Exhibit 10.15
[FORM OF ESCROW AGREEMENT]
ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of this ______ day of ________ 2003 ("Escrow
Agreement") is by and among Sardy House, LLC, a Colorado limited liability
company ("Sardy House"), North and South Aspen, L.L.C., a Colorado limited
liability company which owns all 25 of the outstanding limited liability company
membership interests of Sardy House ("North South"), X. X. Xxxxxxx & Company, a
Colorado corporation ("Underwriter"), and Computershare Trust Company, Inc., a
Colorado corporation, as Escrow Agent ("Escrow Agent"). Collectively, Sardy
House and North South are hereinafter referred to as the "Issuer."
BACKGROUND
A. The Issuer is conducting a public offering through the Underwriter of up
to the total of 25 limited liability company membership interests of Sardy House
("Membership Interests") held by North South, which constitute all of the issued
and outstanding Membership Interests.
B. The offering is being conducted on a "best efforts, all or none" basis
as to a minimum offering of seven (7) Membership Interests necessary to allow
for complete repayment of the bank debt of up to $4,350,000 on the Sardy House
property, the sale of which seven (7) Membership Interests must result in total
proceeds of a minimum of $4,665,000 before any commissions and referral fees and
excluding accrued interest on the bank debt to be repaid, and on a "best
efforts" basis as to the remaining 18 Membership Interests up to the maximum
offering of 25 Membership Interests. If a minimum of seven (7) Membership
Interests are not sold by ________, 2004, subject to extension for up to an
additional 30 days, the offering will be terminated and all money received shall
be returned to investors with interest within five (5) business days. Until the
minimum offering is achieved, all funds received from investors shall be
deposited into an interest bearing escrow account, with interest to be credited
toward the final purchase price.
C. In connection with the offering, Sardy House has filed a Registration
Statement on Form SB-2 (Registration No. 333-105521) (together with all
amendments thereto, the "Registration Statement") with the Securities and
Exchange Commission (the "SEC").
D. Persons who purchase Membership Interests in the offering will be
required to do so pursuant to a Subscription Agreement, the form of which is
attached as Exhibit A to this Escrow Agreement (the "Subscription Agreement")
(such persons who purchase the Membership Interests pursuant to the Subscription
Agreement are hereinafter referred to as the "Subscribers").
E. In accordance with the Subscription Agreement, the Subscribers will be
required to submit full payment for their investment in the Membership Interests
at the time they return the executed Subscription Agreement to the Issuer or
Underwriter.
F. The offering price is $750,000 per Membership Interest. This price may
be changed at any time after _____________, 2003. If the offering price is
decreased it will be decreased for all purchasers, and if the offering price is
increased it will be increased for all purchasers who have not as of that date
executed Subscription Agreements and submitted Subscription Funds.
G. Issuer and Underwriter desire to establish an escrow account with Escrow
Agent for the deposit of funds received from Subscribers in order to comply with
Rule 10b-9 and Rule 15c2-4 of the rules promulgated by the SEC under the
Securities Exchange Act of 1934.
H. All payments for Subscriptions for Membership Interests ("Subscription
Funds") and the executed Subscription Agreements received by Issuer or
Underwriter shall be promptly forwarded, by no later than noon of the next
business day after receipt, to Escrow Agent, and Escrow Agent has agreed to
accept, hold and disburse such Subscription Funds deposited with it in
accordance with the terms of this Escrow Agreement.
I. In order to establish the escrow of Subscription Funds and to effect the
consummation of the transactions contemplated by the Subscription Agreements,
the parties hereto have entered into this Escrow Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Certain Definitions. The following terms shall have the following
meanings when used herein:
"Cash Investment" shall mean the number of Membership Interests subscribed
for by a Subscriber multiplied by the Purchase Price (as defined below) per
Membership Interest, as set forth in the Subscription Agreement submitted by
such Subscriber.
"Construction Loan Agreement" shall mean that certain Construction Loan
Agreement dated March 28, 2003 among Sardy House, North South and WestStar Bank,
as amended.
"Effective Date" shall mean the date on which the Registration Statement is
declared effective by the SEC.
"Entire Offering" shall mean the sale of all 25 Membership Interests
offered.
"Escrow Account" shall mean the interest bearing account entitled
"Computershare Trust Company, Inc., as Escrow Agent for Sardy House, LLC"
established by the Escrow Agent with a bank.
"Escrow Funds" shall mean the Subscription Funds deposited with Escrow
Agent pursuant to this Escrow Agreement, together with any interest and other
income thereon.
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"Escrow Period" shall have the meaning set forth in Section 3 of this
Escrow Agreement.
"Maximum Offering Notice" shall mean a written notification, signed by the
Issuer, which shall specify that: (a) subscriptions for the Entire Offering have
been received and accepted; and (b) such subscriptions have not been withdrawn,
rejected or otherwise terminated.
"Membership Interests" shall have the meaning set forth in the Section of
this Escrow Agreement titled "Background."
"Minimum Offering" shall mean the sale of seven (7) Membership Interests,
which shall result in the receipt of total Subscription Funds of a minimum of
$4,665,000 before any commissions and referral fees, which total represents the
total minimum Subscription Funds necessary to upon release from escrow enable
North South to, as disclosed in the prospectus included in the Registration
Statement, (a) pay all commissions and referral fees in connection with the sale
of such Membership Interests and (b) completely repay the total indebtedness of
the Issuer to WestStar Bank of up to $4,350,000 pursuant to the Construction
Loan Agreement.
"Minimum Offering Notice" shall mean a written notification, signed by the
Issuer, which shall specify that: (a) subscriptions for the Minimum Offering
have been received and accepted; and (b) such subscriptions have not been
withdrawn, rejected or otherwise terminated.
"Purchase Price" shall mean the purchase price for each Membership Interest
as determined by the Issuer, which Purchase Price is initially $750,000 but may
be changed by Issuer at any time after ______________, 2003. If the Purchase
Price is decreased it shall be decreased for all purchasers, and if the Purchase
Price is increased it shall be increased for all purchasers who have not as of
that date executed Subscription Agreements and submitted Subscription Funds.
"Subscribers" shall have the meaning set forth in the Section of this
Escrow Agreement titled "Background."
"Subscription Accounting" shall mean an accounting of all subscriptions for
Membership Interests received and accepted by Issuer as of the date of such
accounting, indicating for each subscription the Subscriber's name, address and
taxpayer identification number, the number and total purchase price of
subscribed Membership Interests, any withdrawal of such subscription by the
Subscriber, any rejection of such subscription by the Issuers, or other
termination, for whatever reason, of such subscription.
"Subscription Funds" shall have the meaning set forth in the Section of
this Escrow Agreement titled "Background."
2. Appointment of and Acceptance by Escrow Agent and Establishment of
Escrow Account. Issuer hereby appoints Escrow Agent to serve as escrow agent
hereunder, and Escrow Agent hereby accepts such appointment in accordance with
the terms of this Escrow Agreement. In accepting such appointment, Escrow Agent
represents and warrants that it is a "bank," as that term is defined in Section
3(a)(6) of the Securities Exchange Act of 1934.
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Prior to the Effective Date, the parties hereto shall establish the Escrow
Account. The Issuer and the Underwriter shall instruct Subscribers to make
payments for Subscription Funds either by wire transfer or check payable to
"Computershare Trust Company, Inc., as Escrow Agent for Sardy House, LLC." Wire
transfers shall be directed to the following account:
Bank:______________________________________
ABA #:_____________________________________
Account #:_________________________________
Account Name:Computershare Trust Company, Inc., as Escrow Agent for
Sardy House, LLC
Any check received that is made payable to a party other than Escrow Agent shall
be returned to the person who submitted the check.
3. Deposits into Escrow Account and Escrow Period.
(a) Deposits into Escrow Account. After the Effective Date, Issuer and
Underwriter shall forward to Escrow Agent, by no later than noon of the
next business day after receipt, (i) the Subscription Funds and
Subscription Agreements received by Issuer or Underwriter for deposit into
the Escrow Account and (ii) the appropriate IRS Form W-9s or Form W-8s (or
Escrow Agent's substitute forms therefor) for each Subscriber that are
required to be executed and delivered by each Subscriber pursuant to the
terms of the Subscription Agreement. Escrow Agent agrees to deposit into
the Escrow Account, upon the receipt thereof, any and all Subscription
Funds, including all checks and other instruments and monies payable to
Escrow Agent as escrow agent therefor. Escrow Agent is hereby authorized to
forward each check or other instrument for collection, and upon collection
of the proceeds of each check or other instrument deposit the collected
proceeds into the Escrow Account.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE
SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT
BE SUBJECT TO ANY LIEN OR CHARGE BY ESCROW AGENT OR BY JUDGMENT
OR CREDITORS' CLAIMS AGAINST ISSUER UNTIL RELEASED TO ISSUER IN
ACCORDANCE WITH SECTION 5(a) HEREOF.
No party shall accept any funds from Subscribers prior to the
Effective Date. Upon receipt of any Subscription Funds which are not equal
to the proper Cash Investment for such subscription or if a notice of
insufficient funds has been received by Escrow Agent for a check for such
Subscription Funds, Escrow Agent's sole obligation shall be to notify
Issuer of such fact and to return such Subscription Funds to Issuer. If
Issuer rejects any subscription for which the Escrow Agent has already
deposited Subscription Funds into the Escrow Account, the Escrow Agent
shall promptly issue a check payable to the Subscriber in the amount of the
Subscriber's subscription check plus
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interest earned on such funds, after the Escrow Agent has cleared such
funds, and deliver such check to Issuer. Issuer shall promptly deliver such
check to the Subscriber.
(b) Escrow Period for Minimum Offering. The escrow period (the "Escrow
Period") with respect to the Minimum Offering shall begin with the
Effective Date and shall terminate upon the earlier of the following to
occur:
(i) The date upon which the Escrow Agent confirms that it has
received the Minimum Offering Notice, and the Subscription Funds
with respect to such Minimum Offering Notice have been deposited
into the Escrow Account; or
(ii) 5:00 p.m. (Denver, Colorado time) on __________, 2004, unless
extended from time to time in writing by the Issuer and
Underwriter for an additional number of days as described in the
prospectus included in the Registration Statement, but not to be
extended for more than an additional 30 days (as extended, the
"Expiration Date"), if Subscription Funds with respect to the
Minimum Offering have not been deposited into the Escrow Account
by the Expiration Date; or
(iii) The date upon which Escrow Agent receives written notice from
Issuer of a determination to terminate the offering prior to
completion of the Minimum Offering.
(c) Escrow Period for Subscription Funds Received After Completion of
Minimum Offering. The Escrow Period with respect to any Subscription Funds
received and deposited into the Escrow Account after the Minimum Offering
has been completed shall be as set forth in the provisions for such
Subscription Funds in Section 5(a)(ii) of this Escrow Agreement.
4. Investment of Escrow Funds. Prior to the disbursement of Escrow Funds
pursuant to Section 5 of this Escrow Agreement, the Escrow Funds shall be
invested only as directed in writing by Issuer. The Issuer may only direct
investments in the following:
(a) short-term securities issued or guaranteed by the United States of
America Government or of any agency thereof and backed by the full
faith and credit of the United States of America;
(b) bank accounts or bank money-market accounts with commercial banks
with capital, surplus and undivided profits aggregating in excess
of $1 billion (based on the most recent financial statements of
such bank which are then publicly available at the SEC or
otherwise); or
(c) short-term certificates of deposit issued by a commercial bank
with a combined capital and surplus (or parent holding company of
which has a combined capital and surplus) of at least $50,000,000.
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In the absence of specific written instructions by the Issuer, the Escrow
Agent shall invest and reinvest the Escrow Funds in bank money-market accounts
as set forth in paragraph (b) of this Section 4.
5. Disbursements of Escrow Funds.
(a) Completion of Offering.
(i) Completion of Minimum Offering. Escrow Agent shall pay to
North South by wire transfer the amount of the Escrow Funds equal to
the Purchase Price multiplied by the number of Membership Interests
purchased in the Minimum Offering, excluding interest and other income
earned on the Escrow Funds, and deliver all documents and instruments,
including certificates representing the Membership Interests for the
Subscribers, no later than three (3) business days following receipt
by Escrow Agent of the following items:
(1) The Minimum Offering Notice;
(2) A Subscription Accounting, substantiating the sale of
the Minimum Offering;
(3) Subscription Agreements signed by all Subscribers;
(4) Certificates representing the Membership Interests for
the Subscribers;
(5) Such other certificates, notices or other documents as
Escrow Agent, in its discretion, shall reasonably
require and shall have requested from Issuer in writing;
and
(6) Cleared Subscription Funds.
At such time that Escrow Agent pays to North South in accordance with
the above terms the value of the Escrow Funds equal to the Purchase
Price multiplied by the number of Membership Interests purchased in
the Minimum Offering, excluding interest and other income earned on
such Escrow Funds, Escrow Agent shall deliver to each Subscriber the
certificate representing the Membership Interests purchased by such
Subscriber. In addition, in order to credit the interest and other
income earned on the Escrow Funds toward the final Purchase Price paid
by the Subscribers for their Membership Interests, Escrow Agent shall
at such time pay by check to each Subscriber such Subscriber's pro
rata amount of interest and other income earned on the Escrow Funds
represented by such Subscriber's Subscription Funds. Further, if the
amount of Subscription Funds paid by any Subscriber and deposited into
the Escrow Account exceeds the final Purchase Price for the Membership
Interests purchased by such Subscriber, Escrow Agent shall include in
the amount of the check to such Subscriber the amount by which the
Subscription Funds paid by such Subscriber and deposited into the
Escrow Account exceeds the final Purchase Price.
In connection with the completion of the Minimum Offering and the
receipt of Escrow Funds from Escrow Agent in connection therewith,
North South
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acknowledges that it is solely obligated and responsible for the
application of such released funds to payment of any commissions and
referral fees in connection with the sale of the Membership Interests
and to complete repayment of the outstanding indebtedness of the
Issuer to WestStar Bank under the Construction Loan Agreement, as
disclosed in the prospectus included in the Registration Statement.
(ii) Subscription Funds Received After Completion of Minimum
Offering. Commencing 14 days after the completion of the Minimum
Offering, Escrow Agent shall pay to North South by wire transfer the
amount of the Escrow Funds equal to the Purchase Price multiplied by
the number of Membership Interests purchased after the completion of
the Minimum Offering, excluding interest and other income earned on
the Escrow Funds, no later than three (3) business days following
receipt by the Escrow Agent of the items set forth in Sections
5(a)(i)(2), (3), (4), (5) and (6) above with respect to Subscription
Funds received after the completion of the Minimum Offering (with the
document set forth in Section 5(a)(i)(2) not subject to a requirement
to re-substantiate the sale of the Minimum Offering).
At such time that Escrow Agent pays to North South in accordance with
the above terms the value of the Escrow Funds equal to the Purchase
Price multiplied by the number of Membership Interests purchased after
completion of the Minimum Offering, excluding interest and other
income earned on such Escrow Funds, Escrow Agent shall deliver to each
Subscriber the certificate representing the Membership Interests
purchased by such Subscriber. In addition, in order to credit the
interest and other income earned on the Escrow Funds toward the final
Purchase Price paid by the Subscribers for their Membership Interests,
Escrow Agent shall at such time pay by check to each Subscriber such
Subscriber's pro rata amount of interest and other income earned on
the Escrow Funds represented by such Subscriber's Subscription Funds.
Further, if the amount of Subscription Funds paid by any Subscriber
and deposited into and remaining in the Escrow Account exceeds the
final Purchase Price for the Membership Interests purchased by such
Subscriber, Escrow Agent shall include in the amount of the check to
such Subscriber the amount by which the Subscription Funds paid by
such Subscriber and deposited into and remaining in the Escrow Account
exceeds the final Purchase Price.
In connection with the receipt of Escrow Funds from Escrow Agent after
the completion of the Minimum Offering, North South acknowledges that
it is solely obligated and responsible for the application of such
released funds to payment of any commissions and referral fees in
connection with the sale of the Membership Interests, as disclosed in
the prospectus included in the Registration Statement.
The foregoing process for Subscription Funds received after the
completion of the Minimum Offering may be repeated every 14 days until
receipt of the Maximum Offering Notice or the termination or
expiration of the offering.
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Notwithstanding the foregoing, Escrow Agent shall not be obligated to
disburse the Escrow Funds to North South if Escrow Agent reasonably
believes that (i) Subscription Funds in full payment equal to the
required Cash Investment based on the Purchase Price for that number
of Membership Interests equal to or greater than the Minimum Offering
have not been received, deposited with and collected by Escrow Agent,
subject to the right of Issuer to consummate the sale of some, but not
all, of the Membership Interests (subject to the Minimum Offering
condition) or (ii) any of the certifications and opinions set forth in
the documents furnished to Escrow Agent are incorrect or incomplete.
(b) Termination of the Offering. No later than five (5) business
days after the receipt by Escrow Agent of written notice from Issuer
of a determination to terminate the offering and that there will be no
closing or further closing of the sale of Membership Interests to
Subscribers, Escrow Agent shall pay to each Subscriber, by bank draft
and by first class mail, that portion of the Escrow Funds equal to the
amount of the Subscription Funds paid by such Subscriber and deposited
into the Escrow Account, plus interest and other income earned
thereon.
(c) Rejection or Withdrawal of Subscriptions. No later than five
(5) business days after receipt by Escrow Agent of written notice from
Issuer that Issuer has rejected or permitted a withdrawal of any
Subscription for which Subscription Funds have already been deposited
into the Escrow Account by Escrow Agent, Escrow Agent shall pay to
such Subscriber, by bank draft and by first class mail, that portion
of the Escrow Funds equal to the amount of the Subscription Funds paid
by such Subscriber and deposited into the Escrow Account, plus
interest and other income earned thereon.
(d) Expiration of Offering Period. Notwithstanding anything to
the contrary contained herein, if Escrow Agent shall not have received
the Minimum Offering Notice and cleared Subscription Funds therefore
on or before the Expiration Date, Escrow Agent shall, within five (5)
business days after such date and without any further instruction or
direction from Issuer, return to each Subscriber, by bank draft and by
first class mail, that portion of the Escrow Funds equal to the amount
of the Subscription Funds paid by such Subscriber and deposited into
the Escrow Account, plus interest and other income earned thereon.
6. Suspension of Performance or Disbursement into Court. If, at any time,
there shall exist any dispute between Issuer, Underwriter, Escrow Agent,
Subscribers or any other person with respect to the holding or disposition of
any portion of the Escrow Funds or any other obligations of Escrow Agent
hereunder, or if at any time Escrow Agent is unable to determine, to Escrow
Agent's sole satisfaction, the proper disposition of any portion of the Escrow
Funds or Escrow Agent's proper actions with respect to its obligations
hereunder, or if Issuer has not within thirty (30) days of the furnishing by
Escrow Agent of a notice of resignation pursuant to Section 7 hereof appointed a
successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole
discretion, take either or both of the following actions:
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(a) Suspend the performance of any of its obligations under this
Escrow Agreement until such dispute or uncertainty shall be resolved to the
sole satisfaction of Escrow Agent or until a successor Escrow Agent shall
have been appointed (as the case may be); and/or
(b) Petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in Denver, Colorado
for instructions with respect to such dispute or uncertainty, and pay to
such court all funds held by it for holding and disposition in accordance
with the instructions of such court. In determining the resolution of such
dispute or uncertainty, such court shall apply the laws of the State of
Colorado.
Escrow Agent shall have no liability to Issuer, Underwriter, Subscribers or
any other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the disbursement of funds held in the Escrow Account or any delay
in or with respect to any action required or requested of Escrow Agent.
7. Resignation and Removal of Escrow Agent. Escrow Agent may resign from
the performance of its duties hereunder at any time by giving thirty (30) days'
prior written notice to Issuer, or may be removed by Issuer, with or without
cause, at any time by Issuer giving prior written notice to Escrow Agent. Such
resignation or removal shall take effect upon the appointment of a successor
Escrow Agent as provided herein below. Upon any such notice of resignation or
removal, Issuer shall appoint a successor Escrow Agent hereunder. If the Issuer
shall fail to appoint a successor Escrow Agent within thirty (30) days after
such notice of resignation or removal, the Escrow Agent shall have the right to
deposit the Escrow Funds to a court of competent jurisdiction for the
appointment of a successor Escrow Agent. Upon the acceptance in writing by a
successor Escrow Agent of any appointment as Escrow Agent hereunder, such
successor Escrow Agent shall thereupon succeed to and become vested with and
subject to all the rights, powers, privileges, duties and obligations of the
former Escrow Agent, and the former Escrow Agent shall be discharged from its
duties and obligations under this Escrow Agreement, but shall not be discharged
from any liability for actions taken as Escrow Agent hereunder prior to such
succession. After any former Escrow Agent's resignation or removal, the
provisions of this Escrow Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Escrow Agent under this Escrow
Agreement.
8. Liability of Escrow Agent.
(a) Escrow Agent shall have no liability or obligation with respect to
the Escrow Funds other than as set forth in this Escrow Agreement, except
for any liability which may result from Escrow Agent's willful misconduct
or gross negligence. Escrow Agent's sole responsibility shall be for the
safekeeping and disbursement of the Escrow Funds in accordance with the
terms of this Escrow Agreement. Escrow Agent shall have no implied duties
or obligations and shall not be charged with knowledge or notice of any
fact or circumstance not specifically set forth herein. Escrow Agent may
rely upon any instrument, whether bearing original, conformed or facsimile
signatures, not only as to its
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due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein which Escrow Agent shall in
good faith believe to be genuine, to have been signed or presented by the
person or parties purporting to sign the same, and to conform to the
provisions of this Escrow Agreement. In no event shall Escrow Agent be
liable for incidental, indirect, special, consequential or punitive
damages. Escrow Agent shall not be obligated to take any legal action or
commence any proceeding in connection with the Escrow Funds or any account
in which the Escrow Funds are deposited or this Escrow Agreement, or to
appear in, prosecute or defend any such legal action or proceeding. Without
limiting the generality of the foregoing, Escrow Agent shall not be
responsible for or required to enforce any of the terms or conditions of
any Subscription Agreement with Subscribers or any other agreement between
Issuer and/or Subscribers. Escrow Agent shall not be responsible or liable
in any manner for the performance by Issuer or any Subscribers of their
respective obligations under any Subscription Agreement nor shall Escrow
Agent be responsible or liable in any manner for the failure of Issuer,
Underwriter or any third party (including any Subscriber) to honor any of
the provisions of this Escrow Agreement. Escrow Agent may consult legal
counsel selected by it in the event of any dispute or question as to the
construction of any of the provisions hereof or of any other agreement or
of its duties hereunder, and shall incur no liability and shall be fully
indemnified from any liability whatsoever in acting in accordance with the
opinion or instruction of such counsel. Issuer shall promptly pay, upon
demand, the reasonable fees and expenses of any such counsel.
(b) Escrow Agent is authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Escrow
Funds, without determination by Escrow Agent of such court's jurisdiction
in the matter. If any portion of the Escrow Funds is at any time attached,
garnished or levied upon under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by any court affecting such property or any
part thereof, then and in any such event, Escrow Agent is authorized, in
its sole discretion, to rely upon and comply with any such order, writ,
judgment or decree which it is advised by legal counsel selected by it that
is binding upon it without the need for appeal or other action; and if
Escrow Agent complies with any such order, writ, judgment or decree, it
shall not be liable to any of the parties hereto or to any other person or
entity by reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
9. Indemnification of Escrow Agent. From and at all times after the date of
this Escrow Agreement, Issuer shall, except as otherwise hereinafter provided,
to the fullest extent permitted by law, indemnify and hold harmless Escrow Agent
and each officer, director, employee, attorney, agent and affiliate of Escrow
Agent (collectively, the "Indemnified Parties") against any and all actions,
claims (whether or not valid), losses, damages, liabilities, costs and expenses
of any kind or nature whatsoever (including without limitation reasonable
attorneys' fees, costs and expenses) incurred by or asserted against any of the
Indemnified Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of, arising from or in any way relating to any claim,
demand, suit, action or proceeding (including any inquiry or
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investigation) by any person, including without limitation Issuer or
Subscribers, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Escrow Agreement or any transactions contemplated herein, whether or not
any such Indemnified Party is a party to any such action, proceeding, suit or
the target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for any
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim shall be
brought or asserted against any Indemnified Party, such Indemnified Party shall
promptly notify Issuer in writing and Issuer shall promptly assume and enter an
appropriate defense for such Indemnified Party, including the employment of
counsel (reasonably satisfactory to such Indemnified Party) and the payment of
all expenses. Such Indemnified Party shall, in its sole discretion, have the
right to employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such
Indemnified Party, except that Issuer shall be liable for and shall pay all such
fees and expenses if (i) Issuer agrees to pay such fees and expenses, (ii)
Issuer shall fail, in the reasonable discretion of such Indemnified Party, to
employ counsel reasonably satisfactory to the Indemnified Party in any such
action or proceeding, (iii) Issuer is the plaintiff in any such action or
proceeding, or (iv) the named parties to any such action or proceeding
(including any impleaded parties) include both Indemnified Party and Issuer, and
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to Issuer. All such fees and expenses payable by Issuer pursuant
to the foregoing sentence shall be paid from time to time as incurred, both in
advance of and after the final disposition of such action or claim. The
obligations of Issuer under this Section 9 shall survive any termination of this
Escrow Agreement and the resignation or removal of Escrow Agent.
10. Compensation to Escrow Agent.
(a) Fees. Issuer shall pay to Escrow Agent the fees set forth in the
attached Exhibit B to this Escrow Agreement.
(b) No Disbursements from Escrow Funds to Pay Escrow Agent or Other
Parties. Escrow Agent is not authorized to disburse to itself or any other
person from the Escrow Funds (i) any amounts due to Escrow Agent or any
other party under this Section 10 or (ii) any amount Escrow Agent or any
Indemnified Party is entitled to seek pursuant to Section 9 hereof.
Notwithstanding the foregoing, Escrow Agent may hold Escrow Funds until its
fees are paid by Issuer.
11. Representations and Warranties. The Issuers make the following
representations and warranties to Escrow Agent:
(a) Each Issuer is a limited liability company duly formed and validly
subsisting under the laws of the State of Colorado, and each Issuer has
full power and
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authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder.
(b) This Escrow Agreement has been duly approved by all necessary
limited liability company action of each Issuer, including any necessary
approval by the members of each Issuer, has been executed by duly
authorized managers of each Issuer, and constitutes a valid and binding
agreement of each Issuer, enforceable in accordance with its terms (except
as limited by bankruptcy, insolvency, or other laws affecting the
enforcement of creditors' rights).
(c) The execution, delivery and performance by each Issuer of this
Escrow Agreement will not violate, conflict with, or cause a default under
the articles of organization or the operating agreement of either Issuer,
any applicable law or regulation, any court order or administrative ruling
or decree to which either Issuer is a party or any of its property is
subject, or any agreement, contract, indenture or other binding arrangement
to which either Issuer is a party or any of its property is subject.
(d) No party other than the parties hereto and the prospective
Subscribers have, or shall have, any lien, claim or security interest in
the Escrow Funds or any part thereof. No financing statement under the
Uniform Commercial Code is on file in any jurisdiction claiming a security
interest in or describing (whether specifically or generally) the Escrow
Funds or any part thereof.
(e) Each Issuer hereby acknowledges that the status of Escrow Agent is
that of agent only for the limited purposes set forth herein, and hereby
represents and covenants that no representation or implication shall be
made that Escrow Agent has investigated the desirability or advisability of
investment in the Membership Interests or has approved, endorsed or passed
upon the merits of the investment therein and that the name of Escrow Agent
has not and shall not be used in any manner in connection with the offer or
sale of the Membership Interests other than to state that Escrow Agent has
agreed to serve as Escrow Agent for the limited purposes set forth herein,
as disclosed in the prospectus included in the Registration Statement.
(f) All of the representations and warranties of each Issuer contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any deposits to or disbursement from the Escrow
Funds.
12. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mail, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities, and addressed to the party to be noticed as follows:
12
If to Issuer: North and South Aspen, L.L.C.
c/o Hotel Lenado
000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Underwriter: X. X. Xxxxxxx & Company
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Rothgerber Xxxxxxx & Xxxxx LLP
One Xxxxx Center, Suite 3000
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Escrow Agent: Computershare Trust Company, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust
Fax: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
13. Amendments or Waiver. This Escrow Agreement may be changed, waived or
discharged only by a writing signed by all of the parties hereto. No delay or
omission by any party in exercising any right with respect thereto shall operate
as a waiver. A waiver on any one occasion shall not be construed as a bar to, or
waiver of, any right or remedy on any future occasion.
14. Severability. To the extent any provision of this Escrow Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
13
15. Governing Law. This Escrow Agreement shall be construed and interpreted
in accordance with the internal laws of the State of Colorado without giving
effect to the principles or rules governing conflict of laws.
16. Entire Agreement. This Escrow Agreement constitutes the entire
agreement among the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in its entirety
the obligations and duties of Escrow Agent with respect to the Escrow Funds.
17. Assignability. This Escrow Agreement shall not be assignable without
the written consent of all of the parties hereto.
18. Binding Effects. All of the terms of this Escrow Agreement, as it may
be amended from time to time, shall be binding upon, inure to the benefit of and
be enforceable by the respective successors and permitted assigns of Issuer,
Underwriter, Subscribers and Escrow Agent.
19. Execution in Counterparts. This Escrow Agreement may be executed in two
or more counterparts, which when so executed shall constitute one and the same
agreement.
20. Termination. This Escrow Agreement may be terminated at any time by a
written document signed by all of the parties hereto. Upon the first to occur of
(a) the disbursement of all amounts of Escrow Funds pursuant to Section 5 hereof
or (b) the disbursement of all amounts of Escrow Funds into a court pursuant to
Section 6 hereof, this Escrow Agreement shall terminate and Escrow Agent shall
have no further obligation or liability whatsoever with respect to this Escrow
Agreement or the Escrow Funds.
21. Dealings. Escrow Agent and any stockholder, director, officer or
employee of Escrow Agent may buy, sell and deal in any of the securities of
Issuer and become pecuniarily interested in any transaction in which Issuer may
be interested, and contract and lend money to Issuer and otherwise act as fully
and freely as though it were not Escrow Agent under this Escrow Agreement.
Nothing herein shall preclude Escrow Agent from acting in any other capacity for
the Subscribers or any other person or entity.
22. Signatures by Facsimile. Any facsimile signature of any party hereto
shall constitute a legal, valid and binding execution hereof by such party.
[Remainder of page intentionally left blank]
14
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed as of the date first above written.
ISSUER:
SARDY HOUSE, LLC, NORTH AND SOUTH ASPEN, L.L.C.,
a Colorado limited liability company a Colorado limited liability company
By: BLOCK 66, LLC, By:
a Colorado limited liability ---------------------------------
company, Xxxxxx X. Xxxxxx, Manager
its Manager
By:
-----------------------------
Xxxxxx X. Xxxxxx, Manager
UNDERWRITER:
X. X. XXXXXXX & COMPANY,
a Colorado corporation
By:
---------------------------------------
Xxxxx X. Xxxxxxx, President
ESCROW AGENT:
COMPUTERSHARE TRUST COMPANY, INC.,
a Colorado corporation,
as Escrow Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
15
EXHIBIT A
SUBSCRIPTION AGREEMENT
[Form of Subscription Agreement]
A-1
EXHIBIT B
COMPUTERSHARE TRUST COMPANY, INC.
SARDY HOUSE, LLC
ESCROW AGENT FEE SCHEDULE
Account Acceptance and Annual Administrative Fee $5,000
The above fee includes the following services:
> Receipt of the Subscription Agreements
> Processing the Subscription Funds
> Verification of the Collection of Subscription Funds
Subscription Agreements Received and Reviewed $10 each.
Deposit for Return of Funds to Subscribers $150
Return of Funds to Subscribers $20 each
The above fee is required in the event the following services are required:
> Check issuance
> Calculation of Interest earned and paid to Subscribers
> 1099's issued to Subscribers
> Bank Reconciliation
> Stationary and Supply Expense
> Out-of-Pocket Expense
Tax Reporting - Transmittal of Information to IRS $250
1099 Issuance $1.75 per form
Out-of-Pocket Expenses At cost
> Included but not limited to: attorney fees, printing, stationary, express
mail charges, wire transfer fees and postage.
THE ACCEPTANCE, ANNUAL AND DEPOSIT FEES ARE PAYABLE AT THE CLOSING OF THE
ESCROW. Special or extraordinary events, such as amendments to the documents or
disputes are not included in the above fees, and we reserve the right to charge
an additional amount based on the time incurred in handling such events should
they occur. Late charges are 1 1/2% per month on outstanding balances owing 45
days from date of invoice.
B-1
