ESCROW DEPOSIT AGREEMENT
AGREEMENT
dated
this ____ day of [ ______ ] 2007, by and among RxElite
Holdings, Inc.,
a
Delaware corporation (the “Company”),
having an address at 0000 X. Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx 00000,
[___________] (the “Investor
Representative”)
and
SIGNATURE
BANK (the
“Escrow
Agent”),
a New
York State chartered bank, having an office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
WITNESSETH:
WHEREAS,
the
Company is offering (the “Offering”)
a
minimum of $5,000,000 (the “Minimum
Amount”)
of the
Company’s units (the “Units”),
each
Unit consisting of one share of the Company’s common stock, par value $0.00237
per share (the “Common
Stock”)
and a
detachable warrant to purchase ½ of one share of Common Stock at an exercise
price of $0.85 per share;
WHEREAS,
unless
the Offering is completed by ________, 2007 (the “Termination
Date”),
unless extended by the Company and the Investor Representative for up at an
additional 1-week period (the “Final
Termination Date”),
the
Offering will terminate and all funds will be returned to the subscribers in
the
Offering (the “Subscribers”)
without interest, penalty or offset;
WHEREAS,
immediately prior to the initial closing of the Offering, Subscribers will
be
provided a draft Current Report on Form 8-K (the “Form
8-K”),
and
in connection therewith Subscribers will be asked to execute a reconfirmation
of
their desire to subscribe for the Units in the Offering;
WHEREAS,
the
Company desires to establish an escrow account with the Escrow Agent into which
the Company shall instruct the Subscribers to deposit checks and other
instruments or wire funds for the payment of money made payable to the order
of
“Signature Bank, as Escrow Agent for RxElite Holdings, Inc.,” and Escrow Agent
is willing to accept said checks and other instruments and wires for the payment
of money in accordance with the terms hereinafter set forth;
WHEREAS,
the
Company represents and warrants to the Escrow Agent that it has not stated
to
any individual or entity that the Escrow Agent’s duties will include anything
other than those duties stated in this Agreement; and
WHEREAS,
the
Company represents and warrants to the Escrow Agent that a copy of all documents
that have been delivered to Subscribers and third parties that include Escrow
Agent’s name and duties, have been attached hereto as Schedule I.
NOW,
THEREFORE, IT IS AGREED as
follows:
1. Delivery
of Escrow Funds.
(a) The
Company shall instruct Subscribers to deliver to Escrow Agent checks made
payable to the order of “Signature Bank, as Escrow Agent for RxElite Holdings,
Inc.”, or wire transfer to [___________] for credit to Signature Bank, as Escrow
Agent for RxElite Holdings, Inc., Account No. _____________, in each case,
with
the name, address and social security number or taxpayer identification number
of the individual or entity making payment. In the event any Subscriber’s
address and/or social security number or taxpayer identification number are
not
provided to Escrow Agent by the Subscriber, then the Company and the Investor
Representative agree to promptly provide Escrow Agent with such information
(unless the Subscriber is a non-U.S. person). The checks or wire transfers
shall
be deposited into a non-interest-bearing account at Signature Bank entitled
“Signature Bank, as Escrow Agent for RxElite Holdings, Inc.” (the “Escrow
Account”).
(b) The
collected funds deposited into the Escrow Account are referred to as the
“Escrow
Funds.”
(c) Escrow
Agent shall have no duty or responsibility to enforce the collection or demand
payment of any funds deposited into the Escrow Account. If, for any reason,
any
check deposited into Escrow Account shall be returned unpaid to the Escrow
Agent, the sole duty of the Escrow Agent shall be to return the check to the
Subscriber and advise the Company promptly thereof.
(d) Escrow
Agent shall hold all Escrow Funds in the Escrow Account free from any lien,
claim or offset of Escrow Agent, except as set forth herein.
2. Release
of Escrow Funds.
The
Escrow Funds shall be paid by the Escrow Agent in accordance with the
following:
(a) In
the
event that the Company and the Investor Representative advise Escrow Agent
in
writing that the Offering has been terminated (the “Termination
Notice”),
Escrow Agent shall promptly return the funds paid by each Subscriber to said
Subscriber without interest or deduction, penalty or expense.
(b) If
prior
to 3:00 P.M. (local New York City time) on the Termination Date, Escrow Agent
receives written notification, in the form of Exhibit A, attached hereto and
made a part hereof, and signed by the Company and the Investor Representative,
stating that the Termination Date has been extended, the date shall be so
extended to the Final Termination Date.
(c) Provided
that the Escrow Agent does not receive the Termination Notice stated in
paragraph 2(a) above and there is the Minimum Amount deposited into the Escrow
Account on or prior to the end of the Termination Date or the Final Termination
Date (if Escrow Agent has, prior to the Termination Date, received Exhibit
A in
accordance with paragraph 2(b) above), Escrow Agent shall, upon receipt of
written instructions, in form and substance satisfactory to Escrow Agent,
received from the Company and the Investor Representative (including a
representation from the Company that the Company has furnished each Subscriber
with the Form 8-K and that each Subscriber reconfirmed its investment in the
Offering following receipt of the Form 8-K), pay the Escrow Funds in accordance
with such written instructions, such payment or payments to be made by wire
transfer within one (1) business day of receipt of such written instructions.
The same procedures shall be coordinated with respect to any subsequent closings
occurring prior to the Termination Date (if Escrow Agent has, prior to the
Termination Date, received Exhibit A in accordance with paragraph 2(b)
above).
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(d) If
by
3:00 P.M. (local New York City time) on the later of the Termination Date or
the
Final Termination Date (if Escrow Agent has received Exhibit A, in accordance
with paragraph 2(b) above), Escrow Agent (i) has not received written
instructions from the Company and the Investor Representative and wire transfer
instructions executed by the Company and the Investor Representative regarding
the disbursement of the Escrow Funds and payment of fees and expenses of the
Offering, or (ii) there is a balance in Escrow Account of less than the Minimum
Amount, the Escrow Agent shall promptly return the Escrow Funds to the
Subscribers without interest or deductions, penalty or expense. The Escrow
Funds
returned to each Subscriber shall be free and clear of any and all claims of
Escrow Agent.
(e) Escrow
Agent shall not be required to pay any uncollected funds or any funds which
are
not available for withdrawal.
(f) If
the
Termination Date or any other date that is a deadline under this Agreement
for
giving Escrow Agent notice or instructions or for the Escrow Agent to take
action is not a Banking Day, then such date shall be changed to the Banking
Day
that immediately precedes such date. A “Banking
Day”
is
any
day other than a Saturday, Sunday or a day that a New York State chartered
bank
is not legally obligated to be opened.
(g) The
Company may reject or cancel any subscription in the Offering in whole or in
part. If payment for any such rejected or canceled subscription has been
delivered to Escrow Agent, the Company will inform Escrow Agent of the rejection
or cancellation, and Escrow Agent upon receiving such notice shall promptly
return such funds to said Subscriber, but in no event prior to those funds
becoming collected and available for withdrawal. In addition, Subscribers are
required to reconfirm their subscription upon receipt of the Form 8-K.
Subscribers who do not reconfirm their subscription will be entitled to a return
of their subscription funds, without interest or deduction, and Escrow Agent
upon receiving written notice from the Company shall promptly return such funds
to such Subscribers.
(h) Notwithstanding
anything to contrary that may be contained herein, any Subscribers may instruct
Escrow Agent to return such Subscriber’s subscriptions at any time prior to a
closing on such Subscriber’s funds in accordance with the terms set forth
herein. Upon receipt of such an instruction, Escrow Agent shall promptly return
such funds to said Subscriber.
3. Acceptance
by Escrow Agent.
Escrow
Agent hereby accepts and agrees to perform its obligations hereunder, provided
that:
(a) Escrow
Agent may act in reliance upon any signature believed by it to be genuine,
and
may assume that any person who has been designated by the Company and any other
person to give any written instructions, notice or receipt, or make any
statements in connection with the provisions hereof has been duly authorized
to
do so. Escrow Agent shall have no duty to make inquiry as to the genuineness,
accuracy or validity of any statements or instructions or any signatures on
statements or instructions. The names and true signatures of each individual
authorized to act singly on behalf of the Company and other persons are stated
in Schedule II, which is attached hereto and made a part hereof. The Company
and
each other person may each remove or add one or more of its authorized signers
stated on Schedule II by notifying the Escrow Agent of such change in accordance
with this Agreement, which notice shall include the true signature for any
new
authorized signatories.
3
(b) Escrow
Agent may act relative hereto in reliance upon advice of counsel in reference
to
any matter connected herewith. The Escrow Agent shall not be liable for any
mistake of fact or error of judgment or law, or for any acts or omissions of
any
kind, unless caused by its willful misconduct or gross negligence.
(c) The
Company and the Investor Representative agree to indemnify and hold Escrow
Agent
harmless from and against any and all claims, losses, costs, liabilities,
damages, suits, demands, judgments or expenses (including but not limited to
reasonable attorney’s fees) claimed against or incurred by Escrow Agent, in good
faith, arising out of or related, directly or indirectly, to this Escrow
Agreement unless caused by a breach of this Escrow Agreement by Escrow Agent
or
by Escrow Agent’s gross negligence or willful misconduct.
(d) In
the
event that Escrow Agent shall be uncertain as to its duties or rights hereunder,
Escrow Agent shall be entitled to (i) refrain from taking any action other
than
to keep safely the Escrow Funds until it shall be directed otherwise by a court
of competent jurisdiction, or (ii) deliver the Escrow Funds to a court of
competent jurisdiction.
(e) Escrow
Agent shall have no duty, responsibility or obligation to interpret or enforce
the terms of any agreement other than Escrow Agent’s obligations hereunder, and
the Escrow Agent shall not be required to make a request that any monies be
delivered to the Escrow Account, it being agreed that the sole duties and
responsibilities of Escrow Agent, to the extent not prohibited by applicable
law, shall be (i) to accept checks or other instruments for the payment of
money
and wire transfers delivered to Escrow Agent for the Escrow Account and deposit
said checks and wire transfers into the non-interest bearing Escrow Account,
and
(ii) to disburse or refrain from disbursing the Escrow Funds as stated above,
provided that the checks received by Escrow Agent have been collected and are
available for withdrawal.
4. Resignation
and Termination of the Escrow Agent.
Escrow
Agent may resign at any time by giving 30 days’ prior written notice of such
resignation to the Company and the Investor Representative. Upon providing
such
notice, Escrow Agent shall have no further obligation hereunder except to hold
the Escrow Funds that it receives until the end of such 30-day period. In such
event, Escrow Agent shall not take any action, other than receiving and
depositing funds, until the Company and the Investor Representative have
designated a banking corporation, trust company, attorney or other person as
successor. Upon receipt of such written designation signed by the Company and
the Investor Representative, the Escrow Agent shall promptly deliver the Escrow
Funds to such successor and shall thereafter have no further obligations
hereunder. If such instructions are not received within 30 days following the
effective date of such resignation, then the Escrow Agent may deposit the Escrow
Funds and any other amounts held by it pursuant to this Agreement with a clerk
of a court of competent jurisdiction pending the appointment of a successor.
In
either case provided for in this paragraph, Escrow Agent shall be relieved
of
all further obligations and released from all liability thereafter arising
with
respect to the Escrow Funds.
4
5. Termination.
The
Company and the Investor Representative may terminate the appointment of the
Escrow Agent hereunder upon written notice specifying the date upon which such
termination shall take effect, which date shall be at least 30 days from the
date of such notice. In the event of such termination, the Company and the
Investor Representative shall, within 30 days of such notice, appoint a
successor escrow agent and the Escrow Agent shall, upon receipt of written
instructions signed by the Company and the Investor Representative turn over
to
such successor escrow agent all of the Escrow Funds; provided, however, that
if
the Company and the Investor Representative fail to appoint a successor escrow
agent within such 30-day period, such termination notice shall be null and
void
and Escrow Agent shall continue to be bound by all of the provisions hereof.
Upon receipt of the Escrow Funds, the successor escrow agent shall become Escrow
Agent hereunder and shall be bound by all of the provisions hereof and Signature
Bank shall be relieved of all further obligations and released from all
liability thereafter arising with respect to the Escrow Funds.
6. Investment.
All
funds received by Escrow Agent will be held only in non-interest bearing bank
accounts at Signature Bank.
7. Compensation.
Escrow
Agent shall be entitled, for the duties to be performed by it hereunder, to
a
fee of $2,500 which fee shall be paid by the Company promptly following the
signing of this Agreement. In addition, the Company shall be obligated to
reimburse Escrow Agent for all costs and expenses incurred in good faith in
connection with the Escrow Account and this Agreement, including reasonable
counsel fees. Neither the modification, cancellation, termination or rescission
of this Agreement, nor the resignation or termination of the Escrow Agent shall
affect the right of Escrow Agent to retain the amount of any fee that has been
paid, or be reimbursed or paid for any fees, costs or expenses that have been
incurred or become due prior to the effective date of any such modification,
cancellation, termination, resignation or rescission. To the extent Escrow
Agent
has incurred any such costs or expenses or any such fees become due prior to
any
closing, Escrow Agent shall advise the Company and the Investor Representative
and the Company and the Investor Representative shall direct all such amounts
to
be paid directly at any such closing.
8. Notices.
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be in writing and shall be deemed to have been duly given
if sent by hand-delivery, by facsimile (followed by first-class mail), by
nationally recognized overnight courier service or by registered or certified
mail, return receipt requested, in each case costs prepaid, to the addresses
set
forth below.
If
to the
Company:
RxElite
Holdings Inc.
0000
X.
Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxx, Chief Executive Officer
5
If
to the
Investor Representative:
_______________
_______________
_______________
If
to
Escrow Agent:
Signature
Bank
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xx. Xxxxxx Xxxx, Group Director and Senior Vice President
9. General.
(a) This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York applicable to agreements made and to be entirely
performed within such State without regard to choice of law
principles.
(b) This
Agreement sets forth the entire agreement and understanding of the parties
in
respect to the matters contained herein and supersedes all prior agreements,
arrangements and understandings relating thereto.
(c) All
of
the terms and conditions of this Agreement shall be binding upon, and inure
to
the benefit of and be enforceable by, the parties hereto.
(d) This
Agreement may be amended, modified, superseded or canceled, and any of the
terms
or conditions hereof may be waived, only by a written instrument executed by
each party hereto or, in the case of a waiver, by the party waiving compliance.
The failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver of any party of any condition, or of the breach of any
term
contained in this Agreement, whether by conduct or otherwise, in any one or
more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement. No party may assign any rights,
duties or obligations hereunder unless all other parties have given their prior
written consent.
(e) If
any
provision included in this Agreement proves to be invalid or unenforceable,
it
shall not affect the validity of the remaining provisions.
(f) This
Agreement and any amendment or modification of 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.
10. Form
of Signature.
The
parties hereto agree to accept a facsimile transmission copy of their respective
actual signatures as evidence of their actual signatures to this Agreement
and
any amendment or termination of this Agreement; provided, however, that each
party who produces a facsimile signature agrees, by the express terms hereof,
to
place, promptly after transmission of his or her signature by fax, a true and
correct original copy of his or her signature in overnight mail to the address
of the other party.
6
[SIGNATURE
PAGE FOLLOWS]
7
IN
WITNESS WHEREOF,
the
parties have duly executed this Agreement as of the date first set forth
above.
| RXELITE HOLDINGS, INC. | ||
|
By:
Name:
Title:
|
||
|
INVESTOR
REPRESENTATIVE
By:
Name:
Title:
|
||
|
SIGNATURE
BANK
By:
Name:
Title:
By:
Name:
Title:
|
8
EXHIBIT
A
Date:
__________________
Signature
Bank
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxx, Group Director and Senior Vice President
Dear
Xx.
Xxxx:
In
accordance with the terms of Section 2(b) of an Escrow Deposit Agreement dated
__________, 2007, by and among RXELITE
HOLDINGS, INC. (the
“Company”),
[ ] (the
“Investor Representative”) and SIGNATURE
BANK (the
“Escrow
Agent”),
the
Company and the Investor Representative hereby notify the Escrow Agent that
the
Termination Date has been extended to __________ __, 2007.
Very
truly yours,
|
RXELITE
HOLDINGS, INC.
By:
Name:
Title:
|
INVESTOR
REPRESENTATIVE
By:
Name:
Title:
|
Schedule
I
OFFERING
DOCUMENTS
Schedule
II
The
Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by the following on behalf of RxElite Holdings, Inc.
and [ ] (the “Investor
Representative”).
RXELITE
HOLDINGS, INC.
|
Name
|
True
Signature
OR
|
INVESTOR
REPRESENTATIVE
|
Name
|
True
Signature
OR
|
