ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into and effective as of the 11th day
of September 2003, by and between Brenex Oil Corporation, a Utah corporation
(the "Company"), Xxxxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxx (collectively the
"Principal Stockholders"), Xxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxxx
(collectively, the "Directors and Officers) and Xxxxx & Schloss LLP (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Reorganization (the "Plan
of Reorganization") of even date herewith, Brenex Acquisition Corporation, a
Nevada Corporation and wholly owned subsidiary of the Company, shall merge
with and into CinemaElectric, Inc., a Delaware corporation; and
WHEREAS, the Principal Stockholders and the Directors and Officers
agreed, as a condition to the Plan of Reorganization, to execute an agreement
to the effect that they will not sell or otherwise dispose of any equity
securities of the Company for a period of 1 year (the "Lock-up Period")
following the Closing (as defined in the Plan of Reorganization); and
WHEREAS, pursuant to the Plan of Reorganization the Principal
Stockholders and the Directors and Officers agreed to deposit the certificates
representing the shares of common stock of the Company beneficially owned by
the Principal Stockholders and the Directors and Officers with a mutually
acceptable escrow agent during the Lock-Up Period; and
WHEREAS, the Principal Stockholders and the Directors and Officers are
ready, willing and able to so deposit such shares of Common Stock with the
Escrow Agent pursuant to 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:
1.0 Deposit of Shares. In satisfaction of their obligations under the
Plan of Reorganization, the Principal Stockholders and the Directors and
Officers shall deposit with the Escrow Agent one or more certificates
representing not less than ______________ shares of Common Stock of the
Company
2.0 Release of Shares.
Upon expiration of the Lock-up Period, the shares of Common Stock then
held by the Escrow Agent shall be released to the Principal Stockholders and
the Directors and Officers and this Agreement shall terminate.
3.0 Limitations of Escrow Agent's Capacity.
3.1 This Escrow Agreement expressly and exclusively sets forth the
duties of the Escrow Agent with respect to any and all matters pertinent
hereto and no implied duties or obligations shall be read into this Escrow
Agreement against the Escrow Agent.
3.2 The Escrow Agent shall act hereunder as a depository only, and
is not responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of the subject matter of this Escrow
Agreement or any part thereof, whether in form or substance, or for the form
of execution thereof, or for any endorsement or lack of endorsement thereon or
for any description therein. It shall be sufficient if a writing purporting
to be such instrument, document, certificate, statement or notice is delivered
to the Escrow Agent and purports on its face to be correct in form and signed
or otherwise executed by the party or parties required to sign or execute the
same under this Escrow Agreement. The Escrow Agent shall not be required in
any way to determine the identity or authority of any person executing the
same or the genuineness of such signature.
3.3 This Escrow Agreement as it presently exists or may hereafter
be amended constitutes the entire agreement between the Escrow Agent and any
other parties hereto in connection with the subject matter hereof, and no
other agreement entered into between the parties or any of them, shall be
considered as adopted or binding, in whole or in part, upon the Escrow Agent
notwithstanding that any other agreement may be deposited with the Escrow
Agent or the Escrow Agent may have knowledge thereof.
3.4 The Escrow Agent shall have no liability or obligation to
notify any party hereto or any other party interested in this Escrow Agreement
of any payment required or maturity occurring under this Escrow Agreement or
under the terms of any instrument deposited herewith unless such notice is
explicitly provided for in this Escrow Agreement.
3.5 The Escrow Agent shall not be charged with notice of
knowledge of any fact or information not herein set forth.
4.0 Authority of Escrow Agent.
4.1 The Escrow Agent is hereby authorized and directed by the
undersigned to deliver the subject matter of this Escrow Agreement only in
accordance with the provisions of Section 2 above.
4.2 The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, power
of attorney or other paper or document which the Escrow Agent in good faith
believes to be genuine and what it purports to be, including items requesting
or authorizing release, disbursement or retainage of the subject matter of
this Escrow Agreement and the items amending the terms of this Escrow
Agreement.
4.3 The Escrow Agent may consult with legal counsel in the event
of any dispute or question as to the construction of any of the provisions
hereof or its duties hereunder, and shall incur no liability and shall be
fully protected in act and in accordance with the advise of such counsel. The
Escrow Agent has acted as legal counsel for CinemaElectric, Inc, and may
continue to act as legal counsel for CinemaElectric, Inc., from time to time,
notwithstanding its duties as the Escrow Agent hereunder. The Company, the
Principal Stockholders and the Directors and Officers consent to the Escrow
Agent in such capacity as legal counsel for CinemaElectric, Inc. and waive any
claim that such representation represents a conflict of interest on the part
of the Escrow Agent. The Company, the Principal Stockholders and the
Directors and Officers understand that CinemaElectric, Inc. and the Escrow
Agent are relying explicitly on the foregoing provision in entering into this
Escrow Agreement.
4.4 In the event of any disagreement between any of the parties
to this Escrow Agreement, or between any of them and any other person,
resulting in adverse claims or demands being made in connection with the
matters covered by this Escrow Agreement, or in the event that the Escrow
Agent, in good faith, shall be in doubt as to what action it should take, the
Escrow Agent may, at its option, refuse to comply with any claims or demands
on it, or refuse to take any other action hereunder, so long as such
disagreement continues or such doubt exists and in any such event the Escrow
Agent shall not be or become liable in any way or to any person for its
failure or refusal to act, and the Escrow Agent shall be entitled to continue
to refrain from acting until (i) the rights of all interested parties shall
have been fully and finally adjudicated by a court of competent jurisdiction,
or (ii) all differences shall have been adjudged and all doubt resolved by
agreement among all the interested persons, and the Escrow Agent shall have
been notified thereof in writing signed by all such persons. Notwithstanding
the preceding, the Escrow Agent may in its discretion obey the order or
judgment, decree or levy of any court, whether with or without jurisdiction,
and the Escrow Agent is hereby authorized in its sole discretion, to comply
with and obey (and shall have no liability to any person or party so doing)
any such orders, judgments, decrees or levies which the Escrow Agent is
advised by legal counsel of its own choosing is binding upon it. The rights
of the Escrow Agent under this subsection are cumulative with all other rights
which it may have by law or otherwise.
4.5 The Escrow Agent shall have no liability for any loss
arising from any cause beyond its control, including but not limited to the
following (i) any delay, error omission or default of any mail, telegraph,
cable or wireless agency or operator or (ii) the acts or edicts of any
government or governmental agency or other group or entity exercising
governmental powers.
4.6 Without in any way limiting any other provision of this
Escrow Agreement as expressly understood and agreed that the Escrow Agent
shall be under no duty or obligation to give any notice or to do or to omit
the doing of any action or anything with respect to the subject matter hereof
except to receive, hold and deliver the same in accordance with the terms
hereof. The Escrow Agent shall not be liable for any error in judgment, or
act or omission, or any mistake of law or fact or for doing anything it may do
or refrain from doing in connection herewith, except for its own willful
misconduct or gross negligence.
4.7 The Escrow Agent shall be indemnified and held harmless
from anything which it may do or refrain from doing in connection herewith or
for any claims, demands or losses or for any damages made or suffered by any
party to this Escrow Agreement except such as may rise through or be caused by
the Escrow Agent's willful misconduct or gross negligence.
4.8 In the event that any controversy should arise among the
parties with respect to this Escrow Agreement, or should the Escrow Agent
resign and the parties fail to select another escrow agent to act in its
stead, the Escrow Agent shall have the right to institute a xxxx of
interpleader in any court of competent jurisdiction to determine the rights of
the parties, all at the cost of the Company.
5.0 Resignation. The Escrow Agent's responsibilities as escrow agent
hereunder shall terminate if the Escrow Agent shall resign by written notice
to the Company, the Principal Stockholders, the Directors and Officers and
CinemaElectric, Inc. In the event of any such resignation, the Company, the
Principal Stockholders, the Directors and Officers and CinemaElectric, Inc.
shall appoint a successor Escrow Agent.
6.0 General Provisions.
6.1 Unless any party has sent notice to all other parties that
a dispute exists regarding any part of the subject matter hereof, this
Agreement shall be terminated on the earlier of (a) the complete disbursement
of the subject matter of this Escrow Agreement, or (b) the expiration of the
Lock-Up Period. Upon such termination, the Escrow Agent is hereby directed to
deliver any shares of Common Stock then held by the Escrow Agent to the
Principal Stockholders, the Directors and Officers, pursuant to their
respective ownership thereof.
6.2 At the termination date set out in subsection 6.1 above,
the Escrow Agent shall be discharged from any further obligation.
6.3 Where directions or instructions from more than one of
the undersigned are required, such directions or instructions may be given by
separate instruments of similar tenor. Any of the undersigned may act
hereunder through an agent or attorney-in-fact, provided satisfactory written
evidence of authority is first furnished to any party relying on such
authority.
6.4 The Company shall reimburse the Escrow Agent for its
reasonable costs and expenses incurred in connection with the performance by
it of services under this Escrow Agreement (including reasonable fees and
expenses of Escrow Agent's counsel).
6.5 Any payment, notice, request for consent, report, or any
other communication required or permitted in this Escrow Agreement shall be in
writing and shall be deemed to have been given when personally delivered to
the party hereunder specified against receipt therefor or when placed in the
United States Postal Service, registered or certified, with return receipt
requested, postage prepaid and addressed as follows:
If to the Escrow Agent:
Xxxxx & Schloss LLP
00 X.00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to the Company:
Brenex Oil Corporation
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
If to the Principal Stockholders:
Xxxxxxxx X. Xxxxxxxxx
00 Xxxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxx
000 Xxxx Xxxxxxxxx Xxxxx
Xx. Xxxxxx, Xxxx 00000
If to the Directors and Officers:
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxxx X. Xxxxxxxx
00000 Xxxxxxxxx Xxxx Xxxx
Xxxxxx, Xxxx 00000
Any party may unilaterally designate a different address by giving
notice of each such change in the manner specified above to the other party.
6.6 This Escrow Agreement is being made in and is intended to be
construed according to the laws of the State of New York without giving effect
to conflict of law provisions. Any action to enforce, arising out of, or
relating in any way to, any provision of this Escrow Agreement shall only be
brought in a state or Federal court sitting in New York City. It shall inure
to and be binding upon the parties hereto and their respective successors,
receivers, personal representatives, trustees and assigns.
6.7 Words used in the singular number may include the plural and
the plural may include the singular. The section headings appearing in this
instrument have been inserted for convenience only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
conditions of this Escrow Agreement.
6.8 The terms of this Escrow Agreement may be altered, amended,
modified or revoked only by an instrument in writing signed by all the parties
hereto.
6.9 If one or more of the provisions hereof shall for any reason
be held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not
affect any other provisions hereof and this Escrow Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
6.10 This Agreement may be executed in one or more counterparts,
each of which so executed shall be deemed to be an original; but such
counterparts shall together constitute one and the same instrument.
The parties below execute this Escrow Agreement as of the date first
written above.
BRENEX OIL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: Secretary
ESCROW AGENT
XXXXX & XXXXXXX LLP
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
PRINCIPAL STOCKHOLDERS
/s/ Xxxxxx Sydenham
/s/ Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxx
DIRECTORS & OFFICERS
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxxxx
