eACCELERATION CORP.
AMENDED AND RESTATED
ESCROW AGREEMENT
with
AMERICAN STOCK TRANSFER & TRUST CO.
This Agreement is made and entered into as of February __, 2000 by and
among eACCELERATION CORP. a Delaware corporation (the "Company") and AMERICAN
TRANSFER & TRUST CO., a New York corporation with a principal corporate trust
office at 0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Escrow Agent").
WHEREAS, the Company proposes to offer for sale to investors through a
direct public offering (the "Offering") up to 3,000,000 shares of common stock,
par value $.0001 per share (the "Shares") with a minimum offering of 400,000
Shares (the "Minimum Offering), at a proposed price of $6.25 per Share.
WHEREAS, the Offering will terminate at the close of business on the date
which is nine (9) months after the effective date of the registration statement
for the Shares unless otherwise terminated by the Company (the "Termination
Date"), except that the Termination Date will be no longer than 180 days after
the effective date of the registration statement for the Shares in the event
that Minimum Offering has not been fully subscribed, and if acceptable
subscriptions for the minimum number of Shares have not been received by the
Company on or before such date, no Shares will be sold and all payments made by
subscribers will be refunded with any earned interest by the Escrow Agent as
soon as practicable upon written authorization of fund destination by the
subscribers. The Company reserves the right, in its sole discretion, to reject
any subscription, in whole or in part, for the purchase of the Shares offered in
the Offering. In the case of orders which are rejected or partially rejected,
the Escrow Agent will promptly refund, without interest, the amount of the
subscription price representing the entire rejected order or that portion
thereof which has not been accepted.
WHEREAS, with respect to all subscription payments for Shares received from
subscribers, the Company proposes to establish an escrow account with the Escrow
Agent at its office, 0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000.
WHEREAS, the Company intends to sell the Shares on a "best efforts all or
none" basis as to the Minimum Offering, and on a "best efforts" basis as to an
additional 2,600,000 Shares.
WHEREAS, the Company desires to establish an escrow account in which funds
received from subscribers of Shares ("subscribers") will be deposited pending
completion of the escrow period (the "Escrow Fund Account"), and the Escrow
Agent has agreed to serve as escrow agent in accordance with the terms and
conditions set in the Escrow Agreement, between the Company and the Escrow
Agent, dated as of November 12, 1999.
WHEREAS, the Escrow Agent and the Company agree to amend and restate the
Escrow Agreement with the terms and conditions set forth herein.
NOW THEREFORE, the parties hereto agree as follows:
1. The Escrow Agent shall hold the Escrow Fund Account subject to the
terms of this Escrow Agreement and shall act in accordance with the instructions
contained in this Escrow Agreement.
2. Upon the written instructions of the Company, the Escrow Agent shall
deliver all or a part of the Escrow Fund at such times and in such manner as
shall be set forth in such instructions. Any such written instruction of the
Company shall be accompanied by a written opinion of counsel to the Company to
the effect that all conditions to the release of the subject funds have been
satisfied.
3. (a) The proceeds from the sale of the Shares in the Offering will be
deposited into an interest bearing account until the Minimum Offering is sold;
(b) In the event the proceeds from the sale of the Shares in the
Offering are insufficient to meet the Minimum Offering requirement, such
proceeds will be returned directly to investors by the Escrow Agent with
interest without deduction for expenses, including escrow agent fees;
(c) The Escrow Fund Account is not subject to claims by the Company's
creditors, affiliates, associates or underwriters, if any, until such funds have
been released under the terms hereof; and
(d) The regulatory administrator of any state in which the Offering is
registered has the right to inspect and make copies of the records of the Escrow
Agent relating to the Offering upon the reasonable request of such
administrator, during the regular business hours of the Escrow Agent.
4. This Escrow Agreement shall terminate upon the final distribution of
all amounts in the Escrow Account and any income earned thereon.
5. (a) The Escrow Agent shall not in any way be bound or affected by any
notice of modification or cancellation of this Escrow Agreement unless in
writing signed by the Company, nor shall the Escrow Agent be bound by any
modification hereof unless the same shall be satisfactory to it. The Escrow
Agent shall be entitled to rely upon any notice, certification, demand or other
writing delivered to it hereunder by the Company without being required to
determine the authenticity or the correctness of any facts stated therein, the
propriety or validity of the service thereof, or the jurisdiction of the court
issuing any judgment.
(b) The Escrow Agent may act in reliance upon any signature believed
by it to be genuine, and may assume that any person purporting to give any
notice or receipt, or make any statements in connection with the provisions
hereof has been duly authorized to do so.
(c) The Escrow Agent may act relative hereto in reliance upon advice
of counsel in reference to any matter connected herewith, and shall not be
liable for any mistake of fact or error or judgment, or for any acts or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.
(d) The Escrow Agent may resign and be discharged of its duties as
Escrow Agent hereunder by giving ten (10) days written notice to the Company.
Such resignation shall take effect ten (10) days after the giving of such
notice, or upon receipt by the Escrow Agent of an instrument of acceptance
executed by a successor escrow agent and upon delivery by the Escrow Agent to
such successor of all of the escrowed documents and funds or securities then
held by it. If no successor escrow agent is appointed in writing ten (10) days
after giving such notice, the Escrow Agent shall deliver all funds in the Escrow
Account to the Company.
(e) The Company hereby agrees to indemnify and hold the Escrow Agent
harmless from any loss, liability or expense, arising out of or related to this
Escrow Agreement, and for all costs and expenses, including the fees and
expenses of counsel, incurred in connection with this Escrow Agreement. The
provisions of this paragraph shall survive the termination of this Agreement.
(f) The duties and obligations of the Escrow Agent shall be determined
solely by the express provisions of this Agreement and the Escrow Agent shall
not be liable except for the performance of such duties
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and obligations as are specifically set forth in this Escrow Agreement. The
Escrow Agent shall have no liability or duty to inquire into the terms and
conditions of any agreement to which it is not a party.
(g) If a controversy arises between one or more of the parties hereto,
or between any of the parties hereto and any person not a party hereto, as to
whether or not or to whom the Agent shall deliver the Escrow Account or any
portion thereof or as to any other matter arising out of or relating to this
Agreement or the Escrow Account deposited hereunder, the Escrow Agent shall not
be required to determine same and need not make any delivery of the funds in the
Escrow Account or any portion thereof but may retain such funds until the rights
of the parties to the dispute shall have finally been determined by agreement or
by final order of court of competent jurisdiction, provided, however, that the
time of appeal of any such final order has expired without an appeal having been
made. The Escrow Agent shall deliver the Escrow Account or any portion thereof
within 15 days after the Escrow Agent has received written notice of any such
agreement or final order (accompanied by an affidavit that the time for appeal
has expired without an appeal having been made). The Escrow Agent shall be
entitled to assume that no such controversy has arisen unless it has received a
written notice that such a controversy has arisen which refers specifically to
this Agreement and identifies by name and address the adverse claimants to the
controversy. If a controversy of the type referred to in this paragraph arises,
the Escrow Agent may, in its sole discretion but shall not be obligated to,
commence interpleader or similar actions or proceedings for determination of the
controversy.
(h) The Escrow Agent shall not be required to institute or defend any
action (including interpleader) or legal process involving any matter referred
to herein which in any manner affects it or its duties or liabilities hereunder.
In the event the Escrow Agent shall institute or defend any such action or legal
process, it shall do so only upon receiving full indemnity in an amount and of
such character as it shall require, against any and all claims liabilities,
judgments, attorney's fees and other expenses of every kind in relation thereto,
except in the case of its own willful misconduct or gross negligence.
(i) In the event that the Escrow Agent receives or becomes aware of
conflicting demands or claims with respect to any funds, securities, property or
documents deposited or delivered in connection herewith, or the parties disagree
about the interpretation of this Agreement, or about the rights and obligations,
or the propriety, of any action contemplated by the Escrow Agent hereunder, or
if the Escrow Agent otherwise has any doubts as to the proper disposition of
funds or the execution of any of its duties hereunder, the Escrow Agent shall
have the right to discontinue any or all further acts on its part until such
conflict, disagreement or doubt is resolved to its satisfaction. In addition,
the Escrow Agent may, in its sole discretion, file an action in interpleader in
any court of competent jurisdiction to resolve the dispute or uncertainty. The
Company agrees to indemnify the Escrow Agent and hold it harmless from and
against all costs, including reasonable attorney's fees and expenses incurred by
it in connection with such action. In the event that the Escrow Agent files an
action in interpleader, it shall thereupon be fully released and discharged from
all further obligations to perform any and all duties or obligations imposed
upon it by this Agreement, other than safekeeping of the assets in the Escrow
Account, if not paid into Court.
6. Any notice, direction, request, instruction, legal process, or other
instrument to be given or served hereunder by any party to another shall be in
writing, shall be delivered personally or sent by certified mail, return receipt
requested, to the respective party or parties at the following addresses, and
shall be deemed to have been given when received.
IF TO THE COMPANY,
eAcceleration Corp.
0000 XX Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
Tel: (000) 000-0000
Fax: (000) 000-0000
Tax ID#: 00-0000000
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WITH A COPY TO,
Xxxxxxx & Xxxxxxxx, LLC
00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Escrow Agent, 0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Department.
Any party may change its or his address by written notice to each of
the other parties.
7. The Escrow Agent's fee for acting under this Escrow Agreement shall be
set forth in a separate letter and agreed to by the party or parties responsible
for payment. The Escrow Agent's fees and expenses, including counsel fees, shall
be paid by the Company. The Escrow Agent is hereby given a first priority lien
on the Escrow Fund to protect, indemnify and reimburse itself for all fees,
costs, expenses and liabilities arising out of this Escrow Agreement and the
performance of its duties hereunder.
8. This Escrow Agreement shall be binding upon the parties hereto, and
their respective successors, legal representatives and assigns.
eACCELERATION CORP.
By:
-------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST CO., as
Escrow Agent
Date:
------------------------
By:
------------------------
Name:
Title:
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EXHIBIT A
AMERICAN STOCK TRANSFER & TRUST CO. AS ESCROW AGENT FOR EACCELERATION CORP.
Escrow Agent Fee: $15,000
Out-of-Pocket Expenses: billed as incurred
Out-of-Pocket expenses shall include but are not limited to: legal, travel,
telephone, facsimile, postage, overnight courier and other related expenses. In
the event special administrative attention is required due to unusual
circumstances, an additional maintenance fee will be charged to cover time and
expenses.
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