EXHIBIT 99.2
IMPOUND AGREEMENT
This agreement dated December 17, 1997 is between First Union National
Bank (the "Impound Agent") and Success Development International, Inc., a
Florida corporation (the "Company").
The Company proposes to offer directly for sale to investors (the
"Offering") up to 500,000 shares of its Common Stock (the "Shares") at a price
of $5.50 per share (the "Proceeds") as described in its Prospectus. The Company
desires to establish an escrow account in which funds received from subscribers
will be deposited pending completion of the escrow period. First Union National
Bank, agrees to serve as Impound Agent in accordance with the terms and
conditions of this agreement and certifies that it is not affiliated with the
Company.
1. ESTABLISHMENT OF ESCROW ACCOUNT. Effective as of the date of the
commencement of the Offering, the Company will establish an interest bearing
escrow account with the Impound Agent, entitled "First Union National Bank.
ESCROW ACCOUNT NO. 4072864055" (the "Escrow Account"). The Impound Agent shall
invest all funds received in the escrow account only in investment permissible
under SEC Rule 15c2-4.
2. IMPOUND PERIOD. The Impound Period shall begin with the commencement of
the Offering and shall terminate upon the earlier to occur of: (a) subject to
paragraph 4B the date upon which the Impound Agent has received in the Escrow
Account gross proceeds of $550,000 in deposited funds (the "Minimum"), (b) three
months after the date of the Prospectus, or (c) the date upon which a
determination is made by the Company in writing to the Impound Agent to
terminate the offering prior to the sale of the Minimum.
During the escrow period the Company is aware and understands that it is
not entitled to any funds received into escrow, such funds are not assets of the
Company and no amounts deposited in the Escrow Account shall become property of
the Company or any other entity, or be subject to the debts of the Company of
any other entity.
3. DEPOSITS INTO THE ESCROW ACCOUNT. Subscribers shall make all checks
payable to the Impound Agent and the Company agrees that it shall properly
deliver, by noon the next business day, all monies received from subscribers for
the payment of the Shares to the Impound Agent for deposit in the Escrow
Account, accompanied with a copy of the attached form of "Share Purchase
Agreement," executed by the Company and the investor. All payments to the
Company by reason of credit card purchases of the Shares shall be forwarded by
the Company in the form of a check to the Impound Agent for deposit into the
Escrow Account. The Company shall date and number-stamp each Share Purchase
Agreement and shall also provide the Escrow Agent with, and maintain for its own
records, a copy of the form of consideration.
4. DISBURSEMENTS FROM THE ESCROW ACCOUNT. A. In the event the Impound
Agent does not receive the Minimum deposits totaling $550,000 prior to the
termination of the Impound Period, the Impound Agent shall promptly refund to
each subscriber the amount received from such subscriber, without deduction,
penalty or expense to such subscriber, and the Impound Agent shall notify the
Company of such distribution. The purchase money returned to each subscriber
shall be free and clear of any and all claims of the Company or any of its
creditors.
B. In the event the Impound Agent receives the Minimum prior to the
termination of the Impound Period, the Escrow Amount will not be released to the
Company until such amount is received by the Impound Agent in collected funds.
For purposes of this Agreement, the term "collected funds" shall mean all funds
received by the Impound Agent which have cleared normal banking channels and are
in the form of cash, plus any interest accrued on such funds. The Minimum may be
met by funds that are deposited from the effective date of the offering up to
and including the date on which the contingency must be met.
5. COLLECTION PROCEDURE. The Company agrees that if a deposited check is
returned unpaid for any reason, the Impound Agent may charge the Escrow Account
for the amount of the check. However, the Impound Agent may represent a returned
check for payment by the financial institution on which it is drawn, but the
Impound Agent is not required to do so. The Impound Agent may represent the
check without notifying the Company that it is doing so or that the check was
not paid. Any check returned unpaid to the Impound Agent shall be returned to
the Company.
6. INTEREST ON ESCROW AMOUNT. Refunds to subscribers pursuant to paragraph
4A shall include each subscriber's pro-rata share of any interest earned while
the subscriber's funds were on deposit.
7. RECORDS TO BE MAINTAINED BY THE IMPOUND AGENT. Records and accounts of
the transactions kept bent shall include records of all transactions in the
Escrow Account and copies of all Share Purchase Agreements. The Company shall
maintain the original Share Purchase Agreements and copies of all checks, along
with any other records of transactions for a period of five years after the
termination of the Impound Period.
8. COMPENSATION OF IMPOUND AGENT. The Company shall pay the Impound Agent
a fee for its escrow services in an amount of $2,000.00. If it is necessary for
the Impound Agent to return funds to subscribers, the Company shall pay to the
Impound Agent an additional amount sufficient to reimburse it for its actual
cost for disbursing such funds.
9. LIABILITY OF THE IMPOUND AGENT. The Impound Agent may conclusively rely
on, and shall be protected, when it acts in good faith upon, any statement,
certificate, notice, request, consent, order or other document which it believes
to be genuine and which has been signed by the proper party. Provided it uses
due care, the Impound Agent shall have no duty or liability to verify any such
statement, certificate, notice, request, consent, order or other document and
its sole responsibility shall be to act only as expressly set forth in this
Agreement. The Impound Agent shall be under no obligation to institute or defend
any action, suit or proceeding in connection with the Agreement unless it is
indemnified to its satisfaction. The Impound Agent may consult counsel in
respect of any questions arising under this Agreement and the Impound Agent
shall not be liable for any action taken, or omitted, in good faith upon advise
of such counsel.
10. This Agreement shall be binding upon, and inure to, the benefit of the
parties hereto, their heirs, successors and assigns.
11. This agreement shall terminate in its entirety when all the Escrow
Amount has been distributed as provided in paragraph 4., above.
12. All statements and other notices produced by the Impound Agent related
to the Escrow Account shall be mailed to the Company as follows:
Success Development International, Inc.
0000 Xxx Xx. Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Chief Executive Officer
Except for deposits, which shall be made at the Jacksonville office only,
all notices and other communications from the Company shall be made to the
Impound Agent as follows:
First Union National Bank
Corporate Trust Group
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
13. The Impound Agent shall be entitled to rely on all notices and
instructions received from the Company.
14. The Company hereby agrees to defend, indemnify, and to hold the
Impound Agent harmless against, any loss, liability or expense incurred without
gross negligence or bad faith on the part of Impound Agent arising out of or in
connection with its entering into this Agreement and carrying out its duties
hereunder, including the cost and expense of defending itself against any claim
or liability.
15. In the event the Impound Agent shall be uncertain as to its duties or
rights hereunder or it shall receive instructions, claims or demands from any of
the parties hereto or from third parties with respect to the property held
hereunder, which, in its opinion, are in conflict with any provision of this
Agreement, it shall be entitled to refrain from taking any action (other than to
keep safely the funds in the Escrow Account) until it shall be directed to act
by order or judgment of a court of competent jurisdiction.
16. This Agreement shall be governed by Florida law and any action or
proceeding, including arbitration, arising in connection with this Agreement
shall be brought and held in Florida.
FIRST UNION NATIONAL BANK SUCCESS DEVELOPMENT
INTERNATIONAL, INC.
By:/s/ XXXXX XXXXXXX By:/s/ XXXXX X. XXXXX
Xxxxx Xxxxxxx Xxxxx X. Xxxxx
Vice President Chief Executive Officer
