ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") dated as of _____________ ___,
2004, is made by and among Global Axcess Corp, a Nevada corporation ("Buyer"),
ATM Network Services, Inc. dba The ▇▇▇▇▇▇ Group, a Nevada corporation ("Seller")
and Potter Minton, a Texas professional corporation ("Escrow Agent").
Capitalized terms used herein but not defined herein have the meanings ascribed
to them in the Purchase Agreement (as defined below).
WHEREAS, Buyer and Seller have entered into an Asset Purchase Agreement
(the "Purchase Agreement") dated as of September ____, 2004, whereby Seller
agrees to sell to Buyer certain assets as described therein; and
WHEREAS, Section 2.2 of the Purchase Agreement provides for the deposit by
the Buyer with an escrow agent of five hundred thousand ($500,000) dollars of
the total Purchase Price thereunder as security for the prompt, timely and full
payment of certain expenses incurred by Seller prior to the Closing; and
WHEREAS, the Escrow Agent is willing to act as escrow agent hereunder;
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. Establishment of Escrow Fund and Deposit of Funds. Concurrently
with the execution of this Escrow Agreement, the Buyer is hereby delivering to
the Escrow Agent five hundred thousand ($500,000) dollars pursuant to Section
2.2 of the Purchase Agreement, which together with any interest or income
thereon that may be held by the Escrow Agent is hereinafter referred to as the
"Escrow Fund". The Escrow Fund shall be maintained and handled by the Escrow
Agent in accordance with the terms and conditions hereinafter set forth.
2. Investment of Escrow Fund.
(a) Unless the Buyer and the Seller jointly instruct the Escrow
Agent in writing otherwise, the Escrow Agent shall invest and reinvest the
Escrow Fund in an uninsured money market bank account at Bank of America. Escrow
Agent shall not be liable for any loss resulting from failure of the bank or any
other cause except for willful misconduct or gross negligence of Escrow Agent.
(b) Informational tax reports filed by the Escrow Agent with the
Internal Revenue Service shall allocate all interest or other income accrued or
paid on the Escrow Fund to Seller and Seller shall report such interest or other
income as income to it on all tax returns filed by Seller.
3. Release of the Escrow Fund.
(a) Seller agrees to promptly deliver to Escrow Agent, with a
copy to Buyer, any bills or invoices that it receives after the Closing that
relate to expenses that accrued or arose under the Transferred Agreements (as
defined in the Purchase Agreement) or relating to Seller's business prior to the
Closing (collectively, "Invoices"), including without limitation, any and all
invoices received from any of the vendors listed on Exhibit A attached hereto.
If Seller contends that it disputes any portion of such Invoices, Seller shall
include information regarding the nature of such dispute and the amount in
dispute with the delivery of such Invoice. The Escrow Agent shall promptly upon
receipt of each Invoice, make payment out of the Escrow Fund for the amount of
such Invoice or, if in dispute, for the undisputed portion thereof. In addition
Seller may present to Escrow Agent, with a copy to Buyer,a sworn statement by
Seller that checks totaling the amount requested have been issued and mailed to
the parties entitled to monthly commissions, stating the name of each Payee and
the amount paid and Escrow Agent shall reimburse Seller for such amount from the
Escrow Fund.
(b) In the event that Buyer receives any Invoices that relate to
expenses that accrued or arose under the Transferred Agreements or relating to
Seller's business prior to the Closing, Buyer shall deliver such Invoices to
Escrow Agent, with a copy to Seller. If Seller disputes any portion of such
Invoices, Seller shall notify Buyer and Escrow Agent ("Dispute Notice") of such
dispute, the details thereof and the amount so in dispute, within ten days after
receiving a copy of the Invoice from Buyer. If Escrow Agent has not received a
Dispute Notice from Seller on or before the tenth day after its receipt of the
Invoice, it shall promptly pay such Invoice. If Escrow Agent has received a
Dispute Notice from Seller, Escrow Agent shall promptly pay the undisputed
portion of the applicable Invoice.
(c) Seller agrees to use its commercially reasonable efforts to
resolve any disputed Invoices as soon as reasonably practicable and to notify
Buyer and Escrow Agent upon reaching any such settlement ("Settlement Notice")
with a vendor. Escrow Agent shall promptly pay any additional amounts owed to a
vendor under an Invoice as a result of any such settlement.
(d) On ____________________, 2004, Escrow Agent shall release the
remaining balance of the Escrow Funds, less the disputed amount of any Invoices
that have not been resolved.
(e) Provided, notwithstanding the foregoing, Escrow Agent may
require the written approval of Seller and/or Buyer as a condition to release or
disbursement of any portion of the Escrow Fund.
4. Termination of Escrow Agreement. This Agreement shall terminate
upon disbursement by the Escrow Agent of all of the Escrow Fund in accordance
with the provisions of this Escrow Agreement. Upon termination of this Agreement
Seller shall remain liable for all valid Invoices.
5. Buyer Settlement. Buyer may, at its option, pay any Invoice, or the
disputed portion of any Invoices, and seek reimbursement from the Escrow Fund.
The Escrow Agent shall reimburse Buyer for such payments to same extent as it is
authorized to pay the original vendor. If Buyer pays any disputed Invoice, Buyer
and Seller will negotiate in good faith the settlement thereof. If they are
unable to reach agreement on the valid amount of the Invoice and, therefore, the
amount the Escrow Agent or Seller shall reimburse Buyer, such dispute shall be
resolved in any Federal Court in Texas or in State Court in Cherokee County,
Texas. The parties hereby consent to the personal and exclusive jurisdiction of
such courts.
6. Escrow Agent. The parties hereto agree that:
(a) The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this Escrow Agreement and the
Escrow Agent shall not be liable except for the performance of such duties and
obligations as are specifically set out in this Escrow Agreement. The Escrow
Agent shall not be bound in any way by any agreement or contract between Buyer
and Seller, including the Purchase Agreement (whether or not the Escrow Agent
has knowledge thereof).
(b) The Escrow Agent shall be fully protected in acting on and
relying upon any written advice, certificate, notice, direction, instruction,
request, or other paper or document which the Escrow Agent in good faith
believes to be genuine and to have been signed or presented by the proper party
or parties, and may assume that any person purporting to give such advice,
certificate, notice, direction, instruction or request or other paper or
document has been duly authorized to do so.
(c) The Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it in good faith or
for any mistake in fact or law, or for anything which it may do or refrain from
doing in connection herewith, except its own gross negligence or willful
misconduct and may consult with counsel of its own choice and shall have full
and complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
(d) In the event that the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions with respect to the
Escrow Fund which, in its sole opinion, are in conflict with either other
instructions received by it or any provision of this Agreement, it shall be
entitled to hold the Escrow Fund, or a portion thereof, in escrow, pending the
resolution of such uncertainty to the Escrow Agent's sole satisfaction, by
written confirmation of an agreement between Buyer and Seller or by final
judgment of a court or courts of competent jurisdiction; or the Escrow Agent, at
its option, may deposit the Escrow Fund into the registry of a court of
competent jurisdiction located in Cherokee County, Texas, in a proceeding to
which all parties in interest are joined.
(e) The Escrow Agent shall be entitled to reimbursement for any
and all expenses incurred by Escrow Agent in the performance of its obligations
hereunder which expenses may be deducted by the Escrow Agent from the Escrow
Fund.
(f) The Escrow Agent hereby accepts its appointment and agrees to
act as Escrow Agent under and in accordance with the terms and conditions of
this Escrow Agreement.
(g) The Escrow Agent is acting as an intermediary, not as
attorney for Seller or Buyer with respect to the matters made the subject of
this Agreement. Seller and Buyer waive any conflict of interest.
7. Notices, Etc. All notices, requests, demands, and other
communications hereunder shall be deemed to have been duly given, if delivered
in person or by courier, or by facsimile transmissions (with notice being
effective the day after confirmation of successful facsimile transmission and
upon receipt in all other instances) to the party for whom intended at the
following addresses:
If to the Buyer:
Global Axcess Corp
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Seller:
The ▇▇▇▇▇▇ Group
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent:
Potter Minton
110 North College, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may, by written notice to the others, change the address to which
notices to such party are to be delivered or mailed.
8. Resignation or Removal of Escrow Agent.
(a) The Escrow Agent may resign and be discharged from its duties
or obligations hereunder by giving 30 days' prior notice in writing of such
resignation specifying a date under which such resignation shall take effect;
provided, however, that no such resignation shall be effective until a successor
Escrow Agent shall be appointed hereunder and the Escrow Agent shall have
delivered the Escrow Fund hereunder to such successor Escrow Agent. In the event
of the Escrow Agent's resignation, Buyer shall select a new Escrow Agent who
shall be reasonably satisfactory to Seller.
(b) The Buyer and the Seller may remove the Escrow Agent upon
written notice to the Escrow Agent signed by the Buyer and the Seller. Such
removal shall take effect upon delivery of the Escrow Fund to a successor Escrow
Agent designated in writing by the Buyer and the Seller and the Escrow Agent
thereupon shall have no further duties or responsibilities in connection
herewith. The Escrow Agent shall promptly deliver the Escrow Fund without
unreasonable delay after receiving the designation of a successor Escrow Agent.
9. General. This Escrow Agreement: (i) shall be construed and enforced
in accordance with the laws of the State of Florida, without reference to its
conflicts of law principles; (ii) shall inure to the benefit of and be binding
upon the successors and assigns of the Buyer and the successors and assigns of
the Seller, nothing in this Escrow Agreement, expressed or implied, being
intended to confer upon any other person any rights or remedies hereunder; (iii)
may only be modified by a writing signed by all of the parties hereto and no
waiver hereunder shall be effective unless in a writing signed by the party
against whom enforcement of the waiver is sought; and (iv) may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. This Escrow
Agreement and any rights pursuant hereto may not be assigned by either of the
Buyer, on one hand, or the Seller, on the other hand, without the prior written
consent of Seller, on the one hand or the Buyer, on the other hand. The Section
and other headings contained in this Escrow Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Escrow Agreement.
10. Fees. Escrow Agent shall be entitled to a reasonable fee for its
service, which shall be paid by Seller.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement on the first written above.
GLOBAL AXCESS CORP, a Nevada corporation
By:_____________________________________
Name: __________________________________
Title: ________________________________
ATM NETWORK SERVICES, INC., dba
The ▇▇▇▇▇▇ Group, a Nevada corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
POTTER MINTON, a Texas
professional
corporation
By: ____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT A
LIST OF VENDORS
All customers who have earned automated teller machine and point of sale
compensation
Bantek West, Inc.
Core Data Resources
Euronet USA, Inc.
▇▇▇▇ Systems, Inc.
Southwestern ▇▇▇▇
Tranax Technologies
Triton Systems
Wilmington Savings Fund Society FSB
Wincor AutoTell, LLC
