ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into
as of
April 1, 2005 by DIRECTVIEW, INC., a Nevada
corporation (the "Company"); CORNELL
CAPITAL PARTNERS, LP, a Delaware limited
partnership (the "Investor"); and DAVID
GONZALEZ, ESQ. (the "Escrow Agent").
BACKGROUND
WHEREAS, the Company and the Investor have entered into a
Standby
Equity Distribution Agreement (the "Standby
Equity Distribution Agreement")
dated as of the date hereof, pursuant to
which the Investor will purchase the
Company's Common Stock, par value $0.0001
per share (the "Common Stock"), at a
price per share equal to the Purchase
Price, as that term is defined in the
Standby Equity Distribution Agreement, for
an aggregate price of up to Ten
Million Dollars ($10,000,000). The Standby
Equity Distribution Agreement
provides that on each Advance Date the
Investor, as that term is defined in the
Standby Equity Distribution 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 Standby Equity Distribution
Agreement, with the Escrow Agent, 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
Escrow Agent at a closing to be held
as set forth in the Standby Equity
Distribution Agreement (the "Closing").
WHEREAS, Escrow Agent has agreed to accept, hold, and disburse
the
funds and the shares of the Company's
Common Stock 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 Standby Equity
Distribution 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.
<PAGE>
2. Appointment of and Acceptance by Escrow
Agent.
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 the Escrow Agent to serve as the
holder of the shares of the Company's
Common Stock which shall be purchased by
the Investor. The Escrow Agent 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.
c. The Company hereby acknowledges that the
Escrow Agent is general counsel to
the Investor, a partner in the general
partner of the Investor and counsel to
the Investor in connection with the
transactions contemplated and referenced
herein and will be acting as the escrow
agent for shares of the Company's Common
Stock as outlined herein. The Company
agrees that in the event of any dispute
arising in connection with this Escrow
Agreement or otherwise in connection with
any transaction or agreement contemplated
and referenced herein, the Escrow
Agent shall be permitted to continue to
represent the Investor and the Company
will not seek to disqualify such
counsel.
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:
DirectView, Inc./Cornell Capital Partners,
LP. The Investor will wire funds to
the account of the Escrow Agent as
follows:
Bank:
Wachovia, N.A. of New Jersey
Routing #:
031201467
Account #:
2000014931134
Name on Account:
David Gonzalez Attorney Trust Account
Name on Sub-Account:
DirectView, Inc./Cornell Capital Partners, LP Escrow
account
b. On or prior to the date of this
Agreement the Escrow Agent 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 the Escrow Agent
as follows:
Brokerage Firm:
Sloan Securities Corp.
Clearing House:
Fiserv
Account #:
56887298
DTC #:
0632
Name on Account:
David Gonzalez 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.
<PAGE>
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 has received such Common Stock
via D.W.A.C from the Company which are to
be issued to the Investor pursuant to
the Standby Equity Distribution Agreement,
the Escrow Agent 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 the
Escrow Agent directing the Escrow Agent 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 the Escrow Agent 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 Escrow
Agent has on file.
In the event the Escrow Agent does not receive the amount of
the
Advance from the Investor or the shares of
Common Stock to be purchased by the
Investor from the Company, the Escrow Agent
shall notify the Company and the
Investor.
In the event that the Escrow Agent has not received the Common
Stock to
be purchased by the Investor from the
Company, in no event will the Escrow Funds
be released to the Company until such
shares are received by the Escrow
Agreement. 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 Standby
Equity Distribution Agreement.
6. Deposit of Funds. The Escrow Agent is
hereby authorized to deposit the wire
transfer proceeds in the Escrow
Account.
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 the Common Stock 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.
<PAGE>
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.
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 may retain the Escrow
Fund, or such portion thereof, as to which
no Joint Written Direction has been
received, in a non-interest bearing money
market account.
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 13a.(iv) and 13b.(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
unde
