FUND ESCROW AGREEMENT
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THIS FUND ESCROW AGREEMENT (the "Agreement") is made and entered into this
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5th day of December, 2001, by and between PACIFIC INTERMEDIA, INC., a Colorado
corporation (the "Company"), 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000,
and CITYWIDE BANKS, a national banking association, 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000 (the "Escrow Agent").
WHEREAS, the Company desires to make an offering to the public of $100,000
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worth of shares (the "Shares") of the Company's common stock, $.001 par value
per share (the "Common Stock"), on a $50,000 "best efforts, all-or-none" basis
and an additional $50,000 worth of shares of Common Stock on a best efforts only
basis, under an arrangement whereby all Shares are to be offered to the public
through the executive officers and directors of the Company in an offering
conducted pursuant to a Registration Statement on Form SB-2 filed with the U.S.
Securities and Exchange Commission under Section 5 of the Securities Act of
1933, as amended, and Section 11-51-308(1)(p) of the Colorado Securities Act, as
amended (the "Public Offering"); and
WHEREAS, the parties wish to enter into an agreement pursuant to which the
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gross proceeds from the first $50,000 worth of shares of Common Stock sold in
the Public Offering would be impounded in escrow, which gross proceeds may be
released to the Company only in the event of the sale of a minimum of $50,000
worth of shares of Common Stock within the time set forth herein and, otherwise,
the escrowed gross proceeds are to be returned by the Escrow Agent to the
subscribers without deduction for commissions or expenses and without interest
thereon; and
WHEREAS, the Company and the Escrow Agent desire to enter into an agreement
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with respect to the above-described escrow;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
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and covenants contained herein, IT IS HEREBY AGREED as follows:
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1. The Company shall deliver to the Escrow Agent, by noon of the next
business day following receipt thereof, all proceeds from the sale of the first
$50,000 worth of shares of Common Stock sold in the Public Offering, together
with a written account of the sales setting forth, among other things, the names
and addresses of the subscribers, the number of shares of Common Stock purchased
by each, the amount paid therefor, the date of the sale and whether the
consideration received was in the form of cash or evidenced by a check.
2. All money delivered to the Escrow Agent pursuant hereto shall be
deposited immediately by the Escrow Agent into a separate non-interest bearing
account described as the "Pacific InterMedia, Inc. - Citywide Banks Escrow
Acount" (the "Escrow Account") and shall be made payable to "Citywide Banks -
Escrow Agent." The Escrow Account shall be created and maintained pursuant to
the rules and regulations of the Escrow Agent pertaining to such accounts.
3. During the Escrow Period (as hereinafter defined), none of the
amounts deposited in the Escrow Account shall become the property of the Company
or any other entity, or be subject to the debts of the Company or any other
entity, and, except as expressly provided herein with respect to payments by the
Escrow Agent to the Company, the Escrow Agent shall make or permit no
disbursement from the Escrow Account. The Escrow Agent shall not be required to
make any disbursement until all funds deposited are collected and paid.
4. The Escrow Period shall begin on the date of the Prospectus (the
"Prospectus") and shall terminate on the first to occur of the following dates:
A. Ninety (90) days after the date of the Prospectus. The
termination date in the preceding sentence may be extended for a
period of ninety (90) days at the election of the Company, with a copy
of such notice of extension provided to the Escrow Agent.
B. The date upon which gross proceeds of $50,000 from the sale of
shares of Common Stock have been deposited with the Escrow Agent and
are collected and paid.
C. At the election of the Company with a copy of such notice of
termination provided to the Escrow Agent.
5. In the event that the Escrow Period terminates pursuant to paragraph
4.A. or 4.C. above, the Escrow Agent, on the basis of its records, shall
promptly return to each of the subscribers the amount paid by them for the
purchase of the shares of Common Stock collected by the Escrow Agent, without
interest or deduction. Each amount paid or payable to each subscriber pursuant
to this paragraph shall be deemed to be the property of each subscriber, free
and clear of any or all claims of the Company or of any of its creditors, and
the respective agreements to purchase the shares of Common Stock made with
respect to the Public Offering shall thereupon be deemed to be canceled without
any further liability of said subscribers to pay for the shares of Common Stock
purchased. The Escrow Agent shall be required to make such payment only to the
person named in the written account of each sale to be furnished by the Company
pursuant to paragraph 1 hereof at the address given in such written account.
With regard to any funds payable to subscribers that the Escrow Agent cannot
disburse to said subscribers because the address given in the written account is
defective or that the Escrow Agent cannot, for any other reason, disburse to
said subscribers, the Escrow Agent shall at its option and sole discretion
either: (a) deposit said funds with the Clerk of the District Court of the
County of Arapahoe, State of Colorado, and interplead the parties hereto, or (b)
pay said funds to the Company at its principal place of business at 0000 Xxxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, no later than thirty (30) calendar days
after the termination of the Escrow Period. Upon so depositing such funds and
filing its complaint in interpleader under subparagraph (a) of this paragraph 5
or upon making payment to the Company under subparagraph (b) of this paragraph
5, the Escrow Agent shall be completely discharged and released from all further
liability under the terms hereof. If the Escrow Agent elects to invoke
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subparagraph (a) of this paragraph 5, the parties hereto, for themselves, their
heirs, successors and assigns, do hereby submit themselves to the jurisdiction
of said Court and do hereby appoint the Clerk of said Court as their agent for
service of all process in connection with the proceeding mentioned in this
paragraph. The Escrow Agent shall be entitled to recover from the interpled
funds all attorneys' fees and costs associated with the interpleader action.
6. In the event the Escrow Period terminates pursuant to paragraph 4.B.,
the Escrow Agent shall pay over to the Company all funds in the Escrow Account
without interest thereon or deduction therefrom as promptly as possible, but in
no event later than ten (10) business days after such termination and on the
basis of its records, in accordance with written instructions to the Escrow
Agent, which shall specify the date, time and place of delivery of the proceeds
and the amount of the proceeds to be paid to the Company. At such time as the
Escrow Agent shall have made the payments and remittances provided for in this
paragraph, the Escrow Agent shall be completely discharged and released of any
and all further liabilities and responsibilities hereunder.
7. The Company shall give the Escrow Agent notice of the date upon which
the Public Offering will commence.
8. The Escrow Agent, in its actions pursuant to this Agreement, shall be
fully protected in every reasonable exercise of its discretion and shall have no
obligations hereunder to the Company, or to any other party, except as expressly
set forth herein. This Agreement is made between the signatory parties only.
9. The Escrow Agent shall have no obligation to invest any of the
deposited funds or to pay interest thereon.
10. The Escrow Agent shall not issue any certificate of deposit, stock
certificate, or any other instrument or document representing any interest in
the deposited funds. The Escrow Agent shall not be responsible for fees in
conjunction with the issuance or transfer of the shares of Common Stock.
11. The Company shall provide to the Escrow Agent all information
necessary to facilitate the administration of this Agreement, and the Escrow
Agent may rely upon any such information provided. In performing any of its
duties hereunder, the Escrow Agent shall not incur any liability for any claims,
damages, losses, costs, or expenses, except for willful misconduct or gross
negligence, and it shall, accordingly, not incur any such liability with respect
to (i) any action taken or omitted in good faith upon advice of its counsel
given with respect to any questions relating to the duties and responsibilities
of the Escrow Agent under this Agreement, or (ii) any action taken or omitted in
reliance upon any instrument, including the written notices provided for herein,
not only as to its due execution and the 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.
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12. The Company shall indemnify and hold harmless the Escrow Agent against
any and all losses, claims, damages, liabilities, costs of investigation and
attorneys' fees and disbursements that may be imposed upon the Escrow Agent or
incurred by the Escrow Agent hereunder in the performance of its duties
hereunder, including any litigation arising from this Agreement, whether arising
from any interpleader action under paragraph 5(a) or 13(a), or from any other
suit or court proceeding arising in any other way from the Agreement or
involving the subject matter hereof.
13. If at any time a dispute shall exist as to the duties of the Escrow
Agent or the terms hereof, or if the Escrow Agent fails to receive the
instructions required in paragraph 6 within fifteen (15) days after the
termination of the Escrow Period under paragraph 4, the Escrow Agent may, in its
sole discretion, either: (a) deposit said funds with the Clerk of the District
Court of the County of Arapahoe, State of Colorado and may interplead the
parties hereto, or (b) pay said funds to the Company at its principal place of
business at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000; provided, however,
that if the dispute shall occur prior to the termination of the Escrow Period
pursuant to Paragraph 4.B. above and the Escrow Agent desires to terminate its
services under the terms of this Agreement, then, and in that event, the Escrow
Agent shall return to each of the subscribers the amount paid by him for the
purchase of the shares of Common Stock collected by the Escrow Agent, without
interest or deduction, in the manner as provided in paragraph 5 hereof. The
parties hereto, for themselves, their heirs, successors and assigns do hereby
submit themselves to the jurisdiction of said Court and do hereby appoint the
Clerk of said Court as their agent for service of all process in connection with
the preceding mentioned in this paragraph. The Escrow Agent shall be entitled to
recover from the interpled funds all attorneys' fees and costs associated with
the interpleader action.
14. The Escrow Agent is hereby expressly authorized and directed to
disregard any and all notices or warnings given by the Company, other than those
notices and warnings specifically called for in the Agreement, or by any other
person or corporation, excepting only orders or process of court, and is hereby
expressly authorized to comply with and obey any and all orders, judgments, or
decrees of any court, and in case the Escrow Agent obeys or complies with any
such order, judgment, or decree of any court, it shall not be liable to the
Company or to any other person, firm, or corporation by reason of such
compliance, notwithstanding that any such order, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated, or found to
have been entered without jurisdiction.
15. The Company shall pay the Escrow Agent a non-refundable fee of $1,000
upon the execution of this Agreement. In the event that this Agreement is
terminated in such a manner as to cause funds to be returned to the original
investors, the Company agrees to pay the Escrow Agent an additional fee of $5.00
per returned check to investors.
16. This Agreement constitutes an integrated contract and is the entire
agreement between the parties. No parole evidence may be considered in
determining the meaning of any term used herein or in interpreting this
Agreement.
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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 sent telex,
telegram, or cable to:
In case of the Company:
PACIFIC INTERMEDIA, INC.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, President
with a copy to:
XXXXXXXX XXXX, ESQ.
Xxxx & Associates
00000 Xxxx 00xx Xxxxxx, Xxxxx #0-X
Xxxxx Xxxxx, Xxxxxxxx 00000
In case of the Escrow Agent:
CITYWIDE BANKS
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
18. This Agreement shall be governed and interpreted by the laws of the
State of Colorado.
IN WITNESS WHEREOF, the Company and the Escrow Agent have executed this
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Escrow Agreement on the day and year first above written.
THE COMPANY: THE ESCROW AGENT:
PACIFIC INTERMEDIA, INC. CITYWIDE BANKS, N.A.
By: /s/ Xxxxx X. Xxxxxx By:
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Xxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxx, Vice President
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