ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is entered into by and between, INC., LTD.
("Customer") and ("Bank").
WHEREAS, the Customer is in the process of effecting an S-B2 public offering of
its shares common stock (the "Shares"); and
WHEREAS, prospective purchasers of the Shares ("Investors") will be tendering
funds to the Customer, subject to certain conditions; and
WHEREAS, the Customer desires that such funds be deposited at the Bank in an
interest bearing escrow account for safekeeping pending the results of the
offering of the Shares; and
WHEREAS, the parties desire to enter into certain agreements regarding said
escrow account;
NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties do
hereby agree as follows:
1. Appointment, Acceptance, and Compensation
(a) The Customer hereby appoints the Bank, a state banking association, as
its escrow agent under this Agreement and the Bank hereby accepts such
appointment. This Agreement will govern the relationship between the
Bank and the Customer with respect to the Escrowed Funds (as defined
in Section 3 below).
(b) The Bank shall receive no compensation for its services hereunder.
However, the Bank shall be reimbursed for all out-of-pocket expenses,
including, but not limited to, reasonable attorney's fees, incurred in
connection with the services rendered by the Bank pursuant to this
Agreement. Customer shall pay all expenses of the Bank under this
Agreement directly, and none of such expenses shall be charged against
or paid from the Escrowed Funds.
2. Establishment of Escrow Account. The Bank shall establish a bank account
under the name "XxxXxxxxXxXxxx.xxx, Inc., Escrow Account" (the "Escrow
Account"). The Escrow Account shall be separate from any account of the
Customer. The Escrow Account shall bear interest at the prevailing rate.
3. Deposits to Escrow Account. The Customer may, from time to time, deliver,
or cause to be delivered, to the Bank, for deposit into the Escrow Account,
funds received from Investors. Such funds may be delivered by
check or other instrument, or may be effected by wire transfer. Funds shall
be drawn on domestic branches of United States banks, shall be payable in
United States dollars, and shall be made payable to the order of
"XxxXxxxxXxXxxx.xxx, Inc., Escrow Account." All funds delivered by the
Customer to the Bank, when cleared and collected, shall be referred to
herein as the "Escrowed Funds." The Bank is hereby authorized, on behalf of
the Customer, to endorse and forward for presentment and collection all
checks received on account of subscriptions for Shares. If, after the
receipt and deposit by the Bank of any check tendered in connection with
any subscription, such check shall be returned as uncollectable, the Bank
shall immediately return such check to the Customer for disposition.
4. Safekeeping of Funds. The Bank shall hold all funds deposited in the
Escrow Account in safekeeping until (i) the release of the Escrowed Funds
to Customer pursuant to Section 5 below, or (ii) the return of the Escrowed
Funds to the Investors pursuant to Sections 7 and 8 below. Additionally,
the Bank will: (a) allow the administrators of the states listed in
Schedule A the right to inspect and make copies of the records of the Bank
at any reasonable time wherever the records are located; (b) notify the
administrators of such states in writing upon the release of the Escrowed
Funds pursuant to Sections 5 and 8 below; (c) release and return the
Escrowed Funds to the Investors with interest and without any deductions
for expenses, including expenses of the Bank, in the event that the
subscriptions for the Shares are insufficient to meet the minimum offering
amount within the time specified in this Agreement
5. Escrow Release
(a) At such time as the conditions for the release of the Escrowed Funds
shall have been met, as described in Section
(b) below (the "Escrow Release"), the Bank shall immediately release and
deliver the Escrowed Funds to Customer.
(c) As a condition to the release of the Escrowed Funds to Customer, (i)
the total amount of the Escrowed Funds must equal or exceed Two
Million Dollars ($2,000,000); and (ii) Customer must provide the Bank
with a certificate, executed by the Customer under penalties of
perjury, that it has received subscriptions for the minimum number of
Shares as set forth in its prospectus.
6. Additional Deposits. From and after the Escrow Release, Customer may
continue to deposit funds from Investors into the Escrow Account, but shall
be entitled to immediately withdraw said funds upon written request.
7. Rejected Subscriptions. In the event that the Customer rejects any
subscription for any reason, the Bank shall, upon receipt of written
instructions from the Customer, return and deliver the Escrowed Funds
attributable thereto, with interest, if any, and without deduction, to the
Investor from whom the Escrowed Funds were received at the address provided
to the Bank by the Customer . Such funds shall be returned by certified
mail, return receipt requested, and the Bank may complete the return
receipt to such certified mail so that such receipts are returned to the
Customer.
8. Failure to Achieve Escrow Release. In the event that Escrow Release does
not occur on or before May 31, 2001, the Bank shall, not earlier than
thirty (30) days after such date (unless agreed to the contrary by the
Customer) nor more than sixty (60) days after such date, deliver to each
Investor, at the addresses provided by the Customer to the Bank, the
Escrowed Funds held on behalf of each Investor.
9. Ownership of Funds. The Bank does hereby acknowledge and agree that all
Escrowed Funds held in the Escrow Account shall, until disbursed to
Customer in accordance with the provisions of this Agreement, be held for
the benefit of each Investor and each Investor shall be considered the
owner of its respective Escrowed Funds for all purposes.
10. Successor Escrow Agents. The Bank, or any successor escrow agent, may
resign from its duties under this Agreement at any time by giving notice in
writing to the Customer and shall be discharged from its duties under this
Agreement on the first to occur of the appointment of a successor escrow
agent as provided in this Section , or the expiration of thirty (30)
calendar days after such notice is given, and may be discharged from its
duties under this Agreement upon receipt from the Customer of five (5) days
prior written notice of such discharge. In the event of any resignation or
discharge of the Bank, a successor escrow agent shall be appointed by the
Customer. A successor escrow agent shall be selected from among those state
or national banks possessing trust powers whose principal office is located
in the United States of America. Any successor escrow agent shall deliver
to the Customer and the Bank a written instrument accepting
appointment under this Agreement, and thereupon it shall succeed to all of
the rights and duties of the Bank hereunder, and shall be entitled to
receive the Escrowed Funds. Upon the resignation or discharge of the Bank,
the Bank shall deliver all Escrowed Funds in its possession pursuant to the
terms of this Agreement to such person or persons as the Customer shall
designate in writing.
11. Rights, Privileges, Immunities and Liabilities of the Bank: The following
shall govern the rights, privileges, immunities and liabilities of the
Bank:
(a) Not Party to Other Agreements. The Bank is not a party to, and is not
bound by, any agreements involving the Customer other than this
Agreement.
(b) Indemnification. In the event the Bank becomes involved in any suit,
litigation, or other investigative or legal proceeding in connection
with this Agreement, the Escrowed Funds, or any matter related
thereto, the Customer agrees to indemnify and save the Bank harmless
from all loss, costs, damage, expense, liability, and attorney's fees
suffered or incurred by the Bank as a result thereof, except any such
loss, cost, damage, expense, liability, or attorney's fees that arise
as a result, directly or indirectly, of the Bank's gross negligence or
willful misconduct.
(c) Acting on Notices. The Bank shall have no responsibility for the
genuineness or validity of any document or other item deposited with
it, and shall be protected in acting in accordance with any written
notice, request, waiver, consent, certificate, receipt, authorization,
power of attorney, or other document or instrument that the Bank, in
good faith, believes to be genuine and signed by the proper parties.
(d) Standard of Care. The Bank shall not be liable for anything that it
may do or refrain from doing in connection herewith provided that it
acts in good faith.
(e) Consultation with Counsel. The Bank may consult with legal counsel in
the event of any dispute or question as to the construction of any of
the provisions of this Agreement or its duties hereunder, and it shall
incur no liability and shall be fully protected in acting in
accordance with the opinion and instructions of such counsel.
(f) Discharge of Obligations. The Bank, having transferred the Escrowed
Funds to the Customer or the Investors in accordance with the
provisions of this Agreement, shall be discharged from any further
obligations hereunder.
12. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered or mailed, first
class, certified or registered, postage prepaid, return receipt requested,
addressed to the party for whom they are intended at the following
addresses:
A. If to Bank: Bank address
B. If to Customer: XxxXxxxxXxXxxx.xxx address Such names and
addresses may be changed by written notice.
13. Entire Agreement and Amendments. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter
contained herein and may be amended or terminated (except as expressly
provided herein) only by a written instrument executed by all parties, or
their respective successors or assigns. There are no restrictions,
promises, warranties, covenants, or undertakings other than those expressly
set forth herein.
14. Headings. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the state of Texas without regard to its
conflict of law rules.
16. Parties in Interest. This Agreement shall inure to the benefit of and be
binding upon the Bank, the Customer, the Investors, and their successors
and assigns.
17. Provisions Severable. If any one or more covenants, agreements, or
provisions herein shall be held for any reason whatsoever invalid or
unenforceable, then such covenants, agreements, or provisions shall be null
and void and shall be deemed severable from the remainder of this Agreement
and in no way affect the validity of any such remainder.
18. Number and Gender. Whenever required by the context, any reference herein
to the singular shall include the plural, any reference to the plural shall
include the singular, and the gender of any pronoun shall mean
and include the appropriate gender, whether masculine, feminine, or neuter.
19. Counterparts. This Agreement may be executed simultaneously in multiple
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
EXECUTED this the , 2000
