ESCROW AGREEMENT
Exhibit
10.3
This
Escrow Agreement (this “Agreement”) is made and entered into effective as of
March 30, 2009 (the “Effective Date”) by and between W2 Energy, Inc., a Nevada
corporation (the “Company”), Access Capital Fund I, LLC, a Nevada limited
liability company (“Access”), and The Lebrecht Group, APLC (the
“Agent”). Each of the Company and Access shall be referred to as a
“Party” and collectively as the “Parties.”
I. Escrow
1.01 Appointment and Acknowledgment of
Escrow Agent.
The
Company and Access hereby appoint the Agent, and the Agent hereby agrees to
serve, as Escrow Agent pursuant to the terms of this Agreement. The
Agent acknowledges receipt of the following:
(a) from
the Company:
(i) a
fully executed copy of a Convertible Promissory Note of even date herewith, in
the original principal amount of $25,000.00 (the “Note”);
(ii) a
stock certificate representing 15,000,000 shares of common stock of the Company
(the “Shares”), issued in the name of the Agent; and
(iii) a
fully executed Irrevocable Instruction Letter to Transfer Agent of even date
herewith (the “Instruction Letter”).
(b) from
Access, the sum of $25,000.00 (the “Purchase Price”).
The
properties described in Sections 1.01(a) and 1.01(b) collectively are referred
to as the “Escrowed Property.” If the Escrowed Property includes
property on which dividends are paid, on which interest is earned, or to which
other accretions are added, then the Escrowed Property shall include such
dividends, interest, or accretions. If the Escrowed Property consists
of stock, the Agent shall exercise all rights and privileges of a stockholder
with respect to the shares deposited and held pursuant to this
Agreement.
1.02 Operation of
Escrow.
The Parties hereto agree that the
escrow created by this Agreement (the “Escrow”) shall operate as
follows:
(a) Upon
receipt of the Escrowed Property, the Agent shall make the following
distributions:
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(i) $5,500
to Xxxxx & Associates;
(ii) $2,000
to the outside accountant identified by the Company; and
(iii) $15,500.00
to the Agent.
(b) Upon
receipt of a Notice of Conversion (in form as set forth in Exhibit A to the
Note) from Access, the Agent shall send to the Company’s transfer agent the
following items and shall request that the number of Shares set forth in the
Notice of Conversion be issued and delivered to Access:
(i) a
copy of the applicable Notice of Conversion;
(ii) a
stock certificate representing at least the number of Shares set forth in the
Notice of Conversion;
(iii) a
copy of the Instruction Letter;
(iv) if
applicable, a legal opinion executed by the Agent covering the issuance of the
Shares set forth in the Notice of Conversion without restriction under Rule
144.
The
decision as to whether the issuance of the Shares set forth in the Notice of
Conversion may be done without restrictive legend under Rule 144 shall be at the
sole discretion
of the Agent without any further input by the Company or the transfer
agent.
(c) If,
at any time, the number of Shares held by the Agent is less than two (2) times
the number of shares necessary to complete a conversion of the balance of the
Note, then within three (3) business days of receipt of notice from the Agent,
the Company shall deliver to the Agent that number of additional shares of its
common stock so that the Agent maintains, at all times, at least two (2) times
the number of shares necessary to complete a conversion of the balance of the
Note.
(d) Upon
receipt of notice from Access that the Note has been satisfied in full, any
remaining Shares shall be delivered to the Company and this Agreement shall
automatically terminate.
1.03 Further Provisions Relating to the
Escrow.
(a) Distributions
by the Agent in accordance with the terms of this Agreement shall operate to
divest all right, title, interest, claim, and demand, either at law or in
equity, of any party to this Agreement (other than the distributee) in and to
the Escrowed Property distributed and shall be a perpetual bar both at law and
in equity with respect to such distributed Escrowed Property against the parties
to this Agreement and against
any person claiming or attempting to claim such distributed escrowed property
from, through, or under such party.
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(b) The
Company agrees to reimburse the Agent for the Agent’s reasonable fees and other
expenses (including legal fees and expenses) incurred by the Agent in connection
with its duties hereunder.
(c) The
Company agrees to indemnify and hold harmless the Agent against and in respect
of any and all claims, suits, actions, proceedings (formal or informal),
investigations, judgments, deficiencies, damages, settlements, liabilities, and
legal and other expenses (including legal counsel fees and expenses of attorneys
chosen by the Agent) as and when incurred and whether or not involving a third
party arising out of or based upon any act, omissions, alleged act, or alleged
omission by the Agent or any other cause, in any case in connection with the
acceptance of, or the performance or nonperformance by the Agent of, any of the
Agent’s duties under this Agreement, except as a result of the Agent’s bad faith
or gross negligence. The Agent shall be fully protected by acting in
reliance upon any notice, advice, direction, other document, or signature
believed by the Agent to be genuine, by assuming that any person purporting to
give the Agent any notice, advice, direction, or other document in accordance
with the provisions hereof, in connection with this Agreement, or in connection
with the Agent’s duties under this Agreement, has been duly authorized so to do,
or by acting or failing to act in good faith on the advice of any counsel
retained by the Agent, which may be The Lebrecht Group, APLC. The
Company acknowledges that The Lebrecht Group, APLC acts as counsel to Access and
may continue to serve in that capacity, and neither anything contained herein,
the execution or delivery hereof by the Agent, nor the performance by the Agent
of its duties hereunder shall in any way affect or require termination of such
relationship with Access. The Agent shall not be liable for any
mistake of fact or of law or any error of judgment, or for any act or any
omission, except as a result of the Agent’s bad faith or gross
negligence. If any of the Escrowed Property is represented by stock
certificates, the Agent shall not be liable if the Agent submits all or a
portion of the Escrowed Property to be broken into smaller denominations to the
appropriate transfer agent, and such transfer agent fails to return properly
that portion of the Escrowed Property to the Agent which such transfer agent was
instructed to return.
(d) The
Agent makes no representation as to the validity, value, genuineness, or the
collectibility of any security or other document or instrument held by or
delivered to the Agent.
(e) The
Agent shall have no duties or responsibilities except those expressly set forth
herein. The Parties hereto agree that the Agent will not be called
upon to construe any contract or instrument. The Agent shall not be
bound by any notice of a claim, or demand with respect thereto, or any waiver,
modification, amendment, termination, cancellation, or revision of this
Agreement, unless in writing and signed by the other Parties hereto and received
by the Agent and, if the Agent’s duties as Escrow Agent hereunder are affected,
unless the Agent shall have given its prior written consent
thereto. The Agent shall not be bound by any assignment by the
Company or by Access of its
rights hereunder unless the Agent shall have received written notice thereof
from the assignor. The Agent is authorized to comply with and obey
laws, rules, regulations, orders, judgments, and decrees of any governmental
authority, court, or other tribunal. If the Agent complies with any
such law, rule, regulation, order, judgment, or decree, the Agent shall not be
liable to any of the Parties hereto or to any other person even if such law,
rule, order, regulation, judgment, or decree is subsequently reversed, modified,
annulled, set aside, vacated, found to have been entered without jurisdiction,
or found to be in violation of or beyond the scope of a constitution or a
law.
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(f) If
the Agent shall be uncertain as to the Agent’s duties or rights hereunder, shall
receive any notice, advice, direction, or other document from any other party
with respect to the Escrowed Property which, in the Agent’s opinion, is in
conflict with any of the provisions of this Agreement, or should be advised that
a dispute has arisen with respect to the payment, ownership, or right of
possession of the Escrowed Property or any part thereof, or the property to be
exchanged for the Escrowed Property (or as to the delivery, non-delivery, or
content of any notice, advice, direction, or other document), the Agent shall be
entitled, without liability to anyone, to refrain from taking any action other
than to use the Agent’s reasonable efforts to keep safely the Escrowed Property
until the Agent shall be directed otherwise in writing by both other parties
hereto or by an order, decree, or judgment of a court of competent jurisdiction
which has been finally affirmed on appeal or which by lapse of time or otherwise
is no longer subject to appeal (a “Final Judgment”), but the Agent shall
be under no duty to institute or to defend any proceeding, although
the Agent may, in the Agent’s discretion and at the expense of the Company and
Access as provided in Section 1.03(c), institute or defend such
proceedings.
(g) The
Agent (and any successor escrow agent or agents) reserves the right to resign as
the Escrow Agent at any time, provided fifteen (15) days’ prior written notice
is given to the other parties hereto, and provided further that a mutually
acceptable successor Escrow Agent(s) is named within such fifteen (15) day
period. The Agent may, but is not obligated to, petition any court in
the State of Utah having jurisdiction to designate a successor Escrow
Agent. The resignation of the Agent (and any successor escrow agent
or agents) shall be effective only upon delivery of the Escrowed Property to the
successor escrow agent(s). The Parties reserve the right to jointly
remove the Escrow Agent at any time, provided fifteen (15) days’ prior written
notice is given to the Escrow Agent. If no successor Escrow Agent has
been appointed and has accepted the Escrowed Property within fifteen (15) days
after the Notice is sent, all responsibilities of the Agent hereunder shall,
nevertheless, case. The Agent’s sole responsibility thereafter shall
be to use the Agent’s reasonable efforts to keep safely the Escrowed Property
and to deliver the Escrowed Property as may be directed in writing by both of
the other parties hereto or by a Final Judgment. Except as set forth
in this Section 1.03(g), this Agreement shall not otherwise be assignable by the
Agent without the prior written consent of the other parties
hereto.
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(h) The
Company and Access authorize the Agent, if the Agent is threatened with
litigation or is sued, to interplead all interested parties in any court of
competent jurisdiction and to deposit the Escrowed Property with the clerk of
that court.
(i) The
Agent’s responsibilities and liabilities hereunder, except as a result of the
Agent’s own bad faith or gross negligence, will terminate upon the delivery by
the Agent of al the Escrowed Property under any provision of this
Agreement.
II. Miscellaneous
2.01 Further Action.
At any
time and from time to time, The Company and Access each agrees, at its own
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this
Agreement. If any portion of the Escrowed Property consists of stock
certificates, the Company shall pay any transfer tax arising out of the placing
of the Escrowed Property into the Escrow, the delivery of the Escrowed Property
out of the Escrow, or the transfer of the Escrowed Property into the name of any
person or entity pursuant to the terms of this Agreement. The Agent
shall have no liability regarding transfer taxes even if one or both of the
Parties hereto fails to comply with the obligations set forth in the prior
sentence.
2.02 Survival.
Subject
to Section 1.03(i), the covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive the delivery by
the Agent of the Escrowed Property, irrespective of any investigation made by or
on behalf of any party.
2.03 Modification.
This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements among them concerning such subject matter,
and (subject to Section 1.03(e)) may be modified only by a written instrument
duly executed by each party.
2.04 Notices.
Any
notice to be given hereunder shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or sent by overnight courier, or
by facsimile transmission. Notice shall be deemed to have been
received on the date and time of personal or overnight delivery or facsimile
transmission, if received during normal business hours of the recipient; if not,
then on the next business day.
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Notices
to the Company shall be sent to:
|
W2
Energy, Inc.
00
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx
Xxxxxx X0X0X0
Attn: Xxxx
XxXxxxx
Facsimile
No.: (000) 000-0000
|
Notices
to the Holder shall be sent to:
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Access
Capital Fund I, LLC
0000
X. Xxxxxxxxx Xxx, Xxxxx 000
Xxxx,
Xxxx 00000
Attn: Xxxxxxx
Xxxxxxxxxx, Manager
Facsimile
No.: (___)____________
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Notices
to the Agent shall be sent to:
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The
Lebrecht Group, APLC
000
X. Xxxxx Xxxxxx Xxxxxxx,
Xxxxx
000
Xxxxx
Xxxxxx, Xxxx 00000
Attn: Xxxxx
X. Xxxxxxxx, President
Facsimile
No.: (000)
000-0000
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2.05 Waiver.
Any
waiver by any party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in
writing.
2.06 Binding Effect.
Subject
to Section 1.03(g), the provisions of this Agreement shall be binding upon and
inure to the benefit of the Company and Access and their respective assigns,
heirs, and personal representatives, and shall be binding upon and insure to the
benefit of the Agent and the Agent’s successors and assigns.
2.07 No Third Party
Beneficiaries.
This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement (except as provided in
Section 2.06).
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2.08 Jurisdiction.
The
parties hereby irrevocably consent to the jurisdiction of the courts of the
State of Utah and of any federal court located in such State in connection with
any action or proceeding arising out of or relating to this Agreement, and
document or instrument delivered pursuant to, in connection with, or
simultaneously with this Agreement, a breach of this Agreement or of any such
document or instrument, or the Escrowed Property.
2.09 Separability.
This
entire Agreement shall be void if any provision of this Agreement other than the
second and third sentences of Section 2.11 is invalid, illegal, unenforceable,
or inapplicable to any person or circumstance to which it is intended to be
applicable, except that the provisions of Section 1.03 shall
survive.
2.10 Headings.
The
headings in this Agreement are solely for convenience of reference and shall be
given no effect in the construction or interpretation of this
Agreement.
2.11 Counterparts; Governing
Law.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with
the laws of the State of Utah without giving effect to conflict of
laws. Any action, suit, or proceeding arising out of, based on, or in
connection with this Agreement , any document or instrument delivered pursuant
to, in connection with, or simultaneously with this Agreement, any breach of
this Agreement or any such document or instrument, or any transaction
contemplated hereby or thereby may be brought only in the appropriate court in
Salt Lake County, Utah, and each party covenants and agrees not to assert, by
way of motion, as a defense, or otherwise, in any such action, suit, or
proceeding, any claim that such party is not subject personally to the
jurisdiction of such court, that such party’s property is exempt or immune from
attachment or execution, that the action, suit, or proceeding is brought in an
inconvenient forum, that the venue of the action, suit, or proceeding is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
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IN WITNESS WHEREOF, the Parties have
duly executed this Agreement as of the date first written above.
“Company”
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“Purchaser”
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W2
Energy, Inc.,
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Access
Capital Fund I, LLC,
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a
Nevada corporation
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a
Nevada limited liability company
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/s/ Xxxxxxx XxXxxxx | /s/ Xxxxxxx Xxxxxxxxxx | ||
By: Xxxxxxx
XxXxxxx
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By: Xxxxxxx
Xxxxxxxxxx
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Its: President
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Its: Manager
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“Agent”
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The
Lebrecht Group, APLC
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/s/ Xxxxx X. Xxxxxxxx, Esq | |||
By: Xxxxx
X. Xxxxxxxx, Esq.
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Its: President
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