EXHIBIT 10.3
EXECUTION COPY
ESCROW AGREEMENT
THIS AGREEMENT dated the 2nd day of April, 2002
A M O N G:
AUCXIS CORP.
(hereinafter "Aucxis")
- and -
ABN AMRO CAPITAL (BELGIUM) NV
(hereinafter "ABN")
- and -
BODIN SAPHIR PENSION SCHEME
(hereinafter "Bodin")
- and -
MAGNUM TECHNOLOGY LTD.
(hereinafter "Magnum")
- and -
J.J. MENNILLO
(hereinafter "J.J.")
- and -
BLAKE, CASSELS & GRAYDON LLP
(hereinafter "Blakes")
WHEREAS:
A. ABN, Bodin, Magnum and J.J. shall sometimes collectively be referred to as
the "Lenders";
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B. Aucxis, the Lenders and Aucxis NV entered into a convertible bridge loan
agreement dated April 16th 2002 (the "Main Agreement"), a copy of which is
attached as Schedule "A" hereto, pursuant to which each of ABN, Bodin, Magnum
and J.J. agreed to make available to Aucxis by way of loan the amount of
U.S.$125,000, representing an aggregate loan by the Lenders to Aucxis of
U.S.$500,000;
C. Aucxis and the Lenders desire to place the said loans (up to an aggregate
amount of U.S.$500,000 (the "Deposit")) in escrow with Blakes; and
D. Blakes is willing to hold the Deposit in escrow on behalf of Aucxis and the
Lenders subject to the terms and conditions of this Agreement.
NOW THEREFORE in consideration of the sum of $10 and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Deposit and Interest. The Deposit shall be held in escrow by Blakes and
deposited in a trust account with the Canadian Imperial Bank of Commerce. If any
interest is earned on the Deposit ("Interest") which is credited to such trust
account, the Interest shall at all times be held by Blakes for the benefit of
Aucxis. Blakes makes no representation as to the yield available upon the
Deposit, shall bear no liability for any failure to achieve the maximum possible
yield from the Deposit and shall not be responsible for any failure of Canadian
Imperial Bank of Commerce. The party receiving interest, if any, on the Deposit
shall pay all income and other taxes applicable thereto or exigible thereon.
2. Disposition of Deposit. Blakes is hereby irrevocably authorized and directed
to pay the Deposit and Interest, if any, in one single tranche or in several
tranches as follows:
(a) Upon receipt of a written direction signed by Aucxis, Blakes is hereby
irrevocably authorized and directed to pay the Interest in accordance with such
written direction;
(b) Upon receipt of a written Draw-down Notice (as such term is defined in the
Main Agreement) substantially in the form of Schedule 5 to the Main Agreement,
signed by Aucxis, Blakes is hereby irrevocably authorized and directed to pay
the Deposit in accordance with such Draw-down Notice;
(c) Upon receipt of a written Prepayment Notice (as such term is defined in the
Main Agreement) substantially in the form of Schedule 6 to the Main Agreement,
signed by Aucxis, Blakes is hereby irrevocably authorized and directed to pay
the Deposit in accordance with such Prepayment Notice;
(d) Upon receipt of a written Notice of Unlawfulness (as such term is defined in
the Main Agreement) signed by any of ABN, Bodin, Magnum or J.J. and receipt of a
direction executed by Aucxis confirming that Aucxis does not challenge such
Notice of Unlawfulness, Blakes is hereby
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irrevocably authorized and directed to pay to ABN, Bodin, Magnum or J.J., in
accordance with such Notice of Unlawfulness, their pro-rata shares of the
Deposit, based on the amount that each Lender paid to Blakes on account of the
Deposit, or of the remaining portion thereof as of the date of the receipt by
Blakes of the Notice of Unlawfulness in the event a portion of the Deposit has
previously been released pursuant to the terms of this Agreement, which amount
shall not include Interest;
(e) Upon receipt of a written Notice of Default (as such term is defined in the
Main Agreement) signed by any of ABN, Bodin, Magnum or J.J. and receipt of a
direction executed by Aucxis confirming that Aucxis does not challenge such
Notice of Default, Blakes is hereby irrevocably authorized and directed to pay
to ABN, Bodin, Magnum or J.J., in accordance with such Notice of Default, their
pro-rata share of the Deposit, based on the amount that each Lender paid to
Blakes on account of the Deposit, or of the remaining portion thereof as of the
date of the receipt by Blakes of the Notice of Default in the event a portion of
the Deposit has previously been released pursuant to the terms of this
Agreement, which amount shall not include Interest; and
(f) on or following December 31, 2002, Blakes is hereby irrevocably authorized
and directed to pay the Deposit, or any remaining portion thereof in the event a
portion of the Deposit has previously been released pursuant to the terms of
this Agreement, which amount shall not include Interest, upon the receipt of a
written direction from the Lenders and in accordance with such written
direction.
Blakes shall have no obligation to make any determination as to the validity of
any such directions, Draw-down Notices, Notices of Unlawfulness or any claims
made by any party for entitlement to the Deposit and Blakes shall be entitled to
continue to hold the Deposit until such time as Blakes receives the written
directions, Draw-down Notices and Notices of Unlawfulness as contemplated in
this Section 2 or until Blakes is directed by final judgment of a Court as to
the disposition of the Deposit.
3. Dispute. Blakes shall have the right at any time to deposit the Deposit and
Interest earned thereon, if any, with the Accountant of the Ontario Superior
Court of Justice in accordance with the Rules of Civil Procedure respecting
interpleader or in such other manner or on such other grounds as such Court may
direct. Blakes shall give written notice of any such deposit to Aucxis and the
Lenders immediately after such deposit is made.
4. No Agency. The parties acknowledge that Blakes is acting solely as a
stakeholder at their request and for their convenience and Blakes shall not be
deemed to be the agent of either Aucxis or the Lenders in respect of the escrow
herein referred to. Blakes shall not be liable to either Aucxis or the Lenders
for any error in judgment or for any act or omission on its part in respect of
the escrow herein referred to unless such error in judgment, act or omission is
made, taken or suffered in bad faith or involves gross negligence.
5. Indemnity. Aucxis and the Lenders hereby jointly and severally agree to
indemnify and hold Blakes harmless from and against all costs, claims (including
those from third parties) and expenses, including solicitor's fees and
disbursements incurred in connection with or arising
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from the performance of Blakes' duties or rights hereunder; provided that this
indemnity shall not extend to actions or omissions taken or suffered by Blakes
in bad faith or involving gross negligence on the part of Blakes.
6. Fees. Aucxis agrees to pay to Blakes forthwith upon receipt of an invoice
therefor all of Blakes' accounts for time, disbursements and applicable goods
and services taxes relating to the performance by Blakes of its duties or rights
hereunder or other work incidental to or contemplated pursuant to the terms of
this Agreement.
7. Limitation on Duties. It is understood and agreed that Blakes' only duties
and obligations in respect of the Deposit are expressly set out in this
Agreement. Blakes shall have the right to consult with separate counsel of its
own choosing (if it deems such consultation advisable) and shall not be liable
for any action taken, suffered or omitted to be taken by it if Blakes acts in
accordance with the advice of such counsel. Blakes shall be protected if it acts
upon any written or oral communication, notice, certificate or other instrument
or document believed by Blakes to be genuine and to be properly given or
executed without the necessity of verifying the truth or accuracy of the same or
the authority of the person giving or executing the same.
8. Resignation of Blakes. Blakes may, at any time, resign its obligations under
this Agreement and be discharged from all further duties and liabilities
hereunder by giving Aucxis and the Lenders at least 10 days notice in writing of
its intention to resign or such shorter notice as Aucxis and the Lenders may
accept as sufficient. Aucxis and the Lenders agree that they shall forthwith
upon receipt of such notice appoint a new stakeholder to act in the place and
stead of Blakes and if they fail to agree on such appointment, Aucxis or the
Lenders or Blakes may apply to a Judge of the Ontario Superior Court of Justice
on such notice as such Judge may direct for the appointment of a new
stakeholder. Upon any new appointment, the new stakeholder will be vested with
the same powers, rights, duties and obligations as if it had been originally
named herein as stakeholder and such new stakeholder shall enter into an
agreement with Aucxis and the Lenders agreeing to be bound by all of the
provisions of this Agreement.
9. Discharge from Duties. Upon disposing of the Deposit and Interest thereon, if
any, in accordance with the provisions of this Agreement, Blakes shall be
relieved and discharged from all claims and liabilities relating to the Deposit
and Interest thereon, if any, and Blakes shall not be subject to any claims made
by or on behalf of any party hereto.
10. No Conflict. The fact that Blakes is acting as stakeholder under this
Agreement shall not in any way prevent it from representing Aucxis or Aucxis NV
in connection with the transactions contemplated in the Main Agreement or any
litigation arising from the Main Agreement or this Agreement or from
representing Aucxis or Aucxis NV or any other party in any other capacity or in
any other transaction.
11. Notice. All notices or other communications given pursuant to this Agreement
shall be in writing and shall be either delivered by hand or by facsimile
transmission addressed as follows:
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in the case of Aucxis, to:
AUCXIS CORP.
220 King Street West
Toronto, Ontario
M5H 1K4
Attention: Chief Financial Officer
Facsimile: + 1 416-214-0585
in the case of ABN, to:
ABN AMRO CAPITAL (BELGIUM)
Regentlaan 53
1000 Brussels
Belgium
Attention: Mr Bart Sonck
Facsimile: +32-2-546-0411
in the case of Bodin, to:
Bodin Saphir Pension Scheme
Heronden, Chart Hill, Chart Sutton
Kent ME 17 3EZ
England
Attention: Mr Nicholas Saphir
Facsimile: +44-1622-844361
in the case of Magnum, to:
Magnum Technology Ltd.
St. Peter's House, St. Peter Port
Guernsey GY1 6AX
The Channel Islands
Attention: Mssrs Nick Moss or Vince Aylaward
Facsimile: +44-1481-712686
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in the case of J.J., to:
Jean Jacques Menillo
270 Chemin de Carambot de la Ribassiere
13190 Allauch
France
Facsimile: +33 1 5326 0001
in the case of Blakes, to:
Blake, Cassels & Graydon LLP
World Exchange Plaza
45 O'Connor Street
Ottawa, Ontario
Canada
K1P 1A4
Attention: Gary Jessop
Facsimile: +1 613-788-2247
Any notice or other communication shall conclusively be deemed to have been
given and received on the date on which it was delivered or sent if delivered or
sent during normal business hours on a business day, and if delivered after
normal business hours or on other than a business day, shall be deemed to have
been given or sent on the next following business day. Any party may change its
address for notices or other communications by giving notice thereof to the
other parties to this Agreement in accordance with this Section. For the purpose
of this Agreement, a business day means any day (other than a Saturday, a Sunday
or a statutory holiday in the Province of Ontario, Canada) on which banks are
open for general business in the Province of Ontario, Canada.
12. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein.
13. Modification. This Agreement may only be modified or amended by an agreement
in writing signed by all of the parties hereto.
14. Time. Time shall be of the essence of this Agreement.
15. Successors and Assigns. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
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IN WITNESS WHEREOF the parties have executed this Agreement.
AUCXIS CORP.
By:
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Name: Dennis Petke
Title: Chief Financial Officer
ABN AMRO CAPITAL (BELGIUM) NV
By:
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Name:
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Title: Special Attorney
BODIN SAPHIR PENSION SCHEME
By:
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Name: Nicholas Saphir
Title: Trustee
MAGNUM TECHNOLOGY LTD.
By:
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Name: Nicholas Moss for and on behalf
of First Board Limited
Title: Director
J.J. MENNILLO
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BLAKE, CASSELS & GRAYDON LLP
By:
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Name: Don Greenfield
Title: Administrative Partner