EXHIBIT 2.2
ESCROW AGREEMENT
This Agreement appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. A lawyer located in ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇, ▇▇ as the Escrow Agent (ESCROW AGENT), in connection with the an
Asset Sale Agreement (AGREEMENT), dated the day of March 8, 2001, by and between
Watchout! Inc. (BUYER) and Novalink Finance Ltd. (SELLER). The SELLER shall
deposit Five Hundred Thousand (500,000) common shares of Expanded Systems Inc.
being all of the outstanding shares of the Expanded Systems Solution Inc., (THE
STOCK) into an Escrow Account (ESCROW ACCOUNT) with the ESCROW AGENT. The BUYER
shall deposit Four Hundred Thousand (400,000) shares of Watchout! Inc. common
shares (THE SHARES) into the ESCROW ACCOUNT.
ESCROW AGENT agrees to hold THE SHARES and THE STOCK in an Escrow Account
(ESCROW ACCOUNT) to fulfill the terms of the AGREEMENT. The ESCROW AGENT will
liquidate shares on account for the BUYER on the terms as set forth in the
AGREEMENT to fulfill the obligation of the BUYER in accordance with the terms
and conditions specified in the AGREEMENT, as summarized below. This ESCROW
ACCOUNT is established for the payment, by the BUYER pursuant to the AGREEMENT
for the sum of Two Hundred Thousand ($200,000) Dollars.
The shares deposited into this ESCROW ACCOUNT shall be registered under a
registration statement with the SEC as more clearly specified in the AGREEMENT.
Upon the registration statement becoming effective the Escrow Agent ("ESCROW
AGENT") is to liquidate THE SHARES in the ESCROW ACCOUNT in an orderly fashion,
in any event no more than 20,000 of THE SHARES per week. The ESCROW AGENT shall
liquate THE SHARES over the liquidation period and pay no more than Fifty
Thousand dollars ($50,000) at the end of the first and second periods, and, no
more than One Hundred Thousand dollars ($100,000) at the end of the third
period. The ESCROW AGENT shall not sell more than One Hundred Thousand (100,000)
of THE SHARES during the first third of the liquidation period. The ESCROW AGENT
shall not sell more than one hundred thousand of THE SHARES during the second
third of the liquidation period The ESCROW AGENT shall not sell more than Two
Hundred Thousand (200,000) of THE SHARES during the final third of the
liquidation period. The proceeds of the sale shall be paid to the SELLER seven
days after the close of each period.
If the total amount paid to the SELLER during the total three periods is less
than Two Hundred Thousand ($200,000) dollars (SHORTFALL) the ESCROW AGENT will
continue to liquidate any shares left in the ESCROW ACCOUNT to make up the
SHORTFALL. The Escrow Agent may exceed the two hundred thousand share limit in
the third period only in the event of a SHORTFALL. The proceeds of the sale
shall be paid to the SELLER seven days after the close of each period. In the
event of a SHORTFALL from the proceeds of the sale of all Four Hundred Thousand
(400,000) shares during the total three periods the ESCROW AGENT is required to
notify the Board of Director of the BUYER and demand the shortfall to be paid
seven days after the end of the final period. In the event of excess shares in
the ESCROW ACCONT after the SELLER has been paid the Two Hundred Thousand
($200,000) dollars the ESCROW AGENT shall return these shares to the BUYER.
During the period of time THE STOCK is held by the ESCROW AGENT, and so long as
BUYER is not in default in the payment schedule, the SELLER agrees that the
BUYER shall have the right to vote THE STOCK on all corporate matters. THE STOCK
of EXPANDED shall be delivered to BUYER upon completion of the escrow terms.
The services of the undersigned as ESCROW AGENT shall be rendered without
compensation, except that the ESCROW AGENT shall be entitled to a reasonable
legal fee for services incurred in connection with the sale of such shares. Such
legal fees to be paid by the BUYER. This Escrow Agreement is being executed in
connection with and simultaneously with the closing of the Asset Sale Agreement.
Any modifications or changes in this Agreement shall be in writing and signed by
all of the parties hereto. The ESCROW AGENT will exercise ordinary care with
respect to the custody of the BUYER'S deposits; and the ESCROW AGENT will not be
liable for any acts or omissions that are undertaken in good faith and with
ordinary care. Without limitation, ESCROW AGENT may assume without verification
the genuineness of any signatures on any writings submitted to it in connection
with BUYER'S deposits and the ESCROW AGENT may maintain the cash portion of the
BUYER'S deposits in a co-mingled trust account. ESCROW AGENT shall invest the
proceeds of sale of THE SHARES in an interest bearing account. All earnings upon
the BUYER'S deposits shall remain the sole and exclusive property of the BUYER.
Dated: __________________
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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ESCROW AGENT- ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
