EXHIBIT 99.01
ESCROW AGREEMENT INFORMATION SHEET
1. THE ISSUER
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Name: Osmotics Corporation
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Address: 0000 - 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
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State of incorporation of organization: Delaware
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2. THE UNDERWRITER
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Name: National Securities Corporation
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Address: 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000
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State of incorporation of organization: Washington
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3. THE SECURITIES
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Description of the Securities to be offered (e.g. shares of or warrants for
common stock, debentures, units consisting shares and warrants, etc.):
Common Stock
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Par value, if any: $.001 per share
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Offering price per share/unit/other: $6.00 per share
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4. MINIMUM AMOUNTS REQUIRED FOR DISBURSEMENT OF THE ESCROW ACCOUNT
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Aggregate dollar amount which must be collected before the Escrow Account
may be disbursed to the Issuer ("Minimum Dollar Amount"): $3,000,000
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Total amount of securities which must be subscribed for before the Escrow
Account may be disbursed to the Issuer ("Minimum Securities Amount")
500,000 Shares
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5. PLAN OF DISTRIBUTION OF THE SECURITIES
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Offering Period: 60 calendar days
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Extension Period, if any: 30 calendar days
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Collection Period, if any: N/A business days
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6. TITLE OF ESCROW ACCOUNT: Continental Stock Transfer & Trust Company,
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Escrow Agent for the offering by Osmotics Corporation
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7. ESCROW AGENT FEES
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Amount due on execution of the Escrow Agreement: $1,000.00 and $1,000.00
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upon completion of the escrow
Fee for each check disbursed pursuant to the terms of the Escrow
Agreement: $ 0
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Fee for each check returned pursuant to the terms of
the Escrow Agreement: $ 0
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Fee for Additional Closings, if any: $500.00
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ESCROW AGREEMENT (PUBLIC OFFERING)
AGREEMENT made this ______ day of _____________________, 1997 by and among
the Issuer and the Underwriter whose names and addresses appear on the
Information Sheet (as defined herein) attached to this Agreement and Continental
Stock Transfer & Trust Company (the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, the Issuer has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Registration Statement")
covering a proposed public offering of its securities as described on the
Information Sheet;
WHEREAS, the Underwriter proposes to offer the Securities, as agent for the
Issuer, for sale to the public on a "best efforts, all or none" basis with
respect to the Minimum Securities Amount and Minimum Dollar Amount and at the
price per share or other unit all as set forth on the Information Sheet;
WHEREAS, the Issuer and the Underwriter propose to establish an escrow
account (the "Escrow Account"), to which subscription monies which are received
by the Escrow Agent from the Underwriter in connection with such public offering
are to be credited, and the Escrow Agent is willing to establish the Escrow
Account on the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the Escrow Agent has an agreement with Chemical Bank to establish
a special bank account (the "Bank Account") into which the subscription monies,
which are received by the Escrow Agent from the Underwriter and credited to the
Escrow Account, are to be deposited;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Information Sheet. Each capitalized term not otherwise defined
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in this Agreement shall have the meaning set forth for such term on the
information sheet which is attached to this Agreement and is incorporated by
reference herein and made a part hereof (the "Information Sheet").
2. Establishment of the Bank Account.
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2.1 The Escrow Agent shall establish a non-interest-bearing bank
account at the branch of Chemical Bank selected by the Escrow Agent, and bearing
the designation set forth on the Information Sheet (heretofore defined as the
"Bank Account"). The purpose of the Bank Account is for (a) the deposit of all
subscription monies (checks, cash or wire transfers) which are received by the
Underwriter from prospective purchasers of the Securities and are delivered by
the Underwriter to the Escrow Agent, (b) the holding of amounts of subscription
monies
which are collected through the banking system, and (c) the disbursement
of collected funds, all as described herein.
2.2 On or before the date of the initial deposit in the Bank Account
pursuant to this Agreement, the Underwriter shall notify the Escrow Agent in
writing of the effective date of the Registration Statement (the "Effective
Date"), and the Escrow Agent shall not be required to accept any amounts for
credit to the Escrow Account or for deposit in the Bank Account prior to its
receipt of such notification.
2.3 The Offering Period, which shall be deemed to commence on the
Effective Date, shall consist of the number of calendar days or business days
set forth on the Information Sheet. The Offering Period shall be extended by an
Extension Period only if the Escrow Agent shall have received written notice
thereof at least five (5) business days prior to the expiration of the Offering
Period. The Extension Period, which shall be deemed to commence on the next
calendar day following the expiration of the Offering Period, shall consist of
the number of calendar days or business days set forth on the Information Sheet.
The last day of the Offering Period, or the last day of the Extension Period (if
the Escrow Agent has received written notice thereof as hereinabove provided),
is referred to herein as the "Termination Date". Except as provided in Section
4.3 hereof, after the Termination Date the Underwriter shall not deposit, and
the Escrow Agent shall not accept, any additional amounts representing payments
by prospective purchasers.
3. Deposits to the Bank Account.
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3.1 The Underwriter shall promptly deliver to the Escrow Agent all
monies which it receives from prospective purchasers of the Securities, which
monies shall be in the form of checks, cash, or wire transfers. Upon the Escrow
Agent's receipt of such monies, they shall be credited to the Escrow Account.
All checks delivered to the Escrow Agent shall be made payable to "Continental
Stock Transfer & Trust Company, as Escrow Agent for the offering by [the
Issuer]". Any check payable other than to the Escrow Agent as required hereby
shall be returned to the prospective purchaser, or if the Escrow Agent has
insufficient information to do so, then to the Underwriter (together with any
Subscription Information, as defined below or other documents delivered
therewith) by noon of the next business day following receipt of such check by
the Escrow Agent, and such check shall be deemed not to have been delivered to
the Escrow Agent pursuant to the terms of this Agreement.
3.2 Promptly after receiving subscription monies as described in
Section 3.1, the Escrow Agent shall deposit the same into the Bank Account.
Amounts of monies so deposited are hereinafter referred to as "Escrow Amounts".
The Escrow Agent shall cause Chemical Bank to process all Escrow Amounts for
collection through the banking system. Simultaneously with each deposit to the
Escrow Account, the Underwriter (or the Issuer, if such deposit is made by the
Issuer) shall inform the Escrow Agent in writing of the name and address of the
prospective purchaser, the amount of Securities subscribed for by such
purchaser, and the aggregate dollar amount of such subscription (collectively,
the "Subscription Information").
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3.3 The Escrow Agent shall not be required to accept for credit to
the Escrow Account or for deposit into the Bank Account checks which are not
accompanied by the appropriate Subscription Information. Wire transfers and
cash representing payments by prospective purchasers shall not be deemed
deposited in the Escrow Account until the Escrow Agent has received in writing
the Subscription Information required with respect to such payments.
3.4 The Escrow Agent shall not be required to accept in the Escrow
Account any amounts representing payments by prospective purchasers, whether by
check, cash or wire, except during the Escrow Agent's regular business hours.
3.5 Only those Escrow Amounts, which have been deposited in the Bank
Account and which have cleared the banking system and have been collected by the
Escrow Agent, are herein referred to as the "Fund".
3.6 If the proposed offering is terminated before the Termination
Date, the Escrow Agent shall refund any portion of the Fund prior to
disbursement of the Fund in accordance with Article 4 hereof upon instructions
in writing signed by both the Issuer and the Underwriter.
4. Disbursement from the Bank Account.
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4.1 Subject to Section 4.3 below, if by the close of regular banking
hours on the Termination Date the Escrow Agent determines that the amount in the
Fund is less than the Minimum Dollar Amount or the Minimum Securities Amount, as
indicated by the Subscription Information submitted to the Escrow Agent, then in
either such case, the Escrow Agent shall promptly refund to each prospective
purchaser the amount of payment received from such purchaser which is then held
in the Fund or which thereafter clears the banking system, without interest
thereon or deduction therefrom, by drawing checks on the Bank Account for the
amounts of such payments and transmitting them to the purchasers. In such
event, the Escrow Agent shall promptly notify the Issuer and the Underwriter of
its distribution of the Fund.
4.2 Subject to Section 4.3 below, if at any time up to the close of
regular banking hours on the Termination Date, the Escrow Agent determines that
the amount in the Fund is at least equal to the Minimum Dollar Amount and
represents the sale of not less than the Minimum Securities Amount, the Escrow
Agent shall promptly notify the Issuer and the Underwriter of such fact in
writing. The Escrow Agent shall promptly disburse the Fund, by drawing checks
on the Bank Account in accordance with instructions in writing signed by both
the Issuer and the Underwriter as to the disbursement of the Fund, promptly
after it receives such instructions.
4.3 [This provision applies only if a Collection Period has been
provided for by the appropriate indication on the Information Sheet.] If the
Escrow Agent or the Underwriter has on hand at the close of business on the
Termination Date any uncollected amounts which when added to the Fund would
raise the amount in the Fund to the Minimum Dollar Amount, and result in the
Fund representing the sale of the Minimum Securities Amount, the Collection
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Period (consisting of the number of business days set forth on the Information
Sheet) shall be utilized to allow such uncollected amounts to clear the banking
system. During the Collection Period, the Underwriter (and the Issuer) shall
not deposit, and the Escrow Agent shall not accept, any additional amounts;
provided, however, that such amounts as were received by the Underwriter (or the
Issuer) by the close of business on the Termination Date may be deposited with
the Escrow Agent by noon of the next business day following the Termination
Date. If at the close of business on the last day of the Collection Period an
amount sufficient to raise the amount in the Fund to the Minimum Dollar Amount
and which would result in the Fund representing the sale of the Minimum
Securities Amount shall not have cleared the banking system, the Escrow Agent
shall promptly notify the Issuer and the Underwriter in writing of such fact and
shall promptly return all amounts then in the Fund, and any amounts which
thereafter clear the banking system, to the prospective purchasers as provided
in Section 4.2 hereof.
4.4 Upon disbursement of the Fund pursuant to the terms of this
Article 4, the Escrow Agent shall be relieved of all further obligations and
released from all liability under this Agreement. It is expressly agreed and
understood that in no event shall the aggregate amount of payments made by the
Escrow Agent exceed the amount of the Fund.
5. Rights, Duties and Responsibilities of the Escrow Agent. It is
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understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature, and that:
5.1 The Escrow Agent shall notify the Underwriter, on a daily basis,
of the Escrow Amounts which have been deposited in the Bank Account and of the
amounts, constituting the Fund, which have cleared the banking system and have
been collected by the Escrow Agent.
5.2 The Escrow Agent shall not be responsible for or be required to
enforce any of the terms or conditions of the underwriting agreement or any
other agreement between the Underwriter and the Issuer nor shall the Escrow
Agent be responsible for the performance by the Underwriter or the Issuer of
their respective obligations under this Agreement.
5.3 The Escrow Agent shall not be required to accept from the
Underwriter (or the Issuer) any Subscription Information pertaining to
prospective purchasers unless such Subscription Information is accompanied by
checks, cash, or wire transfers meeting the requirements of Section 3.1, nor
shall the Escrow Agent be required to keep records of any information with
respect to payments deposited by the Underwriter (or the Issuer) except as to
the amount of such payments; however, the Escrow Agent shall notify the
Underwriter within a reasonable time of any discrepancy between the amount set
forth in any Subscription Information and the amount delivered to the Escrow
Agent therewith. Such amount need not be accepted for deposit in the Escrow
Account until such discrepancy has been resolved.
5.4 The Escrow Agent shall be under no duty or responsibility to
enforce collection of any check delivered to it hereunder. The Escrow Agent,
within a reasonable time, shall return to the Underwriter any check received
which is dishonored, together with the Subscription Information, if any, which
accompanied such check.
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5.5 The Escrow Agent shall be entitled to rely upon the accuracy, act
in reliance upon the contents, and assume the genuineness of any notice,
instruction, certificate, signature, instrument or other document which is given
to the Escrow Agent pursuant to this Agreement without the necessity of the
Escrow Agent verifying the truth or accuracy thereof. The Escrow Agent shall
not be obligated to make any inquiry as to the authority, capacity, existence or
identity of any person purporting to give any such notice or instructions or to
execute any such certificate, instrument or other document.
5.6 If the Escrow Agent is uncertain as to its duties or rights
hereunder or shall receive instructions with respect to the Bank Account, the
Escrow Amounts or the Fund which, in its sole determination, are in conflict
either with other instructions received by it or with any provision of this
Agreement, it shall be entitled to hold the Escrow Amounts, the Fund, or a
portion thereof, in the Bank Account pending the resolution of such uncertainty
to the Escrow Agent's sole satisfaction, by final judgment of a court or courts
of competent jurisdiction or otherwise; or the Escrow Agent, at its sole option,
may deposit the Fund (and any other Escrow Amounts that thereafter become part
of the Fund) with the Clerk of a court of competent jurisdiction in a proceeding
to which all parties in interest are joined. Upon the deposit by the Escrow
Agent of the Fund with the Clerk of any court, the Escrow Agent shall be
relieved of all further obligations and released from all liability hereunder.
5.7 The Escrow Agent shall not be liable for any action taken or
omitted hereunder, or for the misconduct of any employee, agent or attorney
appointed by it, except in the case of willful misconduct or gross negligence.
The Escrow Agent shall be entitled to consult with counsel of its own choosing
and shall not be liable for any action taken, suffered or omitted by it in
accordance with the advice of such counsel.
5.8 The Escrow Agent shall have no responsibility at any time to
ascertain whether or not any security interest exists in the Escrow Amounts, the
Fund or any part thereof or to file any financing statement under the Uniform
Commercial Code with respect to the fund or any part thereof.
6. Amendment; Resignation. This Agreement may be altered or amended
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only with the written consent of the Issuer, the Underwriter and the Escrow
Agent. The Escrow Agent may resign for any reason upon three (3) business days'
written notice to the Issuer and the Underwriter. Should the Escrow Agent resign
as herein provided, it shall not be required to accept any deposit, make any
disbursement or otherwise dispose of the Escrow Amounts or the Fund, but its
only duty shall be to hold the Escrow Amounts until they clear the banking
system and the Fund for a period of not more than five (5) business days
following the effective date of such resignation, at which time (a) if a
successor escrow agent shall have been appointed and written notice thereof
(including the name and address of such successor escrow agent) shall have been
given to the resigning Escrow Agent by the Issuer, the Underwriter and such
successor escrow agent, then the resigning Xxxxxx Agent shall pay over to the
successor escrow agent the Fund, less any portion thereof previously paid out in
accordance with this Agreement; or (b) if the resigning Xxxxxx Agent shall not
have received written notice signed by the Issuer, the Underwriter and a
successor escrow agent, then the resigning Escrow Agent shall promptly refund
the amount in the Fund to each prospective purchaser, without interest thereon
or
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deduction therefrom, and the resigning Escrow Agent shall promptly notify the
Issuer and the Underwriter in writing of its liquidation and distribution of the
Fund; whereupon, in either case, the Escrow Agent shall be relieved of all
further obligations and released from all liability under this Agreement.
Without limiting the provisions of Section 8 hereof, the resigning Escrow Agent
shall be entitled to be reimbursed by the Issuer and the Underwriter for any
expenses incurred in connection with its resignation, transfer of the Fund to a
successor escrow agent or distribution of the Fund pursuant to this Section 6.
7. Representations and Warranties. The Issuer and the Underwriter
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hereby jointly and severally represent and warrant to the Escrow Agent that:
7.1 No party other than the parties hereto and the prospective
purchasers have, or shall have, any lien, claim or security interest in the
Escrow Amounts or the Fund or any part thereof.
7.2 No financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Amounts or the Fund or any part thereof.
7.3 The Subscription Information submitted with each deposit shall,
at the time of submission and at the time of the disbursement of the Fund, be
deemed a representation and warranty that such deposit represents a bona fide
payment by the purchaser described therein for the amount of Securities set
forth in such Subscription Information.
7.4 All of the information contained in the Information Sheet is, as
of the date hereof, and will be, at the time of any disbursement of the Fund,
true and correct.
8. Fees and Expenses. The Escrow Agent shall be entitled to the Escrow
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Agent Fees set forth on the Information Sheet, payable as and when stated
therein. In addition, the Issuer and the Underwriter jointly and severally agree
to reimburse the Escrow Agent for any reasonable expenses incurred in connection
with this Agreement, including, but not limited to, reasonable counsel fees.
Upon receipt of the Minimum Dollar Amount, the Escrow Agent shall have a lien
upon the Fund to the extent of its fees for services as Escrow Agent.
9. Indemnification and Contribution
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9.1 The Issuer and the Underwriter (collectively referred to as the
"Indemnitors") jointly and severally agree to indemnify the Escrow Agent and its
officers, directors, employees, agents and shareholders (collectively referred
to as the "Indemnitees") against, and hold them harmless of and from, any and
all loss, liability, cost, damage and expense, including without limitation,
reasonable counsel fees, which the Indemnitees may suffer or incur by reason of
any action, claim or proceeding brought against the Indemnitees arising out of
or relating in any way to this Agreement or any transaction to which this
Agreement relates, unless such action, claim or proceeding is the result of the
willful misconduct or gross negligence of the Indemnities.
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9.2 If the indemnification provided for in Section 9.1 is applicable,
but for any reason is held to be unavailable, the Indemnitors shall contribute
such amounts as are just and equitable to pay, or to reimburse the Indemnitees
for, the aggregate of any and all losses, liabilities, costs, damages and
expenses, including counsel fees, actually incurred by the Indemnitees as a
result of or in connection with, and any amount paid in settlement of, any
action, claim or proceeding arising out of or relating in any way to any actions
or omissions of the Indemnitors.
9.3 The provisions of this Article 9 shall survive any termination of
this Agreement, whether by disbursement of the Fund, resignation of the Escrow
Agent or otherwise.
10. Governing Law and Assignment. This Agreement shall be construed in
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accordance with and governed by the laws of the State of New York and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that any assignment or transfer by any party of its rights
under this Agreement or with respect to the Escrow Amounts or the Fund shall be
void as against the Escrow Agent unless (a) written notice thereof shall be
given to the Escrow Agent; and (b) the Escrow Agent shall have consented in
writing to such assignment or transfer.
11. Notices. All notices required to be given in connection with this
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Agreement shall be sent by registered or certified mail, return receipt
requested, or by hand delivery with receipt acknowledged, or by the Express Mail
service offered by the United States Post Office, and addressed, if to the
Issuer or the Underwriter, at their respective addresses set forth on the
Information Sheet, and if to the Escrow Agent, at its address set forth above,
to the attention of the Trust Department.
12. Severability. If any provision of this Agreement or the application
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thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement or the application of
such provision to persons or circumstances other than those to which it is held
invalid or unenforceable shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law.
13. Execution in Several Counterparts. This Agreement may be executed in
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several counterparts or by separate instruments, and all of such counterparts
and instruments shall constitute one agreement, binding on all of the parties
hereto.
14. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings (written or oral) of the
parties in connection therewith.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
THE ISSUER CONTINENTAL STOCK
TRANSFER & TRUST COMPANY
By: By:
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THE UNDERWRITER
By:
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