EXHIBIT F
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ESCROW AGREEMENT
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THIS ESCROW AGREEMENT ("Agreement") is made as of December 18, 2001 by and
between Xxxxxxxx Resonance Enterprises, Inc. Resonance Enterprises, Inc. (the
"Company"), TECINVEST SERVICES, INC. (the "Investor") and Xxxxxx X. XxXxxxx,
Esq., with an office at 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxx, XX 00000 (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, Company will be selling shares of its common stock (the "Shares"),
to Investor upon terms as set forth in the Investment Agreement and related
documents (the "Transaction Documents") entered into by the Company and
Investor; and
WHEREAS, Company and Investor have requested that the Escrow Agent hold the
Shares and funds ("Funds") being used to purchase the Shares in escrow pursuant
to the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
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TERMS OF THE ESCROW
1.1 The parties hereby agree to have Xxxxxx X. XxXxxxx, Esq. act as Escrow
Agent whereby the Escrow Agent shall receive the Shares and Funds in escrow and
distribute the same as set forth in this Agreement. Any capitalized terms not
defined herein shall have the meaning ascribed to them in the Transaction
Documents.
1.2 Prior to each Put Notice Date, (i) the Company shall deliver to the
Escrow Agent certificates representing the Shares to be issued to the Investor
or deposit such Shares into the account(s) (with the Investor receiving
confirmation that the Shares are in such account(s)) designated by the Investor
for the benefit of the Investor and (ii) the Investor shall deliver to the
Escrow Agent the Purchase Price to be paid for such Shares (after receipt of
confirmation of delivery of such Shares), determined as aforesaid, by wire
transfer. In the alternative to physical delivery of certificates for Common
Stock to the Escrow Agent, if delivery of the Shares may be effectuated by
electronic book-entry through The Depository Trust Company ("DTC"), then
delivery of the Shares pursuant to such purchase shall, unless requested
otherwise by such Investor, settle by book-entry transfer through DTC by the Put
Notice Date. The parties agree to coordinate with DTC to accomplish this
objective. In addition, each of the Company and the Investor shall deliver all
documents, instruments and writings required to be delivered by either of them
to the Escrow Agent pursuant to the Investment Agreement at or prior to each
Closing.
The number of Shares to be delivered to the Escrow Agent shall be the
result of the following formula:
Purchase Amount
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Purchase Price
1.3 Prior to each Closing Date the Investor shall wire to the Escrow Agent
that amount necessary to purchase the Shares on the Closing Date as required by
the Transaction Documents (the "Purchase Amount").
1.4 On each Closing Date the Escrow Agent shall forward the Shares being
purchased to the Investor, per Investor's written instructions, and wire the
amount necessary to purchase the Shares, pursuant to the Transaction Documents,
to the Company, per the Company's written instructions. Subject to the terms set
forth in the Transaction Documents, the Investor is required to purchase the
lesser of (a) the Dollar Amount set forth in the Put Notice and (b) 15% of the
total Average Daily Equity Traded during the applicable Purchase Period. The
Escrow Agent shall deduct from the Funds he receives in escrow from the Investor
the following amounts:
(a) On each Closing Date Escrow Agent shall deduct from the Purchase
Amount as an escrow fee the sum of $500 for each Put Notice which
amount the Escrow Agent may deduct from the proceeds received in
escrow from the Investor;
1.5 After Investor's receipt of a Put Notice, but prior to the related
Closing Date, the Investor may authorize the Escrow Agent to release a portion
of the Purchase Amount from escrow to the Company in exchange for a fixed number
of Shares, subject to the following conditions:
(a) The Investor shall fill out and sign a "Partial Release of Purchase
Amount and Shares from Escrow" (the "Partial Release Form"). See
Exhibit A attached hereto. The Partial Release Form shall set forth
the number of Shares to be released to Investor and the dollar amount
the Escrow Agent shall wire to the Company.
(b) The Partial Release Form shall be filled out and signed by the
Investor and faxed to the Company and the Escrow Agent prior to 12:00
p.m. New York City time.
The number of Shares stated in the Partial Release Form shall be equal to
the dollar amount to be released divided by 85% of the average of the four (4)
lowest closing bid prices during that number of Trading Days in the Purchase
Period that have expired, but if less than four (4) Trading Days have expired
prior to receipt by the Company of the Partial Release Form, then the lowest
closing bid price for that number of days shall be used.
The Company and Investor agree that on the related closing date, an
adjustment shall be made so that the terms set forth in the Investment Agreement
shall be honored with the balance of the Purchase Price being released to the
Company and the balance of Shares owed to Investor being released to Investor.
1.6 If the Escrow Agent does not have the exact number of Shares to send
Investor, because of the denominations of the various Share certificates, the
parties will mutually agree on how to resolve the matter.
1.7 This Agreement may be altered or amended only with the written consent
of all of the parties hereto. Should Company attempt to change this Agreement in
a manner which, in the Escrow Agent's discretion, shall be undesirable, the
Escrow Agent may resign as Escrow Agent by notifying Company and Investor in
writing. In the case of the Escrow Agent's resignation or removal pursuant to
the foregoing, his only duty, until receipt of notice from Company and Investor
that a successor escrow agent has been appointed, shall be to hold and preserve
the Shares and Funds that are in his possession. Upon receipt by the Escrow
Agent of said notice from Company and Investor of the appointment of a successor
escrow agent, the name of a successor escrow account and a direction to transfer
the Shares and Funds, the Escrow Agent shall promptly thereafter transfer all of
the Shares and Funds that he is still holding in escrow, to said successor
escrow agent. Immediately after said transfer of the Shares and Funds, the
Escrow Agent shall furnish Company and Investor with proof of such transfer. The
Escrow Agent is authorized to disregard any notices, requests, instructions or
demands received by it from Company or Investor after notice of resignation or
removal has been given.
1.8 The Escrow Agent shall be reimbursed by Company and Investor for any
reasonable expenses incurred in the event there is a conflict between the
parties and the Escrow Agent shall deem it necessary to retain counsel, upon
whose advice the Escrow Agent may rely. The Escrow Agent shall not be liable for
any action taken or omitted by him in good faith and in no event shall the
Escrow Agent be liable or responsible except for the Escrow Agent's own gross
negligence or willful misconduct. The Escrow Agent has made no representations
or warranties to the Company in connection with this transaction. The Escrow
Agent has no liability hereunder to either party other than to hold the Shares
and Funds received by the Investor and to deliver them under the terms hereof.
Each party hereto agrees to indemnify and hold harmless the Escrow Agent from
and with respect to any suits, claims, actions or liabilities arising in any way
out of this transaction including the obligation to defend any legal action
brought which in any way arises out of or is related to this Agreement or the
investment being made by Investor. The Company acknowledges and represents that
it is not being represented in a legal capacity by Xxxxxx X. XxXxxxx, and has
had the opportunity to consult with its own legal advisors prior to the signing
of this Agreement. The Company acknowledges that the Escrow Agent is not
rendering securities advice to the Company with respect to this proposed
transaction. The Escrow Agent has acted as legal counsel for the Investor and
may continue to act as legal counsel for the Investor, from time to time,
notwithstanding its duties as the Escrow Agent hereunder. The Company consents
to the Escrow Agent acting in such capacity as legal counsel for the Investor
and waives any claim that such representation represents a conflict of interest
on the part of the Escrow Agent. The Company understands that the Investor and
Escrow Agent are relying explicitly on the foregoing provisions contained in
this Section 1.8 in entering into this Agreement.
1.9 The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith, and any act done or omitted by the Escrow Agent pursuant
to the advice of the Escrow Agent's attorneys-at-law shall be conclusive
evidence of such good faith.
1.10 The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
1.11 The Escrow Agent shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
1.12 If the Escrow Agent reasonably requires other or further documents in
connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.13 It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the documents or the
Funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and
directed in the Escrow Agent's sole discretion (a) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the Funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (b) to deliver
the Funds and any other property and documents held by the Escrow Agent
hereunder to a state or federal court having competent subject matter
jurisdiction and located in the State of Connecticut in accordance with the
applicable procedure therefor.
ARTICLE 2
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MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed any extension of the time
for performance of any other obligation or act.
2.2 This Agreement shall not be binding assignable.
2.3 This Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.4 Whenever required by the context of this Agreement, the singular shall
include the plural and masculine shall include the feminine. This Agreement may
be executed in two or more counterparts, all of which taken together shall
constitute one instrument. Execution and delivery of this Agreement by exchange
of facsimile copies bearing the facsimile signature of a party shall constitute
a valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
2.5 The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance of the
laws of the State of Florida. The parties agree that any dispute arising under
or with respect to or in connection with this Agreement, whether during the term
of this Agreement or at any subsequent time, shall be resolved fully and
exclusively by binding arbitration in accordance with the commercial rules then
in force of the American Arbitration Association with the proceedings taking
place in West Palm Beach, Florida before a panel of three (3) arbitrators.
2.6 Any notice required or permitted hereunder shall be given in manner
provided in the Section headed "NOTICES" in the Transaction Documents, the terms
of which are incorporated herein by reference.
2.7 By signing this Agreement, the Escrow Agent becomes a party hereto only
for the purpose of this Agreement; the Escrow Agent does not become a party to
the Transaction Documents.
2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 18th day of December 2001.
TECINVEST SERVICES, INC.
By: /s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: Director
XXXXXXXX RESONANCE ENTERPRISES, INC.
By: /s/ X.X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: COO
XXXXXX X. XXXXXXX, ESCROW AGENT
By: /s/XXxxxxx XxXxxxx
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Xxxxxx X. XxXxxxx, Esq.
EXHIBIT A
PARTIAL RELEASE OF PURCHASE AMOUNT AND SHARES FROM ESCROW
Xxxxx X. Xxxxxxxx, COO
Xxxxxxxx Resonance Enterprises, Inc.
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxx X. XxXxxxx, Esq.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Pursuant to the terms of the Escrow Agreement the Investor requests the release
from escrow of __________ shares of the Company's Common Stock by overnight
delivery and authorizes the Escrow Agent to release from escrow $----------- .
By:
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Note: The number of Shares stated in this PARTIAL RELEASE OF PURCHASE AMOUNT AND
SHARES FROM ESCROW Form shall be equal to the dollar amount to be released
divided by 85% of the average of the four (4) lowest closing bid prices during
that number of Trading Days in the Purchase Period that have expired, but if
less than four (4) Trading Days have expired prior to receipt by the Company of
this Form, then the lowest closing bid price for that number of days shall be
used.
