EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of August
2, 2000, by and among Geotec Thermal Generators, Inc., a corporation
incorporated under the laws of the State of Florida, (the "Company"), Investwell
Investments Limted, a British Virgin Islands corporation ("Investor"), and
Xxxxxxx Xxxxxx & Green, P.C., (the "Escrow Agent"). Capitalized terms used but
not defined herein shall have the meanings set forth in the Private Equity Line
of Credit Agreement referred to in the first recital.
W I T N E S S E T H:
WHEREAS, the Investor will from time to time as requested by
the Company, purchase shares of the Company's Common Stock from the Company as
set forth in that certain Private Equity Line of Credit Agreement (the "Purchase
Agreement") dated the date hereof between the Investor and the Company, which
will be issued as per the terms and conditions contained herein and in the
Purchase Agreement; and
WHEREAS, the Company and the Investor have requested that the
Escrow Agent hold in escrow and then distribute the initial documents and
certain funds which are conditions precedent to the effectiveness of the
Purchase Agreement, and have further requested that upon each exercise of a Put,
the Escrow Agent hold the relevant documents and the applicable purchase price
pending receipt by the Investor of certificates representing the securities
issuable upon such Put;
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 FOR THE INITIAL CLOSING
1.1. The parties hereby agree to establish an escrow account with the Escrow
Agent whereby the Escrow Agent shall hold the funds and documents which are
referenced in Section 7.2 of the Purchase Agreement.
1.2. At the Initial Closing, the Company shall deliver to the Escrow Agent:
(i) the initial original Initial Warrant certificate in the form of
Exhibit D to the Purchase Agreement;
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(ii) the original executed Registration Rights Agreement in the form of
Exhibit C to the Purchase Agreement;
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(iii) the original executed opinion of Atlas, Xxxxxxxx, Trop & Borkson,
P.A., counsel of the Company, in the form of Exhibit E to the purchase
agreement; ---------
(iv) the sum of $25,000;
(v) a warrant certificate to purchase up to 500,000 shares of common stock
issued to Xxxxxx and Xxxxxx Securities Corporation otherwise identical
in form to that of the Warrant (the "J&L Warrant");
(vi) the original executed Company counterpart of this Escrow Agreement; and
(vii) the original executed Company counterpart of the Purchase Agreement.
1.3. Upon receipt of the foregoing, and receipt of executed counterparts from
Investor of the Purchase Agreement, the Registration Rights Agreement and this
Escrow Agreement, the Escrow Agent shall calculate the exercise price of the
Initial Warrant and the J&L Warrant and enter the exercise price, the
commencement date and termination date of such warrants on the faces thereof and
immediately transfer the sum of Twenty-Five Thousand Dollars ($25,000) to
Xxxxxxx Xxxxxx & Green, P.C. ("EB&G"), 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
for the Investor's legal and administrative costs and the Escrow Agent shall
then arrange to have the Initial Warrant certificate, the Purchase Agreement,
this Escrow Agreement, the Registration Rights Agreement and the opinion of
counsel delivered to the Investor and the J&L Warrant certificate delivered to
Jesup & Xxxxxx Securities Corporation.
ARTICLE 2
TERMS OF THE ESCROW FOR EACH PUT
2.1. (a) Each time the Company shall send a Put Notice to the Investor as
provided in the Purchase Agreement, it shall send a copy, by facsimile, to the
Escrow Agent.
(b) Each time the Investor shall purchase shares pursuant to a Put, the Investor
shall send the applicable Investment Amount of the Put Shares to the Escrow
Agent on or before the Closing Date for such Put. The Company shall promptly,
but no later than five (5) Trading Days after receipt of notice from the Escrow
Agent that it has the funds for the Investment Amount cause its Transfer Agent
to deliver the Put Shares to Investor's account through the Depository Trust
Company, if possible, or else to deliver such certificates to the Escrow Agent.
In the event that the certificates representing the Put Shares are not in the
Investor's or the Escrow Agent's possession within five (5) Trading Days of the
date of the Escrow Agent's notice, then Investor shall have the right to demand,
by notice, the return of the Investment Amount, and the Put Notice shall be
deemed cancelled. The Escrow Agent shall within one (1) Trading Day of Closing
wire the Investment Amount per the written instructions of the Company net of:
(i) a brokerage fee equal to ten percent (10%) of the Investment Amount of each
Put, to Jesup & Xxxxxx Securities Corporation; and
(ii) One Thousand Five Hundred Dollars ($1,500) as escrow expenses to the Escrow
Agent.
The Escrow Agent shall remit Broker's fee to Broker in accordance with wire
instructions that will be sent to Escrow Agent from Broker.
ARTICLE 3
MISCELLANEOUS
3.1. 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 an extension of the time
for performance of any other obligation or act.
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 set forth in the Purchase Agreement.
3.2. This Escrow Agreement shall be binding upon and shall inure to the benefit
of the permitted successors and permitted assigns of the parties hereto.
3.3. This Escrow 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 Escrow 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 their respective agents duly authorized in writing
or as otherwise expressly permitted herein.
3.4. Whenever required by the context of this Escrow Agreement, the singular
shall include the plural and masculine shall include the feminine. This Escrow
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 Escrow Agreement.
3.5. The parties hereto expressly agree that this Escrow Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of New York. Except as expressly set forth herein, any action
to enforce, arising out of, or relating in any way to, any provisions of this
Escrow Agreement shall brought through the American Arbitration Association at
the designated locale of New York, New York as is more fully set forth in the
Purchase Agreement.
3.6. The Escrow Agent's duties hereunder may be altered, amended, modified or
revoked only by a writing signed by the Company, each Investor and the Escrow
Agent.
3.7. 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, excepting only its own gross negligence or willful misconduct,
and any act done or omitted by the Escrow Agent pursuant to the advice of the
Escrow Agent's attorneys-at-law (other than Escrow Agent itself) shall be
conclusive evidence of such good faith.
3.8. 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.
3.9. The Escrow Agent shall not be liable in any respect on account of the
identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder or hereunder.
3.10. The Escrow Agent shall be entitled to employ such legal counsel and other
experts as the Escrow Agent may deem necessary properly to advise the Escrow
Agent in connection with the Escrow Agent's duties hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor. 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 in such capacity as legal counsel for the Investors 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 the
Escrow Agent are relying explicitly on the foregoing provision in entering into
this Escrow Agreement.
3.11. The Escrow Agent's responsibilities as escrow agent hereunder shall
terminate if the Escrow Agent shall resign by written notice to the Company and
the Investor. In the event of any such resignation, the Investors and the
Company shall appoint a successor Escrow Agent.
3.12. If the Escrow Agent reasonably requires other or further instruments in
connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
3.13. 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
escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed in the Escrow Agent's sole discretion (1) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or 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 (2) to deliver the
escrow 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 and City of New York in accordance with
the applicable procedure therefor.
3.14. The Company and the Investor agree jointly and severally to indemnify and
hold harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in any
way arising from or relating to the duties or performance of the Escrow Agent
hereunder or the transactions contemplated hereby or by the Purchase Agreement
other than any such claim, liability, cost or expense to the extent the same
shall have been determined by final, unappealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of this __ day of August, 2000.
GEOTEC THERMAL GENERATORS, INC.
By:
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Xxxxxx Xxxx, President & COB
INVESTOR:
Investwell Investments Limted
By:
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Xxxx Xxxxxxx, Authorized Signatory
ESCROW AGENT
XXXXXXX XXXXXX & GREEN, P.C.
By:
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Xxxxxx X. Xxxxxxx
Authorized Signatory
