Exhibit 10.9
ESCROW AGREEMENT
AGREEMENT dated this __ day of June, 2004, among Xxxxxx Motorcycle Company,
Ltd., a Delaware corporation, having an address at Xxxxxxx Xxxxxx, Xxxxxxxx 0,
Xxxxxxxxxxx, Xxx Xxxxxx 00000 (the "Company"), Xxxxx Xxxxxxx & Co., Inc., having
an address at 00 Xxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Underwriter")
and HSBC Bank USA, a banking corporation and trust company organized and
existing under the laws of the State of New York, having offices at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as escrow agent (the "Escrow Agent").
W I T N E S S E T H
WHEREAS, the Company has prepared and filed a Form SB-2 registration statement
and amendments thereto (Commission File No. 333-109119) with the U.S. Securities
and Exchange Commission (the "SEC") (such registration statement, together with
any amendments, supplements and exhibits thereto is hereinafter referred to
collectively as the "Registration Statement") in connection with the planned
initial public offering of a minimum 750,000 "Units" and a maximum 2,000,000
Units, at the offering price of $10.25 per Unit, for sale to the public (the
"Investors"), with each Unit being comprised of 2 shares of the Company's common
stock and 1 common stock purchase warrant; and
WHEREAS, the Company desires to establish a non-interest bearing trust account
with the Escrow Agent into which the Underwriter shall deposit the Investors'
checks or wire transfers for the payment of money made payable to the order of
the Company's Escrow Account (as defined herein), and the Escrow Agent is
willing to accept said checks, wire transfers for the payment of money in
accordance with the terms hereinafter set forth; and
WHEREAS, the Company represents and warrants to the Escrow Agent that it has not
stated to any individual or entity that the Escrow Agent's duties will include
anything other than those duties stated in this Agreement; and
WHEREAS, the Company warrants to the Escrow Agent that a copy of the
Registration Statement and amendments thereto as well as the Subscription
Agreements to be entered into between the Company and the Investors, and all
other documents such party has delivered to prospective Investors that include
the Escrow Agent's name and duties, have been attached hereto as Schedule 1;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Delivery Of Escrow Funds
(a)(i) The Underwriter shall deliver to the Escrow Agent checks received from
each prospective Investor made payable to the order of " Xxxxxx Motorcycle
Company, Ltd. Escrow Account." The checks shall be deposited into an account at
HSBC Bank USA entitled "Xxxxxx Motorcycle Escrow Account"(the "Escrow Account"),
or
(ii) The Escrow Agent shall receive money directly from prospective Investors by
means of check or wire transfer. If by wire transfer, money shall be wired to
HSBC Bank USA, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA Number
000-000-000, HSBC Bank USA as the Escrow Agent for the Company, Account
No.10-878618. All such money shall be deposited into the Escrow Account.
(b) The collected funds deposited into the Escrow Account are hereinafter
referred to as the "Escrow Funds".
(c) The Escrow Agent shall have no duty or responsibility to enforce the
collection or demand payment of any funds deposited into the Escrow Account. If,
for any reason, any check deposited into the Escrow Account shall be returned
unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be to return
the check to the Company.
(d) Promptly after checks and wire transfers are delivered to the Escrow Agent
from the Underwriter, the Underwriter shall provide the Escrow Agent with the
Investor's original Subscription Agreement, which shall include the Investor's
name, address and other applicable information (social security number or
employer identification number, if appropriate). The Escrow Agent shall hold the
Subscription Agreements pending release of the Escrow Funds as provided in
Section 2 below.
2. Release of Escrow Funds. The Escrow Funds shall be paid by the Escrow Agent
in accordance with the following:
(a) In the event that the Company and the Underwriter advise the Escrow Agent in
writing that the public offering described in the Registration Statement has
been withdrawn, the Escrow Agent shall promptly return the funds paid by each
prospective Investor, to said prospective Investor, without interest.
(b) If prior to 3:00 P.M. (local New York City time) on the day, 90 days
following the effective date of the Registration Statement (the "Termination
Date"), the Escrow Agent receives written notification, in the form of Exhibit
A, attached hereto and made a part hereof, and signed by the Company and the
Underwriter, stating that the Termination Date has been extended to a date
stated therein (the "Final Termination Date") the date shall be so extended.
(c) Provided that the Escrow Agent does not receive a notice stated in
accordance with Section 2(a) above and there is at least $7,687,500 in the
Escrow Account on or prior to the Termination Date or the Final Termination Date
(if the Escrow Agent has, prior to the Termination Date, received a notice in
accordance with Section 2(b) hereof), the Escrow Agent shall promptly notify the
Company and the Underwriter of such fact in writing. The Escrow Agent shall
promptly disburse the Escrow Funds by wire transfer in accordance with written
instructions signed by the Company and the Underwriter and delivered by the
Company and the Underwriter to the Escrow Agent. After any such disbursement
that is effected prior to the Termination Date or the Final Termination Date (if
the Escrow Agent has, prior to the Termination Date, received a notice in
accordance with Section 2(b) hereof), deposits may continue to be made to the
Escrow Account in accordance with Section 1 hereof and the Escrow Agent shall
make additional disbursements of the Escrow Funds in accordance with this
Section 2(c).
(d) If by 3:00 P.M. (local New York City time) on the Termination Date or the
Final Termination Date (if the Escrow Agent has, prior to the Termination Date,
received a notice in accordance with Section 2(b) hereof), the Escrow Agent has
not received written instructions from the Company and the Underwriter in
accordance with Section 2(c) hereof, or there is a balance in the Escrow Account
of less than $7,687,500, the Escrow Agent shall promptly return the Escrow
Funds.
(e) The Escrow Agent shall not be required to pay any uncollected funds or any
funds which are not available for withdrawal.
3. Acceptance by The Escrow Agent. The Escrow Agent hereby accepts and agrees to
perform its obligations hereunder, provided that:
(a) The Escrow Agent may act in reliance upon any signature believed by it to be
genuine, and may assume that any person who has been designated by the Company
to give any written instructions, notice or receipt, or make any statements in
connection with the provisions hereof has been duly authorized to do so. The
Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy
or validity of any statements or instructions or any signatures on statements or
instructions. The names and true signatures of each individual authorized to act
on behalf of the Company and are stated in Schedule A, which is attached hereto
and made a part hereof.
(b) The Escrow Agent may act relative hereto in reliance upon advice of counsel
in deference to any matter connected herewith. The Escrow Agent shall not be
liable for any mistake of fact or error of judgment or law, or for any acts or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.
(c) The Company agrees to indemnify and hold the Escrow Agent harmless from and
against any and all claims, losses, costs, liabilities, damages, suits, demands,
judgments or actual out-of-pocket expenses (including but not limited to
reasonable attorney's fees) claimed against or incurred by the Escrow Agent
arising out of related, directly or indirectly, to this Agreement, unless caused
by the Escrow Agent's willful misconduct or gross negligence.
(d) In the event that the Escrow Agent shall be uncertain as to its duties or
rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking
any action or other than to keep safely the Escrow Funds until it shall be
directed otherwise by a court of competent jurisdiction, or (ii) deliver the
Escrow Funds to a court of competent jurisdiction.
(e) The Escrow Agent shall have no duty, responsibility or obligation to
interpret or enforce the terms of any agreement other than the Escrow Agent's
obligations hereunder, and the Escrow Agent shall not be required to make a
request that any monies be delivered to the Escrow Account, it being agreed that
the sole duties and responsibilities of the Escrow Agent shall be (i) to accept
checks and wire transfers delivered to the Escrow Agent for the Escrow Account
and deposit said checks and wire transfers into the Escrow Account, (ii) to
notify the Underwriter and the Company of its receipt of funds, (iii) to
disburse or refrain from disbursing the Escrow Funds in accordance with Section
2 hereof, provided that the checks received by the Escrow Agent have been
collected and are available for withdrawal.
4. Resignation and Termination of the Escrow Agent
(a) Resignation. The Escrow Agent may resign at any time by giving 30 days'
written notice of such resignation to the Underwriter and the Company. Upon
providing such notice, the Escrow Agent shall have no further obligation
hereunder except to hold the Escrow Funds which it has received as of the date
on which it provided the notice of resignation as depositary. In such event, the
Escrow Agent shall not take any action until the Underwriter and the Company has
designated a banking corporation, trust company, attorney or other person as
successor (the "Successor Escrow Agent"). Upon receipt of such written
instructions signed by the Underwriter and the Company and the Placement Agent,
the Escrow Agent shall promptly deliver the Escrow Funds, net of any outstanding
charges, to such successor and shall thereafter have no further obligations
hereunder. If such instructions are not received within 30 days following the
effective date of such resignation, then the Escrow Agent may deposit the Escrow
Funds and any other amounts held by it pursuant to this Agreement with a clerk
of a court of competent jurisdiction pending the appointment of a Successor
Escrow Agent. In either case provided for in this Section 4, the Escrow Agent
shall be relieved of all further obligations and released from all liability
thereafter arising with respect to the Escrow Funds and all income earned
thereon.
(b) Termination. The Company may terminate the appointment of the Escrow Agent
hereunder upon written notice specifying the date upon which such termination
shall take effect. In the event of such termination, the Company shall, within
30 days of such notice, appoint a Successor Escrow Agent and the Escrow Agent
shall, upon receipt of written instructions signed by the Company and the
Underwriter turn over to such Successor Escrow Agent all of the Escrow Funds;
provided, however, that if the Company fails to appoint a Successor Escrow Agent
within such 30-day period, such termination notice shall be null and void and
the Escrow Agent shall continue to be bound by all of the provisions hereof.
Upon receipt of the Escrow Funds, the Successor Escrow Agent shall become the
Escrow Agent hereunder and shall be bound by all of the provisions hereof and
the original Escrow Agent shall be relieved of all further obligations and
released from all liability thereafter arising with respect to the Escrow Funds.
5. Notices. All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to be
duly given when received by hand delivery, by facsimile (when confirmed by
return facsimile) followed by first-class mail, by nationally recognized
overnight courier service or by prepaid registered or certified mail, return
receipt requested to the addresses set forth below:
Xxxxxx Motorcycle Company, Ltd.
Xxxxxxx Xxxxxx, Xxxxxxxx 0
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chief Executive Officer
If to the Placement Agent:
Xxxxx Xxxxxxx & Co., Inc.
00 Xxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxx Xx. Xxxxxxx Xxxxxxxxx
If to the Escrow Agent:
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
6. General
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to agreements made and to be
entirely performed within such State.
(b) This Agreement, together with the Exhibits and Schedules annexed hereto,
sets forth the entire agreement and understanding of the parties in respect to
the matters contained herein and supersedes all prior agreements, arrangements
and understandings relating thereto
(c) All of the terms and conditions of this Agreement shall be binding upon, and
inure to the benefits of and be enforceable by, the parties hereto.
(d) This Agreement may be amended, modified, superseded or canceled, and any of
the terms or conditions hereof may be waived, only by a written instrument
executed by each party hereto or, in the case of a waiver, by the party waiving
compliance. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect its right at a later time to
enforce the same. No waiver of any party of any condition, or of the breach of
any term contained in this Agreement, whether by conduct or otherwise, in any
one or more instance shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or a waiver of any other
condition or of the breach of any other term of this Agreement. No party may
assign any rights, duties or obligations hereunder unless all other parties have
given their prior written consent.
(e) Of any provision included in this Agreement shall be determined by a court
of competent jurisdiction to be invalid or unenforceable, it shall not affect
the validity of the remaining provisions.
(f) This Agreement may be executed in several counterparts or by separate
instruments and all of such counterparts and instruments shall constitute one
agreement, binding on all of the parties hereto.
7. Fees. At the time the Escrow Account is opened, the Company shall pay the
Escrow Agent its fees and expenses as agreed to seperatly in writing (including
the reasonable fees and expenses of counsel to the Escrow Agent).
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first set forth above.
XXXXXX MOTORCYCLE COMPANY, LTD.
By:
Xxxxxx X. Xxxxxx
Chief Executive Officer
UNDERWRITER:
XXXXX XXXXXXX & CO., INC.
By:
Name:
Title:
HSBC BANK USA, AS ESCROW AGENT
By:
Name:
Title:
EXHIBIT A
________ __, 200_
HSBC BANK USA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust
Dear Sirs:
In accordance with the terms of Section 2(b) of that certain Escrow Agreement
dated JUNE __, 2004 by and among Xxxxxx Motorcycle Company, Ltd. (the
"Company"), Xxxxx Xxxxxxx & Co., Inc. (the "Placement Agent") and HSBC Bank, USA
(the "Escrow Agent"), the Company and the Placement Agent hereby notify the
Escrow Agent that the Final Termination Date shall be ___________ __, 2004.
XXXXXX MOTORCYCLE COMPANY, LTD.
By:____________________________________
Xxxxxx X. Xxxxxx
Chief Executive Officer
XXXXX XXXXXXX & CO., INC.
By:____________________________________
Name:
Title:
SCHEDULE A
The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by the following on behalf of XXXXXX MOTORCYCLE
COMPANY, LTD.
Xxxxxx X. Xxxxxx True Signature
Name True Signature
The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by the following on behalf of XXXXX XXXXXXX & CO.,
INC.
Name True Signature
Name True Signature
