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EXHIBIT 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement") is made as of October
30, 2000, by and among Xxxxxx.xxx Corporation, a corporation incorporated under
the laws of Delaware (the "Company"), Investwell Investments Limited
("Purchaser"), and Xxxxxxx Xxxxxx & Green, P.C., having an address at 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "Escrow Agent"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Common Stock Purchase
Agreement referred to in the first recital.
WHEREAS, the Purchaser will from time to time as requested by the
Company, purchase shares of the Company's Common Stock from the Company as set
forth in that certain Common Stock Purchase Agreement (the "Purchase Agreement")
dated the date hereof between the Purchaser and the Company, which will be
issued as per the terms and conditions contained herein and in the Purchase
Agreement; and
WHEREAS, the Company and the Purchaser have requested that the Escrow
Agent hold in escrow and then distribute the initial documents and certain funds
which are conditions precedent to the effectiveness of the Purchase Agreement,
and have further requested that upon each exercise of a Draw Down, the Escrow
Agent hold the relevant documents and the applicable purchase price pending
receipt by Purchaser of certificates representing the securities issuable upon
such Draw Down;
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 I
TERMS OF THE ESCROW FOR THE INITIAL CLOSING
1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds and documents which
are referenced in Section 5.2 of the Purchase Agreement.
1.2. At the Initial Closing, the Company shall deliver to the Escrow
Agent:
(i) the original executed Company counterpart of the
Registration Rights Agreement in the form of Exhibit A
to the Purchase Agreement;
(ii) the original executed opinion of Xxxxxxxx & Xxxxxxxx LLP
in the form of Exhibit C to the Purchase Agreement;
(iii) the sum of $35,000 for the non accountable expense
allowance of Ladenburg Xxxxxxxx & Co. Inc.;
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(iv) the original executed Company counterpart of this Escrow
Agreement;
(v) the original executed Company counterpart of the
Purchase Agreement;
(vi) the original executed Warrant in the form of Exhibit E
to the Purchase Agreement; and
(vii) a warrant issued to Ladenburg Xxxxxxxx & Co. Inc. (the
"LT Warrant").
1.3. Upon receipt of the foregoing, and receipt of executed counterparts
from Purchaser of the Purchase Agreement, the Registration Rights Agreement and
this Escrow Agreement, the Escrow Agent shall calculate and enter the exercise
price, the issuance date and termination date on the face of the Initial Warrant
and the LT Warrant and immediately transfer the sum of $35,000 as a
non-accountable expense allowance to Ladenburg Xxxxxxxx & Co. Inc. The Escrow
Agent shall then arrange to have the Purchase Agreement, this Escrow Agreement,
the Registration Rights Agreement, the Warrant, the LT Warrant and the opinion
of counsel delivered to the appropriate parties.
1.4. Wire transfers to the Escrow Agent shall be made as follows:
Xxxxxxx Xxxxxx & Green, P.C.
Master Escrow Account
Chase Manhattan Bank
0000 Xxxxxxxx - Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No. 000000000
Account No. 035 1 346036
Attention: L. Borneo
ARTICLE II
TERMS OF THE ESCROW FOR EACH DRAW DOWN
2.1. Each time that the Company shall send a Draw Down Notice to the
Purchaser as provided in the Purchase Agreement, it shall send a copy, by
facsimile, to the Escrow Agent.
2.2. Each time the Purchaser shall purchase Shares pursuant to a Draw
Down, the Purchaser shall send the applicable purchase price of the Draw Down
Shares to the Escrow Agent, via wire transfer. The Escrow Agent shall advise the
Company in writing that it has received the purchase price for such Draw Down
Shares. The Company shall promptly, but no later than three (3) Trading Days
after receipt of such funding notice from the Escrow Agent, cause its transfer
agent to issue the Draw Down Shares electronically to the Purchaser's DTC
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account, as specified by the Purchaser from time to time, through DTC's DWAC
System, deliver an updated original executed opinion of Xxxxxxxx & Xxxxxxxx LLP,
in the form of Exhibit C to the Purchase Agreement, and deliver a Form 424(b)
supplemental prospectus to the Escrow Agent. Upon receipt of written
confirmation from the transfer agent or from the Purchaser that such Draw Down
Shares have been so deposited, the opinion and the supplemental prospectus have
been so delivered, the Escrow Agent shall, within one (1) Trading Day wire 98%
of the Purchase Price of the Draw Down per the written instructions of the
Company, net of $750 as escrow expenses to the Escrow Agent and the remaining 2%
of the Purchase Price as directed by Ladenburg Xxxxxxxx & Co. Inc. and deliver
the opinion and the supplemental prospectus to the Purchaser.
ARTICLE III
MISCELLANEOUS
3.1. No waiver or 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 an extension of
the time for performance of any other obligation or act.
3.2. All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent by fax, overnight courier, registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
received upon receipt thereof, as set forth in the Purchase Agreement.
3.3. This Escrow Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.
3.4. This Escrow 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 Escrow
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 their respective agents duly authorized in writing
or as otherwise expressly permitted herein.
3.5. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
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3.6. The parties hereto expressly agree that this Escrow Agreement shall
be governed by, interpreted under and construed and enforced in accordance with
the laws of the State of New York. Except as expressly set forth herein, any
action to enforce, arising out of, or relating in any way to, any provisions of
this Escrow Agreement shall be brought in the Federal or state courts of New
York, New York as is more fully set forth in the Purchase Agreement.
3.7. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, Purchaser and the
Escrow Agent.
3.8. 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, excepting only its own gross negligence or willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law (other than Escrow Agent itself)
shall be conclusive evidence of such good faith.
3.9. 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.
3.10. The Escrow Agent shall not be liable in any respect on account of
the identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder or hereunder.
3.11. The Escrow Agent shall be entitled to employ such legal counsel
and other experts as the Escrow Agent may deem necessary properly to advise the
Escrow Agent in connection with the Escrow Agent's duties hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR THE
PURCHASER, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR THE PURCHASER, FROM TIME
TO TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER. THE COMPANY
CONSENTS TO THE ESCROW AGENT IN SUCH CAPACITY AS LEGAL COUNSEL FOR THE PURCHASER
AND WAIVES ANY CLAIM THAT SUCH REPRESENTATION REPRESENTS A CONFLICT OF INTEREST
ON THE PART OF THE ESCROW AGENT. THE COMPANY UNDERSTANDS THAT THE PURCHASER AND
THE ESCROW AGENT ARE RELYING EXPLICITLY ON THE FOREGOING PROVISION IN ENTERING
INTO THIS ESCROW AGREEMENT.
3.12. The Escrow Agent's responsibilities as escrow agent hereunder
shall terminate if the Escrow Agent shall resign by written notice to the
Company and the Purchaser. In the event of any such resignation, the Purchaser
and the Company shall appoint a successor Escrow Agent.
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3.13. If the Escrow Agent reasonably requires other or further
instruments in connection with this Escrow Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
3.14. 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 escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (1) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned 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 (2)
to deliver the escrow 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 and City of New York in accordance
with the applicable procedure therefor.
3.15. The Company and the Purchaser agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Purchase
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of this 30th day of October, 2000.
XXXXXX.XXX CORPORATION
By: /s/ XXXXXX X. XXXXX
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Xxxxxx Xxxxx, President & CEO
INVESTWELL INVESTMENTS LIMITED
By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Title: Director
ESCROW AGENT:
XXXXXXX XXXXXX & GREEN, P.C.
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, Authorized Signatory
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