PROCEEDS ESCROW AGREEMENT
PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of
___________, 2001, by and between Alaska Freightways, Inc., a
Nevada corporation (the "Company") and BRIGHTON BANK of Salt Lake
City, Utah (the "Escrow Agent")
W I T N E S S E T H
WHEREAS, the Company intends to engage in a public offering
of certain of its securities (the "Offering"), which Offering
contemplates minimum aggregate offering proceeds of $75,000 and
maximum aggregate offering proceeds of $300,000;
WHEREAS, 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 "Brighton
Bank, Alaska Freightways, Inc., Escrow Account" together with the
Subscribers mailing address. The funds delivered to the Escrow
Agent shall be deposited by the Escrow Agent into a non-interest-
bearing account designated "Brighton Bank, DML, Inc., Escrow
Account" (the "Escrow Account") and shall be held and distributed
by the Escrow Agent in accordance with the terms hereof. The
collected funds deposited into the Escrow Account are referred to
herein as the "Escrow Funds." The Escrow Agent shall 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.
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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 Funds shall be
paid by the Escrow Agent in accordance with the following:
(a) Provided that the Escrow Funds total at least
$75,000 at or before 4:00 p.m., _____________________ time, on
_________, 2001, (or ___________, 2001 if extended by the Company
by written notice to the Escrow Agent given on or before
_________, 2001), or on any date prior thereto, the Escrow Funds
(or any portion thereof) 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
thereafter, the Escrow Account will remain open for the purpose
of depositing therein the subscription price for additional
securities sold by the Company in the Offering, which additional
Escrow Funds shall be paid to the Company or as otherwise
instructed by the Company upon receipt by the Escrow Agent of a
Release Notice as described above; and
(b) if the Escrow Agent has not received a Release
Notice from the Company at or before 4:00 p.m. ________________
time, on __________, 2001, (or ____________, 2001 if extended by
the Company by written notice to the Escrow Agent given on or
before _________________ , 2001), and the Escrow Funds do not
total at least $75,000 at such time and date, then the Escrow
Funds shall be 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:
(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
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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
$_____, receipt of which is hereby acknowledged. In addition, if
the Escrow Funds are returned to subscribers under 4(b), above,
the Escrow Agent shall receive a fee of $_______ per check for
such service. 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
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: Alaska Freightways, Inc.
000 Xxxx 00xx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
To Escrow Agent: BRIGHTON BANK
000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn:_______________________
Any party may change its address by providing written notice of
such change to the other parties hereto.
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8. Resignation by Escrow Agent. Upon thirty (30) calendar
days' prior written notice to the non-bank Party 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 non-bank Party with
sufficient information concerning the status of the Escrow Fund
to enable the non-bank parties 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 non-bank Party.
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
Utah, 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.
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.
Alaska Freightways, Inc.
___________________________________
By: Xxxxxx X. Xxxxxx
Its: President
BRIGHTON BANK
___________________________________
By: _______________________________
Its: ________________________________
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EXHIBIT A
Release Notice
BRIGHTON BANK
Gentlemen:
The undersigned hereby authorize and instruct BRIGHTON BANK,
escrow agent, to release [$______________] 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
________________, 2001.
Alaska Freightways, Inc.
_________________________________
By: Xxxxxx X. Xxxxxx
Its: President
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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 whom is authorized to act on behalf of the
Company:
On Behalf of Alaska Freightways, Inc.
Name Title Signature
Xxxxxx X. Xxxxxx President ______________________________
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