EXHIBIT 1
ESCROW AGREEMENT
22
EXHIBIT 1
ESCROW AGREEMENT IN ACCORDANCE WITH RULE 419
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
ESCROW AGREEMENT dated as of __________, 1999 (the "Agreement") by and between 4
Xxxxxxx - I, Inc., a Florida corporation (the "Company") and Palm State
Equities, Inc. (the "Escrow Agent").
The Company, through its officers and director and selected broker-dealers, will
sell up to 10,000,000 shares of Common Stock, par value $.001 (the "shares"), as
more fully described in the Company's definitive Prospectus dated
________________ , 1999 comprising part of the company's Registration Statement
on Form SB-2, as amended (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Act") (File NO. *) declared effective on
__________________ (the "Prospectus").
The Company desires that the Escrow Agent accept all offering proceeds, after
deduction of cash paid for underwriting commissions, underwriting expenses and
dealer allowances and amounts permitted to be released to the Company under Rule
419(b)(2)(vi), a copy of which rule is attached hereto and made a part hereof,
to be derived by the company from the sale of the shares (the "Offering
Proceeds"), as well as the share certificates representing the shares issued in
connection with the company's offering, in escrow, to be held and disbursed as
hereinafter provided.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Escrow Agent. The company hereby
appoints the Escrow Agent to act in accordance with and
subject to the terms of this Agreement, and the Escrow
Agent hereby accepts such appointment and agrees to act
in accordance with and subject to such terms.
2. Share Certificates. Subject to Rule 419, upon the
Company's distribution of its securities, the Company
shall promptly deliver to the Escrow Agent all share
certificates representing the shares issued in
connection with the Company's offering, which shall be
held in trust for the purchasers as set forth in Rule
419. The identity of the purchasers of the securities
shall be included on the stock certificates or other
documents evidencing such securities. Securities held
in trust are to remain as issued and shall be held for
the sole benefit of the purchasers, who shall have
voting rights with respect to securities held in their
names, as provide be applicable state law. No transfer
or other disposition of securities so held or any
interest related such securities shall be permitted
other than by will or the laws of descent and
distribution, or under a qualified domestic relations
order as defined by the Internal Revenue code of 1986
as amended [26 U.S.C. 1 et seq.], or Title 1 of the
Employee Retirement Income Security Act [29 U.S.C. 1001
et seq.], or the rules thereunder. Warrants,
convertible securities or other derivative securities,
if any, relating to securities held in the Escrow
Account may be exercised or converted in accordance
with their terms; provided however, that securities
received upon exercise or conversion, are also so held.
23
3. Release of the shares. Upon the earlier of (i) receipt
by the Escrow Agent of a signed representation from the
Company to the Escrow Agent, that the requirements of
Rule 419(e)(1) and (e)(2) have been met, and
consummation of an acquisition(s) meeting the
requirements of Rule 419(e)(2) or (ii) written
notification from the Company to the Escrow Agent to
deliver the Offering Proceeds to another escrow agent
in accordance with Paragraph 5.8 then, in such event,
the Escrow Agent shall release the securities to the
purchasers or registered holders identified on the
trust securities or deliver such other escrow agent, as
the case may be, whereupon the Escrow Agent shall be
released from further liability hereunder.
Notwithstanding the foregoing, if an acquisition
meeting the requirements of Rule 419(e)(1) has not
occurred by a date in 18 months after the effective
date of the Registration Statement, funds held in the
Escrow Account shall be returned by first class mail or
equally prompt means to the purchasers in five business
days following that date.
4. Concerning the Escrow Agent.
The Escrow Agent shall not be liable for any actions taken or omitted by
it, or any action suffered by it to be taken or omitted by it, in good
faith and in the exercise of its own best judgment, and may rely
conclusively and shall be protected in acting upon any order, notice
demand, certificate, opinion or advice of counsel (including counsel
chosen by the Escrow Agent), statement , instrument , report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provision, but also as to the truth and
acceptability of any information therein contained) which is believed by
the Escrow Agent to be genuine and to be signed or presented by the
proper person or person.
The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement unless
evidenced by a writing delivered to the Escrow Agent signed by the proper
party or parties and, if the duties or rights of the Escrow Agent are
affected, unless it shall have given its prior written consent thereto.
The Escrow Agent shall not be responsible for the sufficiency or
accuracy, the form of, or the execution validity, value or genuineness of
any document or property received, held or delivered by it hereunder, or
of any signature or endorsement thereon, or for any lack of endorsement
thereon, or for any description therein, nor shall the Escrow Agent be
responsible or liable in any respect on account of the identity,
authority or rights of the person executing or delivering or purporting
to execute or deliver any document or property paid or delivered by the
Escrow Agent under the provisions hereof.
The Escrow Agent shall not be liable for any loss which may be incurred
by reason of any investment of any monies or properties which it holds
hereunder. The Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or
persons, that a fact or an event by reason of which an action would or
might be taken by the Escrow Agent does not exist or has not occurred,
without incurring liability for any action taken or omitted, in good
24
faith and in the exercise of its own best judgment, in reliance upon such
assumption.
The Escrow Agent shall be indemnified and held harmless by the Company
form and against any expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit
or other proceeding involving any claim, or in connection with any claim
or demand, which in any way directly or indirectly arises out of or
relates to this Agreement, the services of the Escrow Agent hereunder,
the monies or other property held by it hereunder or any such expense or
loss. Promptly after the receipt by the Escrow Agent of notice of any
demand or claim or the commencement of any action, suit or proceeding,
the Escrow Agent shall, if a claim in respect thereof shall be made
against the other parties hereto, notify such parties thereof in writing;
but the failure by the Escrow Agent to give such notice shall not relieve
any party form any liability which such party may have to the Escrow
Agent hereunder. Upon the receipt of such notice, the Escrow Agent, in
its sole discretion, may commence an action in the nature of interpleader
in an appropriate court to determine ownership or disposition of the
Escrow Account or it may deposit the Escrow Account with the clerk of any
appropriate court or it may retain the Escrow Account pending receipt of
a final, non-appealable order of a court having jurisdiction over all of
the parties hereto directing to whom and under what circumstances the
Escrow Account is to be disbursed and delivered.
The Escrow Agent shall be entitled to reasonable compensation from the
Company for all services rendered by it hereunder.
From time to time on and after the date hereof, the Company shall deliver
or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the
Escrow Agent shall reasonably request (it being understood that the
Escrow Agent shall have no obligation to make such request) to carry out
more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected in
acting hereunder.
The Escrow Agent may resign at any time and be discharged from its duties
as Escrow Agent hereunder by its giving the Company at least thirty (30)
days' prior written notice thereof. As soon as practicable after its
resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the Company, all monies and property held hereunder upon
presentation of the document appointing the new escrow agent and its
acceptance thereof. If no new escrow agent is so appointed in the sixty
(60) day period following the giving of such notice of resignation, the
Escrow Agent may deposit the Escrow Account with any court it deems
appropriate.
The Escrow Agent shall resign and be discharged form its duties as Escrow
Agent hereunder if so requested in writing at anytime by the Company,
provided, however, that such resignation shall become effective only upon
acceptance of appointment by a successor escrow agent as provided above.
Notwithstanding anything herein to the contrary, the Escrow Agent shall
25
not be relieved from liability thereunder for its own gross negligence or
its own willful misconduct.
5. Miscellaneous.
This Agreement shall for all purposes be deemed to be made under and
shall be construed in accordance with the laws of the State of Florida.
This Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof and, except as expressly provided
herein, may not be changed or modified except by an instrument in writing
signed by the party to be charged.
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation thereof.
This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto and their legal representatives, successors and
assigns.
Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, return receipt requested, postage
prepaid, and shall be deemed given when so delivered personally or, if
mailed, two (2) days after the date of mailing. The parties may change
the persons and addresses to which the notices or other communications
are to be sent by giving written notice to any such change in the manner
provided herein for giving notice.
WITNESS the execution of this Agreement as of the date first above written.
4 Xxxxxxx - I, INC.
By: ______________________________________
President
This Escrow Agreement is accepted as of the ______ day of __________, 1998.
Palm State Equities, Inc.
By: _______________________________________
Authorized Representative
26
