EXHIBIT 10.48
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of August 7,
2000 (the "Effective Date") by and among E*Comnetrix Inc. (formerly, USV
Telemanagement, Inc.), a company incorporated under the laws of the Canada and
having an office at 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx X, Xxxxx 000, Xxxx Xxxxxx,
XX 00000 ("E*Comnetrix"), EXSTREAM DATA, INC., a California corporation having
an office at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000
("EXSTREAM"), the shareholders listed on Schedule A (the "Pooling
Shareholders"), and Xxxxxx Xxxxxx, as the agent for the Pooling Shareholders
("Shareholders' Agent"), and Xxxxxxx X. Xxxxxxxx (the "Escrow Agent").
RECITALS
WHEREAS, E*Comnetrix, EXSTREAM and certain shareholders of EXSTREAM,
including the Pooling Shareholders (collectively, the "EXSTREAM Shareholders"),
have entered into a Share Exchange Agreement dated as of August 7, 2000 (the
"Exchange Agreement"), pursuant to which E*Comnetrix will exchange common shares
of E*Comnetrix (the "E*Comnetrix Shares") in exchange for shares of EXSTREAM
("EXSTREAM Shares") held by the EXSTREAM Shareholders; and
WHEREAS, the Exchange Agreement contemplates the establishment of an
escrow arrangement to secure the indemnification obligations of the Pooling
Shareholders related to the Xxxxxx Claims (as defined below) and the execution
and delivery of this Agreement; and
WHEREAS, the Exchange Agreement requires pursuant to Section 1.3 of the
Exchange Agreement that a portion of the E*Comnetrix Shares issuable to the
Pooling Shareholders shall be held in Escrow (the "Escrow Amount") to compensate
E*Comnetrix for any damages pursuant to the indemnification obligation of the
Pooling Shareholders related to the Xxxxxx Claims; and
WHEREAS, pursuant to Section 10 of this Agreement, the Pooling
Shareholders have appointed Xxxxxx Xxxxxx to serve as Shareholders' Agent for,
among other things, all matters set forth in this Agreement; and
WHEREAS, this Agreement sets forth the basis on which the Escrow Agent
will receive and hold, and make disbursements from, the Escrow Fund (as defined
below) and the duties for which the Escrow Agent will be responsible.
AGREEMENT
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. Defined Terms. Capitalized terms used in this Agreement and not otherwise
defined shall have the meanings given to them in the Exchange Agreement, a
copy of which is attached hereto.
(a) "Damages" shall mean any and all losses, costs, damages, third-party
claims, liabilities and expenses, including, without limitation,
reasonable legal fees arising out of the Xxxxxx Claims, settlement of
the Xxxxxx Claims or breach of this Agreement.
(b) "Costs" shall mean any and all costs, expenses, and legal fees arising
out of the Xxxxxx Claims, settlement of the Xxxxxx Claims or breach of
this Agreement.
(c) "Escrow Agent" shall mean Xxxxxxx X. Xxxxxxxx, or such other successor
agent as may be selected under the terms set forth in Section 9.
(c) "Escrow Fund" shall mean that the 1,400,000 Escrowed Shares, as
provided for in Section 1.3 of the Exchange Agreement.
(d) "Judgment" shall mean a final, non-appealable determination and award
of damages, whether in law or in equity, rendered by a court of
competent jurisdiction related to the Xxxxxx Claims.
(e) "Xxxxxx Claims" shall mean (a) any and all claims arising out of the
complaint filed by Xxxxxxx X. Xxxxxx in the Superior Court of
California, County of Alameda (No. 826985-0) and (b) any and all
manner of action and causes of action, suits, debts, dues, accounts,
contracts, agreements, judgments, claims and demands whatsoever
brought by Xxxxxxx X. Xxxxxx, whether in law or in equity, which now
exist or may subsequently arise based on facts or circumstances in
existence on the Time of Closing.
(f) "Shareholders' Agent" shall mean Xxxxxx Xxxxxx, or such successor as
may be selected under the terms set forth in Section 10.
2. Escrow.
(a) Escrow. The Pooling Shareholders agree to place into escrow with the
Escrow Agent a total 1,400,000 E*Comnetrix Shares, in the numbers set
forth beside such shareholder's name on Schedule A, out of the number
of E*Comnetrix Shares otherwise issuable to such Pooling Shareholders
pursuant to Section 1.1 of the Exchange Agreement, for the purposes of
satisfying any indemnification, compensation or reimbursement in which
an Indemnified Person (as defined below) may be entitled to under
Section 3(a).
(b) Shares Placed in Escrow. Within ten (10) days of the Effective Date,
E*Comnetrix shall issue certificates for a total of 1,400,000
E*Comnetrix Shares registered in the name of the Escrow Agent as
nominee for each of the Pooling Shareholders, in accordance with
Section 2(a), to be held in escrow in accordance with this Agreement.
The portion of the Escrow Fund contributed on behalf of each Pooling
Shareholder shall be as set forth on Schedule A, and such E*Comnetrix
Shares shall be beneficially owned by such Pooling Shareholder,
subject to the terms of this Agreement. The E*Comnetrix Shares being
held in escrow pursuant to this Agreement (the "Escrow Shares") shall
constitute the Escrow Fund with respect to the indemnification and
other obligations of EXSTREAM and, where applicable, the Pooling
Shareholders related to Damages or Judgments arising out of the Xxxxxx
Claims. The Escrow Fund shall be held as a trust fund and shall not be
subject to any lien, attachment, trustee process or any other judicial
process of any creditor of any party hereto.
(c) Acceptance. The Escrow Agent agrees to accept delivery of the Escrow
Fund, to hold the Escrow Fund in an escrow account (the "Escrow
Account"), and to disburse the Escrow Shares in accordance with the
terms and procedures set forth in this Agreement.
(d) Dividends. E*Comnetrix and each of the Pooling Shareholders agree
among themselves, for the benefit of E*Comnetrix and the Escrow Agent,
that any securities or other property distributable (whether by way of
dividend, stock split or otherwise) in respect of or in exchange for
any Escrow Shares prior to final distribution shall be deposited with
and held by the Escrow Agent in the Escrow Account. Notwithstanding
the preceding sentence, ordinary cash dividends will be paid by
E*Comnetrix directly to the Pooling
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Shareholders and not to the Escrow Agent. Unless and until the Escrow
Agent shall actually receive such additional securities or other
property, it may assume without inquiry that the Escrow Shares
currently being held by it in the Escrow Account are all that the
Escrow Agent is required to hold. At the time any Escrow Shares are
required to be released from the Escrow Account to any Indemnified
Person pursuant to this Agreement, any securities or other property
previously received by the Escrow Agent in respect of or in exchange
for such Escrow Shares shall be released from the Escrow to such
Indemnified Person.
(e) Voting. Each Pooling Shareholder shall be deemed the record holder of,
and shall have voting rights with respect to the E*Comnetrix Shares
contributed to the Escrow Fund by such Pooling Shareholder (and on any
voting securities and other equity securities added to the Escrow Fund
in respect of Escrow Shares).
(f) Transferability. The Escrow Shares shall not be assignable or
transferable, other than by operation of law or with the prior written
consent of E*Comnetrix and the Shareholders' Agent. No transfer of any
of such interests by operation of law shall be recognized or given
effect until E*Comnetrix and the Escrow Agent shall have received
written notice of such transfer.
(g) Piggyback Registration Rights
The Escrow Shares shall not be subject to any Piggyback Registration
Rights which have been or will be granted to any Pooling Shareholder.
(h) Fractional Shares. No fractional E*Comnetrix Shares shall be retained
in or released from the Escrow Account pursuant to this Agreement. In
connection with any release of Escrow Shares from the Escrow Account,
E*Comnetrix and the Escrow Agent shall "round down" in order to avoid
retaining any fractional share in the Escrow Account and in order to
avoid releasing any fractional share from the Escrow Account. When
shares are "rounded down," no cash-in-lieu payments will be made.
3. Indemnification for Xxxxxx Claims.
(a) Subject to the limitations set forth in this Agreement, from and after
the Closing Date, the Pooling Shareholders will indemnify and hold
harmless E*Comnetrix and EXSTREAM, and their officers, directors,
employees, agents and representatives (each, an "Indemnified Person"
and collectively as "Indemnified Persons") from and against any and
all Damages, Settlements and Judgments arising out of the Xxxxxx
Claims ("Indemnified Obligations"). Each Indemnified Person shall act
in good faith and in a commercially reasonable manner to mitigate any
Damages it may suffer, regardless of whether the damages threshold
contained in Section 3(b) has been attained.
(b) The Pooling Shareholders, E*Comnetrix and EXSTREAM acknowledge that
E*Comnetrix shall have the right to settle the Xxxxxx Claims on behalf
of the Indemnified Persons ("Settlement"), and that 150,000 Escrowed
Shares shall be immediately available for the purposes of settling
Costs and 200,000 Escrowed Shares shall be immediately available for
the purposes of settling such Xxxxxx Claims, in whole or in part, and
any Damages related to the Xxxxxx Claims, except that no Escrowed
Shares shall be available for the purposes of settling the Xxxxxx
Claims until such time as the Indemnified Persons have incurred at
minimum $30,000 in Costs. The Pooling Shareholders,
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E*Comnetrix and EXSTREAM also acknowledge that the Escrow Fund shall
be used to indemnify the Indemnified Persons for any and all Judgments
related to the Xxxxxx Claims. Therefore, the Indemnified Persons shall
be entitled to immediate indemnification from the Pooling Shareholders
hereunder (i) to the extent the aggregate amount of Damages suffered
by such Indemnified Person does not exceed an amount equal to the
value of 350,000 Escrowed Shares and (ii) to the full extent of any
Judgment related to the Xxxxxx Claims regardless of the amount of such
Judgment, not withstanding the foregoing the limit of the
Indemnification Obligations of the Pooling Shareholders shall not
exceed the Escrow Fund. In the absence of a Judgement, if the
aggregate amount of Damages suffered by all of the Indemnified Persons
exceeds an amount equal to the value of 350,000 Escrowed Shares, an
Indemnified Person shall be entitled to indemnification from the
Pooling Shareholders only if there is not Claim Objection pursuant to
Section 4(c) within ten calendar days of delivering an Officer's
Certificate related to Damages.
(c) The Indemnified Person may not receive any shares from the Escrow Fund
with respect to the indemnification obligations of the Pooling
Shareholders set forth in Section 3(a) unless and until an Officer's
Certificate or Certificates (as defined in Section 4(a) below) has
been delivered to the Escrow Agent as provided in Section 4(a) below
and such amount is determined pursuant to Section 3(b) and the terms
of this Agreement to be payable.
4. Administration of Escrow Account. Except as otherwise provided herein, the
Escrow Agent shall administer the Escrow Account as follows:
(a) Claims Upon Escrow Fund. If any Indemnified Person has or claims to
have incurred or suffered damages for which it is or may be entitled
to indemnification, compensation or reimbursement under Section 3(a),
such Indemnified Person may deliver a certificate signed by any
officer of E*Comnetrix (an "Officer's Certificate") to the Escrow
Agent. Upon receipt by the Escrow Agent of an Officer's Certificate,
specifying in reasonable detail the individual items of such Damages,
Settlement or Judgment, the amount, the date each such item was paid
or properly accrued or arose, the nature the claim, expense, payments,
costs or other losses to which such item is related, the Escrow Agent
shall, subject to the provisions of Section 3(b), deliver to the
Indemnified Person out of the Escrow Fund, as promptly as practicable,
Escrowed Shares or other assets held in the Escrow Fund having a value
equal to such Damages with respect to the indemnification obligations
of the Pooling Shareholders. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such Officer's
Certificate shall be delivered to the Shareholders' Agent.
(b) Valuation. For the purpose of compensating the Indemnified Person for
its Damages pursuant to this Agreement, the Escrowed Shares in the
Escrow Fund shall be valued at US$1.00 per share.
(c) Objection to Claims. In the event the aggregate number of Escrowed
Shares to be issued pursuant to claims for Damages made under Section
3(a), including the claim for Damages set forth in such Officer's
Certificate, exceeds 350,000 Escrowed Shares, the Escrow Agent, for a
period of ten days, shall make no delivery of Escrowed Shares unless
the Escrow Agent shall have received written authorization from the
Shareholders' Agent to make such delivery. After the expiration of
such ten day period, the Escrow Agent shall make delivery of the
Escrowed Shares or other property in the Escrow Fund,
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provided that no such payment or delivery may be made if the
Shareholders' Agent shall object in a written statement to the claim
made in the Officer's Certificate (a "Claim Objection") as set forth
below in Section 4(d), and such statement shall have been delivered to
the Escrow Agent and to the Indemnified Person prior to the expiration
of such ten day period. Notwithstanding the foregoing, the Pooling
Shareholders acknowledge that no Claim Objection shall be made with
respect to any Judgment.
(d) Delivery of Claim Objection. Within ten calendar days after receipt by
the Shareholders' Agent of an Officer's Certificate in which the
aggregate number of Escrowed Shares to be issued pursuant to claims
for Damages made under Section 3(a), including the claim for Damages
set forth in such Officer's Certificate, exceeds 350,000 Escrowed
Shares, the Shareholders' Agent may deliver to the Escrow Agent and
the Indemnified Person who delivered the Officer's Certificate a Claim
Objection in which the Shareholders' Agent: (i) agrees that a whole
number of Escrow Shares having a value equal to the full claimed
Damages may be released from the Escrow Account to the Indemnified
Person; (ii) agrees that Escrow Shares having a value equal to part,
but not all, of the claimed Damages (the "Agreed Amount") may be
released from the Escrow Account to the Indemnified Person or (iii)
indicates that no part of the claimed Damages may be released from the
Escrow Account to the Indemnified Person. Any part of the claimed
Damages that is not to be released to the Indemnified Person shall be
the "Contested Amount." If a Claim Objection is not received by the
Escrow Agent within such ten calendar day period, then the
Shareholders' Agent shall be deemed to have agreed that Escrow Shares
having a value equal to the full claimed Damages may be released to
the Indemnified Person from the Escrow Account, and such payment shall
be deemed to be made in full satisfaction of the claim described in
such Officer's Certificate. The Escrow Agent shall promptly following
the receipt of the Claim Objection deliver Escrow Shares having a
value equal to the Agreed Amount or, if the Escrow Agent has not
received a Claim Objection, promptly following the expiration of the
ten calendar day period, deliver to such Indemnified Person such
Escrow Shares having a value equal to the full claimed amount.
(e) Response to Claim Objection. In case the Shareholders' Agent shall
deliver a Claim Objection to the Escrow Agent and the Indemnified
Person, the Indemnified Person shall have ten days to respond in a
written statement to the objection of the Shareholders' Agent. If
after such ten day period there remains a dispute as to any claims,
the Shareholders' Agent and Indemnified Person shall attempt in good
faith for ten days to agree upon the rights of the respective parties
with respect to each of such claims. If the Shareholders' Agent and
Indemnified Person should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties and shall be
furnished to the Escrow Agent. The Escrow Agent shall be entitled to
rely on any such memorandum and shall distribute the Escrowed Shares
or other property from the Escrow Fund in accordance with the terms
thereof.
(f) Arbitration of Claim Objection. If the Shareholders' Agent and the
Indemnified Person are unable to resolve the dispute relating to any
Contested Amount within ten business days after the delivery of the
Claim Objection, then the claim described in the Claim Objection may
be settled by binding arbitration in Marin County, California (or such
other place as the disputing parties may agree), in accordance with
the Commercial Arbitration Rules then in effect of the American
Arbitration Association (the "AAA Rules") upon 15 calendar days'
notice from either party to the other. Arbitration will be
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conducted by three arbitrators; one selected by E*Comnetrix within 15
calendar days of such notice, one selected by the Shareholders' Agent
within 15 calendar days of such notice and the third selected by the
first two arbitrators. If E*Comnetrix or the Shareholders' Agent fails
to select an arbitrator prior to the expiration of the 15 business day
period referred to in the preceding sentence of this Section 4(f),
then the other shall be entitled to select the second arbitrator. The
parties agree to use all reasonable efforts to cause the arbitration
hearing to be conducted within ninety (90) calendar days after the
appointment of the last of the three arbitrators and to use all
reasonable efforts to cause the arbitrators' decision to be furnished
within ninety (90) calendar days after the appointment of the last of
the three arbitrators. The parties further agree that discovery shall
be completed at least 20 business days prior to the date of the
arbitration hearing. The arbitrators' decision shall relate solely to
whether the Indemnified Person is entitled to recover the Contested
Amount (or a portion thereof), and the portion of such Contested
Amount the Indemnified Person is entitled to recover. The final
decision of the arbitrators shall be furnished to the Shareholders'
Agent, the Indemnified Person and the Escrow Agent in writing and
shall constitute a conclusive determination of the issue in question,
binding upon the Indemnified Person and the Escrow Agent and shall not
be contested by any of them. The Indemnified Person shall be deemed to
be the non-prevailing party unless the arbitrators award such
Indemnified Person more than one-half (1/2) the amount in dispute,
plus any amounts not in dispute; otherwise, the Shareholders' Agent
and the Pooling Shareholders shall be deemed to be the non-prevailing
party. Subject to the next sentence, the non-prevailing party in any
arbitration shall pay the reasonable expenses (including attorneys'
fees) of the prevailing party, any additional reasonable fees and
expenses (including reasonable legal fees) of the Escrow Agent, and
the fees and expenses associated with the arbitration (including the
arbitrators' fees and expenses). Any amounts payable by the
Shareholders' Agent and the Pooling Shareholders hereunder shall be
paid solely out of Escrow Shares.
(g) The Escrow Agent shall release Escrow Shares from the Escrow Account
in connection with any Contested Amount within 5 business days after
the delivery to it of: (i) a copy of a settlement agreement executed
by the Indemnified Person and the Shareholders' Agent setting forth
instructions to the Escrow Agent as to the number of Escrow Shares, if
any, to be released from the Escrow Account, with respect to such
Contested Amount or (ii) a copy of the award of the arbitrators
referred to and as provided in Section 4(f) setting forth instructions
to the Escrow Agent as to the number of Escrow Shares, if any, to be
released from the Escrow Account, with respect to such Contested
Amount.
(h) Any Escrow Shares released from the Escrow Account to an Indemnified
Person shall be deemed to reduce the Escrow Shares pro rata with
respect to each Pooling Shareholder in accordance with each Pooling
Shareholder's percentage interest in the Escrow Fund as set forth in
Schedule A.
5. Termination and Release of Escrow Shares.
(a) In order for a termination of this Escrow Agreement to be effective
the following conditions must be met: (i) (A) the full and complete
satisfaction and settlement of any and all of the Xxxxxx Claims, to
the satisfaction of the Indemnified Persons, or (B) a final Judgment
has been rendered with respect to any and all Xxxxxx Claims and (ii) a
portion of the Escrow Shares has been retained in the Escrow Fund,
which, in the judgment of the Indemnified Person, and subject to the
objection of the Shareholders' Agent and the subsequent arbitration of
the matter in the manner provided in Section 4(d) is an amount
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necessary to satisfy the expected Damages attributable to any
Settlement, Judgement or unsatisfied claims specified in any Officer's
Certificate theretofore delivered to the Escrow Agent prior to
termination of the Escrow Agreement with respect to facts and
circumstances existing prior to expiration of the Escrow Agreement,
until such claims have been resolved. This Escrow shall terminate upon
the release by the Escrow Agent of the entire Escrow Fund in
accordance with this Agreement (the "Termination").
(b) Within five business days after the Termination, the Escrow Agent
shall distribute or cause the stock transfer agent for the E*Comnetrix
Shares to distribute to each of the Pooling Shareholders at such
Pooling Shareholder's address set forth on Schedule A such Pooling
Shareholder's pro-rata portion of the Escrow Shares then held in
escrow and based on the percentage interests in the Escrow Fund set
forth in Schedule A.
(c) The Escrow Agent is not the stock transfer agent for the E*Comnetrix
Shares. Accordingly, if a distribution of a number of E*Comnetrix
Shares less than all of the Escrow Shares is to be made, the Escrow
Agent must requisition the appropriate number of shares from such
stock transfer agent, delivering to it the appropriate stock
certificate. For the purposes of this Agreement, the Escrow Agent
shall be deemed to have delivered E*Comnetrix Shares to the Pooling
Shareholder entitled to it when the Escrow Agent has delivered such
certificate to such stock transfer agent with instructions to deliver
it to the appropriate Pooling Shareholder. Distributions of
E*Comnetrix Shares shall be made to E*Comnetrix or the Pooling
Shareholders, as appropriate, at the addresses described in Section
11.
6. Stock Splits. All numbers contained in, and all calculations required to
be made pursuant to, this Agreement shall be adjusted as appropriate to reflect
any stock split, reverse stock split, stock dividend or similar transaction
effected by E*Comnetrix after the date hereof; provided, however, that the
Escrow Agent shall have received notice of such stock split or other action and
shall have received the appropriate number of additional E*Comnetrix Shares or
other property. In the event of any such stock split or other similar
occurrence, E*Comnetrix shall deliver to the Shareholders' Agent and the Escrow
Agent a revised version of Exhibit A setting forth the new number of Escrow
Shares held in the Escrow Fund. Unless and until the Escrow Agent receives the
certificates representing additional E*Comnetrix Shares or other property, the
Escrow Agent may assume without inquiry that no such stock or other property has
been or is required to be issued with respect to Escrow Shares.
7. Fees and Expenses. Upon the execution of this Agreement by all parties
hereto and the initial deposit of the Escrow Fund in the Escrow Account, fees
and expenses, in accordance with Schedule B attached hereto, will be payable to
the Escrow Agent. This Escrow Agent fee will be paid the Escrow Agent on an
annual basis until the Escrow is terminated. In accordance with Schedule B
attached hereto, the Escrow Agent will also be entitled to reimbursement for
reasonable and documented out-of-pocket expenses, incurred by the Escrow Agent
in the performance of its duties hereunder and the execution and delivery of
this Agreement. All such fees and expenses shall be paid directly by the Pooling
Shareholders. The Escrow Agent shall be entitled to deduct any unpaid fees and
expenses from the Escrow Account.
8. Limitation of Escrow Agent's Liability.
(a) The Escrow Agent undertakes to perform such duties as are specifically
set forth in this Agreement only and shall have no duty under any
other agreement or document notwithstanding their being referred to
herein or attached hereto as an exhibit. The Escrow Agent shall not be
liable except for the performance of such duties as are
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specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Escrow
Agent. The Escrow Agent shall incur no liability with respect to any
action taken by it or for any inaction on its part in reliance upon
any notice, direction, instruction, consent, statement or other
document believed by it to be genuine and duly authorized, nor for any
other action or inaction except for its own willful misconduct or
negligence. In all questions arising under this Agreement, the Escrow
Agent may rely on the advice of counsel, and for anything done,
omitted or suffered in good faith by the Escrow Agent based upon such
advice the Escrow Agent shall not be liable to anyone. The Escrow
Agent shall not be required to take any action hereunder involving any
expense unless the payment of such expense is made or provided for in
a manner reasonably satisfactory to it. In no event shall the Escrow
Agent be liable for incidental, punitive or consequential damages.
(b) The Pooling Shareholders, jointly and severally, hereby agree to
indemnify the Escrow Agent, its officers, directors, employees and
agents for, and hold it harmless against, any loss, liability or
expense incurred without negligence or willful misconduct on the part
of Escrow Agent, arising out of or in connection with its carrying out
of its duties hereunder. This right of indemnification shall survive
the termination of this Agreement, and the resignation of the Escrow
Agent. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Pooling Shareholders.
9. Successor Escrow Agent. In the event the Escrow Agent becomes unavailable or
unwilling to continue as escrow agent under this Agreement, the Escrow Agent may
resign and be discharged from its duties and obligations hereunder by giving its
written resignation to the parties to this Agreement. Such resignation shall
take effect not less than 30 calendar days after it is given to all parties
hereto. E*Comnetrix may appoint a successor Escrow Agent reasonably acceptable
to the Shareholder Agent. The successor Escrow Agent shall execute and deliver
to the retiring Escrow Agent and the other parties hereto an instrument
accepting such appointment, and the successor Escrow Agent shall, without
further acts, be vested with all the estates, property rights, powers and duties
of the predecessor Escrow Agent as if originally named as Escrow Agent herein.
The Escrow Agent shall act in accordance with written instructions from
E*Comnetrix as to the transfer of the Escrow Fund to a successor escrow agent.
10. Shareholders' Agent. By virtue of their execution and delivery of this
Agreement, the Pooling Shareholders have approved the indemnification and escrow
terms set forth herein and agreed to appoint Xxxxxx Dumper as the initial
Shareholders' Agent, subject to change by a majority of the Pooling
Shareholders, to give and receive notices and communications, to authorize
delivery to E*Comnetrix of E*Comnetrix Shares, cash or other property from the
Escrow Fund, to object to such deliveries, to agree to, negotiate, enter into
settlements and compromises of, and demand dispute resolution pursuant to
Section 4(c), (d), (e) and (f) of this Agreement and comply with orders of
courts and awards of arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the judgment of the Shareholders' Agent for
the accomplishment of the foregoing subject to the prior approval by a majority
vote of the following Pooling Shareholders each of which has the following
number of votes; Xxxxxx Xxxxxx, two votes; Xxxxxxx Xxxx, one vote; Xxxx Xxxxxxx,
one vote; Xxxxxx Dumper, one vote, notwithstanding the foregoing the
Shareholder's Agent shall be authorized to take any and all actions necessary to
comply with orders of courts and awards of arbitrators without the prior
approval by a majority vote of the named Pooling Shareholders. The Shareholders'
Agent shall not be responsible for any act done or omitted hereunder as
Shareholders' Agent while acting in good faith and in the exercise of reasonable
judgment. The Shareholders' Agent shall be held harmless against any loss,
liability or expense incurred without gross negligence, bad faith or willful
misconduct on the part of the Shareholders' Agent and arising out of or in
connection with the acceptance or administration of the
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Shareholders' Agent's duties hereunder, including the reasonable fees and
expenses of any legal counsel or other professionals retained by the
Shareholders' Agent.
11. Notices. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered personally or by
commercial mail (return receipt requested) or sent via facsimile (with
confirmation of receipt) to the address or facsimile telephone number set forth
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
To the Escrow Agent:
0000 Xxxxxxxx Xxx. 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To E*Comnetrix:
Xxxx X. Xxxxx
President
Telephone: 866. 326.6638
Facsimile: 415.331.9855
To the Pooling Shareholders at the addresses set
forth beside each Pooling Shareholder's name on
Schedule A.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service, or on the
date five calendar days after dispatch by certified or registered mail if
mailed, in each case delivered or mailed (properly addressed) to such party as
provided in this Section or in accordance with the latest unrevised direction
from such party given in accordance with this Section. Any address or addressee
specified above may be changed by notice to the other parties in accordance with
this Section.
The Escrow Agent may assume that any Officer's Certificate, Claim Objection or
other notice of any kind required to be delivered to the Escrow Agent and any
other person has been received by such other person if it has been received by
the Escrow Agent, but the Escrow Agent need not inquire into or verify such
receipt. Notices or communications to or from the Shareholders' Agent shall
constitute notice to or from each of the Pooling Shareholders .
12. Miscellaneous.
(a) Headings. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection
with the construction or interpretation of this Agreement.
(b) Counterparts. This Agreement may be executed by facsimile in
several counterparts, including counterparts by facsimile, each
of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
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(c) Governing Law and Venue. This Agreement shall be construed in
accordance with, and governed in all respects by, the internal
laws of the State of California (without giving effect to
principles of conflicts of laws), and the parties agree that any
action relating to this Agreement shall be instituted and
prosecuted in the court of the County of Marin, State of
California, and each party waives the right to change of venue.
(d) Successors and Assigns This Agreement shall be binding upon each
of the parties hereto and each of their respective permitted
successors and assigns, if any. No Pooling Shareholder may assign
such Pooling Shareholder's rights under this Agreement without
the express prior written consent of E*Comnetrix, provided,
however, that (i) upon the death of a Pooling Shareholder, such
Pooling Shareholder's rights under this Agreement shall be
transferred to the person(s) who receive such Pooling
Shareholder's E*Comnetrix Shares under the laws of descent and
distribution and (ii) a Pooling Shareholder may assign such
Shareholder's rights under this Agreement to any organization
qualified under Section 501(c)(3) of the Internal Revenue Code to
which the Shareholder transfers E*Comnetrix Shares or in
connection with an estate planning transaction. Nothing in this
Agreement is intended to confer, or shall be deemed to confer,
any rights or remedies upon any person or entity other than the
parties hereto and their permitted successors and assigns. This
Agreement shall inure to the benefit of: the Shareholders' Agent
and the Pooling Shareholders; E*Comnetrix; Escrow Agent and the
respective successors and assigns, if any, of the foregoing.
(e) Waiver. No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Agreement, and no
delay on the part of any Person in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single
or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any
other power, right, privilege or remedy. No person shall be
deemed to have waived any claim arising out of this Agreement, or
any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly
executed and delivered on behalf of such person; and any such
waiver shall not be applicable or have any effect except in the
specific instance in which it is given.
(f) Amendments. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly
executed and delivered on behalf of the party or parties against
whom the same is to be enforced; provided, however, that any
amendment duly executed and delivered by the Shareholders' Agent
shall be deemed to have been duly executed and delivered by all
of the Pooling Shareholders and provided further however, that
E*Comnetrix may amend this Agreement solely to add additional
parties to Exhibit A upon execution of a counterpart signature
page of this Agreement.
(g) Severability. In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void
or unenforceable to any extent, the remainder of this Agreement,
and the application of such provision to Persons or circumstances
other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or
otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
11
(h) Entire Agreement. This Agreement and the other agreements
referred to herein set forth the entire understanding of the
parties hereto relating to the subject matter hereof and thereof
and supersede all prior agreements and understandings among or
between any of the parties relating to the subject matter hereof
and thereof.
(i) Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or related to this Agreement or
the transactions contemplated hereby.
(j) Tax Reporting Information and Certification of Tax Identification
Numbers.
(i) The parties hereto agree that, for tax reporting purposes,
all interest, dividends or other income, if any,
attributable to the Escrow Shares or any other amount held
in escrow by the Escrow Agent pursuant to this Agreement
shall be allocable to the Pooling Shareholders in accordance
with their percentage interests in the Escrow Fund set forth
in Exhibit A.
(ii) Each of the Pooling Shareholders agree to provide the Escrow
Agent with certified tax identification numbers for each of
them by furnishing appropriate forms W-9 (or Forms W-8, in
the case of non-U.S. persons) and any other forms and
documents that the Escrow Agent may reasonably request
(collectively, "Tax Reporting Documentation") to the Escrow
Agent within 30 calendar days after the date hereof. The
parties hereto understand that, if such Tax Reporting
Documentation is not so certified to the Escrow Agent, the
Escrow Agent shall be required by the Internal Revenue Code,
as it may be amended from time to time, to withhold a
portion of any interest, dividend or other income earned on
the investment of monies or other property held by the
Escrow Agent pursuant to this Agreement.
(k) Construction. For purposes of this Agreement, whenever the
context requires: the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine
and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders. The parties hereto agree that
any rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in the
construction or interpretation of this Agreement. As used in this
Agreement, the words "include" and "including," and variations
thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without
limitation."
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
12
SIGNED, SEALED & DELIVERED )
by Xxxxxx Xxxxxx in the presence of: )
)
___________________________________ )
Signature of Witness )
) Xxxxxx Xxxxxx
Name: )
--------------------------------
)
Address: )
-----------------------------
)
---------------------------------------- )
Occupation: )
--------------------------
SIGNED, SEALED & DELIVERED by )
Xxxxx Xxxxxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxxx Xxxxxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
---------------------------------------- )
Occupation: )
---------------------------
SIGNED, SEALED & DELIVERED by )
Xxxxxx Dumper in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxxxx Dumper
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
13
SIGNED, SEALED & DELIVERED by )
Xxxxx Gorokin Morganster in the presence of:)
)
________________________________________ )
Signature of Witness )
) Xxxxx Gorokin Morganster
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
SIGNED, SEALED & DELIVERED by )
Xxxxxx Xxxxxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxxxx Xxxxxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
SIGNED, SEALED & DELIVERED by )
Xxxx Xxxxxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxx Xxxxxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
14
SIGNED, SEALED & DELIVERED by )
Xxxx Xxxxxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxx Xxxxxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
SIGNED, SEALED & DELIVERED by )
Xxxxx Xxxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxxx Xxxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
SIGNED, SEALED & DELIVERED by )
Xxxxxxx Xxxx in the presence of: )
)
________________________________________ )
Signature of Witness )
) Xxxxxxx Xxxx
Name: )
---------------------------------
)
Address: )
------------------------------
)
----------------------------------------- )
Occupation: )
---------------------------
15
EXECUTED by Exstream Data, Inc. by:
/s/ [Illegible]
Xxxxxx Xxxxxx
President
EXECUTED by E*Comnetrix Inc.
/s/ [Illegible]
Xxxx Xxxxx
President
EXECUTED by Escrow Agent
/s/ [Illegible]
Xxxxxxx X Xxxxxxxx
16
Schedule A
--------------------------------------------------------------------------------
SHAREHOLDER ESCROWED SHARES ADDRESS PRO RATA PERCENTAGE
INTEREST IN ESCROW FUND
--------------------------------------------------------------------------------
000 Xxxxxxx Xx. Apt#2 0.39%
Xxxxx Xxxxxxx 5,438 Xxxxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx Dumper 32,630 00 XxxxXxxxx Xxxxx 2.33%
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------
0000 Xxxx Xxx. #000 1.32%
Xxxxx Xxxxxxxxxx 18,490 Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 13,596 109 Via Sevilla 0.97%
Xxxxxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxx Xxxxxxx 1,088 0000 Xxxxx Xxxx Xxxx #0000 0.07%
Xxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxx Xxxxxxx 130,520 000 Xxxxxxx Xx. 0.00%
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
0000 Xxxxx Xx. 63.89%
Xxxxxx Xxxxxx 894,529 Xxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx Xxxxx 5,438 000 Xxxxx Xx. 0.00%
Xxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
000 Xxxxxx Xx. 21.31%
Xxxxxxx Xxxx 298,271 Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
17
Schedule B
Escrow Fees and Expenses
NONE
