EXHIBIT E
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT
THIS AGREEMENT is made as of May ___, 2005 by and among Galaxy Minerals,
Inc., with its principal office at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxxx 00000 (hereinafter the "Company"), GCA Strategic Investment Fund
Limited, with its principal office at Mechanics Building, 12 Church St.,
Hamilton, Bermuda (hereinafter the "Purchaser"), and The Law Offices of Xxx X.
Xxxxxxxx, X.X. Xxx 0000, Xxxxxx, Xxxxxxx 00000 (hereinafter the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Purchaser will be purchasing Warrants and Convertible
Notes (the "Securities") from the Company at a purchase price as set forth in
the Securities Purchase Agreement (the "Securities Purchase Agreement") signed
by the Company and the Purchaser; and
WHEREAS, it is intended that the purchase of Securities be
consummated in accordance with the requirements set forth by Regulation D,
promulgated under the Securities Act of 1933, as amended; and
WHEREAS, the Company has requested that the Escrow Agent hold the
funds of the Purchaser ($1,870,000) in escrow until the Escrow Agent has
received the Securities or had the opportunity to speak with the Company to
confirm their issuance. The Escrow Agent will then immediately wire transfer or
otherwise deliver at the Company's direction immediately available funds to the
Company or the Company's account or the Company's payees and arrange for
delivery of the Securities to the Purchaser per the Purchaser's written
instructions.
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 1.
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with
the Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase
of the Securities.
1.2. Upon the Escrow Agent's receipt of funds from the Purchaser
into his attorney trustee account, he shall notify the Company, or the Company's
designated attorney or agent, of the amount of funds he has received into his
account.
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1.3. The Company, upon receipt of said notice and acceptance of the
Purchaser's Securities Purchase Agreement, as evidenced by the Company's
execution thereof, shall deliver to the Escrow Agent the Securities being
purchased.
1.4. Upon receipt of the Securities, the Escrow Agent shall
immediately wire to the Company and or the Company's payees that amount of funds
necessary to purchase the Securities, per the written instructions of the
Company. Contemporaneously therewith, the Escrow Agent shall arrange to have the
Securities delivered as per instructions from the Purchaser.
1.5. If, for any reason, the Escrow Agent does not receive the
Securities within five (5) days of the date hereof, the Escrow Agent will
promptly return any funds received by it from the Purchaser to the Purchaser,
without any further instructions from either the Company or Purchaser.
1.6. This Agreement may be altered or amended only with the consent
of all of the parties hereto. The Escrow Agent may resign by following the
procedures hereafter set forth. In the case of the Escrow Agent's resignation,
his only duty, until receipt of notice from the Company and the Purchaser or
their agents that a successor escrow agent shall have been appointed, shall be
to hold and preserve the Securities and/or funds. Upon receipt by the Escrow
Agent of said notice from the Company and the Purchaser of the appointment of a
successor escrow agent, the name of a successor escrow account and a direction
to transfer the Securities and/or funds, the Escrow Agent shall promptly
thereafter transfer all of the Securities and/or funds held in escrow to said
successor escrow agent. Immediately after said transfer of Securities, the
Escrow Agent shall furnish the Company and the Purchaser with proof of such
transfer. The Escrow Agent is authorized to disregard any notices, request,
instructions or demands received by it from the Company or the Purchaser after
notice of resignation or removal shall have been given, unless the same shall be
the aforementioned notice from the Company and the Purchaser to transfer the
Securities and funds to a successor escrow agent or to return same to the
respective parties.
1.7. The Company shall pay the Escrow Agent a fee of $1,000.00 and
shall reimburse the Escrow Agent for its reasonable expenses in the event there
is a conflict between the parties and the Escrow Agent shall deem it necessary
to retain counsel.
1.8. The Escrow Agent has no liability hereunder to either party
other than to hold the Securities and funds, and to deliver them in accordance
with the terms hereof. The Escrow Agent shall not be liable for any action taken
or omitted by him in good faith; and in no event shall the Escrow Agent be
liable or responsible except for the Escrow Agent's own gross negligence or
willful misconduct.
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1.9. Each party hereto agrees, jointly, to indemnify and hold
harmless the Escrow Agent from and with respect to any and all suits, claims,
damages, demands, actions, liabilities or losses arising in any way out of this
transaction including the obligation to defend any legal action brought which in
any way arises out of or is related to this Agreement, except any such suit,
claim, damage, demand, action, liability or loss arising out of the Escrow
Agent's gross negligence or willful misconduct.
1.10. Escrow Agent shall not be responsible for: (i) the sufficiency
or correctness as to the form, execution or the validity of this Agreement; or
(ii) the identity, authority or right of any person executing any notice or
document given to Escrow Agent.
ARTICLE 2.
MISCELLANEOUS
2.1. 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 any
extension of the time for performance of any other obligation
or act.
2.2. The Securities shall be delivered to the Purchaser at the
address set forth below. 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 follows:
(i) To the Company: Galaxy Minerals, Inc. 000 Xxxx Xxx.
Xxxxx 000
Xxxx Xxxxx, XX. 00000
Attn: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile : (000) 000-0000
(ii) To the Purchaser:
GCA Strategic Investment Fund Limited
c/o Prime Management Limited
Mechanics Building
00 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx, XX00
Xxxx: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile : (000) 000-0000
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(iii) To the Escrow Agent:
The Law Offices of Xxx X. Xxxxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2.3. This Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and assigns of the parties hereto.
2.4. This Agreement is the final expression of, and contains the
entire Agreement between, the parties with respect to the subject matter hereof
and supercedes all prior understandings with respect thereto. This 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 its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.5. Whenever required by the context of this Agreement, the
singular shall include the plural and masculine shall include the feminine. This
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 Agreement.
2.6. The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of Delaware. Any action to enforce, existing out of, or
relating in any way to, any provisions of this Agreement shall be brought
through the American Arbitration Association at the designated locale of
Delaware.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of May
___, 2005.
Galaxy Minerals, Inc.
By:
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Name: Xxxxxxx Xxxxxxx
Title: President
GCA Strategic Investment Fund Limited.
By:
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Name: Xxxxx X. Xxxxxx
Title: Director
The Law Offices of Xxx X. Xxxxxxxx
By:
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Name: Xxx X. Xxxxxxxx, Esq.
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