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EXHIBIT 10.8
SUBSCRIPTION ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into as of the _____the day of
August, 1999 by and among Xxxxxxxx.xxx Corporation, a Delaware corporation (the
"Corporation"); __________ , an __________ corporation (the "Marketing Agent");
and ___________ a national banking association (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Corporation is conducting a public offering for sale to
investors on a best efforts basis up to __________ shares of its Common Stock
(the "Common Stock") and under which the Corporation and the Marketing Agent
will be soliciting subscription funds in the form of cash, check, authorized
withdrawals from _____________________ or other immediately available funds
(the "Subscription Funds") from subscribers at a price of $10.00 per share (the
"Offering") in the offering (the "Subscribers");
WHEREAS, on August _____, 1999, the Securities and Exchange Commission
declared effective the Company's Registration Statement on Form SB-2 for the
purpose of registering for sale under the Securities Act of 1933, as amended,
500,000 shares (the "Minimum Shares") to 700,000 shares the ("Maximum Shares")
of its Common Stock in the Offering;
WHEREAS, the subscription period for the Offering will expire at 4:00
p.m., C.S.T. on __________, 1999, subject to the Corporation's right to extend
the subscription period without notice until __________, 1999, or terminate the
Offering at any time (the "Expiration Date") and subject further to the right
of the Marketing Agent, in its sole discretion, to permit investors to submit
irrevocable orders together with legally binding commitments for payment for
shares of Common Stock for which they subscribe at any time prior to the
Expiration Date with payment to be received at any time prior to 24 hours
before completion of the Offering (the "Closing"); and
WHEREAS, the Corporation and the Marketing Agent desire to establish
an escrow account with the Escrow Agent for the purpose of holding the
subscription funds received during the course of the offering (the "Escrow
Funds");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements, representations, warranties and dependent promises set
forth herein, the parties agree as follows:
1. Appointment of Escrow Agent. The Corporation and the Marketing
Agent appoint the Escrow Agent to hold the Subscription Funds, and the Escrow
Agent accepts the appointment, all in accordance with the terms and subject to
the conditions of this Escrow Agreement.
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(a) Establishment of Escrow Account. On or prior to the date
of commencement of the Offering, the parties shall establish an
interest-bearing escrow account which shall be entitled "Xxxxxxxx.xxx
Corporation Escrow Account" (the "Escrow Account"). The Marketing Agent will
instruct Subscribers to make checks for subscriptions payable to the order of
or wire transfer funds directly to the Marketing Agent which shall promptly
transmit such funds to the Escrow Agent for deposit into the Escrow Account in
accordance with the provisions of Rule 15c2-4 of the Securities Exchange Act of
1934, as amended.
(b) The Escrow Period. The Escrow Period shall begin with the
commencement of the Offering and shall terminate upon the earlier to occur of
the following dates:
(i) The date upon which the Escrow Agent confirms
that it has received in the Escrow Account subscriptions for the Maximum Shares
and subscriptions therefor have been accepted by the Corporation;
(ii) The Expiration Date (unless extended as
permitted in the Prospectus); or
(iii) The date upon which a determination is made by
the Corporation and the Marketing Agent to terminate the Offering prior to the
sale of the Minimum Shares.
During the Escrow Period, the Corporation is aware and understands that it is
not entitled to any of the Escrow Funds and no amounts deposited in the Escrow
Account shall become the property of the Corporation or any other entity, or be
subject to the debts of the Corporation or any other entity, until such Escrow
Funds are disbursed in accordance with Section 3 below.
2. Deposit of Funds.
(a) The Escrow Agent is hereby authorized to forward each
check for collection, and upon collection of the proceeds of each check,
deposit the collected proceeds in the Escrow Account. As an alternative, the
Escrow Agent may telephone the bank on which the check is drawn to confirm that
the check has been paid.
Any check returned unpaid to the Escrow Agent shall be returned to the
Marketing Agent. In such cases, the Escrow Agent will promptly notify the
Corporation of such return.
If the Corporation rejects any subscriptions for which the Escrow
Agent has already collected funds, the Escrow Agent shall promptly issue a
refund check to the rejected Subscriber. If the Corporation rejects any
subscription for which the Escrow Agent has not yet collected funds but has
submitted the Subscriber's check for collection, the Escrow Agent shall
promptly issue a check in 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 yet submitted a rejected Subscriber's
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check for collection, the Escrow Agent shall promptly remit the Subscriber's
check directly to the Subscriber.
(b) The Corporation will deposit or cause to be deposited
with the Escrow Agent all proceeds from the sale of the Common Stock received
from Subscribers, accompanied by executed Order Forms and Certifications in the
form attached hereto as Exhibit "A" and "B." The Escrow Agent shall (i) make
copies of all subscription checks, Order Forms and Certificates received by it,
(ii) promptly deposit such checks for collection in the Escrow Account to be
maintained hereunder, (iii) retain a copy of each Order Form and Certificate
for its records and (iv) promptly forward to the Corporation a copy of each
such check and the executed original of each such Order Form and Certificate if
received. The Escrow Agent shall have no responsibility for proceeds from the
sale of the Common Stock not received and collected by it.
The Escrow Agent shall promptly notify the Corporation of any
subscription received without accompanying subscription documents or where the
subscription does not exactly match the subscription document ("Unidentified
Subscriptions"). Any Unidentified Subscriptions and accompanying documents not
identified in writing by the Corporation within three (3) business days of such
notification shall be returned by the Escrow Agent to the Subscriber. All
Unidentified Contributions that are subsequently identified shall be
immediately deposited into escrow.
(c) Based upon information set forth in the Order Forms
delivered hereunder, the Escrow Agent shall maintain a written record of names
and addresses of the Subscribers, the amount of the Common Stock subscribed for
by each Subscriber and the amounts received from each Subscriber.
(d) All Escrow Funds deposited shall be invested in money
market funds investing solely in United States government and agency securities
(e.g., TCB Federal Money Market Fund), unless other written direction is given
by the Corporation or the Marketing Agent.
3. Disbursement.
(a) The Escrow Agent shall notify the Corporation at such
time as it has received, in payment for the Common Stock, cash and
subscriptions aggregating $5,000,000 (the "Target Amount").
(b) At such time as the Escrow Agent has received in cash and
subscriptions the Target Amount, the Escrow Agent shall disburse said amount to
the Corporation upon written disbursement instructions outlined in 3(d) below
from the Corporation and the Marketing Agent. After the Target Amount of
cleared funds has been received, the Escrow Agent shall continue collecting
Subscriber's funds, pursuant to the procedure set forth above, until notified
by the Corporation to either disburse such funds to the Corporation or return
the Subscribers' amounts exceeding the Target Amount to such Subscribers
presenting funds over the Target Amount, with interest accrued thereon. The
Escrow Agent shall immediately disburse such
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funds to the Corporation from time to time upon written notification from the
Corporation that such subscriptions have been accepted by the Corporation.
(c) In the event the Minimum Amount has not been subscribed
for by __________, 1999, or the extended date provided to the Escrow Agent by
the Corporation or the Marketing Agent, the Corporation and the Marketing Agent
shall confirm such fact in writing, whereupon the Escrow Agent shall return the
full amount of each Subscriber's deposit with interest accrued thereon to each
Subscriber.
(d) Each Disbursement Instruction shall be signed by two
officers of the Corporation and the Marketing Agent and shall contain the
following information: (i) a reference to this Agreement, (ii) the identity of
the person to whom a disbursement of Escrow Funds is to be made, (iii) the
amount of Escrow Funds to be disbursed (including the interest thereon), (iv)
instructions as to the form or method and destination of the disbursement
(e.g., cashier's, wire transfer instructions) and (v) a summary statement of
the event or condition which has occasioned the delivery of the Disbursement
Instruction. Escrow Agent shall not be responsible for evaluating the truth or
sufficiency of the summary statement or Disbursement Instruction.
4. Confirmation/Discrepancies. The Escrow Agent shall confirm receipt
or investment of Escrow Funds by its monthly account statement delivered to the
Corporation unless otherwise indicated.
5. Taxpayer Information. Prior to any investment of Escrow Funds, the
Corporation shall provide the Escrow Agent with written certification of its
taxpayer identification number, and in any event, with appropriate W-8 or W-9
forms within 30 days from the date hereof. Failure to provide such information
and forms may result in a penalty and require the Escrow Agent to withhold tax
on any interest payable hereunder.
6. Reliance. The Escrow Agent shall be protected in acting in good
faith upon any written notice, request, waiver, consent, certificate, receipt,
authorization or other paper or document which the Escrow Agent believes to be
genuine and what it purports to be.
7. Escrow Agent Liability. The Escrow Agent shall not be liable for
anything which it may do or refrain from doing in good faith in connection with
this Escrow Agreement, except its own gross negligence or willful misconduct.
8. Legal Representation. The Escrow Agent may confer with legal
counsel in the event of any dispute or question as to the construction of any
of the provisions hereof, or its duties hereunder, and it shall incur no
liability and it shall be fully protected in acting in accordance with the
opinions of such counsel.
9. Disputes. In the event of any genuine disagreement resulting in
adverse claims or demands being made in connection with the subject matter of
this Escrow Agreement, or in the event that the Escrow Agent in good faith is
in doubt as to what action it should take
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hereunder, the Escrow Agent may, at its option, refuse to comply with any
claims or demands on it, or refuse to take any other action hereunder so long
as such disagreement continues or such debt exists, and in such event, the
Escrow Agent shall not be or become liable in any way or to any person for its
failure or refusal to act, and the Escrow Agent shall be entitled to continue
to refrain from acting until (i) the rights of all parties have been fully and
finally adjudicated by a court of competent jurisdiction or (ii) all
differences shall have been adjudged and all doubt resolved by agreement among
all of the interested persons, and the Escrow Agent shall have been notified
thereof in writing signed by all such persons. In addition to the foregoing
remedies, the Escrow Agent is hereby authorized in the event of any doubt as to
the course of action it should take under this Escrow Agreement, to petition
the District Court of Xxxxxx County, Texas, or the United States Federal
District of the Western District of Texas, for instructions or to interplead
the funds or asset so held into such court. The parties agree to the
jurisdiction of either of said courts over their persons as well as the
Property, waive personal service of process and agree that service of process
by certified or registered mail, return receipt requested, to the address set
forth below each party's signature to this Escrow Agreement shall constitute
adequate service.
10. Indemnity. The Escrow Agent shall not be liable for anything which
it may do or refrain from doing in connection with this Escrow Agreement,
provided it acts in good faith, including its own negligence, except for its
own gross negligence or willful misconduct. The parties hereto agree to
indemnify the Escrow Agent for, and to hold it harmless against, any loss,
liability or expense (including, without limitation, reasonable attorneys'
fees) incurred by it without gross negligence or willful misconduct on its part
arising out of or in connection with its entering into this Escrow Agreement
and the carrying out of its duties hereunder, including the costs and expenses
of defending itself against any claim of liability in the premises.
11. Resignation of Escrow Agent. The Escrow Agent may resign for any
reason, upon 30 days written notice to the parties to the Escrow Agreement.
Upon expiration of such 30-day notice period, the Escrow Agent may deliver all
cash or property in its possession under this Escrow Agreement to any successor
Escrow Agent appointed by the Corporation, or if no successor Escrow Agent has
been appointed, to any court of competent jurisdiction in Xxxxxx County, Texas.
Upon either such delivery, the Escrow Agent shall be released from any and all
liability under this Escrow Agreement. A termination under this paragraph shall
in no way change the terms of paragraphs 9, 10 and 12 affecting reimbursement
of expenses, indemnity and fees. The Escrow Agent shall have the right to
deduct from Escrow Funds transferred to any successor Escrow Agent any
outstanding and unpaid expenses or fees.
12. Escrow Agent Fee. Simultaneous with the execution of this
Agreement, the Corporation has paid the Escrow Agent a fee of $______________.
13. Notices. All notices and communications hereunder shall be in
writing, and shall be deemed to be duly given if sent registered or certified
mail, return receipt requested, to the prospective address set forth below. The
Escrow Agent shall not be charged with knowledge of any fact, including but not
limited to performance or non-performance of any condition, unless it has
actually received written notice thereof from all of the parties hereto of
their authorized representative clearly referring to this Escrow Agreement.
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If to the Corporation: Xxxxxxxx.xxx Corporation
0000 Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxx X. Xxxxx
With a copy to: Xxxxxx & Xxxxxx, P.C.
000 Xxxxxxxx Xxx.
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
If to the Escrow Agent:
Attn:
If to the Marketing Agent:
Attn:
With a copy to:
Attn:
14. Successors. The rights created by this Escrow Agreement shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successor and assigns of the Escrow Agent and the parties hereto.
15. Choice of Law. This Escrow Agreement shall be construed and
enforced according to the laws of the State of Texas.
16. No Interest Created in Fund. The Escrow Agent shall not issue any
certificate of deposit, stock certificates or any other instrument or document
representing any interest in the Escrow Account.
17. Termination. This Escrow Agreement shall terminate and the Escrow
Agent shall be discharged of all responsibility hereunder at such time as the
Escrow Agent shall have completed its duties hereunder.
18. Counterparts. This Escrow Agreement may be executed in several
counterparts, or by separate instruments, and all such counterparts and
instruments shall constitute one agreement, binding on all of the parties
hereto.
19. Entire Agreement. This Escrow Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and transactions described herein and supersedes all prior
agreements of understandings, written or oral, between the parties with respect
thereto.
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20. Severability. If any provision of this Escrow Agreement is
declared by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force and effect without being impaired or invalidated in any way.
21. Collection of Funds. It is strictly understood that the Escrow
Agent has no duty to disburse any funds, to any party, until such funds have
been collected by the Escrow Agent, and those funds are available. It is hereby
acknowledged by the parties that funds deposited with the Escrow Agent in the
form of a cashier's check shall be deemed to be immediately available funds for
the purpose of disbursements.
22. Agents. The following persons are authorized to direct the Escrow
Agent regarding any transactions to this Escrow including, but not limited to,
disbursements and investments:
Xxx X. Xxxxx
Xxxxx X. Xxxxxxxx
IN WITNESS WHEREOF, the Escrow Agent and the Corporation have executed
this Escrow Agreement on the day and year first written above.
ESCROW AGENT:
By:
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Its:
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CORPORATION:
XXXXXXXX.XXX CORPORATION
By:
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Its:
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MARKETING AGENT:
CHOICE INVESTMENTS, INC.
By:
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Its:
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