ESCROW AGREEMENT
AGREEMENT made this ____ day of __________, 2003, by and among Mac
Filmworks, Inc., a Delaware corporation, with its mailing address at 0000
Xxxxxxxxx Xxxx, Xxxxx X-0, Xxxxxxxxxx, Xxxxxxxxx 00000 (the "Corporation"), One
Financial Services, Ltd., a corporation with its principal offices at 0000
Xxxxxxxx Xxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Placement Agent") and
__________________ with offices at _______________________________________
(the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Escrow Agent has been advised that the Corporation is
organized under the laws of the State of Delaware; and
WHEREAS, the Escrow Agent has been advised that the Corporation is
authorized to issue 50,000,000 shares of common stock, $.001 par value (the
"Common Stock") and 10,000,000 shares of preferred stock, $.001 par value; and
WHEREAS, the Escrow Agent has been advised that the Corporation has
filed with the Securities and Exchange Commission (the "SEC") a registration
statement on Form SB-2 (the "Registration Statement") pursuant to the General
Rules and Regulations under the Securities Act of 1933, as amended (the "Act"),
covering a proposed public offering (the "Offering") of 250,000 Units (the
"Units") at an offering price of $1.00 per Unit; and
WHEREAS, the Escrow Agent has been advised that the Placement Agent
proposes to offer the Units, as agent for the Corporation, for sale to the
public on a best efforts minimum/maximum basis with a minimum offering of
100,000 Units or $100,000, and a maximum offering of 250,000 units or $250,000;
and
WHEREAS, in compliance with Rule 240.l5c2-4 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, the
Corporation and the Placement Agent proposes to establish an escrow account with
the Escrow Agent; and
WHEREAS, the Escrow Agent is willing to establish an escrow account on
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. Establishment of Escrow Account. The parties hereto shall establish,
and by execution of this Agreement hereby agree to establish, a
non-interest-bearing escrow account with a designated branch of the Escrow
Agent, which escrow account shall be entitled "__________________ as Escrow
Agent for Mac Filmworks, Inc." (the "Escrow Account"). The Corporation shall
notify the Escrow Agent in writing of the Effective Date as defined by Statute
within 15 days of notification by the Securities and Exchange Commission.
2. Deposits into the Escrow Account.
(a) The gross proceeds from the sale of the Units up to a
total of $100,000 will be deposited in the escrow account (the "Fund") by the
Placement Agent, co-underwriters and selling group members with you as Escrow
Agent on the terms and conditions hereinafter set forth.
(b) Purchasers of the Units will be instructed to remit the
purchase price in the form or checks (which checks must be certified if remitted
during the last five business days of the offering period), drafts or other
instruments for the payment of money, payable only to the order of your bank;
however, in the event the said checks, drafts or other instruments are made
payable to the Placement Agent or selling group member, they may be endorsed by
the named payee to the order of the escrow account. (It should be noted that
only non-affiliated $25,000 net capital broker/dealers may endorse checks to
your order, although you are under no duty or obligation to investigate same).
Such payments will be remitted directly to you by the Placement Agent,
co-underwriter, or selling group member (to an Account Representative at the
Branch designated in writing by the Escrow agent for deposit into the Escrow
Account), and each days receipts will be remitted by the Placement Agent,
co-underwriter or selling group member, as the case may be, to you before 12:00
noon, of the next business day following receipt, together with a list of, or
copies of; the confirmations showing the amount of Units and the names and
addresses of any of the persons subscribing for the offered Units. In this
regard, the Escrow Agent shall have the right to rely fully on the confirmation
slips or other writing so furnished to it by the Placement Agent,
co-underwriters and selling group members. The Escrow Agent has not the
obligation but may refuse to accept deposits not accompanied by confirmation
slips. And cash received by the Placement Agent, co-underwriter or selling group
member on account of the purchase price of such Unit will be likewise remitted
directly to you before 12:00 noon of the next business day following receipt.
(c) The aforesaid checks, drafts, etc., are to be collected by
you, but only if properly endorsed or otherwise in such form as shall permit the
immediate collection by you, and the proceeds thereof, together with all cash
delivered to you hereunder, are to be held in escrow until the total amount of
such cash and proceeds reaches the sum of at least $100,000 in cleared funds
(which represents the proceeds from the sale of at least 100,000 Units).
3. Disbursements-from-the-Escrow Agent.
(a) In the event that the Escrow Agent does not receive a
minimum of $100,000 (the "Minimum") (which represents the proceeds from the sale
of 100,000 Units) in cleared funds from the Placement Agent or members of the
selling group for deposit in the Escrow Account within 90 days from the
Effective Date (which period may be extended for an additional 90 days by mutual
consent of the Corporation and the Placement Agent with written notice given to
the Escrow Agent within 15 days of the mutual consent), upon the furnishing of
written notice thereof to the Escrow Agent jointly signed by the Corporation and
the Placement Agent), the Escrow Agent shall refund to each prospective
purchaser the amount actually received from such purchaser, without interest
thereon or deduction therefrom, and the Escrow agent shall notify the Placement
Agent and the Corporation of its distribution of the Fund. Such 90 days (180
days if extended) shall be extended for a period of up to ten business days for
bank collection purposes only.
(b) In the event that the Escrow Agent receives the Minimum
for deposit in the Escrow Account within 90 days from the Effective Date (which
period may be extended for an additional 90 days pursuant to (a) above), the
Escrow Agent shall notify the Corporation of such fact in writing within a
reasonable time. The Escrow Agent shall hold such monies in escrow, until given
instructions in writing by the Corporation and the Placement Agent as to the
deposition of the Fund and such other document as may be necessary in the
opinion of the Escrow Agent.
(c) In the event that the Corporation and the Placement Agent
mutually agree to terminate the offering prior to 90 days from the Effective
Date (which period may be extended for an additional 90 days pursuant to (a)
above) upon the furnishing of written notice thereof to the Escrow Agent jointly
signed by the Corporation and the Placement Agent, the Escrow Agent shall refund
to each prospective purchaser the amount actually received from such purchaser,
without interest thereon or deduction therefrom, and the Escrow Agent shall
notify the Placement Agent and the Corporation of its distribution of the Fund.
In no event shall the Escrow Agent refund any amount to any prospective
purchaser until such amount is, to the Escrow Agents satisfaction, available in
cleared funds.
(d) Upon the disbursement of the Fund pursuant to either (a),
(b) or (c) above, the Escrow Agent will be under no further responsibility with
respect to this Agreement. In this regard it expressly is agreed and understood
that in no event shall the aggregate amount of payments made by the Escrow agent
exceed the amount of the Fund.
4. Rights, Duties and Responsibilities of Escrow Agent
It is understood and agreed that the duties of the Escrow Agent are
purely ministerial in nature. It is further agreed that:
(a) The Escrow Agent shall not be required to enforce any of
the terms or conditions of the underwriting agreement or any other agreement
between the Placement Agent and the Corporation, nor shall the Escrow Agent be
responsible for the performance by the Placement Agent or the Corporation of
their respective obligations under this agreement;
(b) The Escrow Agent shall not be required to accept from the
Placement Agent or members of the selling group any confirmation slips or other
writings issued to prospective purchasers hereunder unless the same are
accompanied by cash, checks, drafts or other instruments for the payment of
money, nor shall the Escrow Agent be required to keep records of any information
on checks, drafts or other Instruments received or collected by the Escrow Agent
from the Placement Agent or members of the selling group except as to the amount
of same; however, the Escrow Agent shall notify the Placement Agent within a
reasonable time, by wire or otherwise, of any discrepancy between the amount set
forth on any such confirmation slip or other writing and the sum, or sums,
delivered to the Escrow Agent therewith. The Escrow Agent may at its own
discretion refuse to accept any deposits lacking required documentation or
containing discrepancies;
(c) The Escrow Agent shall be under no duty or responsibility
to enforce collection of any check, draft or other instrument for the payment of
money delivered to it hereunder, but the Escrow Agent, within a reasonable time,
shall return to the Placement Agent any check, draft or other instrument
received which is dishonored, together with the confirmation slip or other
writing, if any, which accompanied such check, draft or other instrument;
(d) The Escrow Agent shall have the right to act in reliance
upon any document, instrument or signature believed by it to be genuine and to
assume that any person purporting to give any notice or instructions in
accordance with the Agreement or in connection with any transaction to which
this Agreement relates has been duly authorized to do so. The Escrow Agent shall
not be obligated to make any inquiry as to the authority, capacity, existence or
identity of any person purporting to give any such notice or instructions. The
individual who sign below personally acknowledge that they are authorized to
sign on behalf of their respective entities, that they have submitted to the
Escrow Agent a confirmation of their signature duly guaranteed and the Escrow
Agent need only recognize those signatures on notices or demands;
(e) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions with respect to
the Fund which; in its sole opinion, are in conflict with either other
instructions received by it or any provisions of this Agreement, it shall be
entitled to hold the Fund, or a portion thereof, in the Escrow Account pending
the resolution of such uncertainty to the Escrow Agent's sole satisfaction, by
final judgment of a court or courts of competent jurisdiction or otherwise; or
the Escrow Agent, at its option, may deposit the fund in the registry of a court
of competent jurisdiction in a proceeding to which all parties in interest are
joined;
(f) The Escrow Agent shall not be liable for any action taken
or omitted hereunder except in the case of its willful misconduct, nor shall it
be liable for the default or misconduct of any employee, agent or attorney
appointed by it. The Escrow Agent shall be entitled to consult with counsel of
its own choosing and shall not be liable for any action taken, suffered or
omitted by it in accordance with the advice of such counsel; and
(g) The Escrow Agent shall have no responsibility at any time
to ascertain whether or not any security interest exists in the Fund or any part
thereof or to file any financing statement under the Uniform Commercial Code
with respect to the Fund or any part thereof.
5. Amendment: Resignation. The Agreement and/or the terms of the
Offering day be altered or amended only with the written consent of the
Corporation, the Placement Agent and the Escrow Agent. Should the Corporation
and/or the Placement Agent attempt to change the Agreement and/or the terms of
the Offering in a manner which, in the Escrow Agents sole opinion, is
undesirable, the Escrow Agent may resign as Escrow Agent upon 10 days' written
notice to the Corporation and the Placement Agent; otherwise, it may resign as
Escrow Agent at any time upon 30 days' written notice to the Corporation and the
Placement Agent. In the case of the Escrow Agent's resignation its only duty
shall be to hold and dispose of the Fund in accordance with the original
provisions of this Agreement until a successor Escrow Agent shall be appointed
and written notice of the name and address of such successor Escrow Agent shall
be given to the Escrow Agent by the Corporation and the Placement Agent,
whereupon the Escrow Agent's only duty shall be to pay over to the successor
Escrow Agent the Fund, less any portion thereof previously paid out in
accordance with the Agreement.
6. Warranties. The Corporation and the Placement Agent warrant to and
agree with the Escrow Agent that, unless otherwise expressly set forth in this
Agreement:
(a) No party other than the parties hereto and the prospective
purchasers have, or shall have, any lien, claim or security interest in the Fund
or any part thereof;
(b) The Registration Statement was declared effective by the
SEC on ________________; and
(c) No financing statement under the Uniform Commercial Code
is on file in any jurisdiction claiming a security interest in or describing
(whether specially or generally) the Fund or any part thereof,
7. Fees and Expenses. The Escrow Agent shall be entitled to a fee of
$____________, which shall be due and payable upon Execution of this Agreement
and such additional fees are outlined on the attached Exhibit I: which Exhibit
is incorporated by reference herein. The Escrow Agent shall also be reimbursed
by the Corporation and the Placement Agent for any reasonable expenses incurred
in connection with this Agreement, including, but not limited to, reasonable
counsel fees.
8. Indemnification and Contribution.
(a) The Corporation and the Placement Agent (collectively
referred to as the "Indemnitors") jointly and severally agree to indemnify the
Escrow Agent and its officers, agents; directors and stockholders, jointly and
severally (the "Indemnitees") against, and hold them harmless of and from any
and all loss, liability, cost, damage and expense, including without limitation,
reasonable counsel fees, which the Indemnitees may suffer or incur by reason of
any action, claim or proceeding brought against the Indemnitees, arising out of
or relating in any way to this Agreement or any transaction to which this
Agreement relates, whether or not any such action, claim or proceeding as the
result of the negligence of the Indemnitees. If any person shall assert any
claim (whether or not by the institution of any action, suit or other
proceeding) against any of the Indemnitees arising out of the Agreement or any
transaction to which this Agreement relates whether or not such claim ultimately
is established, the Indemnitors shall pay all costs and expenses of the defense
of such claim including, without limitation, reasonable counsel fees. There
shall be included in the loss, liability, cost damage and expense against which
the Indemnitees are indemnified hereunder all sums which any of the Indemnitees
may pay in settlement of any such claim.
(b) If the indemnification provided for in this Section 8 is
applicable, but for any reason is held to be unavailable, the Indemnitors shall
contribute such amounts as are just and equitable to pay (or to reimburse the
Indemnitees for) the aggregate of any and all losses, liabilities, costs,
damages and expenses, including counsel fees, actually incurred by the
Indemnitees as a result of or in connection with, and any amount paid in
settlement of: any action, claim or proceeding arising out of or relating in any
way to any acts or omissions of the Indemnitors.
(c) Any Indemnitee which proposes to assert the right to be
indemnified under this Section 8, promptly after receipt of notice of
commencement of any action, suit or proceeding against such Indemnitee in
respect of which a claim is to be made against the Indemnitors under this
Section 8, shall notify the Indemnitors of the commencement to such action, suit
or proceeding, enclosing a copy of all papers served, but the omission as to
notify the Indemnitors of any such action, suit or proceeding shall not relieve
the Indemnitors from any liability which they may have to any Indemnitee
otherwise than under this Section 8. In case any such action, suit or proceeding
shall be brought against any Indemnitee and it shall notify the Indemnitors of
the commencement thereof, the Indemnitors shall be entitled to participate in
and, to the extent that they shall wish, to assume the defense thereof: with
counsel satisfactory to such Indemnitee, and after notice from the Indemnitors
to such Indemnitee of their election so to assume the defense thereof the
Indemnitors shall not be liable to such Indemnitee for any legal or other
expenses, other than reasonable costs of investigation subsequently incurred by
such Indemnitee in connection with the defense thereof. The Indemnitee shall
have the right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee unless (i)
the employment of counsel by such Indemnnitee has been authorized by the
Indemnitors, (ii) the Indemnitee shall have concluded reasonably that there may
be a conflict of interest among the Indemnitors and the Indemnitee in the
conduct of the defense of such action (in which case the Indemnitors shall not
have the right to direct the defense of such action on behalf of the Indemnitee)
or (all) the indemnitors in fact shall not have employed counsel to assume the
defense of such action, fn each of which cases the fees and expenses of counsel
shall be borne by the indemnitors.
9. Rule I5c2-4. We are required to bring your attention to Rule 15c2-4
(the "Rule" promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, and to obtain your confirmation that the
escrowed funds will be invested only in investments permissible under the Rule.
The Rule is applicable to all escrow agreements similar to this Agreement, and,
generally speaking, provides in substance that you, as escrow agent hereunder,
may only invest the escrowed funds in investments permitted by the Rule.
Permitted investments have been interpreted to xxxx either ii) short-term
certificates of deposit issued by a bank, or (ii) short-term securities issued
or guaranteed by the United States Government. If you should, in fact, make any
investment of the escrowed funds, any such investment must be made in
recognition of the Rule's requirement that the escrowed funds must be capable of
being transmitted promptly to the Issuer or the persons subscribing for the
offered Units once the contingencies described in the preceding paragraphs of
this agreement have or have not occurred. The maturity date of a permitted
investment should not extend beyond the "anticipated contingency occurrence
date" unless the instrument concerned can be readily sold or otherwise disposed
of for cash by the time the contingency occurs, without any dissipation of the
funds invested. The following securities are not permissible investments: money
market funds; corporate equity or debt Securities; repurchase agreements;
bankers acceptances; commercial paper; and municipal securities. You should also
be aware of the fact that the statutory definition of a bank does not include a
savings and loan association.
10. Governing Law and Assignment. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York and shall be
binding upon the parties hereto and their respective successors and assign;
provided, however, that any assignment or transfer by any party of its rights
under this agreement or with respect to the Fund shall be void against the
Escrow Agent unless:
(a) written notice thereof shall be given to the Escrow Agent,
and
(b) the Escrow Agent shall have consented in writing to such
assignment or transfer.
11. Notices. All notices required to be given in connection with this
Agreement shall be sent by registered or certified mail, return receipt
requested, and addressed to the Corporation at 0000 Xxxxxxxxx Xxxx, Xxxxx X-0,
Xxxxxxxxxx, Xxxxxxxxx 00000, copy to Xxxx Xxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.,
Xxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000; the Placement Agent at 0000
Xxxxxxxx Xxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000; copy to Xxxxxx X. Xxxxxxxx, Xx.,
Esq., Sonfield a Sonfield, 000 Xxxxx Xxxx Xxx Xxxx, Xxxxxxx, Xxxxx 00000; and
the Escrow Agent at _______________________________________.
12. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement or the application of
such provision to persons or circumstances other than those to which it is held
invalid or unenforceable shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law.
13. Execution in Several Counterparts. This Agreement may be executed
in several counterparts or by separate instruments, and all of such counterparts
and instruments shall constitute one agreement, binding on all of the parties
hereto.
14. Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the context
may require.
15. Captions. All captions are for convenience only and shall not limit
or define the text hereof.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreement and understandings (written or oral) of the
parties in connection herewith.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day first above written;
MAC FILMWORKS, INC.
By:________________________________
Xxx XxXxxxxxxx, Sr., President & CEO
ONE FINANCIAL SECURITIES, LTD.
By:_______________________________
Xxxxxx Xxxxx, President
---------------------------------------
AS ESCROW AGENT
By:_______________________________
Name:_____________________________
Title:______________________________
EXHIBIT I
CORPORATE TRUST ESCROW SERVICE FEES
(Public Stock Offerings)
Distribution of Fund: $5.00 per distribution
Subscriptions in excess of 50: $2.50 per
subscription
Returned Deposit: $5.00 per returned item
All others: Negotiated on basis of service requirements.
Fees are due and payable by the underwriter upon closing or distribution of the
funds.
EAB reserves the right to require additional indemnification and/or guarantees
when it deems appropriate.
* OPTIONAL Formal Closing at $250.00
