ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
May 21, 2001, by Global Foods Online Inc., a Nevada corporation (the
"Company"); Cornell Capital Partners, L.P., a limited liability
partnership (the "Investor"); Xxxxxx Xxxxxxxx LLP (the "Investor's
Counsel"); and First Union National Bank, a national banking
association, as Escrow Agent hereunder (the "Escrow Agent").
BACKGROUND
WHEREAS, the Company and the Investor have entered into an Equity Line
of (the "Equity Line of Credit Agreement"), dated as of the date hereof,
pursuant to which the Company proposes to sell the Company's Common
Stock, $0.001 par value per share (the "Common Stock"), at a price per
share equal to the Purchase Price, as that term is defined in the Equity
Line of Credit Agreement, for an aggregate price of up to $3,000,000.
The Equity Line of Credit Agreement provides that on each Advance Date
the Investor shall deposit the Advance pursuant to the Advance Notice
in a segregated escrow account to be held by Escrow Agent and the
Company shall deposit shares of the Company's Common Stock, which shall
be purchased by the Investor as set forth in the Equity Line of Credit
Agreement, with the Investor's Counsel, in order to effectuate a
disbursement to the Company of the Advance by the Escrow Agent and a
disbursement to the Investor of the shares of the Company's Common Stock
by Investor's Counsel at a closing to be held as set forth in the Equity
Line of Credit Agreement (the "Closing").
WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the funds
deposited with it in accordance with the terms of this Agreement.
WHEREAS, Investor's Counsel has agreed to accept, hold, and disburse the
shares of the Company's Common Stock which have been deposited with it
in accordance with the terms of this Agreement.
WHEREAS, in order to establish the escrow of funds and shares to effect
the provisions of the Equity Line of Credit Agreement, the parties
hereto have entered into this Agreement.
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed as
follows:
1. Definitions. The following terms shall have the following meanings
when used herein:
a. "Escrow Funds" shall mean the Advance funds deposited with the
Escrow Agent pursuant to this Agreement.
b. "Joint Written Direction" shall mean a written direction executed
by the Investor and the Company directing Escrow Agent to disburse all
or a portion of the Escrow Funds or to take or refrain from taking any
action pursuant to this Agreement.
c. "Common Stock Joint Written Direction" shall mean a written
direction executed by the Investor and the Company directing Investor's
Counsel to disburse all or a portion of the shares of the Company's
Common Stock or to refrain from taking any action pursuant to this
Agreement.
Appointment of and Acceptance by Escrow Agent and Investor's Counsel.
The Investor and the Company hereby appoint Escrow Agent to serve as
Escrow Agent hereunder. Escrow Agent hereby accepts such appointment
and, upon receipt by wire transfer of the Escrow Funds in accordance
with Section 3 below, agrees to hold, invest and disburse the Escrow
Funds in accordance with this Agreement.
B. The Investor and the Company hereby appoint Investor's Counsel to
serve as the holder of the shares of the Company's Common Stock which
shall be purchased by the Investor. Investor's Counsel hereby accepts
such appointment and, upon receipt via D.W.A.C of the shares of the
Company's Common Stock in accordance with Section 3 below, agrees to
hold and disburse the shares of the Company's Common Stock in accordance
with this Agreement.
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Creation of Escrow Account/Common Stock Account.
A. On or prior to the date of this Agreement the Escrow Agent shall
establish an
escrow account for the deposit of the Escrow Funds entitled as follows:
ARS Networks, Inc./Cornell Capital Partners L.P. The Investor will
wire funds to the account of the Escrow Agent as follows:
Bank: First Union National Bank of New Jersey
Routing #: 000000000
Account #: 2020000659170
Name on Account: Xxxxxx Xxxxxxxx LLP/First Union as Escrow Agent
Name on Sub-Account: Global Foods Online Inc./Cornell Capital Partners,
L.P. Escrow account
Reference Sub-Account #: 1483-01
Attn: Xxxxxx Xxxxxxx (000) 000-0000
Xxxxxxx Xxxxxxxxx (000) 000-0000
Note: Only wire transfers shall be accepted.
B. On or prior to the date of this Agreement Investor's Counsel shall
establish an account for the D.W.A.C. of the shares of Common Stock
entitled as follows: ARS Networks, Inc. The Company will D.W.A.C.
shares of the Company's Common Stock to the account of Investor's
Counsel as follows:
Brokerage Firm: The May Xxxxx Group, Inc.
Clearing Firm: Xxxx Xxxxxxxx
Account #: 12H7-16679688
DTC #: 0235
Name on Account: Xxxxxx Xxxxxxxx LLP
4. Deposits into the Escrow Account. The Investor agrees that it shall
promptly deliver all monies for the payment of the Common Stock to the
Escrow Agent for deposit in the Escrow Account.
5. Disbursements from the Escrow Account.
(a) At such time as Escrow Agent has collected and deposited instruments
of payment in the total amount of the Advance and the Investor's
counsel, Investor's Counsel, has received such Common Stock via D.W.A.C
from the Company which are to be issued to the Investor pursuant to the
Equity Line of Credit Agreement, Investor's Counsel shall notify the
Company and the Investor. The Escrow Agent will continue to hold such
funds until the Investor and Company execute and deliver a Joint
Written Direction directing the Escrow Agent to disburse the Escrow
Funds pursuant to Joint Written Direction at which time the Escrow Agent
shall wire the Escrow Funds to the Company. In disbursing such funds,
Escrow Agent is authorized to rely upon such Joint Written Direction
from Company and may accept any signatory from the Company listed on the
signature page to this Agreement and any signature from the Investor
that Escrow Agent already has on file. Simultaneous with delivery of
the executed Joint Written Direction to the Escrow Agent the Investor
and Company shall execute and deliver a Common Stock Joint Written
Direction to Investor's Counsel directing Investor's Counsel to release
via D.W.A.C to the Investor the shares of the Company's Common Stock.
In releasing such shares of Common Stock Investor's Counsel is
authorized to rely upon such Common Stock Joint Written Direction from
Company and may accept any signatory from the Company listed on the
signature page to this Agreement and any signature from the Investor
Investor's Counsel has on file.
In the event the Escrow Agent does not receive the amount of the Advance
from the Investor, the Escrow Agent shall notify the Company and the
Investor. In the event Investor's Counsel does not receive the shares
of Common Stock to be purchased by the Investor Investor's Counsel shall
notify the Company and the Investor.
In the event that the Escrow Agent is advised by the Investor's Counsel
Investor's Counsel that the Common Stock has not been received from the
Company, in no event will the Escrow Funds be released to the Company
until such shares are received by the Investor 's Counsel. For purposes
of this Agreement, the term "Common Stock Certificates" shall mean
Common Stock certificates to be purchased pursuant to the respective
Advance Notice pursuant to the Equity Line of Credit Agreement executed
on May 21, 2001.
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6. Collection Procedure. The Escrow Agent is hereby authorized to
forward each wire for collection and, upon collection of the proceeds of
each wire deposit the collected proceeds in the Escrow Account.
Any wires returned unpaid to the Escrow Agent shall be returned to the
Investor. In such cases, the Escrow Agent will promptly notify the
Company of such return.
Suspension of Performance: Disbursement Into Court.
A. Escrow Agent. If at any time, there shall exist any dispute between
the Company and the Investor with respect to holding or disposition of
any portion of the Escrow Funds or any other obligations of Escrow Agent
hereunder, or if at any time Escrow Agent is unable to determine, to
Escrow Agent's sole satisfaction, the proper disposition of any portion
of the Escrow Funds or Escrow Agent's proper actions with respect to its
obligations hereunder, or if the parties have not within thirty (30)
days of the furnishing by Escrow Agent of a notice of resignation
pursuant to Section 9 hereof, appointed a successor Escrow Agent to act
hereunder, then Escrow Agent may, in its sole discretion, take either or
both of the following actions:
i. suspend the performance of any of its obligations (including without
limitation any disbursement obligations) under this Escrow Agreement
until such dispute or uncertainty shall be resolved to the sole
satisfaction of Escrow Agent or until a successor Escrow Agent shall be
appointed (as the case may be); provided however, Escrow Agent shall
continue to invest the Escrow Funds in accordance with Section 8 hereof;
and/or
ii. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue
convenient to Escrow Agent, for instructions with respect to such
dispute or uncertainty, and to the extent required by law, pay into such
court, for holding and disposition in accordance with the instructions
of such court, all funds held by it in the Escrow Funds, after deduction
and payment to Escrow Agent of all fees and expenses (including court
costs and attorneys' fees) payable to, incurred by, or expected to be
incurred by Escrow Agent in connection with performance of its duties
and the exercise of its rights hereunder.
iii. Escrow Agent shall have no liability to the Company, the Investor,
or any person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a
result of any delay in the disbursement of funds held in the Escrow
Funds or any delay in with respect to any other action required or
requested of Escrow Agent.
B. Investor's Counsel. If at any time, there shall exist any dispute
between the Company and the Investor with respect to holding or
disposition of any portion of the shares of Common Stock or any other
obligations of Investor's Counsel hereunder, or if at any time
Investor's Counsel is unable to determine, to Investor's Counsel's sole
satisfaction, the proper disposition of any portion of the shares of
Common Stock or Investor's Counsel's proper actions with respect to its
obligations hereunder, then Investor's Counsel may, in its sole
discretion, take either or both of the following actions:
i. suspend the performance of any of its obligations (including without
limitation any disbursement obligations) under this Escrow Agreement
until such dispute or uncertainty shall be resolved to the sole
satisfaction of Investor's Counsel or until a successor shall be
appointed (as the case may be); and/or
ii. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue
convenient to Investor's Counsel, for instructions with respect to such
dispute or uncertainty, and to the extent required by law, pay into such
court, for holding and disposition in accordance with the instructions
of such court, all shares of the Company's Common Stock funds held by
it, after deduction and payment to Investor's Counsel of all fees and
expenses (including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by Investor's Counsel in
connection with performance of its duties and the exercise of its rights
hereunder.
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iii. Investor's Counsel shall have no liability to the Company, the
Investor, or any person with respect to any such suspension of
performance or disbursement into court, specifically including any
liability or claimed liability that may arise, or be alleged to have
arisen, out of or as a result of any delay in the release of shares of
the Company's Common Stock or any delay in with respect to any other
action required or requested of Xxxxxx Xxxxxxxx, LLP.
8. Investment of Escrow Funds. The Escrow Agent shall deposit the Escrow
Funds in a non-interest bearing money market account.
If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent shall invest the
Escrow Fund, or such portion thereof, as to which no Joint Written
Direction has been received, in investments described above. The
foregoing investments shall be made by the Escrow Agent.
Notwithstanding anything to the contrary contained, Escrow Agent may,
without notice to the parties, sell or liquidate any of the foregoing
investments at any time if the proceeds thereof are required for any
release of funds permitted or required hereunder, and Escrow Agent shall
not be liable or responsible for any loss, cost or penalty resulting
from any such sale or liquidation. With respect to any funds received
by Escrow Agent for deposit into the Escrow Funds after ten o'clock,
a.m., New Jersey time, Escrow Agent shall not be required to invest such
funds or to effect such investment instruction until the next day upon
which banks in New Jersey are open for business.
Resignation and Removal of Escrow Agent. Escrow Agent may resign from
the performance of its duties hereunder at any time by giving thirty
(30) days' prior written notice to the parties or may be removed, with
or without cause, by the parties, acting jointly, by furnishing a Joint
Written Direction to Escrow Agent, at any time by the giving of ten (10)
days' prior written notice to Escrow Agent as provided herein below.
Upon any such notice of resignation or removal, the representatives of
the Investor and the Company identified in Sections 13a.(iv) and
13b.(iv), below, jointly shall appoint a successor Escrow Agent
hereunder, which shall be a commercial bank, trust company or other
financial institution with a combined capital and surplus in excess of
$10,000,000.00. Upon the acceptance in writing of any appointment of
Escrow Agent hereunder by a successor Escrow Agent, such successor
Escrow Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Escrow Agent, and
the retiring Escrow Agent shall be discharged from its duties and
obligations under this Escrow Agreement, but shall not be discharged
from any liability for actions taken as Escrow Agent hereunder prior to
such succession. After any retiring Escrow Agent's resignation or
removal, the provisions of this Escrow Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it while it
was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent
shall transmit all records pertaining to the Escrow Funds and shall pay
all funds held by it in the Escrow Funds to the successor Escrow Agent,
after making copies of such records as the retiring Escrow Agent deems
advisable and after deduction and payment to the retiring Escrow Agent
of all fees and expenses (including court costs and attorneys' fees)
payable to, incurred by, or expected to be incurred by the retiring
Escrow Agent in connection with the performance of its duties and the
exercise of its rights hereunder.
10. Liability of Escrow Agent.
a. Escrow Agent shall have no liability or obligation with respect to
the Escrow Funds except for Escrow Agent's willful misconduct or gross
negligence. Escrow Agent's sole responsibility shall be for the
safekeeping, investment, and disbursement of the Escrow Funds in
accordance with the terms of this Agreement. Escrow Agent shall have no
implied duties or obligations and shall not be charged with knowledge or
notice or any fact or circumstance not specifically set forth herein.
Escrow Agent may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein, which Escrow Agent shall
in good faith believe to be genuine, to have been signed or presented by
the person or parties purporting to sign the same and conform to the
provisions of this Agreement. In no event shall Escrow Agent be liable
for incidental, indirect, special, and consequential or punitive
damages. Escrow Agent shall not be obligated to take any legal action
or commence any proceeding in connection with the Escrow Funds, any
account in which Escrow Funds are deposited, this Agreement or the
Equity Line of Credit Agreement, or to appear in, prosecute or defend
any such legal action or proceeding. Escrow Agent may consult legal
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counsel selected by it in any event of any dispute or question as to
construction of any of the provisions hereof or of any other agreement
or its duties hereunder, or relating to any dispute involving any party
hereto, and shall incur no liability and shall be fully indemnified from
any liability whatsoever in acting in accordance with the opinion or
instructions of such counsel. The Company and the Investor jointly and
severally shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel.
The Escrow Agent is hereby authorized, in its sole discretion, to comply
with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court's
jurisdiction in the matter. If any portion of the Escrow Funds is at
any time attached, garnished or levied upon under any court order, or in
case the payment, assignment, transfer, conveyance or delivery of any
such property shall be stayed or enjoined by any court order, or in any
case any order judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then and in any such event,
the Escrow Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ judgment or decree which it is advised
by legal counsel selected by it, binding upon it, without the need for
appeal or other action; and if the Escrow Agent complies with any such
order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such
compliance even though such order, writ judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
10. Liability of Investor's Counsel.
a. Notwithstanding any liability attributable to Investor's Counsel as
counsel to the Investor, Investor's Counsel shall have no liability or
obligation with respect to the shares of the Company's Common Stock
except for Investor's Counsel's willful misconduct or gross negligence.
Investor's Counsel's sole responsibility shall be for the safekeeping
and release of the shares of the Company's Common Stock in accordance
with the terms of this Agreement. Investor's Counsel shall have no
implied duties or obligations and shall not be charged with knowledge or
notice or any fact or circumstance not specifically set forth herein.
Investor's Counsel may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein, which Investor's Counsel
shall in good faith believe to be genuine, to have been signed or
presented by the person or parties purporting to sign the same and
conform to the provisions of this Agreement. In no event shall
Investor's Counsel be liable for incidental, indirect, special, and
consequential or punitive damages. Investor's Counsel shall not be
obligated to take any legal action or commence any proceeding in
connection with the shares of the Company's Common Stock, any account in
which shares of Common Stock are deposited and this Agreement, or to
appear in, prosecute or defend any such legal action or proceeding.
Investor's Counsel may consult legal counsel selected by it in any event
of any dispute or question as to construction of any of the provisions
hereof or of any other agreement or its duties hereunder, or relating to
any dispute involving any party hereto, and shall incur no liability and
shall be fully indemnified from any liability whatsoever in acting in
accordance with the opinion or instructions of such counsel. The
Company and the Investor jointly and severally shall promptly pay, upon
demand, the reasonable fees and expenses of any such counsel.
Investor's Counsel is hereby authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect
to the shares of the Company's Common Stock, without determination by
Investor's Counsel of such court's jurisdiction in the matter. If any
portion of the shares of the Company's Common Stock are at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in any case
any order judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then and in any such event,
the Investor's Counsel is authorized, in its sole discretion, to rely
upon and comply with any such order, writ judgment or decree which it is
advised by legal counsel selected by it, binding upon it, without the
need for appeal or other action; and if Investor's Counsel complies with
any such order, writ, judgment or decree, it shall not be liable to any
of the parties hereto or to any other person or entity by reason of such
compliance even though such order, writ judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
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12. Indemnification of Escrow Agent. From and at all times after the
date of this Agreement, the parties jointly and severally, shall, to the
fullest extent permitted by law and to the extent provided herein,
indemnify and hold harmless Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively,
the "Indemnified Parties") against any and all actions, claims (whether
or not valid), losses, damages, liabilities, costs and expenses of any
kind or nature whatsoever (including without limitation reasonable
attorney's fees, costs and expenses) incurred by or asserted against any
of the Indemnified Parties from and after the date hereof, whether
direct, indirect or consequential, as a result of or arising from or in
any way relating to any claim, demand, suit, action, or proceeding
(including any inquiry or investigation) by any person, including
without limitation the parties to this Agreement, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against
any Indemnified Party under any statute or regulation, including, but
not limited to, any federal or state securities laws, or under any
common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or
failure of performance of this Agreement or any transaction contemplated
herein, whether or not any such Indemnified Party is a party to any such
action or proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have
the right to be indemnified hereunder for liability finally determined
by a court of competent jurisdiction, subject to no further appeal, to
have resulted from the gross negligence or willful misconduct of such
Indemnified Party. If any such action or claim shall be brought or
asserted against any Indemnified Party, such Indemnified Party shall
promptly notify the Company and the Investor hereunder in writing, and
the and the Company shall assume the defense thereof, including the
employment of counsel and the payment of all expenses. Such Indemnified
Party shall, in its sole discretion, have the right to employ separate
counsel (who may be selected by such Indemnified Party in its sole
discretion) in any such action and to participate and to participate in
the defense thereof, and the fees and expenses of such counsel shall be
paid by such Indemnified Party, except that the Investor and/or the
Company shall be required to pay such fees and expense if (a) the
Investor or the Company agree to pay such fees and expenses, or (b) the
Investor and/or the Company shall fail to assume the defense of such
action or proceeding or shall fail, in the sole discretion of such
Indemnified Party, to employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding, (c) the Investor and
the Company is the plaintiff in any such action or proceeding or (d) the
named or potential parties to any such action or proceeding (including
any potentially impleaded parties) include both Indemnified Party the
Company and/or the Investor Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Company
or the Investor. The Investor and the Company shall be jointly and
severally liable to pay fees and expenses of counsel pursuant to the
preceding sentence, except that any obligation to pay under clause (a)
shall apply only to the party so agreeing. All such fees and expenses
payable by the Company and/or the Investor pursuant to the foregoing
sentence shall be paid from time to time as incurred, both in advance of
and after the final disposition of such action or claim. The
obligations of the parties under this section shall survive any
termination of this Agreement, and resignation or removal of the Escrow
Agent shall be independent of any obligation of Escrow Agent.
13. Indemnification of Investor's Counsel. From and at all times after
the date of this Agreement, the parties jointly and severally, shall, to
the fullest extent permitted by law and to the extent provided herein,
indemnify and hold harmless Investor's Counsel and each partner,
director, officer, employee, attorney, agent and affiliate of Investor's
Counsel (collectively, the "Indemnified Parties") against any and all
actions, claims (whether or not valid), losses, damages, liabilities,
costs and expenses of any kind or nature whatsoever (including without
limitation reasonable attorney's fees, costs and expenses) incurred by
or asserted against any of the Indemnified Parties from and after the
date hereof, whether direct, indirect or consequential, as a result of
or arising from or in any way relating to any claim, demand, suit,
action, or proceeding (including any inquiry or investigation) by any
person, including without limitation the parties to this Agreement,
whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation,
including, but not limited to, any federal or state securities laws, or
under any common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or
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failure of performance of this Agreement or any transaction contemplated
herein, whether or not any such Indemnified Party is a party to any such
action or proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have
the right to be indemnified hereunder for liability finally determined
by a court of competent jurisdiction, subject to no further appeal, to
have resulted solely from the gross negligence or willful misconduct of
such Indemnified Party. If any such action or claim shall be brought or
asserted against any Indemnified Party, such Indemnified Party shall
promptly notify the Company and the Investor hereunder in writing, and
the Investor and the Company shall assume the defense thereof, including
the employment of counsel and the payment of all expenses. Such
Indemnified Party shall, in its sole discretion, have the right to
employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate and to
participate in the defense thereof, and the fees and expenses of such
counsel shall be paid by such Indemnified Party, except that the
Investor and/or the Company shall be required to pay such fees and
expense if (a) the Investor or the Company agree to pay such fees and
expenses, or (b) the Investor and/or the Company shall fail to assume
the defense of such action or proceeding or shall fail, in the sole
discretion of such Indemnified Party, to employ counsel reasonably
satisfactory to the Indemnified Party in any such action or proceeding,
(c) the Investor and the Company is the plaintiff in any such action or
proceeding or (d) the named or potential parties to any such action or
proceeding (including any potentially impleaded parties) include both
Indemnified Party the Company and/or the Investor Indemnified Party
shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company or the Investor. The Investor and the Company
shall be jointly and severally liable to pay fees and expenses of
counsel pursuant to the preceding sentence, except that any obligation
to pay under clause (a) shall apply only to the party so agreeing. All
such fees and expenses payable by the Company and/or the Investor
pursuant to the foregoing sentence shall be paid from time to time as
incurred, both in advance of and after the final disposition of such
action or claim. The obligations of the parties under this section
shall survive any termination of this Agreement, and resignation or
removal of the Escrow Agent shall be independent of any obligation of
Escrow Agent.
14. Expenses of Escrow Agent. Except as set forth in Section 11 the
Company shall reimburse Escrow Agent for all of its reasonable out-of-
pocket expenses, including attorneys' fees, travel expenses, telephone
and facsimile transmission costs, postage (including express mail and
overnight delivery charges), copying charges and the like. All of the
compensation and reimbursement obligations set forth in this Section
shall be payable by the Company, upon demand by Escrow Agent. The
obligations of the Company under this Section shall survive any
termination of this Agreement and the resignation or removal of Escrow
Agent.
13. Warranties.
a. Investor makes the following representations and warranties to Escrow
Agent and the Investor's Counsel :
(i) Investor has full power and authority to execute and deliver this
Escrow Agreement and to perform its obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all necessary
corporate action of Investor, including any necessary shareholder
approval, has been executed by duly authorized officers of the Investor,
enforceable in accordance with its terms.
(iii) The execution, delivery, and performance of the Investor of this
Agreement will not violate, conflict with, or cause a default under the
certificate of incorporation or bylaws of Investor, any applicable law
or regulation, any court order or administrative ruling or degree to
which the Investor is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement.
(iv) Xxxx X. Xxxxxx has been duly appointed to act as the representative
of Investor hereunder and has full power and authority to execute,
deliver, and perform this Escrow Agreement, to execute and deliver any
Joint Written Direction, to amend, modify, or waive any provision of
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this Agreement, and to take any and all other actions as the Investor's
representative under this Agreement, all without further consent or
direction form, or notice to, the Investor or any other party.
(v) No party other than the parties hereto and the Investors have, or
shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform Commercial
Code is on file in any jurisdiction claiming a security interest in or
describing (whether specifically or generally) the Escrow Funds or any
part thereof.
(vi) All of the representations and warranties of the Investor contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.
b. The Company makes the following representations and warranties to
Escrow Agent and Investor's Counsel:
(i) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada, and has full
power and authority to execute and deliver this Escrow Agreement and to
perform its obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all necessary
corporate action of the Company, including any necessary shareholder
approval, has been executed by duly authorized officers of the Company,
enforceable in accordance with its terms.
(iii) The execution, delivery, and performance by the Company of this
Escrow Agreement is in accordance with the Equity Line of Credit
Agreement and will not violate, conflict with, or cause a default under
the certificate of incorporation or bylaws of the Company, any
applicable law or regulation, any court order or administrative ruling
or decree to which the Company is a party or any of its property is
subject, or any agreement, contract, indenture, or other binding
arrangement.
(iv) Xxxx Xxxxxxxx and Xxxxx Xxxxxx have been duly appointed to act as
the representative of the Company hereunder and has full power and
authority to execute, deliver, and perform this Escrow Agreement, to
execute and deliver any Joint Written Direction, to amend, modify or
waive any provision of this Agreement and to take all other actions as
the Company's Representative under this Agreement, all without further
consent or direction from, or notice to, the Company or any other party.
(v) No party other than the parties hereto shall have, any lien, claim
or security interest in the Escrow Funds or any part thereof. No
financing statement under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.
(vi) All of the representations and warranties of the Company contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.
14. Consent to Jurisdiction and Venue. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising
from this Agreement, the parties hereto agree that the United States
District Court for the District of New Jersey shall have the sole and
exclusive jurisdiction over any such proceeding. If all such courts
lack federal subject matter jurisdiction, the parties agree that the
Superior Court Division of New Jersey, Chancery Division of Essex County
shall have sole and exclusive jurisdiction. Any of these courts shall
be proper venue for any such lawsuit or judicial proceeding and the
parties hereto waive any objection to such venue. The parties hereto
consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept the service of process to vest
personal jurisdiction over them in any of these courts.
15. Notice. All notices and other communications hereunder shall be
in writing
and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail
with return receipt requested and postage prepaid, when delivered
personally, one (1) day delivered to any overnight courier, or when
transmitted by facsimile transmission and addressed to the party to be
notified as follows:
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If to Investor, to: Cornell Capital Partners, L.P.
c/o Yorkville Advisors, LLC
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxx Xxxxxx
With copy to: Xxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0
Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Company, to: Global Foods Online Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, President
Xxxxx Xxxxxx, Chairman
Facsimile:
With copy to: Xxxx X. Xxxxxx
Attorney-at-Law
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
If to the Escrow Agent, to: First Union National Bank,
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Or to such other address as each party may designate for itself by like
notice.
16. Amendments or Waiver. This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties of the
Escrow Agent. No delay or omission by any party in exercising any right
with respect hereto shall operate as waiver. A waiver on any one
occasion shall not be construed as a bar to, or waiver of, any right or
remedy on any future occasion.
17. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
18. Governing Law. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of New Jersey without
giving effect to the conflict of laws principles thereof.
Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relating to the holding, investment, and
disbursement of the Escrow Funds and sets forth in their entirety the
obligations and duties of the Escrow Agent with respect to the Escrow
Funds.
20. Binding Effect. All of the terms of this Agreement, as amended from
time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective heirs, successors and assigns of the
Placement Agent, the Company, or the Escrow Agent.
21. Execution of Counterparts. This Agreement and any Joint Written
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.
22. Termination. Upon the first to occur of the disbursement of all
amounts in the Escrow Funds pursuant to Joint Written Directions or the
disbursement of all amounts in the Escrow Funds into court pursuant to
Section 7 hereof, this Agreement shall terminate and Escrow Agent shall
have no further obligation or liability whatsoever with respect to this
Agreement or the Escrow Funds.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.
GLOBAL FOODS ONLINE INC.
By: /s/Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: President
By: /s/Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chairman
FIRST UNION NATIONAL BANK
By: /s/Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: As the Escrow Agent
CORNELL CAPITAL PARTNERS, L.P.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Fund Manager
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