ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of __Date________between____YOUR
COMPANY_____________. (the "Company") and COMMERCE BANK, N.A., a Banking
Corporation organized and existing under the laws of the United States of
America (the "Escrow Agent").
WITNESSETH:
The Company, pursuant to a Stock Purchase Agreement dated as of __ Date
__________ (the "Agreement") is offering securities (the "Offering") to certain
qualified subscribers (the "Subscribers") consisting of _____________shares of
the Company's common stock per unit, for a purchase price of ____ per Unit. The
aggregate subscriptions that must be received before any subscription payments
will be released to the Company from the escrow created pursuant to the terms
and conditions contained herein is _____________ Units or any combination of
fractional units aggregating ___________ (the "Aggregate Subscriptions Amount").
Thereafter, subscription payments will be released to the Company upon written
request by the Company to the Escrow Agent.
Pursuant to the terms of the Offering, the Company will deliver to the Escrow
Agent each subscription payment (a "Subscription Payment") received by the
Company from a subscriber. The Subscription Payment of such subscriber will be
collectively held in one escrow by the Escrow Agent on the terms and conditions
hereinafter set forth. The Company will maintain all subscriber records and at
least bi-weekly supply the Escrow Agent with a list showing such subscribers
name, address and amount of Subscription Payment.
The offering and sale of the Shares will terminate no later than 90 days
following the effectiveness of the offering (the ("Effective Date"), unless
extended upon written direction by the Company for up to an additional 90 days,
or such earlier date as shall be determined by the Company (the "Termination
Date") . No funds will be accepted by the Escrow Agent after the Termination
Date.
The Company agrees to provide the Escrow Agent, in writing, with the Effective
Date and the Termination Date.
NOW, THEREFORE, the Company and the Escrow Agent agree as follows:
1. Deposits. Each Subscription Payment received by the Company from a subscriber
shall be forwarded to the Escrow Agent along with a certificate from the Company
(the "Subscription Certificate") setting forth the name, address, social
security number and telephone number of such subscriber, the number of Units or
fractional or split Units being purchased and the purchase price being paid for
the same. If the Subscription Payment is in the form of a check, it shall be
enclosed with the Subscription Agreement. If the Subscription Payment is to be
made by wire transfer, the Subscription Agreement shall also state the name,
address and telephone number of the financial institution that will be wiring
such Subscription Payment.
Each Subscription Payment received by the Escrow Agent from the Company will be
deposited and held in accordance with Section 6(a) below. Such account will be
held in the name of (the "Escrow"). It is understood that all checks received by
Escrow Agent are subject to clearance time and the funds represented thereby
cannot be drawn upon or invested until such time as the same constitute good and
collected funds. It is additionally understood that should any checks be
returned to the Escrow Agent as uncollectible, or returned because of
insufficient funds, the Escrow Agent is authorized and instructed to charge
expenses incurred by the Escrow Agent on such uncollected checks to the Escrow.
The Escrow Agent shall redeposit such check(s) for collection only upon the
verbal instruction of the Company; however, in no instance shall the check(s) be
presented for collection more than two (2) times. Should the check(s) be
uncollectible after the second presentation, the Escrow Agent, shall promptly
notify the Company and hold said check(s) until the subscriber has replaced the
same with a cashier's check or such other form of draft that the Company and
escrow Agent approve, at which time the Escrow Agent shall as soon as
practicable return said uncollectible check(s) to the subscriber. In the event
the subscriber does not replace said check(s) with a cashier's check or such
other form or draft acceptable to Escrow Agent and the Company, the Escrow Agent
shall as soon as practicable return the same to such subscriber.
2. Rejection of Subscription Payment. The Company hereby certifies that such
Subscription Agreement provides that the purchase of any Unit is subject to the
approval of the Company. The Company agrees to notify the Escrow Agent in
writing or telephonically with written confirmation as to which Subscriptions
are being accepted and which rejected. All such rejections shall be refunded to
the respective subscribers at the close of this escrow pursuant to the procedure
described in Paragraph 4 hereof, as applicable, or as otherwise directed in
writing by the company.
3. Release of Escrow Funds on Closing. If on a Closing Date, as shortened or
extended pursuant to the terms of the Agreement the Escrow Agent (a) holds
Subscription Payments, representing subscriptions as to which the Company has
notified the Escrow Agent, pursuant to paragraph 2 hereof, that the Company has
accepted, and (b) has received from the Company a certificate stating that all
conditions to such Closing have been met, (i.e. specifically, in the case of the
Initial Closing, that the Aggregate Subscription Amount has been accepted), then
the Escrow Agent is authorized and instructed to make the following payments:
(i) all principal amounts held by the Escrow Agent in the Escrow representing
subscriptions as to which the Company has notified the Escrow Agent, pursuant to
Paragraph 2 hereof, that the Company has accepted, shall be paid to the Company;
(ii) all principal amounts held by the Escrow Agent in the Escrow, representing
subscriptions as to which the Company has notified the Escrow Agent, pursuant to
paragraph 2 hereof, that the Partnership has rejected, shall be paid to the
subscriber. All payments to be made by the Escrow Agent to a subscriber shall be
forwarded to the last known address of the subscriber, as communicated in
writing to the Escrow Agent by the Company, mailed by first class mail. All
payments to be made by the Escrow Agent to the Company shall be forwarded to the
Company as the Company shall direct. Upon release of any funds pursuant to this
Paragraph 4, the Escrow shall be closed as to the funds released; provided,
however , that this Agreement shall remain in effect for further Subscription
Payments received by the Escrow Agent from subscribers which shall be placed in
Escrow and held by the Escrow Agent in accordance with the terms of this
Agreement.
All payments to be made by the Escrow Agent to the Company shall be forwarded to
the Company as the Company shall direct. Upon release of any funds pursuant to
this Paragraph 3, the Escrow shall be closed as to the funds released; provided,
however , that this Agreement shall remain in effect for further Subscription
Payments received by the Escrow Agent from subscribers which shall be placed in
Escrow and held by the Escrow Agent in accordance with the terms of this
Agreement.
4. Other Refunds. If the Escrow Agent has received from the Company a
certificate stating that the Offering is being terminated, then the Escrow Agent
is authorized and instructed to make the following payments: (i) all principal
amounts held by the Escrow Agent in the Escrow together less the expenses
incurred by the Escrow Agent for uncollected checks, if any, shall be paid to
the subscribers of the Company; (ii) All earnings shall be paid to the Company.
All payments to be made by the Escrow Agent to a subscriber, as communicated in
writing to the Escrow Agent by the Company, will be mailed by first class mail.
All payments to be made by the Escrow Agent to the Company shall be issued to
such account as the Company may direct. Upon release of the funds pursuant to
this Paragraph 4, the Escrow Agent's duties as Escrow Agent will cease and the
Escrow shall be closed.
5. Fees. The Company hereby agrees that the Escrow Agent shall be entitled to a
fee of $ 500 Acceptance Fee and $3,500 Administration Fee plus all out of pocket
expenses incurred by the Escrow Agent, (the "Escrow Fee"). The fee is due and
payable by upon execution of the Escrow Agreement. If any fee is not so paid, it
shall become a charge upon the Escrowed Funds. The Escrow Agent agrees that in
the event that a subsidiary company to the Company is formed to facilitate
investment in the Company, the Escrow Fee shall include services to the
subsidiary Company which are the same as the services set forth herein to the
Company and the Escrow Fee shall be prorated between the two companies
6. Rights, Liabilities and Indemnification of the Escrow Agent.
(a) The Escrowed Funds shall be invested by the Escrow Agent in accordance
with the signed, written instructions of __________. In the absence of written
instructions from the above-named party, the Escrow Agent shall invest the
Escrowed Funds in the Ultra money market fund customarily utilized by the Escrow
Agent's corporate trust department in the ordinary course of its corporate trust
and escrow agent duties.
In investing the Escrowed Funds, the Escrow Agent shall rely upon the written
instructions of and the Escrow Agent shall be and hereby is relieved of all
liability with respect to making, holding, redeeming or selling such investments
in accordance with such instructions. In the absence of the written investment
instructions contemplated herein, for any reasons whatsoever, the Escrow Agent
shall be and hereby is relieved of all liability with respect to making,
holding, redeeming or selling investments made in accordance with the preceding
paragraph which prescribes the permissible investment vehicles for the Escrowed
Funds absent written instructions from Xxxxx Xxxxx.
Escrow Agent is and shall be under no duty to enforce the obligation
of__________ to furnish written investment instructions nor shall the Escrow
Agent be liable to any person, firm or corporation, including any of the parties
hereto, for the investments made, held, redeemed or sold as directed herein in
the event that written investment instructions from Xxxxx Xxxxx are not
furnished to the Escrow Agent.
(b) The Escrow Agent shall not be responsible for or be required to
enforce any of the terms or conditions of the Securities Purchase Agreement or
any other agreement between BMA Securities and ___ YOUR COMPANY____________
(c) The parties hereto represent to the Escrow Agent that they are
authorized to enter into the Escrow Agreement by their duly authorized
representatives and that the Escrow Agent is entitled to rely on this
representation without the need to confirm the authority of the representatives.
(d) The duties and obligations of the Escrow Agent shall be limited to and
determined solely by the express provisions of this Escrow Agreement and no
implied duties or obligations shall be read into this Escrow Agreement against
the Escrow Agent.
(e) The Escrow Agent is not bound by and is under no duty to inquire into
the terms or validity of any other agreements or documents, including any
agreements or documents which may be related to, referred to in or deposited
with the Escrow Agent in connection with this Escrow Agreement.
(f) The Escrow Agent shall be entitled to rely upon and shall be protected
in acting in reliance upon any instruction, notice, information, certificate,
instrument or other document which is submitted to it in connection with its
duties under this Escrow Agreement and which the Escrow Agent in good faith
believes to have been signed or presented by the proper party or parties. The
Escrow Agent shall have no liability with respect to the form, execution,
validity or authenticity thereof.
(g) The Escrow Agent shall not be liable for any act which the Escrow
Agent may do or omit to do hereunder, or for any mistake of fact or law, or for
any error of judgment, or for the misconduct of any employee, agent or attorney
appointed by it, while acting in good faith, unless caused by or arising from
its own gross negligence or willful misconduct.
(h) The Escrow Agent shall be entitled to consult with counsel of its own
selection and the opinion of such counsel shall be full and complete
authorization and protection to the Escrow Agent in respect of any action taken
or omitted by the Escrow Agent hereunder in good faith and in accordance with
the opinion of such counsel.
(i) The Escrow Agent shall have the right at any time to resign for any
reason and be discharged of its duties as Escrow Agent hereunder by giving
written notice of its resignation to the parties hereto at least thirty
days/business days prior to the date specified for such resignation to take
effect. All obligations of the Escrow Agent hereunder shall cease and terminate
on the effective date of its resignation and its sole responsibility thereafter
shall be to hold the Escrowed Funds, etc. for a period of thirty days/business
days following the effective date of resignation, at which time,
I) if a successor escrow agent shall have been appointed and written notice
thereof shall have been given to the resigning Escrow Agent by parties hereto
and the successor escrow agent, then the resigning Escrow Agent shall deliver
the Escrowed Funds, etc. to the successor escrow agent; or
II) if a successor escrow agent shall not have been appointed, for any reason
whatsoever, the resigning Escrow Agent shall deliver the Escrowed Funds, etc. to
a court of competent jurisdiction and give written notice of the same to the
parties hereto.
The resigning Escrow Agent shall be entitled to be reimbursed by
_________________ for any expenses incurred in connection with its resignation
and transfer of the Escrowed Funds, etc., pursuant to and in accordance with the
provisions of this section.
(j) ______________ jointly and severally agree to indemnify and hold the
Escrow Agent harmless from and against any and all liabilities, causes of
action, claims, demands, judgments, damages, costs and expenses (including
reasonable attorneys fees and expenses) that may arise out of or in connection
with the Escrow Agent's good faith acceptance of or performance of its duties
and obligations under this Escrow Agreement. The Escrow Agent shall be under no
duty to institute any suit, or to take any remedial procedures under this Escrow
Agreement, or to enter any appearance or in any way defend any suit in which it
may be made a defendant hereunder until it shall be indemnified as provided
above.
(k) In the event that the Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions with respect to the Escrow
Fund which, in its sole discretion, are in conflict either with other
instructions received by it or with any provision of this Agreement, the Escrow
Agent shall have the absolute right to suspend all further performance under
this Escrow Agreement (except for the safekeeping of the Escrow Fund) until the
resolution of such uncertainty or conflicting instructions to the Escrow Agent's
sole satisfaction by final judgment of a court of competent jurisdiction, joint
written instructions from all of the other parties hereto, or otherwise.
(l) In the event that any controversy arises between one or more of the
parties hereto or any other party with respect to this Escrow Agreement or the
Escrow Fund, the Escrow Agent shall not be required to determine the proper
disposition of such controversy or the proper disposition of the Escrow Fund and
shall have the absolute right, in its sole discretion, to deposit the Escrow
Fund with the Clerk of a court of competent jurisdiction, file a suit in
interpleader and obtain an order from the court requiring all parties involved
to litigate in such court their respective claims arising out of or in
connection with the Escrow Fund. Upon the deposit by the Escrow Agent of the
Escrow Fund with the Clerk of a court of competent jurisdiction in accordance
with this provision, the Escrow Agent shall be relieved of all further
obligations and released from all liability hereunder.
(m) The Company hereby indemnifies and holds the Escrow Agent harmless
from any possible violations of any Environmental Laws including any local,
state or federal law, rule or regulation pertaining to environmental matters, as
now or hereafter enacted or amended, including without limitation, the Federal
Comprehensive Environmental Response; Compensation and Liability Act of 1980;
the Federal Resource Conservation and Recovery Act; the Federal Superfund
Amendments and Reauthorization Act of 1986; the Federal Toxic Substance Control
Act; the Federal Hazardous Material Transportation Act; the Federal Clean Air
Act; the Federal Water Pollution Control Act; the Industrial Site Recovery Act;
the New Jersey Spill Act; the Underground Storage Tank Act; together with any
other federal, state or local superlien, or other statutes, rules or
regulations, as now or hereafter amended in any way pertaining to clean-up,
disclosure, water pollution control, air pollution control, regulation of solid
waste, hazardous waste management, storage tanks, regulation of environmentally
sensitive areas, use of ground water, surface waters and wetlands, hazardous and
toxic substance reporting and any other laws including case laws, which might be
deemed or referred to as environmental common law.
7. Modification, Amendment, Rescission. No rescission, modification, amendment,
supplement or change of this Escrow Agreement shall be valid or in effect unless
notice thereof is given to the Escrow Agent in writing by the Company and
accepted by the Escrow Agent.
8. Successors and Assigns. The provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, successors or assigns and shall survive the termination of this Escrow
Agreement.
9. Copies. This Escrow Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10. Notices. All notices, instructions and other communications under this
Escrow Agreement shall be in writing except as otherwise specified herein and
shall be deemed duly given if sent by certified or registered mail, postage
prepaid, return receipt requested and addressed as follows:
(a) If to the Escrow Agent:
Commerce Bank, NA
Attn.: Corporate Trust Administration
000 Xxxxxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Company:
YOUR COMPANY Inc.
Address
City, State , zip
Telephone:
Fax:
11. Applicable Law. This Escrow Agreement shall be governed by and construed in
accordance with the laws of the United State of America.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on
the day and year first above written.
By:
Title
Commerce Bank, N.A.
By:
Title:
