ESCROW DEPOSIT AGREEMENT
AGREEMENT
dated this __ day of ____ 20__, by and between SMARTMETRIC, INC., a Nevada
corporation (the “Company”), having its principal place of business at 00 Xxxx
Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and SIGNATURE BANK (the "Escrow Agent"), a New York
State chartered bank and having an office at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
W I T N E S S E T H:
WHEREAS,
the Company has filed with the Securities and Exchange Commission (“SEC”) a
registration statement (the “Registration Statement”) covering a proposed public
offering (the “Offering”) of Company’s securities (collectively, the
“Securities”, and individually, a “Share”) at a price of $1.50 per Share on a
“best efforts, all or none basis” a minimum of 333,333 shares ($499,999.50)
(“Minimum Amount”) and a maximum of 6,666,6666 shares ($10,000,000) (“Maximum
Amount”); and
WHEREAS,
unless the Company sells the Minimum Amount by ______, which is 90 days from the
date of the prospectus (the “Termination Date”), or if the Offering is extended
by the Company for an additional 90 days until ______ (the “Final Termination
Date”), the Offering will terminate and all funds will be returned to the
Subscribers (hereinafter defined); and
WHEREAS,
the Company desires to establish an escrow account with Escrow Agent into which
the Company shall instruct subscribers to deposit checks and other instruments
for the payment of money made payable to the order of Signature Bank, as Escrow
Agent for SmartMetric, Inc. and Escrow Agent is willing to accept said checks
and other instruments for the payment of money in accordance with the terms
hereinafter set forth; and
WHEREAS,
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,
Company warrants to the Escrow Agent that a copy of the Registration Statement
and all other documents which have been delivered to Subscribers and third
parties which include Escrow Agent’s name and duties, have been attached hereto
as Schedule 1;
NOW,
THEREFORE, IT IS AGREED as follows:
1. Delivery
of Escrow Funds.
(a) (i)
The Company shall cause to be delivered to Escrow Agent checks received from
Subscribers made payable to the order of Signature Bank, as Escrow Agent for
SmartMetric, Inc., along with the name, address and social security number or
taxpayer identification number of the individual or entity making payment
(“Subscriber”). The checks shall be deposited into a non interest-bearing
account at Signature Bank entitled "Signature Bank, as Escrow Agent for
SmartMetric, Inc.” (the "Escrow Account").
(a) (ii)
The Escrow Agent may receive money from the Subscriber by means of wire
transfer, whereby money shall be wired to Signature Bank, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, ABA Number 000000000 for credit to Signature Bank, as
Escrow Agent for SmartMetric, Inc., Account No. ____________. In the event that
the Escrow Agent receives funds directly from the Subscriber, the Company shall
provide the Escrow Agent in writing with the name, address and social security
number or taxpayer identification number of the Subscriber. All such money shall
be deposited into the Escrow Account.
(b) The
collected funds deposited into the Escrow Account are referred to as the "Escrow
Funds.”
(c) The
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 the 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.
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 advises the Escrow Agent in writing that the offering has
been withdrawn, 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, the Escrow
Agent receives written notification, in form of Exhibit A, attached hereto and
made a part hereof, and signed by the Company, stating that the Termination Date
has been extended to, or any date prior to, the Final Termination Date, the date
shall be so extended.
(c) Provided
that the Escrow Agent does not receive the notice stated in (a) above and there
is at least the Minimum Amount deposited into the Escrow Account on or prior to
the Termination Date or the Final Termination Date or such other date that is
after the Termination Date (if Escrow Agent has, prior to the Termination Date,
received Exhibit A), the Escrow Agent shall, upon receipt of written
instructions, in the form of Exhibit B or in form and substance satisfactory to
the Escrow Agent, received from the Company, pay the Escrow Funds in accordance
with such written instructions, such payment or payments to be made by wire
transfer or bank check.
(d) If by
3:00 P.M. (local New York City time) on the Termination Date, or in the event
the Escrow Agent has received Exhibit A, in accordance with (b) above, on the
Final Termination Date, the Escrow Agent has not received written instructions
from the Company regarding the disbursement of the Escrow Funds or there is a
balance in the Escrow Account of less than the Minimum Amount, the Escrow Agent
shall promptly return the Escrow Funds to the Subscribers.
(e) The
Escrow Agent shall not be required to pay any uncollected funds or any funds
that are not available for withdrawal.
3. Acceptance
by Escrow Agent. The
Escrow Agent hereby accepts and agrees to perform its obligations hereunder,
provided that:
(a) The
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
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 is stated in Schedule A, which is attached
hereto and made a part hereof.
(b) The
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 agrees to indemnify and hold the Escrow Agent harmless from and against
any and all claims, losses, costs, liabilities, damages, suits, demands,
judgments or expenses (including but not limited to attorney's fees) claimed
against or incurred by Escrow Agent arising out of or related, directly or
indirectly, to the Escrow Agreement.
(d) In the
event that the Escrow Agent shall be uncertain as to its duties or rights
hereunder, the Escrow Agent shall, to the extent not prohibited by applicable
law, 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) The
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 the 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 the 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 the Escrow Agent have been
collected and are available for withdrawal.
4. Resignation
and Termination of the Escrow Agent. The
Escrow Agent may resign at any time by giving 30 days' notice of such
resignation to the Company. Upon providing such notice, the Escrow Agent shall
have no further obligation hereunder except to hold the Escrow Funds that it has
received as of the date on which it provided the notice of resignation as
depositary. In such event, the Escrow Agent shall not take any action until the
Company has designated a banking corporation, trust company, attorney or other
person as successor. Upon receipt of such written instructions signed by the
Company, the Escrow Agent shall promptly deliver the Escrow Funds, net of any
outstanding charges, 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, the
Escrow Agent shall be relieved of all further obligations and released from all
liability thereafter arising with respect to the Escrow Funds and all interest
earned thereon.
5. Termination. The
Company 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 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, turn over to such successor escrow agent all
of the Escrow Funds; provided, however, that if the Company fails to appoint a
successor escrow agent within such 30-day period, such termination notice shall
be null and void and the 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 the Escrow Agent hereunder and shall be bound by all of the
provisions hereof and the Escrow Agent 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 the Escrow Agent shall be invested 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 $1,500 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 reasonable costs and expenses incurred in
connection with this Agreement, including reasonable counsel fees other than the
cost and expense attributable to the preparation and execution of this
Agreement. No modification, cancellation or rescission of this Agreement or
resignation or termination of the Escrow Agent shall affect the right of Escrow
Agent to retain the amount of any fee which has been paid prior to the effective
date of any such modification, cancellation, rescission, resignation or
termination. If the Company fails to pay such compensation or reimbursement,
then the Company shall incude such payment to the Escrow Agent on Exhibit B,
which provides disbursemnent instructions in accordance with paragraph
2(c).
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 nationally recognized overnight courier service or
by prepaid registered or certified mail, return receipt requested, to the
addresses set forth below.
If to the
Company:
00 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attention:
_____________________
Fax:
______________
If to
Escrow Agent:
Signature
Bank
00
Xxxxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxx
X. Xxxxx, Group Director & Senior Vice President
Fax:
000-000-0000
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 modification 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.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first set forth above.
By:
_______________________
Name:
Title:
SIGNATURE
BANK
By:
_____________________________
Name:
Title:
By:
_____________________________
Name:
Title:
Exhibit
A
Date:
__________________
Signature
Bank
00
Xxxxxxxx
Xxx Xxxx,
XX 00000
Attention:
Xxxxx X. Xxxxx,
Group
Director & Senior Vice President
Dear Xx.
Xxxxx:
In
accordance with the terms of Section 2(b) of an Escrow Deposit Agreement dated
___ _______, by and between SmartMetric, Inc. (the “Company”) and Signature Bank
(the “Escrow Agent”), the Company hereby notifies the Escrow Agent that the
Termination Date has been extended to __________ __, 20__.
Very
truly yours,
By:_____________
Name:
Title:
Exhibit
B
FORM OF ESCROW RELEASE NOTICE
Date:
SIGNATURE
BANK
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
X.X. 00000
Attn:
____________
Dear
________:
In
accordance with the terms of paragraph 2(c) of an Escrow Deposit Agreement dated
as of ________ __, 2004 (the "Escrow Agreement"), by and between SmartMetric,
Inc. (the "Company") and Signature Bank (the "Escrow Agent"), the Company hereby
notifies the Escrow Agent that the ________ closing will be held on ___________
for gross proceeds of $_________.
PLEASE
DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions
attached):
____________________________: $
________________________: $
________________________: $
Very
truly yours,
SmartMetric,
Inc.
By:
__________________________________
Name:
_____________
Title:
_____________
Schedule
A
The
Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by any one of the following on behalf of SmartMetric,
Inc.
|
Name |
True
Signature |
|
_____________________________________ |
______________________________________
|
|
____________________________________ |
______________________________________ |
