PROCEEDS ESCROW AGREEMENT
PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of February 21, 2002, by
and between Silicon South, Inc., a Nevada corporation (the "Company") and Escrow
Specialists of Salt Lake City, Utah (the "Escrow Agent").
W I T N E S S E T H
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WHEREAS, the Company intends to engage in a private offering of certain of
its securities (the "Offering"), which Offering contemplates minimum aggregate
offering proceeds of $75,000 and maximum aggregate offering proceeds of
$100,000;
WHEREAS, there will be deposited into an escrow account with Escrow Agent
from time to time funds from prospective investors who wish to subscribe for
securities offered in connection with the Offering ("Subscribers"), which funds
will be held in escrow and distributed in accordance with the terms hereof; and
WHEREAS, the Escrow Agent is willing to act as an escrow agent in respect
of the Escrow Funds (as hereinafter defined) upon the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable considerations, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints the Escrow
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Agent as escrow agent in accordance with the terms and conditions set forth
herein, and the Escrow Agent hereby accepts such appointment.
2. Delivery of Escrow Funds.
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(a) The Company shall deliver to the Escrow Agent checks or wire
transfers made payable to the order of "Escrow Specialists, Silicon South, Inc.,
Escrow Account" together with the Subscribers mailing address. The funds
delivered to the Escrow Agent shall be deposited by the Escrow Agent into a
non-interest-bearing account designated "Escrow Specialists, Silicon South,
Inc., Escrow Account" (the "Escrow Account") and shall be held and distributed
by the Escrow Agent in accordance with the terms hereof. The collected funds
deposited into the Escrow Account are referred to herein as the "Escrow Funds."
The Escrow Agent shall acknowledge receipt of all Escrow Funds by notifying the
Company of deposits into the Escrow Account in the Escrow Agent's customary
manner no later than the next business day following the business day on which
the Escrow Funds are deposited into the Escrow Account.
(b) The Escrow Agent shall have no duty or responsibility to
enforce the collection or demand payment of any funds deposited into the Escrow
Account. If, for any reason, any check deposited into the Escrow Account shall
be returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall
be to return the check to the Company.
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3. Investment of the Escrow Funds. The Escrow Account shall not bear
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interest and no other investment of the Escrow Funds shall be made while held by
the Escrow Agent.
4. Release of Escrow Funds. The Escrow Funds shall be paid by the
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Escrow Agent in accordance with the following:
(a) Provided that the Escrow Funds total at least $75,000 at or
before 4:00 p.m., Salt Lake City time, on ___________________, 2002, (or
__________________, 2002 if extended by the Company by written notice to the
Escrow Agent given on or before ______________, 2002), or on any date prior
thereto, the Escrow Funds (or any portion thereof) shall be paid to the Company
or as otherwise instructed by the Company, within one (1) business day after the
Escrow Agent receives a written release notice in substantially the form of
Exhibit A attached hereto (a "Release Notice") signed by an authorized person of
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the Company and thereafter, the Escrow Account will remain open for the purpose
of depositing therein the subscription price for additional securities sold by
the Company in the Offering, which additional Escrow Funds shall be paid to the
Company or as otherwise instructed by the Company upon receipt by the Escrow
Agent of a Release Notice as described above; and
(b) if the Escrow Agent has not received a Release Notice from the
Company at or before 4:00 p.m. Salt Lake City time, on _______________, 2002,
(or _______________, 2001 if extended by the Company by written notice to the
Escrow Agent given on or before ____________________, 2002), and the Escrow
Funds do not total at least $75,000 at such time and date, then the Escrow Funds
shall be returned to Subscribers.
In the event that at any time the Escrow Agent shall receive from the Company
written instructions signed by an individual who is identified on Exhibit B
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attached hereon as a person authorized to act on behalf of the Company,
requesting the Escrow Agent to refund to a Subscriber the amount of a collected
check or other funds received by the Escrow Agent, the Escrow Agent shall make
such refund to the Subscriber within one (1) business day after receiving such
instructions.
5. Limitation of Responsibility and Liability of the Escrow Agent. The
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Escrow Agent:
(a) shall not be liable for any error of judgment 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
herewith, except its own gross negligence and willful misconduct;
(b) shall be authorized to rely upon all written instructions
and/or communications of the non-bank Party which appear to be valid on their
face;
(c) shall have no implied obligations or responsibilities
hereunder, nor shall it have any obligation or responsibility to collect funds
or seek the deposit of money or property;
(d) may consult with legal counsel of its choice with regard to
any legal question arising in connection with this duties or responsibilities
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hereunder, and shall have no liability or responsibility by reason of any action
it may take or fail to take in accordance with the opinions of such counsel;
(e) 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; and
(f) shall be entitled to comply with any final order, judgment or
decree of a court of competent jurisdiction, and/or with the consistent written
instructions from the non-bank Party.
6. Costs and Expenses. The fee of the Escrow Agent is $100.00, receipt
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of which is hereby acknowledged. In addition, if the Escrow Funds are returned
to subscribers under 4(b), above, the Escrow Agent shall receive a fee of
$_____________ per check for such service. The fee agreed on 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
attorneys' fees, occasioned by any delay, controversy, litigation, or event and
the same may be recoverable only from the Company.
7. Notices. All notices and communications shall be deemed to have
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been duly given: at the time delivered by hand, if personally delivered; when
received, if deposited in the mail, postage prepaid, addressed as provided
below; when transmission is verified, if telecopied; and on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery;
To the Company: Silicon South, Inc.
00 Xxxx Xxx Xxx
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxx Rule
To Escrow Agent: Escrow Specialists
P. O. Xxx 0000
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Any party may change its address by providing written notice of such change to
the other parties hereto.
8. Resignation by Escrow Agent. Upon thirty (30) calendar days' prior
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written notice to the non-bank Party delivered or sent as required above, the
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Escrow Agent shall have the right to resign as escrow agent hereunder and to
thereby terminate its duties and responsibilities hereunder, and shall thereupon
be released from these instructions. Upon resignation by the Escrow Agent, the
Escrow Agent shall provide the non-bank Party with sufficient information
concerning the status of the Escrow Fund to enable the non-bank parties to
provide the same to a successor escrow agent.
9. Termination of Escrow Agreement. The Escrow Agent's
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responsibilities thereunder shall terminate at such time as the Escrow Fund
shall have been fully disbursed pursuant to the terms hereof, or upon earlier
termination of this escrow arrangement pursuant to written instructions executed
by the non-bank Party. Such written notice of earlier termination shall include
instruction to the Escrow Agent for the distribution of the Escrow Fund.
10. Entire Agreement. This Agreement contains the entire understanding
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by and among the parties hereto; there are no promises, agreements,
understandings, representations or warranties, other than as herein set forth.
No change or modification of this Agreement shall be valid or effective unless
the same is in writing and is signed by all of the parties hereto.
11. Applicable Law, Successors and Assigns. This Agreement shall be
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governed in all respects by the laws of the state of Utah, and shall be binding
upon and shall inure to the benefit of the parties hereto, and their respective
heirs, executors, administrators, legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused their respective hands
to be set hereto with the intention of being bound effective in all respects as
of the date and year first hereinabove written.
SILICON SOUTH, INC.
/s/
By: Xxxxxx Rule
Its: President
ESCROW SPECIALISTS
/s/
By: Xxxxxx Xxxxxxx
Its: Owner
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EXHIBIT A
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Release Notice
ESCROW SPECIALISTS
Gentlemen:
The undersigned hereby authorize and instruct ESCROW SPECIALISTS, escrow
agent, to release [$______________] of Escrow Funds from the Escrow Account and
to deliver such funds as follows:
[Insert Delivery Instructions]
IN WITNESS WHEREOF, this release has been executed on ________________,
2002.
SILICON SOUTH, INC.
_________________________________
By: Xxxxxx Rule
Its: President
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EXHIBIT B
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Authorized Personnel
The Escrow Agent is authorized to accept instructions and notices signed or
believed by the Escrow Agent to be signed by any one of the following each of
whom is authorized to act on behalf of the Company:
On Behalf of SILICON SOUTH, INC.
Name Title Signature
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Xxxxxx Rule President /s/
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