EXHIBIT 10.4
PROCEEDS ESCROW AGREEMENT
THIS PROCEEDS ESCROW AGREEMENT (the "Agreement") is made and entered
into this _____ day of __________, 2007, by and between PRINCETON SECURITY
TECHNOLGIES, INC., a Nevada corporation (the "Company"), and ESCROW SPECIALISTS,
Salt Lake City, Utah (the "Escrow Agent").
PREMISES
The Company proposes to offer for sale to the general public in certain
states up to 750,000 shares of common stock, par value $0.001, at an offering
price of $0.40 per share (the "Shares"), pursuant to the registration provisions
of the Securities Act of 1933, as amended, and pursuant to a registration
statement on Form SB-2 (the "Registration Statement"), SEC File No. 333-141482,
on file with the Securities and Exchange Commission (the "Commission"). The
Company will offer the Shares for sale through its officers and directors on a
"best efforts, all or none" basis in accordance with the terms of the prospectus
(the "Prospectus") included in the Registration Statement. In accordance with
the terms of the Prospectus, the Company desires to provide for the escrow of
the minimum subscription payments for Shares until the amount, as set forth
below, has been received.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Until termination of this Agreement, all funds collected by the
Company from subscriptions for the purchase of Shares in the subject offering
shall be deposited promptly with the trust department of the Escrow Agent, but
in any event no longer than noon of the next business day following receipt.
2. Concurrently with transmitting funds to the trust department of the
Escrow Agent, the Company shall also deliver to the Escrow Agent a schedule
setting forth the name and address of each subscriber whose funds are included
in such transmittal, the number of Shares subscribed for, and the dollar amount
paid. All funds so deposited shall remain the property of the subscriber and
shall not be subject to any lien or charges by Escrow Agent, or judgments or
creditors' claims against the Company until released to it in the manner
hereinafter provided.
3. If at any time prior to the expiration of the minimum offering
period, as specified in paragraph 4, $100,000 has been deposited pursuant to
this Agreement, the Escrow Agent shall promptly confirm the receipt of such
funds to the Company and on written request of the Company, promptly transmit
the balance to the Company (such event is hereinafter referred to as the
"Closing"). Thereafter, the Escrow Agent shall continue to accept deposits from
the Company and transmit without further request or instruction the balance to
the Company until the offering is terminated.
4. If within 120 days after the effective date of the Registration
Statement, the Company has not deposited $100,000 in good funds with the Escrow
Agent, the Escrow Agent shall so notify the Company and shall promptly transmit
to those investors who subscribed for the purchase of the Shares the amount of
money each such investor so paid. The Escrow Agent shall furnish to the Company
an accounting for the refund in full to all subscribers.
5. If at any time prior to the termination of the escrow the Escrow
Agent is advised by the Commission that a stop order has been issued with
respect to the Registration Statement, the Escrow Agent shall, 20 days after the
date of any such stop order, return all funds to the respective subscribers
unless it receives written notice within such 20-day period that the stop order
has been lifted.
6. It is understood and agreed that the duties of the Escrow Agent are
entirely ministerial, being limited to receiving monies from the Company and
holding and disbursing such monies in accordance with this Agreement. The Escrow
Agent shall have no obligation to invest the offering proceeds.
7. The Escrow Agent 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.
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8. The Escrow Agent shall not take any action pursuant to additional
escrow instructions not included herein unless such instructions are in writing
and have been signed by the Company.
9. The Escrow Agent shall not be required to take or be bound by notice
of any default of any person or to take such default involving any expense or
liability, unless notice in writing is given to an officer of the Escrow Agent
of such default by the undersigned or any of them, and unless it is indemnified
in a manner satisfactory to it against any expense or liability arising
therefrom.
10. The Escrow Agent shall not be liable for acting on any notice,
request, waiver, consent, receipt, or other paper or document believed by the
Escrow Agent to be genuine and to have been signed by the proper party or
parties.
11. The Escrow Agent 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 willful misconduct.
12. The Escrow Agent shall not be answerable for the default or
misconduct of any agent, attorney, or employee appointed by it if such agent
attorney or employee shall have been selected with reasonable care.
13. The Escrow Agent may consult with legal counsel in the event of any
dispute or question as to the consideration of the foregoing instructions or the
Escrow Agent's duties hereunder, and the Escrow Agent shall incur no liability
and shall be fully protected in acting in accordance with the opinion and
instructions of such counsel.
14. In the event of any disagreement between the Company and the Escrow
Agent and/or any other person, resulting in adverse claims and/or demands being
made in connection with or for any papers, money, or property involved herein or
affected hereby, the Escrow Agent shall be entitled at its option to refuse to
comply with any such claim, or demand so long as such disagreement shall
continue and, in so refusing, the Escrow Agent shall not be or become liable to
the undersigned or any of them or to any person named in the foregoing
instructions for the failure or refusal to comply with such conflicting or
adverse demands, and the Escrow Agent shall be entitled to continue to so
refrain and refuse to so act until (a) the rights of adverse claimants have been
fully adjudicated in a court assuming and having jurisdiction of the parties and
the securities, monies, papers, and property involved herein or affected hereby;
and/or (b) all differences shall have been adjusted by agreement and the Escrow
Agent shall have been notified in writing signed by all of the interested
parties.
15. The Escrow Agent reserves the right to resign hereunder, upon ten
(10) days prior written notice to the Company. In the event of said resignation,
and prior to the effective date thereof, the Company, by written notice to the
Escrow Agent, shall designate a successor escrow agent to assume the
responsibilities of the Escrow Agent under this Agreement, and the Escrow Agent
immediately shall deliver any undisbursed offering proceeds to such successor
escrow agent. If the Company shall fail to designate such a successor escrow
agent within such time period, the Escrow Agent may deliver any undisbursed
offering proceeds into the registry of any court having jurisdiction.
16. The consideration for its agreement to act as the Escrow Agent is $
100.00, the receipt of which is hereby acknowledged for the first 25 checks
received and $1.00 for each check after 25. In addition, if $100,000 is not
received in escrow within the escrow period and the Escrow agent is required to
return funds to investors as provided in section 4, the Escrow Agent shall
receive a fee of $5.00 per check for such services. 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 arising 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. Any
additional compensation to the Escrow Agent arising as a result of litigation
pertaining to this Agreement and any other additional compensation to the Escrow
Agent shall be paid by the Company.
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17. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns,
including any successor to the Escrow Agent in the event of its liquidation;
provided, however, that no party may assign this Agreement or any interest
herein without the prior written consent of the other parties.
18. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Utah and the laws of the United States applicable
to the State of Utah.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, as of the date first
above written.
Princeton Security Technologies, Inc.,
a Nevada Corporation
Xxxxxx Xxxxxxxx
President
I, Xxxxxx Xxxxxxx, a duly authorized officer of the Escrow Agent,
hereby acknowledge receipt of this Agreement and agree to act as Escrow Agent in
accordance with said Agreement and on the terms and conditions above set forth
this ______ day of _______________, 2007.
ESCROW SPECIALISTS
Xxxxxx Xxxxxxx
Duly Authorized Officer
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