EXHIBIT 10.56
ESCROW AGREEMENT
THIS AGREEMENT is made as of Februry 28, 0000,
X X X X X X X:
E*COMNETRIX INC., a company continued under the Canada
Business Corporations Act, having an office at 0000 Xxxxxx
Xx., Xxx. 0000, Xxxxxxxxxx, Xxxxxxxxxx, XXX 00000
("E*Comnetrix") - and -
XXXX XXXXX, businessperson, of 000 Xxxxx Xxxx Xx., #0, Xxxx,
Xxxxxx 00000
("Xxxxx") - and -
J. XXXX MUSTAD, businessperson, of 000 Xxxx Xxxxx Xxxx, Xxx
Xxxxxx, Xxxxxxxxxx 00000
( the "Escrow Agent")
RECITALS:
A. E*Comnetrix and Xxxxx (collectively, the "Transaction Parties") have
entered into an agreement pursuant to which E*Comnetrix will issue to Xxxxx
1,000,000 units (the "Units") at the price of US$0.05 per Unit, each Unit
consisting of one common share in the capital of E*Comnetrix (the "Shares")
and one non-transferable share purchase warrant entitling Xxxxx to purchase
one additional common share in the capital of E*Comnetrix at the price of
US$0.05 per share until March 1, 2007 (the "Warrants");
B. The Shares and Warrants will be deposited with the Escrow Agent to be held
in escrow by the Escrow Agent on the terms and conditions contained in this
Agreement;
NOW THEREFORE in consideration of the sum of $1.00 and for other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
ARTICLE 1.
INTERPRETATION
1.1. Definitions
In this Agreement:
1.1.1. "this Agreement", "hereto", "herein", "hereof", "hereby",
"hereunder" and any similar expressions refer to this Agreement as it may
be amended or supplemented from time to time, and not to any particular
Article, section or other portion hereof;
1.1.2. "Business Day" means any day, other than Saturday, Sunday or any
statutory holiday in British Columbia; and
1.1.3. "Person" means any individual, partnership, limited partnership,
joint venture, syndicate, sole proprietorship, company or corporation with
or without share capital, unincorporated association, trust, trustee,
executor, administrator or other legal personal representative, regulatory
body or agency, government or governmental agency, authority or entity
however designated or constituted.
1.2. Headings
The inclusion of headings in this Agreement is for convenience of
reference only and shall not affect the construction or interpretation
hereof.
1.3. References to Articles and Sections
Whenever in this Agreement a particular Article, section or other
portion thereof is referred to then, unless otherwise indicated, such reference
pertains to the particular Article, section or portion thereof contained herein.
1.4. Gender and Number
In this Agreement, unless the context otherwise requires, words
importing the singular include the plural and vice versa and words
importing gender include all genders.
1.5. Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct
and severable and a declaration of invalidity or unenforceability of
any such provision or part thereof by a court of competent
jurisdiction shall not affect the validity or enforceability of any
other provision hereof.
1.6. Amendment, Waiver
No amendment or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any
provision of this Agreement shall constitute a waiver of any other
provision nor shall any waiver of any provision of this Agreement
constitute a continuing waiver unless otherwise expressly provided.
1.7. Governing Law, Attornment
This Agreement shall be governed by and construed in accordance
with the law of the State of Nevada applicable therein and the
Transaction Parties hereby irrevocably attorn to the jurisdiction of
the state of Nevada.
1.8. Term of Agreement
This Agreement (other than section 3.3, which shall survive the
termination of the escrow) shall be of no further force or effect as
of and from the date on which the Escrow Agent no longer holds any of
the Shares or Warrants, unless otherwise terminated, extended or
modified by all of the parties hereto.
1.9 Counterparts
This Agreement may be executed in as many counterparts as may be
necessary or by facsimile and each such facsimile or counterpart so executed
will be deemed to be an original and such counterparts together will constitute
one and the same instrument and notwithstanding the date of execution will be
deemed to bear the date as set out on the first page of this Agreement.
ARTICLE 2.
ESCROW
2.1. Transaction Documents
Upon execution, the Shares and Warrants shall be held in escrow
by the Escrow Agent until released in accordance with Section 2.2, 2.3
or 2.4 (the "Escrow Period").
2.2. Release of Shares and Warrants to Xxxxx
The Shares and Warrants are to be released from the escrow hereby
created and delivered by the Escrow Agent to Xxxxx within five
Business Days of the receipt by the Escrow Agent of written notice
from the Chief Executive Officer or President of E*Comnetrix that, and
E*Comnetrix agrees to notify the Escrow Agent within five Business
Days from the date that, any one of the following have occurred:
(a) the average of the closing bid and ask prices for the common
shares of E*Comnetrix on the Over-the-Counter Bulletin Board
or any other major stock exchange in the United States of
America for any period of 30 consecutive calendar days is
equal to or greater than US$0.50; or
(b) subsequent to the date the Shares and Warrants are issued
(the "Issue Date"), E*Comnetrix has two consecutive fiscal
quarters of positive earnings before interest, taxes,
depreciation and amortization charges ("EBITDA"); or
(c) E*Comnetrix enters into or the board of directors of
E*Comnetrix (the "Board") approves any contract or agreement
that could reasonably be expected, in principle or intent or
outcome, to result in a change of control of E*Comnetrix; or
(d) E*Comnetrix enters into or the Board approves any contract
or agreement that could reasonably be expected, in principle
or intent or outcome, to result in a merger or consolidation
of E*Comnetrix with one or more corporations; or
(e) E*Comnetrix enters into or the Board approves any contract
or agreement that could reasonably be expected, in principle
or intent or outcome, to result in a sale or disposition of
a majority of the assets of E*Comnetrix or any of its
subsidiaries; or
(f) Xxxxx is removed as President of E*Comnetrix by the Board;
or
(g) the Board, by the approval of a majority of the Board
including the affirmative vote of Xxxx Mustad if he is then
a member of the Board but not including the vote of Xxxxx,
approves the release of the Shares and Warrants from the
escrow hereby created.
2.3. Return of Purchase Price to Xxxxx
In the event that E*Comnetrix retains counsel to or files for
bankruptcy protection or other protection from creditors, E*Comnetrix
will pay to Xxxxx US$50,000 plus any amounts received by E*Comnetrix
from Xxxxx in respect of his exercise of any of the Warrants
(collectively, the "Monies") and within five business days of the
receipt by the Escrow Agent of written notice from the President of
E*Comnetrix confirming that the Monies have been paid to Xxxxx, the
Shares and Warrants will be released from the escrow hereby created
and delivered by the Escrow Agent to E*Comnetrix to be returned to the
treasury of E*Comnetrix and cancelled.
2.4 Release of Shares and Warrants to E*Comnetrix
If the Shares and Warrants have not been released and delivered
to Xxxxx pursuant to section 2.2 and the Monies have not been paid to
Xxxxx pursuant to section 2.3 by 5:00 p.m. on August 1, 2003, then
E*Comnetrix will pay to Xxxxx the Monies by September 1, 2003 and
within five business days of the receipt by the Escrow Agent of
written notice from the President of E*Comnetrix confirming that the
Monies have been paid to Xxxxx, the Shares and Warrants will be
released from the escrow hereby created and delivered by the Escrow
Agent to E*Comnetrix to be returned to the treasury of E*Comnetrix and
cancelled. In the event that E*Comnetrix does not pay the Monies to
Xxxxx by September 1, 2003, within five Business Days of the receipt
by the Escrow Agent of written notice from Xxxxx confirming that the
Monies have not been paid to Xxxxx, the Shares and Warrants will be
released from the escrow hereby created and delivered by the Escrow
Agent to Xxxxx.
ARTICLE 3.
PROTECTION OF ESCROW AGENT
3.1. Instructions to Escrow Agent
E*Comnetrix and Xxxxx shall, as and when necessary, give
instructions to the Escrow Agent, and the Escrow Agent shall be
entitled to rely on such instructions and shall not be responsible for
any action taken in reliance on such instructions. Except as provided
in sections 2.2, 2.3, and 2.4 the Escrow Agent shall not be required
to take any action with respect to the Shares and Warrants except on
the joint written instructions of E*Comnetrix and Xxxxx.
3.2. Indemnity
The Transaction Parties shall jointly and severally indemnify the
Escrow Agent and every attorney appointed by it in respect of all
liabilities and expenses incurred by it (including legal fees on a
solicitor and their own client basis) in good faith in the execution
or purported execution of any rights and obligations in accordance
with this Agreement.
3.3. No Liability for Losses
The Escrow Agent shall not be liable for any losses arising in
connection with the exercise or purported exercise of any of its
rights, powers, obligations and discretions in good faith under this
Agreement and in particular (but without limitation) the Escrow Agent
shall not be liable for anything other than the delivery of the Shares
and Warrants in accordance with this Agreement.
3.4. Reliance
In acting hereunder the Escrow Agent shall be fully protected in
relying upon and shall be entitled to rely upon an opinion of
independent legal counsel satisfactory to the Escrow Agent as to the
fulfilment of its duties and obligations hereunder and shall not be
responsible for any act or omission with respect to its administration
of this Agreement except for its own wilful act or default.
3.5. Depository Only
It is expressly understood that the Escrow Agent acts hereunder
as a depository only and is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity
of any instrument deposited with it or for the form of execution of
such instrument or for the identity, authority or rights of any Person
executing or depositing the same or for the terms and conditions of
any instrument pursuant to which the parties may act.
3.6. No Other Responsibilities
The Escrow Agent shall not have any duties or responsibilities
except those set forth in this Agreement and shall not incur any
liability in acting upon any signature, notice, request, waiver,
consent, receipt or other paper or document believed by the Escrow
Agent to be genuine and the Escrow Agent may assume that any Person
purporting to give any notice on behalf of any party in accordance
with the provisions hereof has been duly authorized to do so.
3.7. Not Bound by Modifications
The Escrow Agent shall not be bound by any modification,
cancellation or rescission of this Agreement unless in writing and
signed by the Transaction Parties. In no event shall any modification
of this Agreement affect the rights or duties of the Escrow Agent or
be binding upon the Escrow Agent unless it shall have given its prior
written consent thereto.
3.8. Uncertainty
In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions, claims or
demands from any of the Transaction Parties or from any other Person
with respect to the Shares and Warrants or the provisions of this
Agreement which, in its opinion, are in conflict with any provision of
this Agreement, it shall be entitled to refrain from taking any action
until it shall be directed otherwise in writing by all the Transaction
Parties hereto or by final order or judgment of a court of competent
jurisdiction in respect of which no further right of appeal lies
and/or in respect of which the time for appeal therefrom has expired.
ARTICLE 4.
GENERAL
4.1. Notices
Any notice, document, request or other communication required or
permitted to be given hereunder will be in writing and will be given
by delivery to the relevant address indicated below or by facsimile
transmission or electronic message system to such address and such
notice shall, if sent on any day by facsimile transmission or
electronic message system after the normal business hours of the
recipient, be deemed to have been given on the next Business Day:
E*Comnetrix Inc.
0000 Xxxxxx Xx., Xxx. 0000
Xxxxxxxxxx, Xxxxxxxxxx
XXX 00000
Attention: Board of Director
Telecopier Number: 510-985-0900
Xxxx Xxxxx
000 Xxxxx Xxxx Xx., #0
Xxxx, Xxxxxx, 00000
Telecopier number: 000-000-0000
Escrow Agent
J. Xxxx Mustad
000 Xxxx Xxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx, 00000
Telecopier number: 000-000-0000
4.2. Miscellaneous Fees and Expenses
E*Comnetrix will pay or procure the payment when due of all
present and future fees, costs, charges and expenses of the Escrow
Agent acting in that capacity pursuant to this Agreement.
4.3. Successors and Assigns
This Agreement shall be binding and shall enure to the benefit of
the Transaction Parties and the Escrow Agent and their respective
successors and assigns.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement.
E*COMNETRIX INC.
By: /s/ J. Xxxx Mustad
-----------------------------------
J. Xxxx Mustad
Director, Chief Executive Officer
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
Director
/s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx
