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EXHIBIT 10.103
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of this 6th day of January,
2000, by and among THE BANK OF NEW YORK (the "ESCROW AGENT"), Xxxxxxx.xxx, Inc.
(the "AGENT") and BioShield Technologies, Inc. (the "Company").
RECITALS
The Company proposes to offer for sale to investors through the Agent
up to $4,000,000 in Series A Convertible Preferred Stock of (the "SECURITIES")
in one tranche of $4,000,000 (the "MINIMUM") resulting in gross proceeds to the
Company of $4,000,000 (the "PROCEEDS").
The Agent intends to sell the Securities as the Company's agent on a
best efforts all-or-none (the "OFFERING").
The Company and Agent desire to establish an escrow account in which
funds received from subscribers will be deposited pending completion of the
Escrow Period. The Bank of New York agrees to serve as Escrow Agent in
accordance with the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT. On or prior to the date of the
commencement of the offering, the parties shall establish an escrow account with
the Escrow Agent, which escrow account shall be entitled, BioShield Series A
Preferred Stock Account (the "ESCROW ACCOUNT"). The Agent will instruct
subscribers to wire funds to the account of the Escrow Agent as follows:
The Bank of New York
ABA #000000000
GLA 111565
Re: TAS#_______________, Corpfin & BSTI Escrow
Attn: Xxxxx XxXxxxxxx 000-000-0000
Only wire transfers shall be accepted.
2. ESCROW PERIOD. The Escrow period shall begin with the commencement of
the Offering and shall terminate upon the earlier to occur of the following
dates:
A. The date upon which the Escrow Agent confirms that its has
received in the Escrow Account gross proceeds of $4,000,000 in
deposited, funds (the "MAXIMUM");
B. The expiration of thirty (30) days from the date of
commencement of the Offering (unless extended by mutual
written agreement between the Company and the Agent with a
copy of such extension to the Escrow Agent); or
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C. The date upon which a determination is made by the Company and
the Agent to terminate the offering prior to the sale of the
Maximum.
During the Escrow Period, the Company is aware and understands that it is not
entitled to any funds received into escrow and no amounts 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.
3. DEPOSITS INTO THE ESCROW ACCOUNT. The Agent agrees that it
shall instruct all subscribers to make payment for the Securities to the Escrow
Agent for deposit in the Escrow Account.
4. DISBURSEMENTS FROM THE ESCROW ACCOUNT. At such time as Escrow
Agent has collected and deposited instruments of payment in the total amount of
the Minimum and any amounts up to the Maximum, Escrow Agent shall notify the
Company and the Agent. The Escrow Agent will continue to hold such funds until
Agent and Company jointly notify Escrow Agent in writing as to the disbursement
of funds pursuant to a closing statement signed by each of the Agent and the
Company (the "CLOSING STATEMENT"). In disbursing such funds, Escrow Agent is
authorized to rely upon such Closing Statement from Company and Agent.
In the event the Escrow Agent does not receive the minimum deposits
totaling $4,000,000 prior to the expiration of the Escrow Period (the "MINIMUM
DEPOSITS"), the Escrow Agent shall notify the Company and the Agent. Upon
receipt of payment instructions from the Company, the Escrow Agent shall refund
to each subscriber with interest the amount received from each subscriber,
without deduction, penalty, or expense to the subscriber. The purchase money
returned to each subscriber shall be free and clear of any and all claims of the
Company or any of its creditors.
In the event the Escrow Agent does receive deposits totaling the
Minimum prior to expiration of the Escrow Period, in no event will the Escrow
Amount be released to the Company until such amount is received by the Escrow
Agent in collected funds. For purposes of this Agreement, the term "collected
funds" shall mean all funds received by the Escrow Agent which have cleared
normal banking channels and are in the form of cash.
5. COLLECTION PROCEDURE. The Escrow Agent is hereby authorized to
forward each wire for collection and, upon collection of the proceeds of each
wire deposit the collected proceeds in the Escrow Account.
Any wires returned unpaid to the Escrow Agent shall be returned to the
Agent. In such cases, the Escrow Agent will promptly notify the Company for such
return.
If the Company rejects any subscription for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check or
wire to the rejected subscriber. If the Company rejects any subscription for
which the Escrow Agent has not yet collected funds but
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has submitted the subscriber's wire for collection, the Escrow Agent shall
promptly issue a check or wire the amount of the subscriber's wire to the
rejected subscriber after the Escrow Agent has cleared such funds. If the Escrow
Agent has not yet submitted a rejected subscriber's wire for collection, the
Escrow Agent shall promptly remit the subscriber's wire directly to the
subscriber. The Company shall provide payment instructions to the Escrow Agent.
6. INVESTMENT OF ESCROW AMOUNT. The Escrow Agent may invest the
Escrow Amount only in such accounts or investments as the Company may specify by
written notice. The Company may only specify investment in money market
instruments.
7. COMPENSATION OF ESCROW AGENT. The Company shall, pay the
Escrow Agent a fee for its escrow services as set forth on Exhibit "A" to this
Escrow Agreement. If it is necessary for the Escrow Agent to return funds to the
subscribers, the Company shall pay to the Escrow Agent an additional amount
sufficient to reimburse it for its fees and actual cost in disbursing such
funds. However, if funds are refunded to subscribers, no such fee, reimbursement
for costs and expenses, indemnification for any damages incurred by the Escrow
Agent, or any monies whatsoever shall be paid out of or chargeable to the
principal amount of funds on deposit in the Escrow Account.
8. GENERAL PROVISIONS.
(a) (i) Escrow Agent shall not be liable to anyone for any
damages, losses, or expense which they may incur as a
result of any act or omission of Escrow Agent, unless
such damages, losses, or expenses are caused by
Escrow Agent's willful misconduct or gross
negligence. Accordingly, Escrow Agent shall not incur
any such liability with respect to (i) any action
taken or omitted in good faith upon the advice of
Escrow Agent's counsel or counsel for any other party
hereto, given with respect to any question relating
to the duties and responsibilities of Escrow Agent
under this Agreement or (ii) any action taken or
omitted in reliance upon any instrument, including
execution, or the identity or authority of any person
executing such instrument, its validity and
effectiveness, but also as to the truth and accuracy
of any information contained therein which Escrow
Agent shall, in good faith, believe to be genuine, to
have been signed by a proper person or persons and to
conform to the provisions of this Escrow Agreement.
(ii) Escrow Agent shall not be bound in any way by any
contract or agreement between other parties hereto,
whether or not it has knowledge of any such contract
or agreement or of its terms or conditions.
(iii) The parties hereto, jointly and severally, hereby
agree to indemnify and, hold harmless Escrow Agent
against any and all costs, losses, claims, damages,
liabilities, expenses, including reasonable costs of
investigation, court costs, and attorney's fees, and
disbursements, which may be imposed upon Escrow
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Agent in connection with its acceptance of
appointment as Escrow Agent hereunder, including any
litigation arising from this Escrow Agreement or
involving the subject matter hereof, and all such
costs, expenses and disbursements shall be deducted
from the income (if sufficient) or paid by the
parties hereto, except for matters arising from the
gross negligence or willful misconduct of Escrow
Agent.
(iv) As security for such fees and expenses of Escrow
Agent and any and all losses, claims, damages,
liabilities and expenses incurred by Escrow Agent in
connection with its acceptance of appointment
hereunder, and with performance of the agreements
herein contained, the Escrow Agent is hereby given a
lien upon all assets held by Escrow Agent hereunder,
which lien shall be prior to all other liens upon or
claims against such assets, except for claims of
subscribers in the event the Minimum is not raised.
(b) (i) In the event of any disagreement among any of the
parties to this Agreement, or among them or any other
person resulting in adverse claims and demands being
made in connection with or from any property involved
herein or affected hereby, Escrow Agent shall be
entitled to refuse to comply with any such claims or
demands as long as such disagreement may continue,
and in so refusing, shall make no delivery or other
disposition of any property then held by it under
this Escrow Agreement , and in so doing the Escrow
Agent shall be entitled to continue to refrain from
acting until (a) the right of adverse claimants shall
have been finally settled by binding arbitration. or
finally adjudicated in a court assuming and having
jurisdiction. of the property involved herein or
affected hereby or (b) all differences shall have
been adjusted by agreement and Escrow Agent shall
have been notified in writing of such agreement
signed by the parties hereto.
(ii) In the event of such disagreement (or resignation
under the terms of this Agreement), Escrow Agent may,
but need not, tender into the registry or custody of
any court of competent jurisdiction all, money or
property in its hands under the terms of this
Agreement, together with such legal proceedings as it
deems appropriate and thereupon to be discharged from
all further duties under this Escrow Agreement. The
filing of any such legal proceeding shall not deprive
Escrow Agent of its compensation earned prior to such
filing.
(iii) Escrow Agent shall have no obligation to take any
legal, action in connection with this Escrow
Agreement or towards its enforcement, or to appear
in, prosecute or defend any action or legal
proceeding which would or might involve it in any
cost, expense, loss or liability unless security and
indemnity shall be furnished.
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(c) This Agreement contains the entire understanding between and
among the parties hereto, and shall be binding upon and inure
to the benefit of such parties, and subject to its terms,
their respective successors, heirs, assigns and legal
representatives. Any corporation into which Escrow Agent may
be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which Escrow Agent shall be a party, or any
corporation to which substantially all the corporate trust
business of Escrow Agent may be transferred, shall., subject
to the terms of the Escrow Agreement, be Escrow Agent under
this Escrow Agreement without further act.
(d) This Escrow Agreement is being delivered in and shall be
governed by and construed and enforced in accordance with the
laws of the State of Georgia without giving effect to the
principals or rules governing conflicts of laws.
(e) Notices, requests, demands or other communications required or
permitted under this Escrow Agreement will be in writing and
will be deemed given when actually delivered, received via
facsimile notice for which a confirmation is received, or the
third business day after said notice has been sent by
certified mail, postage prepaid, return receipt requested to:
If to Escrow Agent: The Bank of New York
Suite 520
000 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to Agent: Xxxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
If to Company: BioShield Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
or such other address as a party may specify in writing to
other parties pursuant hereto.
(f) This Escrow Agreement shall not be modified, revoked, released
or terminated except in writing and signed by parties hereto.
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(g) Should, at any time, any attempt be made to modify this Escrow
Agreement in a manner that would increase the duties and
responsibilities of Escrow Agent, or to modify this Escrow
Agreement in any matter which Escrow Agent shall deem
undesirable, or at any other time, Escrow Agent may resign by
notifying the parties in writing, by certified mail to their
respective addresses here and above set forth. Until (i) the
acceptance by such successor Escrow Agent as shall be
appointment by such parties; or (ii) 60 days following the
date upon which notice was mailed, whichever occurs sooner,
Escrow Agent's only remaining obligation shall be to perform
its duties hereunder in accordance with the terms of this
Escrow Agreement. If said 60 days have passed without the
acceptance by such successor Escrow Agent as shall have been
appointed by such parties, then the Escrow Agent may exercise
its rights under item 8(c) (ii) of this Agreement.
(h) No Implied Duties. The Escrow Agent undertakes to perform only
such duties as are expressly set forth herein and no
additional duties or obligations shall be implied hereunder.
The parties hereby acknowledge that the Escrow Agency is
serving as the Escrow Agent of the offering for the limited
purposes set forth herein, and hereby agree that they will not
represent or imply that the Escrow Agent, by serving as the
escrow agent hereunder or otherwise, has investigated the
desirability or advisability of this investment, or has
approved, endorsed or passed upon the merits of this offering
or any related, offering. It is further agreed that no party
shall in any way use the name "The Bank of New York" in any
sales presentation or literature except in, the context of the
duties of the Escrow Agent as escrow agent of the Offering in
the strictest sense. Any breach or violation of this paragraph
(i) shall be grounds for the immediate resignation by the
Escrow Agent. This Escrow Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and
the same instrument.
[REMAINDER OF DOCUMENT LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year above set forth.
ESCROW AGENT: THE BANK OF NEW YORK
By:
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AGENT: XXXXXXX.XXX, INC.
By:
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COMPANY: BIOSHIELD TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chairman of the Board and Chief Executive
Officer
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Executive Vice President
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