EXHIBIT 4.3
ESCROW AGREEMENT
Letter of Escrow Instructions
Law Offices of Xxxxxxx X. Xx
00-00 000xx Xxxxxx, #0X
Xxxxxx Xxxxx, XX 00000
Re: Greenway Technologies Corp.- Rule 419 escrow,
This Letter of Escrow Instructions to Law Offices of Xxxxxxx X. Xx,
hereinafter called Escrow Agent, shall immediately and automatically become
operative and effective upon the commencement of a public distribution of
certain securities of Greenway Technologies Corp. (the "Company") which is
described more fully in the Company's Form SB-2 Registration Statement under
the Securities Act of 1933 (Registration No. 333-_____).
The Company will deliver the papers, stock certificates, money and other
property hereinafter described to the Escrow Agent. All such papers, stock
certificates, money and other property are to be held and disposed of by the
Escrow Agent in accordance with the following instructions and upon the terms
and conditions hereinafter set forth, to which the undersigned agree:
ARTICLE 1. ESCROW PURPOSE
1.1 This Escrow Agreement describes clearing and holding escrow that will
be established by Greenway Technologies Corp. (the "Company") and all current
stockholders of the Company (the "Selling Stockholders") in accordance with
the requirements of Securities and Exchange Commission Rule 419, adopted
pursuant to the provisions of Section 7(b) of the Securities Act of 1933. The
Company, the Selling Stockholders and the Escrow Agent are the only parties to
this Escrow Agreement.
1.2 In connection with the distribution described in the Company's Form
SB-2 Registration Statement (the "Distribution"), the Selling Stockholders
intend to transfer certain shares of the Company's $.0001 par value common
stock (the "Common Stock") to certain classes of transferees described in the
definitive prospectus filed as part of the Company's Form SB-2 Registration
Statement.
1.3 The purpose of the escrow shall be to hold and ultimately distribute
the following stock certificates in accordance with the terms of Sections 4
through 6 of this Escrow Agreement,
(a) Stock certificates evidencing the ownership of 300,000 presently
issued and outstanding shares of Common Stock (the "Gift Shares") that will
be transferred to certain individuals and organizations selected by the Selling
Stockholders (the "Recipients"), registered in the names of the Recipients
and delivered to the Escrow Agent upon issuance; and
(b) Stock certificates evidencing the ownership of up to 1,700,000
presently issued and outstanding shares of Common Stock (the "Founders'
Shares") that have been registered for resale by the Selling Stockholders.
1.4 This Escrow Agreement constitutes an essential element of the Company's
proposed public offering of securities and is required by Securities and
Exchange Commission Rule 419. The parties to this Escrow Agreement shall, at
all times, conduct all of their activities relating to the Rule 419 escrow
created hereby in strict compliance with the letter and the spirit of Rule 419.
In the event of any inconsistency between the terms of this Escrow Agreement
and the requirements of Rule 419, the requirements of Rule 419 shall have
priority.
ARTICLE 2. ESCROW DEPOSITS
2.1 The Escrow Agent shall accept deposits to the Escrow Account from time
to time during the entire term of this Agreement. All stock certificates
delivered to the Escrow Agent shall, upon delivery, automatically become
subject to the provisions of this Escrow Agreement.
2.2 The initial Escrow Deposits will be in the form of individual stock
certificates representing the ownership of Gift Shares. All stock certificates
representing Gift Shares shall be registered in the name of individual
Recipient and contain complete information respecting the Recipient's name,
mailing address and taxpayer identification number. Upon completion of the
Gift Share Distribution, the Selling Stockholders shall jointly execute and
deliver to the Escrow Agent a schedule that identifies the specific Gift
Share transfers made by each Selling Stockholder. When the Escrow Agent
receives the stock certificates and other information specified in this
Paragraph, it shall promptly examine the stock certificates to confirm that
the stockholder information printed on the stock certificates complies in
all particulars with the stockholder information in the supporting schedules.
The Company shall promptly correct any errors, omissions or inconsistencies
noted by the Escrow Agent.
2.3 Additional Escrow Deposits in the form of individual stock
certificates representing the ownership of Founders' Shares may be made
from time to time during the term of this Agreement. When any of the
Selling Stockholders enter into an agreement to sell all or any part of
the Founders' Shares, the Selling Stockholder shall promptly deliver stock
certificates representing the ownership of the transferred Founders'
Shares to the Escrow Agent. All such certificates shall be registered in
the name of the Selling Stockholder and duly endorsed for transfer to the
purchaser. All certificates for Founders' Shares delivered to the Escrow
Agent shall be accompanied by a copy of the associated stock purchase
agreement and such additional documentation as the Company, the Selling
Stockholder and the Escrow Agent deem necessary or desirable to comply with
the requirements of Rule 419, or otherwise provide for the efficient
performance of the Escrow Agent's duties hereunder.
2.4 All stock certificates delivered to the Escrow Agent pursuant to the
provisions of this Section 2 shall be held and disposed of by Escrow Agent
in accordance with the following instructions and upon the terms and
conditions set forth herein.
ARTICLE 3. TERMINATION AND DISBURSEMENTS
3.1 If the Company has not negotiated a business combination, filed a
post-effective amendment to its registration statement, successfully completed
a reconfirmation offering meeting the requirements of Rule 419 and closed on
the business combination agreement within 18 months after the effective date
of its registration statement (the "Final Termination Date"), the Escrow Agent
shall:
(a) Return all stock certificates representing Gift Shares to the
Selling Stockholders; and
(b) Return all stock certificates representing Founders' Shares to
the Selling Stockholders.
When all stock certificates have been returned to the Selling
Stockholders in accordance with the provisions of this Paragraph 3.1, this
Escrow Agreement will terminate.
3.2 If the Company negotiates a business combination, files a post-effective
amendment to its registration statement and conducts a reconfirmation offering
meeting the requirements of Rule 419; and the terms of such offering are not
accepted by the number of Gift Share Recipients specified in the definitive
prospectus included in the Company's post-effective amendment, the Company
shall immediately notify the Escrow Agent that the terms of its reconfirmation
offering have been rejected by the Gift Share Recipients and the Escrow Agent
shall:
(a) Return all stock certificates representing Gift Shares to the
Selling Stockholders; and
(b) Return all stock certificates representing Founders' Shares to
the Selling Stockholders.
When all stock certificates have been returned to the Selling
Stockholders in accordance with the provisions this Paragraph 3.2, this Escrow
Agreement will terminate.
3.3 If the Company negotiates a business combination, files a post-effective
amendment to its registration statement and completes a reconfirmation offering
meeting the requirements of Rule 419 on or before the Final Termination Date,
the Company shall promptly deliver, or cause to be delivered, to the Escrow
Agent:
(a) A copy of the definitive prospectus included in its post-effective
amendment and used in connection with the reconfirmation offering;
(b) A schedule setting forth the identity of each Gift Share Recipient
who has approved the terms of the reconfirmation offering in writing; and
(c) A schedule setting forth the identity of each Gift Share Recipient
who has rejected the terms of the reconfirmation offering in writing or
otherwise failed to execute a reconfirmation agreement within the time limits
specified in the definitive prospectus.
Upon receipt of the foregoing documentation, the Escrow Agent shall return
to the Selling Stockholders all stock certificates registered in the names of
Gift Share Recipients who received Gift Shares in connection with the
Distribution and ultimately refused or failed to execute a reconfirmation
agreement within the time limits specified in the definitive prospectus
3.4 If the Company satisfies the conditions of Paragraph 3.3, actually closes
the business combination described in the post-effective amendment to its
registration statement and delivers to the Escrow Agent a Certificate signed
by the President and Secretary that all conditions precedent to the final
release of stock certificates set forth in Rule 419(e)(3) have been satisfied,
the Escrow Agent shall:
(a) Mail stock certificates to each Gift Share Recipient who received
Common Stock in connection with the Distribution and subsequently executed a
reconfirmation agreement; and
(b) Deliver stock certificates for the Founders' Shares to the closing
agents specified in the associated stock purchase agreements; but only if a
closing agent was specified in the purchase agreement delivered to the Escrow
Agent pursuant to Paragraph 2.3 of this agreement. In the event that a closing
agent was not so specified, the Escrow Agent shall retain possession of the
stock certificates pending its receipt of joint instructions from the Selling
Stockholder and purchaser.
When all stock certificates and all Escrow Funds deposited with the
Escrow Agent have been disbursed in accordance with the provisions of this
Paragraph 3.4, this Escrow Agreement will terminate.
ARTICLE 4. NO MODIFICATION
4.1 After the effective date of the Company's Registration Statement, these
instructions shall not be modified, rescinded or amended without the written
consent of each Gift Share Recipient and each purchaser of Founders' Shares who
may be adversely affected by such modification, rescission or amendment.
ARTICLE 5. GENERAL PROVISIONS
5.1 All parties understand and agree that Escrow Agent is not a principal,
participant, or beneficiary of the underlying transaction that necessitates
this Escrow Agreement. The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely
and shall be protected in acting or refraining from acting on any instrument
believed by it to be genuine and to have been signed or presented by the
proper party or parties, their officers, representatives or agents. The Escrow
Agent shall not be liable for any action taken or omitted by it in good faith
and believed by it to be authorized hereby, nor for action taken or omitted
by it in accordance with the advice of its counsel. Escrow Agent shall be
responsible for holding, investing and disbursing the Escrowed Assets pursuant
to the Escrow Agreement, but in no event shall be liable for any exemplary or
consequential damages in excess of Escrow Agent's fee hereunder.
5.2 Unless otherwise provided herein, the Escrow Agent shall accept the
Escrowed Assets pursuant to the Escrow Agreement and invest such assets at
the written request of the parties hereto specifying with particularity or
by accompanying schedule the type and identity of the assets to be deposited.
Acceptance of the Escrowed Assets shall be communicated by Escrow Agent to
parties by account statement or otherwise in writing as soon as practicable
after receipt, and any discrepancies shall be noted to Escrow Agent by the
parties in writing within forty five (45) days of receiving such
communication. Failure to note any discrepancies shall be deemed confirmation
of the description of Escrowed Assets listed on the report regardless of any
variations from the original schedule. Any request to invest assets shall be
in writing or facsimile and specify the type of investment to be made, the
maturity date, and the principal amount to be invested. The Escrow Agent shall
not be liable for delay or failure to invest funds without written instructions
or for losses on any investments made by it pursuant to and in compliance with
such instructions.
5.3 Should any controversy arise between the undersigned with respect to
this Escrow Agreement or with respect to the right to receive the Escrowed
Assets, Escrow Agent shall have the right to consult counsel and/or to
institute a xxxx of interpleader in any court of competent jurisdiction to
determine the rights of the parties. In the event it is a party to any
dispute, Escrow Agent shall have the additional right to refer such
controversy to binding arbitration. Should such actions be necessary, or
should Escrow Agent become involved in litigation in any manner whatsoever
on account of this Escrow Agreement of the Escrowed Assets made hereunder,
the undersigned hereby bind and obligate themselves, their heirs and legal
representatives to pay Escrow Agent, in addition to any charge made hereunder
for acting as Escrow Agent, reasonable attorney's fees incurred by Escrow
Agent, and any other disbursements, expenses, losses, costs and damages in
connection with and resulting from such actions.
5.4 The Escrow Agent shall have no liability under, or duty to inquire
beyond the terms and provisions of the Escrow Agreement, and it is agreed
that its duties are purely ministerial in nature, and that the Escrow Agent
shall incur no liability whatsoever except for willful misconduct or gross
negligence so long as it has acted in good faith. The Escrow Agent shall not
be bound by any modification, amendment, termination, cancellation, rescission
or suppression of this Escrow Agreement unless the same shall be in writing
and signed by all of the other parties hereto and, if its duties as Escrow
Agent hereunder are affected thereby, unless it shall have given prior
written consent thereto.
5.5 The Escrow Agent may at any time resign hereunder by giving written
notice of its resignation to the other parties hereto, at their address set
forth herein, at least ten (10) days prior to the date specified for such
resignation to take effect, and upon the effective date of such resignation,
the Escrowed Assets hereunder shall be delivered to such person as may be
designated in writing by the appropriate parties executing this Escrow
Agreement, whereupon all the Escrow Agent's obligations hereunder shall
cease and terminate. The Escrow Agent's sole responsibility until such
termination shall be to keep safely all Escrowed Assets and to deliver the
same to a person designated by the appropriate parties executing this
Escrow Agreement or in accordance with the directions of a final order or
judgment of a court of competent jurisdiction.
5.6 The parties agree to indemnify, defend and hold the Escrow Agent
harmless from and against any and all loss, damage, tax, liability and
expense that may be incurred by the Escrow Agent arising out of or in
connection with its acceptance or appointments as Escrow Agent hereunder,
including costs and expenses of defending itself against any claim or
liability in connection with its performance hereunder.
5.7 The parties jointly and severally agree to pay to the Escrow
Agent its fees for the services rendered pursuant to the provisions of this
Escrow Agreement and will reimburse the Escrow Agent for reasonable
expenses, including reasonable attorney's fees incurred in connection with
the negotiations, drafting and performance of such services. Except as
otherwise noted, this fee covers account acceptance, set up and termination
expenses; plus usual and customary related administrative services such as
safekeeping, investment and payment of funds specified herein or in the
exhibits attached. Activities requiring excessive administrator time or
out-of-pocket expenses such as optional substitution of collateral or
securities shall be deemed extraordinary expenses for which related costs,
transaction charges, and additional fees will be billed at Escrow Agent's
standard charges for such items. A fee schedule has been provided to all
parties to this Escrow.
5.8 Escrow Agent is hereby given a lien on all Escrowed Assets for all
indebtedness that may become owing to Escrow Agent hereunder, which lien may
be enforced by Escrow Agent by setoff or appropriate foreclosure proceedings.
5.9 The parties warrant to the Escrow Agent that there are no Federal,
State or local tax liability or filing requirements whatsoever concerning
the Escrow Agent's actions contemplated hereunder and warrant and represent
to the Escrow Agent that the Escrow Agent has no duty to withhold or file any
report of any tax liability under any Federal of State income tax, local or
State property tax, local or State sales or use taxes, or any other tax by
any taxing authority. The parties hereto agree to jointly and severally
indemnify the Escrow Agent fully for any tax liability, penalties or interest
incurred by the Escrow Agent arising hereunder and agree to pay in full any
such tax liability together with penalty and interest if any tax liability
is ultimately assessed against the Escrow Agent for any reason as a result
of its action hereunder (except for the Escrow Agent's individual income tax
liability arising from its income fees).
5.10 The Escrow Agent shall have no liability for loss arising from any
cause beyond its control, including, but not limited to, the following: (a)
the act, failure or neglect of any agent or correspondent selected by the
Escrow Agent or the parties hereto; (b) any delay, error, omission or default
connected with the remittance of funds; (c) any delay, error, omission or
default of any mail, telegraph, cable or wireless agency or operator; (d)
the acts or edicts of any government or governmental agency or other group
or entity exercising governmental powers.
5.11 This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The parties hereto
expressly waive such duties and liabilities, it being their intent to create
solely an agency relationship and hold the Escrow Agent liable only in the
event of its gross negligence or willful misconduct in order to obtain the
lower fee schedule rates as specifically negotiated with the Escrow Agent.
ARTICLE 6. NOTICES
6.1 All notices, demands, requests or payments provided for or given
pursuant to this Escrow must be in writing or facsimile. All such notices
shall be deemed to have been properly given or served by personal delivery
or by depositing the same in the United States mail addressed to the person
entitled to receive such notice at the address set forth below.
To the Company: To the Escrow Agent:
Miao Xxxx Xxxxx, President Law Offices of Xxxxxxx X. Xx
Xxxxxxxx Technologies Corp. 00-00 000xx Xxxxxx, #0X
19 Lane 000, Xxxx Xxxxx Xxxx Xxxxxx Xxxxx, XX 00000
Xxxxxxxx 000000, Xxxxx U.S.A.
6.2 All notices shall be effective when received.
Approved and accepted by the Parties this 9th day of December 2002.
Greenway Technologies Corp. Law Offices of Xxxxxxx X. Xx
By: MIAO XXXX XXXXX By: XXXXXXX X. XX
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Miao Xxxx Xxxxx, President Xxxxxxx X. Xx, Esq.
