EXHIBIT 99.1
ESCROW AGREEMENT
ESCROW AGREEMENT (this "AGREEMENT"), dated as of December 4, 2000, by
and among Alpha Venture Capital, Inc., a corporation organized and existing
under the laws of the Xxxx Islands (the "INVESTOR"), XxxxXxxxxxx.xxx,
Incorporated, a corporation organized and existing under the laws of the State
of Nevada (the "COMPANY") and Dundee Securities Corporation, as escrow agent
(the "ESCROW AGENT").
W I T N E S S E T H:
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WHEREAS, pursuant to an Equity Line of Credit Agreement dated as of
December 1, 2000 between the Company and the Investor (the "CREDIT AGREEMENT"),
the Company and the Investor desire to have shares of common stock of the
Company (the "COMMON STOCK") delivered to the Escrow Agent to hold, along with
immediately available funds for the purchase of the Securities (the "ESCROW
FUNDS"), and the Escrow Agent has agreed to receive, hold and redeliver the
Escrow Funds, all upon the terms and subject to the conditions hereinafter set
forth. Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings provided in the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. On the sixth (6th) Trading Day following any Put Date, the Company
shall deliver to the Escrow Agent a certificate for such number of shares of
Common Stock and the Warrants to be purchased pursuant to the applicable Put
Purchase Notice and the Investor shall deliver to the Escrow Agent the Purchase
Price for such Put in immediately available funds.
2. The Escrow Agent shall promptly notify the Company of receipt of the
Purchase Price for the Put Shares and the Warrants for the applicable Put, and
notify the Investor (or such agent as the Investor may designate in writing) of
receipt of the certificate for such Put Shares and the Warrants. On the Put
Closing Date (the seventh day following the Put Date), (a) the delivery of the
Purchase Price by the Investor and the certificate for such Put Shares and the
Warrants by the Company shall be deemed to constitute compliance with the
conditions precedent to the purchase and sale of the Put pursuant to the Credit
Agreement, unless otherwise notified in writing by the Investor and the Company
and (b) upon the joint written directions of the Company and the Investor, the
Escrow Agent shall release the relevant Escrow Funds to or upon the order of the
Company, and shall release the relevant Common Stock to the Investor. If the
Company and the Investor jointly notify the Escrow Agent that on the relevant
Put Closing Date that any conditions precedent to the obligations of the Company
or the Investor, as the case may be, under the Credit Agreement to be effected
that date were not satisfied or waived, then the Escrow Agent shall return the
relevant Escrow Funds to the Investor. Prior to return of any Escrow Funds to
the Investor, the Investor shall furnish such tax reporting or other information
as shall be appropriate for the Escrow Agent to comply with applicable United
States laws. The Escrow Agent shall deposit all funds received hereunder in the
Escrow Agent's account.
3. (a) The certificates for any Put Shares delivered to the Escrow
Agent pursuant hereto shall be deposited for safekeeping with the Escrow Agent
(the "ESCROW ACCOUNT"). During the Escrow Period (hereinafter defined), none of
such Put Shares deposited in the Escrow Account shall become the property of the
Investor or any other entity or be subject to the debts of the Investor or any
other entity except as expressly provided herein, and the Escrow Agent shall
neither make nor permit any disbursements or deliveries from the Escrow Account
except as expressly provided herein.
(b) The Escrow Period shall begin on the Effective Date of the Credit
Agreement and shall continue until it expires pursuant to the Credit Agreement.
Notwithstanding the foregoing, if any Put Shares remain in the Escrow Account,
all such Put Shares then remaining in the Escrow Account shall be forwarded to
the Company's transfer agent for the Common Stock within five (5) business days
thereafter upon written request given to the Escrow Agent by the Company.
4. The Company shall deliver to the Escrow Agent appropriate written
notice of any extension or amendment to the Agreement.
5. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, the Investor and
the Escrow Agent.
6. 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.
7. 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.
8. 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 Credit Agreement or any documents or papers
deposited or called for hereunder.
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9. The Escrow Agent shall be entitled to employ such legal counsel and
other experts as the Escrow Agent may deem necessary 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 therefore.
10. 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 Investor. In the event of any such resignation, the Investor and the Company
shall appoint a mutually agreeable successor Escrow Agent.
11. If the Escrow Agent reasonably requires other or further
instruments in connection with this Agreement or obligations in respect hereto,
the necessary parties hereto shall join in furnishing such instruments.
12. 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 (a) 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 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 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 City of New York and State of New York in
accordance with the applicable procedure therefore.
13. The Company and the Investor agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its officers, directors,
employees and agents 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 other than any such claim, liability, cost or expense to the
extent the same shall (a) have been tax obligations in connection with Escrow
Agent's fee hereunder, or (b) 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. It is understood and
agreed that this indemnification shall survive the termination or discharge of
this agreement or the resignation of the Escrow Agent.
14. Any notice to the Investor or the Company required or permitted
hereunder shall be given in the manner provided in the Section headed "Notices"
in the Credit Agreement, the terms of which are incorporated herein by
reference. Any notice to the Escrow Agent shall be
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addressed to Dundee Securities Corporation, Suite 3424 Four Bentall Centre, 1055
Dunsmuir Street, P.O. Box 49207, Vancouver, BC V7X lK8, Attn: Xxxxx Xxxxx, Fax
No.: (000) 000-0000, Tel No.: (000) 000-0000.
15. By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of this Agreement and the Escrow Agent does not become a
party to the Credit Agreement. The Company and the Investor have become parties
hereto by their execution and delivery of the Credit Agreement, as provided
therein.
16. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns and
shall be governed by the laws of the State of New York without giving effect to
principles governing the conflicts of laws. A facsimile transmission of these
instructions signed by the Escrow Agent shall be legal and binding on all
parties hereto.
17. The rights and obligations of any party hereto are not assignable
without the written consent of the other parties hereto. This Agreement
constitutes the entire agreement amongst the parties with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
XXXXXXXXXXX.XXX, INCORPORATED
BY: /s/
---------------------------------
Name:
Title:
ALPHA VENTURE CAPITAL, INC.
By: /s/
---------------------------------
Name:
Title:
DUNDEE SECURITIES CORPORATION
By: /s/
---------------------------------
Name:
Title:
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