FUNDS ESCROW AGREEMENT
This Agreement is dated as of the 26th day of March, 2002 among Cybertel
Communications Corp., a Nevada corporation (the "Company"), Alpha Capital
Aktiengesellschaft ("Subscriber"), and Grushko & Xxxxxxx, P.C. (the "Escrow
Agent"):
W I T N E S S E T H:
WHEREAS, the Company and Subscriber have entered into a Subscription
Agreement ("Subscription Agreement") calling for the sale by the Company to
the Subscriber of Convertible Notes ("Notes") and issuance of Common Stock
Purchase Warrants ("Warrants") in the aggregate principal amount of $200,000;
and
WHEREAS, the parties hereto require the Company to deliver the Notes and
Warrants against payment therefor, with such Notes and payment to be delivered
to the Escrow Agent to be held in escrow and released by the Escrow Agent in
accordance with the terms and conditions of this Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant
to the terms and conditions of this Agreement;
NOW THEREFORE, the parties agree as follows:
ARTICLE I
INTERPRETATION
1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Agreement" means this Agreement and all amendments made
hereto and thereto by written agreement between the parties;
(b) "Escrowed Payment" means the sum of $200,000 which includes
the cash Purchase Price (as defined in the Subscription Agreement) of the
Notes.
(c) "Finder's Fees" means the Finder's Fees to be paid to Libra
Finance, S.A. described in Section 6 of the Subscription Agreement.
(d) "Notes" means Convertible Notes of the Company issued to the
Subscriber in the form of Exhibit A annexed to the Subscription Agreement and
in the principal amount of $200,000.
(e) "Legal Opinion" means the original signed legal opinion
referred to in Section 3 of the Subscription Agreement.
(f) "Subscription Agreement" means the Subscription Agreement to
be entered into by the parties in reference to the Notes and the exhibits
thereto.
(g) "Warrants" means the common stock purchase warrants of the
Company described in Section 5 of the Subscription Agreement.
(h) Collectively, the executed Subscription Agreement, Finder's
Fee, Legal Opinion, Notes, and Warrants are referred to as "Company
Documents."
(i) Collectively, the Escrowed Payment and Subscription
Agreement are referred to as "Subscriber Documents."
1.2. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the Company Documents and Subscriber
Documents and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. There are no
warranties, representations and other agreements made by the parties in
connection with the subject matter hereof except as specifically set forth in
this Agreement.
1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions
hereof may be waived, only by a written instrument signed by all parties, or,
in the case of a waiver, by the party waiving compliance. Except as expressly
stated herein, no delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or privilege
hereunder.
1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement.
1.6. Law Governing this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York. Both parties and the individuals executing
this Agreement and other agreements on behalf of the Company agree to submit
to the jurisdiction of such courts and waive trial by jury. The prevailing
party (which shall be the party which receives an award most closely
resembling the remedy or action sought) shall be entitled to recover from the
other party its reasonable attorney's fees and costs. In the event that any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision of any agreement.
1.7. Specific Enforcement, Consent to Jurisdiction. The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injuction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof or thereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity. Subject to Section 1.6 hereof, each of the Company and
Subscriber hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper.
Nothing in this Section shall affect or limit any right to serve process in
any other manner permitted by law.
1.8. Fees. The Company shall pay the Subscriber's attorney the fees
described in Section 6 of the Subscription Agreement. These fees shall be
payable by deduction from the cash portion of the Escrowed Payment, but only
if the corresponding balance of the cash portion of the Escrowed Payment is to
be released to or on behalf of the Company pursuant to this Agreement.
ARTICLE II
DELIVERIES TO THE ESCROW AGENT
2.1. Delivery of Company Documents to Escrow Agent. On or about the
date hereof, the Company shall deliver to the Escrow Agent the Company
Documents.
2.2 Delivery of Subscriber Documents to Escrow Agent. On or about the
date hereof, the Subscriber shall deliver to the Escrow Agent the Subscriber
Documents. The Escrowed Payment will be delivered pursuant to the following
wire transfer instructions:
Citibank, N.A.
ABA Number: 0210-00089
For Credit to: Grushko & Xxxxxxx, XXXX Trust Account
Account Number: 00000000
2.3. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.
2.4. Escrow Agent to Deliver Company Documents and Subscriber
Documents. The Escrow Agent shall hold and release the Company Documents and
Subscriber Documents only in accordance with the terms and conditions of this
Agreement.
ARTICLE III
RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS
3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:
(a) Upon receipt by the Escrow Agent of the Company Documents and
the corresponding Subscriber Documents, the Escrow Agent will simultaneously
release the Company Documents to the Subscribers and release the corresponding
Subscriber Documents to the Company except that (i) the Finder's Fees will be
delivered to the Finders, and (ii) the fee described in Section 1.8 above will
be released to the Subscriber's attorneys. At the request of the Escrow
Agent, the Company will provide written facsimile or original instructions to
the Escrow Agent as to the disposition of all funds releasable to the Company.
(b) In the event the Escrow Agent does not receive Company
Documents and the corresponding Subscriber Documents prior to March 29, 2002,
then the Escrow Agent will promptly return the Company Documents to the
Company, and promptly return the Subscriber Documents to the Subscribers.
(c) Upon receipt by the Escrow Agent of joint written
instructions ("Joint Instructions") signed by the Company and the Subscriber,
it shall deliver the Company Documents and Subscriber Documents in accordance
with the terms of the Joint Instructions.
(d) Upon receipt by the Escrow Agent of a final and non-
appealable judgment, order, decree or award of a court of competent
jurisdiction (a "Court Order"), the Escrow Agent shall deliver the Company
Documents and Subscriber Documents in accordance with the Court Order. Any
Court Order shall be accompanied by an opinion of counsel for the party
presenting the Court Order to the Escrow Agent (which opinion shall be
satisfactory to the Escrow Agent) to the effect that the court issuing the
Court Order has competent jurisdiction and that the Court Order is final and
non-appealable.
3.2. Acknowledgement of Company and Subscriber; Disputes. The Company
and the Subscriber acknowledge that the only terms and conditions upon which
the Company Documents and Subscriber Documents are to be released are set
forth in Sections 3 and 4 of this Agreement. The Company and the Subscriber
reaffirm their agreement to abide by the terms and conditions of this
Agreement with respect to the release of the Notes and Escrowed Payment. Any
dispute with respect to the release of the Notes and Escrowed Payment shall be
resolved pursuant to Section 4.2 or by agreement between the Company and
Subscriber.
ARTICLE IV
CONCERNING THE ESCROW AGENT
4.1. Duties and Responsibilities of the Escrow Agent. The Escrow
Agent's duties and responsibilities shall be subject to the following terms
and conditions:
(a) The Subscriber and Company acknowledge and agree that the
Escrow Agent (i) shall not be responsible for or bound by, and shall not be
required to inquire into whether either the Subscriber or Company is entitled
to receipt of the Company Documents and Subscriber Documents pursuant to, any
other agreement or otherwise; (ii) shall be obligated only for the performance
of such duties as are specifically assumed by the Escrow Agent pursuant to
this Agreement; (iii) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction, instrument,
statement, request or document furnished to it hereunder and believed by the
Escrow Agent in good faith to be genuine and to have been signed or presented
by the proper person or party, without being required to determine the
authenticity or correctness of any fact stated therein or the propriety or
validity or the service thereof; (iv) may assume that any person purporting to
give notice or make any statement or execute any document in connection with
the provisions hereof has been duly authorized to do so; (v) shall not be
under any duty to give the property held by Escrow Agent hereunder any greater
degree of care than Escrow Agent gives its own similar property; and (vi) may
consult counsel satisfactory to Escrow Agent, the opinion of such counsel to
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by Escrow Agent hereunder in good faith and in
accordance with the opinion of such counsel.
(b) The Subscriber and Company acknowledge that the Escrow Agent
is acting solely as a stakeholder at their request and that the Escrow Agent
shall not be liable for any action taken by Escrow Agent in good faith and
believed by Escrow Agent to be authorized or within the rights or powers
conferred upon Escrow Agent by this Agreement. The Subscriber and Company,
jointly and severally, agree to indemnify and hold harmless the Escrow Agent
and any of Escrow Agent's partners, employees, agents and representatives for
any action taken or omitted to be taken by Escrow Agent or any of them
hereunder, including the fees of outside counsel and other costs and expenses
of defending itself against any claim or liability under this Agreement,
except in the case of gross negligence or willful misconduct on Escrow Agent's
part committed in its capacity as Escrow Agent under this Agreement. The
Escrow Agent shall owe a duty only to the Subscriber and Company under this
Agreement and to no other person.
(c) The Subscriber and Company jointly and severally agree to
reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including outside counsel fees, to the extent authorized hereunder) incurred
in connection with the performance of its duties and responsibilities
hereunder.
(d) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving five (5) days prior written notice of resignation to the
Subscriber and the Company. Prior to the effective date of the resignation as
specified in such notice, the Subscriber and Company will issue to the Escrow
Agent a Joint Instruction authorizing delivery of the Company Documents and
Subscriber Documents to a substitute Escrow Agent selected by the Subscriber
and Company. If no successor Escrow Agent is named by the Subscriber and
Company, the Escrow Agent may apply to a court of competent jurisdiction in
the State of New York for appointment of a successor Escrow Agent, and to
deposit the Company Documents and Subscriber Documents with the clerk of any
such court.
(e) The Escrow Agent does not have and will not have any
interest in the Company Documents and Subscriber Documents, but is serving
only as escrow agent, having only possession thereof. The Escrow Agent shall
not be liable for any loss resulting from the making or retention of any
investment in accordance with this Escrow Agreement.
(f) This Agreement sets forth exclusively the duties of the
Escrow Agent with respect to any and all matters pertinent thereto and no
implied duties or obligations shall be read into this Agreement.
(g) The Escrow Agent shall be permitted to act as counsel for
the Subscriber or the Company, as the case may be, in any dispute as to the
disposition of the Company Documents and Subscriber Documents, in any other
dispute between the Subscriber and Company, whether or not the Escrow Agent is
then holding the Company Documents and Subscriber Documents and continues to
act as the Escrow Agent hereunder.
(h) The provisions of this Section 4.1 shall survive the
resignation of the Escrow Agent or the termination of this Agreement.
4.2. Dispute Resolution: Judgments. Resolution of disputes arising
under this Agreement shall be subject to the following terms and conditions:
(a) If any dispute shall arise with respect to the delivery,
ownership, right of possession or disposition of the Company Documents and
Subscriber Documents, or if the Escrow Agent shall in good faith be uncertain
as to its duties or rights hereunder, the Escrow Agent shall be authorized,
without liability to anyone, to (i) refrain from taking any action other than
to continue to hold the Company Documents and Subscriber Documents pending
receipt of a Joint Instruction from the Subscriber and Company, or (ii)
deposit the Company Documents and Subscriber Documents with any court of
competent jurisdiction in the State of New York, in which event the Escrow
Agent shall give written notice thereof to the Subscriber and the Company and
shall thereupon be relieved and discharged from all further obligations
pursuant to this Agreement. The Escrow Agent may, but shall be under no duty
to, institute or defend any legal proceedings which relate to the Company
Documents and Subscriber Documents. The Escrow Agent shall have the right to
retain counsel if it becomes involved in any disagreement, dispute or
litigation on account of this Agreement or otherwise determines that it is
necessary to consult counsel.
(b) The Escrow Agent is hereby expressly authorized to comply
with and obey any Court Order. In case the Escrow Agent obeys or complies
with a Court Order, the Escrow Agent shall not be liable to the Subscriber and
Company or to any other person, firm, corporation or entity by reason of such
compliance.
ARTICLE V
GENERAL MATTERS
5.1. Termination. This escrow shall terminate upon the release of all
of the Company Documents and Subscriber Documents or at any time upon the
agreement in writing of the Subscriber and Company.
5.2. Notices. All notices, request, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given one (1) day after being sent by telecopy (with copy
delivered by overnight courier, regular or certified mail):
(a) If to the Company, to:
Cybertel Communications Corp.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
(000) 000-0000 (Telecopier)
With a copy to:
Xxxxxxxxxx & Xxxxxxxxxx
Xxxxxx Xxxxxxxx, Xxxxx 000
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
(000) 000-0000 (Telecopier)
(b) If to the Subscriber, to:
Alpha Capital Aktiengesellschaft
Xxxxxxxxx 0
0000 Xxxxxxxxxxx
Vaduz, Lichtenstein
Fax: 000-00-00000000
(c) If to the Escrow Agent, to:
Grushko & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telecopier)
or to such other address as any of them shall give to the others by notice
made pursuant to this Section 5.2.
5.3. Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith.
5.4. Assignment; Binding Agreement. Neither this Agreement nor any
right or obligation hereunder shall be assignable by any party without the
prior written consent of the other parties hereto. This Agreement shall enure
to the benefit of and be binding upon the parties hereto and their respective
legal representatives, successors and assigns.
5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights and privileges
of the parties hereto shall be enforceable to the fullest extent permitted by
law.
5.6. Counterparts/Execution. This Agreement may be executed in any
number of counterparts and by different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original,
but all such counterparts shall constitute but one and the same instrument.
This Agreement may be executed by facsimile transmission.
5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.
CYBERTEL COMMUNICATIONS CORP.
the "Company"
By:/s/Xxxxxxx Xxxxxxxxxxx
/s/
ALPHA CAPITAL AKTIENGESELLSCHAFT
- "Subscriber"
ESCROW AGENT:
/s/Grushko & Xxxxxxx, PC
GRUSHKO & XXXXXXX, P.C.
