9. ESCROW AGREEMENT BY AND BETWEEN THE
COMPANY, THE UNDERWRITER AND CHASE MANHATTAN BANK
ESCROW AGREEMENT
Escrow Agreement dated as of ____________, 1998 by and
among The Chase Manhattan Bank, a New York state chartered bank with offices
at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, AWG, Ltd., a Nevada
corporation with offices at 0000 Xxx Xxxxx Xxxx, Xxxx, Xxxxxxxxxx 00000 and
Xxxxx Xxxx and Shire, Inc., an Indiana corporation with offices at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H
WHEREAS, AWG, Ltd. (the "Issuer-Corporation") has filed a
registration statement on Form SB-1 under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission, File No. 333-48165 (the
"Registration Statement"), relating to the subscription for and sale of a
maximum of 500,000 shares (the "Shares") of Series A 6% Preferred Stock (the
"Preferred Stock") in the Issuer-Corporation, with a minimum investment
required of 300,000 shares of Preferred Stock at a price of $10.00 per Share;
and
WHEREAS, Xxxxx Xxxx and Shire, Inc. (the "Depositor-
Agent") has been named as the Underwriter in connection with the
proposed offering of the Preferred Stock in accordance with the
terms of the Underwriting Agreement dated as of _____________,
1998 among the Issuer-Corporation and the Depositor-Agent (the
"Underwriting Agreement"); and
WHEREAS, in compliance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended, the Issuer-Corporation and the
Depositor-Agent propose to establish an escrow fund with The Chase Manhattan
Bank (the "Bank-Escrowee"); and
WHEREAS, the offering of Preferred Stock will terminate no
later than sixty (60) days of the date the Registration Statement is declared
effective by the Securities and Exchange Commission (the "Effective Date")
unless extended by the Issuer- Corporation for an additional thirty (30) days
(the "Offering Termination Date"). If subscriptions for at least 300,000
shares of Preferred Stock ($3,000,000) have not been received by the Offering
Termination Date, no Preferred Stock will be sold; and
WHEREAS, the Bank-Escrowee has agreed to act as escrow
agent in connection with the proposed fund;
NOW, THEREFORE, it is agreed as follows:
1. For a period commencing on the Effective Date and
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terminating at the latest of the Offering Termination Date, Closing Date or
the Option Closing Date, as the latter two terms are defined in the
Underwriting Agreement and as the same is set forth in the Registration
Statement of the Issuer-Corporation, the Bank-Escrowee shall act as escrow
agent and agrees to receive and disburse the proceeds from the sale of the
Preferred Stock in accordance herewith. The Depositor-Agent and the Issuer-
Corporation agree to notify the Bank-Escrowee (a) promptly after the
Registration Statement has been declared effective by the Securities and
Exchange Commission, (b) if the proposed offering of the Preferred Stock is
extended as provided in the Underwriting Agreement, (c) of the Offering
Termination Date and (d) of the Closing Date and each Option Closing Date.
2. All moneys received by the Depositor-Agent and the
Issuer-Corporation in connection with the sale of the Preferred Stock shall
be deposited by the Depositor-Agent and the Issuer-Corporation in a
non-interest escrow account to be established for this purpose by the
Bank-Escrowee.
3. If at least 300,000 shares of Preferred Stock have been
subscribed for and any funds remain in the escrow account on the later of the
Closing Date, Option Closing Date or the Offering Termination Date, such
funds will be promptly paid to or credited
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to the account of, or otherwise transferred to the Issuer-Corporation less
expenses (as specified in written instructions from the Issuer-Corporation
and the Depositor-Agent, signing jointly).
4. Upon receipt by the Bank-Escrowee of appropriate written
instructions at the Closing Date and Option Closing Date as the case may be,
from the Issuer-Corporation and the Depositor-Agent, jointly, giving notice
of the events described herein, the Bank-Escrowee shall pay to or credit to
the account of, or otherwise transfer (as specified in such instructions) to,
the Issuer-Corporation and other instructed parties such portion of the
deposited funds then held in escrow as specified in such instructions.
5. If at least 300,000 shares of Preferred Stock have not
been subscribed for by the Offering Termination Date, then the
Depositor-Agent and the Issuer-Corporation promptly shall so advise the
Bank-Escrowee, shall furnish to the Bank-Escrowee a list containing the name
and address of, the amount received from each subscriber whose funds have
been deposited and shall authorize the Bank-Escrowee to return the
subscription funds theretofore received, without interest, to the subscribers
as named.
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6. In the event of either (a) the occurrence of all the
events contemplated by Sections 3 and 4 hereof, or (b) at least 300,000
shares of Preferred Stock not having been subscribed for by the Offering
Termination Date and the repayment to the subscribers of the amounts provided
in Section 5 hereof, the Bank-Escrowee shall be relieved of all liabilities
in connection with the escrow deposits provided for herein.
7. The Issuer-Corporation hereby agrees to (i) pay the
Bank-Escrowee upon execution of this Agreement reasonable compensation for
the services to be rendered hereunder, as described on Schedule I attached
hereto, and (ii) pay or reimburse the Bank-Escrowee upon request for all
expenses, disbursements and advances, including reasonable attorney's fees,
incurred or made by it in connection with this agreement.
8. It is understood and agreed, further, that the Bank-
Escrowee shall:
(a) be under no duty to enforce payment of any
subscription which is to be paid to and held by it
hereunder;
(b) be under no duty to accept funds, checks,
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drafts or instructions for the payment of money from anyone
other than the Depositor-Agent and the Issuer-Corporation
or to give any receipt therefor except to the
Depositor-Agent and the Issuer-Corporation;
(c) be protected in acting under any notice,
request, certificate, approval, consent or other paper
believed by it to be genuine, signed by the proper party or
parties and in accordance with the terms of this Agreement;
(d) be deemed conclusively to have given and
delivered any notice required to be given or delivered
hereunder if the same is in writing, signed by any one of
its authorized officers, and mailed by registered or
certified mail, or delivered by hand, to the Depository-
Agent, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Xxxx Xxxxx and the Issuer-Corporation, 0000 Xxx Xxxxx Xxxx,
Xxxx, Xxxxxxxxxx 00000, Attn.: Xxxx X. Xxxxxxxx with a copy
to Doros & Brescia, P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn.: Xxxxxx X. Xxxxxxx and with a
copy to Jackier, Gould, Bean, Upfal & Eizelman, 0000 Xxxxx
Xxxxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000,
Attn: Xxxxxxx X. Xxxxxxxx and be
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deemed conclusively to have received any notice required to
be given or delivered hereunder if the same is in writing,
signed by any one of the authorized officers of the
Depositary-Agent and the Issuer-Corporation, and mailed, by
registered or certified mail, or delivered by hand, to the
Bank-Escrowee's Corporate Trust Department, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 000000, Attn.: Escrow
Administration: 15th Floor.
(e) be indemnified by the Depositor-Agent and the
Issuer-Corporation against any claim made against it by
reason of its action or failing to act in connection with
any of the transactions contemplated hereby and against any
loss it may sustain in carrying out the terms of this
Agreement, except such claims which are occasioned by its
bad faith, gross negligence or willful misconduct. Anything
in this agreement to the contrary notwitstanding, in no
event shall the Bank-Escrowee be liable for special,
indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits),
even if the Bank-Escrowee has been advised of the
likelihood of such loss or damage and regardless of the
form of action;
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(f) promptly notify the Depositor-Agent and the
Issuer-Corporation of any discrepancy between the amounts
set forth on any statement delivered by the Depositor-
Agent or the Issuer-Corporation, as the case may be, and
the sum or sums delivered to the Bank-Escrowee therewith;
(g) have no duty to inquire into the terms and
conditions of this Agreement, such duties being purely
ministerial in nature;
(h) be permitted to consult with counsel of its
choice, including in-house counsel, and shall not be liable
for any action taken, suffered or omitted by it in
accordance with the advice of such counsel, provided,
however that nothing in this subsection (h), nor any action
taken by the Bank-Escrowee, or suffered or omitted by it in
accordance with the advice of any counsel, shall relieve
the Bank-Escrowee from liability for any claims that are
occasioned by its bad faith, gross negligence or willful
misconduct, all as provided in subsection (e) above;
(i) not be bound by any modification, amendment,
termination, cancellation, recision or supersession of
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this Agreement, unless the same shall be in writing and
signed by all parties hereto;
(j) have no liability for following the
instructions herein or expressly provided for, or written
instructions given by the Depositor-Agent or the Issuer-
Corporation; and
(k) have the right, at any time, to resign
hereunder by given written notice of its resignation to
take effect, and upon the effective date of such
resignation all cash and other payments and all other
property then held by the Bank-Escrowee hereunder shall be
delivered by it to such person as may be designated in
writing by the other parties executing this Agreement,
whereupon the Bank-Escrowee's obligations hereunder shall
cease and terminate. If no such person has been designated
by such date, all obligations of the Bank-Escrowee
hereunder shall, nevertheless, cease and terminate. The
Bank-Escrowee's sole responsibility thereafter shall be to
keep safely all property then held by it and to deliver the
same to a person designated by the other parties executing
this Agreement or in accordance with the directions of a
final order or
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judgment of a court of competent jurisdiction.
9. If any checks or other instruments deposited in the
escrow account established hereunder prove uncollectible, the
Issuer-Corporation shall deliver the returned checks or other instruments to
the Issuer-Corporation.
10. Nothing in this Agreement is intended to or shall
confer upon anyone other than the parties hereto any legal right, remedy or
claim. This Agreement shall be construed in accordance with the laws of the
State of New York and may be modified only in writing.
11. (a) In the event funds transfer instructions are given
(other than in writing at the time of execution of the Agreement), whether in
writing, by telecopier or otherwise the Bank-Escrowee is authorized to seek
confirmation of such instructions by telephone call-back to person or persons
designed on Schedule 1 hereto, and the Bank-Escrowee may rely upon the
confirmations of anyone purporting to be the person or persons so designated.
The persons and telephone numbers for call-backs may be changed only in a
writing actually received and acknowledged by the Bank-Escrowee. The parties
to this Agreement acknowledge that such security procedure is commercially
reasonable.
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(b) It is understood that the Bank-Escrowee and
the beneficiary's bank in any funds transfer may rely solely upon any account
numbers or similar identifying number provided by either of the other parties
hereto identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an
intermediary bank. The Bank-Escrowee may apply any of the escrowed funds for
any payment order it executes using any such identifying number, even where
its use may result in a person other than the beneficiary being paid, or the
transfer of funds to a bank other than the beneficiary's bank or an
intermediary bank designated.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
THE CHASE MANHATTAN BANK
By: ____________________________
AWG, LTD.
By: ____________________________
Xxxx X. Xxxxxxxx, President
XXXXX XXXX AND SHIRE, INC.
By: _____________________________
Xxxxxxxx Xxx Khan, President
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Schedule 1
o $2,500 per annum, or any part thereof, without proration
for partial years.
o $5.00 per check.
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Schedule 2
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Issuer-Corporation:
Name Telephone Number
----------------------------------- ----------------------------------
1. Xxxx X. Xxxxxxxx 000-000-0000
2. Xxxxxx Xxxxxxxx 000-000-0000
If to Depositor-Agent:
Name Telephone Number
----------------------------------- ----------------------------------
1. Xxxx Xxxxx 000-000-0000
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