Exhibit 10.3
ESCROW AGREEMENT
THIS AGREEMENT dated for reference the 27th day of January, 1999.
AMONG:
BINGO.COM, INC. (formerly known as Progressive General Lumber Corp.), a
company, incorporated pursuant to the laws of the State of Florida and
having an address of Suite 702 - 543 Granville Street, Vancouver, British
Columbia V6C 1X8
(hereinafter called the "Purchaser")
OF THE FIRST PART
AND:
BINGO, INC., a corporati6n incorporated pursuant to the laws of Anguilla
and having an address at P.O. Box 1127, The Hansa Bank Building, Landsome
Road, The Valley, Anguilla, B.W.1.
(hereinafter called the "Vendor")
OF THE SECOND PART
AND:
CLARK, WILSON, Barristers & Solicitors, of Suite 800 - 885 West Georgia
Street, Vancouver, British Columbia V6C 3H1
(hereinafter called the "Escrow Agent")
OF THE THIRD PART
WITNESSES THAT WHEREAS:
A. Pursuant to the Asset Purchase Agreement, the Purchaser agreed to purchase
the domain name "bingo.com" (the "Domain Name") from the Vendor;
B. The Asset Purchase Agreement provides that in the event the Purchaser
defaults in certain payments to the Vendor, the Purchaser will cause the Domain
Name to be transferred, assigned and relinquished back to the.Vendor;
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C. In order to facilitate such transfer in the event of such default by the
Purchaser, the Purchaser has agreed to deliver to the Escrow Agent the Transfer
Documents fully executed by the Purchaser and specifying the Vendor as the new
registrant for the Domain Name;
D. The Purchaser and Vendor have agreed that the Escrow Agent shall hold the
Purchase Shares until confirmation is received that the Domain Name has been
registered in the name of the Purchaser; and
E. The Vendor and the Purchaser desire to appoint the Escrow Agent, and the
Escrow Agent has agreed to act as escrow agent to hold the Transfer Documents
and the Purchaser Shares in accordance with the terms hereof;
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Wherever used in this Agreement, unless the context otherwise
requires, the following words and terms will have the meanings shown:
(a) "Agreement" means this Escrow Agreement;
(b) "Asset Purchase Agreement" means the asset purchase agreement, dated
for reference January 18, 1999, and made among the Vendor and the
Purchaser;
(c) "Notice of Dispute" means a written objection of the Purchaser to
delivery of the Transfer Documents to the Vendor pursuant to a Default
Notice, together with evidence of payment of the outstanding amounts
owing to the Vendor;
(d) "Purchase Shares" means 500,000 common shares without par value in the
capital stock of the Purchaser issuable to the Vendor pursuant to the
Asset Purchaser Agreement;
(e) "Statutory Declaration" means a statutory declaration or equivalent
signed by an officer of the Vendor and notarized, stating that the
amount owing by the Purchaser, pursuant to a Default Notice delivered
at least 60 days prior to the statutory declaration, remains unpaid;
(f) "Transfer Documents" means all of the registrant name change
agreements (or such form of document as is required from time to time
by the administrator of the InterNIC internet domain name registration
service to effect such transfer and registration) executed by the
Purchaser transferring the Domain Name from the Purchaser to the
Vendor.
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1.2 Any capitalized term not defined herein shall have the meaning
ascribed thereto in the Asset Purchase Agreement.
1.3 In this Agreement:
(a) the headings have been inserted for convenience of reference only and
in no way define, limit, or enlarge the scope or meaning of the
provisions of this Agreement;
(b) all references to any party, whether a party to this Agreement or not,
will be read with such changes in number and gender as the context or
reference requires; and
(c) when the context hereof makes it possible, the word "Person" includes
in its meaning any firm and any body corporate or politic.
2. DEPOSIT OF TRANSFER DOCUMENTS AND PURCHASE SHARES
2.1 The Purchaser will within thirty (30) days after completion of the
registration of the Domain Name in the name of the Purchaser deliver the
Transfer Documents to the Escrow Agent for deposit in escrow with the Escrow
Agent on the terms of this Agreement and the Asset Purchase Agreement.
2.2 The Purchaser will deliver, on Closing of the Asset Purchase
Agreement, the Purchase Shares to the Escrow Agent for deposit in escrow with
the Escrow Agent on the terms of this Agreement and the Asset Purchase
Agreement.
3. ESCROW PROVISIONS TRANSFER DOCUMENTS AND PURCHASE SHARES
3.1 The Purchaser hereby directs the Escrow Agent to retain the Transfer
Documents and the Purchase Shares, and not to do or cause anything to be done.to
release the same from escrow except in accordance with this Agreement. The
Escrow Agent accepts its responsibilities hereunder and agrees to perform them
in accordance with the terms hereof.
3.2 The Escrow Agent will hold the Purchase Shares in escrow and
undelivered until written confirmation (the "Confirmation") is received from
InterNIC that the Domain Name has been transferred to the Purchaser in which
case the Escrow Agent shall deliver the certificates representing the Purchase
Shares to the Vendor. If the Confirmation is not received within thirty (30)
days after Closing of the Asset Purchase Agreement, the Escrow Agent shall
deliver the certificates representing the Purchase Shares to the Purchaser.
3.3 The Escrow Agent will hold the Transfer Documents in escrow and
undelivered so long as the Purchaser is not in default of payment of the
Purchase Price as provided in the Asset Purchase Agreement and will deliver the
Transfer Documents to the Vendor if, after expiration of the Default Period in
respect of any particular Default Notice, the Purchaser has
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not made the outstanding payment specified in that Default Notice and the Vendor
has delivered the Statutory Declaration to the Escrow Agent and the purchaser
has not delivered a Notice of Dispute to the Escrow Agent.
3.4 The Vendor agrees to deliver to the Escrow Agent a copy of any Default
Notice delivered to the Purchaser. Upon the expiration of the Default Period, if
the, outstanding payment specified in the Default Notice has not been paid, the
Vendor will deliver to the Escrow Agent the Statutory Declaration. If prior to
the receipt of the Statutory Declaration the Purchaser has delivered to the
Escrow Agent a Notice of Dispute, the Es crow Agent may:
(a) retain the Transfer Documents until the Purchaser and the Vendor
deliver joint instructions to the Escrow Agent; or
(b) interplead the Transfer Documents into court in an interpleader action
for the benefit of the Purchaser and the Vendor.
3.5 If the Escrow Agent delivers the Transfer Documents to the Vendor
pursuant to Clause 3.2, without restricting any other rights available to it,
the Vendor will be entitled to transfer the Domain Name into its name.
3.6 The Transfer Documents and the Purchase Shares will not be sold,
assigned, hypothecated, alienated, released from escrow, transferred within
escrow or otherwise in any manner dealt with except in accordance with this
Agreement or as may be required by reason of the bankruptcy of the Purchaser, in
which case the Escrow Agent will hold the Transfer Documents and the Purchase
Shares subject to this Agreement, for whatever person, firm or corporation shall
be legally entitled to be or become the registered owner thereof.
4. THE ESCROW AGENT
4.1 In exercising the rights, duties and obligations prescribed or
confirmed by this Agreement, the Escrow Agent will act honestly and in good
faith and will exercise that degree of care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
4.2 The Purchaser and the Vendor jointly and severally covenant and agree
from time to time and at all times hereafter well and truly to save, defend and
keep harmless and fully indemnify the Escrow Agent, its successors, and assigns,
from and against all loss, costs, charges, suits, demands, claims, damages and
expenses which the Escrow Agent, its successors or assigns may at any time or
times hereafter bear, sustain, suffer or be put unto for or by reason or on
account of its acting pursuant to this Agreement or anything in any manner
relating thereto or by reason of the Escrow Agent's compliance in good faith
with the terms hereof.
4.3 In case proceedings should hereafter be taken in any court respecting
the Transfer Documents or the Purchase Shares, the Escrow Agent will not be
obliged to defend any such action or submit its rights to the court until it has
been indemnified by other good and sufficient security in addition to the
indemnity given in Clause 4.2 against its costs of such proceedings.
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4.4 The Escrow Agent will have no responsibility in respect of loss of the
Transfer Documents or the Purchase Shares except the duty to exercise such care
in the safekeeping thereof as it would exercise if the Transfer Documents and
the Purchase Shares belonged to the Escrow Agent. The Escrow Agent may act on
the advice of counsel but will not be responsible for acting or failing to act
on the advice of counsel.
4.5 The Escrow Agent will not be bound in any way by any contract between
the parties hereto whether or not it has notice thereof or of its terms and
conditions and the only duty, liability and responsibility of the Escrow Agent
will be to hold the Transfer Documents and the Purchase Shares as herein
directed and to pay and deliver the same to such persons and other such
conditions as are herein set forth.. The Escrow Agent will not be required to
pass upon the sufficiency of any of the Transfer Documents or Purchase Shares or
to ascertain whether or not the person or persons who have executed, signed or
otherwise issued or authenticated the said documents have authority to, so
execute, sign or authorize, issue or authenticate the said documents or any of
them, or the same persons named therein or otherwise to pass upon any
requirement of such instruments that may be essential of their validity, but it
shall be sufficient for all purposes under this Agreement insofar as the Escrow
Agent is concerned that the said documents are deposited with it as herein
specified by the parties executing this Agreement with the Escrow Agent.
4.6 In no event will the Escrow Agent be deemed to have assumed any
liability or responsibility for the sufficiency, form and manner of making any
notice or demand provided for under this Agreement or of the identity of the
persons executing the same, but it shall be sufficient if any writing purporting
to be such a notice, demand or protest is served upon the Escrow Agent in any
manner sufficient to bring it to its attention.
4.7 In the event that the Transfer Documents or Purchase Shares are
attached, garnished or levied upon under any court order, or if the delivery of
such property is stayed or enjoined by any court order or if any court order,
judgment or decree is made or entered affecting such property or affecting any
act by the Escrow Agent, the Escrow Agent may, in its sole discretion, obey and
comply with all writs, orders, judgments or decrees so entered or issued,
whether with or without jurisdiction, notwithstanding any provision of this
Agreement to the contrary. If the Escrow Agent obeys and complies with any such
writs, order, judgment. or decrees it will not be liable to any of the parties
hereto or to any other person, firm or corporation by reason of such compliance,
notwithstanding that such writs, orders, judgments or decrees may be
subsequently reversed, modified, annulled, set aside or vacated.
4.8 Except as herein otherwise provided, the Escrow Agent is authorized
and directed to disregard in its sole discretion any and all notices and
warnings which may be given to it by any of the parties hereto or by any other
person, firm, association or corporation. It will, however, obey the order,
judgment or decree of any court of competent jurisdiction, and it is hereby
authorized to comply with and obey such orders, judgements or decrees and in
case of such compliance, it shall not be liable by reason thereof to any of the
parties hereto or to any other person, firm, association or corporation, even if
thereafter any such order, judgment or decree may be reversed, modified,
annulled, set aside or vacated.
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4.9 If the Escrow Agent receives any written instructions contrary to the
instructions contained in this Agreement, the Escrow Agent may continue to hold
the Transfer Documents or Purchase Shares until the lawful determination of the
issue between the parties hereto.
4.10 If protest is made, to any action contemplated by the Escrow Agent
under this Agreement, the Escrow Agent may continue to hold the Transfer
Documents or Purchase Shares until the right to the documents is legally
determined by a court of competent jurisdiction or otherwise.
4.11 If written notice of protest is made by either the Purchaser or the
Vendor to the Escrow Agent to any action contemplated by the Escrow Agent under
this Agreement, and such notice sets out reasons for such protest, the Escrow
Agent will be entitled to continue to hold the Transfer Documents or the
Purchase Shares until the right to the documents is legally determined by a
court of competent jurisdiction or otherwise.
4.12 The Escrow Agent may resign as Escrow Agent by giving not less then
ten (10) days' notice thereof to each of the Purchaser or the Vendor. The
Purchaser and the Vendor may terminate the Escrow Agent by giving to the Escrow
Agent a notice of termination executed by each of them not less than ten (10)
days' prior to the proposed date of termination. The resignation or termination
of the Escrow Agent will be effective and the Escrow Agent will cease to be
bound by this Agreement on the date that is ten (10) days after the date of
receipt of the termination notice given hereunder or on such other date as the
Escrow Agent, the Purchaser and the Vendor may agree upon. All indemnities
granted to the Escrow Agent will survive the termination of this Agreement or
the resignation or termination of the Escrow Agent.
4.13 Notwithstanding anything herein to the contrary, the Escrow Agent may
act upon any written instructions given by the Vendor and the Purchaser jointly.
4.14 Notwithstanding anything to the contrary contained herein, in the
event of any dispute arising between the Purchaser and the Vendor or between any
other persons or between any of them with respect to the Asset Purchase
Agreement, this Agreement or any matters arising thereto, or with respect to the
Shares, the Escrow Agent may in its sole discretion deliver and interplead the
Transfer Documents and the Purchase Shares into court and such delivery and
interpleading will be an effective discharge to the Escrow Agent.
4.15 The Escrow Agent is under no responsibility to take any action
whatsoever unless and until the fees and disbursements of the Escrow Agent due
or reasonably expected to accrue are paid in full.
5. COUNTERPARTS
5.1 This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument.
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6. GENERAL
6.1 Except as herein otherwise Provided, no subsequent alteration,
amendment, change or addition to this Agreement will be binding upon the parties
hereto unless reduced to writing and signed by the parties.
6.2 This Agreement will enure to the benefit of and be binding upon the
parties and their respective heirs, executors, administrators, successors, and
assigns.
6.3 The parties will execute and deliver all such further documents, do or
cause to be done all such further acts and things, and give all such further
assurances as may be necessary to give full effect to the provisions and intent
of this Agreement.
6.4 This Agreement will be governed by and construed in accordance with
the law of British Columbia.
6.5 Any notice required or permitted to be given under this Agreement will
be in writing and may be given by delivering, sending by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy, or sending by prepaid registered mail posted in Canada the United
States and Australia, the notice to the addresses set forth on the first page of
this agreement (or to such other address or facsimile number as any party may
specify by notice in writing to another party). Any notice delivered or sent by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy on a business clay will be deemed
conclusively to have been effectively given on the day the notice was delivered,
or the transmission was sent successfully, as the case may be. Any notice sent
by prepaid registered mail will be deemed conclusively to have been effectively
given on the third business day after posting; but if at the time of posting or
between the time of posting and the third business day thereafter there is a
strike, lockout, or other labour disturbance affecting postal service, then the
notice will not be effectively given until actually delivered.
6.6 Time is of the essence of this Agreement.
6.7 Delivery of an executed copy of this Agreement by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy will be deemed to be execution and delivery of this Agreement on
the date of such communication by the party so delivering such copy, subject to
delivery of an originally executed copy of this Agreement to the other party
hereto within two weeks of the date of delivery of the copy sent via the
electronic communication.
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6.8 It is understood and agreed by the parties to this Agreement that the
only duties and obligations of the Escrow Agent are those specifically stated
herein and no other.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed under
seal and delivered this ----- day of January, 1999.
CLARK, WILSON
Per: --------------------------------
Partner
BING0.COM, INC.
Per: --------------------------------
Authorized Signatory
BINGO, INC.
Per: --------------------------------
Authorized Signatory