EXHIBIT 10.12
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of this 9th day of December, 1998 by and among
PTN Media, Inc., a Delaware Corporation (the "Corporation"), HORNBLOWER & WEEKS,
INC., a Georgia Corporation ("HORNBLOWER"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, a New York Corporation (the "Agent").
WITNESSETH :
WHEREAS, the Corporation is offering 400,000 shares of common stock
(the "Offering"), pursuant to a Prospectus dated September 18, 1998 as amended
or supplemented from time to time (the "Prospectus") in accordance with the
registration provisions of the Securities Act of 1933;
WHEREAS, the Prospectus provides that:
a. The Offering will commence immediately and will continue until the
earlier to occur of (i) the sale of all the Offering or (ii) January 31, 1999
(the "Offering Period):
b. When Hornblower & Weeks, Inc. and the Corporation agree, the
Corporation will conduct a closing (the "Closing") on the sale of such Shares.
Subsequent closings may be held at the discretion of the Corporation with
respect to additional sales of Shares up to the Maximum Offering during the
Offering Period, any of which Closings may be held up to fourteen (14) days
thereafter;
c. Tendered subscriptions for all Shares shall be subject to
acceptance by the Corporation, which subscriptions may be rejected in the sole
discretion of the Corporation and Hornblower acting in good faith, or for any
other reason in the sole discretion of either the Corporation or Hornblower;
and
d. Proceeds from the sale of the Shares shall be held in escrow by the
Agent pending a Closing on the Shares, and disbursed upon such Closing; and if
no such Closing is conducted, then such funds shall be returned to the
subscribers, without interest to the extent obtained by the Corporation, after
the termination of the Offering Period (the "Termination Date").
NOW, THEREFORE, in consideration of the mutual promises herein
contained and intending to be legally bound, the parties hereby agree as
follows:
1. Appointment of Agent. The Corporation hereby appoints American Stock Transfer
& Trust Company of New York as escrow agent in accordance with the terms and
condition set forth herein, and the Agent hereby accepts such appointment.
2. Delivery of Subscription Proceeds. All checks, drafts, or other instruments
received from subscribers for the Shares will be delivered by the Corporation to
the Agent, made payable to "American Stock Transfer & Trust Company", Special
Account Re: PTN Media, Inc., as to each subscriber, his name, address, social
security number or employer identification number, number of Shares subscribed
for, and the amount paid in connection with such subscription. The Agent is
hereby empowered on behalf of the Corporation to endorse and collect all checks,
drafts, or other instruments received on account of subscriptions for Shares.
3. Agent to Hold and Disburse Funds. The Agent will hold and disburse all funds
received by it pursuant to the terms of this Escrow Agreement, as follows;
3.1 In the event that prior to the Termination Date the Agent has received funds
(and such funds are cleared within fourteen (14) days of the Termination Date)
and Hornblower and the Corporation determine to hold a closing, on the date of
such Closing (the "Closing Date"), pursuant to written instructions signed by
the Corporation and Hornblower; pay to the Corporation, and/or to any other
person designated in such instruction, the proceeds received by the Agent from
the sale of such Shares provided that the Corporation's counsel has confirmed in
writing that a closing has taken place and that all conditions relating to the
release of the funds have been met. Prior to the Termination Date, if the Agent
receives any funds from the sale of Shares, it will promptly, upon written
instructions signed by the Corporation and Hornblower, pay to the Corporation,
and/or to any other person designated in such instruction, the proceeds received
by the Agent from the sale of such Shares
3.2 All funds received by the Agent pursuant to the terms of this Escrow
Agreement may be held in a bank money market account.
3.3 In the event that by the Termination Date the Agent still possesses funds
(and such funds are cleared within fourteen (14) days of the Termination Date),
and no closing on such funds has occurred, then the Agent shall, within 15
business days of the Termination date, return to the subscribers for the Shares
the respective amounts which such subscribers have paid, without interest.
3.4 If no written instructions are received by the Agent from the Corporation
and Hornblower relative to the admission of one or more subscribers to the
Corporation within 14 days of the Termination Date, the Agent will return all
subscriber funds to the subscribers, for which no written instructions were
received, without interest.
3.5 If the Corporation or Hornblower reject any subscription for which the Agent
has already collected funds, the Agent shall, within two (2) business days,
issue a refund check to the rejected subscriber pursuant to written instructions
signed by the Corporation and Hornblower. If the Corporation or Hornblower
rejects any subscription for which the Agent has not yet received collected
funds but has submitted the subscriber's check for collection, the Agent shall
within two (2) business days, issue a check in the amount of the subscriber's
check to the rejected subscriber after the Agent has cleared such funds. If the
Agent has not yet submitted a rejected subscriber's check for collection, the
Agent shall promptly remit the subscriber's check directly to the subscriber.
4. Exculpation and Indemnification of Agent:
4.1 The Agent shall have no duties or responsibilities other than those
expressly set forth herein. The Agent shall have no duty to enforce any
obligation of any person to make any payment or delivery, or to direct or cause
any payment or delivery to be made, or to enforce any obligation of any person
to perform any other act. The Agent shall be under no liability to the other
parties hereto or to anyone else by reason of any failure on the part of any
party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person's obligations under such
document. Except for amendments to this Agreement referred to below, and except
for instructions given to the Agent by the Corporation relating to the escrow
deposit under this Agreement, the Agent shall not be obligated to recognize any
agreement between any and all of the persons referred to herein, notwithstanding
that references thereto may be made herein and whether or not its has knowledge
thereof.
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4.2 The Agent shall not be liable to the Corporation or to anyone else for any
action taken or omitted by it, or any action suffered by it to be taken or
omitted, in good faith and in the exercise of its own best judgment. The Agent
may rely conclusively and shall be protected in acting upon any order, notice,
demand, certificate, opinion or advice of counsel (including counsel chosen by
the Agent), statement, instrument, report or other paper or document (not only
as to its due execution and the validity and effectiveness of its provisions,
but also as to the truth and acceptability of any information therein
contained), which is believed by the Agent to be genuine and to be signed or
presented by the proper person or persons. The Agent shall not be bound by any
notice or demand, or any waiver, modification, termination or rescission of this
Agreement or any of the terms thereof, unless evidenced by a writing delivered
to the Agent signed by the proper party and, if the duties or rights of the
Agent are affected, unless it shall give its prior written consent thereto.
4.3 The Agent shall not be responsible for the sufficiency or accuracy of the
form of, or the execution, validity, value or genuineness of, any document or
property received, held or delivered by it hereunder, or of any signature or
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Agent be responsible or liable to the other
parties hereto or to anyone else in any respect on account of the identity,
authority or rights of the persons executing or delivering or purporting to
execute or deliver any document or property of this Agreement. The Agent shall
have no responsibility with respect of the use or application of any funds or
other property paid or delivered by the Agent pursuant to the provisions hereof.
The Agent shall not be liable to the Corporation or to anyone else for any loss
which may be incurred by reason of any investment of any monies which it holds
hereunder provided the Agent has complied with the provisions of Section 3.2
hereunder.
4.4 The Agent shall have the right to assume in the absence of written notice to
the contrary from the proper person or persons that a fact or an event by reason
of which an action would or might be taken by the Agent does not exist or has
not occurred, without any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, in reliance upon such
assumption.
4.5 The Agent will be indemnified and held harmless by the Corporation from and
against any and all expenses, including reasonable counsel fees and
disbursements, or loss claim, or in connection with any claim or demand, which
in any way, directly or indirectly arises out of or relates to this Agreement,
the services of the Agent hereunder, the monies or other property held by it
hereunder.
4.6 For the purposes hereof, the term "expense or loss" shall include all
amounts paid or payable to satisfy any claim, demand or liability, or in
settlement of any claim, demand, action, suit or proceeding settled with express
written consent of Agent, and all costs and expenses, including, but not limited
to, reasonable counsel fees and disbursements, paid or incurred in
investigating, or defending against any such claim, demand, action, suit or
proceeding.
5. Termination of Agreement and Resignation of Agent.
5.1 The Escrow Agreement shall terminate on the final disposition of the monies
and property held in escrow hereunder, provided that the rights of the Agent and
the obligations of the other parties hereto under Sections 4 and 7 shall survive
the termination hereof.
5.2 The Agent may resign at any time and be discharged from its duties as Agent
hereunder by giving the Corporation at least thirty (30) days written notice
thereof. As soon as practicable after its resignation, the Agent shall turn over
to a successor escrow agent appointed by the Corporation all monies and property
held hereunder (less such amount as the Agent is entitled to retain pursuant to
Section 7) upon presentation of the document appointing the new escrow agent and
its acceptance thereof. If no new Agent is so appointed within
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the sixty (60)day period following such notice of resignation, the Agent
may deposit the aforesaid monies and property with any court it deems
appropriate.
6. Form of Payments by Agent.
6.1 Any payments by the Agent to subscribers or to persons other than the
Corporation pursuant to the terms of this Agreement shall be made by check,
payable to the order of each respective subscriber or other person.
6.2 All amounts referred to herein are expressed in United States Dollars and
all payments by the Agent shall be made in such dollars.
7. Compensation of Agent. For services rendered, the Agent shall receive as
compensation all interest income earned on the funds received pursuant to this
Agreement. The Agent shall also be entitled to reimbursement from the
Corporation for all expenses paid or incurred by it in the administration of its
duties hereunder, including, but not limited to, all counsel, advisors' and
Agents' fees and disbursements and all reasonable taxes or other governmental
charges. It is anticipated that such disbursements shall not exceed $500 barring
any unforeseen circumstances.
8. Notices. All notices, requests, demands and other communications provided for
herein shall be in writing, shall be delivered by hand or by first-class mail,
shall be deemed given when received and shall be addressed to the parties hereto
at their respective addresses listed below or to such other persons or addressed
as the relevant party shall designate as to itself from time to time in writing
delivered in like manner.
If to the Corporation:
PTN Media, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
If to the Agent:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Tel.#: 000-000-0000
Fax.#: 000-000-0000
If to Hornblower:
Hornblower & Weeks, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Tel.#: 000-000-0000
Fax.#: 000-000-0000
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9. Further Assurances. From time to time on and after the date hereof, the
Corporation shall deliver or cause to be delivered to the Agent such further
documents and instruments and shall do and cause to be done such further acts as
the Agent shall reasonably request (it being understood that the Agent shall
have no obligation to make any such requests) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure itself that it is protected in acting hereunder.
10. Consent to Service of Process: The Corporation hereby irrevocably consents
to the jurisdiction of the courts of the State of New York and of any federal
court located in such State in connection with any action, suit or other
proceeding arising out of or relating to this Agreement or any action taken or
omitted hereunder, and waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made by certified or
registered mail directed to the Corporation at its address for purposes of
notices hereunder.
11. Miscellaneous.
11.1 If for any reason the escrow deposit is not received by the Agent as
contemplated herein, the Corporation shall reimburse the Agent for all expenses,
including reasonable counsel fees and disbursements paid or incurred by it in
making preparations for providing the services contemplated hereby in an amount
not to exceed $500.
11.2 This Agreement shall be construed without regard to any presumption or
other rule requiring construction against the party causing such instrument to
be drafted. The terms "hereby", "hereto", "hereunder", and any similar terms, as
used in this Agreement refer to the Agreement in its entirety and not only to
the particular portion of this Agreement where term is used. The word "person"
shall mean any natural person, partnership, Corporation, government and any
other form of business or legal entity. All words or terms used in this
Agreement, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require. This Agreement shall not be admissible in evidence to construe the
provisions of any prior agreements. The rule of ejusdem generis shall not be
applicable herein to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
11.3 This Agreement and the rights and obligations hereunder of the Corporation
may be assigned by the Corporation only to a successor to the Corporation's
entire business. This Agreement and the rights and obligations hereunder of the
Agent may be assigned by the Agent only to a successor to its entire business.
This Agreement shall be binding upon and inure to the benefit of each party's
respective successors, heirs and permitted assigns. No other person shall
acquire or have any rights under or by virtue of this Agreement. This Agreement
may not be changed orally or modified, amended or supplemented without an
express written agreement executed by the Agent, the Corporation and Hornblower.
This Agreement is intended to be for the sole benefit of the parties hereto, and
(subject to the provisions of this Section 11.3) their respective successors,
heirs and assigns, and none of the provisions of this Agreement are intended to
be, nor shall they be construed to be, for the benefit of any third person.
11.4 This Agreement Shall be governed by and construed in accordance with the
internal laws of the State of New York. The representations and warranties
contained in this Agreement shall survive the executive and delivery hereof and
any investigations made by any party. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect any of the
terms hereof.
12. Executions in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which
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shall together constitute one of the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signature of all the parties reflected hereon as the
signatures.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on
the day and year first above written.
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
PTN MEDIA, INC.
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xx. Xxxxx Xxxxxx
Title: President
HORNBLOWER & WEEKS, INCORPORATED
By: /s/ Xxxx Xxxxxxxxx
------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer
