ART DESIGN, INC. ESCROW AGREEMENT
Exhibit
9.0
This
Escrow Agreement
this “Agreement”), is made and entered into this __________, 2006 by and between
ART DESIGN, INC., a Colorado corporation (the "Issuer") and Community Banks
of
Colorado (the "Escrow Agent").
W
I T N E S S E T H
:
WHEREAS,
the Issuer
intends to raise a minimum of $100,000 and a maximum of $200,000 through
the
sale of Common Shares of its securities (the "Shares") for cash pursuant
to a
Prospectus dated _________, 2006 (the “Prospectus”); and
WHEREAS,
the Issuer
is offering the Shares on a "best efforts minimum or none" basis, meaning
that
no Shares will be sold unless at least $100,000 in principal amount of
the
Shares have been sold within one hundred twenty (120) days after the effective
date of the Issuer's Prospectus (which period may be extended for an additional
ninety (90) days by the Issuer) Subscribers will not be entitled to a
return of funds from such escrow during the 120-day offering period or
any
extension period, for a potential total of 210 days., and
WHEREAS,
the Shares
are being offered and sold to investors (the "Subscribers") pursuant to a
Registration Statement under cover of Form SB-2 of the Securities Act of
1933
and registration under applicable state securities laws.
NOW,
THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:
1. Deposits.
A.
The Issuer
agrees that it shall, as soon as shall be practicable following receipt
thereof,
but in no event later than by noon of the next business day following
receipt
thereof, deliver to the Escrow Agent all cash proceeds from the sale
of the
together with a copy of the subscription agreement therefor from each
Subscriber, which shall set forth, among other things, the
Subscribers
name and address,
Social Security or Tax Identification Number, the number of Shares purchased
and
the amount paid therefor. All Subscribers'
checks will be
made payable to the Escrow Agent. The Escrow Agent shall have no responsibility
for subscription proceeds not received and collected by
it.
All
funds and
remittances delivered to the Escrow Agent pursuant this Agreement shall be
deposited immediately by the Escrow Agent into a separate, non-interest bearing
account designated substantially as follows: “ART DESIGN, INC.-Community Banks
of Colorado Escrow Agent” (the “Escrow Account”).
2. Rejection
of
Subscriptions for Shares.
Any
subscription for
Shares may be rejected in whole or in part by the Issuer. The Issuer will
notify
the Escrow Agent, in writing, that a subscription has been rejected. Upon
the
receipt of a notice of rejection or partial rejection, the Escrow Agent shall
return to the Subscriber the amount of the subscription that has been rejected
by the Issuer, without interest thereon.
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3. Disbursement;
Termination.
A.
Within three (3)
business day of receipt of subscriptions and funds aggregating $100,000,
the
Escrow Agent shall disburse the funds held by it pursuant to this Agreement
to
the Issuer, in accordance with written instructions from the Company to the
Escrow Agent, at which time this Agreement will terminate. At such time as
the
Escrow Agent shall have made the payment provided for in this subsection
3.a.,
it shall be completely discharged and released of any and all further
liabilities and responsibilities hereunder.
B. This Agreement shall also terminate upon the earlier of (i) the date the
Issuer notifies the Escrow Agent that the offering of Shares has been
terminated, or (ii) the 121st
day after the
effective date of the Issuer’s Prospectus unless extended for an additional
ninety (90) days upon agreement of the Issuer, unless Escrow Agent holds
at
least $100,000 pursuant to this Agreement. Subscribers will not be entitled
to a
return of funds from such escrow during the 120-day offering period or any
extension period, for a potential total of 210 days.
C.
If this Agreement
is terminated pursuant to subsection 3.B., within five (5) business days
after
the termination, Escrow Agent shall return to each Subscriber the subscription
proceeds attributable to him or her hereunder, without interest thereon.
All
returns and deliveries to a Subscriber hereunder shall be mailed by regular
mail
to the residential or business address of such Subscriber, as provided to
the
Escrow Agent pursuant to Section 1, above. With regard to any funds payable
to
Subscribers of Shares which the Escrow Agent cannot disburse or return to
the
Subscribers because the address given in the written account is
defective or
which the Escrow Agent cannot, for any other reason, disburse to the Subscriber,
the Escrow Agent shall at its option and sole discretion either: (a) deposit
the
funds with the Clerk of the District Court of Arapahoe County, State of Colorado
or with the Clerk of the United States District Court for the District of
Colorado, and interplead the parties hereto, or (b) retain such funds until
a
valid determination regarding such Subscriber can be made. Upon the Escrow
Agent’s so depositing such funds and filing its complaint in interpleader under
subparagraph (a), the parties herein, for themselves, their heirs, successors
and assigns, do hereby appoint the Clerk of the Court as their agent for
service
of all process in connection with the proceeding mentioned in this
paragraph.
D.
Any payment to a
Subscriber may be made by a check of the Escrow Agent. Each amount paid or
payable to each Subscriber pursuant to this subsection 3.C. shall be deemed
to
be the property of each Subscriber, free and clear of any or all claims of
the
Company or any of its creditors, and the respective agreements to purchase
the
Shares made and entered into in the Prospectus shall thereupon be deemed
to be
canceled and without any further liability of the Subscribers to pay for
the
Shares purchased.
E.
The Issuer shall
make a true copy of this Escrow Agreement available to each Subscriber at
no
charge.
4. Escrow
Agent.
The
parties further
covenant, warrant and agree that the Escrow Agent:
A.
Shall have no duty
to collect any proceeds of the offering of the Shares.
B.
Undertakes to
perform only such duties as are expressly set forth herein and no implied
duties
or obligations shall be read into this Agreement against the Escrow
Agent.
C.
May act in
reliance upon any writing or instrument or signature which it believes in
good
faith to be genuine, may assume the validity and accuracy of any statement
or
assertion contained in such a writing or instrument, and may assume that
any
person purporting to give any writing, notice, advice, or instructions in
connection with the provisions hereof has been duly authorized to do
so.
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D.
Shall
not be liable, in any manner, for the validity, sufficiency or correctness,
as
to form, manner and execution, of any instrument deposited in the Escrow
Account
or with respect to the identity, authority, or right of any person executing
the
same, and its duties hereunder shall be limited to the safekeeping of such
moneys, instruments or other documents received by it as escrow holder and
for
the disposition of the same in accordance with the written instrument accepted
by it in the Escrow Account.
E.
May
consult with counsel of its own choice and shall have full and complete
authorization and protection for any action taken or suffered by it hereunder
in
good faith and in accordance with the opinion of such counsel. The Escrow
Agent
shall otherwise not be liable for any mistake of fact or error of judgment
or
any acts or omissions of any kind, unless caused by its willful misconduct
or
gross negligence.
F.
May resign upon 30
days written notice to the parties to this Agreement. If a successor Escrow
Agent is not appointed within this 30 day period, the Escrow Agent may petition
a court of competent jurisdiction to name a successor.
G.
May,
in the event of doubt as to its duties or liabilities under the provisions
of
this escrow, in its sole discretion, continue to hold the monies which are
the
subject to this escrow until all interested persons mutually agree to the
disbursement thereof, and may, in its sole discretion, file an action in
interpleader to resolve such disagreement. The Escrow Agent shall be indemnified
for all costs, including reasonable attorneys, fees, in trial and appellate
courts, in connection with the aforesaid interpleader action and shall be
fully
protected in suspending all or a part of its activities under this Agreement
until final judgment in the interpleader action is received.
H.
May
accept directions hereunder from the Issuer or such other agents of the Issuer
whose names and signatures are supplied to the Escrow Agent in a letter executed
on behalf of the Issuer.
I.
Shall have no
obligation to pay interest on any funds so deposited.
J.
Except
as set forth in Exhibit "A" to this Agreement, Escrow Agent shall not earn
a fee
for its services hereunder; however, the Escrow Agent shall be reimbursed
by the
Issuer for normal and routine banking charges incurred in connection with
the
maintenance of the Escrow Account.
5.
Indemnification.
A.
The Issuer agrees to absolve, exonerate, hold harmless, indemnify and defend
the
Escrow Agent from any and all claims, liabilities, losses, actions, suits
or
proceedings at law or in equity, or any other expense, fees, or charges of
any
character or nature, including attorneys, fees in trial and appellate courts,
and the cost of defending any action, suit or proceeding or of resisting
or the
settlement of any claim, which it may incur or with which it may be threatened
by reason of its acting as Escrow Agent.
B.
The Escrow Agent shall be vested with a lien on all property deposited hereunder
for indemnification for attorneys, fees, court costs, or any other expense,
fees
or charges of any character or nature which may be incurred by said Escrow
Agent
by reason of disputes arising between the makers of this escrow, as to the
correct interpretation of this Agreement and instructions given to the Escrow
Agent hereunder or otherwise, and shall have the right, regardless of the
instructions aforesaid, to hold such property until and unless such additional
expenses, fees, and charges shall be fully paid.[
C. This indemnity shall not apply in any cause that arises from the willful
misconduct or gross negligence of the Escrow Agent.
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D.
The Company
shall promptly deliver copies to the Escrow Agent of any pleading or request
for
discovery served on it which might in any way affect the offering of the
Shares.
E.
This indemnity
shall survive the termination of this Agreement.
6. No
Property
Rights in Escrow Account
During
the term of
this Agreement, none of the cash deposited in the Escrow Account shall become
the property of the Company or any other entity, or be subject to the debts
of
the Company or any other entity, and, except as expressly provided herein
with
respect to payments by the Escrow Agent to the Company, the Escrow Agent
shall
make or permit no disbursement from the Escrow Account. The Escrow Agent
shall
not be required to make any disbursement until all funds deposited with it
have
cleared and been finally paid.
7. Prospectus.
The
Company shall
give the Escrow Agent immediate written notice of the date upon which the
Prospectus is effective and has furnished Escrow Agent with a copy of the
Prospectus.
8. Notices.
All
notices and
communications hereunder shall be in writing and shall be deemed to be duly
given if sent by facsimile transmission, by U.S. Mail, or by private express
delivery, to the respective addresses set forth at the end hereof. The Escrow
Agent shall be obligated to accept notice only from the following individual,
who is authorized to act under this Agreement on behalf of the Issuer: Xxxxx
Xxxxxxx.
In
the Case of the
Company:
0000
X.
Xxxxx
Xxxxxxxxx,
Xxxxxxxx
00000
Telephone
Number
(000) 000-0000
Fax
Number (000)
000-0000
In
the Case of the
Escrow Agent:
Community
Banks of
Colorado
Attention:
Xxxxx X.
Xxxx
0000
X.X.
Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Telephone
Number
(000) 000-0000
Fax
Number (000)
000-0000
9. Successors
and
Assigns.
The
rights created by
this Agreement shall inure to the benefit of and the obligations created
hereby
shall be binding upon the successors and assigns of the Escrow Agent and
the
Issuer.
10. Construction.
This
Agreement shall
be construed and enforced according to the laws of the State of Colorado.
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11. Term.
A.
This Escrow
Agreement shall terminate and the Escrow Agent shall be discharged of all
responsibility hereunder at such time as this Agreement is terminated pursuant
to paragraphs 3A or 11B of this Agreement.
B.
Notwithstanding
anything herein to the contrary, upon receipt of written notice from the
Issuer
that the offering of Shares has been terminated, the Escrow Agent shall return
to each Subscriber, the subscription proceeds received and collected from
him or
her hereunder, without interest thereon, and at such time this Agreement
will
terminate.
C.
In no event shall
this Escrow Agreement be in effect for a period beyond that specified in
paragraph 3 of this Agreement and, at that time, all sums shall be transferred
pursuant to such paragraph 3A.
IN
WITNESS WHEREOF,
the parties hereto have executed this Escrow Agreement on the day and year
first
above written.
"Issuer"
By: __________________
Xxxxx
Xxxxxxx, President
"Escrow
Agent"
COMMUNITY
BANKS OF
COLORADO
By:
Xxxxx
X. Xxxx,
President
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EXHIBIT
"A"
ESCROW
FEES
Acceptance
Fee:
$500,
plus
$3.00 per returned check.
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