ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") dated as of September
30, 2004 is by and between Lifesciences Opportunities Incorporated, a Florida
corporation (the "Company") and Xxxxxx Xxxxx Securities, Inc. (the "Escrow
Agent").
RECITALS
WHEREAS, the Company proposes to offer for sale to the public 10,000
shares (the "Shares") of Common Stock, par value $0.0001 per share, of the
Company, at a price of $6.00 per share;
WHEREAS, the Shares will be offer on a "best efforts basis" in
accordance with the terms and conditions set forth in the Company's definitive
prospectus (the "Prospectus"), the form of which is included in the Company's
Registration Statement on Form SB-2 (SEC File No. 333-117100 as amended from
time to time(the "Registration Statement");
WHEREAS, the public offering of the Shares is subject to and will be
conducted in accordance with Rule 419 under the Securities Act of 1933, as
amended (the "Securities Act") pertaining to public offerings by companies
commonly referred to as "blank check companies";
WHEREAS, the public offering of the Shares will commence on or about
the date of the Prospectus and will end on the date or dates as set forth in the
Prospectus;
WHEREAS, subscribers for Shares shall deposit with the Escrow Agent, by
check or wire transfer payment, the aggregate subscription price for the Shares
subscribed for;
WHEREAS, all funds representing the subscription price of Shares
subscribed for shall be deposited and held in an escrow account the "Escrow
Account") established and maintained by the Escrow Agent;
WHEREAS, the Company desires to appoint the Escrow Agent as the escrow
agent for the Escrow Account, on the terms and conditions set forth herein in
order to comply with the requirements of Rule 419 of the Securities Act;
WHEREAS, if subscriptions for at least 5,000 Shares have not been
received and accepted by the Company and at least $26,100 (net of underwriting
commissions and expenses payable) of funds have not been deposited into the
Escrow Account within the time period therefor as set forth in the Prospectus
(the "Minimum Time Period"), all funds deposited in the Escrow Account shall be
returned promptly to the subscribers;
WHEREAS, if subscriptions for at least 5,000 Shares have been received
and accepted by the Company and at least $26,100 of funds have been deposited
into the Escrow Account within the Minimum Time Period, the Company will deposit
into the Escrow Account stock certificates in the name of each subscriber
representing the number of Shares purchased from the Company;
WHEREAS, if subscriptions for at least 5,000 Shares have been received
and accepted by the Company and at least $26,100 of funds have been deposited
into the Escrow Account within the Minimum Time Period, the escrowed funds and
the stock certificates deposited by the Company shall be held in the Escrow
Account for a period thereafter of up to 18 months after the date of the
Prospectus (the "Post-Offering Period") until the escrowed funds and the
escrowed stock certificates are released and delivered in accordance with the
terms and conditions set forth herein;
WHEREAS, the escrowed Shares being held in the Escrow Account may not
be transferred except in accordance with the terms and conditions set forth
herein; and
WHEREAS, the Escrow Agent agrees to serve as escrow agent in accordance
with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements set forth
below, the parties hereby agree as follows:
1. APPOINTMENT OF ESCROW AGENT AND ESTABLISHMENT OF ESCROW ACCOUNT.
The Company hereby appoints the Escrow Agent as the escrow agent
hereunder in accordance with the terms and conditions set forth herein, and the
Escrow Agent hereby accepts such appointment. The Escrow Agent shall establish a
separate the Escrow Account in the name of "Lifesciences Opportunities
Incorporated - Escrow Account." The Escrow Account shall be maintained and
administered and the escrowed funds and the escrowed securities shall be
released and delivered in accordance with the terms and conditions set forth
herein.
2. DEPOSIT OF FUNDS.
(a) All funds received by the Escrow Agent from subscribers for
the Shares shall be deposited and held in the Escrow Account. The Escrow Agent
is hereby empowered on behalf of the Company to endorse and collect all checks,
drafts, or other instruments received on account of subscriptions for Shares.
Any check returned unpaid to the Escrow Agent shall be returned by the Escrow
Agent to the subscriber. In such cases, the Escrow Agent shall promptly notify
the Company of such return. The Escrow Agent shall provide information to the
Company as to the funds deposited into the Escrow Account and the collection
status of such funds. As used herein, "collection" means the normal process by
which a bank clears checks and collects funds thereon. The Company shall provide
information to the Escrow Agent as to each subscriber's name, address, number of
Shares subscribed for and the subscription price paid therefor, and such other
information concerning the subscribers as the Escrow Agent may reasonably
request.
(b) If the Company rejects any subscription for which the Escrow
Agent has collected funds from the subscriber, the Escrow Agent shall promptly
issue a refund check to the rejected subscriber. If the Company rejects any
subscription for which the Escrow Agent has not collected funds but has
submitted the subscriber's check for collection, the Escrow Agent shall, upon
receipt of written instructions from the Company, promptly issue a check for the
amount of the subscriber's check to the rejected subscriber after the Escrow
Agent has cleared such funds. If the Escrow Agent has not submitted a rejected
subscriber's check for collection, the Escrow Agent shall, upon receipt of
written instructions from the Company, promptly remit the subscriber's check
directly to the subscriber.
2
(c) All funds received by the Escrow Agent pursuant to this Escrow
Agreement and deposited and held in the Escrow Account may be invested only as
permitted by the Prospectus.
3. STATUS OF FUNDS.
Until all funds in the Escrow Account are disbursed in accordance with
the terms and conditions of this Escrow Agreement, all funds deposited into the
Escrow Account shall be considered the property of the subscribers. The funds
deposited and held in the Escrow Account shall not become the property of the
Company or subject to its debts or obligations, unless and until such funds have
been disbursed to the Company in accordance with the terms and conditions of
this Escrow Agreement. The Escrow Agent shall not make any disbursements of
funds from the Escrow Account except as expressly provided herein.
4. RETURN OF FUNDS IF THE OFFERING IS NOT FULLY SUBSCRIBED.
If subscriptions for at least 5,000 Shares have not been received and
accepted by the Company and at least $26,100 of funds have not been deposited
into the Escrow Account within the Minimum Time Period, all funds deposited by
subscribers if any, shall be returned promptly to the subscribers without
deduction, penalty, or expense.
5. DEPOSIT OF CERTIFICATES.
If subscriptions for at least 5,000 Shares have been received and
accepted by the Company and at least $26,100 of funds has been deposited into
the Escrow Account within the Minimum Time Period, the Company shall deposit
into the Escrow Account share certificates issued in the names of each
subscriber for the number of Shares sold by the Company to each subscriber. The
share certificates shall be held in the Escrow Account during the Post- Offering
Period and shall not be released or delivered by the Escrow Agent except as
expressly provided herein.
6. RETENTION OF FUNDS IN THE ESCROW ACCOUNT.
If subscriptions for at least 5,000 Shares have been received and
accepted by the Company and at least $26,100 of funds has been deposited into
the Escrow Account within the Minimum Time Period, the funds shall be held in
the Escrow Account during the Post- Offering Period and shall not be disbursed
by the Escrow Agent except as expressly provided herein.
7. TRANSFER OF SECURITIES HELD IN THE ESCROW ACCOUNT.
The shares held in the Escrow Account shall not be transferred other
than by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986 as
amended or Title I of the Employee Retirement Income Security Act, or applicable
rules. In no event, however, shall any shares held in the Escrow Account be
released or delivered by the Escrow Agent except as expressly provided elsewhere
herein.
3
8. DISTRIBUTIONS FROM THE ESCROW ACCOUNT.
(a) The Escrow Agent shall make distributions of the funds held in
the Escrow Account during the Post-Offering Period in accordance with the
instructions set forth in Schedule A attached hereto.
(b) The Escrow Agent shall make distributions of the certificates
representing the Shares held in the Escrow Account during the Post-Offering
Period in accordance with the instructions set forth in Schedule B attached
hereto.
(c) The parties agree that all records relating to transactions
made pursuant to the Escrow Agreement and the Escrow Account shall be available,
at all reasonable times, for inspection, examination and reproduction by any
party hereto, or any representative of any of the parties hereto, and such
persons are authorized to examine and audit the Escrow Account pursuant hereto
and the Escrow Agent is expressly authorized and directed to permit such
examination and audit.
9. EXCULPATION AND INDEMNIFICATION OF ESCROW AGENT.
(a) The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth herein. The Escrow Agent shall have no duty
to enforce any obligation of any person to make any payment or delivery, or to
direct or cause any payment or delivery to be made, or to enforce any obligation
of any person to perform any other act. The Escrow agent shall be under no
liability to the other parties hereto or to anyone else by reason of any failure
on the part of any party hereto or any maker, guarantor, endorser or other
signatory of any document or any other person to perform such person's
obligations under such document. Except for amendments to this Agreement
referred to below, and except for instructions given to the Escrow Agent by the
Company and the subscribers relating to the Escrow Account, the Escrow Agent
shall not be obligated to recognize any agreement between any and all of the
persons referred to herein, notwithstanding that references thereto may be made
herein and whether or not it has knowledge thereof.
(b) The Escrow Agent shall not be liable to the Company or to
anyone else for any action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith and in the exercise of its own best
judgment. The Escrow Agent 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 provisions, but also as to the truth and acceptability of
any information therein contained), which is reasonably believed by the Escrow
Agent to be genuine and to be signed or presented by the proper person or
persons. The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Escrow Agreement or any
of the terms thereof, 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 give its prior written consent
thereto.
4
(c) The Escrow Agent shall not be responsible for the sufficiency
or accuracy of 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 to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property pursuant to the
provisions of this Agreement. Except as specifically provided for herein, the
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof. The Escrow Agent shall not be liable to the Company or to
anyone else for any loss which may be incurred by reason of any investment of
any monies which it holds hereunder provided the Escrow Agent has complied with
the provisions hereof.
(d) 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 to the
other parties hereto or to anyone else for any action taken or omitted, or any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, in reliance upon such assumption.
(e) To the extent that the Escrow Agent becomes liable for the
payment of taxes, including withholding taxes, in respect of income derived from
the investment of funds held hereunder or any payment made hereunder, the Escrow
Agent may pay such taxes. The Escrow Agent may withhold from any payment of
monies held by it hereunder such amount as the Escrow Agent estimates to be
sufficient to provide for the payment of such taxes not yet paid, and may use
the sum withheld for that purpose. The Escrow Agent shall be indemnified and
held harmless against any liability for taxes and for any penalties or interest
in respect of taxes, on such investment income or payments in the manner
provided in Section 9(f) hereof.
(f) The Escrow Agent will be indemnified and held harmless by the
Company from and against any and all expenses, including reasonable 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 Escrow Agreement, the services of the Escrow Agent hereunder,
the monies or other property held by it hereunder or any income earned from
investment of such monies; provided, that such expenses or loss are not as a
result of the Escrow Agent acting, or omitting to take action, in bad faith or
with willful misconduct or gross negligence. 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 is to
be made against the Company, notify the Company thereof in writing, but the
failure by the Escrow Agent to give such notice shall not relieve the Company
from any liability which the Company may have to the Escrow Agent hereunder. For
the purposes hereof, the term "expense or loss" shall include all amounts paid
or payable to satisfy any claim, demand or liability, or in settlement of any
claim, demand, action, suit or proceeding settled with the express written
consent of the Escrow Agent, and all costs and expenses, including, but not
limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claims, demand, action, suit or
proceeding.
5
10. TERMINATION OF ESCROW AGREEMENT AND RESIGNATION OF ESCROW AGENT.
(a) This Escrow Agreement shall terminate on the final disposition
of the monies and property held in the Escrow Account hereunder, provided that
the rights of the Escrow Agent and the obligations of the other parties hereto
under Sections 9 and 11 hereof shall survive the termination hereof.
(b) The Escrow Agent may resign at any time and be discharged from
its duties as Escrow Agent hereunder by giving the Company and the subscribers
at least 30 days' 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 within the 60-day period following such notice of
resignation, the Escrow Agent may deposit the aforesaid monies and property with
any court it deems appropriate.
11. FORM OF PAYMENTS BY ESCROW AGENT.
(a) Any payments by the Escrow Agent to subscribers or to the
persons other than the Company pursuant to the terms of this Escrow Agreement
shall be made by check, payable to the order of each respective subscriber or
other person.
(b) All amounts referred to herein are expressed in United States
Dollars and all payments by the Escrow Agent shall be made in such dollars.
12. COMPENSATION OF ESCROW AGENT.
For services rendered, the Escrow Agent shall not receive any
compensation nor be entitled to reimbursement from the Company for any expenses
paid or incurred by it in the administration of its duties hereunder. No such
fee, reimbursement for costs and expenses, indemnification or any damages
incurred by the Escrow Agent or any monies whatsoever shall be paid out of or
chargeable to the subscription funds held in the Escrow Account.
13. NOTICES.
Unless expressly provided herein to the contrary, notices hereunder
shall be in writing, and delivered by telecopier, overnight express mail,
first-class postage prepaid, delivered personally or by receipted courier
service. All such notices shall be deemed delivered upon receipt by the
addressee. All such notices shall be addressed as follows (or to such other
address as any party hereto may from time to time designate by notice duly given
in accordance with this paragraph):
6
If to the Company, to:
Lifesciences Opportunities Incorporated
-----------------------------------------
-----------------------------------------
If to the Escrow Agent, to:
-----------------------------------------
-----------------------------------------
14. MISCELLANEOUS.
(a) Choice of Law and Jurisdiction. This Escrow Agreement shall be
governed by and construed in accordance with the law of the State of Florida as
applied to agreements made and to be performed entirely in Florida. The parties
to this Agreement hereby agree that jurisdiction over such parties and over the
subject matter of any action or proceeding arising under this Agreement may be
exercised by a competent court of the State of Florida or by a United States
Court sitting therein exclusively. The parties agree that delivery or mailing of
any process or other papers in the manner provided herein, or in such other
manner as may be permitted by law, shall be valid and sufficient service
thereof.
(b) Benefits and Assignment. Nothing in this Agreement, expressed
or implied, shall give or be construed to give any person, firm or corporation,
other than the parties hereto and their successors and assigns, any legal claim
under any covenant, condition or provision hereof, all the covenants,
conditions, and provisions contained in this Agreement being for the sole
benefit of the parties hereto and their successors and assigns. No party may
assign any of its rights or obligations under this Escrow Agreement without (i)
the written consent of all the other parties, which consent may be withheld in
the sole discretion of the party whose consent is sought and (ii) the written
agreement of the transferee that it will be bound by the provisions of this
Agreement.
(c) Counterparts. This Agreement may be executed in several
counterparts, each one of which shall constitute an original, and all
collectively shall constitute but one instrument.
(d) Amendment and Waiver. This Agreement may be modified only by a
written amendment signed by all the parties hereto, and no waiver of any
provision hereof shall be effective unless expressed in a writing signed by the
party to be charged.
(e) Headings. The headings of the sections hereof are included for
convenience of reference only and do not form part of this Agreement.
(f) Entire Agreement. This Agreement contains the complete
agreement of the parties with respect to its subject matter and supersedes and
replaces any previously made proposals, representation, warranties or agreements
with respect thereto by any of the parties hereto.
7
IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the date first written above.
LIFESCIENCES OPPORTUNITIES INCORPORATED
By: /s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx, President
XXXXXX XXXXX SECURITIES, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx, President
8
SCHEDULE A
1. RELEASE OF ESCROW ASSETS TO THE COMPANY. Funds held in the Escrow
Account shall be released to the Company in accordance with the following:
(a) Except as set forth in Section 1b. hereof, the Escrow Agent shall
not release funds to the Company prior to:
i. receipt by the Escrow Agent of a signed representation from the
Company, together with other evidence acceptable to the Escrow Agent, that the
requirements of paragraphs (e)(1) and (e)(2) of Rule 419 under the Securities
Act of 1933 have been met; and
ii. the consummation by the Company of an acquisition meeting the
requirements of paragraph (e)(2)(3) of such Rule 419.
(b) The Escrow Agent shall not be responsible for the sufficiency
or accuracy of the form of, or the execution, validity, value or genuineness of,
any document received in connection with this Section 1a. of this Schedule A, 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 to any other parties to this Agreement or to anyone else in any respect
on account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any such document.
(c) If subscriptions for at least 5,000 Shares have been received
and accepted by the Company and at least $26,100 of funds have been deposited
into the Escrow Account within the Minimum Time Period, the Escrow Agent shall
then release to the Company, promptly after the Company has deposited the
requisite stock certificates into the Escrow Account, an amount equal to 10% of
the funds then held in the Escrow Account as well as 10% of any additional funds
deposited in the Escrow Account.
(d) The Escrow Agent shall release to the Company the balance of
the funds held in the Escrow Account promptly upon compliance by the Company
with the provisions of Section 1a. hereof.
2. DISBURSEMENT OF FUNDS TO THE SUBSCRIBERS. Funds held in the Escrow
Account deposited by or on behalf of subscribers to the Shares hall be disbursed
to the subscribers in accordance with the following:
(a) If the Company has not received written notification from any
subscriber by the 45th business day following the effective date of the
Post-Effective Amendment to the Company's Registration Statement required by
paragraph (e)(1) of such Rule 419 that such subscriber has elected to remain an
investor, the Escrow Agent shall send to such subscriber by first class mail
within five business days such subscriber's funds held in the Escrow Account.
(b) If the Company has not consummated a business combination
meeting the requirements of such Rule 419 within 18 months after the effective
date of the Registration Statement, the Escrow Agent shall send to each
subscriber by first class mail within five business days after such date the
funds deposited in the Escrow Account by or on behalf of such subscriber.
SCHEDULE B
1. DELIVERY OF CERTIFICATES TO THE SUBSCRIBERS. If the Company complies
with the provisions of Section 1a. of Schedule A to the Escrow Agreement, the
Escrow Agent shall deliver the certificates to subscribers identified by the
Company as having timely elected to remain an investor subscriber.
2. RETURN OF CERTIFICATES TO THE COMPANY. Share certificates held in
the Escrow Account shall be returned to the Company in accordance with the
following
(a) If the Company has not consummated a business combination
meeting the requirements of Rule 419 under the Securities Act of 1933
within 18 months after the effective date of the Registration
Statement, the Escrow Agent shall return all of the share certificates
to the Company.
(b) If the Company has not received written notification from
any subscriber by the 45th business day following the effective date of
the Post-Effective Amendment to the Company's Registration Statement
required by paragraph (e)(1) of such Rule 419 that such subscriber has
elected to remain an investor, the Escrow Agent shall return the share
certificate registered in the name of such subscriber to the Company.
