Exhibit 1.3
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made and entered into this ___ day
of __________, 1998, by and between Xxxxxxx Holdings, Inc., a corporation
organized under the laws of the State of Maryland (the "Company"), The
Xxxxxxx Co., a corporation organized under the laws of the State of Maryland
(the "Underwriter"), and UMB BANK, N.A., a national banking association
organized and existing under the laws of the United States of America, as
Escrow Agent (the "Escrow Agent").
W I T N E S S E T H :
WHEREAS, the Company is a corporation organized under the laws of the State
of Maryland and the Underwriter is a corporation organized under the laws of
the State of Maryland and is a wholly-owned direct subsidiary of the Company;
WHEREAS, the Company desires to offer for sale a maximum of 1,000,000 shares
(the "Maximum Offering") of its common stock, $.001 par value, (the
"Shares"); and
WHEREAS, the Company has filed a Registration Statement on Form SB-2 (the
"Registration Statement") under the Securities Act of 1933, as amended, and
has made filings with certain state securities commissions under applicable
state "blue sky" laws relating to the issuance and sale of the Shares;
WHEREAS, in compliance with the terms of the proposed offering set forth in
the Preliminary and Final Prospectuses which are a part of the Registration
Statement (the "Prospectus"), the Company will establish a segregated escrow
account with the Escrow Agent (the "Escrow Account") into which proceeds (the
"Subscription Proceeds") from subscriptions submitted by subscribers (the
"Applicants") to purchase Shares (the "Subscriptions") will be deposited;
WHREAS, THE OFFERING PERIOD FOR Subscriptions shall commence upon the
effectiveness of the Registration Statement, which date of effectiveness will
be certified in writing to the Escrow Agent by the Company and the
Underwriter (the "Effective Date");
WHEREAS, the termination date of the offering period for Subscriptions will
be on the earlier to occur of: the date selected by the Company, which date
will be certified in writing to the Escrow Agent by the Company and the
Underwriter; the date of the sale of the Maximum Offering; or the date that
is one hundred eighty (180) days after the Effective Date, unless extended by
the Company for one or more additional periods not to exceed an additional
thirty (30) days in the aggregate (the "Additional Periods"), in which case,
on that date which such Additional Periods expire, provided that such
Additional Periods are certified in writing to the Escrow Agent by the
Company and the Underwriter, and provided further that the receipt of such
notice by the Escrow Agent is prior to the termination of this Escrow
Agreement (the "Termination Date" and the
period from the Effective Date until the Termination Date is hereinafter
referred to as the "Offering Period");
WHEREAS, upon the receipt by the Escrow Agent of not less than the Minimum
Amount of Subscription Proceeds, the Escrow Agent shall notify the
Underwriter and deliver the Subscription Proceeds to the order of the
Company. The Escrow Agent shall continue to receive and deliver any
Subscription Proceeds to the Company until the end of the Offering Period, on
which date the Escrow Account shall terminate (the "Closing Date"); and
WHEREAS, the Escrow Agent has agreed to act as escrow agent in connection
with and under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
l. Until the Closing Date, the Escrow Agent shall act as escrow
agent hereunder and agrees to receive and hold the Subscriptions in
accordance with this Agreement.
2. All Subscriptions and checks received and not rejected by the
Underwriter on behalf of the Company pursuant to the Prospectus during the
Offering Period shall be transmitted directly to the Escrow Agent by 12:00
Noon Central Time of the next business day after the receipt thereof by the
Underwriter, and shall be deposited by the Escrow Agent in the Escrow
Account. In addition, the Underwriter shall deliver to the Escrow Agent
names, addresses and a completed Form W-9 for each Applicant and such other
information regarding any Applicant as the Escrow Agent may from time to
time request in writing. The Escrow Agent shall provide the Underwriter a
statement of the assets held and transactions of the Escrow Account as the
Underwriter shall from time to time request in writing.
3. Notwithstanding the provisions of Paragraph 2 hereof, if at any
time the Underwriter shall provide written notice to the Escrow Agent that
any Subscription is invalid or unacceptable, in whole or in part, or that
any Subscription Proceeds deposited with the Escrow Agent cannot be
lawfully accepted, in whole or in part, the Escrow Agent shall promptly
(within not less than ten (10) days) deliver to the Applicant submitting
such Subscription , without deduction, the Subscription Proceeds (or
portion thereof) which has been rejected.
4. Upon acceptance of any Subscription and the deposit of the
related Subscription Proceeds into the Escrow Account, the Underwriter
shall provide prompt written notice to the Applicant of such acceptance.
5. Promptly upon the Escrow Agent's receipt of Subscription Proceeds
from the Underwriter, the Escrow Agent shall proceed to collect upon such
payment instrument(s). All such collection efforts shall be subject to the
Escrow Agent's collection procedures in the ordinary course of its banking
business; provided, however, that if any payment
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instrument at any time delivered to Escrow Agent hereunder shall be
returned to Escrow Agent as being uncollectable, Escrow Agent shall attempt
a second time to collect such item before returning such item to the
Underwriter as uncollectable. Subject to the foregoing, Escrow Agent shall
promptly give written notice to the Underwriter of any uncollected item
delivered to Escrow Agent under this Agreement. Escrow Agent shall not be
required or have a duty to take legal action to enforce payment of any
uncollected item delivered to it under this Agreement. The Escrow Agent
shall have no duty or obligation to collect (except for collection in the
ordinary course of its banking business) any amounts at any time due in
respect of any Subscriptions, and shall not be responsible for any defaults
thereunder or hereunder by any other party, or for the application of any
funds received by it from the Applicants after payment of such funds by it
to the Company as herein provided. In the event that Escrow Agent shall
have disbursed Subscription Proceeds to the Company or returned such moneys
to the Applicant in accordance with this Agreement with respect to any
payment instrument and subsequently it shall be determined that such item
shall be uncollectable, the Company shall upon Escrow Agent's demand
reimburse it for the amount so disbursed.
6. Escrow Agent shall invest all Subscription Proceeds deposited
with it hereunder, and earnings thereon, if any, in obligations of the
United States Government or any agency thereof with maturities of no
greater than ninety (90) days or in bank money market deposits or funds as
the Company shall from time to time direct in writing, and the Escrow Agent
shall incur no liability when investing in accordance with such direction.
7. The Company and the Underwriter agree to certify in writing to
the Escrow Agent the Effective Date and any Additional Periods. The
Offering Period shall commence on the Effective Date and shall expire on
the Termination Date.
8. If Subscription Proceeds for not less
than__________________________ Dollars ($_______________) (the "Minimum
Amount") are received and accepted by the Underwriter and not less than the
Minimum Amount in Subscription Proceeds have been delivered to the Escrow
Agent (along with other items required by Section 2 hereof), have cleared
the banking system and are on deposit in available funds with the Escrow
Agent, the Escrow Agent will notify the Underwriter and pay over to the
order of the Company all of the Subscription Proceeds then on deposit in
the Escrow Account, together with all interest or other income, if any ,
earned on the Subscription Proceeds held hereunder. Following such
payment, the Escrow Agent shall continue to receive Subscription Proceeds
as provided in Paragraph 2 hereof, and upon receipt of available funds on
or before the Closing Date, shall deliver such Subscription Proceeds, from
time to time, to the order of the Company. On the Closing Date, all duties
and responsibilities of the Escrow Agent shall cease and terminate,
including without limitation, the obligation to receive and collect
Subscription Proceeds and deliver same to Company.
9. If Subscription Proceeds for not less than the Minimum Amount
have not been received by the Escrow Agent in available funds by 4:00 P.M.
Central Time on the final day of the Offering Period, Subscription Proceeds
held hereunder by the Escrow Agent will be
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returned by the Escrow Agent to the Applicants and any interest earned upon
the Subscription Proceeds shall be paid over to the order of the Company
promptly following the expiration of the Offering Period.
10. Prior to delivery to it of the Subscription Proceeds, the Company
shall have no title, right, claim, lien or any other interest in the funds
held in escrow hereunder, and such funds shall under no circumstances be
available to the Company or its creditors for payment or reimbursement for
liabilities or indebtedness.
11. It is understood and agreed, further, that the Escrow Agent
shall:
A. have no duty to compel delivery of any Subscription by
the Underwriter or the Company and shall be under no duty to
deliver any Subscription, or to pay and transfer any moneys
hereunder, unless the same shall have been first received by the
Escrow Agent pursuant to the provisions of this Agreement;
B. be under no duty to enforce payment of any Subscription
which is to be paid to and held by it hereunder;
C. be under no duty to accept any information from any
person or entity other than the Underwriter and the Company, or
their designated agents, and then only to the extent and in the
manner expressly provided for in this Agreement;
D. act hereunder as a depository only and be protected in
acting upon any Subscription, and related items supplied pursuant
to Section 2 hereof, and the information contained therein
without responsibility to determine the validity or sufficiency
of the same, and be protected in acting upon any other notice,
opinion, request, certificate, approval, consent or other paper
delivered to it and represented to it to be genuine and to be
signed by the proper party or parties;
E. be deemed conclusively to have given and delivered any
notice required to be given or delivered hereunder if the same is
in writing, signed by any one of its authorized officers and (1)
mailed, by registered or certified mail, postage prepaid, or (2)
by hand delivery, in a sealed wrapper, addressed to the
Underwriter or the Company and manually receipted for by the
addressee;
F. be indemnified and held harmless by the Company and the
Underwriter, jointly and severally, against any claim made
against it by reason of its acting or failing to act in
connection with any of the transactions contemplated hereby and
against any loss, liability, cost, suit or expense, including
attorneys' fees and other expense of defending itself against any
claim of liability it may sustain in carrying out the terms of
this Agreement except such claims which are occasioned by its
gross negligence or willful misconduct;
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G. have no liability or duty to inquire into the terms and
conditions of the Prospectus, Registration Statement,
Subscriptions or any of the exhibits annexed thereto, nor to
ascertain or compel compliance by the Company or the Underwriter
with any of the requirements thereof or of law or regulation, and
that its duties and responsibilities shall be limited to those
expressly set forth under this Agreement and are purely
ministerial in nature;
H. be permitted to consult with counsel of its choice,
including in-house counsel, and shall not be liable for any
action taken, suffered or omitted by it in good faith in
accordance with the advice of such counsel, provided, however,
that nothing contained in this Subparagraph H, nor any action
taken by the Escrow Agent, or of any such counsel, shall relieve
the Escrow Agent from liability for any claims which are
occasioned by its gross negligence or willful misconduct, all as
provided in Subparagraph F above;
I. not be bound by any amendment or revocation of this
Agreement, unless the same shall be in writing and signed by all
of the parties to this Agreement;
J. be entitled, should it be uncertain as to its duties
and rights hereunder (including, without limitation, uncertainty
resulting from receipt of conflicting instructions or directions
from any of the parties hereto), to refrain from taking any
action other than to keep all property held by it in escrow
hereunder until it shall be directed otherwise in writing by the
Underwriter and the Company, or by a final judgment by a court of
competent jurisdiction;
K. have no liability for following the instructions herein
contained or expressly provided for, or written instructions
given, by the Underwriter or the Company;
L. have the right, at any time, to resign hereunder by
giving written notice of its resignation to the Underwriter and
the Company at their address as set forth in Paragraph 12 hereof,
at least thirty (30) days before the date specified for such
resignation to take effect, and upon the effective date of such
resignation:
(l) all cash and other funds and all other property
then held by the Escrow Agent hereunder shall be delivered
by it to such successor Escrow Agent as may be designated in
writing by the Company, whereupon the Escrow Agent's
obligations hereunder shall cease and terminate;
(2) if no such successor Escrow Agent has been
designated by such date, all obligations of the Escrow Agent
hereunder shall, nevertheless, cease and terminate, and the
Escrow Agent's sole responsibility thereafter shall be to
keep all property then held by it and to deliver the same to
a person designated in writing by the Company or in
accordance with the directions of a final order or judgment
of a court of competent jurisdiction; yet, if no such
designation,
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order or judgment is received by Escrow Agent within thirty
(30) days after its giving such resignation notice, it is
unconditionally and irrevocably authorized and empowered to
petition a court of competent jurisdiction for directions.
M. be reimbursed by the Company at the termination of the
escrow for all reasonable costs, fees, charges, expenses,
disbursements and advances (including, but not limited to,
acceptance and administration fees and expenses as provided
in Exhibit A hereto, as well as legal, consultant and
advisor fees and charges) incurred or made by it in
accordance with any provision of this Agreement, or as a
result of the acceptance of this Agreement.
12. By acceptance of its duties hereunder, the Escrow Agent makes no
representation as to and is not responsible or liable in any manner for the
sufficiency, correctness, genuineness, or validity of this Agreement, the
Shares, the Registration Statement, the Prospectus, or any related document
or instrument.
13. All deliveries and notices to the Escrow Agent shall be effective
upon receipt by the Escrow Agent and shall be in writing and sent or
delivered to:
UMB BANK, N.A.
ATTN: Corporate Trust Division
000 Xxxxx Xxxxxx
P. O. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Any notice given on behalf of the Company or the Underwriter shall be
signed by one or more of the officers of the Company or the Underwriter, as
the case may be, and shall be sufficient for all purposes hereunder.
All deliveries and notices hereunder to the Company and the
Underwriter shall be in writing and shall be sent or delivered to:
The Company at:
Xxxxxxx Holdings, Inc.
Attn: Xxxxxx X. Xxxxxxx, Xx.
The World Trade Center - Baltimore
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
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The Underwriter at:
The Xxxxxxx Co.
Attn: Xxxxxx X. Xxxxxxx, Xx.
The World Trade Center - Baltimore
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
A copy of each delivery, notice and/or report, whether given by the
Underwriter, the Company or the Escrow Agent, shall be simultaneously sent
or delivered to each of the other parties to this Agreement.
14.Any invalidity, in whole or in part, of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement.
5. Nothing in this Agreement is intended to or shall confer upon
anyone other than the parties hereto any legal or equitable right, remedy
or claim. This Agreement shall be construed in accordance with the laws of
the State of Missouri and may be amended or resolved only by a writing
executed by the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf
of each of the parties hereto as of the day and year first above written.
Xxxxxxx Holdings, Inc.,
Company
By:
----------------------------
Title
--------------------------
The Xxxxxxx Co.,
Underwriter
By:
----------------------------
Title
--------------------------
UMB BANK, N.A., as Escrow Agent,
Escrow Agent
By:
-----------------------------
Bbds0038 Title
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EXHIBIT A
Acceptance and Annual Fee - review
escrow agreement and establish and
maintain account $1,500.00
Transaction Fees
(a) per subscriber deposit 2.00
(b) per subscriber interest payment 3.00
(c) per subscriber return of
subscription amount if
minimum amount not sold 5.00
(d) per subscriber subscription rejection 10.00
(e) per returned check 10.00
(f) per Form 1099 (Int., B or Misc.) 1.00
In addition to the specified fees, all expenses related to the administration
of the Agreement and the Escrow Account (other than normal overhead expenses
of the regular staff) such as, but not limited to, travel, postage, shipping,
courier, telephone, facsimile, supplies, legal fees, accounting fees, etc.,
will be reimbursable. The acceptance and annual fee will be payable by
Xxxxxxx Holdings, Inc. at the termination of the escrow. Other fees and
expenses will be billed as incurred or at the termination of the escrow.
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