ESCROW DEPOSIT AGREEMENT
Exhibit 10.3
AGREEMENT dated this 21st day
of October 2009, by and among PURDEN LAKE RESOURCE CORP., a
Delaware corporation (the “Company”),
having an address at 0 Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, MAY XXXXX PARTNERS, LLC, a
Delaware limited liability company, registered broker-dealer and a member of the
Financial Industry Regulatory Authority, Inc. (“May
Xxxxx”), having an address at 000 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, AMERICAN CAPITAL PARTNERS,
LLC, a New York limited liability company, registered broker-dealer and a
member of the Financial Industry Regulatory Authority, Inc. (“American
Capital” and, together with May Xxxxx, collectively, the “Placement
Agents”), having an address at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000, and SIGNATURE
BANK (the “Escrow
Agent”), a New York State chartered bank, having an office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. All terms not herein defined shall
have the meaning ascribed to them in the Company’s Confidential Private Offering
Memorandum, as amended and supplemented from time to time, including all
attachments, schedules and exhibits thereto (collectively, the “Memorandum”).
W I T N E S S E T H:
WHEREAS, pursuant to the terms
of the Memorandum, the Company is offering (the “Offering”)
for sale on a “reasonable efforts all-or-none” basis a minimum (the “Minimum
Amount”) of 582 units (each a “Unit”
and, collectively, the “Units”)
for an aggregate purchase price of $5,820,000 and on a “reasonable efforts”
basis a maximum (the “Maximum
Amount”) of 1,147 Units for an aggregate purchase price of $11,470,000,
each Unit consisting of (i) 3,937 shares of the Company’s common stock (the
“Common
Stock”), and (ii) a five-year warrant (the “Warrant”)
to purchase 514 additional shares of Common Stock (the “Warrant
Shares”) at an exercise price of $3.81 per share. The Units
are being sold at a purchase price of $10,000 per Unit, with a minimum
investment of one (1) Unit ($10,000) (which minimum investment may be waived by
the Company and the Placement Agent in their discretion);
WHEREAS, unless the Minimum
Amount is sold by November 20, 2009 (the “Initial
Termination Date”), which period may be extended until December 21, 2009
(the “Final
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Termination
Date”) by the Company and the Placement Agents in their mutual
discretion, the
Offering will terminate and all funds will be returned to the subscribers in the
Offering (the “Subscribers”)
without interest, penalty or offset;
WHEREAS, the Company and the
Placement Agents desire to establish an escrow account with the Escrow Agent
into which the Company shall instruct the Subscribers to deposit checks and
other instruments for the payment of money made payable to the order of
“Signature Bank, as Escrow Agent for Purden Lake Resource Corp.,” and the Escrow
Agent is willing to accept said checks and other instruments for the payment of
money in accordance with the terms hereinafter set forth;
WHEREAS, the Company and the
Placement Agents represent and warrant to the Escrow Agent that they have not
stated to any individual or entity that the Escrow Agent’s duties will include
anything other than those duties stated in this Agreement; and
WHEREAS, the Company and the Placement Agents
warrant to the Escrow Agent that a copy of the Memorandum and all other
documents which have been delivered to Subscribers which include the Escrow
Agent’s name and duties, have been attached hereto as Schedule
I.
NOW, THEREFORE, IT IS AGREED
as follows:
1. Delivery of Escrow
Funds.
(a) The
Placement Agents and the Company shall instruct Subscribers to deliver to the
Placement Agents or Escrow Agent checks made payable to the order of “Signature
Bank, as Escrow Agent for Purden Lake Resource Corp.,” or wire transfer to
Signature Bank, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA No. 000000000 for credit to
Signature Bank, as Escrow Agent for Purden Lake Resource Corp., Account No.
1501326425, in each
case, with the name, address and social security number or taxpayer
identification number of the individual or entity making payment. In
the event any Subscriber’s address and/or social security number or taxpayer
identification number are not provided to the Escrow Agent by such Subscriber,
the Placement Agents and/or the Company agree to promptly provide the Escrow
Agent with such information. The checks or wire transfers shall be
deposited into a non interest-bearing account at Signature Bank entitled
“Signature Bank, as Escrow Agent for Purden Lake Resource Corp.” (the “Escrow
Account”).
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(b) The
collected funds deposited into the Escrow Account are referred to as the “Escrow
Funds.”
(c) The
Escrow Agent shall have no duty or responsibility to enforce the collection or
demand payment of any funds deposited into the Escrow Account. If,
for any reason, any check deposited into the Escrow Account shall be returned
unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be to return
the check to the Subscriber and advise the Company and the Placement Agents
promptly thereof.
(d) The
Escrow Agent shall hold all Escrow Funds in the Escrow Account free from any
lien, claim or offset of the Escrow Agent, except as set forth
herein.
2. Release of Escrow
Funds. The Escrow Funds shall be paid by the Escrow Agent in
accordance with the following:
(a) In
the event that the Company and the Placement Agents advise the Escrow Agent in
writing that the Offering has been terminated (the “Termination
Notice”), the Escrow Agent shall promptly return the Escrow Funds paid by
each Subscriber, and not previously closed upon, to said Subscriber without
interest or deduction, penalty or offset.
(b) If
prior to 3:00 P.M. (New York City time) on or prior to the Initial Termination
Date, the Escrow Agent receives written notification, in the form of Exhibit
A attached hereto and made a part hereof (the “Extension
Notice”), signed by the Company and the Placement Agents stating that the
Initial Termination Date has been extended to a date on or before the Final
Termination Date, the date shall be so extended.
(c) Provided
that the Escrow Agent has not received a Termination Notice pursuant to Section 2(a) hereof
and there is at least the Minimum Amount deposited into the Escrow Account on or
prior to (i) the Initial Termination Date or (ii) the Final Termination Date (in
the event that the Escrow Agent has received an Extension Notice), the Escrow
Agent shall, upon
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receipt
of written instructions, in form and substance satisfactory to the Escrow Agent,
received from the Company and the Placement Agents, pay the Escrow Funds in
accordance with such written instructions, such payment or payments to be made
by wire transfer on the same Banking Day (as defined in Section 2(f) hereof)
of receipt of such written instructions (the “First
Closing”); provided, however, if such
instructions are received after 3:00 PM (New York City time) on any day, such
payments shall be made by the Escrow Agent so that they are received before 3:00
PM (New York City time) on the next day which is a Banking Day. The
same procedures shall be coordinated with respect to any subsequent closings
occurring prior to the Initial Termination Date or the Final Termination Date,
as applicable. Notwithstanding anything contained herein, a final
closing may be held no later than ten (10) business days after the Initial
Termination Date or the Final Termination Date, as
applicable.
(d) If
by 3:00 P.M. (local New York City time) on the Initial Termination Date or, in
the event that the Escrow Agent has received the Extension Notice, on the Final
Termination Date, the Escrow Agent (i) has not received written instructions
from the Company and the Placement Agents pursuant to Section 2(c) hereof
regarding the disbursement of the Escrow Funds, or (ii) there is a balance in
the Escrow Account of less than the Minimum Amount and the First Closing has not
yet occurred, then the Escrow Agent shall promptly return the Escrow Funds to
the Subscribers without interest or deductions, penalty or expense and shall
promptly notify the Company and the Placement Agents thereof. The
Escrow Funds returned to each Subscriber shall be free and clear of any and all
claims of the Escrow Agent.
(e) The
Escrow Agent shall not be required to pay any uncollected funds or any funds
which are not available for withdrawal.
(f) If
any other date that is a deadline under this Agreement for giving the Escrow
Agent notice or instructions or for the Escrow Agent to take action is not a
Banking Day, then such date shall be changed to the Banking Day that is
immediately after such date. A “Banking
Day” is any day other than a Saturday, Sunday or Bank
Holiday.
(g) The
Company may reject or cancel any subscription for Units in whole or in part. If
payment for any such rejected or canceled subscription has been delivered to the
Escrow
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Agent,
the Company and the Placement Agents will inform the Escrow Agent of the
rejection or cancellation, and the Escrow Agent upon receiving such notice shall
promptly return such funds to said Subscriber, but in no event prior to those
funds becoming collected and available for withdrawal.
3. Acceptance by Escrow
Agent. The Escrow Agent hereby accepts and agrees to perform
its obligations hereunder, provided that:
(a) The
Escrow Agent may act in reliance upon any signature reasonably believed by it to
be genuine, and may assume that any person who has been designated by the
Placement Agents or the Company to give any written instructions, notice or
receipt, or make any statements in connection with the provisions hereof has
been duly authorized to do so. The Escrow Agent shall have no duty to
make inquiry as to the genuineness, accuracy or validity of any statements or
instructions or any signatures on statements or instructions. The
names and true signatures of each individual authorized to act singly on behalf
of the Company and the Placement Agents are stated in Schedule
II, which is attached hereto and made a part hereof. The
Company and the Placement Agents may each remove or add one or more of its
authorized signers listed on Schedule
II by notifying the Escrow Agent of such change in accordance with this
Agreement, which notice shall include the true signature for any new authorized
signatories.
(b) The
Escrow Agent may act relative hereto in reliance upon advice of counsel in
reference to any matter connected herewith. The Escrow Agent shall
not be liable for any mistake of fact or error of judgment or law, or for any
acts or omissions of any kind, unless caused by its willful misconduct or gross
negligence.
(c) The
Placement Agents and the Company agree to indemnify and hold the Escrow Agent
harmless from and against any and all claims, losses, costs, liabilities,
damages, suits, demands, judgments or expenses (including but not limited to
reasonable attorney’s fees) claimed against or incurred by the Escrow Agent, in
good faith, arising out of or related, directly or indirectly, to this Escrow
Agreement unless caused by a breach of this Agreement by the Escrow Agent or by
the Escrow Agent’s gross negligence or willful misconduct.
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(d) In
the event that the Escrow Agent shall be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be entitled to (i) refrain from taking any
action other than to keep safely the Escrow Funds until it shall be directed
otherwise by a court of competent jurisdiction, or (ii) deliver the Escrow Funds
to a court of competent jurisdiction and in either case it shall notify the
Company and the Placement Agents thereof.
(e) The
Escrow Agent shall have no duty, responsibility or obligation to interpret or
enforce the terms of any agreement other than the Escrow Agent’s obligations
hereunder, and the Escrow Agent shall not be required to make a request that any
monies be delivered to the Escrow Account, it being agreed that the sole duties
and responsibilities of the Escrow Agent, to the extent not prohibited by
applicable law, shall be (i) to accept checks or other instruments for the
payment of money and wire transfers delivered to the Escrow Agent for the Escrow
Account and deposit said checks and wire transfers into the non-interest bearing
Escrow Account, and (ii) to disburse or refrain from disbursing the Escrow Funds
as stated above, provided that the checks received by the Escrow Agent have been
collected and are available for withdrawal.
4. Resignation and Termination
of the Escrow Agent. The Escrow Agent may resign at any time
by giving thirty (30) days’ prior written notice of such resignation to the
Placement Agents and the Company. Upon providing such notice, the
Escrow Agent shall have no further obligation hereunder except to comply with
Section 2(c)
and to hold the Escrow Funds which it thereafter receives until the end of such
30-day period. In such event, the Escrow Agent shall not take any
action, other than complying with Section 2(c) and
receiving and depositing Subscribers’ checks and wire transfers in accordance
with this Agreement, until the Company together with the Placement Agents have
designated a banking corporation, trust company, attorney or other person as
successor. Upon receipt of such written designation signed by the
Placement Agents and the Company, the Escrow Agent shall promptly deliver the
Escrow Funds to such successor and shall thereafter have no further obligations
hereunder. If such instructions are not received within thirty (30)
days following the effective date of such resignation, then the Escrow Agent may
deposit the Escrow Funds and any other amounts held by it pursuant to this
Agreement with a clerk of a court of competent jurisdiction pending the
appointment of a successor. In either case provided for in this
paragraph, the Escrow Agent shall be relieved of all further obligations and
released from all liability thereafter arising with respect to the Escrow
Funds.
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5. Termination. The
Company and the Placement Agents may terminate the appointment of the Escrow
Agent hereunder upon written notice specifying the date upon which such
termination shall take effect, which date shall be at least thirty (30) days
from the date of such notice. In the event of such termination, the
Company and the Placement Agents shall, within thirty (30) days of such notice,
appoint a successor escrow agent and the Escrow Agent shall, upon receipt of
written instructions signed by the Company and the Placement Agents, turn over
to such successor escrow agent all of the Escrow Funds; provided, however, that if the
Company and the Placement Agents fail to appoint a successor escrow agent within
such 30-day period, such termination notice shall be null and void and the
Escrow Agent shall continue to be bound by all of the provisions
hereof. Upon receipt of the Escrow Funds, the successor escrow agent
shall become the Escrow Agent hereunder and shall be bound by all of the
provisions hereof and Signature Bank shall be relieved of all further
obligations and released from all liability thereafter arising with respect to
the Escrow Funds and under this Agreement. Nothing herein shall,
however, release the Escrow Agent from liability for its actions or omissions as
provided herein arising prior to the appointment of such successor.
6. Investment. All
funds received by the Escrow Agent will be held only in non-interest bearing
bank accounts at Signature Bank.
7. Compensation. The
Escrow Agent shall be entitled, for the duties to be performed by it hereunder,
to a fee of $3,500 which fee shall be paid by the Company promptly following the
signing of this Agreement. In addition, the Company shall be
obligated to reimburse the Escrow Agent for all third party fees, costs and
expenses incurred in good faith or that become due in connection with the Escrow
Account and this Agreement, including reasonable and actual attorney’s
fees. Neither the modification, cancellation, termination or
rescission of this Agreement, nor the resignation or termination of the Escrow
Agent shall affect the right of the Escrow Agent to retain the amount of any fee
which has been paid, or to be reimbursed or paid for any costs or expenses that
have been incurred or become due prior to the effective date of any
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such
modification, cancellation, termination, resignation or
rescission. To the extent the Escrow Agent has not been paid any fee
or has incurred any such costs or expenses prior to any closing, the Escrow
Agent shall advise the Company and the Company shall direct all such amounts to
be paid directly at any such closing.
8. Notices. All
notices, requests, demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
if sent by hand-delivery, by facsimile (followed by first-class mail), one (1)
business day after sent by nationally recognized overnight courier service or
three (3) business days after sent by registered or certified mail, return
receipt requested, in each case costs prepaid, to the addresses set forth
below.
If to the Placement
Agents:
May Xxxxx
Partners, LLC
000 Xxxxx
Xxxxxx, 0xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxx
May
Fax: (000)
000-0000
American
Capital Partners, LLC
000 Xxxx
Xxxxxx
Xxxxxxxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx X. Xxxxxxx
Fax:
(000) 000-0000
With a
copy to:
Gusrae,
Xxxxxx, Xxxxx & Xxxxxxx PLLC
000 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxxx
X. Xxxxxxx, Esq.
Fax: (000)
000-0000
If to the
Company:
Purden
Lake Resource Corp.
0 Xxxxxxx
Xxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxx
Xxxxxx
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If to the
Escrow Agent:
Signature Bank
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx
Xxxxxx, Group Director and
Senior Vice President
Fax:
(000) 000-0000
9. General.
(a) This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York applicable to agreements made and to be entirely
performed within such State without regard to choice of law principles and any
action brought hereunder shall be brought in the courts of the State of New
York, located in the County of New York. Each party hereto irrevocably
waives any objection on the grounds of venue, forum non-conveniens or any
similar grounds and irrevocably consents to service of process by mail or in any
manner permitted by applicable law and consents to the jurisdiction of said
courts. Each of the parties hereto hereby waives all right to trial by
jury in any action, proceeding or counterclaim arising out of the transactions
contemplated by this Agreement.
(b) This
Agreement sets forth the entire agreement and understanding of the parties in
respect to the matters contained herein and supersedes all prior agreements,
arrangements and understandings relating thereto.
(c) All
of the terms and conditions of this Agreement shall be binding upon, and inure
to the benefit of and be enforceable by, the parties hereto, as well as their
respective successors and assigns.
(d) This
Agreement may be amended, modified, superseded or canceled, and any of the terms
or conditions hereof may be waived, only by a written instrument executed by
each party hereto or, in the case of a waiver, by the party waiving
compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver of any party of any
condition, or of the breach of any term contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any
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such
condition or breach or a waiver of any other condition or of the breach of any
other term of this Agreement. No party may assign any rights, duties
or obligations hereunder unless all other parties have given their prior written
consent.
(e) If
any provision included in this Agreement proves to be invalid or unenforceable,
it shall not affect the validity of the remaining provisions.
(f) This
Agreement and any amendment or modification of this Agreement may be executed in
several counterparts or by separate instruments and all of such counterparts and
instruments shall constitute one agreement, binding on all of the parties
hereto.
10. Form of Signature.
The parties hereto agree to accept a facsimile transmission copy of their
respective actual signatures as evidence of their actual signatures to this
Agreement and any amendment or modification of this Agreement; provided, however, that each
party who produces a facsimile signature agrees, by the express terms hereof, to
place, promptly after transmission of his or her signature by fax, a true and
correct original copy of his or her signature in overnight mail to the address
of the other parties.
[Signature
page follows]
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IN WITNESS WHEREOF, the
parties have duly executed this Escrow Agreement as of the date first set forth
above.
MAY XXXXX
PARTNERS, LLC
By:
__________________________
Name: Xxxx
May
Title:
AMERICAN
CAPITAL PARTNERS, LLC
By:
__________________________
Name: Xxxxxxx
X. Xxxxxxx
Title:
PURDEN
LAKE RESOURCE CORP.
By:
__________________________
Name: Xxxx
Xxxxxx
Title:
SIGNATURE
BANK
By:
_____________________________
Name:
Title:
By:
_____________________________
Name:
Title:
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EXHIBIT
A
Date:
__________________
Signature
Bank
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xx. Xxxxx
Xxxxxx, Group Director and
Senior Vice President
Re: Purden Lake Resource Corp.
Escrow Account No. 1501326425
Dear Xx.
Xxxxxx:
In
accordance with the terms of Section 2(b) of an
Escrow Deposit Agreement dated October 21, 2009, by and among PURDEN LAKE RESOURCE CORP.
(the “Company”),
MAY XXXXX PARTNERS, LLC
(“May
Xxxxx”), AMERICAN
CAPITAL PARTNERS, LLC (“American
Capital” and, together with May Xxxxx, collectively, the “Placement
Agents”) and SIGNATURE
BANK (the “Escrow
Agent”), the Company and the Placement Agents hereby notify the Escrow
Agent that the Offering Period has been extended to December 21, 2009, the
Final Termination Date.
Very
truly yours,
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MAY
XXXXX PARTNERS, LLC
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PURDEN
LAKE RESOURCE CORP.
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By: _____________________________
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By: __________________________
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Name:
Xxxx May
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Name:
Xxxx Xxxxxx
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Title:
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Title:
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AMERICAN
CAPITAL PARTNERS, LLC
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By: _____________________________
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Name: Xxxxxxx X.
Xxxxxxx
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Title:
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12
Schedule
I
OFFERING
DOCUMENTS
13
Schedule
II
The Escrow Agent is authorized to
accept instructions signed or believed by the Escrow Agent to be signed by any
one of the following on behalf of Purden Lake Resource Corp., May Xxxxx
Partners, LLC and American Capital Partners, LLC
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PURDEN LAKE RESOURCE
CORP.
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Name
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True
Signature
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Xxxx
Xxxxxx
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MAY XXXXX PARTNERS,
LLC
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Name
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True
Signature
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Xxxx
May
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AMERICAN CAPITAL PARTNERS,
LLC
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Name
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True
Signature
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Xxxxxxx
X. Xxxxxxx
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