1
EXHIBIT 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated the _______ day of __________ 1999, by and
between HealthTronics, a Georgia corporation (the "Company"), Capital Growth
Management, Inc. as Placement Agent (the "Placement Agent"), and (Name of
bank), (the "Escrow Agent"), a banking association.
W I T N E S S:
WHEREAS, the Company proposes to offer and sell up to 1,000,000 Shares
of Common Stock (referred to as the "Shares") to investors pursuant to Section
5 of the Securities Act of 1933, as amended and Form SB-2 promulgated
thereunder; and
WHEREAS, the Company will agree with subscribers for such shares that
the subscription price paid in cash by such subscribers will be refunded to
them if less than an aggregate of $500,004 has been raised from the sale of
Shares, and payments therefore received, by _________________, 1999, (the
"Closing Date") or by _____________, 1999, if the offering is extended by the
Company and you receive written notice to that effect on or before the Closing
Date (the "Extended Closing Date") and
WHEREAS, the Company desires to establish an escrow for such funds,
and the Escrow Agent is willing to serve as Escrow Agent upon the terms and
conditions herein set forth:
NOW, THEREFORE, in consideration of the promises and other good and
valuable considerations, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties covenant and agree as follows:
1. DEPOSIT WITH ESCROW AGENT: The Escrow Agent agrees that it
will from time to time accept as Escrow Agent funds (the "Escrow Deposit")
received by it representing the subscription amount paid in cash by subscribers
for the Company's Shares. Subscription Agreements for the Shares and
accompanying checks received by the Placement Agent at its offices shall be
reviewed for accuracy by the Placement Agent and, immediately thereafter, the
Placement Agent shall deliver such checks to Escrow Agent pursuant to this
Agreement. Accompanying each such check shall be information describing (1) the
name, address and Federal Tax Identification
1
2
Number of the Subscriber, (2) the number of Shares subscribed for, and (3) the
subscription price.
2. DISTRIBUTION OF ESCROW DEPOSIT: The Escrow Agent shall
distribute the Escrow Deposit in the amounts, at the times, and upon the
conditions hereinafter set out:
2.1 If at any time on or prior to the Closing Date or
the Extended Closing Date, said $500,004 in aggregate amount of Shares have
been sold, then upon the happening of such event, the Escrow Agent shall
deliver 90% of the Escrow Deposit by a certified or cashier's check made
payable to "HealthTronics, Inc." or by wire transfer to said account which
shall be maintained at (Name of bank). At the same time, the Escrow Agent shall
deliver 10% of the Escrow Deposit by a certified or cashier's check made
payable to "Capital Growth Management, Inc." or by wire transfer to said
account which shall be maintained at (Name of bank). An Affidavit or
certification from the Company that an aggregate of $500,004 of Shares have
been timely sold and the receipt by Escrow Agent of $500,004 hereunder shall
constitute sufficient evidence for the purposes of this Agreement that such
event has occurred.
2.2 If the Escrow Deposit does not, on or prior to the
or the Extended Closing Date, become deliverable to the Company pursuant to
Paragraph 2.1 above, the Escrow Agent shall return the Escrow Deposit to the
respective subscribers in amounts equal to the subscription amount theretofore
paid by each of them without interest and without deductions.
3. LIABILITY OF ESCROW AGENT:
3.1 In performing any of its duties under this Escrow
Agreement, or upon the claimed failure to perform its duties hereunder, Escrow
Agent shall not be liable to anyone for any damages, losses, or expenses which
they may incur as a result of the Escrow Agent so acting, or failing to act;
provided, however, Escrow Agent shall be liable for damages arising out of its
willful default or gross negligence under this Agreement. Accordingly, Escrow
Agent shall not incur any such liability with respect to (I) any action taken
or omitted to be taken in good faith upon advise of its counsel or counsel for
the Company given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder or (ii) to any action taken or
omitted to be taken in reliance upon any document, including any written notice
or
2
3
instructions provided for in this Escrow Agreement, not only as to its due
execution and to the validity and effectiveness of its provisions but also as
to the truth and accuracy of any information contained therein, which the
Escrow Agent shall in good faith believe to be genuine, to have been signed or
presented by proper person or persons and to conform with the provisions of
this Agreement.
3.2 The Company hereby agrees to indemnify and hold
harmless Escrow Agent against any and all losses, claims, damages, liabilities
and expenses, including, without limitation, reasonable costs of investigation
and counsel fees and disbursements which may be incurred by it resulting from
any act or omission of the Company; except, that if Escrow Agent shall be found
guilty of willful default or gross negligence under this Agreement by any court
of competent jurisdiction, then, in that event, Escrow Agent shall bear all
such losses, claims, damages and expenses.
3.3 In the event of the breach by the Company of any
covenant contained herein or a dispute between any of the parties hereto
sufficient in the discretion of Escrow Agent to justify its doing so, the
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands under the
terms of this Agreement, together with such legal proceedings as it deems
appropriate, and thereupon to be discharged from all further duties under this
Agreement. Any such legal action may be brought in any such court as Escrow
Agent shall determine to have jurisdiction thereof. The filing of any such
legal proceedings shall not deprive Escrow Agent of its compensation earned
prior to such filing or after the filing of such legal proceedings if the
Escrow Agreement remains effective; and the Company shall indemnify Escrow
Agent against its court costs and attorneys' fees incurred in filing such legal
proceedings.
4. INABILITY TO DELIVER: In the event that checks for
subscriptions delivered to the Escrow Agent by the Placement Agent pursuant to
this Escrow Agreement are not cleared, the Escrow Agent shall deliver such
uncleared checks to the Company unless the Escrow Deposit is returned to
subscribers pursuant to 2.2 above, in which case Escrow Agent shall mail such
uncleared checks to the subscribers. Escrow Agent shall have no responsibility
to collect, or to institute any action with respect to, any checks.
3
4
5. NOTICES: All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally, given by prepaid telegram or deposited for mailing, first class,
postage prepaid, registered or certified mail, as follows:
A) If to the subscribers for the Company's Shares:
To their respective addresses as specified in their
Subscription Agreements or as furnished to Escrow Agent
pursuant to Paragraph 1 of this Agreement.
B) If to the Company:
HealthTronics, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxx,
President
C) If to the Placement Agent:
Capital Growth Management, Inc.
0000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx #0
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X.
Xxxxx, President
D) If to the Escrow Agent:
(Name of bank)
________________________________________________
________________________________________________
Attention:______________________________________
6. GENERAL:
6.1 This Escrow Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia.
6.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning of
interpretation of this Escrow Agreement.
4
5
6.3 This escrow agreement sets forth the entire
agreement and understanding of the parties in respect to this escrow
transaction except as to fees and out-of-pocket expenses of escrow agent which
are referred to in Section 7 below and supersedes all prior agreements,
arrangements and understandings relating to the subject matter hereof.
6.4 This Escrow 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 the 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 Escrow
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 such
condition or breach of a waiver of any other condition or of the breach of any
other terms of this Escrow Agreement.
6.5 This Escrow Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
6.6 This Escrow Agreement shall inure to the benefit of
the several parties and their respective executors, administrators, successors,
heirs and assigns.
7. FEES OF ESCROW AGENT: The Company agrees to pay the Escrow
Agent as compensation for services hereunder by separate agreement. (See
Exhibit "A", attached.)
8. REPRESENTATION OF THE COMPANY: The Company hereby
acknowledges that the status of the Escrow Agent with respect to the offering
of the Shares is that of agent only for the limited purposes herein set forth,
and hereby agrees it will not represent or imply that Escrow Agent, by serving
as Escrow Agent hereunder or otherwise, has investigated the desirability or
advisability of investment in the Company, or has approved, endorsed or passed
upon the merits of the Shares of the Company, nor shall the Company use the
name of Escrow Agent in any manner whatsoever in connection with the offer or
sale of the Shares other than by acknowledgment
5
6
that it has agreed to serve as Escrow Agent for the limited purposes herein set
forth.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
HealthTronics, Inc.
"COMPANY"
By:
-----------------------------------------
Xxx X. Xxxxx, President
Capital Growth Management, Inc.
"PLACEMENT AGENT"
By:
-----------------------------------------
Xxxxxxx X. Xxxxx, President
(Name of bank)
"ESCROW AGENT"
By:
-----------------------------------------
6
