ESCROW AGREEMENT
ESCROW AGREEMENT (the "Escrow Agreement") dated as of
February 21, 1996, by and among Medcross, Inc., a Florida
corporation (the "Purchaser"), ILINK, Ltd., a Utah limited
partnership (the "Seller") and De Xxxxxxx Xxxxxxxxxxx Xxxxx &
Xxxxx, a professional corporation (the "Escrow Agent").
WHEREAS, the Purchaser and the Seller (hereinafter sometimes
collectively referred to as the "Parties"), have entered into a
certain Stock Purchase Agreement dated as of the date hereof (the
"Purchase Agreement"), pursuant to which the Purchaser has agreed
to purchase all of the issued and outstanding shares of common
stock of I-Link Worldwide Inc. ("Worldwide") owned by the Seller in
exchange for the issuance to the Seller of 4,000,000 shares of
common stock, par value $.007 per share, of the Purchaser (the
"Common Stock");
WHEREAS, the Purchaser desires to place in escrow an aggregate
of 2,600,000 shares of the 4,000,000 shares of Common Stock issued
to the Seller pursuant to Section 1.2(b) of the Purchase Agreement
(the "Escrowed Stock") to be held in escrow by the Escrow Agent
upon the terms and conditions set forth herein; and
WHEREAS, the 2,600,000 shares of Escrowed Stock shall be
titled in the name of the Seller in accordance with Section 1.2(b)
of the Purchase Agreement and shall be released upon the conditions
set forth herein.
NOW THEREFORE, it is agreed as follows:
Section 1. Each of the Parties hereby appoint the Escrow
Agent to serve as escrow agent with respect to the Escrowed Stock
issued to the Seller pursuant to Section 1.2(b) of the Purchase
Agreement, subject to the terms and conditions of this Escrow
Agreement, and the Escrow Agent hereby accepts such appointment.
Section 2. Contemporaneous with the execution of this Escrow
Agreement, the Purchaser will deliver certificates representing the
shares of the Escrowed Stock to the Escrow Agent, which
certificates shall have been issued in the name of the Seller and
shall bear legends relating to the restrictions on transfer thereof
imposed by the Securities Act of 1933 and indicating that the
shares of Common Stock evidenced by such certificate are subject to
the terms and conditions of this Escrow Agreement.
Section 3. The Escrow Agent will hold the Escrowed Stock for
the benefit of the Parties, until the same are released pursuant to
this Escrow Agreement. Prior to satisfaction of the conditions
stated in Section 5 hereof, the Escrowed Stock shall not be subject
to levy or attachment to satisfy any obligation of the Seller or
the Purchasers.
Section 4. The Escrow Agent shall make no distribution of the
Escrowed Stock except in accordance with this Escrow Agreement.
Section 5. The Escrowed Stock shall be released upon receipt
from the appropriate officer or representative of the Purchaser (as
set forth in Section 8) of a certificate executed by the Chief
Executive Officer of the Purchaser certifying that one or more
conditions of release of the Escrowed Stock hereunder has been
satisfied (the "Certificate of Release").
(a) Purchaser shall promptly deliver a Certificate of Release
for 1,600,000 shares of the 2,600,000 shares of Escrowed Stock at
such time as the Purchaser or Worldwide has received gross proceeds
greater than or equal to $4,000,000 from the sale of its securities
pursuant to the conduct of one or more private or public offerings
prior to December 31, 1996; and
(b) Purchaser shall promptly deliver a Certificate of Release
for the remaining 1,000,000 shares of the 2,600,000 shares of
Escrowed Stock upon the first to occur of the following:
(i) monthly net revenue (determined in accordance with generally
accepted accounting principles and consistent with past practices)
derived from the subscribers (the "Subscribers") serviced by
Worldwide and revenue derived from the sale of related products
and/or services equals or exceeds $1,000,000; or (ii) the number of
Subscribers exceeds 100,000 prior to one year from the date of
receipt by the Purchaser of gross proceeds equal to $4,000,000 from
the sale of its securities pursuant to the conduct of one or more
private or public offerings.
(c) Purchaser shall promptly deliver a Certificate of Release
with respect to all remaining Escrowed Stock when the provisions of
Section 7 of the Employment Agreement dated the date hereof between
Worldwide and Xxxx Xxxxxx (or Section 7 of the Employment Agreement
dated the date hereof between Worldwide and Xxxx Xxxxxxxxx) so
provide.
Upon receipt of the Certificate of Release, the Escrow Agent
shall, within ten business days of receipt of the Certificate of
Release, deliver the Escrowed Stock to Seller. In the event that
written objection is received by the Escrow Agent within the ten
business days set forth above and a disagreement arises over
disposition of the Escrowed Stock, the Escrow Agent shall be
governed by Section 9 below.
Any Escrowed Stock remaining in the possession of the Escrow
Agent on March 31, 1998 shall be released and delivered to the
Purchaser for cancellation.
Upon distribution of the Escrowed Stock in accordance
herewith, all obligations of the Escrow Agent shall cease and the
Escrow Agent shall be released from any and all liability directly
or indirectly relating to this Escrow Agreement or the
administration of the escrow without any further action by or on
behalf of any party hereto.
Section 6. The Escrow Agent is not a party to and shall not
be bound by, charged with any knowledge of, or under any duty to
enforce any contract between or among any of the Parties. The
Escrow Agent shall act as a depository only and shall not be
required to take notice of any default, pledge or warranty under
any contract between or among the Parties.
Section 7. The Escrow Agent is not responsible or liable in
any manner whatever for the sufficiency, correctness, genuineness
or validity of any instrument, agreement or material distributed in
connection with the Purchase Agreement or for the identity,
authority or right of any person executing such agreement.
Section 8. The Escrow Agent may accept the written directions
contemplated by this Escrow Agreement from the board of directors
of the Purchaser or such officers or agents whose names and
signatures are supplied to the Escrow Agent by the board of
directors of the Purchaser. The Escrow Agent shall be protected
and may act in reliance upon any writing or instrument or
signature which it, in good faith, believes to be genuine, may
assume the validity and accuracy of any statement or assertion
contained in such writing or instrument and may assume that any
person purporting to give any writing, notice, advice or
instruction in connection with the provisions of this Escrow
Agreement has been duly authorized to do so.
Section 9. In the event of any disagreement between any of
the Parties resulting in conflicting or adverse claims or demands
being made in connection with the Escrowed Stock, the Escrow Agent
shall be entitled, at its option, to refuse to comply with or
recognize any such claims or demands so long as the disagreement
shall continue, and in so doing the Escrow Agent shall not become
liable in any way to any person for its failure or refusal to
comply with such conflicting or adverse claims or demands, and its
duties hereunder shall be suspended until (i) the rights of
claimants have been finally adjudicated or the differences adjusted
between the Parties, and (ii) the Escrow Agent shall have been
notified thereof in a writing or writings signed by all persons
interested. In the event the differences between the Parties have
not been adjusted and the Escrow Agent so notified following
receipt of notice by the Escrow Agent of conflicting or adverse
claims or demands, the Escrow Agent may at any time interplead the
Escrowed Stock in a court of proper jurisdiction, and thereupon the
Escrow Agent shall be fully and completely discharged of its duties
as Escrow Agent. Each of the Purchasers and the Seller shall
reimburse the Escrow Agent for one-half of its costs, expenses and
reasonable legal fees in connection with any actions taken pursuant
to this section.
Section 10. Without any certification, notification or
consent, the Escrow Agent may at any time deposit all or part of
the Escrowed Stock in the Escrow Account with a court upon receipt
of any notice from a court or governmental agency requesting or
directing it to do so and shall provide written notice of such
deposit to the other Parties hereto within ten business days
thereafter and all obligations of Escrow Agent shall thereupon
cease, and Escrow Agent shall be released from any and all
liability directly or indirectly relating to this Escrow Agreement
or the administration of the escrow without any further action on
behalf of any party hereto.
Section 11. The Escrow Agent shall be indemnified by the
Parties as follows:
(a) Each of the Parties (the "Indemnifying Parties") will,
jointly and severally, indemnify and hold the Escrow Agent, and
its officers, directors, employees, agents, partners, shareholders,
and affiliates (collectively, the "Indemnified Parties") harmless
against any loss, liability or expense (including reasonable
attorney's fees and costs) incurred without gross negligence or
willful misconduct on its or their part, arising out of, or in
connection with, its acceptance or administration of duties imposed
by this Escrow Agreement, as well as the costs and expenses of
defending against any such claim, suit, action or proceeding;
provided, however, that the Indemnifying Parties shall indemnify
and hold harmless the Indemnified Parties with respect to any
amount paid for any settlement or compromise only if such
settlement or compromise is effected with the written consent of
each of them, which shall not be unreasonably withheld.
(b) The Escrow Agent shall give notice to the Indemnifying
Parties of any action or proceeding commenced against it or any
other Indemnified Party in respect of which indemnity may be sought
under the Escrow Agreement promptly after such Indemnified Party
shall have been served with a summons or other form of legal
process giving information as to the nature and the basis of the
claim, but failure to so notify the Indemnifying Parties shall not
relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. The Indemnifying Parties may
participate at their own expense in the defense of such action. If
it so elects within a reasonable time after receipt of such notice,
an Indemnifying Party may assume the defense of such action with
counsel chosen by it and approved by the Indemnified Parties who
are defendants in that action, unless the Indemnified Parties
reasonably object to such assumption; provided, however, that an
Indemnifying Party may not effect any settlement or compromise of,
or fail to pursue, including an appeal, any claim, suit, action or
proceeding relating to the Indemnified Parties without the written
consent of each of them, which shall not be unreasonably withheld.
If an Indemnifying Party assumes the defense of the action, the
Indemnifying Party shall not be liable for any fees and expenses of
counsel for the Indemnified Parties incurred thereafter in
connection with such action unless such counsel has acted at the
request of the Indemnifying Party.
Section 12. The acceptance by the Escrow Agent of its duties
as such under this Escrow Agreement is subject to the following
further terms and conditions:
(a) The Escrow Agent shall be entitled to rely upon and be
protected in acting upon any certification, statement, request,
waiver, consent, receipt, instruction, agreement or other
instrument or communication whatsoever which the Escrow Agent in
good faith believes to be genuine and what it purports to be, not
only as to its due execution and the validity and effectiveness of
its provisions, but also as to the truth and acceptability of any
information therein contained.
(b) No term or provision of this Escrow Agreement is intended
to create, nor shall any such term or provision be deemed to have
created, any principal-agent, trust, joint venture, partnership,
debtor-creditor or attorney-client relationship between or among
the Escrow Agent and any of the Parties. This Escrow Agreement
shall not be deemed to prohibit or in any way restrict Escrow
Agent's representation of any of the Parties who may be advised by
Escrow Agent on any and all matters pertaining to this Escrow
Agreement. To the extent one or more of the Parties including each
Purchaser are or have been represented by Escrow Agent, each such
Party or person hereby waives any conflict of interest and
irrevocably authorizes and directs the Escrow Agent to carry out
the terms and provisions of this Escrow Agreement fairly as to all
parties, without regard to any such representation and irrespective
of the impact upon any of the Parties or any Purchaser. Escrow
Agent's only duties are those expressly set forth in this Escrow
Agreement, and each of the Parties and each Purchaser authorizes
Escrow Agent to perform those duties in accordance with its usual
practices in holding documents of its own or those of other
escrows. Escrow Agent may exercise or otherwise enforce any of its
rights, powers, privileges, remedies and interests under this
Escrow Agreement and applicable law or perform any of its duties
under this Escrow Agreement by or through its partners,
shareholders, employees, attorneys, agents or designees.
(c) The Escrow Agent, and its directors, officers, partners,
shareholders, employees, agents, attorneys and affiliates, are not
a party to and are not bound by, any agreements between the Parties
or which may be evidenced by or arise out of the foregoing
instructions and shall not incur any liability whatsoever for the
holding or delivery of the Escrowed Stock or the taking of any
other action in accordance with the terms and provisions of this
Escrow Agreement, for any mistake or error in judgment, for
compliance with any applicable law or any attachment, order or
other directive of any court or other authority (irrespective of
any conflicting term or provision of this Escrow Agreement), or for
any act or omission of any other person engaged by Escrow Agent in
connection with this Escrow Agreement; and the Parties hereby waive
any and all claims and actions whatsoever against Escrow Agent and
its designees, and its and their respective directors, officers,
partners, employees, attorneys and agents, arising out of or
related directly or indirectly to any and all of the foregoing
acts, omissions and circumstances. Furthermore, Escrow Agent and
its designees, and their respective directors, officers, partners,
employee, attorneys and agents, shall not incur any liability
(other than for a person's own acts or omissions amounting to gross
negligence or willful misconduct as finally determined pursuant to
applicable law by a governmental authority having jurisdiction) for
other acts and omissions arising out of or related directly or
indirectly to this Escrow Agreement, the Escrowed Stock or the
Purchase Agreement; and the Parties hereby expressly waive and
release any and all claims and actions (other than those
attributable to a person's own acts or omissions amounting to gross
negligence or willful misconduct as finally determined pursuant to
applicable law by a governmental authority having jurisdiction)
against Escrow Agent and its designees, and their respective
directors, officers, partners, employees, attorneys and agents,
arising out of or related directly or indirectly to any and all of
the foregoing acts, omissions and circumstances.
(d) The Escrow Agent may consult with competent and
responsible legal counsel (including itself or counsel for any of
the Parties hereto), independent public accountants and other
experts selected by the Escrow Agent and it shall not be liable for
any action taken or omitted by it in good faith in accordance with
the advice of any such counsel, accountants or other experts.
Section 13. This Escrow Agreement shall terminate at the end
of three (3) years from the date of this Escrow Agreement, or on
such earlier date as the Escrow Agent shall have distributed the
Escrowed Stock in accordance with the provisions of this Escrow
Agreement or the Purchase Agreement shall have been terminated;
provided, however, that the provisions of Sections 11 and 12 hereof
shall survive termination. The Company shall promptly give notice
to the Escrow Agent of the termination or extension of the Purchase
Agreement. This Escrow Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns.
Section 14. This Escrow Agreement and the Purchase Agreement
constitute the entire agreement between the Parties as to the
Escrowed Stock and shall not be modified except in writing, signed
and acknowledged by all parties. In the event of any conflict
between the Purchase Agreement and this Escrow Agreement, this
Escrow Agreement shall govern.
Section 15. All notices and communications hereunder shall be
in writing and shall be deemed to be given on the date the same is
deposited in the United States mail, registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Escrow Agent, addressed to:
De Xxxxxxx Xxxxxxxxxxx Xxxxx & Xxxxx
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Purchasers, addressed to:
Xx. Xxxxx Y.L. Toh
Medcross, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to the Seller, addressed to:
Xx. Xxxx Xxxxxx, President
GNet Enterprises, Inc., General Partner
ILINK, Ltd.
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Section 16. This Escrow Agreement shall be construed and
enforced according to the laws of the District of Columbia. Each
of the Parties hereby covenants and agrees that the Superior Court
of the District of Columbia or the United States District Court for
the District of Columbia, at the election of the Escrow Agent,
shall have personal jurisdiction and proper venue over any dispute
with the Escrow Agent; provided that the foregoing consent to
jurisdiction and venue by the other parties shall not deprive
Escrow Agent of the right in its discretion voluntarily to commence
or participate in any action, suit or proceeding in any other court
having jurisdiction and venue over the Parties. Each of the
Parties, including each Purchaser, hereby waives personal service
of any summons, complaint or other process, which may be delivered
by the means permitted for notices under Section 15 hereof. Within
thirty (30) days after service of process, each of the Parties
agree to appear or answer and if no appearance or answer is made
within such period, that party shall be deemed in default and
judgment may be entered by Escrow Agent against that party for the
relief demanded in any complaint so served. In any action or
proceeding involving Escrow Agent in any jurisdiction, each of the
Parties waives trial by jury. Nothing in this Escrow Agreement is
intended to, or shall confer upon anyone other than the parties to
this Escrow Agreement (except the officers, directors, employees,
agents or affiliates of the Escrow Agent) any legal or equitable
rights, remedy or claim.
Section 17.
(a) Escrow Agent shall have the right to resign upon notice
to the remaining Parties; and the remaining Parties shall jointly
appoint a successor escrow agent by notice to Escrow Agent.
(b) Upon the resignation of Escrow Agent and the designation
of a successor escrow agent, Escrow Agent (or its legal
representative) shall deliver to the successor escrow agent a copy
of this Escrow Agreement and the Escrowed Stock. Upon such
delivery of the Escrowed Stock, Escrow Agent shall be released from
any and all liability directly or indirectly relating to this
Escrow Agreement, the administration of the escrow or the Escrowed
Stock without any action on behalf of any party hereto. Any
successor escrow agent shall have all the rights and shall be
subject to all of the obligations of Escrow Agent.
(c) Upon the dissolution, disqualification or refusal of
Escrow Agent (or any successor escrow agent) to serve, or continue
to serve under this Escrow Agreement, and should the Parties hereto
fail to agree upon a successor escrow agent, the parties hereto or
the Escrow Agent shall have the right to make application for the
appointment of such successor escrow agent in a court of equity.
Section 18. In the event that any dispute arises hereunder
between the Seller and the Purchaser and such dispute is submitted
to a court for judicial resolution pursuant to the terms hereof,
the prevailing party shall receive reimbursement of its related
costs and attorney's fees by the other party.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the day and year first above written.
ESCROW AGENT:
WITNESS: DE XXXXXXX XXXXXXXXXXX XXXXX &VIRGA,
a professional corporation
/s/ Xxxx Xxxxxx By: /s/ Xxxxx X. Xx Xxxxxxx
Xxxxx X. Xx Xxxxxxx, Vice
President and Secretary
PURCHASER:
WITNESS:
/s/ Xxxxxxxxx Xxxxxxxxxxxx By: /s/ Xxxxx Y.L. Toh
Xxxxx Y. L. Toh, President of
Medcross, Inc.
SELLER:
WITNESS:
/s/Xxxxx X. Xx Xxxxxxx By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President of GNet
Enterprises, Inc., general partner of
ILINK, Ltd.
