DEBENTURE AND WARRANT SHARES ESCROW AGREEMENT
DEBENTURE AND WARRANT SHARES ESCROW AGREEMENT (this
"Agreement"), dated as of May 1, 2000, by and among INVU, Inc., a Colorado
corporation with its principal place of business at The Beren, Blisworth Hill
Farm, Stoke Road, Blisworth, North- hampton, NNZ 3DB (the "Company"); Xxxxxx
Xxxxxxxxxx & Xxxxxxxx, LLP with its principal place of business at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "Escrow Agent"); GEM Global Yield Fund Limited,
a Nevis company, with its administrative office at Xxxxxxxx & Co., 00 Xxxxxxxx
Xx., Xxxxxx X0X 0XX ("GEM Global"); and Turbo International Ltd., a Bahamas
corporation, with its administrative office at 00 Xxxxxxx Xxxxxx, P.O. Box N
7755, Nassau, Bahamas ("Turbo") (each of GEM Global and Turbo is a "Purchaser
and collectively the "Purchasers").
Recitals
A. Simultaneously with the execution of this Agreement, the
Purchasers and the Company entered into a Convertible Debenture Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement") incorporated
herein by reference, pursuant to which the Purchasers have agreed to purchase
certain Debentures and Warrants (the "Debentures" and the "Warrants") of the
Company.
B. The Escrow Agent is willing to act as escrow agent pur-
suant to the terms of this Agreement with respect to the purchase of the
Debentures and the Warrants.
C. All capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Procedure for Escrow. The procedure of escrow shall be
governed by the provisions of Article 2 of the Debenture Purchase Agreement.
2. Terms of Escrow. The terms of the escrow shall be
governed by Article 4 of the Purchase Agreement, Article 2 of the Warrant and
Articles 4 and 5 of the Debenture.
3. Duties and Obligations of the Escrow Agent.
(a) The parties hereto agree that the duties and
obligations of the Escrow Agent are only such as are herein specifically
provided and no other. The Escrow Agent's duties are as a depositary only, and
the Escrow Agent shall incur no liability whatsoever, except as a direct result
of its willful misconduct or gross negligence.
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(b) The Escrow Agent may consult with counsel of
its choice, and shall not be liable for any action taken, suffered or omitted by
it in accordance with the advice of such counsel.
(c) The Escrow Agent shall not be bound in any
way by the terms of any other agreement to which the Purchasers and the Company
are parties, whether or not it has knowledge thereof, and the Escrow Agent shall
not in any way be required to determine whether or not any other agreement has
been complied with by the Purchasers and the Company, or any other party
thereto. The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this Agreement unless
the same shall be in writing and signed jointly by the Purchasers and the
Company, and agreed to in writing by the Escrow Agent.
(d) If the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions, claims or demands
which, in its opinion, are in conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action, other than to
keep safely all property held in escrow or to take certain action, until it
shall jointly be directed otherwise in writing by the Purchasers and the Company
or by a final judgment of a court of competent jurisdiction.
(e) The Escrow Agent shall be fully protected in
relying upon any written notice, demand, certificate or document which it, in
good faith, believes to be genuine. The Escrow Agent shall not be responsible
for the sufficiency or accuracy of the form, execution, validity or genuineness
of documents or securities now or hereafter deposited hereunder, or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement.
(f) The Escrow Agent shall not be required to
institute legal proceedings of any kind and shall not be required to defend any
legal proceedings which may be instituted against it or in respect of the
Consideration.
(g) If the Escrow Agent at any time, in its sole
discretion, deems it necessary or advisable to relinquish custody of the
Consideration, it may do so by delivering the same to any other escrow agent
mutually agreeable to the Purchasers and the Company and, if no such escrow
agent shall be selected within three days of the Escrow Agent's notification to
the Purchasers and the Company of its desire to so relinquish custody of the
Consideration, then the Escrow Agent may do so by delivering the Consideration
to the clerk or other proper officer of a court of competent jurisdiction as may
be permitted by law. The fee of any court officer shall be borne by the Company.
Upon such delivery, the Escrow Agent shall be discharged from any and all
responsibility or liability with respect to the Consideration and this Agreement
and the Company and the Purchasers shall promptly pay to the Escrow Agent all
monies which may be owed it for its services hereunder, including, but not
limited to, reimbursement of its out-of-pocket expenses pursuant to paragraph
(i) below.
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(h) This Agreement shall not create any
fiduciary duty on the Escrow Agent's part to the Purchasers or the Company, nor
disqualify the Escrow Agent from representing either party hereto in any dispute
with the other, including any dispute with respect to the Consideration.
(i) The Escrow Agent represents that it is
counsel to the Purchasers. The parties agree that the Escrow Agent's engagement
as provided for herein is not and shall not be objectionable for any reason.
(j) Upon the performance of this Agreement, the
Escrow Agent shall be deemed released and discharged of any further obligations
hereunder.
4. Indemnification.
(a) The Purchasers hereby indemnify and hold
free and harmless Escrow Agent from any and all losses, expenses, liabilities
and damages (including but not limited to reasonable attorney's fees, and
amounts paid in settlement) resulting from claims asserted by the Company
against Escrow Agent with respect to the performance of any of the provisions of
this Agreement.
(b) The Company hereby indemnifies and holds
free and harmless Escrow Agent from any and all losses, expenses, liabilities
and damages (including but not limited to reasonable attorney's fees, and amount
paid in settlement) resulting from claims asserted by the Purchasers against
Escrow Agent with respect to the performance of any of the provisions of this
Agreement.
(c) The Purchasers and the Company, jointly and
severally, hereby indemnify and hold the Escrow Agent harmless from and against
any and all losses, damages, taxes, liabilities and expenses that may be
incurred by the Escrow Agent, arising out of or in connection with its
acceptance of appointment as the Escrow Agent hereunder and/or the performance
of its duties pursuant to this Agreement, the Purchase Agreement, the Debentures
and the Warrants, including, but not limited to, all legal costs and expenses of
the Escrow Agent incurred defending itself against any claim or liability in
connection with its performance hereunder, provided that the Escrow Agent shall
not be entitled to any indemnity for any losses, damages, taxes, liabilities or
expenses that directly result from its willful misconduct or gross negligence.
(d) In the event of any legal action between the
parties to this Agreement to enforce any of its terms, the legal fees of the
prevailing party shall be paid by the party(ies) who did not prevail.
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5. Miscellaneous.
(a) All Notice of Conversions, Objections, notices,
requests, demands and other communications hereunder shall be in writing, sent
by telecopier, upon proof of sending thereof to the following addresses:
(i) If to the Company: INVU, Inc.
The Beren,
Blisworth Hill Farm
Stoke Road
Blisworth
North-hampton, NNZ 3DB
Attn: Xxxxx Xxxxxx
Tel: 000 00 0000 000000
Fax: 000 00 0000 000000
With copies to: Jenkens & Xxxxxxxxx, P.C.
0000 Xxxx Xxxxxx,
Xxxxx 0000
Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(ii) If to the Purchasers: At the fax numbers set
forth in the Purchase
Agreement.
(iii) If to the Escrow Agent: Xxxxxx Gottbetter &
Xxxxxxxx, LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxxxx,
Esq.
Tel: 000-000-0000
Fax: 000-000-0000
or at such other address as any of the parties to this Agreement may hereafter
designate in the manner set forth above to the others.
(b) This Agreement shall be construed and
enforced in accordance with the law of the State of New York applicable to
contracts entered into and performed entirely within New York.
(c) This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
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delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
(d) This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The assignment by a party of this Agreement or any rights hereunder shall not
affect the obligations of such party under this Agreement.
6. Termination of Escrow. This Escrow Agreement shall begin
upon the date hereof and shall terminate upon the earlier of (i) the conversion
of the full amount of the Debentures; (ii) the Expiration Date of the Warrants;
or (iii) the Maturity Date of the Debentures. Upon the termination of the Escrow
Agreement, the Escrow Agent shall return any unconverted Debenture Escrow Shares
to the Company.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed the day and year first above written.
Escrow Agent: The Company:
XXXXXX XXXXXXXXXX & INVU, INC.
XXXXXXXX, LLP
By: By:
--------------------------- ------------------------------
Name: Name:
Title: Title:
Purchasers:
GEM GLOBAL YIELD FUND LIMITED
By:
------------------------------
Name:
Title:
TURBO INTERNATIONAL LTD.
By:
------------------------------
Name:
Title:
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