EXHIBIT 10.24
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT made and entered into this ___ day of March,
2000, by and between THE PERSONS NAMED IN ANNEX A hereto (herein collectively
referred to as "Depositors"); BANK WINDSOR, a corporate fiduciary with principal
office in Minneapolis, Minnesota (hereinafter called the "Escrow Agent");
FOUNDERS FOOD & XXXXXXX LTD., a corporation with principal offices in St. Louis
Park, Minnesota (hereinafter called the "Issuer") and the COMMISSIONER OF
COMMERCE FOR THE STATE OF MINNESOTA (hereinafter called the "Commissioner");
WITNESSETH THAT:
Each of the Depositors is the owner of common stock or options or
warrants to purchase common stock of the Issuer and each owns the number of
units of such security listed opposite his or her name on Annex A, attached
hereto and made a part hereof.
The Issuer has applied to the Commissioner for registration of its
securities for sale to residents of Minnesota, and as a condition of
registration the Depositors, the Escrow Agent and the Issuer agree to be bound
by this Agreement and the applicable rules and regulations of the Commissioner.
Each of the Depositors has deposited the securities listed opposite his
or her name on Annex A with the Escrow Agent, and the Escrow Agent hereby
acknowledges receipt thereof. These securities are herein collectively referred
to as "escrowed securities."
THEREFORE, the parties agree as follows:
1. The Escrow Agent agrees to hold the escrowed securities until such
time as Escrow Agent shall receive a written release issued by the Commissioner
permitting the release from escrow of all or a part of the escrowed securities
held under this Agreement. Upon receipt of such release, the Escrow Agent may
release to each Depositor all or a part of the escrowed securities in accordance
with the order of the Commissioner.
Subject to the above provisions, the term of escrow under this
Agreement shall run for a period of three (3) years from the date of the
Order of Registration, unless at an earlier date the Issuer shall have
demonstrated annual net earnings, after taxes and excluding extraordinary
items, determined in accordance with generally accepted accounting
principles, for any two (2) consecutive years after the date of the Order of
Registration, of at least five percent (5%) on an amount determined by
multiplying the total number of outstanding shares of the Issuer, including
the escrowed securities, by the average price per share paid by public
investors. The existence of the required annual net earnings shall be
demonstrated by certification to that effect furnished to the Commissioner by
an independent certified public accountant or an authorized officer of the
Issuer. In addition, the Issuer and each of the Depositors shall furnish the
Commissioner a written statement that none of the escrowed securities nor any
interests therein have been sold, transferred or otherwise disposed of
(except as permitted by paragraph 4) as a condition of the release from
escrow.
2. Notwithstanding any provision of paragraph 1, the Commissioner
may, in his or her discretion, terminate the term of escrow with respect to
all or any part of the escrowed securities of any Depositor before the
expiration of the period of occurrence of the event specified in paragraph 1
and release such securities if the Commissioner determines that the release
of such securities to the Depositor(s) will not be detrimental to the Issuer,
the public investors or any other party concerned. At the time of release by
the Commissioner of any securities from escrow, the application of this
Agreement shall terminate with respect
to the securities so released.
3. While it is held in escrow pursuant to this Agreement, no
escrowed security nor any interest therein, nor any right or title thereto,
may be sold or transferred, by means of transfer of the security separate
from the certificate representing it or otherwise, without the prior written
release of the Commissioner, except that the release of the Commissioner need
not be obtained to transfer escrowed shares by will or the laws of descent
and distribution or otherwise by order or process of any Court.
4. Upon receipt of such written release from the Commissioner
directing that some or all of the escrowed securities of the Depositor held
under this Escrow Agreement be released for the purpose of transfer to
another person against concurrent deposit of the securities so transferred,
the Escrow Agent may release such securities but only against such deposit
under this Agreement of all the transferred securities. The Commissioner
shall authorize such transfer of the escrowed securities only upon receipt of
a signed statement by the proposed transferee that he or she has full
knowledge of the terms of this Escrow Agreement and that the proposed
transferee accepts such securities subject to the conditions of this Escrow
Agreement.
5. The Depositors agree that they shall be entitled to receive cash
and property dividends with respect to the escrowed securities while such
securities are held in escrow pursuant to this agreement to the same extent
as other security holders of the same class of security and that said cash or
property dividends shall be placed under the terms of this Escrow Agreement.
6. Upon declaration of any dividend in shares of the Issuer or a
subsidiary to which the escrowed securities are entitled pursuant to a share
dividend or split authorized by a vote of the shareholders, the Depositors
and the Escrow Agent shall forthwith enter into a Supplemental Escrow
Agreement, covering such share dividend, which Supplemental Escrow Agreement
shall incorporate all the conditions of escrow contained in this Agreement.
The shares received as dividend shall be forthwith deposited in escrow with
the Escrow Agent pursuant to such Supplemental Escrow Agreement, and the
Escrow Agent shall deliver to the Commissioner a receipt for the shares thus
escrowed.
7. During the term of escrow, the Depositors shall not be entitled
to and hereby waive all rights to participate in any distribution of assets
of the Issuer in the event of liquidation, dissolution, or winding up, until
the public investors shall have received cash or property in an amount or
value equal to the price paid by public investors for securities purchased by
such public investors; and thereafter the Depositors shall participate
without the public investors until they shall have received cash or other
property in an amount or value equal to the price paid by the Depositors for
the escrowed securities; and thereafter the public investors and the
Depositors shall participate equally according to the terms of their
securities. Any Depositor(s) seeking release of all or any part of the
escrowed securities pursuant to this paragraph 7 shall furnish the
Commissioner a written statement that none of the escrowed securities nor any
interests therein have been sold, transferred (except as provided in
paragraph 4) or otherwise disposed of, without the consent of the
Commissioner, as a condition of the release from escrow.
8. This Escrow Agreement shall not be construed to prohibit any
Depositor from participating in any distribution of securities of any
corporation other than the Issuer resulting from the sale of assets of the
Issuer or a merger or consolidation of the Issuer with or into any other
corporation or corporations. In the event of such a transaction, the Escrow
Agent should obtain written authorization from the Commissioner prior to the
release of the escrowed securities, and, any such distribution payable in
securities of any corporation other than the Issuer paid with respect to the
escrowed securities shall be delivered to the Escrow Agent and held pursuant
to a Supplemental Escrow Agreement prepared and executed as described in
paragraph 6, above. In the event of a merger or consolidation of the Issuer
with or into any other corporation or corporations, any securities shall be
delivered to the Escrow Agent and held pursuant to a Supplemental Escrow
Agreement prepared and executed as described in paragraph 6, above.
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9. The Escrow Agent may conclusively rely upon and shall be
protected in acting upon any statement, certificate, notice, request,
consent, order, or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties. The Escrow Agent
shall have no duty or liability to verify any such statement, certificate,
notice, request, consent, order, or other document and its sole
responsibility shall be to act only as expressly set forth in this Escrow
Agreement. The Escrow Agent shall be under no obligation to institute or
defend any action, suit, or proceeding in connection with this Escrow
Agreement unless first indemnified to its satisfaction. The Escrow Agent may
consult counsel in respect of any question arising under this Escrow
Agreement and the Escrow Agent shall not be liable for any action take or
omitted in good faith upon advice of such counsel. All securities held by
Escrow Agent pursuant to this Escrow Agreement shall constitute trust
property for the purposes for which they are held and the Escrow Agent shall
not be liable for any interest thereon.
10. The Escrow Agent shall be entitled to receive from the Issuer
reasonable compensation for its services as contemplated herein. In the event
that the Escrow Agent shall render any additional service not provided for
herein or that any controversy shall arise hereunder or that the Escrow Agent
shall be made a party or shall intervene in any action, suit or proceeding
pertaining to this Escrow Agreement, it shall be entitled to receive
reasonable compensation from the Issuer for such additional services.
11. This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, successors, and assigns.
12. This Escrow Agreement shall terminate in its entirety when all
escrowed securities covered hereby and by any Escrow Agreements supplemental
hereto have been released as provided in paragraph 1.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on
the Date first above written.
Escrow Agent: Issuer:
BANK WINDSOR FOUNDERS FOOD & XXXXXXX LTD.
By By
--------------------------------- ---------------------------------
Its Its
-------------------------------- --------------------------------
Depositors:
BREWING VENTURES LLC:
By
---------------------------------
Its
--------------------------------
------------------------------------
Xxxxxx X. Xxx III
ACCEPTED FOR FILING:
---------------------------------
Commissioner of Commerce
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ANNEX A
NUMBER OF
NAME AND ADDRESS OF DEPOSITOR DESCRIPTION OF ESCROWED SECURITY ESCROWED SECURITIES
----------------------------- -------------------------------- -------------------
Brewing Ventures LLC Common Stock 1,662,500
0000 Xxxxx Xxxx Xxxx
Xx. Xxxxx Xxxx, XX
00000
Xxxxxx X. Xxx III Stock Option dtd 8/18/97 10,000
2515 Manitou Island Stock Option dtd 8/18/98 5,000
Xxxxx Xxxx Xxxx, XX 00000 Stock Option dtd 8/19/99 5,000
