Common use of TERMS OF THE ESCROW Clause in Contracts

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 2 contracts

Samples: Make Good Securities Escrow Agreement, Make Good Securities Escrow Agreement (Orient Paper Inc.)

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TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account (the “Escrow Account”) with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (stock certificates of Series M Preferred Stock representing such number of shares of Series M Perferrred Stock that upon the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 automatic conversion thereof into shares of Common Stock at the time of effectiveness of the Reverse Split will equal the number of shares of Common Stock constituting one hundred percent (100%) of the shares of Common Stock underlying the Series A Preferred Shares indicated on Schedule A hereto (such shares of Series M Preferred Stock delivered by the Principal Stockholder shall be referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank, signature medallion guaranteed or in other form and substance acceptable for transfer. Fifty percent (50%) into of the Escrow Shares shall be allocated for the 2011 Performance Threshold and shall be referred to as the “2011 Escrow Shares” and the remaining fifty percent (50%) of the Escrow Shares shall be allocated for the 2012 Performance Threshold and shall be referred to as the “2012 Escrow Shares”. 1.3. The parties hereby agree that the Escrow Shares shall be distributed based on and subject to the achievement of the Performance Thresholds as set forth below: (i) If the Company achieves less than 100% of the 2011 Performance Threshold, then the 2011 Escrow Shares shall be distributed to each Purchaser, pro rata, calculated as follows: (a) A = X Y (b) B = (A)(Z) Where: A = such Purchaser’s percentage ownership of 2011 Escrow Shares B = the number of 2011 Escrow Shares to be distributed to such Purchaser X = the number of shares of Series A Preferred (on an as converted basis) and Conversion Shares owned by such Purchaser as of the date of distribution of the 2011 Escrow Shares (the “Distribution Date”) Y = number of Series A Preferred Shares issued on the Closing Date (on an as-converted basis) Z = the 2011 Escrow Shares Within five (5) business days of the Purchasers’ receipt of the 2011 Financial Statements, the Purchasers shall provide sole written instructions to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize instructing the Escrow Agent to transfer issue and deliver the 2011 Escrow Shares to the Purchasers in accordance with the calculation above. If the Company achieves the 2011 Performance Threshold or there are any 2011 Escrow Shares remaining after disbursement to the Purchasers in accordance with the calculation above, such excess shares back 2011 Escrow Shares shall be returned to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from Stockholder. (ii) If the Company achieves less than 100% of the 2012 Performance Threshold, then the 2012 Escrow Shares shall be distributed to each Purchaser, pro rata, calculated as follows: (a) A = X Y (b) B = (A)(Z) Where: A = such Purchaser’s percentage ownership of 2012 Escrow Shares B = the number of 2012 Escrow Shares to be distributed to such Purchaser X = the number of shares of Series A Preferred (on an as converted basis) and Conversion Shares owned by such Purchaser as of the Buyers. For date of distribution of the avoidance 2012 Escrow Shares (the “Distribution Date”) Y = number of any doubtSeries A Preferred Shares issued on the Closing Date (on an as-converted basis) Z = the 2012 Escrow Shares Within five (5) business days of the Purchasers’ receipt of the 2012 Financial Statements, the Purchasers shall provide sole written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2012 Escrow Shares to the Purchasers in accordance with the calculation above. If the Company achieves the 2012 Performance Threshold or there are any 2012 Escrow Shares remaining after disbursement to the Purchasers in accordance with the calculation above, such 2012 Escrow Shares shall be returned to the Principal Stockholder. (iii) Notwithstanding anything to the contrary set forth herein, only those Purchasers who own shares of Series A Preferred or Conversion Shares of the Company at the time that the Escrow Shares are distributed hereunder shall be entitled to receive Escrow Shares calculated based on their ownership interest at the time such Escrow Shares are distributed hereunder. Any Escrow Shares not delivered to any Purchaser because such Purchaser no longer holds shares of Series A Preferred or Conversion Shares will be responsible for procuring returned to the deposit of Principal Stockholder. If any Purchaser transfers Preferred Shares purchased pursuant to the Purchase Agreement, the rights to the Escrow Shares shall similarly transfer to such transferee, pursuant to the terms in this Agreement, with no further action required by the Purchaser, the transferee or the Company. 1.4. If the Company does not achieve either the 2011 Performance Threshold or the 2012 Performance Threshold, the Company shall use reasonable best efforts to promptly cause the Escrow Shares. All parties agree , to indemnify be delivered to the Purchasers, including causing its transfer agent to promptly, but in no event longer than five (5) business days, transfer the certificates into the names of the Purchasers and hold harmless JPMorgan Chase Bank, N.A. and causing its Affiliates, employees, and representatives from securities counsel to provide any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed written instruction required by the Escrow AgentAgent in a timely manner so that the issuances and delivery contemplated above can be achieved within five business days following delivery of the 2011 Financial Statements or 2012 Financial Statements, other than those which have resulted from as applicable, to the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A.Purchasers. 1.31.5. The Company will provide the Buyers Purchasers and the Placement Agent with (i) the Company’s audited financial statements for 20092011, prepared in accordance with US GAAP, no later than the date for filing the Company’s Annual Report on or before March 31Form 10-K for 2011, 2010 including any extension for filing the 2011 Annual Report which may be requested under Rule 12b-25 of the Securities Exchange Act of 1934, as amended (the “Annual Report”) with the Securities and Exchange Commission (“SEC”), and (ii) the Company’s audited financial statements for 20102012, prepared in accordance with US GAAP, on or before March 31, 2011no later than the date for filing the Company’s Annual Report for 2012 with the SEC, so as to allow the Buyers Purchasers the opportunity to evaluate whether the 2009 2011 Performance Threshold and the 2010 2012 Performance Threshold were attained. In the event that any Buyer receives the Purchasers receive the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documentsperiodic reports filed with the SEC, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information publicas required under Regulation FD. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Securities Escrow Agreement (Timberjack Sporting Supplies, Inc.)

TERMS OF THE ESCROW. 1.1. 1.1 The parties hereby agree to establish an escrow account (the “Escrow Account”) with the Escrow Agent whereby the Escrow Agent shall hold the collected funds deposited into the Escrow Shares as contemplated by this AgreementAccount (the “Escrow Funds”). 1.2. 1.2 Upon the execution Escrow Agent’s receipt of this Agreementthe Escrow Funds from the Subscribers for the Closing, it shall telephonically advise Bullfrog, or Bullfrog’S designated attorney or agent, of the amount of funds it has received into the Escrow Account. 1.3 Wire transfers to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (the “be made as follows: 1.4 The Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause shall, upon receipt of written instructions in a form and substance satisfactory to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven from Bullfrog, assuming the Minimum Offering (7) days thereof. The Escrow Agent Custody Account shall be as defined in the sole name of Subscription Agreement) has been subscribed and been accepted by Bullfrog, pay the Escrow Agent and only Funds in accordance with such written instructions, such payment or payments to be made by wire transfer within one (1) business day of receipt of such written instructions. 1.5 Bullfrog may reject or cancel any subscription in the Escrow Agent shall have sole authority Offering in whole or in part. If payment for any such rejected or canceled subscription has been delivered to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from Bullfrog will inform the gross negligenceEscrow Agent of the rejection or cancellation, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attainedEscrow Agent upon receiving such notice shall promptly return such funds to said Subscriber, but in no event prior to those funds becoming collected and available for withdrawal. In addition, if Subscribers are required to reconfirm their subscription upon receipt of the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day K. Subscribers who do not reconfirm their subscription will be entitled to a return of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Thresholdtheir subscription funds, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreementwithout interest or deduction, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent upon receiving written notice from Bullfrog shall promptly return such funds to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Subscribers. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Subscription Agreement (Bullfrog Gold Corp.)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, each Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing one hundred percent (100%) of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock underlying the Preferred Shares issuable under the Purchase Agreement and indicated on Schedule A hereto (such shares of Common Stock plus such additional number of shares of Common Stock as may be required to be deposited hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”) into the Escrow Agent Custody Account within seven ), along with updated stock powers executed in blank with signature medallion guaranteed (7) days thereof. The Escrow Agent Custody Account unless such guarantee shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from waived by the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A.Company’s transfer agent). 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the 2007 Escrow Shares (as hereinafter defined) shall be delivered to based on the Buyers achievement of the 2007 Performance Threshold as set forth below: (i) If Net Income for 2009 shall be the Company does not achieve at least ten per cent (10%) less than 92% of the 2009 2007 Performance Threshold, then (x) all of the 2009 Escrow Shares (defined belowthe “2007 Escrow Shares”)(or, in the event that any Purchaser(s) have exercised a Redemption Right, such number of 2007 Escrow Shares as may remain after a pro-rata reduction in the number of such Escrow Shares based on the number of shares of Series A Preferred redeemed (the “2007 Remaining Shares”)) shall be distributed on a pro rata basis to the Buyers Purchasers which have not exercised a Redemption Right based on the number of shares of Common Stock purchased Series A Preferred owned by each Buyer pursuant to such Purchasers as of the Securities Purchase Agreement, and (y) within date thereof. Within five (5)business 5) business days after March 31, 2010of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2007 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. (ii) If the Company achieves between 92% and 99% of the 2007 Performance Threshold, the Escrow Agent shall deliver to the Purchasers which have not exercised a Redemption Right, on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof, the number of 2007 Remaining Shares multiplied by the percentage by which the 2007 Performance Threshold was not achieved and multiplied by 200%. Any remaining Escrow Shares shall continue to be held in escrow hereunder. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2007 Remaining Shares to the Purchasers and to hold the remaining Escrow Shares in escrow. (iii) If the Company achieves at least 100% of the 2007 Performance Threshold, then the Escrow Shares shall continue to be held in escrow hereunder. 1.4. The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2008 Performance Threshold as set forth below: (i) If the Company does not achieve at least 80% of each of the 2008 Performance Threshold, then all of the Escrow Shares (the “2008 Escrow Shares”) (or, in the event that any Purchaser(s) have exercised a Redemption Right, such number of 2008 Escrow Shares as may remain after a pro-rata reduction in the number of such Escrow Shares based on the number of shares of Series A Preferred redeemed (the “2008 Remaining Shares”)), shall be distributed on a pro rata basis to the Purchasers which have not exercised a Redemption Right based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow 2008 Remaining Shares to each Buyer the Purchasers on a pro rata basis based on the number of shares of Common Stock purchased Series A Preferred owned by that Buyer pursuant to such Purchasers as of the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%date thereof. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Company achieves between 80% and 99% of the 2008 Performance Threshold, then (xa) the 2010 Escrow Shares (defined below) Agent shall be distributed deliver to the Purchasers, on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased Series A Preferred owned by each Buyer pursuant such Purchasers as of the date thereof, the number of 2008 Remaining Shares equal to the Securities Purchase Agreement, number of 2008 Remaining Shares multiplied by the percentage by which the 2008 Performance Threshold was not achieved and multiplied by 200% and (yb) within the remaining 2008 Escrow Shares shall be returned to each Principal Stockholder. Within five (5)business 5) business days after March 31, 2011of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 applicable number of 2008 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, Purchasers and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in Principal Stockholder. (iii) In the event the Company misses achieves at least 100% of the 2010 2008 Performance Threshold by less than 10%Threshold, all of the 2008 Remaining Shares shall be returned to each Principal Stockholder at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those Purchasers who own shares of Series A Preferred acquired under the Purchase Agreement and remain shareholders of the Company at the time that the 2008 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2008 Escrow Shares calculated based on their ownership interest at the time when such 2008 Escrow Shares become deliverable hereunder. Any 2008 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement will be delivered to the Principal Stockholder. 1.5. The Company will provide the Purchaser Representative with (i) the Company’s audited financial statements for 2007 and 2008, prepared in accordance with US GAAP, on the earliest date practicable so as to allow the Purchaser Representative the opportunity to evaluate whether each of the 2007 and 2008 Performance Thresholds were attained. 1.6. Upon the written request of the Company and Purchaser Representative, the Escrow Agent shall deliver the 2007 Remaining Shares, the 2008 Remaining Shares, as applicable, to each Purchaser and/or each Principal Stockholder pursuant to the written instructions of the Company and Purchaser Representative.

Appears in 1 contract

Samples: Securities Escrow Agreement (Aamaxan Transport Group, Inc.)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account (the “Escrow Account”) with the Escrow Agent whereby the Escrow Agent shall hold the Offering Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, : (i) Magnify Wealth and the Original Stockholders shall deliver stock certificates to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 consisting of _____ and ______shares of Common Stock respectively, and the Additional Escrow Shares (“Escrow Shares”as defined in Section 1.4 below), along with updated stock powers executed in blank, signature medallion guaranteed or in other form and substance acceptable for transfer; and (ii) into Maxim shall deliver to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be a list of the Purchasers in the sole name Offering. If the underwriter’s over-allotment option relating to the Offering (the “Over-allotment Option”) is exercised, then Maxim shall supplement such list of Purchasers at the closing of the Over-allotment Option by delivering to the Escrow Agent and only a list of additional Purchasers who bought Units in the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A.Over-allotment Option. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Offering Escrow Shares and the Additional Escrow Shares shall be delivered distributed based on and subject to the Buyers achievement of the Offering Performance Threshold as set forth below: (i) If Net Income for 2009 shall be the Company achieves at least ten per cent (10%) less than 95% of the 2009 Offering Performance Threshold, then the Offering Escrow Shares and the Additional Escrow Shares shall be released to Magnify Wealth and the Original Stockholders in the same proportion in which they deposited such shares into the Escrow Account. Within five (x5) business days of Maxim’s receipt of the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase AgreementFinancial Statements, and (y) within five (5)business days after March 31, 2010, the Company Maxim shall provide sole written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Offering Escrow Shares and the Additional Escrow Shares to the Pledgors. (ii) If the Company achieves at least [50%] but less than 95% of the Offering Performance Threshold, the Escrow Agent shall deliver to each Buyer on a pro rata basis based on Purchaser in the Offering who holds shares of Common Stock, or shares of Common Stock underlying Units as of the Determination Date Offering, Escrow Shares in accordance with the calculation below. (a) A = X/Y (b) B = 2*(A*Z) Where: A = such Purchaser’s percentage ownership of Offering Escrow Shares B = the number of Offering Escrow Shares to be distributed to such Purchaser X = the aggregate number of shares of Common Stock purchased or shares of Common Stock underlying Units owned by such Purchaser on the Determination Date, provided however that Buyer pursuant to such number shall not exceed the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Units bought by such Purchaser in the Offering Y = the number of Units issued upon the consummation of this Offering (including any Units issued in the Over-allotment Option) Z = the Offering Escrow Shares equivalent to multiplied by the percentage by which the Company missed Offering Performance Threshold was not achieved Within five (5) business days of Maxim’s receipt of the 2009 Performance Threshold. For exampleFinancial Statements, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company Maxim shall provide sole written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Offering Escrow Shares to each Buyer the Purchasers in accordance with the calculation above. Only those Purchasers who continue to own shares of Common Stock or shares of Common Stock underlying Units on a pro rata basis the Determination Date shall be entitled to receive Offering Escrow Shares calculated based on their ownership interest in shares of Common Stock or shares of Common Stock underlying Units on the Determination Date. Any Offering Escrow Shares remaining after disbursement to such Purchasers and the Additional Escrow Shares shall be returned to Magnify Wealth and the Original Stockholders in the same respective proportion as their initial deposit of the Offering Escrow Shares and Additional Escrow Shares. (iii) If the Company achieves less than [50%] of the Offering Performance Thresholds, then the Escrow Agent shall deliver to each Purchaser of Units in the Offering, Offering Escrow Shares in accordance with the calculation below: (a) A = X/Y (b) B = (A*Z) Where: A = such Purchaser’s percentage ownership of Offering Escrow Shares B = the number of Offering Escrow Shares to be distributed to such Purchaser X = the number of Units bought by such Purchaser in this Offering Y = number of Units issued upon the consummation of this Offering (including any Units issued in the Over-allotment Option) Z = the Offering Escrow Shares Within five business days of the underwriter’s receipt of the 2009 Financial Statements, Maxim shall provide sole written instructions to the Escrow Agent instructing the Escrow Agent to: (i) issue and deliver the Offering Escrow Shares to the Purchasers in accordance with the calculation above, and (ii) issue and deliver to the Purchasers a specific number of the Additional Escrow Shares required as a result of the rounding up of fractional shares as discussed in Section 1.4. Any Additional Escrow Shares remaining after disbursement to such Purchasers shall be returned to Magnify Wealth and the Original Stockholders in the same respective proportion as their initial deposit of the Additional Escrow Shares 1.4. No fractional shares shall be delivered to the Purchasers under the calculations set forth in Section 1.3. If, upon calculation of the Offering Escrow Shares to be delivered to the purchasers pursuant to these calculations, a purchaser would be entitled to receive a fractional interest in a share, such number of shares shall be rounded up or down to the nearest whole number of shares of Common Stock purchased by that Buyer pursuant to be delivered to such Purchaser. In addition to the Securities Purchase AgreementOffering Escrow Shares, Magnify Wealth and the Original Stockholders shall deposit _________ and __________ shares, respectively (the “Additional Escrow Shares”), with Corporate Stock Transfer, Inc. in accordance with Section 1.2, solely to cover any shares required to be delivered to the Purchasers in excess of the Offering Escrow Shares as a result of the rounding up of fractional shares under the calculations set forth in Section 1.3. 1.5. If the Company does not achieve at least 95% of the Offering Performance Threshold, the Company shall use reasonable best efforts to promptly cause the Offering Escrow Shares, and, if necessary, the Additional Escrow Shares, to be delivered to the Purchasers as discussed in Section 1.3, including causing its transfer agent to promptly, but in no event longer than five (5) business days, transfer the certificates into the names of the Purchaser as discussed in Section 1.3, and shall causing its securities counsel to provide any written instruction required by the Escrow Agent in a copy of such instructions timely manner so that the issuances and delivery contemplated above can be achieved. 1.7. The Company will provide Maxim with the Company’s 2009 Financial Statements, prepared in accordance with US GAAP, no later than the Determination Date to each Buyer. “2010 Escrow Shares” shall be allow Maxim the number of Escrow Shares equivalent opportunity to evaluate whether the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Offering Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%was achieved.

Appears in 1 contract

Samples: Make Good Escrow Agreement (Lihua International Inc.)

TERMS OF THE ESCROW. 1.1. 1.1 The parties Recitals above are incorporated into this Escrow Agreement as covenants of this Escrow Agreement to the same extent said Recitals would be incorporated if repeated within these covenants. 1.2 CTC, the CTC Stockholders, and Iceweb hereby agree to establish an escrow account with appoint THE LAW OFFICES OF DOXXXXX XXXXXXX XXXXXXX, LLC, a Missouri professional limited liability company as the Escrow Agent whereby hereunder. Escrow Agent hereby accepts this appointment, subject to the requirements of this Escrow Agreement. Escrow Agent will be paid the law firm’s regular hourly rate for the provision of professional services for the services rendered under and in accordance with this Escrow Agreement. 1.3 Escrow Agent hereby acknowledges that it has received a copy of the Share Exchange Agreement and has a copy on file for reference as appropriate in the performance of its duties under this Escrow Agreement. 1.4 At Closing, the Settlement Attorney, as defined in the Share Exchange Agreement, shall instruct Olde Monmouth Stock Transfer to deliver to the Escrow Agent shall hold 2,390,171 shares of Iceweb Common Stock, titled in the name of THE LAW OFFICES OF DOXXXXX XXXXXXX XXXXXXX, LLC, ESCROW AGENT, to be held by the Escrow Shares as contemplated by Agent in safekeeping pursuant to the terms of this Escrow Agreement (the “Escrowed Stock”). Said Iceweb Common Stock shall contain the Rule 144 restrictions in accordance with the Share Exchange Agreement. 1.2. Upon the execution of this Agreement, the 1.5 The Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (continue holding the “Escrow Agent Custody Account”) whereupon Escrowed Stock pending written instructions signed by all CTC Stockholders and by Kaxx xith respect to disposition of the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Escrowed Stock (“Escrow SharesWritten Instructions) into the ), and Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in will follow said Written Instructions, subject to the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed thereinfollowing requirements. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Accountconcludes, in its reasonable judgment, that a controversy exists between the parties agree CTC Stockholders and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall Kaxx xhat will not be responsible for procuring resolved by the deposit issuance of Escrow Shares. All parties agree Written Instructions to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from or if the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so Written Instructions create a reasonable doubt as to allow the Buyers appropriate disposition of the opportunity to evaluate whether Escrowed Stock, Escrow Agent may interplead the 2009 Performance Threshold and Escrowed Stock with the 2010 Performance Threshold were attainedCircuit Court of Jaxxxxx Xounty, Missouri at Kansas City (the “Interpleader Court”). In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K Escrow Agent does not receive Written Instructions within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that 365 days following the Escrow Shares shall be delivered to the Buyers as set forth below: Date (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. 2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Escrow Agreement (Iceweb Inc)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Escrow Agent Agreement shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (the “Escrow Agent Custody Brokerage Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 5,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven (7) days thereofBrokerage Account. The Escrow Agent Custody Brokerage Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 if 5,000,00 shares of Common Stock into the Escrow Agent Custody Brokerage Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers,In addition, the Principal Shareholder shall deliver to the Escrow Agent her options to purchase 2,000,000 shares of Common Stock, along with undatedstock powers executed in blank with signature medallion guaranteed within seven (7) days of the grant of the same to her pursuant to Section 4(o) of the Securities Purchase Agreement. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of the options and stock powers from the Principal Shareholder. The said 5,000,000 shares of Common Stock and the options to purchase 2,000,000 shares of Common Stock shall collectively be referred to as “Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A.”. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2008, prepared in accordance with US GAAP, on or before March 31, 2009 and (ii) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 2008 Performance Threshold and the 2010 2009 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2008 shall be at least ten per cent (10%) less than the 2008 Performance Threshold, then (x) the 2008 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5) business days after March 31, 2009, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2008 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2008 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2008 Performance Threshold. For example, if the Company were to miss the 2008 Performance Threshold by 15%, the 2008 Escrow Shares shall comprise 750,000 shares of Common Stock and options to purchase 300,000 shares of Common Stock. For the avoidance of any doubt, no 2008 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2008 Performance Threshold by less than 10%. (ii) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business 5) business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 1525%, the 2009 Escrow Shares shall comprise 450,000 1,250,000 shares of Common Stock and options to purchase 500,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Make Good Securities Escrow Agreement (Universal Travel Group)

TERMS OF THE ESCROW. 1.1. 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent Company shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. direct that all entry and sponsorship/advertiser funds (the "Escrow Agent Custody Account”Funds") whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in directly deposited by the sole name of entrant or sponsor/advertiser to the Escrow Agent and only escrow bank account managed by the Escrow Agent shall have sole authority to transact escrow holder. No funds will be received by the shares placed thereinCompany into any other account. In the event that the Principal Shareholder deposits shares entrant sends the funds to the Company inadvertently or otherwise, the funds shall immediately be deposited into the escrow account within one banking day or returned to the entrant. Entry fees and all other sponsorship/advertiser funds payable to the Company shall be bank wired to the escrow account pursuant to the instructions from the escrow holder. Funds held in excess the escrow account will not be released to the Company unless and until the tournament for which the funds were received is conducted. In the event the tournament is not conducted by the Company, then the escrow holder is irrevocably instructed to immediately refund the funds to the entrant or sponsor/advertiser who deposited the funds, who is of 3,000,000 shares record by the escrow holder. Not less than five (5) business days prior the commencement of Common Stock into the Tournament, the escrow holder will certify in writing that the funds for the tournament purse has been designated for the purse payment for that tournament. Such certification shall be posted on the website of the Company for verification. Purse payments will be made within 10 days of the conclusion of the event. On the first day of the event, the escrow holder will release and disburse all sponsorship/advertiser funds to the Company received by the escrow holder. 1.2 Upon the conclusion of a Tournament, the Company shall promptly send to the Escrow Agent Custody Account, a notice containing the parties agree amount of each disbursement and hereby irrevocably authorize the recipient's name and address. The Company shall certify to the Escrow Agent to transfer that the disbursements are in accordance with the results of the Tournament. The Escrow Agent shall then disburse the Escrow Funds in accordance with such excess shares back instructions as provided herein. The parties intend that: (a) the Company shall prepare the envelopes and the checks for disbursement to the Principal Shareholder’s brokerage account upon instructions recipients from the Principal Shareholder without requiring further authorization Escrow Fund (b) the Company shall forward such checks to the Escrow Agent for review and countersignature and (c) the Escrow Agent shall thereafter forward the checks to the recipients. Upon the conclusion of the tournament and the disbursement of prize monies to the recipients as defined hereunder, the escrow holder shall disburse any remaining balance to the Company immediately by bank transfer. The escrow holder is instructed to remit to the Company all interest earned on funds deposited into the escrow account on a monthly basis as requested by the Company. The interest on deposited funds are the sole exclusive property of the Company. 1.3 This Agreement may be altered or approval amended only with the consent of all of the parties hereto. The Escrow Agent may resign as Escrow Agent by delivering to the Company thirty days advance written notice. In the case of the Escrow Agent's resignation, its only duty, until receipt of notice from the Company that a successor escrow agent shall have been appointed, shall be to hold and preserve the BuyersEscrow Funds. For Upon receipt by of written notice of appointment and acceptance a successor escrow agent, the avoidance name of any doubta successor escrow account and a direction to transfer the Escrow Funds, the Escrow Agent shall not be responsible for procuring the deposit promptly thereafter transfer all of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow AgentFunds to said successor escrow agent and provide proof of such transfer to the Company. The Escrow Agent is authorized to disregard any notices, requests, instructions or demands received by it from the Company or any other party after notice of resignation shall have been given, other than those which have resulted from the gross negligencewritten notice of appointment and acceptance a successor escrow agent, fraud the name of a successor escrow account and a direction to transfer the Escrow Funds. 1.4 The Escrow Agent shall be reimbursed by the Company for any reasonable expenses incurred in connection with this Agreement. 1.5 The Escrow Agent in its capacity as such has no liability hereunder to the Company or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide any other party other than to hold the Buyers with (i) Escrow Funds and to disburse the Company’s audited financial statements for 2009, prepared Escrow Funds in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained's instructions. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company Nothing contained herein shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing require the Escrow Agent to issue and deliver independently verify the 2009 results of a Tournament or to take instructions from any party other than the Company. The Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” Agent's sole responsibility hereunder shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to disburse the Escrow Agent instructing Funds in accordance with the Escrow Agent to issue Company's instructions as set forth above in paragraphs 1.1 and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%1.

Appears in 1 contract

Samples: Escrow Agreement (Domark International Inc.)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon Within five business days after the execution Effective Time of this Agreementthe Merger, the Sahara Escrow Shareholders shall deliver or cause to be delivered to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing 5,000,000 shares of Pubco Common Stock (the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account), the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAPSchedule A hereto, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared along with stock powers executed in accordance blank with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information publicsignature medallion guaranteed. 1.41.3. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers Sahara Escrow Shareholders, or returned to Pubco for cancellation, based on the achievement of Pubco performance thresholds as set forth below: (i) If Net Income for 2009 In the event that Pubco has launched the online magazine Xxxxxxxx.xxx six months after the Closing Date (the “First Performance Threshold”), 20% of the Escrow Shares shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis released to the Buyers based on Sahara Escrow Shareholders. If the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase AgreementFirst Performance Threshold is met, and (y) within five (5)business business days of the date that is six months after March 31the Closing Date, 2010, Pubco and the Company Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver 20% of the 2009 Escrow Shares to each Buyer on a the Sahara Escrow Shareholders pro rata basis based on in accordance with Schedule A. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. If the number First Performance Threshold is not met, within five business days of shares of Common Stock purchased by the date that Buyer pursuant is six months after the Closing Date, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Securities Purchase AgreementEscrow Agent to return 20% of the Escrow Shares to Pubco, and Pubco shall provide a copy of cancel such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Thresholdforthwith. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 The Escrow Agent shall deliver such Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%accordance with such instructions. (ii) If Net Income for 2010 In the event that Pubco has launched the social network Xxxxxxxxxxx.xxx seven months after the Closing Date (the “Second Performance Threshold”), 20% of the Escrow Shares shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis released to the Buyers based on Sahara Escrow Shareholders. If the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase AgreementSecond Performance Threshold is met, and (y) within five (5)business business days of the date that is seven months after March 31the Closing Date, 2011, Pubco and the Company Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver 20% of the 2010 Escrow Shares to each Buyer on a the Sahara Escrow Shareholders pro rata basis based on in accordance with Schedule A. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. If the Second Performance Threshold is not met, within five business days of the date that is six months after the Closing Date, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent to return 20% of the Escrow Shares to Pubco, and Pubco shall cancel such Escrow Shares forthwith. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. (iii) In the event that, from the period from the launch of the online magazine Xxxxxxxx.xxx, until nine months after the Closing Date, the average number of shares monthly viewer impressions of Common Stock purchased by that Buyer pursuant to Pubco’s online magazine Xxxxxxxx.xxx is at least 300,000 (the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. 2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Third Performance Threshold. For example”), if 20% of the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred released to any Buyer the Sahara Escrow Shareholders. If the Third Performance Threshold is met, within five business days of the date that is nine months after the Closing Date, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver 20% of the Escrow Shares to the Sahara Escrow Shareholders pro rata in accordance with Schedule A. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. If the Third Performance Threshold is not met, within five business days after the date that is nine months after the Closing Date, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent to return 20% of the Escrow Shares to Pubco, and Pubco shall cancel such Escrow Shares forthwith. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. (iv) In the event that Pubco’s social networking site Xxxxxxxxxxx.xxx has at least 200,000 registered users on September 30, 2009 (the Company misses “Fourth Performance Threshold”), 20% of the 2010 Escrow Shares shall be released to the Sahara Escrow Shareholders. If the Fourth Performance Threshold by less than is met, within five business days of September 30, 2009, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver 20% of the Escrow Shares to the Sahara Escrow Shareholders pro rata in accordance with Schedule A. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. If the Fourth Performance Threshold is not met, within five business days of September 30, 2009, Pubco and the Sahara Escrow Shareholders shall provide written instructions to the Escrow Agent to return 20% of the Escrow Shares to Pubco, and Pubco shall cancel such shares forthwith. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. (v) In the event that, Pubco either has revenue of at least $1,000,000 for the year ending December 31, 2009, or accounts receivable of at least $1,000,000 as of December 31, 2009, as disclosed in Pubco’s audited financial statements included in Pubco’s Form 10%-K for the year ending December 31, 2009 filed with the Securities and Exchange Commission (the “Fifth Performance Threshold”), 20% of the Escrow Shares shall be released to the Sahara Escrow Shareholders. If the Fifth Performance Threshold is met, within five business days after the filing of Pubco’s Form 10-K for the year ending December 31, 2009, Pubco shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver 20% of the Escrow Shares to the Sahara Escrow Shareholders pro rata in accordance with Schedule A. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions. If the Fifth Performance Threshold is not met, within five business days after the filing of Pubco’s Form 10-K for the year ending December 31, 2009, Pubco shall provide written instructions to the Escrow Agent to return 20% of the Escrow Shares to Pubco, and Pubco shall cancel such Escrow Shares forthwith. The Escrow Agent shall deliver such Escrow Shares in accordance with such instructions.

Appears in 1 contract

Samples: Securities Escrow Agreement (Mac Filmworks Inc)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this AgreementFunds. 1.2. The Company will cause each subscriber to deliver to the Escrow Agent the funds necessary for the purchase of the Securities, and executed copies of the Subscription Agreement and any supplements thereto (the “Escrowed Documents”). 1.3. Upon receipt of funds from subscribers, the execution Escrow Agent will deposit such amounts into the account listed below, or wire transfers to the Escrow Agent must be made as follows, and the Escrow Agent will notify the Company, telephonically on a periodic basis, of this Agreementthe amount of funds it has received into the escrow account: Colorado Business Bank 000 00xx Xxxxxx Xxxxxx, Xxxxxxxx 00000 ABA Routing Number: Account Name: Xxxxx, Figa & Will, P.C. COLTAF Trust Account Account Number: 1.4. The Escrow Agent is authorized to forward each check for collection and, upon collection of the proceeds of each check, deposit the collected proceeds in the escrow account. As an alternative, the Escrow Agent may telephone the bank on which the check is drawn to confirm that the check has been paid. 1.5. Any check returned unpaid to the Escrow Agent shall be returned to the subscribers, and notice will be given to the Company of such return. 1.6. If the Company rejects any subscription for which the Escrow Agent has already collected funds, the Escrow Agent shall open promptly issue a brokerage account with XX Xxxxxx Xxxxx Bankrefund check to the rejected subscribers, N.A. (without interest thereon. If the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into Company rejects any subscription for which the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in has not yet collected funds but has submitted the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholdersubscriber’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubtcheck for collection, the Escrow Agent shall promptly issue a check in the amount of the subscriber's check to the rejected subscribers after the Escrow Agent has cleared such funds. If the Escrow Agent has not be responsible yet submitted a rejected subscriber’s check for procuring collection, the deposit Escrow Agent shall promptly remit the subscriber’s check directly to the subscriber. 1.7. If the Offering is over-subscribed, the Company may in its sole discretion reject in whole or in part certain subscriptions or may reduce subscriptions pro-rata and shall instruct the Escrow Agent as to which subscriptions or portions thereof to refund to the subscribers. 1.8. Upon the Escrow Agent’s receipt of $300,000 in Escrow Shares. All parties agree Funds from the subscribers, it shall advise the Company by telephone or e-mail of any deficiency compared to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employeesthe purchase price of the Securities due to deduction of wire transfer fees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating the Company will immediately provide additional funds to their duties or performance as instructed by the Escrow Agent, other than those which have resulted to be added to the Escrow Funds, to the extent of such deficiency. 1.9. After receipt of additional funds from the gross negligenceCompany for deduction of wire transfer fees, fraud or willful misconduct of XX Xxxxxx Xxxxx Bankand if the Escrow Agent has received the Escrowed Documents from subscribers, N.A. 1.3. The Company will provide and after the Buyers with (i) the Company’s audited financial statements for 2009Escrowed Funds have had sufficient time to be deposited and cleared as good funds, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, then the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer deliver to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth belowAgent: (i) If Net Income for 2009 shall The instruments, if any, evidencing the Securities to be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis issued to the Buyers based on subscribers or alternatively its written representation that it will deliver any certificates and instruments evidencing the number of shares of Common Stock purchased by each Buyer pursuant Securities to the Securities Purchase subscribers within ten days from the release of the Escrowed Funds; (ii) The Company’s executed counterpart of the Subscription Agreement, and ; and (yiii) within five (5)business days after March 31, 2010Written instructions from the Company advising the Escrow Agent to deliver the Escrow Funds to the Company or its designee via wire transfer. This release of funds is referred to as the “Closing.” After the Closing, the Company shall provide written instructions may request at reasonable intervals that subsequent closings occur with respect to additional deposits of Escrow Funds, subject to the Escrow Agent’s receipt of instruments if any, evidencing Securities to be issued to new subscribers and the Company’s executed counterpart of the Subscription Agreement. 1.10. Once the Escrow Funds have been sent per the Company’s instructions, if provided to the Escrow Agent instructing by the Company the Escrow Agent to issue shall send the Subscription Agreement and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant Securities (if certificated) to the Securities Purchase Agreementrespective subscribers, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer or in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, accordance with Section 1.9 above the Company shall provide written instructions cause such documents and instruments to be delivered to the subscribers within ten days of the Closing and/or any subsequent closings. 1.11. If the Closing has not occurred by August 15, 2018 (subject to extension by the Company, in its sole discretion), then the Escrow Agent instructing the will return all Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant Funds to the Securities Purchase Agreementsubscribers, and shall provide a copy of such instructions to each Buyerwithout interest or deduction. “2010 Escrow Shares” shall be Any subscription not accepted by the number of Escrow Shares equivalent Company prior to the percentage by which final closing will be returned to the Company missed the 2010 Performance Threshold. For examplesubscriber, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%without interest or deduction.

Appears in 1 contract

Samples: Escrow Agreement (VirtualArmour International Inc.)

TERMS OF THE ESCROW. 1.1. The parties Broker and the Company hereby agree to establish with the Escrow Agent, an escrow account or accounts which shall be compliant with all rules and regulations promulgated by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority, Inc. (“FINRA”) and which shall be non-interest bearing trust accounts, with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares funds for the cash purchase of the Securities as contemplated by the subscription agreements relating to the Offering (the “Subscription Agreements”). The Broker hereby certifies that it is a FINRA registered broker dealer and that this Agreement must comply with FINRA and SEC rules and regulations including, without limitation, SEC Rule 15c2-4. The Escrow Agent shall be authorized to establish a single account for the Offering pursuant to the terms of this Agreement. 1.2. Upon the execution Escrow Agent’s receipt of this Agreement, the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. Release Notice attached hereto as Exhibit A (the “Escrow Agent Custody AccountRelease Notice) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the ), Escrow Agent Custody Account within seven (7) days thereofwill release the Escrowed Funds in accordance with the payment instruction set forth in the Use of Proceeds Schedule. The Escrow Agent Custody Account shall be in the sole name of Agent, Broker and Company each hereby agree that the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed thereinRelease Notice may be transmitted via email. 1.3. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Accountdoes not receive an Escrow Release Notice executed by the Broker and the Company by November 14, 2013 unless such date is extended for up to an additional six month period by the Broker and the Company (such date, the parties agree and hereby irrevocably authorize the Escrow Agent Return Date”) relating to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubtEscrowed Funds, the Escrow Agent shall not return such Escrowed Funds to the Purchasers using the payment instructions referenced in Exhibit B of the Subscriber Agreements the Broker is required to provide to the Escrow Agent as stated above. The Escrow Return Date may be responsible for procuring the deposit of Escrow Shares. All parties agree extended by up to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed an additional 90 days by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 Broker and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days their discretion after March 31, 2010, the Company shall provide providing written instructions to the Escrow Agent instructing validly executed by the Escrow Agent to issue Broker and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on Company. Any additional extensions shall require the number written consent of shares 100% of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Purchasers. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Escrow Agreement (True Drinks Holdings, Inc.)

TERMS OF THE ESCROW. 1.1FOR EACH DRAW DOWN 2.1. The parties hereby agree If the Purchaser elects to establish an escrow account with use the Escrow Agent whereby in connection with a Draw Down as provided in the Purchase Agreement, the Purchaser shall send a copy by facsimile, to the Escrow Agent, of the Draw Down Notice delivered by the Company to the Purchaser as provided in the Purchase Agreement. 2.2. If the Purchaser elects to use the Escrow Agent in connection with the purchase of Draw Down Shares as provided in the Purchase Agreement, the Purchaser shall hold send the applicable Purchase Price of the Draw Down Shares to the Escrow Shares as contemplated by this Agreement. 1.2Agent. Upon the execution receipt of this Agreementsuch funds, the Escrow Agent shall open advise the Company that it has received the funds for such Draw Down Shares. The Company shall promptly, but no later than two (2) Trading Days after receipt of such funding notice from the Escrow Agent: (i) cause its transfer agent to issue the Draw Down Shares to the Purchaser via DTC's DWAC system to the account specified by the Purchaser from time to time; (ii) deliver the original executed attorney's opinion in the form of Exhibit C to the Purchase Agreement to the Purchaser; and (iii) deliver a brokerage account with XX Xxxxxx Xxxxx BankForm 424(b) supplemental prospectus to the Purchaser. 2.3. Upon receipt of written confirmation from the Purchaser that such Draw Down Shares have been so deposited and the opinion and the supplemental prospectus have been so delivered, N.A. (the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account shall, within seven two (72) days thereof. The Escrow Agent Custody Account shall be in Trading Days, wire the sole name Purchase Price of such Draw Down Shares to the Company pursuant to the wiring instructions below net of $750 for to the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed thereinas an escrow fee. [Company wiring instructions] 2.4. In the event that such Draw Down Shares are not in the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into DTC account specified by the Escrow Agent Custody Account, Purchaser and the parties agree opinion and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back supplemental prospectus are not delivered to the Principal Shareholder’s brokerage account upon instructions from Purchaser within three (3) Trading Days of the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance date of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent's notice, other than those which then Purchaser shall have resulted from the gross negligenceright to demand, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documentsnotice, the Company shall issue a press release announcing return of the information or file a Form 8-K within one trading day of a request by the Buyer to make Purchase Price, and such information public. 1.4. The parties hereby agree that the Escrow Shares Draw Down Notice shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%deemed cancelled. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Escrow Agreement (Diasys Corp)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Company Deposited Escrow Shares, the Listing Escrow Shares and the Purchaser Deposited Escrow Shares as contemplated by this Agreement. 1.2. Upon Within 30 days following the execution of this Agreement, the Company shall issue and deliver to the Escrow Agent a stock certificate or stock certificates evidencing an aggregate of 334,916 shares of Series B Preferred (which number of shares of Series B Preferred shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. (be equivalent to 30% of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause number of shares of Series B Preferred to be deposited at least 3,000,000 issued and sold to the Purchaser Representative on the Closing Date and which shares of Series B Preferred may be converted into 11,722,060 shares of Common Stock (Stock). The shares of Series B Preferred described in this Section 1.2 shall be referred to in this Agreement as the Company Deposited Escrow Shares”) into the ). All Company Deposited Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account Shares shall be accompanied by stock powers executed in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A.blank with signature medallion guaranteed. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Company Deposited Escrow Shares shall be delivered to based on the Buyers achievement of the Performance Thresholds as set forth below: (i) If the After-Tax Net Income for 2009 shall be at least ten per cent (10%) is less than the 2009 Performance ThresholdTarget Number, then if the Percentage Shortfall (as hereinafter defined) for 2009, is less than fifty percent (50%), but equal or greater than fifteen percent (15%), then an Adjustment Percentage for such year shall be determined. For purposes of this Section, the “Percentage Shortfall” shall mean the percentage obtained by dividing (w) the amount of the shortfall of the After-Tax Net Income from the 2009 Target Number by (x) the 2009 Escrow Shares Target Number. For purposes of this Section, the “Adjustment Percentage” for 2009 shall mean the percentage that the Percentage Shortfall for such year bears to fifty percent (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within 50%). Within five (5)business days after March 31, 2010, the determination of the Percentage Shortfall for 2009 the Purchaser Representative and the Company shall provide give joint written instructions to the Escrow Agent instructing to, and upon receipt of such written instructions, the Escrow Agent shall, within five days after receipt of such instructions deliver to issue and deliver the 2009 Escrow Shares to each Buyer Purchasers on a pro rata basis based on the such number of shares of Common Stock purchased Series B Preferred as is determined by that Buyer pursuant multiplying the Adjustment Percentage for such year by the total number of Company Deposited Escrow Shares then required to be in escrow. In the case of a delivery of less than all of the shares of the Company Deposited Escrow Shares in respect of the computation of the Adjustment Percentage for 2009, the balance of the Company Deposited Escrow Shares which are not required to be delivered to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” Purchasers shall be number of Escrow Shares equivalent returned to the percentage by which the Company missed the 2009 Performance ThresholdCompany. For example, if the Company were to miss the Percentage Shortfall for 2009 Performance Threshold by 15is 20%, the 2009 Adjustment Percentage would be 40%, and 40% of the total number of Company Deposited Escrow Shares shall comprise 450,000 shares of Common Stock. For then required to be in escrow would be delivered to the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed Purchasers on a pro rata basis basis, with the balance being returned to the Buyers based on the number of shares of Common Stock purchased by each Buyer Company pursuant to the Securities Purchase this Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Securities Escrow Agreement (China New Energy Group CO)

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TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, each Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing one hundred percent (100%) of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock underlying the Preferred Shares issuable under the Purchase Agreement and indicated on Schedule A hereto (such shares of Common Stock plus such additional number of shares of Common Stock as may be required to be deposited hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank with signature medallion guaranteed. 1.3. The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) into shall be delivered based on the achievement of the 2008 Performance Thresholds as set forth below: (i) If the Company does not achieve at least 50% of each of the 2008 Performance Thresholds, then all of the Escrow Shares (the “2008 Escrow Shares”) shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of instructing the Escrow Agent to issue and only deliver the 2008 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days after the release of the 2008 Escrow Shares to the Purchasers, each Principal Stockholder shall deposit into the escrow account maintained by the Escrow Agent shall have sole authority to transact Agent, stock certificates evidencing one hundred percent (100%) of the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into underlying the Escrow Agent Custody Account, Preferred Shares issuable under the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from Purchase Agreement. (ii) If the Company achieves between 50% and 95% of the Buyers. For the avoidance of any doubt2008 Performance Thresholds, the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchasers as of the date thereof, the number of 2008 Escrow Shares multiplied by the percentage by which the lowest of the 2008 Performance Thresholds was not achieved and multiplied by 200%. By way of example, if the Company’s Earnings Per Share for 2008 is an amount equal to 60% of the 2008 Performance Thresholds, the Company’s Net Income reported on the 2008 financial statements is an amount equal to 70% of the 2008 Performance Thresholds and the Company’s Cash from Operations reported on the 2008 financial statements is an amount equal to 80% of the 2008 Performance Thresholds, the Purchasers shall receive 200% of the product of 40% of the 2008 Escrow Shares (100%-60%) and, the remaining Escrow Shares shall continue to be responsible for procuring held in escrow hereunder. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2008 Escrow Shares to the Purchasers and to hold the remaining Escrow Shares in escrow. Within five (5) business days after the release of the 2008 Escrow Shares to the Purchasers, each Principal Stockholder shall deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed into the escrow account maintained by the Escrow Agent, other than stock certificates evidencing such number of shares of Common Stock so that the number of Escrow Shares shall equal the number of shares of Common Stock initially deposited pursuant to Section 1.2. (iii) If the Company achieves at least 95% of each of the 2008 Performance Thresholds, then the Escrow Shares shall continue to be held in escrow hereunder. 1.4. The parties hereby agree that the 2009 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2009 Performance Thresholds as set forth below: (i) If the Company does not achieve at least 50% of each of the 2009 Performance Thresholds, then all of the Escrow Shares (the “2009 Escrow Shares”), shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2009 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. (ii) If the Company achieves between 50% and 95% of the 2009 Performance Thresholds, (a) the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchasers as of the date thereof, the number of 2009 Escrow Shares equal to the number of 2009 Escrow Shares multiplied by the percentage by which the lowest of 2009 Performance Thresholds was not achieved and multiplied by 200% and (b) the remaining 2009 Escrow Shares shall be returned to each Principal Stockholder. By way of example, if the Company’s Earnings Per Share for 2009 is an amount equal to 60% of the 2009 Performance Thresholds, the Company’s Net Income reported on the 2009 financial statements is an amount equal to 70% of the 2009 Performance Thresholds and the Company’s Cash from Operations reported on the 2009 financial statements is an amount equal to 80% of the 2009 Performance Thresholds, the Purchasers shall receive 200% of 40% of the 2009 Escrow Shares (100% - 60%) and the remaining 2009 Escrow Shares shall be returned to each Principal Stockholder. Within five (5) business days of the Purchaser Representative’s receipt of the 2009 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2009 Escrow Shares to the Purchasers and to each Principal Stockholder. (iii) In the event the Company achieves at least 95% of each of the 2009 Performance Thresholds, all of the 2009 Escrow Shares shall be returned to each Principal Stockholder at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those which have resulted from Purchasers who own shares of Series A Preferred acquired under the gross negligencePurchase Agreement and remain shareholders of the Company at the time that the 2009 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2009 Escrow Shares calculated based on their ownership interest at the time when such 2009 Escrow Shares become deliverable hereunder. Any 2009 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement will be delivered to the Company. 1.5. If the Company fails to timely comply with its obligations set forth in Section 3.25 of the Purchase Agreement (the “Listing Obligation”), fraud then 1,000,000 shares of Common Stock collectively owned by the Principal Stockholders (the “Penalty Shares”) shall be distributed to the Purchasers on a pro rata basis as set forth in Section 3.25 of the Purchase Agreement. Within five (5) business days after the release of the Penalty Shares to the Purchasers, the Principal Stockholders shall deposit into the escrow account maintained by the Escrow Agent, stock certificates evidencing an aggregate of 1,000,000 shares of Common Stock. 1.6. If the Company does not achieve each of the 2008 Performance Thresholds or willful misconduct each of XX Xxxxxx Xxxxx Bankthe 2009 Performance Thresholds and/or if the Company does not comply with the Listing Obligation, N.A.the Company shall use best efforts to promptly cause the 2008 Escrow Shares, the 2009 Escrow Shares or the Penalty Shares, as applicable, to be delivered to the Purchasers, including causing its transfer agent promptly to issue the certificates in the names of the Purchasers and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved within five business days following delivery of the 2008 financial statements or 2009 financial statements in the case of the 2008 Escrow Shares or the 2009 Escrow Shares, as applicable, to the Purchaser Representative, or, within five business days of September 28, 2009, in the case of the Penalty Shares. 1.31.7. The Company will provide the Buyers Purchaser Representative with (i) the Company’s audited financial statements for 2008, prepared in accordance with US GAAP, on or before March 31, 2009 and (ii) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers Purchaser Representative the opportunity to evaluate whether each of the 2008 Performance Thresholds and each of the 2009 Performance Threshold and the 2010 Performance Threshold Thresholds were attained. In the event that any Buyer Purchaser receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Commission Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer Purchaser to make such information public. 1.41.8. The parties hereby agree that Upon the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number written request of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to and Purchaser Representative, the Escrow Agent instructing the Escrow Agent to issue and shall deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 2008 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For and the avoidance of any doubtPenalty Shares, no 2009 Escrow Shares shall be transferred as applicable, to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer Purchaser and/or each Principal Stockholder pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, written instructions of the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%Purchaser Representative.

Appears in 1 contract

Samples: Securities Escrow Agreement (Southern Sauce Company, Inc.)

TERMS OF THE ESCROW. 1.1. Section 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Section 1.2 Upon the execution of this Agreement, the Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing one hundred percent (100%) of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock underlying the Preferred Shares issuable under the Purchase Agreement (such shares of Common Stock plus such additional number of shares of Common Stock as may be required to be deposited hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank with signature medallion guaranteed. Section 1.3 The parties hereby agree that the 2007 Escrow Shares (as hereinafter defined) into shall be delivered based on the achievement of the 2007 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share and Cash Earnings Per Share for 2007 is less than 50% of the 2007 Performance Threshold, then all of the Escrow Shares (the “2007 Escrow Shares”) shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of instructing the Escrow Agent to issue and only deliver the 2007 Escrow Shares to the Purchasers on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days after the release of the 2007 Escrow Shares to the Purchasers, the Principal Stockholder shall deposit into the escrow account maintained by the Escrow Agent shall have sole authority to transact Agent, stock certificates evidencing one hundred percent (100%) of the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into underlying the Escrow Agent Custody Account, Preferred Shares issuable under the parties agree and hereby irrevocably authorize Purchase Agreement. (ii) If the Escrow Agent Company’s Earnings Per Share for 2007 is greater than or equal to transfer such excess shares back to 50% but less than 95% of the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt2007 Performance Threshold, the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof, the number of 2007 Escrow Shares multiplied by the percentage by which the 2007 Performance Threshold was not achieved and multiplied by 200%. By way of example, if the Company’s Earnings Per Share for 2007 is an amount equal to 60% of the 2007 Performance Threshold, the Purchasers shall receive 200% of the product of 40% of the 2007 Escrow Shares (100% -60%) and, the remaining Escrow Shares shall continue to be responsible for procuring held in escrow hereunder. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2007 Escrow Shares to the Purchasers and to hold the remaining Escrow Shares in escrow. Within five (5) business days after the release of the 2007 Escrow Shares to the Purchasers, the Principal Stockholder shall deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed into the escrow account maintained by the Escrow Agent, other stock certificates evidencing such number of shares of Common Stock so that the number of Escrow Shares shall equal the number of shares of Common Stock initially deposited pursuant to Section 1.2. (iii) If the Company’s Earnings Per Share for 2007 equals or exceeds 95% of the 2007 Performance Threshold, then the Escrow Shares shall continue to be held in escrow hereunder. Notwithstanding anything to the contrary set forth herein, only those Purchasers who own shares of Series A Preferred acquired under the Purchase Agreement and remain shareholders of the Company at the time that any 2007 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2007 Escrow Shares calculated based on their ownership interest at the time when the 2007 Escrow Shares become deliverable hereunder. Any 2007 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement shall remain in escrow with the Escrow Agent. Section 1.4 The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2008 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share for 2008 is less than 50% of the 2008 Performance Threshold, then all of the Escrow Shares (the “2008 Escrow Shares”), shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2008 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. (ii) If the Company’s Earnings Per Share for 2008 is greater than or equal to 50% but less than 95% of the 2008 Performance Threshold, (a) the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof, the number of 2008 Escrow Shares equal to the number of 2008 Escrow Shares multiplied by the percentage by which the 2008 Performance Threshold was not achieved and multiplied by 200% and (b) the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. By way of example, if the Company’s Earnings Per Share for 2008 is an amount equal to 60% of the 2008 Performance Threshold, the Purchasers shall receive 200% of 40% of the 2008 Escrow Shares (100% - 60%) and the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2008 Escrow Shares to the Purchasers and to the Principal Stockholder. (iii) In the event the Company equals or exceeds 95% of the 2008 Performance Threshold, all of the 2008 Escrow Shares shall be returned to the Principal Stockholder- at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those which have resulted from Purchasers who own shares of Series A Preferred acquired under the gross negligencePurchase Agreement and remain shareholders of the Company at the time that the 2008 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2008 Escrow Shares calculated based on their ownership interest at the time when such 2008 Escrow Shares become deliverable hereunder. Any 2008 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement will be delivered to the Company. Section 1.5 If the Company fails to timely comply with its obligations set forth in Section 3.25 of the Purchase Agreement (the “Listing Obligation”), fraud then 1,000,000 shares of Common Stock owned by the Principal Stockholder (the “Penalty Shares”) shall be distributed to the Purchasers on a pro rata basis as set forth in Section 3.25 of the Purchase Agreement. Section 1.6 If the Company does not achieve the 2007 Performance Threshold for 2007 or willful misconduct the 2008 Performance Threshold and/or if the Company does not comply with the Listing Obligation, the Company shall use best efforts to promptly cause the 2007 Escrow Shares, the 2008 Escrow Shares or the Penalty Shares, as applicable, to be delivered to the Purchasers, including causing its transfer agent promptly to issue the certificates in the names of XX Xxxxxx Xxxxx Bankthe Purchasers and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved within five business days following delivery of the 2007 financial statements or 2008 financial statements in the case of the 2007 Escrow Shares or the 2008 Escrow Shares, N.A.as applicable, to the Purchaser Representative, or, within five business days of December 31, 2008, in the case of the Penalty Shares. 1.3. Section 1.7 The Company will provide the Buyers Purchaser Representative with (i) the Company’s audited financial statements for 20092007, prepared in accordance with US GAAP, on or before March 31, 2010 2008 and (ii) the Company’s audited financial statements for 20102008, prepared in accordance with US GAAP, on or before March 31, 20112009, so as to allow the Buyers Purchaser Representative the opportunity to evaluate whether the 2009 2007 Performance Threshold and the 2010 2008 Performance Threshold were attained. In . Section 1.8 Upon the event that any Buyer receives the financial information prior to its dissemination by written request of the Company in either a press release or in the Company’s SEC Documentsand Purchaser Representative, the Company Escrow Agent shall issue a press release announcing deliver the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the 2007 Escrow Shares shall be delivered and the 2008 Escrow Shares, as applicable, to each Purchaser and/or the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer Principal Stockholder pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, written instructions of the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Purchaser Representative. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Series a Convertible Preferred Stock Purchase Agreement (Victory Divide Mining CO)

TERMS OF THE ESCROW. 1.1. 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreementfunds for the purchase of the Securities. 1.2. 1.2 Upon the Escrow Agent's receipt of funds from the Purchaser into his attorney trustee account, he shall notify the Company, or the Company's designated attorney or agent, of the amount of funds he has received into his account. 1.3 The Company, upon receipt of said notice and acceptance of the Purchaser's Securities Purchase Agreement, as evidenced by the Company's execution thereof, shall deliver to the Escrow Agent the Securities being purchased. 1.4 Upon receipt of this Agreementthe Securities, the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bankimmediately wire to the Company that amount of funds necessary to purchase the Securities, N.A. (per the “Escrow Agent Custody Account”) whereupon written instructions of the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into Company. Contemporaneously therewith, the Escrow Agent Custody Account shall arrange to have the Securities delivered as per instructions from the Purchaser. 1.5 If, for any reason, the Escrow Agent does not receive the Securities within seven five (75) days thereofof the date hereof, the Escrow Agent will promptly return any funds received by it from the Purchaser to the Purchaser, without any further instructions from either the Company or Purchaser. 1.6 This Agreement may be altered or amended only with the consent of all of the parties hereto. The Escrow Agent Custody Account shall be in may resign by following the sole name procedures hereafter set forth. In the case of the Escrow Agent and Agent's resignation, his only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess duty, until receipt of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval notice from the Company and the BuyersPurchaser or their agents that a successor escrow agent shall have been appointed, shall be to hold and preserve the Securities and/or funds. For Upon receipt by the avoidance Escrow Agent of any doubtsaid notice from the Company and the Purchaser of the appointment of a successor escrow agent, the name of a successor escrow account and a direction to transfer the Securities and/or funds, the Escrow Agent shall promptly thereafter transfer all of the Securities and/or funds held in escrow to said successor escrow agent. Immediately after said transfer of Securities, the Escrow Agent shall furnish the Company and the Purchaser with proof of such transfer. The Escrow Agent is authorized to disregard any notices, request, instructions or demands received by it from the Company or the Purchaser after notice of resignation or removal shall have been given, unless the same shall be the aforementioned notice from the Company and the Purchaser to transfer the Securities and funds to a successor escrow agent or to return same to the respective parties. 1.7 The Company shall pay the Escrow Agent a fee of $1,000.00 and shall reimburse the Escrow Agent for its reasonable expenses in the event there is a conflict between the parties and the Escrow Agent shall deem it necessary to retain counsel. 1.8 The Escrow Agent has no liability hereunder to either party other than to hold the Securities and funds, and to deliver them in accordance with the terms hereof. The Escrow Agent shall not be liable for any action taken or omitted by him in good faith; and in no event shall the Escrow Agent be liable or responsible except for the Escrow Agent's own gross negligence or willful misconduct. 1.9 Each party hereto agrees, jointly, to indemnify and hold harmless the Escrow Agent from and with respect to any and all suits, claims, damages, demands, actions, liabilities or losses arising in any way out of this transaction including the obligation to defend any legal action brought which in any way arises out of or is related to this Agreement, except any such suit, claim, damage, demand, action, liability or loss arising out of the Escrow Agent’s gross negligence or willful misconduct. 1.10 Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with for: (i) the Company’s audited financial statements for 2009sufficiency or correctness as to the form, prepared in accordance with US GAAP, on execution or before March 31, 2010 and the validity of this Agreement; or (ii) the Company’s audited financial statements for 2010identity, prepared in accordance with US GAAP, on authority or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance right of any doubt, no 2009 person executing any notice or document given to Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Agent. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Escrow Agreement (Hepalife Technologies Inc)

TERMS OF THE ESCROW. 1.1. 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. 1.2 Upon the execution of this Agreement, the Principal Stockholders shall deliver to the Escrow Agent shall open a brokerage account stock certificates evidencing an aggregate of 7,200,000 shares of Common Stock, along with XX Xxxxxx Xxxxx Bankundated stock powers executed in blank with signature medallion guaranteed, N.A. as set forth on Schedule A (the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt, the Escrow Agent shall not be responsible for procuring the deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed by the Escrow Agent, other than those which have resulted from the gross negligence, fraud or willful misconduct of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public). 1.4. 1.3 The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income the Company’s net income for 2009 shall be at least ten per cent (10%) Fiscal 2008, as disclosed in the Company’s Fiscal 2008 Financial Statements, is less than 59.99% of the 2009 Fiscal 2008 Performance Threshold, then (x) all of the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers Purchasers based on the number of shares Preferred Shares owned by such Purchasers as of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and date thereof. Within three (y3) within five (5)business business days after March 31, 2010of the Purchasers’ receipt of the Fiscal 2008 Financial Statements, the Company and the Purchasers shall provide joint written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer the Purchasers on a pro rata basis based on the number of shares Preferred Shares owned by such Purchasers as of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy date thereof in accordance with the terms of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%this Section 1.3(i). (ii) If Net Income the Company’s net income for 2010 shall be at least ten per cent (10%) Fiscal 2008, as disclosed in the Company’s Fiscal 2008 Financial Statements, is equal to or greater than 60% but less than 69.99% of the 2010 Fiscal 2008 Performance Threshold, then the Escrow Agent shall deliver to (xA) the 2010 Escrow Shares (defined below) shall be distributed Purchasers, on a pro rata basis to the Buyers based on the number of shares Preferred Shares owned by such Purchasers as of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreementdate thereof, 5,400,000 Escrow Shares and (yB) within five the Principal Stockholders 1,800,000 Escrow Shares, on a pro rata basis. Within three (5)business 3) business days after March 31, 2011of the Purchasers’ receipt of the Fiscal 2008 Financial Statements, the Company and the Purchasers shall provide joint written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer the Purchasers, on a pro rata basis based on the number of shares Preferred Shares owned by such Purchasers as of Common Stock purchased the date thereof, and the Principal Stockholders in accordance with the terms of this Section 1.3(ii). (iii) If the Company’s net income for Fiscal 2008, as disclosed in the Company’s Fiscal 2008 Financial Statements, is equal to or greater than 70% but less than 79.99% of the Fiscal 2008 Performance Threshold, the Escrow Agent shall deliver to (A) the Purchasers, on a pro rata basis based on the number of Preferred Shares owned by such Purchasers as of the date thereof, 3,600,000 Escrow Shares and (B) the Principal Stockholders 3,600,000 Escrow Shares, on a pro rata basis. Within three (3) business days of the Purchasers’ receipt of the Fiscal 2008 Financial Statements, the Company and the Purchasers shall provide joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver the Escrow Shares to the Purchasers, on a pro rata basis based on the number of Preferred Shares owned by such Purchasers as of the date thereof, and the Principal Stockholders in accordance with the terms of this Section 1.3(iii). (iv) If the Company’s net income for Fiscal 2008, as disclosed in the Company’s Fiscal 2008 Financial Statements, is equal to or greater than 80% but less than or equal to 90% of the Fiscal 2008 Performance Threshold, the Escrow Agent shall deliver to (A) the Purchasers, on a pro rata basis based on the number of Preferred Shares owned by such Purchasers as of the date thereof, 1,800,000 Escrow Shares and (B) the Principal Stockholders 5,400,000 Escrow Shares, on a pro rata basis. Within three (3) business days of the Purchasers’ receipt of the Fiscal 2008 Financial Statements, the Company and the Purchasers shall provide joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver the Escrow Shares to the Purchasers, on a pro rata basis based on the number of Preferred Shares owned by such Purchasers as of the date thereof, and the Principal Stockholders in accordance with the terms of this Section 1.3(iv). (v) If the Company’s net income for Fiscal 2008, as disclosed in the Company’s Fiscal 2008 Financial Statements, is equal to or greater than 90.01% of the Fiscal 2008 Performance Threshold, the Escrow Agent shall return and deliver all of the Escrow Shares to the Principal Stockholders at the address set forth in Section 4.3 hereof. Within three (3) business days of the Purchasers’ receipt of the Fiscal 2008 Financial Statements, the Company and the Purchasers shall provide joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver the Escrow Shares to the Principal Stockholders in accordance with the terms of this Section 1.3(v). Notwithstanding anything to the contrary herein, only those Purchasers who own Preferred Shares acquired pursuant to conversion of the Notes and remain shareholders of the Company at the time that Buyer any Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such Escrow Shares. 1.4 If the Company does not achieve at least 90.01% of the Fiscal 2008 Performance Threshold, the Company shall use its reasonable best efforts to promptly cause the Escrow Shares to be delivered to the Purchasers, including causing its transfer agent promptly to issue the certificates in the names of the Purchasers and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved as soon as practicable following delivery of the Fiscal 2008 Financial Statements to the Purchasers. 1.5 The Company will provide the Purchasers with the Company’s Fiscal 2008 Financial Statements, on or before October 31, 2008, so as to allow the Purchasers the opportunity to evaluate whether the Fiscal 2008 Performance Threshold was attained. 1.6 Upon the joint written request of the Company and the Purchasers, the Escrow Agent shall deliver the Escrow Shares to each Purchaser and/or each Principal Stockholder pursuant to the Securities Purchase Agreement, and shall provide a copy joint written instructions of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed and the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%Purchasers.

Appears in 1 contract

Samples: Securities Escrow Agreement (Rx Staffing, Inc.)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing one hundred percent (100%) of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock underlying the Preferred Shares issuable under the Purchase Agreement (such shares of Common Stock plus such additional number of shares of Common Stock as may be required to be deposited hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank with signature medallion guaranteed. 1.3. The parties hereby agree that the 2007 Escrow Shares (as hereinafter defined) into shall be delivered based on the achievement of the 2007 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share and Cash Earnings Per Share for 2007 is less than 50% of the 2007 Performance Threshold, then all of the Escrow Shares (the “2007 Escrow Shares”) shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of instructing the Escrow Agent to issue and only deliver the 2007 Escrow Shares to the Purchasers on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days after the release of the 2007 Escrow Shares to the Purchasers, the Principal Stockholder shall deposit into the escrow account maintained by the Escrow Agent shall have sole authority to transact Agent, stock certificates evidencing one hundred percent (100%) of the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into underlying the Escrow Agent Custody Account, Preferred Shares issuable under the parties agree and hereby irrevocably authorize Purchase Agreement. (ii) If the Escrow Agent Company’s Earnings Per Share for 2007 is greater than or equal to transfer such excess shares back to 50% but less than 95% of the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from the Company and the Buyers. For the avoidance of any doubt2007 Performance Threshold, the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof, the number of 2007 Escrow Shares multiplied by the percentage by which the 2007 Performance Threshold was not achieved and multiplied by 200%. By way of example, if the Company’s Earnings Per Share for 2007 is an amount equal to 60% of the 2007 Performance Threshold, the Purchasers shall receive 200% of the product of 40% of the 2007 Escrow Shares (100% -60%) and, the remaining Escrow Shares shall continue to be responsible for procuring held in escrow hereunder. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2007 Escrow Shares to the Purchasers and to hold the remaining Escrow Shares in escrow. Within five (5) business days after the release of the 2007 Escrow Shares to the Purchasers, the Principal Stockholder shall deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed into the escrow account maintained by the Escrow Agent, other stock certificates evidencing such number of shares of Common Stock so that the number of Escrow Shares shall equal the number of shares of Common Stock initially deposited pursuant to Section 1.2. (iii) If the Company’s Earnings Per Share for 2007 equals or exceeds 95% of the 2007 Performance Threshold, then the Escrow Shares shall continue to be held in escrow hereunder. Notwithstanding anything to the contrary set forth herein, only those Purchasers who own shares of Series A Preferred acquired under the Purchase Agreement and remain shareholders of the Company at the time that any 2007 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2007 Escrow Shares calculated based on their ownership interest at the time when the 2007 Escrow Shares become deliverable hereunder. Any 2007 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement shall remain in escrow with the Escrow Agent. 1.4. The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2008 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share for 2008 is less than 50% of the 2008 Performance Threshold, then all of the Escrow Shares (the “2008 Escrow Shares”), shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2008 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof. (ii) If the Company’s Earnings Per Share for 2008 is greater than or equal to 50% but less than 95% of the 2008 Performance Threshold, (a) the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series A Preferred owned by such Purchasers as of the date thereof, the number of 2008 Escrow Shares equal to the number of 2008 Escrow Shares multiplied by the percentage by which the 2008 Performance Threshold was not achieved and multiplied by 200% and (b) the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. By way of example, if the Company’s Earnings Per Share for 2008 is an amount equal to 60% of the 2008 Performance Threshold, the Purchasers shall receive 200% of 40% of the 2008 Escrow Shares (100% - 60%) and the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2008 Escrow Shares to the Purchasers and to the Principal Stockholder. (iii) In the event the Company equals or exceeds 95% of the 2008 Performance Threshold, all of the 2008 Escrow Shares shall be returned to the Principal Stockholder- at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those which have resulted from Purchasers who own shares of Series A Preferred acquired under the gross negligencePurchase Agreement and remain shareholders of the Company at the time that the 2008 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2008 Escrow Shares calculated based on their ownership interest at the time when such 2008 Escrow Shares become deliverable hereunder. Any 2008 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series A Preferred acquired under the Purchase Agreement will be delivered to the Company. 1.5. If the Company fails to timely comply with its obligations set forth in Section 3.25 of the Purchase Agreement (the “Listing Obligation”), fraud then 1,000,000 shares of Common Stock owned by the Principal Stockholder (the “Penalty Shares”) shall be distributed to the Purchasers on a pro rata basis as set forth in Section 3.25 of the Purchase Agreement. 1.6. If the Company does not achieve the 2007 Performance Threshold for 2007 or willful misconduct the 2008 Performance Threshold and/or if the Company does not comply with the Listing Obligation, the Company shall use best efforts to promptly cause the 2007 Escrow Shares, the 2008 Escrow Shares or the Penalty Shares, as applicable, to be delivered to the Purchasers, including causing its transfer agent promptly to issue the certificates in the names of XX Xxxxxx Xxxxx Bankthe Purchasers and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved within five business days following delivery of the 2007 financial statements or 2008 financial statements in the case of the 2007 Escrow Shares or the 2008 Escrow Shares, N.A.as applicable, to the Purchaser Representative, or, within five business days of December 31, 2008, in the case of the Penalty Shares. 1.31.7. The Company will provide the Buyers Purchaser Representative with (i) the Company’s audited financial statements for 20092007, prepared in accordance with US GAAP, on or before March 31, 2010 2008 and (ii) the Company’s audited financial statements for 20102008, prepared in accordance with US GAAP, on or before March 31, 20112009, so as to allow the Buyers Purchaser Representative the opportunity to evaluate whether the 2009 2007 Performance Threshold and the 2010 2008 Performance Threshold were attained. 1.8. In Upon the event that any Buyer receives the financial information prior to its dissemination by written request of the Company in either a press release or in the Company’s SEC Documentsand Purchaser Representative, the Company Escrow Agent shall issue a press release announcing deliver the information or file a Form 8-K within one trading day of a request by the Buyer to make such information public. 1.4. The parties hereby agree that the 2007 Escrow Shares shall be delivered and the 2008 Escrow Shares, as applicable, to each Purchaser and/or the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer Principal Stockholder pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, written instructions of the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Purchaser Representative. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Securities Escrow Agreement (Victory Divide Mining CO)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificates evidencing 99,383 shares of Series A Preferred (the “Escrow Agent Custody Account”which number of shares of Series A Preferred may be converted into 5,962,963 shares of Common Stock) whereupon the Principal Shareholder shall deposit (such shares of Series A Preferred plus such additional number of shares of Series A Preferred or cause Common Stock as may be required to be deposited at least 3,000,000 shares of Common Stock (hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank with signature medallion guaranteed. 1.3. The parties hereby agree that the 2007 Escrow Shares (as hereinafter defined) shall be delivered based on the achievement of the 2007 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share for 2007 is less than 50% of the 2007 Performance Threshold, then 62,037 of the Escrow Shares (which number of shares of Series A Preferred may be converted into 3,722,222 shares of Common Stock) (the “2007 Escrow Shares”) shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of the Escrow Agent and only the Escrow Agent shall have sole authority to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into the Escrow Agent Custody Account, the parties agree and hereby irrevocably authorize instructing the Escrow Agent to transfer such excess shares back issue and deliver the 2007 Escrow Shares to the Principal Shareholder’s brokerage account upon instructions from Purchasers on a pro rata basis to the Purchasers based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof. Within five (5) business days after the release of the 2007 Escrow Shares to the Purchasers, the Principal Shareholder without requiring further authorization Stockholder shall deposit into the escrow account maintained by the Escrow Agent, 62,037 shares of Series A Preferred (or, if at such time, the Series A Preferred Stock has been converted into Common Stock, 3,722,222 shares of Common Stock). (ii) If the Company’s Earnings Per Share for 2007 is greater than or approval from equal to 50% but less than 95% of the Company and the Buyers. For the avoidance of any doubt2007 Performance Threshold, the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof, the number of 2007 Escrow Shares multiplied by the percentage by which the 2007 Performance Threshold was not achieved and multiplied by 150%. By way of example, if the Company’s Earnings Per Share for 2007 is an amount equal to 60% of the 2007 Performance Threshold, the Purchasers shall receive 150% of the product of 40% of the 2007 Escrow Shares (100% -60%) and, the remaining Escrow Shares shall continue to be responsible for procuring held in escrow hereunder. Within five (5) business days of the Purchaser Representative’s receipt of the 2007 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2007 Escrow Shares to the Purchasers and to hold the remaining Escrow Shares in escrow. Within five (5) business days after the release of any 2007 Escrow Shares to the Purchasers, the Principal Stockholder shall deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed into the escrow account maintained by the Escrow Agent, other such number of shares of Series A Preferred as shall cause the total number of shares of Series A Preferred held in the escrow account to equal 99,383 (or, if at such time, the Series A Preferred has been converted into Common Stock, such additional number of shares of Common Stock as shall cause the total number of shares of Common Stock held in the escrow account to equal 5,962,963). (iii) If the Company’s Earnings Per Share for 2007 equals or exceeds 95% of the 2007 Performance Threshold, then the Escrow Shares shall continue to be held in escrow hereunder. Notwithstanding anything to the contrary set forth herein, only those Purchasers who own shares of Series B Preferred acquired under the Purchase Agreement and remain shareholders of the Company at the time that any 2007 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2007 Escrow Shares calculated based on their ownership interest at the time when the 2007 Escrow Shares become deliverable hereunder. Any 2007 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series B Preferred acquired under the Purchase Agreement shall remain in escrow with the Escrow Agent. 1.4. If the Company fails to timely comply with its obligations set forth in Section 3.25 of the Purchase Agreement (the “Listing Obligation”), then 16,667 of the Escrow Shares (which number of shares of Series A Preferred are convertible into 1,000,000 shares of Common Stock) (the “Penalty Shares”) shall be distributed to the Purchasers on a pro rata basis based on the number of shares of Series B Preferred owned by such Purchases as of the date thereof. If the Company timely complies with the Listing Obligation, then the Penalty Shares shall be returned to the Principal Stockholder at the address set forth in Section 5.3 hereof. 1.5. The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2008 Performance Threshold as set forth below: (i) If the Company’s Earnings Per Share for 2008 is less than 50% of the 2008 Performance Threshold, then 82,716 of the Escrow Shares (which number of shares of Series A Preferred are convertible into 4,962,963 shares of Common Stock) (the “2008 Escrow Shares”), shall be distributed on a pro rata basis to the Purchasers based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2008 Escrow Shares to the Purchasers on a pro rata basis based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof. (ii) If the Company’s Earnings Per Share for 2008 is greater than or equal to 50% but less than 95% of the 2008 Performance Threshold, (a) the Escrow Agent shall deliver to the Purchasers, on a pro rata basis based on the number of shares of Series B Preferred owned by such Purchasers as of the date thereof, the number of 2008 Escrow Shares equal to the number of 2008 Escrow Shares multiplied by the percentage by which the 2008 Performance Threshold was not achieved and multiplied by 150% and (b) the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. By way of example, if the Company’s Earnings Per Share for 2008 is an amount equal to 60% of the 2008 Performance Threshold, the Purchasers shall receive 150% of 40% of the 2008 Escrow Shares (100% - 60%) and the remaining 2008 Escrow Shares shall be returned to the Principal Stockholder. Within five (5) business days of the Purchaser Representative’s receipt of the 2008 financial statements, the Company and the Purchaser Representative shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2008 Escrow Shares to the Purchasers and to the Principal Stockholder. (iii) In the event the Company equals or exceeds 95% of the 2008 Performance Threshold, all of the 2008 Escrow Shares shall be returned to the Principal Stockholder- at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those which have resulted from Purchasers who own shares of Series B Preferred acquired under the gross negligencePurchase Agreement and remain shareholders of the Company at the time that the 2008 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2008 Escrow Shares calculated based on their ownership interest at the time when such 2008 Escrow Shares become deliverable hereunder. Any 2008 Escrow Shares not delivered to Purchasers because the Purchasers no longer hold shares of Series B Preferred acquired under the Purchase Agreement will be delivered to the Company. 1.6. If the Company does not achieve the 2007 Performance Threshold for 2007 or the 2008 Performance Threshold and/or if the Company does not comply with the Listing Obligation, fraud the Company shall use best efforts to promptly cause the 2007 Escrow Shares, the 2008 Escrow Shares or willful misconduct the Penalty Shares, as applicable, to be delivered to the Purchasers, including causing its transfer agent promptly to issue the certificates in the names of XX Xxxxxx Xxxxx Bankthe Purchasers and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved within ten business days following delivery of the 2007 financial statements or 2008 financial statements in the case of the 2007 Escrow Shares or the 2008 Escrow Shares, N.A.as applicable, to the Purchaser Representative, or. within ten business days of December 31, 2008, in the case of the Penalty Shares. 1.31.7. The Company will provide the Buyers Purchaser Representative with (i) the Company’s audited financial statements for 20092007, prepared in accordance with US GAAP, on or before March 31, 2010 2008 and (ii) the Company’s audited financial statements for 20102008, prepared in accordance with US GAAP, on or before March 31, 20112009, so as to allow the Buyers Purchaser Representative the opportunity to evaluate whether the 2009 2007 Performance Threshold and the 2010 2008 Performance Threshold were attained. 1.8. In Upon the event that any Buyer receives the financial information prior to its dissemination by written request of the Company in either a press release or in the Company’s SEC Documentsand Purchaser Representative, the Company Escrow Agent shall issue a press release announcing deliver the information or file a Form 8-K within one trading day of a request by 2007 Escrow Shares, the Buyer to make such information public. 1.4. The parties hereby agree that the 2008 Escrow Shares shall be delivered and the Penalty Shares, as applicable, to each Purchaser and/or the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer Principal Stockholder pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, written instructions of the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%Purchaser Representative. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Securities Escrow Agreement (National Realty & Mortgage Inc)

TERMS OF THE ESCROW. 1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the Escrow Shares as contemplated by this Agreement. 1.2. Upon the execution of this Agreement, the Principal Stockholder shall deliver to the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bank, N.A. stock certificate evidencing one hundred percent (100%) of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock underlying the Preferred Shares issuable under the Purchase Agreement and indicated on Schedule A hereto (such shares of Common Stock plus such additional number of shares of Common Stock as may be required to be deposited hereunder pursuant to Section 1.3(i) or 1.3(ii) hereof shall be collectively referred to in this Agreement as the “Escrow Shares”), along with updated stock powers executed in blank with signature medallion guaranteed. 1.3. The parties hereby agree that the 2008 Escrow Shares (as hereinafter defined) into shall be delivered based on the achievement of the 2008 Performance Thresholds as set forth below: (i) If the Company does not achieve at least 50% of each of the 2008 Performance Thresholds, then all of the Escrow Shares (the “2008 Escrow Shares”) shall be distributed on a pro rata basis to the Purchaser based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchaser as of the date thereof. Within five (5) business days of the Purchaser’s receipt of the 2008 financial statements, the Company and the Purchaser shall provide written instruction to the Escrow Agent Custody Account within seven (7) days thereof. The Escrow Agent Custody Account shall be in the sole name of instructing the Escrow Agent to issue and only deliver the 2008 Escrow Shares to the Purchaser on a pro rata basis based on the number of shares of Series A Preferred owned by the Purchaser as of the date thereof. Within five (5) business days after the release of the 2008 Escrow Shares to the Purchaser, the Principal Stockholder shall deposit into the escrow account maintained by the Escrow Agent shall have sole authority to transact Agent, stock certificates evidencing one hundred percent (100%) of the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into underlying the Escrow Agent Custody Account, Preferred Shares issuable under the parties agree and hereby irrevocably authorize the Escrow Agent to transfer such excess shares back to the Principal Shareholder’s brokerage account upon instructions from the Principal Shareholder without requiring further authorization or approval from Purchase Agreement. (ii) If the Company achieves between 50% and 95% of the Buyers. For the avoidance of any doubt2008 Performance Thresholds, the Escrow Agent shall deliver to the Purchaser, on a pro rata basis based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchaser as of the date thereof, the number of 2008 Escrow Shares multiplied by the percentage by which the lowest of the 2008 Performance Thresholds was not achieved and multiplied by 200%. By way of example, if the Company’s Earnings Per Share for 2008 is an amount equal to 60% of the 2008 Performance Thresholds, the Company’s Net Income reported on the 2008 financial statements is an amount equal to 70% of the 2008 Performance Thresholds and the Company’s Cash from Operations reported on the 2008 financial statements is an amount equal to 80% of the 2008 Performance Thresholds, the Purchaser shall receive 200% of the product of 40% of the 2008 Escrow Shares (100%-60%) and, the remaining Escrow Shares shall continue to be responsible for procuring held in escrow hereunder. Within five (5) business days of the Purchaser’s receipt of the 2008 financial statements, the Company and the Purchaser shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2008 Escrow Shares to the Purchaser and to hold the remaining Escrow Shares in escrow. Within five (5) business days after the release of the 2008 Escrow Shares to the Purchaser, each Principal Stockholder shall deposit of Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to their duties or performance as instructed into the escrow account maintained by the Escrow Agent, other than stock certificates evidencing such number of shares of Common Stock so that the number of Escrow Shares shall equal the number of shares of Common Stock initially deposited pursuant to Section 1.2. (iii) If the Company achieves at least 95% of each of the 2008 Performance Thresholds, then the Escrow Shares shall continue to be held in escrow hereunder. 1.4. The parties hereby agree that the 2009 Escrow Shares (as hereinafter defined) shall be delivered based on achievement of the 2009 Performance Thresholds as set forth below: (i) If the Company does not achieve at least 50% of each of the 2009 Performance Thresholds, then all of the Escrow Shares (the “2009 Escrow Shares”), shall be distributed on a pro rata basis to the Purchaser based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchaser as of the date thereof. Within five (5) business days of the Purchaser’s receipt of the 2009 financial statements, the Company and the Purchaser shall provide written instruction to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to the Purchaser on a pro rata basis based on the number of shares of Series A Preferred owned by the Purchaser as of the date thereof. (ii) If the Company achieves between 50% and 95% of the 2009 Performance Thresholds, (a) the Escrow Agent shall deliver to the Purchaser, on a pro rata basis based on the number of shares of Series A Preferred and Conversion Shares owned by such Purchaser as of the date thereof, the number of 2009 Escrow Shares equal to the number of 2009 Escrow Shares multiplied by the percentage by which the lowest of 2009 Performance Thresholds was not achieved and multiplied by 200% and (b) the remaining 2009 Escrow Shares shall be returned to the Principal Stockholder. By way of example, if the Company’s Earnings Per Share for 2009 is an amount equal to 60% of the 2009 Performance Thresholds, the Company’s Net Income reported on the 2009 financial statements is an amount equal to 70% of the 2009 Performance Thresholds and the Company’s Cash from Operations reported on the 2009 financial statements is an amount equal to 80% of the 2009 Performance Thresholds, the Purchaser shall receive 200% of 40% of the 2009 Escrow Shares (100% - 60%) and the remaining 2009 Escrow Shares shall be returned to the Principal Stockholder. Within five (5) business days of the Purchaser’s receipt of the 2009 financial statements, the Company and the Purchaser shall provide written instructions to the Escrow Agent instructing the Escrow Agent to deliver the applicable number of 2009 Escrow Shares to the Purchaser and to the Principal Stockholder. (iii) In the event the Company achieves at least 95% of each of the 2009 Performance Thresholds, all of the 2009 Escrow Shares shall be returned to the Principal Stockholder at the address set forth in Section 5.3 hereof. Notwithstanding anything to the contrary set forth herein, only those which have resulted from Purchaser who own shares of Series A Preferred acquired under the gross negligencePurchase Agreement and remain shareholders of the Company at the time that the 2009 Escrow Shares become deliverable hereunder shall be entitled to their pro rata portion of such 2009 Escrow Shares calculated based on their ownership interest at the time when such 2009 Escrow Shares become deliverable hereunder. Any 2009 Escrow Shares not delivered to Purchaser because the Purchaser no longer holds shares of Series A Preferred acquired under the Purchase Agreement will be delivered to the Company. 1.5. If the Company fails to timely comply with its obligations set forth in Section 3.25 of the Purchase Agreement (the “Listing Obligation”), fraud then 1,000,000 shares of Common Stock collectively owned by the Principal Stockholder (the “Penalty Shares”) shall be distributed to the Purchaser and Vision Opportunity China LP on a pro rata basis as set forth in Section 3.25 of the Purchase Agreement. Within five (5) business days after the release of the Penalty Shares to the Purchaser, the Principal Stockholder shall deposit into the escrow account maintained by the Escrow Agent stock certificates evidencing an aggregate of 1,000,000 shares of Common Stock. 1.6. If the Company does not achieve each of the 2008 Performance Thresholds or willful misconduct each of XX Xxxxxx Xxxxx Bankthe 2009 Performance Thresholds and/or if the Company does not comply with the Listing Obligation, N.A.the Company shall use best efforts to promptly cause the 2008 Escrow Shares, the 2009 Escrow Shares or the Penalty Shares, as applicable, to be delivered to the Purchaser, including causing its transfer agent promptly to issue the certificates in the names of the Purchaser and causing its securities counsel to provide any written instruction required by the Escrow Agent in a timely manner so that the issuances and delivery contemplated above can be achieved within five business days following delivery of the 2008 financial statements or 2009 financial statements in the case of the 2008 Escrow Shares or the 2009 Escrow Shares, as applicable, to the Purchaser Representative, or, within five business days of September 28, 2009, in the case of the Penalty Shares. 1.31.7. The Company will provide the Buyers Purchaser with (i) the Company’s audited financial statements for 2008, prepared in accordance with US GAAP, on or before March 31, 2009 and (ii) the Company’s audited financial statements for 2009, prepared in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers Purchaser the opportunity to evaluate whether each of the 2008 Performance Thresholds and each of the 2009 Performance Threshold and the 2010 Performance Threshold Thresholds were attained. In the event that any Buyer the Purchaser receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Commission Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer Purchaser to make such information public. 1.41.8. The parties hereby agree that Upon the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number written request of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to and the Purchaser, the Escrow Agent instructing the Escrow Agent to issue and shall deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 2008 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For and the avoidance of any doubtPenalty Shares, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Thresholdas applicable, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on Purchaser and/or the number of shares of Common Stock purchased by each Buyer Principal Stockholder pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, written instructions of the Company shall provide written instructions to and the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%Purchaser.

Appears in 1 contract

Samples: Securities Escrow Agreement (Southern Sauce Company, Inc.)

TERMS OF THE ESCROW. 1.1. 1.1 The parties hereby agree to establish an escrow account with the Escrow Agent whereby have Joseph B. LaRocco, Esq. act as Xxxxxx Xxxxx xxxxeby the Escrow Agent shall hold receive the Shares and Funds in escrow and distribute the same as set forth in this Agreement. Any capitalized terms not defined herein shall have the meaning ascribed to them in the Transaction Documents. 1.2 The Company agrees that it will not be entitled to deliver a Put Notice to Investor and Investor will not be required to honor a Put Notice, until after the Effective Date and subject to the terms of the Transaction Documents. The Company represents that its transfer agent has agreed to accept a representation letter (See copy of form of representation letter attached to the Investment Agreement as Exhibit G) from the Investor's broker after the Effective Date and after the sale of Shares pursuant to a Put Notice, which representation letter shall state that the Shares were sold in compliance with the prospectus delivery requirements of the Registration Statement. The Company represents that on or before the receipt by the transfer agent of the representation letter, it will instruct its counsel to issue an opinion letter to the transfer agent for the issuance of the Shares being sold and the Company will instruct its transfer agent to issue the appropriate number of Shares in the name of the Investor, or in the broker's street name if so requested by Investor, so that the Shares being purchased from the Company after a Put Notice will bear no legend and not be subject to stop transfer instructions. 1.3 Prior to each Closing Date the Investor shall wire to the Escrow Agent the dollar amount necessary to purchase the Shares on the Closing Date as contemplated required by this Agreementthe Transaction Documents (the "Purchase Amount"). 1.21.4 On each Closing Date the Escrow Agent shall forward the Shares being purchased to the Investor, per Investor's instructions, and wire the amount necessary to purchase the Shares, pursuant to the Transaction Documents, to the Company. Subject to the terms set forth in the Transaction Documents, the Investor is required to purchase the lesser of (a) the Dollar Amount set forth in the Put Notice and (b) 15% of the total Volume Weighted Average Price during the applicable Purchase Period. The Escrow Agent shall deduct from the Funds he receives in escrow from the Investor the following amounts: (a) 5% of the Purchase Amount on each Closing Date, to be wired to the Investor per its instructions (or deducted by the Investor, at its sole option, from the Purchase Amount being wired to the Escrow Agent) (b) On each Closing Date Escrow Agent shall deduct from the Purchase Amount as an escrow fee the sum of $500 for each Put Notice respective to such Closing Date up to $25,000; $1,000 for each Put Notice respective to such Closing Date up to $50,000; $1,500 for each Put Notice respective to such Closing Date up to $75,000 and $2,000 for each Put Notice respective to such Closing Date in excess of $75,000; which amount the Escrow Agent may deduct from the proceeds received in escrow from the Investor. 1.5 Any excess Shares held by the Escrow Agent after disbursement of the appropriate number of Shares to the Investor shall be promptly returned to the Company or its transfer agent, as instructed by the Company. 1.6 This Agreement may be altered or amended only with the written consent of all of the parties hereto. Should Company attempt to change this Agreement in a manner which, in the Escrow Agent's discretion, shall be undesirable, the Escrow Agent may resign as Escrow Agent by notifying Company and Investor in writing. In the case of the Escrow Agent's resignation or removal pursuant to the foregoing, his only duty, until receipt of notice from Company and Investor that a successor escrow agent has been appointed, shall be to hold and preserve the Shares and Funds that are in his possession. Upon receipt by the execution Escrow Agent of this Agreementsaid notice from Company and Investor of the appointment of a successor escrow agent, the name of a successor escrow account and a direction to transfer the Shares and Funds, the Escrow Agent shall open a brokerage account with XX Xxxxxx Xxxxx Bankpromptly thereafter transfer all of the Shares and Funds that he is still holding in escrow, N.A. (to said successor escrow agent. Immediately after said transfer of the “Escrow Agent Custody Account”) whereupon the Principal Shareholder shall deposit or cause to be deposited at least 3,000,000 shares of Common Stock (“Escrow Shares”) into Shares and Funds, the Escrow Agent Custody Account within seven (7) days thereofshall furnish Company and Investor with proof of such transfer. The Escrow Agent Custody Account is authorized to disregard any notices, requests, instructions or demands received by it from Company or Investor after notice of resignation or removal has been given. 1.7 The Escrow Agent shall be reimbursed by Company and Investor for any reasonable expenses incurred in the sole name of event there is a conflict between the Escrow Agent parties and only the Escrow Agent shall have sole authority deem it necessary to transact the shares placed therein. In the event that the Principal Shareholder deposits shares in excess of 3,000,000 shares of Common Stock into retain one counsel, upon whose advice the Escrow Agent Custody Accountmay rely. The Escrow Agent shall not be liable for any action taken or omitted by him in good faith and in no event shall the Escrow Agent be liable or responsible except for the Escrow Agent's own negligence. The Escrow Agent has made no representations or warranties to the Company in connection with this transaction. The Escrow Agent has no liability hereunder to either party other than to hold the Shares and Funds received by the Investor and to deliver them under the terms hereof. Each party hereto agrees to indemnify and hold harmless the Escrow Agent from and with respect to any suits, claims, actions or liabilities arising in any way out of this transaction including the parties agree obligation to defend any legal action brought which in any way arises out of or is related to this Agreement or the investment being made by Investor. The Company acknowledges and hereby irrevocably authorize represents that it is not being represented in a legal capacity by Joseph B. LaRocco, and has had xxx xxxxxxxxxxx xo consult with its own legal advisors prior to the signing of this Agreement. The Company acknowledges that the Escrow Agent is not rendering securities advice to the Company with respect to this proposed transaction. The Escrow Agent has acted as legal counsel for the Investor and may continue to act as legal counsel for the Investor, from time to time, notwithstanding its duties as the Escrow Agent hereunder. The Company consents to the Escrow Agent acting in such capacity as legal counsel for the Investor and waives any claim that such representation represents a conflict of interest on the part of the Escrow Agent. The Company understands that the Investor and Escrow Agent are relying explicitly on the foregoing provisions contained in this Section 1.7 in entering into this Agreement. 1.8 The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to transfer such excess shares back be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith, and any act done or omitted by the Escrow Agent pursuant to the Principal Shareholder’s brokerage account upon instructions from advice of the Principal Shareholder without requiring further authorization Escrow Agent's attorney-at-law shall be conclusive evidence of such good faith. 1.9 The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or approval from the Company by any other person or corporation, excepting only orders or process of courts of law and the Buyers. For the avoidance is hereby expressly authorized to comply with and obey orders, judgments or decrees of any doubtcourt. In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be responsible for procuring liable to any of the deposit parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 1.10 The Escrow Shares. All parties agree to indemnify and hold harmless JPMorgan Chase Bank, N.A. and its Affiliates, employees, and representatives from any and all claims, liabilities, costs or expenses Agent shall not be liable in any way arising from respect on account of the identity, authorities or relating rights of the parties executing or delivering or purporting to their duties execute or performance as instructed deliver the Agreement or any documents or papers deposited or called for hereunder. 1.11 If the Escrow Agent reasonably requires other or further documents in connection with this Agreement, the necessary parties hereto shall join in furnishing such documents. 1.12 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents or the Funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent's sole discretion (a) to retain in the Escrow Agent's possession without liability to anyone all or any part of said documents or the Funds until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (b) to deliver the Funds and any other than those which have resulted from property and documents held by the gross negligence, fraud Escrow Agent hereunder to a state or willful misconduct federal court having competent subject matter jurisdiction and located in the State of XX Xxxxxx Xxxxx Bank, N.A. 1.3. The Company will provide the Buyers with (i) the Company’s audited financial statements for 2009, prepared Connecticut in accordance with US GAAP, on or before March 31, 2010 and (ii) the Company’s audited financial statements for 2010, prepared in accordance with US GAAP, on or before March 31, 2011, so as to allow the Buyers the opportunity to evaluate whether the 2009 Performance Threshold and the 2010 Performance Threshold were attained. In the event that any Buyer receives the financial information prior to its dissemination by the Company in either a press release or in the Company’s SEC Documents, the Company shall issue a press release announcing the information or file a Form 8-K within one trading day of a request by the Buyer to make such information publicapplicable procedure therefor. 1.4. The parties hereby agree that the Escrow Shares shall be delivered to the Buyers as set forth below: (i) If Net Income for 2009 shall be at least ten per cent (10%) less than the 2009 Performance Threshold, then (x) the 2009 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2010, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2009 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2009 Escrow Shares” shall be number of Escrow Shares equivalent to the percentage by which the Company missed the 2009 Performance Threshold. For example, if the Company were to miss the 2009 Performance Threshold by 15%, the 2009 Escrow Shares shall comprise 450,000 shares of Common Stock. For the avoidance of any doubt, no 2009 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2009 Performance Threshold by less than 10%. (ii) If Net Income for 2010 shall be at least ten per cent (10%) less than the 2010 Performance Threshold, then (x) the 2010 Escrow Shares (defined below) shall be distributed on a pro rata basis to the Buyers based on the number of shares of Common Stock purchased by each Buyer pursuant to the Securities Purchase Agreement, and (y) within five (5)business days after March 31, 2011, the Company shall provide written instructions to the Escrow Agent instructing the Escrow Agent to issue and deliver the 2010 Escrow Shares to each Buyer on a pro rata basis based on the number of shares of Common Stock purchased by that Buyer pursuant to the Securities Purchase Agreement, and shall provide a copy of such instructions to each Buyer. “2010 Escrow Shares” shall be the number of Escrow Shares equivalent to the percentage by which the Company missed the 2010 Performance Threshold. For example, if the Company were to miss the 2010 Performance Threshold by 25%, the 2010 Escrow Shares shall comprise 750,000 shares of Common Stock. For the avoidance of any doubt, no 2010 Escrow Shares shall be transferred to any Buyer in the event the Company misses the 2010 Performance Threshold by less than 10%.

Appears in 1 contract

Samples: Escrow Agreement (Access Power Inc)

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