EXHIBIT 9.0
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement") is dated as of
___________, 2011, among Zen Raku Enterprises, Inc., a Colorado corporation
(the "Company"), Corporate Stock Transfer, Inc., as escrow agent (the "Escrow
Agent"), and United Western Bank, as escrow holder (the "Escrow Holder").
Capitalized terms used but not defined herein shall have the meaning set
forth in the Subscription Agreement (as defined below).
RECITALS
A. The Company is in the process of raising capital through a self-
underwritten public offering (the "Offering") of shares of the Company's no
par value common stock (the "Shares") at a price of $0.50 per Share, pursuant
to the terms of a Prospectus dated ____________, (the "Prospectus") and a
Common Stock Subscription Agreement between the Company and the investors
executing a signature page thereto (the "Subscription Agreement").
B. The Company intends to offer the Shares on a "best efforts" basis
with a minimum of 100,000 Shares for an aggregate of $50,000 (the "Minimum
Offering") and a maximum of 400,000 Shares for an aggregate of $200,000 (the
"Maximum Offering") pursuant to the Prospectus and the Subscription
Agreement.
C. Each investor (an "Investor") subscribing to purchase Shares will
complete and execute a signature page to the Subscription Agreement and
tender cash to the Escrow Agent in accordance with the Subscription Agreement
(the "Consideration").
D. Pending the Escrow Agent's receipt of at least the Minimum Offering
amount (but not more than the Maximum Offering amount), the Company may close
upon such amount (the "Closing"), and the Company agrees that the
Consideration from the Investors shall be released in accordance with the
terms hereof.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Appointment of Escrow Agent; Deposits of Cash.
(a) The Company hereby appoints the Escrow Agent as its agent and
custodian to hold and disburse the Consideration deposited with the Escrow
Agent pursuant to the terms of this Escrow Agreement in accordance with the
terms hereof.
(b) Following execution of this Escrow Agreement, the Company will cause
to be delivered to the Escrow Agent from time to time any and all
Consideration received from the Investors upon the execution and delivery of
the Subscription Agreement (the "Escrow Funds").
2. Methods of Disposition of Escrow Funds. The Escrow Agent will hold
the Escrow Funds as specified in this Escrow Agreement until authorized
hereunder to deliver such Escrow Funds, or a portion thereof, as follows:
(a) At the time of the Closing and upon receipt of a certificate in the
form of Schedule I attached hereto executed by the Company, as directed in
such certificate;
(b) If the Minimum Offering amount has not been raised on or before
_________________, 2011, the Escrow Agent shall return the Escrow Funds to
the Investors, without interest, in accordance with the amount actually
deposited by each Investor, or
(c) as directed pursuant to Sections 6(i), 6(k) or 6(l).
3. Purpose of Escrow Funds. The Company acknowledges and agrees that
the purpose of the Escrow Funds is to hold and safeguard the Consideration
pending the Closing of the Offering by the Company pursuant to the
Subscription Agreement.
4. Relationship Between Escrow Agent and Escrow Holder. The Escrow
Holder shall take directions only from the Escrow Agent with respect to the
Escrow Funds.
5. Investments; Disposition of Income. The Escrow Agent shall place
the Escrow Funds in a separate non-interest bearing account with the Escrow
Holder, as directed in writing by the Company, and at all times in compliance
with Rule 15c2-4 promulgated under the Securities Exchange Act of 1934.
6. Concerning the Escrow Agent.
(a) The Escrow Agent shall not be under any duty to give the Escrow
Funds held by it hereunder any greater degree of care than it gives its own
similar property and shall not be required to invest any funds held hereunder
except as directed pursuant to Section 5 of this Escrow Agreement.
(b) This Escrow Agreement expressly sets forth all the duties of the
Escrow Agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into this Escrow Agreement
against the Escrow Agent. The Escrow Agent shall not be bound by the
provisions of any other agreement among the parties hereto except this Escrow
Agreement.
(c) The Escrow Agent shall not be liable, except for its own gross
negligence, willful misconduct or breach of this Escrow Agreement, and,
except with respect to claims based upon such gross negligence, willful
misconduct or breach of this Escrow Agreement, that are successfully asserted
against the Escrow Agent, the other parties hereto shall jointly and
severally indemnify and hold harmless the Escrow Agent (and any successor
Escrow Agent) from and against any and all losses, liabilities, claims,
actions, damages and expenses, including reasonable attorney's fees and
disbursements, arising out of and in connection with this Escrow Agreement.
Without limiting the foregoing, the Escrow Agent shall in no event be liable
in connection with its investment or reinvestment of any Escrow Funds held by
it hereunder in good faith, in accordance with the terms hereof, including,
without limitation, any liability for any delays (not resulting from its
gross negligence, willful misconduct or breach of this Escrow Agreement) in
the investment or reinvestment of the Escrow Funds, or any loss of interest
incident to any such delays.
(d) The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the proprieties, validity or the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature reasonably believed by it to be genuine and may assume that any
person purporting to give notice or advice, accept receipt of or execute any
document, or make any statement in connection with the provisions hereof, has
been duly authorized to do so.
(e) The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Escrow Agreement and shall not be
liable for any action taken or omitted in accordance with such advice, except
for any action constituting gross negligence, willful misconduct or a breach
of this Escrow Agreement.
(f) The Escrow Agent is serving as escrow holder only and has no
interest in the Escrow Funds deposited hereunder. Any payments of income
from this Escrow Agreement shall be subject to withholding regulations then
in force with respect to United States taxes. The Company will provide the
Escrow Agent with appropriate W-9 forms for tax identification number
certification or nonresident alien certifications. This Section 6(f) and
Section 6(c) shall survive notwithstanding any termination of this Escrow
Agreement or the resignation of the Escrow Agent.
(g) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other documents or
instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party as to
the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Funds to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon the Escrow Agent shall be discharged of and
from any and all further obligations arising in connection with this Escrow
Agreement. The resignation of the Escrow Agent will take effect on the
earlier of (i) the appointment of a successor (including a court of competent
jurisdiction) or (ii) the day which is 30 days after the date of delivery of
its written notice of resignation to the other parties hereto. If at that
time the Escrow Agent has not received a designation of a successor Escrow
Agent, the Escrow Agent's sole responsibility after that time shall be to
safekeep the Escrow Funds until receipt of a designation of successor Escrow
Agent or a joint written disposition instruction by the other parties hereto
or a final order of a court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the contents of
any writing of the arbitrators or any third party contemplated herein as a
means to resolve disputes and may rely without any liability upon the
contents thereof.
(k) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the
Escrow Funds, or in the event that the Escrow Agent in good faith is in doubt
as to what action it should take hereunder, the Escrow Agent shall be
entitled to retain the Escrow Funds until the Escrow Agent shall have
received (i) a final nonappealable order of a court of competent jurisdiction
directing delivery of the Escrow Funds or (ii) a written agreement executed
by the other parties hereto directing delivery of the Escrow Funds, in which
event the Escrow Agent shall disburse the Escrow Funds in accordance with
such order or agreement. Any court order referred to in clause (i) above
shall be accompanied by a legal opinion of counsel for the presenting party
satisfactory to the Escrow Agent to the effect that said court order is final
and nonappealable. The Escrow Agent shall act on such court order and legal
opinions without further question.
(l) Notwithstanding anything to the contrary contained herein, in the
event of any dispute between the parties hereto as to the facts of default,
the validity or meaning of these instructions or any other fact or matter
relating to the transaction between the parties, the Escrow Agent is
instructed as follows:
(i) That it shall be under no obligation to act, except as and to
the extent directed under process or order of court, or until it has been
adequately indemnified to its full satisfaction, and shall sustain no
liability for its failure to act pending such process or court order or
indemnification; and
(ii) That it may in its sole and absolute discretion, deposit the
property herein or so much thereof as remains in its hands with the then
Clerk, or acting Clerk, of the District Court of the City and County of
Denver, State of Colorado, interplead the parties hereto, and upon so
depositing such property and filing its complaint in interpleader it shall be
relieved of all liability under the terms hereof as to the property so
deposited, and furthermore, the parties hereto for themselves, their heirs,
legal representatives, successors and assigns do hereby submit themselves to
the jurisdiction of said court and do hereby appoint the then Clerk, or
acting Clerk, of said court as their Agent for the service of all process in
connection with such proceedings. The institution of any such interpleader
action shall not impair the rights of the Escrow Agent under Section 6(c)
above.
(m) The Company agrees to pay the Escrow Agent as compensation for the
services of the Escrow Agent hereunder, a fee of $1,000 as payment in full
for the services to be rendered by the Escrow Agent hereunder. In addition,
the Company agrees to pay all reasonable expenses, disbursements and advances
incurred or made by the Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its counsel).
(n) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional materials) which
mentions the Escrow Agent's name or the rights, powers or duties of the
Escrow Agent shall be issued by the other parties hereto or on such parties'
behalf unless the Escrow Agent shall first have given its specific written
consent to such mention(s), which consent shall not be unreasonably withheld
or delayed.
7. Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in
writing. All such notices shall be delivered personally, by facsimile or by
reputable overnight courier (costs prepaid), and shall be deemed given or
made when delivered personally, the business day sent if sent by facsimile or
one business day after delivery to the overnight courier for next business
day delivery. All such notices are to be given or made to the parties at the
following addresses (or to such other address as any party may designate by a
notice given in accordance with the provisions of this Section):
If to the Company:
Zen Raku Enterprises, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Zen Z. Pool, III, President
Telephone: (000) 000-0000
If to the Escrow Agent:
Corporate Stock Transfer, Inc.
0000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Escrow Holder:
United Western Bank
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: [_______________]
Facsimile: [_______________]
Telephone: (000) 000-0000
8. Waivers and Amendments. This Escrow Agreement may be amended,
superseded, canceled, renewed or extended and the terms hereof may be waived
only by a written instrument signed by the Company and the Escrow Agent.
9. Counterparts; Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Signatures provided by facsimile or electronic transmission will be deemed to
be original signatures.
10. Governing Law; Severability. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of Colorado,
without reference to the choice of law or conflicts of law principles
thereof. Should any clause, section or part of this Agreement be held or
declared to be void or illegal for any reason, all other clauses, sections or
parts of this Agreement shall nevertheless continue in full force and effect.
11. Assignment. Neither the rights nor the obligations of any party to
this Agreement may be transferred or assigned, except by the express written
agreement of the parties hereto. Any purported assignment of this Agreement
shall be null, void and of no effect.
12. Termination. This Escrow Agreement shall terminate upon the
complete distribution of the Escrow Funds in accordance with the terms hereof
(the "Termination Date"). Notwithstanding the foregoing, the Company may
extend the Termination Date by delivering a written notice to that effect to
the Escrow Agent at least two business days prior to the Termination Date, in
which event this Agreement shall terminate on the date specified in such
notice. If any Escrow Funds are subject to a dispute under Section 6(l),
this Escrow Agreement shall remain in full force and effect until such
dispute is resolved in accordance with such Section 6(l).
13. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective representatives,
successors and assigns.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first written above.
THE COMPANY:
ZEN RAKU ENTERPRISES, INC.
By:________________________________
Zen Z. Pool, III
Name: Zen Z. Pool, III
Title: President
THE ESCROW AGENT:
CORPORATE STOCK TRANSFER, INC.
By:_________________________________
Xxxxxxx Xxxx
President
THE ESCROW HOLDER:
UNITED WESTERN BANK
By:_________________________________
Name:
Title:
SCHEDULE I
CERTIFICATE
Reference is hereby made to the Escrow Agreement dated as of
[___________, 2011], among Zen Raku Enterprises, Inc., a Colorado corporation
(the "Company"), Corporate Stock Transfer, Inc., as escrow agent (the "Escrow
Agent"), and United Western Bank, as escrow holder. Capitalized terms used
herein but not defined herein have the meaning assigned such terms in the
Escrow Agreement.
The Company hereby instructs the Escrow Agent to deliver the aggregate
Escrow Funds as follows:
Name Amount
1. Zen Raku Enterprises, Inc. $_________
Representing payment in full of the
gross proceeds of the sale of $_____
of Shares.
WIRE INSTRUCTIONS - as attached in Appendix A to Schedule I
IN WITNESS WHEREOF, the parties set forth below have executed this
certificate as of _____________ 2011.
COMPANY:
ZEN RAKU ENTERPRISES, INC.
By: _______________________________
Name: ____________________________
Title: ___________________________
Appendix A
Wire Instructions for Zen Raku Enterprises, Inc.
