Exhibit 10.15
EXHIBIT F
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made as of July 18, 2001 by and
between xXxxxx.xxx, Inc. (the "Company"), the undersigned investor (the
"Investor") and Xxxxxx X. XxXxxxx, Esq., with an office at 00 Xxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxx, XX 00000 (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Company will be selling shares of its common stock (the
"Shares"), to Investor upon terms as set forth in the Investment Agreement and
related documents (the "Transaction Documents") entered into by the Company and
Investor; and
WHEREAS, Company and Investor have requested that the Escrow Agent hold
the Shares and funds ("Funds") being used to purchase the Shares in escrow
pursuant to the terms of this Agreement.
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 have Xxxxxx X. XxXxxxx, Esq. act as
Escrow Agent whereby the Escrow Agent shall receive the Shares and Funds in
escrow and distribute the same as set forth in this Agreement. Any capitalized
terms not defined herein shall have the meaning ascribed to them in the
Transaction Documents.
1.2 Prior to each Put Notice Date, (i) the Company shall deliver to the
Escrow Agent certificates representing the Shares to be issued to the Investor
and registered in the name of the Investor, or in street name as may be
requested by Investor, or deposit such Shares into the account(s) (with the
Investor receiving confirmation that the Shares are in such account(s))
designated by the Investor for the benefit of the Investor and (ii) the Investor
shall deliver to the Escrow Agent the Purchase Price to be paid for such Shares
(after receipt of confirmation of delivery of such Shares), determined as
aforesaid, by wire transfer. In the alternative to physical delivery of
certificates for Common Stock to the Escrow Agent, if delivery of the Shares may
be effectuated by electronic book-entry through The Depository Trust Company
("DTC"), then delivery of the Shares pursuant to such purchase shall, unless
requested otherwise by such Investor (or holder of such Shares), settle by
book-entry transfer through DTC by the Put Notice Date. The parties agree to
coordinate with DTC to accomplish this objective. In addition, each of the
Company and the Investor shall deliver all documents,
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instruments and writings required to be delivered by either of them to the
Escrow Agent pursuant to the Investment Agreement at or prior to each Closing.
The number of Shares to be delivered to the Escrow Agent shall be the
result of the following formula:
_____________The Dollar Amount of the Put Notice_____________
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92% of the average of the lowest three (3) closing bid prices of the
Company's common stock during the specified Purchase Period
1.3 Prior to each Closing Date the Investor shall wire to the Escrow
Agent that amount necessary to purchase the Shares on the Closing Date as
required by the Transaction Documents (the "Purchase Amount").
1.4 On each Closing Date the Escrow Agent shall forward the Shares being
purchased to the Investor, per Investor's written instructions, and wire the
amount necessary to purchase the Shares, pursuant to the Transaction Documents,
to the Company, per the Company's written instructions. Subject to the terms set
forth in the Transaction Documents, the Investor is required to purchase the
lesser of (a) the Dollar Amount set forth in the Put Notice and (b) 15% of the
total Volume Weighted Average Price during the applicable Purchase Period. The
Escrow Agent shall deduct from the Funds he receives in escrow from the Investor
the following amounts:
(a) 6% of the Purchase Amount on each Closing Date, to be wired to
the Investor, or its designee, per Investor's instructions (or
deducted by the Investor, at its sole option, from the Purchase
Amount being wired to the Escrow Agent);
(b) On each Closing Date Escrow Agent shall deduct from the Purchase
Amount as an escrow fee the sum of $1,000 for each Put Notice;
which amount the Escrow Agent may deduct from the proceeds
received in escrow from the Investor;
(c) Any amount owed to the Investor on the first Closing Date, which
amount represents the balance owed to the Investor pursuant to
the terms of the Investment Agreement; and
(d) Any amount owed to the Escrow Agent on the First Closing Date,
which amount represents the balance owed to the Escrow Agent
pursuant to the terms of the Investment Agreement.
1.5 After Investor's receipt of a Put Notice, but prior to the related
Closing Date, the Investor, at its sole option, may authorize the Escrow Agent
to release, every three (3) Trading Days, a portion of the Purchase Amount from
escrow to the Company in exchange for a fixed number of Shares, subject to the
following conditions:
(a) The Investor shall fill out and sign a "Partial Release of
Purchase Amount and Shares from Escrow" (the "Partial Release
Form"). See Exhibit A attached hereto. The Partial Release Form
shall set forth the
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number of Shares to be released to Investor and the dollar amount
the Escrow Agent shall wire to the Company.
(b) The Partial Release Form shall be filled out and signed by the
Investor and faxed to the Company and the Escrow Agent prior to
12:00 p.m. New York City time.
The number of Shares stated in the Partial Release Form shall be equal
to the dollar amount to be released divided by 92% of the average of the three
(3) lowest closing bid prices during that number of Trading Days in the Purchase
Period that have expired, but if less than three Trading Days have expired prior
to receipt by the Company of the Partial Release Form, then the lowest closing
bid price for that number of days shall be used.
The Company and Investor agree that on the related closing date, an
adjustment shall be made so that the terms set forth in the Investment Agreement
shall be honored with the balance of the Purchase Price being released to the
Company and the balance of Shares owed to Investor being released to Investor.
1.6 If the Escrow Agent does not have the exact number of Shares to send
Investor, because of the denominations of the various Share certificates, the
parties will mutually agree on how to resolve the matter.
1.7 This Agreement may be altered or amended only with the written
consent of all of the parties hereto. Should Company attempt to change this
Agreement in a manner which, in the Escrow Agent's discretion, shall be
undesirable, the Escrow Agent may resign as Escrow Agent by notifying Company
and Investor in writing. In the case of the Escrow Agent's resignation or
removal pursuant to the foregoing, his only duty, until receipt of notice from
Company and Investor that a successor escrow agent has been appointed, shall be
to hold and preserve the Shares and Funds that are in his possession. Upon
receipt by the Escrow Agent of said notice from Company and Investor of the
appointment of a successor escrow agent, the name of a successor escrow account
and a direction to transfer the Shares and Funds, the Escrow Agent shall
promptly thereafter transfer all of the Shares and Funds that he is still
holding in escrow, to said successor escrow agent. Immediately after said
transfer of the Shares and Funds, the Escrow Agent shall furnish Company and
Investor with proof of such transfer. The Escrow Agent is authorized to
disregard any notices, requests, instructions or demands received by it from
Company or Investor after notice of resignation or removal has been given.
1.8 The Escrow Agent shall be reimbursed by Company and Investor for any
reasonable expenses incurred in the event there is a conflict between the
parties and the Escrow Agent shall deem it necessary to retain counsel, upon
whose advice the Escrow Agent may rely. 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. The Escrow Agent has made no representations
or warranties to the Company in connection with this transaction. The Escrow
Agent has no liability hereunder to either party other than to hold the Shares
and Funds received by the Investor and to deliver them under the terms hereof.
Each party hereto agrees
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to indemnify and hold harmless the Escrow Agent from and with respect to any
suits, claims, actions or liabilities 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 or the investment being made by
Investor. The Company acknowledges and represents that it is not being
represented in a legal capacity by Xxxxxx X. XxXxxxx, and has had the
opportunity to consult with its own legal advisors prior to the signing of this
Agreement. The Company acknowledges that the Escrow Agent is not rendering
securities advice to the Company with respect to this proposed transaction. The
Escrow Agent has acted as legal counsel for the Investor and may continue to act
as legal counsel for the Investor, from time to time, notwithstanding its duties
as the Escrow Agent hereunder. The Company consents to the Escrow Agent acting
in such capacity as legal counsel for the Investor and waives any claim that
such representation represents a conflict of interest on the part of the Escrow
Agent. The Company understands that the Investor and Escrow Agent are relying
explicitly on the foregoing provisions contained in this Section 1.8 in entering
into this Agreement.
1.9 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.
1.10 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.
1.11 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 Agreement or any documents or papers
deposited or called for hereunder.
1.12 If the Escrow Agent reasonably requires other or further documents
in connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.13 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 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 Funds until such disputes shall have been settled either by
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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 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 of Connecticut in accordance with the
applicable procedure therefor.
ARTICLE 2
MISCELLANEOUS
2.1 No waiver of 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 This Agreement shall not be assignable.
2.3 This 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 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.
2.4 Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing the facsimile signature of a
party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
2.5 The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance of the
laws of the State of Connecticut. The parties agree that any dispute arising
under or with respect to or in connection with this Agreement, whether during
the term of this Agreement or at any subsequent time, shall be resolved fully
and exclusively by binding arbitration in accordance with the commercial rules
then in force of the American Arbitration Association with the proceedings
taking place in Stamford, Connecticut before a panel of three (3) arbitrators.
2.6 Any notice required or permitted hereunder shall be given in manner
provided in the Section headed "NOTICES" in the Transaction Documents, the terms
of which are incorporated herein by reference.
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2.7 By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of this Agreement; the Escrow Agent does not become a party
to the Transaction Documents.
2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 18th day of July, 2001.
By:_______________________________________
XXxxxx.xxx, Inc.
By:_______________________________________
Xxxxxx X. Xxxxxxx, CEO
XXXXXX X. XXXXXXX, ESCROW AGENT
By:_______________________________________
Xxxxxx X. XxXxxxx, Esq.
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EXHIBIT A
PARTIAL RELEASE OF PURCHASE AMOUNT AND SHARES FROM ESCROW
xXxxxx.xxx, Inc.
000 Xxxxxxx 00
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxx X. XxXxxxx, Esq.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Pursuant to the terms of the Escrow Agreement the Investor requests the release
from escrow of __________ shares of the Company's Common Stock by overnight
delivery and authorizes the Escrow Agent to release from escrow of $___________
.
By:_______________________________________
Note: The number of Shares stated in this PARTIAL RELEASE OF PURCHASE AMOUNT AND
SHARES FROM ESCROW Form shall be equal to the dollar amount to be released
divided by 92% of the average of the three (3) lowest closing bid prices during
that number of Trading Days in the Purchase Period that have expired, but if
less than three (3) Trading Days have expired prior to receipt by the Company of
this Form, then the lowest closing bid price for that number of days shall be
used.
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