PROCEEDS IMPOUND & ESCROW AGREEMENT
THIS PROCEEDS IMPOUND & ESCROW AGREEMENT (this "Agreement") is made and
entered into this 29th day of August, 2002 by and between Java Express, Inc.
(the "Company"), and Escrow Specialists, LC (the "Escrow Agent").
Premises
The Company proposes to offer for sale to the general public in the
States Nevada and Utah, Shares of Common stock (the "Common Stock"), par value
of $.001, at an offering price of $0.05 per Share in accordance with the
registration provisions of the Securities Divisions of the States of Nevada
and Utah and the Securities Act of 1933, as amended, and pursuant to a
registration statement (the "Registration Statement") filed with the
Securities Divisions of the States of Nevada and Utah and the United States
Securities and Exchange Commission. The Company agrees herein to offer for
sale the Common Stock in accordance with the terms of the offering prospectus
filed with the Divisions of Securities of the States of Nevada and Utah. In
accordance with the terms of the Registration Statement, the Company desires
to provide for the impound and escrow of the gross subscription payments for
Common Stock until the amount, as set forth below, has been received.
Agreement
NOW, THEREFORE, the parties hereto agree as follows:
1. The proceeds to the company or to any officer or representative of
the company from subscriptions for the purchase of common stock in the subject
offering shall be deposited promptly with the Escrow Agent, but in any event
no later than five business days following receipt.
2. Concurrently with transmitting funds to the Escrow Agent, the
company shall also deliver to the Escrow Agent a schedule setting forth the
name and address of each subscriber whose funds are included in such
transmittal, the number of shares subscribed for, and the dollar amount paid.
All funds so deposited shall remain the property of the subscriber and shall
not be subject to any lien or charges by the Escrow Agent, or judgements or
creditors' claims against the company until released to it in the manner
hereinafter provided.
3. If at any time prior to the expiration of the minimum offering
period, as specified in paragraph 4, at least $60,000.00 has been deposited
pursuant to this Agreement, the Escrow Agent shall confirm the receipt of such
funds to the company.
4. If, within six (6) months after the effective date of the
Registration Statement, the Company and its agents have not deposited at least
$60,000.00 in good funds with the Escrow Agent, the Escrow Agent shall notify
the company and shall promptly transmit to those investors who subscribed for
the purchase of shares the amount of money each such investor so paid. The
Escrow Agent shall furnish to the company an accounting for the refund in full
to all subscribers.
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5. If at any time prior to the termination of this escrow the Escrow
Agent is advised by the Division of Securities of the State of Nevada and Utah
or the Securities and Exchange Commission that a stop order has been issued
with respect to the registration statement, the Escrow Agent shall thereon
return all funds to the respective subscribers.
6. It is understood and agreed that the duties of the Escrow Agent
are entirely ministerial, being limited to receiving monies from the company
and its agents and holding and disbursing such monies in accordance with this
Agreement.
7. The Escrow Agent is not a party to, and is not bound by any
agreement between the company and any other party which may be evidenced by or
arise out of the foregoing instructions.
8. The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness, or validity of any instrument deposited with it, or
with respect to the form or execution of the same, or the identity, authority,
or rights of any person executing or depositing the same.
9. The Escrow Agent shall not be required to take or be bound by
notice of any default of any person or to take any action with respect to such
default involving any expense or liability, unless notice in writing is given
to an officer of the Escrow Agent or such default by the undersigned or any of
them, and unless it is indemnified in a manner satisfactory to it against any
expense or liability arising therefrom.
10. The Escrow Agent shall not be liable for acting on any notice,
request, waiver, consent, receipt, or other paper or document believed by the
Escrow Agent to be genuine and to have been signed by the proper party or
parties.
11. The Escrow Agent shall not be liable for any error of judgement
or for any act done or step taken or omitted by it in good faith, or for any
mistake of fact or law, or for anything which it may do or refrain from doing
in connection herein, except its own willful misconduct.
12. The Escrow Agent shall not be answerable for the default or
misconduct of any agent, attorney or employee appointed by it if such agent,
attorney, or employee shall have been selected with reasonable care.
13. The Escrow Agent may consult with legal counsel in the event of
any dispute or question as to the consideration of the foregoing instructions
or the Escrow Agent's duties hereunder, and the Escrow Agent shall incur no
liability and shall be fully protected in acting in accordance with the
opinion and instructions of such counsel.
14. In the event of any disagreement between the undersigned or any
of them, the person or persons named in the forgoing instructions, and/or any
other person, resulting in adverse claims and/or demands being made in
connection with or for any papers, money, or property involved herein or
affected hereby, the Escrow Agent shall be entitled at its option to refuse to
comply with any such claim, or demand so long as such disagreement shall
continue and, in so refusing, the Escrow Agent shall not be or become liable
to the
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undersigned or any of them or to any person named in the foregoing
instructions for the failure or refusal to comply with such conflicting or
adverse demands, and the Escrow Agent shall, be entitled to continue to
refrain and refuse to so act until:
(a) the rights of adverse claimants have been finally adjudicated
in a court assuming and having jurisdiction of the parties
and the money, papers, and property involved herein or
affected hereby; and/or
(b) all differences shall have been adjusted by agreement and the
Escrow Agent shall have been notified thereof in writing
signed by all of the persons interested.
15. There shall be a $100.00 set-up charge by the Escrow Agent.
However, if a minimum of $60,000 is not received in escrow within the escrow
period and the Escrow Agent is required to return funds to investors as
provided in section 4, the Escrow Agent shall receive a fee of $5.00 per check
for such service. The fee agreed upon for services rendered hereunder is
intended as full compensation for the Escrow Agent's services as contemplated
by this Agreement. However, in the event that the conditions of this Agreement
are not fulfilled, the Escrow Agent renders any material service not
contemplated by this Agreement, there is any assignment of interest in the
subject matter of this Agreement, there is any material modification hereof,
any material controversy arises hereunder, or the Escrow Agent is made a party
to or justifiably intervenes in any litigation pertaining to this Agreement or
the subject matter hereof, the Escrow Agent shall be reasonably compensated
for such extraordinary expenses, including reasonable attorney's fees,
occasioned by any delay, controversy, litigation, or event and the same may be
recoverable only from the company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, as of the date first
above written.
BY: /s/ Xxxxxx Xxxxxxx
__________________________
Duly Authorized Officer
Escrow Specialists, LC hereby acknowledges receipt of this Agreement and
agrees to act in accordance with said Agreement and on the terms and
conditions above set forth this 29th day of August, 2002.
BY: /s/ Xxxxx Xxxxxxxx
__________________________
Xxxxx Xxxxxxxx, President
Java Express, Inc.
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