EXHIBIT D
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is dated as of
September 20, 1999, by and among Go Online Networks Corporation, a
corporation organized under the laws of the State of Delaware (the
"Company"), the buyer set forth on the execution page hereof (the
"Buyer") and H. XXXXX XXXXXXX, XX., a duly licensed attorney who
practices law in the State of North Carolina, U.S.A., as Escrow
Agent (the "Escrow Agent").
Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in that Securities Purchase
Agreement between the Company and the Buyer dated of even date
herewith (the "Securities Purchase Agreement").
W I T N E S S E T H:
WHEREAS, the Buyer and the Company have entered into the
Securities Purchase Agreement, pursuant to which the Company has
agreed to sell, and the Buyer has agreed to purchase, at the
Closing, a number of Notes along with a number of Warrants
(collectively, the "Securities"); and
WHEREAS, the Buyer and the Company have agreed to
effectuate the Closing utilizing an escrow arrangement as described
in this Agreement; and
WHEREAS, it is a condition of the Company's obligation to
sell, and the Buyer's obli-gation to purchase, the Securities, that
this Agreement be executed and delivered; and
WHEREAS, the Escrow Agent is willing to act hereunder on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
and obligations set forth below, the parties hereto hereby agree as
follows:
1. ESCROW ACCOUNT.
1.1 Deposit. On the Closing Date, by wire
transfer of immediately available funds in United States Dollars,
Buyer shall deposit the full Purchase Price (the "Escrow") with the
Escrow Agent, to be held by the Escrow Agent in a separate
non-interest bearing account (the "Escrow Account"), established at
Wachovia Bank, N.A., (the "Bank"), subject to the terms and
provisions contained herein. At the request of the Company the
Escrow Agent shall provide the Company with all Bank statements,
notices and other writings which it receives from the Bank in
connection with the Escrow Account.
2. DISBURSEMENT OF ESCROW/SECURITIES.
2.1 Disbursement. At the Closing, upon
receipt by the Escrow Agent of all of the moneys, documents, and
things from the respective parties with respect to such Closing as
described in the Securities Purchase Agreement and as further
described in Sections 2.1(a) and 2.1(b) below, the Escrow Agent
shall deliver to each party via facsimile the documents and things
(or if requested by the parties, only the signature pages thereto)
to have been delivered by the other party in accordance with the
Securities Purchase Agreement and this Agreement. The Escrow Agent
shall transfer, by the next business day following the Closing, by
wire transfer to the Company the full Escrow then held, less $2,500
in legal fees to Xxxx Xxxxxxx and $35,000 in fees payable to
Bridgewater Capital Corporation. The Escrow Agent shall, upon
receipt thereof, deliver (via overnight delivery service) to the
Company originals of all other documents and things listed in
Section 2.1(b) below. The Escrow Agent shall, upon receipt thereof,
deliver (via overnight delivery service) originals of all of the
documents and things listed in Section 2.1(a) below to the Buyer at
the address provided in writing by the Buyer to the Escrow Agent.
The Closing may take place via facsimile. This shall be
accomplished in the following manner. Each party shall deliver via
facsimile to the Escrow Agent, at the telecopier number provided on
the signature page to this Agreement, the first page and the fully
executed signature page to each of the documents and things to be
executed by such party at the Closing. If stock certificates, Notes
or Warrants are to be delivered, each such certificate or document
shall be delivered via overnight courier to the Escrow Agent. Upon
receipt of the requisite documents and things via facsimile or
otherwise from each party, the Escrow Agent shall in turn send to
each party the documents and things received from the other party.
Thereafter, upon receipt by the Escrow Agent of the Purchase Price
and the original Notes and Warrants being sold at such Closing, the
Escrow Agent shall wire transfer the Escrow (less the charges and
fees set forth above) to the Company. Nothing herein to the contrary
notwithstanding, the Escrow Agent shall not release the Escrow to
the Company prior to taking physical possession of the Notes and
Warrants being sold at the Closing; likewise, the Escrow Agent shall
not release the original Notes or Warrants being sold at the Closing
prior to receipt in the Escrow Account of the Purchase Price for
such Securities. Each party closing the transactions contemplated
herein via facsimile shall deliver via overnight courier service to
the Escrow Agent complete originals of all documents and things (as
called for in Sections 2.1(a) and 2.1(b) below) within one (1)
business day after such delivery via facsimile. Each party hereby
agrees that a facsimile of each document and thing to be delivered
hereunder, once delivered to the Escrow Agent, shall be binding upon
such party in the same manner as would an original to the full
extent allowed by applicable law.
(a). Items to be Delivered by the Company to the Escrow Agent.
At the Closing. On the Closing Date, the Company
shall deliver to the Escrow Agent on behalf of the Buyer, unless
otherwise stated, three (3) fully executed (by the authorized
officer(s) of the Company) originals of each of the following
documents: (I) the Securities Purchase Agreement, (II) the
Registration Rights Agreement of even date herewith between the
Company and the Buyer, (III) a Note or Notes, as applicable, along
with one (1) copy of each Note issued by the Company; (IV) the fully
executed Warrant along with one (1) copy of the
Warrant; (V) the executed original Legal Opinion (Exhibit E to the
Securities Purchase Agreement) along with one (1) copy thereof; and
(VII) this Agreement.
(b) Items to be Delivered by the Buyer to the Escrow Agent.
At the Closing. On or before the Closing Date, the Buyer shall
deliver to the Escrow Agent on behalf of the Company, unless
otherwise stated, three (3) fully executed originals of each of the
following documents: (I) the Securities Purchase Agreement, (II) the
Registration Rights Agreement of even date herewith between the
Company and the Buyer, (III) this Agreement; and (IV) the full
purchase price for the Securities being purchased at such Closing,
via wire transfer to the Escrow Account.
2.2 Controversies. If any controversy
arises between two or more of the parties hereto, or between any of
the parties hereto and any person not a party hereto, as to whether
or not or to whom the Escrow Agent shall deliver the Escrow or any
portion thereof or as to any other matter arising out of or relating
to this Escrow Agreement, the Escrow Agent shall not be required to
determine the same and need not make any delivery of the Escrow
concerned or any portion thereof but may retain the same until the
rights of the parties to the dispute shall have been finally
determined by agreement or by final judgment of a court of competent
jurisdiction after all appeals have been finally determined (or the
time for further appeals has expired without an appeal having been
made). The Escrow Agent shall deliver that portion of the Escrow
concerned covered by such agreement or final order within five (5)
days after the Escrow Agent receives a copy thereof. The Escrow
Agent shall assume that no such controversy has arisen unless and
until it receives written notice from the Buyer or the Company that
such controversy has arisen, which refers specifically to this
Agreement and identifies the adverse claimants to the controversy.
2.3 No Other Disbursements. No portion of
the Escrow monies shall be disbursed or otherwise transferred except
in accordance with this Section 2, Section 4 or Section 5.1(b).
Without limiting the foregoing, neither Escrow Agent nor the Buyer
shall be entitled to any right of offset against the Escrow or
otherwise entitled to receive any portion of the Escrow.
3. ESCROW AGENT. The acceptance by the
Escrow Agent of his duties hereunder is subject to the following
terms and conditions, which the parties to this Agreement hereby
agree shall govern and control with respect to the rights, duties,
liabilities and immunities of the Escrow Agent:
3.1 The Escrow Agent shall not be responsible or
liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any cash, investments or other amounts
deposited with or held by it.
3.2 The Escrow Agent shall be protected in acting
upon any written notice, certificate, instruction, request or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties.
3.3 The Escrow Agent shall not be liable for any
act done hereunder except in the case of his willful misconduct or
bad faith.
3.4 The Escrow Agent shall not be obligated or
permitted to investigate the correctness or accuracy of any document
or to determine whether or not the signatures contained in said
documents are genuine or to require documentation or evidence
substantiating any such document or signature.
3.5 The Escrow Agent shall have no duties as Escrow Agent
except those which are expressly set forth herein, and in any
modification or amendment hereof; provided, however, that no such
modification or amendment hereof shall affect his duties unless it
shall have given his written consent thereto. The Escrow Agent shall
not be prohibited from owning an equity interest in the Company, the
Buyer, another buyer, any of their respective subsidiaries or any
third party that is in any way affiliated with or conducts business
with either the Company, the Buyer or another buyer.
3.6 The Company and the Buyer specifically
acknowledge that the Escrow Agent is a practicing attorney in
Raleigh, North Carolina U.S.A., and may have worked with or be
affiliated with the Company, the Buyer, or affiliates of either of
them on other unrelated transactions, and that they and each of them
has specifically requested that the Escrow Agent draft the documents
for the said transactions and act as Escrow Agent with respect to
the said transactions. Each party represents that it has retained
legal and other counsel of its choosing with respect to the
transac-tions contemplated herein and in the Securities Purchase
Agreement, and is satisfied in its sole discretion with the form and
content of the documentation drafted by the Escrow Agent. The Escrow
Agent may own an equity interest in the Company and/or may be an
equity owner of the Buyer or another buyer, and may increase or sell
any such interest, so long as in accordance with any and all
applicable law. The said parties hereby waive any objection to the
Escrow Agent so acting based upon conflict of interest or lack of
impartiality. The Escrow Agent agrees to act impartially and in
accordance with the terms of this Agreement and with the parties'
respective instructions, so long as they are not in conflict with
the terms of this Agreement.
4. TERMINATION. This Agreement shall
terminate on the earlier of (a) the date on which the Escrow and all
other escrowed documents and things described herein shall have been
fully disbursed in accordance with the terms and conditions of this
Agreement, (b) any other date agreed to by the Buyer and the
Company, or (c) the next business day after the expiration of the
last of the Notes and the Warrants to be issued by the Company in
accordance with the terms of the Securities Purchase Agreement, in
which event the Escrow shall be disbursed in full to the Company.
5. MISCELLANEOUS.
5.1 Indemnification of Escrow Agent.
(a) The Company and the Buyer each agree, jointly
and severally, to indemnify the Escrow Agent for, and to hold him
harmless against, any loss incurred without willful
misconduct or bad faith on the Escrow Agent's part, arising out of
or in connection with the administration of this Agreement, including
the costs and expenses of defending himself against any claim or
liability in connection with the exercise or performance of any of
his powers or duties hereunder. This indemnification shall not apply
to a party with respect to a direct claim against the Escrow Agent
by such party alleging in good faith a breach of this Agreement by
the Escrow Agent, which claim results in a final non-appealable
judgment against the Escrow Agent with respect to such claim.
(b) In the event of any dispute as to the nature
of the rights or obligations of the Buyer, the Company or the Escrow
Agent hereunder, the Escrow Agent may at any time or from time to
time interplead, deposit and/or pay all or any part of the Escrow
Funds with or to a court of competent jurisdiction sitting in Wake
County, North Carolina or in any appropriate federal court, in
accordance with the procedural rules thereof. The Escrow Agent shall
give notice of such action to the Company and the Buyer. Upon such
interpleader, deposit or payment, the Escrow Agent shall immediately
and automatically be relieved and discharged from all further
obligations and responsibilities hereunder, including the decision
to interplead, deposit or pay such funds.
5.2 Amendments. This Agreement may be
modified or amended only by a written instrument executed by each of
the parties hereto.
5.3 Notices. All communications required or
permitted to be given under this Agreement to any party hereto shall
be sent by first class mail or facsimile to such party at the
address, except in the case of the Escrow Agent, of such party set
forth in the Securities Purchase Agreement and, in the case of the
Escrow Agent, at 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
Xxxxxxxx X.X.X. 00000.
5.5 Successors and Assigns. This
Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that
the Escrow Agent shall not assign his duties under this Agreement.
5.6 Governing Law. This Agreement shall be
governed by and construed and interpreted in accordance with the
laws of the State of North Carolina.
5.7 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be an
original, and all of which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE TO ESCROW AGREEMENT DATED AS OF SEPTEMBER 20, 1999]
THE COMPANY:
GO ONLINE NETWORKS CORPORATION
By: Xxxxxx X. Xxxxxxxx
Xx. Xxxxxx X. Xxxxxxxx, President and CEO
THE BUYER:
THE TRITON PRIVATE EQUITIES FUND, L.P.
By: Triton Capital Management, L.L.C., its General Partner
By: /s/ Xxxx X. Xxxxxxx
Xx. Xxxx X. Xxxxxxx, Managing Member
ESCROW AGENT:
/s/ X. Xxxxx Xxxxxxx, Xx.
X. XXXXX XXXXXXX, XX., XXX.
Address:
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx XXX 00000
Telephone 000.000.0000
Telecopier 919.785.3116
