EXHIBIT 1.2
MEDIACOMM BROADCASTING SYSTEMS, INC.
d/b/a/ XXXXXXX.XXX
Exhibit No. 1.2
Executed Escrow Agreement
ESCROW AGREEMENT
This Agreement made this 14th day of February, 2000, by and between
MediaComm Broadcasting Systems, Inc., d/b/a Xxxxxxx.xxx, a Colorado
corporation (the "Company") and U.S. Bank National Association (the "Escrow
Agent").
WITNESSETH:
WHEREAS, the Company has caused to be prepared and filed a form SB- 2
registration statement with the Securities and Exchange Commission pursuant to
which the Company proposes to issue, and to offer for sale to the public shares
of its Common Stock, no par value per share (the "Common Stock"), the Common
Stock to be offered and sold by the Company on a 450,000 shares minimum,
"all-or-none", 900,000 shares maximum self underwritten basis at a price of
$1.00 per share with a minimum purchase requirement thereunder of $1,000; and
WHEREAS, pursuant to the terms of the registration statement, provision
must be made to impound in escrow for the benefit of the purchasers of the
Offering, $450,000 of the gross proceeds which may be received from sale of the
Common Stock which may be sold; and
WHEREAS, the Company desires to enter into an agreement with the Escrow
Agent for the purpose of fulfilling the escrow requirements as set forth in the
registration statement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, terms and conditions hereinafter set forth, the parties agree as
follows:
1. The Company shall, immediately upon receipt thereof, deliver to the
Escrow Agent, or cause others to deliver, all proceeds from the sale
of up to 450,000 shares of Common Stock, together with a written
account of each sale, which material shall set forth, among other
things, the purchaser's name and address, the purchaser's tax
identification number, the number of shares purchased, the amount paid
therefor, and whether the consideration received was in the form of
cash or evidenced by a check. Proceeds from sale of in excess of the
450,000 shares minimum shall not be deposited with the Escrow Agent.
2. All funds or remittances delivered to the Escrow Agent pursuant hereto
shall be deposited within three business days after receipt by the
Escrow Agent in a separate account designated substantially as
"Xxxxxxx.xxx - Escrow Account" (the "Escrow Account"). The Escrow
Account shall be created and maintained subject to provisions
hereinafter. During the Escrow Period (hereinafter defined) none of
the amounts deposited in the Escrow Account shall become the property
of the Company or any other person or be subject to the debts of the
Company or any other person except as expressly provided herein with
respect to payment by the Escrow Agent to the Company, and the Escrow
Agent shall neither make nor permit any disbursements from the Escrow
Account except as expressly provided herein.
3. The Escrow Period shall begin on the effective date hereof as
stipulated in Section 19 hereof, and shall terminate:
(i) upon sale of the 450,000 shares minimum within the Offering
Period; or
(ii) _______, ___ (60 days from the date of the Prospectus),
which period may be extended for an additional period not to
exceed 60 days (the "Offering Period").
4. In the event the Escrow Period terminates pursuant to the provision of
Paragraph 3(i) hereof, the Escrow Agent shall immediately provide
written notice to the Company that funds deposited in the Escrow
Account total at least $450,000 and the Escrow Agent shall deliver and
pay over to the Company on the Disbursement Date, all amounts
deposited in the Escrow Account. In the event proceeds in the minimum
amount necessary have been received before expiration of the Escrow
Period, an additional period not to exceed 10 days may be allowed to
collect funds deposited in the Escrow Account. The Disbursement Date,
as used herein, shall be defined as a date to be designated in writing
to the Escrow Agent by the Company which date shall be subsequent to
the date upon which proceeds in the amount of at least $450,000 are
deposited in the Escrow Account, if such event occurs prior to the
expiration of the Offering Period. On the making of the payments by
the Escrow Agent as provided for in this paragraph, the Escrow Agent
shall be completely discharged and released of any further liabilities
or responsibilities as to funds paid to the Company.
5. In the event the Escrow Period terminates pursuant to the provision of
Paragraph 3(ii), under circumstances where the minimum of $450,000
shall not have been deposited in the Escrow Account, then the Escrow
Agent shall, as promptly as possible after such termination and on the
basis of its records of the Escrow Account, return to each purchaser
of the Common Stock the collected amounts paid by him, without
interest thereon or deduction therefrom. All amounts paid or payable
to each purchaser pursuant to this paragraph shall be deemed to be the
property of each purchaser, free and clear of any or all claims of the
Company or of any of its credits, and all subscriptions to purchase
the Common Stock shall be deemed cancelled without any further
liability of such purchasers to pay for the Common Stock. The Escrow
Agent shall be required to make such payments only to the persons
named in the written accounts of sale furnished by the Company
pursuant to Paragraph 1 hereof. At such time as the Escrow Agent shall
have made all the payments and remittances provided for in this
paragraph, the Escrow Agent shall be discharged completely and
released of any and all further liabilities and responsibilities
hereunder.
6. With regard to any funds payable to the purchasers of the Common Stock
which the Escrow Agent cannot, for any reason, disburse to said
purchaser pursuant to Paragraph 5 herein, the Escrow Agent, may, after
reasonable efforts to locate said purchaser, deposit said funds with
the Clerk of the District Court of the County of Jefferson, State of
Colorado, or with the Clerk of the United States District Court for
the District of Colorado, and interplead the Company and said
purchaser. Upon so depositing such funds and filing its complaint in
interpleader, the Escrow Agent shall be completely discharged and
released from the further liability or responsibility under the terms
hereof. The Company, for itself, its successor and assigns, does
hereby submit itself to the jurisdiction of said court and does hereby
appoint the clerk of said court as its agent for service of all
process in connection with the proceedings mentioned in this
paragraph, with a copy of any service mailed U.S. Mail, certified,
return receipt requested.
7. The Escrow Agent shall be solely responsible for determining proceeds
which constitute "collected amounts" as such term is used in this
Agreement. The Company shall reimburse the Escrow Agent for any checks
returned following the Escrow Agent's payment to the Company of the
amounts set forth in Paragraph 4 above.
8. The Company shall deliver to the Escrow Agent appropriate written
notice of any extension of the offering period at the date thereof.
9. Escrow Agent assumes no responsibilities obligations, or liabilities
except those expressly provided for in this Agreement as follows:
(a) Escrow Agent shall have no responsibility, obligation or
liability to any person with respect to any action taken,
suffered or omitted to be taken by it in good faith under this
Agreement and shall in no event be liable hereunder except for
its gross negligence or willful misconduct.
(b) Notwithstanding anything herein to the contrary, no reference in
the Agreement to any other agreement shall be construed or deemed
to enlarge the responsibilities, obligations, or liabilities of
Escrow Agent set forth in this Agreement, and Escrow Agent is not
charged with knowledge of any other agreement.
10. A one-time escrow fee in the amount of $1,000 shall be paid to Escrow
Agent by the Company simultaneously with the execution, and signing of
this Agreement, which fee shall be paid by the Company whether or not
this Agreement becomes effective pursuant to Section 19 herein.
11. The Escrow Agent shall invest funds in the triple "A" rated First
American Treasury Obligations Money Fund (Class D). Company hereby
confirms receipt of the First American Funds prospectus. Company
further acknowledges that the fund investment advisor and custodian
are subsidiaries of U.S. Bancorp, and investment in the fund includes
approval of the fund's fees and expenses as detailed in the
prospectus, including advisory and custodial fees and shareholder
service expenses (which may be so called 12b-1 shareholder service
fees), which fees and expenses are paid to U.S. Bank Trust National
Association or U.S. Bank National Association, or subsidiaries of U.S.
Bancorp. The shares of the funds are not deposits or obligations of,
or guaranteed by, any bank including U.S. Bank National Association,
U.S. Bank Trust National Association or any of their affiliates, nor
are they insured by the Federal Deposit Insurance Commission, the
Federal Reserve Board or any other agency. The investment in the funds
involves investment risk, including possible loss of principal. All
accrued interest shall be remitted to the Company upon termination of
the Escrow Period pursuant to Section 3. The Company shall provide
Escrow Agent with a W-9 or W-8 IRS tax form upon execution of this
Agreement. A statement of citizenship will be provided if requested by
Escrow Agent. The Escrow Agent shall not be liable for losses,
penalties or charges incurred upon any sale or purchase of any such
investment.
12. The Escrow Agent shall not issue any certificate of deposit, share
certificates, or any other instrument or document representing any
interest in the deposited funds, except written notice acknowledging
receipt of deposited funds from the Company, a copy of such receipt to
be delivered from time to time by the Escrow Agent to the Company.
13. In performing any of its duties hereunder, the Escrow Agent shall not
incur any liability to anyone for any damages, losses or expenses,
except for willful default or negligence and it shall, accordingly,
not incur any such liability with respect to (a) any action taken or
omitted in good faith upon advise of its counsel given with respect to
any questions relating to the duties and responsibilities of the
Escrow Agent under this Agreement, and (b) any action taken or omitted
in reliance upon any instrument, including the written advise provided
for herein, not only as to the execution, 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 and presented by a
proper person or persons, and to be in compliance with the provisions
of this Agreement.
14. The Company hereby agrees to indemnify and hold harmless the Escrow
Agent against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and counsel fees
and disbursement, which may be imposed on the Escrow Agent or incurred
by the Escrow Agent in connection with its acceptance of appointment
as Escrow Agent hereunder or the performance of its duties hereunder,
except losses occasioned by the negligence or willful misconduct of
the Escrow Agent or its agents, including any litigation arising from
this Agreement or involving the subject matter hereof.
15. In the event of any dispute between the parties or between a party and
a third party, as to 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:
(a) That it shall be under no obligation to act, except 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;
(b) That, if the dispute does not involve the Escrow Agent, it may in
its sole and absolute discretion, after reasonable efforts to
settle the dispute have failed, deposit the property described
herein or so much thereof as remains in its hands with the then
clerk, or acting clerk of District Court of the County of
Jefferson, State of Colorado, and interplead the Company, and any
third party complainant, 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 shall be entitled to recover in such interpleader action,
from the Company, its reasonable attorney's fees and related
costs and expenses incurred in commending such action and further
more, the Company, for itself, its successors or assigns, does
hereby submit itself to the jurisdiction of said court and does
hereby appoint the then clerk or acting clerk of said court as
its agent for the service of all process in connection with such
proceedings.
16. The Escrow Agent shall not be required to institute or defend any
action or legal process involving any matter referred to herein which
in any manner affects it or its duties or liabilities hereunder,
unless or until requested to do so by the Company and then only upon
receiving full indemnity in an amount, and of such a character as it
shall require, against any and all claims, liabilities, judgements,
attorney's fees and other expenses of every kind in relation thereto.
17. All notices, demands, or requests required or authorized hereunder
shall be deemed given sufficiently if in writing and sent by
registered mail or certified mail, return receipt requested and
postage prepaid, or by tested telex, telegram, or cable, in the case
of the Company:
Xxx X. Xxxxxxxx, Chief Executive Officer
000 Xxxx Xxxxxx Xxxxxx #00
Xxxxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
and in the case of the Escrow Agent:
U.S. Bank Corporate Trust Services
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Xxxx Xxxxx
Phone: (000)000-0000
Fax: (000) 000-0000
With Fax Copy to:
Xxxxxxx XxxXxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
18. The validity, interpretation and construction of this Agreement and
each party hereto shall be governed by the laws of the State of
Colorado.
19. This Agreement shall not become effective until delivery to Escrow
Agent of a final Prospectus which forms a part of the aforesaid
registration statement on Form SB-2 under the Securities Act of 1933
that has become effective, and the Company shall have delivered to the
Escrow Agent a definitive copy of such final Prospectus.
IN WITNESS WHEREOF, the Company and the Escrow Agent have executed this
Agreement on the day and year first above written.
THE COMPANY:
MEDIACOMM BROADCASTING SYSTEMS,
INC.
d/b/a Xxxxxxx.xxx
By: /s/
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Xxx X. Xxxxxxxx, Chief Executive Officer
THE ESCROW AGENT:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxx
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Title: Assistant Vice President
