Exhibit No. 99.1
SimplaGene USA, Inc.
Form SB-2, Amendment No. 1
PROCEEDS ESCROW AGREEMENT
PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of November 26, 2002, by
and between SIMPLAGENE USA, INC., a Nevada corporation (the "Company") and
ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION of Minneapolis, Minnesota (the
"Escrow Agent").
W I T N E S S E T H
WHEREAS, the Company intends to engage in a registered offering of certain
of its securities (the "Offering"), which Offering contemplates total aggregate
offering proceeds of $100,000, pursuant to a registration statement on Form SB-2
("Registration Statement") filed with the Securities and Exchange Commission;
WHEREAS, following the effective date of the Registration Statement
("Effective Date") there will be deposited into an escrow account with Escrow
Agent from time to time funds from prospective investors who wish to subscribe
for securities offered in connection with the Offering ("Subscribers"), which
funds will be held in escrow and distributed in accordance with the terms
hereof; and
WHEREAS, the Escrow Agent is willing to act as an escrow agent in respect
of the Escrow Funds (as hereinafter defined) upon the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable considerations, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints the Escrow
Agent as escrow agent in accordance with the terms and conditions set forth
herein, and the Escrow Agent hereby accepts such appointment.
2. Delivery of Escrow Funds.
(a) The Company shall deliver to the Escrow Agent checks or wire
transfers made payable to the order of "Associated Bank, SimplaGene USA
Escrow Account" together with a subscription agreement containing the
Subscriber's name, mailing address, social security number, and amount of
investment. The funds delivered to the Escrow Agent shall be deposited by
the Escrow Agent into a non-interest-bearing account designated "Associated
Bank, SimplaGene USA Escrow Account" (the "Escrow Account") and shall be
held and distributed by the Escrow Agent in accordance with the terms
hereof. The funds deposited into the Escrow Account that are collected are
referred to herein as the "Escrow Funds." The Escrow Agent shall
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acknowledge receipt of all Escrow Funds by notifying the Company of
deposits into the Escrow Account in the Escrow Agent's customary manner no
later than the next business day following the business day on which the
Escrow Funds are deposited into the Escrow Account.
(b) 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.
3. Investment of the Escrow Funds. The Escrow Account shall not bear
interest and no other investment of the Escrow Funds shall be made while held by
the Escrow Agent.
4. Release of Escrow Funds. The Escrow Agent shall pay the Escrow Funds in
accordance with the following:
(a) Provided that the Escrow Agent has received deposits to the Escrow
Account totaling at least $100,000 at or before 3:00 p.m., central time, on
____________, 200__, [within 90 days from the Effective Date] (or
___________, 200__ [within 120 days from the Effective Date] if extended by
the Company by written notice to the Escrow Agent given on or before
_________, 200__) or on any date prior thereto, that are subsequently
collected through normal banking procedures so that the total of the Escrow
Funds is $100,000 after collection, the Escrow Funds shall be paid to the
Company or as otherwise instructed by the Company, within one (1) business
day after the Escrow Agent receives a written release notice in
substantially the form of Exhibit A attached hereto (a "Release Notice")
signed by an authorized person of the Company; and
(b) if the Escrow Agent has not received deposits to the Escrow
Account totaling at least $100,000 at or before 3:00 p.m., central time, on
____________, 200__, [within 90 days from the Effective Date] (or
___________, 200__ [within 120 days from the Effective Date] if extended by
the Company by written notice to the Escrow Agent given on or before
_________, 200__) that for whatever reason are not subsequently collected
through normal banking procedures so that the total of the Escrow Funds is
not $100,000, then the Escrow Funds shall be promptly returned to
Subscribers.
In the event that at any time the Escrow Agent shall receive from the Company
written instructions signed by an individual who is identified on Exhibit B
attached hereon as a person authorized to act on behalf of the Company,
requesting the Escrow Agent to refund to a Subscriber the amount of a collected
check or other funds received by the Escrow Agent, the Escrow Agent shall make
such refund to the Subscriber within one (1) business day after receiving such
instructions.
5. Limitation of Responsibility and Liability of the Escrow Agent. The
Escrow Agent:
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(a) shall not be liable for any error of judgment or for any act done
or step taken or omitted by it in good faith, or for any mistake of fact or
law, or for anything which it may do or refrain from doing in connection
herewith, except its own gross negligence and willful misconduct;
(b) shall be authorized to rely upon all written instructions and/or
communications of the non-bank Party which appear to be valid on their
face;
(c) shall have no implied obligations or responsibilities hereunder,
nor shall it have any obligation or responsibility to collect funds or seek
the deposit of money or property;
(d) may consult with legal counsel of its choice with regard to any
legal question arising in connection with this duties or responsibilities
hereunder, and shall have no liability or responsibility by reason of any
action it may take or fail to take in accordance with the opinions of such
counsel;
(e) acts hereunder as a depository only, and is not responsible or
liable in any manner whatsoever for the sufficiency, correctness,
genuineness, or validity of any instrument deposited with it, or with
respect to the form or execution of the same, or the identity, authority,
or rights of any person executing or depositing the same; and
(f) shall be entitled to comply with any final order, judgment or
decree of a court of competent jurisdiction, and/or with the consistent
written instructions from the non-bank Party.
6. Costs and Expenses. The fee of the Escrow Agent is $1,000 (including one
disbursement with a maximum of two checks) receipt of which is hereby
acknowledged. Additional disbursements will be provided at a fee of $50.00 per
disbursement, and additional checks will be provided at a fee of $3.00 each. In
addition (1) if payment is tendered by Subscribers in the form of checks drawn
on non-US banks, the Escrow Agent shall receive a fee of $15.00 for each such
check deposited in the Escrow Account, (2) if payment is tendered by Subscribers
in the form of a wire transfer, the Escrow Agent shall receive a fee of $10.00
for each such wire transfer received for deposit in the Escrow Account, (3) if
the Escrow Funds are returned to Subscribers under 4(b), above, the Escrow Agent
shall receive a fee of $3.00 per check for such service, (4) if any
disbursement, whether to the Subscribers or per instruction of the Release
Notice, is made by wire transfer from the Escrow Account, the fee shall be
$17.00 per wire, and (5) all out of pocket expenses for special handling, such
as courier delivery service, certified, mail, etc. The Company shall pay all
such fees at the time of occurrence. The fee agreed on for services rendered
hereunder is intended as full compensation for the Escrow Agent's services as
contemplated by this Agreement; however, in the event that the conditions of
this Agreement are not fulfilled, the Escrow Agent renders any material service
not contemplated by this Agreement, there is any assignment of interest in the
subject matter of this Agreement, there is any material modification hereof, any
material controversy arises hereunder, or the Escrow Agent is made a party to or
justifiably intervenes in any litigation pertaining to this Agreement or the
subject matter hereof, the Escrow Agent shall be reasonably compensated for such
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extraordinary expenses, including reasonable attorneys' fees, occasioned by any
delay, controversy, litigation, or event and the same may be recoverable only
from the Company.
7. Notices. All notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when
received, if deposited in the mail, postage prepaid, addressed as provided
below; when transmission is verified, if telecopied; and on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery;
To the Company: SimplaGene USA, Inc.
00000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Vice President
To Escrow Agent: Associated Bank
000 Xxxxxxxxx Xxx. Xx.
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx
Any party may change its address by providing written notice of such change to
the other parties hereto.
8. Resignation by Escrow Agent. Upon thirty (30) calendar days' prior
written notice to the Company delivered or sent as required above, the Escrow
Agent shall have the right to resign as escrow agent hereunder and to thereby
terminate its duties and responsibilities hereunder, and shall thereupon be
released from these instructions. Upon resignation by the Escrow Agent, the
Escrow Agent shall provide the Company with sufficient information concerning
the status of the Escrow Fund to enable the Company to provide the same to a
successor escrow agent.
9. Termination of Escrow Agreement. The Escrow Agent's responsibilities
thereunder shall terminate at such time as the Escrow Fund shall have been fully
disbursed pursuant to the terms hereof, or upon earlier termination of this
escrow arrangement pursuant to written instructions executed by the Company.
Such written notice of earlier termination shall include instruction to the
Escrow Agent for the distribution of the Escrow Fund.
10. Entire Agreement. This Agreement contains the entire understanding by
and among the parties hereto; there are no promises, agreements, understandings,
representations or warranties, other than as herein set forth. No change or
modification of this Agreement shall be valid or effective unless the same is in
writing and is signed by all of the parties hereto.
11. Applicable Law, Successors and Assigns. This Agreement shall be
governed in all respects by the laws of the state of Minnesota, and shall be
binding upon and shall inure to the benefit of the parties hereto, and their
respective heirs, executors, administrators, legal representatives, successors
and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused their respective hands
to be set hereto with the intention of being bound effective in all respects as
of the date and year first hereinabove written.
SIMPLAGENE USA, INC.
By: /s/ Xxxxx Xxxxxxxx, Vice President
ASSOCIATED BANK
By: /s/ Xxxxxx Xxxxxxx, Xx. Vice President
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EXHIBIT A
Release Notice
ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION
000 Xxxxxxxxx Xxx. Xx.
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx
Gentlemen:
The undersigned hereby authorize and instruct ASSOCIATED BANK, escrow
agent, to release $100,000 of Escrow Funds from the Escrow Account and to
deliver such funds as follows:
[Insert Delivery Instructions]
IN WITNESS WHEREOF, this release has been executed on ________________,
200__.
SIMPLAGENE USA, INC.
By: ________________________________
Its: ________________________________
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EXHIBIT B
Authorized Personnel
The Escrow Agent is authorized to accept instructions and notices signed or
believed by the Escrow Agent to be signed by any one of the following each of
who is authorized to act on behalf of the Company:
Name Title Signature
Xxxxx Xxxxxxxx Vice President /s/ Xxxxx Xxxxxxxx
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