preceding the date of delivery to the Escrow Agent of
at least $1,200,000 based on current market quote at the time of
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delivery, together with a schedule listing for each Note and Strip the
exact amount, maturity, and CUSIP number (the "A bonds"); and
(b) By [investor], US Treasury Notes and Strips with a market value on the
date immediately preceding the date of delivery to the Escrow Agent of
at least $1,200,000 based on current market quote at the time of
delivery, together with a schedule listing for each Note and Strip the
exact amount, maturity, and CUSIP number (the "B bonds"); and
(c) By [investor], US Treasury Notes and Strips with a market value on the
date immediately preceding the date of delivery to the Escrow Agent of
at least $1,200,000 based on current market quote at the time of
delivery, together with a schedule listing for each Note and Strip the
exact amount, maturity, and CUSIP number (the "C bonds"); and
(d) By [investor], US Treasury Notes and Strips with a market value on the
date immediately preceding the date of delivery to the Escrow Agent of
at least $1,200,000 based on current market quote at the time of
delivery, together with a schedule listing for each Note and Strip the
exact amount, maturity, and CUSIP number (the "D bonds"); and
(e) By [investor], US Treasury Notes and Strips with a market value on the
date immediately preceding the date of delivery to the Escrow Agent of
at least $1,200,000 based on current market quote at the time of
delivery, together with a schedule listing for each Note and Strip the
exact amount, maturity, and CUSIP number (the "E bonds"); and
(f) By Xstream,
(i) 1,684,212 shares of Xstream common stock, par value $0.001 per
share, CUSIP number , in two certificates with standard
restrictions as defined in the Subscription Agreement issued in
the name of [investor], one certificate shall be in the amount of
1,263,159 shares and the other in the amount of 421,053 shares
(the "A Shares"); and
(ii) 1,684,212 shares of Xstream common stock, par value $0.001 per
share, CUSIP number , in two certificates with standard
restrictions as defined in the Subscription Agreement issued in
the name of [investor], one certificate shall be in the amount of
1,263,159 shares and the other in the amount of 421,053 shares
(the "B Shares"); and
(iii) 1,684,212 shares of Xstream common stock, par value $0.001 per
share, CUSIP number , in two certificates with standard
restrictions as defined in the Subscription Agreement issued in
the name of [investor], one certificate shall be in the amount of
1,263,159 shares and the other in the amount of 421,053 shares
(the "C Shares"); and
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(iv) 1,684,212 shares of Xstream common stock, par value $0.001 per
share, CUSIP number , in two certificates with standard
restrictions as defined in the Subscription Agreement issued in
the name of [investor], one certificate shall be in the amount of
1,263,159 shares and the other in the amount of 421,053 shares
(the "D Shares"); and
(v) 1,684,212 shares of Xstream common stock, par value $0.001 per
share, CUSIP number , in two certificates with standard
restrictions as defined in the Subscription Agreement issued in
the name of [investor], one certificate shall be in the amount of
1,263,159 shares and the other in the amount of 421,053 shares
(the "E Shares"); and
(vi) Either (1) $540,000 cash or (2) 687,719 free trading/registered
shares of Xstream common stock, par value $0.001 per share, CUSIP
number plus $50,000 cash , (either (1) or (2) being the "Initial
Exchange Amount" as defined under the Swap Agreements).
(vii) $55,000 interest impound.
If all of the foregoing Deliveries are not received by the Escrow Agent on or
before the Delivery Date, then the Escrow Agent shall be directed by either
Cogent or Xstream to terminate the Escrow Agreement and to return to Cogent and
Xstream their respective Deliveries, if any, made to the Escrow Agent on or
before that date.
2. DISBURSEMENT OF DELIVERIES. If the Escrow Agent receives all of the
Deliveries on or before the Delivery Date, within three business days following
the Delivery Date the Escrow Agent will be directed by Cogent or Xstream to
disburse the Deliveries as follows:
(a) The A Bonds, the B Bonds, the C Bonds, the D Bonds and the E Bonds will
be transferred to account number at Escrow Agent titled "Cogent Capital
for the benefit of Xstream Beverage Network, Inc." (the "Collateral
Account");
(b) The A Shares will be transferred to account number [ ] at Escrow Agent;
(c) The B Shares will be transferred to account number [ ] at Escrow Agent;
(d) The C Shares will be transferred to account number [ ] at Escrow Agent;
(e) The D Shares will be transferred to account number [ ] at Escrow Agent;
(f) The E Shares will be transferred to account number [ ] at Escrow Agent
(g) The Initial Exchange Amount will be transferred to account number
0000000 at Escrow Agent.
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(h) The interest impound to account number [ ] at Escrow Agent.
3. COLLATERAL ACCOUNT.
(a) Cogent and Xstream are parties to that certain ISDA Master Agreement,
dated as of May 31, 2005 (the "Master Agreement") and the Credit Support Annex
thereto (the "CSA"), and have executed two Confirmations, dated as of May 31,
2005, evidencing Transactions that are subject to the Master Agreement. Cogent
and Xstream hereby notify the Escrow Agent that pursuant to the CSA and the
Confirmations Xstream has granted Cogent a security interest in the Collateral
Account and all financial assets and other items therein. The Escrow Agent
acknowledges being so notified and confirms that it has no actual knowledge or
notice of any restraint, security interest, lien or other adverse claim in or to
the Collateral Account or any item therein. All items in the Collateral Account
shall be treated as "financial assets" within the meaning of the New York
Uniform Commercial Code (the "Code").
(b) The Escrow Agent shall comply with all withdrawal, transfer, payment and
redemption instructions, and all other entitlement orders (as defined in the
Code) (collectively, "orders") received from Cogent (without further consent
from Xstream) concerning the Collateral Account. The Escrow Agent shall not
honor any orders from Xstream with respect to the Collateral Account, unless
otherwise authorized to do so pursuant to written instructions from Cogent. The
Escrow Agent shall not change the name or account number of the Collateral
Account without having received Cogent's prior express written consent thereto.
(c) The Escrow Agent waives, releases and agrees not to assert, exercise or
claim any lien, encumbrance, right (including setoff right) or other claim
against the Collateral Account or any financial asset, cash balance or other
item therein, except with respect to payment (i) of customary fees and
commissions with respect to the routine maintenance and operation of the
Collateral Account or (ii) for financial assets duly purchased for the
Collateral Account in accordance with the provisions hereof, in each case as
provided for under any agreements between Cogent and Xstream relating to the
Collateral Account. The Escrow Agent shall neither advance margin or other
credit against the Collateral Account, nor hypothecate any financial assets
carried in the Collateral Account, without the prior written consent of Cogent.
Except as required by law, the Escrow Agent shall not agree with any other
person or entity that it will comply with any withdrawal, transfer, payment and
redemption instructions, or any other entitlement or other orders, from such
person or entity concerning the Collateral Account or any items therein, without
the prior written consent of Cogent and any such agreement entered into without
such consent shall be null and void.
4. DUTY OF THE ESCROW AGENT. The sole duties and responsibilities of the Escrow
Agent shall be to receive and hold the Deliveries, and disburse the Deliveries
pursuant to Section 2 of this Agreement and to perform the duties and
responsibilities with respect to the Collateral Account expressly set forth in
writing herein (and in its standard securities accounts documentation and terms
and conditions as in effect from time to time, all of which shall apply to the
Accounts to the extent not inconsistent with this Agreement). Escrow Agent is
not responsible for any of the respective duties or obligations of Aegis
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Assessments and Cogent under the Master Agreement, the CSA or the Confirmations,
and all references in this Agreement to the Master Agreement, the CSA or the
Confirmations or any other agreements are for the convenience of the parties
hereto, and Escrow Agent shall have no duties or responsibilities with respect
thereto. Escrow Agent is not responsible for accounting or maintaining any
records other than to document the property received and Deliveries disbursed as
directed. Notwithstanding any item discussed herein, Escrow Agent has no
discretion over the Deliveries deposited with it and cannot be held liable for
any problem or dispute relating to such assets. All property received by the
Escrow Agent in the Collateral Account will be reported for accounting purposes
only.
5. DOCUMENTS. The Escrow Agent may conclusively rely upon and shall be protected
in acting upon any statement, certificate, notice, request, consent, order or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall have no duty or liability
to verify any such statement, certificate, notice, request, consent, order, or
other document and its sole responsibility shall be to act only as expressly set
forth in this Escrow Agreement. The Escrow Agent shall be under no obligation to
institute or defend any action, suit or proceeding in connection with this
Escrow Agreement unless first indemnified to its satisfaction by Cogent and
Xstream.
6. FEES. The Escrow Agent shall be entitled to compensation for its services as
stated in the fee schedule attached hereto as Exhibit A, which compensation
shall be paid by Xstream. The fee agreed upon for the services rendered
hereunder is intended as full compensation for the Escrow Agent's services as
contemplated by this Escrow Agreement; provided, however, that in the event that
the conditions for the disbursement of property under the Escrow Agreement are
not fulfilled, or the Escrow Agent renders any material service not contemplated
in the Escrow Agreement, or there is any assignment of interest in the subject
matter of the Escrow Agreement, or any material modification hereof, or if any
material controversy arises hereunder, or the Escrow Agent is made a party to
any litigation pertaining to the Escrow Agreement, or the subject matter hereof,
then the Escrow Agent shall be reasonably compensated for such extraordinary
services and reimbursed for all costs and expenses, including reasonable
attorney's fees, occasioned by any delay, controversy, litigation or event, and
the same shall be recoverable from Xstream; provided, however, that to the
extent Xstream is required to pay any such costs or expenses to the Escrow Agent
pursuant to the provisions of this Section 5 as a result of the fault or
negligence of Cogent, Xstream shall be entitled to recover such amount from
Cogent.
7. INDEMNIFICATION OF ESCROW AGENT. Cogent and Xstream, both jointly and
severally hereby indemnify and hold harmless the Escrow Agent from and against,
any and all loss, liability, cost, damage and expense, including, without
limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur
by reason of any action, claim or proceeding brought against the Escrow Agent
arising out of or relating in any way to this Escrow Agreement or any
transaction to which this Escrow Agreement relates unless such action, claim or
proceeding is the result of the gross negligence of the Escrow Agent. To the
extent Xstream or Cogent is required to pay any such loss, liability, damage,
cost or expense to the Escrow Agent pursuant to the provisions of this Section 6
as a result of the fault or negligence of the other party, Xstream or Cogent, as
applicable, shall be entitled to recover such amount from the other party. The
Escrow Agent may consult counsel with respect of any question arising under the
Escrow Agreement and the Escrow Agent shall not be liable for any action taken
or omitted in good faith upon advice of such counsel. The obligation of Cogent
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and Xstream under this Section 6 shall survive the termination of this Agreement
or the resignation or removal of the Escrow Agent.
8. NOTICES. All notices, requests, demands, and other communications under this
Escrow Agreement shall be in writing and shall be deemed to have been duly given
(a) on the date of service if served personally on the party to whom notice is
to be given, (b) on the day of transmission if sent by facsimile/email
transmission to the facsimile number/email address given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(c) on the day after delivery to Federal Express or similar overnight courier or
the Express Mail service maintained by the United States Postal Service, or (d)
on the fifth day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed, return receipt requested, to the party as follows:
If to Cogent:
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Cogent Capital Escrow
Attn: Xxxxxxx X. Xxxxxxx, President
00000 Xxxxx 0000 Xxxx
Xxxxx, Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Xstream:
--------------
Xstream Beverage Network, Inc.
Attn:
Telephone:
Fax:
If to [investor]:
-----------------
[investor]
If to [investor]:
-----------------
[investor]
If to [investor]:
-----------------
[investor]
If to [investor]:
-----------------
[investor]
If to [investor]:
-----------------
[investor]
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If to Escrow Agent:
-------------------
Investor's Bank & Trust Company
Attn: ___________________________
_________________________________
_________________________________
Telephone: ______________________
Fax: ____________________________
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
9. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Escrow
Agreement, no party hereto shall assign this Escrow Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect. This Escrow Agreement shall inure to
the benefit of and shall be binding upon the successors and permitted assigns of
the parties hereto.
10. GOVERNING LAW; JURISDICTION. This Escrow Agreement shall be construed,
performed, and enforced in accordance with, and governed by, the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of laws thereof. [This is intended to be "an agreement" within the
meaning of Section 8-110(e) of the Code and the terms "financial assets" and
"entitlement orders" herein shall include the respective meanings given such
terms in Article 8 of such Code.]
11. SEVERABILITY. In the event that any part of this Escrow Agreement is
declared by any court or other judicial or administrative body to be null, void,
or unenforceable, said provision shall survive to the extent it is not so
declared, and all of the other provisions of this Escrow Agreement shall remain
in full force and effect.
12. AMENDMENTS; WAIVERS. This Escrow Agreement may be amended or modified, and
any of the terms, covenants, or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. Any waiver by any party of any condition, or of
the breach of any provision, term, or covenant contained in this Escrow
Agreement, in any one or more instances, shall not be deemed to be nor construed
as further or continuing waiver of any such condition, or of the breach of any
other provision, term, or covenant of this Escrow Agreement.
13. ENTIRE AGREEMENT. This Escrow Agreement contains the entire understanding
among the parties hereto with respect to the escrow contemplated hereby and
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supersedes and replaces all prior and contemporaneous agreements and
understandings, oral or written, with regard to such escrow.
14. SECTION HEADINGS. The section headings in this Escrow Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Escrow Agreement.
15. COUNTERPARTS. This Escrow Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
16. RESIGNATIONS AND TERMINATION. Escrow Agent may resign upon 30 days advance
written notice to the parties hereto. If a successor Escrow Agent is not
appointed within the 30-day period following such notice, Escrow Agent may
petition any court of competent jurisdiction to name a successor Escrow Agent or
interplead the Deliveries with such court, whereupon Escrow Agent's duties
hereunder shall terminate upon the naming of a successor or interpleader of the
Deliveries. This Escrow Agreement shall terminate upon completion of the final
disbursement by the Escrow Agent pursuant to paragraph 2 above.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed the day and year first set forth above.
COGENT CAPITAL CORP.
By: __________________________________
Xxxxxxx X. Xxxxxxx, President
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XSTREAM, INC.
By: __________________________________
[NAME/TITLE]
[INVESTOR]
By: __________________________________
[NAME/TITLE]
[INVESTOR]
By: __________________________________
[NAME/TITLE]
[INVESTOR]
By: __________________________________
[NAME/TITLE]
[INVESTOR]
By: __________________________________
[NAME/TITLE]
[INVESTOR]
By: __________________________________
[NAME/TITLE]
INVESTORS BANK & TRUST COMPANY
By: __________________________________
Name:_________________________________
Its: _________________________________
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Exhibit A
Escrow Agent fees
Annual Escrow Agent Fee: $3,000
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Exhibit B
INVESTORS BANK & TRUST COMPANY
DELIVERY INSTRUCTIONS FOR ACCOUNTS SERVICED OUT OF:
BOSTON
TRUST, INSTITUTIONAL CUSTODY AND RETIREMENT PLAN SERVICES
Account #: 0000000 Account Name: Cogent Capital Escrow
---------------------- -----------------------
Administrator: Xxxxx Xxxxxxxx Phone (000) 000-0000
---------------------- -----------------------
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INVESTORS BANK MAILING INSTRUCTIONS DTC INELIGIBLE SECURITIES -UNRESTRICTED
Investors Bank and Trust Company The Bank of New York
OVERNIGHT One Xxxx Xxxxxx, 0xx Xxxxx
000 Xxxxxxxxx Xxxxxx, XXX 058, 16th Floor Window A
Attn: Xxxxx Xxxxxxxx Xxx Xxxx, XX 00000
Xxxxxx, XX 00000 A/C Name: Investors Bank & Trust Company
REGULAR MAIL A/C#: 017198
P.O. Box 300, TAD 058 4736811 Cogent Capital Escrow
Attn: Xxxxx Xxxxxxxx
Xxxxxx, XX 00000-0000 DTC INELIGIBLE - RESTRICTED / NON-TRANSFERABLE
----------------------------------------------
SECURITIES (MUST BE HELD IN CLIENT NAME)
DTC ELIGIBLE SECURITIES The Bank of New York
-----------------------
Agent Bank Name: Investors Bank & Trust Company One Xxxx Xxxxxx, 0xx Xxxxx
*Agent Bank Number 26016 Window A
Institutional ID: 28166 Xxx Xxxx, XX 00000
DTC Participant Number: 2132 A/C Name: Investors Bank & Trust Company
0000000 - Cogent Capital Escrow A/C#: 017200
4736811 Cogent Capital Escrow
GOVERNMENT ISSUES DELIVERED THROUGH FED BOOK ENTRY
ABA #000000000 DTC INELIGIBLE - RESTRICTED SECURITIES (WILL BE
-----------------------------------------------
INV XX XXX/1020 REREGISTERED INTO NOMINEE NAME)
-------------------------------
Xxxxxx Xxxxxxx Xxxxxx - 0000000 The Bank of New York
One Xxxx Xxxxxx, 0xx Xxxxx
XXXX SECURITIES DELIVERED THROUGH FED BOOK ENTRY Window A
-------------------------------------------------
EFFECTIVE 12/6/02 Xxx Xxxx, XX 00000
-----------------
Federal Reserve Bank of Boston A/C Name: Investors Bank & Trust Company
ABA #000000000 - A/C#: 017195
Investors Bank & Trust Co. - Boston Cogent Capital Escrow - 0000000
Sub Account: #1020
FFC: (0000000 Cogent Capital Escrow) REGISTRATION INSTRUCTIONS FOR BROKER ACCOUNTS
---------------------------------------------
Saturn & Co. Tax ID No. 00-0000000
ACH TRANSFERS IBT A/C #: 4736811
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ABA # 000000000 Account Name: Cogent Capital Escrow
4736811 Attn: Trade Processing TAD 58
Cogent Capital Escrow X.X. Xxx 0000
Xxxxxx, XX 00000-0000
FED WIRE CASH TRANSFERS
{3400} Receiving Bank: DTC ELIGIBLE PHYSICAL CERTIFICATES INSTRUCTIONS
ABA number: 000000000 Depository Trust Company
Short Name: Investors Xx Xxx 00 Xxxxx Xxxxxx
XXX Lookup: Investors Bank & Trust Co. New York Window - Concourse Level
Boston, MA Xxx Xxxx, XX 00000
Attn: Participant # 2132 - IBT
{4100} Beneficiary's Bank: 569530395 Attn: Xxxxxx Xxxxxx
{4200} Beneficiary: 4736811 IBT Acct #: 4736811
{4320} Reference for Beneficiary: Cogent Capital
Escrow Note: Send all legal documentation (ex.
Stock powers) to the administrator at Investors
Bank & Trust via mail
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