Exhibit 10.1
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is made and entered into this 7th
day of June 2000, by and between C.A.T.-N-K., Inc., a Texas corporation
("Issuer"), and Charter Escrow Company, Inc., with offices at 0000 Xxx Xxxx
Xxxxxx, Xxxxxx, Xxxxx ("Escrow Agent") (Issuer and Escrow Agent may hereinafter
be referred to as a "Party" or the "Parties").
Premises
WHEREAS, Issuer is a Blank Check Company, as that term is defined by
subsection (a)(2) of Rule 419 ("Rule 419") under the Securities Act of 1933, as
amended (the "Act"), intending to sell its common stock, no par value ("Common
Stock"), pursuant to a registration statement on Form SB-2 ("Form SB-2") under
the Act with the Securities and Exchange Commission ("SEC");
WHEREAS, Issuer desires to utilize Escrow Agent's services under the terms
and conditions herein provided to satisfy the restrictions and requirements
imposed on Issuer's offering by Rule 419.
Agreement
NOW, THEREFORE, based on the foregoing premises and for and in
consideration of the mutual promises and covenants hereinafter set forth, the
Parties hereby agree as follows:
o Appointment of Escrow Agent. In connection with Issuer's proposed
offering of shares of Common Stock to be conducted after such shares
are registered, Issuer appoints Charter Escrow Company, Inc. as Escrow
Agent in connection with Issuer's Rule 419 offering. In connection with
the Rule 419 offering:
(a) The Escrow Agent shall receive and hold all shares of Common
Stock issued in connection with the offering pursuant to the
terms set forth in this Agreement and in accordance with Rule
419; deposit the gross proceeds from the offering promptly into
an escrow account maintained by an "insured depository
institution," or into a separate bank account; and maintain in
good faith and in the regular course of business the escrow
account records of the insured depository institution, or
separate bank account, providing that the funds in the escrow
account are held for the benefit of the purchasers and showing
the name and interest of each party to the account.
(b) The Escrow Agent shall receive compensation of:
(a) An Establishment Fee equal of Five Hundred Dollars ($500)
upon execution of this Agreement;
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(b) An Administration Fee equal to 1/4 of 1% of the total amount
of proceeds deposited into the escrow account, which
administration fee shall be payable in arrears on an annual
basis; and
(c) The amounts on Exhibit A, Escrow Agent's Schedule of Fees
and Services, for corresponding activities.
B. Duties of Escrow Agent.
1. In connection with the Rule 419 offering, the Escrow Agent shall:
a. Receive and hold all shares of Common Stock issued in
connection with the offering pursuant to the terms set
forth in this Agreement and in accordance with Rule
419;
b. Deposit the gross proceeds from the offering promptly
into an escrow account ("Escrow Account") maintained by
an "insured depository institution," or into a separate
bank account; and
c. Maintain in good faith and in the regular course of
business Escrow Account records of the insured
depository institution, or separate bank account,
providing that the funds in the Escrow Account are held
for the benefit of the purchasers and showing the name
and interest of each party to the account.
2. The Escrow Agent shall be responsible for establishing the Escrow
Account into which the securities to be issued and the funds to
be received in connection with Issuer's proposed offering shall
be deposited and held until an acquisition meeting the criteria
specified in Rule 419 is completed.
3. The Escrow Agent is not responsible for any act or failure to act
on its part, except in the case of its own willful misconduct or
gross negligence. The Escrow Agent shall not be liable for any
error of judgment or for any act done or step taken or omitted in
good faith, or for any mistake of fact or law for anything which
it may do or refrain from doing in connection therewith, except
for its own willful misconduct.
4. The Escrow Agent is not a party to or bound by any agreement
pertaining to the transaction or any other agreement between the
Parties, expect this Agreement.
5. In the event of any disagreement between the Parties or any
person resulting in adverse claims or demands being made in
connection with or for any of the amount in escrow, the Escrow
Agent shall be entitled, at its option, to refuse to comply with
any such claim or demand so long as such disagreement shall
continue, and to initiate a legal proceeding, including but not
limited to an impleader action, to have the dispute resolved.
Until resolution of any such disagreement, Escrow Agent may
refuse to deliver or otherwise dispose of funds until:
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a. The rights of the adverse claimant have been finally
adjudicated in the court assuming and having jurisdiction of
the Parties and the amount in escrow; or
b. The differences shall have been adjusted by agreement among
the affected Parties and the Escrow Agent shall have been
notified thereof in writing signed by the interested
Parties.
6. The duties of the Escrow Agent hereunder are entirely
ministerial, being limited to receiving, holding, and disbursing
the amount in escrow as provided herein. The Escrow Agent may
rely upon and will be protected in acting upon any paper or other
document which may be submitted to it in connection with its
duties hereunder and which is believed by it to be genuine and to
have been signed by the proper party or parties or their
representatives, and shall have no liability or responsibility
with respect to the form, execution, or validity thereof.
C. Deposit and Investment of Offering Proceeds. The proceeds from the Issuer's
offering will be deposited as follows:
1. All offering proceeds, after deduction of cash paid for
underwriting commissions, underwriting expenses, dealer
allowances, and amounts permitted to be released to the Issuer
pursuant to Rule 419(b)(2)(vi) and Section E(1) herein, shall
be deposited promptly into the Escrow Account.
2. Deposited proceeds shall only be invested in an obligation
that constitutes a "deposit", as that term is defined in
section 3(l) of the Federal Deposit Insurance Act.
3. Interest or dividends earned on the funds, if any, shall be
held in the Escrow Account until the funds are released. If
funds held in the Escrow Account are released to a purchaser
of the securities, the purchasers shall receive interest or
dividends earned, if any, on such funds until the date of
release. If funds held in the Escrow Account are released to
the Issuer, interest or dividends earned on such funds up to
the date of release shall be released to the Issuer.
E. Deposit of Securities.
1. All securities issued in connection with the offering, whether
or not for cash consideration, and any other securities issued
with respect to such securities, including securities issued
with respect to stock splits, stock dividends, or similar
rights, shall be deposited directly into the Escrow Account
promptly upon issuance. The identity of the purchaser of the
securities shall be included on the stock certificates or
other documents evidencing such securities.
2. Securities held in the Escrow Account are to remain as issued
and deposited and shall be held for the sole benefit of the
purchasers, who shall have voting rights, if any, with respect
to securities held in their names, as provided by applicable
state
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law. No transfer or other disposition of securities held in
the Escrow Account or any interest related to such securities
shall be permitted other than by will or the laws of descent
and distribution, or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of
1986 [26 U.S.C. 1 et seq.], or the rules thereunder.
F. Distribution and Release of Deposited Securities and Funds.
1. Ten percent (10%) of the net offering proceeds (after
deducting the maximum finders' fees and expenses allowed)
shall be deducted from the funds held in the Escrow Account
and be released to the Issuer prior to the consummation of a
business combination(s), as provided by Rule 419(b)(2)(vi).
2. The securities held in the Escrow Account shall be delivered
to the purchaser or other registered holder identified on the
deposited securities only at the same time as, or, after:
a. The Escrow Agent has received a signed representation
from the Issuer that the requirements of paragraphs
(e)(1) and (e)(2) of Rule 419 have been met, including
receipt by Issuer of Rule 419(e)(2)(iii) confirmations
from investors of at least 75% of the proceeds raised;
and
b. Consummation of an acquisition(s) meeting the
requirements of paragraph (e)(2)(iii) of Rule 419.
G. Governing Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the State of Texas.
The below signatures by the authorized representatives of the Issuer
and Escrow Agent witness their respective agreement to act in accordance with
the terms hereof.
Issuer - C.A.T.-N-K., Inc. Escrow Agent - Charter Escrow Company, Inc.
/s/ Xxxxxx X. Xxxx /s/ Xxxxx Xxxxxx
By: _________________________ By: ______________________________
Xxxxxx X. Xxxx, President Xxxxx Xxxxxx, President
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