EXHIBIT 10.8
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "AGREEMENT") is made and entered into as of
February 14, 2002, by LITE KING CORP., a New York corporation (the "COMPANY");
CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the "INVESTOR");
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 Credit Agreement (the "EQUITY LINE OF CREDIT AGREEMENT") dated as of the date
hereof, pursuant to which the Investor will purchase the Company's Common Stock,
par value $.001 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 amount of up to Twenty Million Dollars
($20,000,000). The Equity Line of Credit Agreement provides that on each Advance
Date the Investor, as that term is defined in the Equity Line of Credit
Agreement, 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.
2. APPOINTMENT OF AND ACCEPTANCE BY ESCROW AGENT AND INVESTOR'S
COUNSEL.
a. 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 or the certificates representing 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.
3. 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: Lite King Corp./Cornell Capital Partners, LP The Investor will wire
funds to the account of the Escrow Agent as follows:
BANK: First Union National Bank of New Jersey
ROUTING #: ▇▇▇▇▇▇▇▇▇
ACCOUNT #: 2020000659170
NAME ON ACCOUNT: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP/First Union as Escrow Agent
NAME ON SUB-ACCOUNT: Lite King Corp./Cornell Capital Partners, LP
Escrow account
REFERENCE SUB-ACCOUNT #: 1743-02
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
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. The
Company will D.W.A.C. shares of the Company's Common Stock to the account of
Investor's Counsel as follows:
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BROKERAGE FIRM: Pershing Securities
ACCOUNT #: ▇▇▇▇▇▇▇▇▇
DTC #: 0443
NAME ON ACCOUNT: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP Escrow Account
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 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
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.
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.
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7. 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
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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.
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
Investor's Counsel.
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.
9. 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 15a.(iv) and 15b.(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
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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
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.
b. 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.
11. 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
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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.
b. 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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.
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 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 failure
of performance of this Agreement or any transaction contemplated herein, whether
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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 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 are 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 and 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 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
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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 are 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 and the 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.
14. EXPENSES OF ESCROW AGENT. Except as set forth in Section 12 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.
15. WARRANTIES.
a. The Investor makes the following representations and warranties
to the Escrow Agent and Investor's Counsel:
i. The Investor has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
ii. This Agreement has been duly approved by all necessary
action of the Investor, including any necessary approval of the limited partner
of the Investor, has been executed by duly authorized officers of the Investor's
general partner, enforceable in accordance with its terms.
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iii. The execution, delivery, and performance of the Investor
of this Agreement will not violate, conflict with, or cause a default under the
agreement of limited partnership of the 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. ▇▇▇▇ ▇. ▇▇▇▇▇▇ has been duly appointed to act as the
representative of Investor hereunder and has full power and authority to
execute, deliver, and perform this Agreement, to execute and deliver any Joint
Written Direction, to amend, modify, or waive any provision of 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 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, the Investor 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 New York, and has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder.
ii. This 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. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ has been duly appointed to act as the
representative of the Company hereunder and has full power and authority to
execute, deliver, and perform this 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.
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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.
16. 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.
17. 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:
If to Investor, to: Cornell Capital Partners, LP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company, to: Lite King Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Treasurer
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
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With copy to: ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent, to: First Union National Bank,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Or to such other address as each party may designate for itself by like
notice.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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 Investor, the Company, or
the Escrow Agent.
23. 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.
24. 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.
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IN WITNESS WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.
LITE KING CORP.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
FIRST UNION NATIONAL BANK
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: As the Escrow Agent
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Portfolio Manager
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Title: Partner
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