EXHIBIT 10.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT made and entered into this 7th day of June, 1996, by
and between Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx, and
Xxxxx X. Xxxxxxx (herein collectively referred to as the "Depositors");
Norwest Bank Minnesota, National Association, a corporate fiduciary with
principal offices in South St. Xxxx, Minnesota (hereinafter called the
"Escrow Agent"); Michigan Brewery, Inc., a corporation with principal offices
in Gaylord, Michigan (hereinafter called the "Issuer") and the commissioner
of commerce for the State of Minnesota (hereinafter called the
"commissioner");
WITNESSETH THAT:
Each of the Depositors is the owner of Common Stock of the Issuer and each
owns the number of shares of such security listed opposite his name on Annex
A, attached hereto and made a part hereof.
The Issuer has applied to the commissioner for registration of its
securities for sale to residents of Minnesota, and as a condition of
registration, the Depositors, the Escrow Agent and the Issuer agree to be
bound by this Agreement and the applicable rules and regulations of the
commissioner.
Each of the Depositors has deposited the securities listed opposite his name
on Annex A with the Escrow Agent, and the Escrow Agent hereby acknowledges
receipt thereof. These securities are herein collectively referred to as
"escrowed securities."
THEREFORE, the parties agree as follows:
1. The Escrow Agent agrees to hold the escrowed securities until such time
as Escrow Agent shall receive a written release issued by the commissioner
permitting the release from escrow of all or a part of the escrowed
securities held under this Agreement. Upon receipt of such release, the
Escrow Agent may release to each Depositor all or a part of the escrowed
securities in accordance with the order of the commissioner.
Subject to the above provisions, the term of escrow under this Agreement
shall run for a period of two years from the date of the Order of
Registration. The Issuer and each of the Depositors shall furnish the
commissioner a written statement that none of the escrowed securities nor any
interests therein have been sold, transferred or otherwise disposed of
(except as permitted by paragraph 4) as a condition of the release from
escrow.
2. Notwithstanding any provision of paragraph 1, the commissioner may, in
his discretion, terminate the term of escrow with respect to all or any part
of the escrowed securities of any Depositor before the expiration of the
period of occurrence of the event specified in paragraph 1 and release such
securities if the commissioner determines that the release of such securities
to the Depositor(s) will not be detrimental to the Issuer, the public
investors or any other party concerned. At the time of release by the
commissioner of any securities from escrow, the application of this Agreement
shall terminate with respect to the securities so released.
3. While it is held in escrow pursuant to this Agreement, no escrowed
security nor any interest therein, nor any right or title thereto, may be
sold or transferred, by means of transfer of the security separate from the
certificate representing it or otherwise, without prior written release of
the commissioner, except that the release of the commissioner need not be
obtained to transfer escrowed shares by will or the laws of descent and
distribution or otherwise by order or process of any Court.
4. Upon receipt of such written release from the commissioner directing
that some or all of the escrowed securities of the Depositor held under this
Agreement be released for the purpose of transfer to another person against
concurrent deposit of the securities so transferred, the Escrow Agent may
release such securities but only against such deposit under this Agreement of
all of the transferred securities. The commissioner shall authorize such
transfer of the escrowed securities only upon receipt of a signed statement
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by the proposed transferee that he or she has full knowledge of the terms of
this Agreement and that the proposed transferee accepts such securities
subject to the conditions of this Agreement.
5. The Depositors agree that they shall be entitled to receive cash and
property dividends with respect to the escrowed securities while such
securities are held in escrow pursuant to this Agreement to the same extent
as other security holders of the same class of security and that said cash or
property dividends shall be placed under the terms of this Agreement.
6. Upon declaration of any dividend in shares of the Issuer to which the
escrowed securities are entitled pursuant to a share dividend or split
authorized by a vote of the shareholders, the Depositors and the Escrow Agent
shall forthwith enter into a Supplemental Escrow Agreement, covering such
share dividend, which Supplemental Escrow Agreement shall incorporate all the
conditions of escrow contained in this Agreement. The shares received as
dividends shall be forthwith deposited in escrow with the Escrow Agent
pursuant to such Supplemental Escrow Agreement, and the Escrow Agent shall
deliver to the commissioner a receipt for the shares thus escrowed.
7. During the term of escrow, the Depositors shall not be entitled to and
hereby waive all rights to participate in any distribution of assets of the
Issuer in the event of liquidation, dissolution, or winding up, until the
public investors shall have received cash or property in an amount or value
equal to the price paid by public investors for securities purchased by such
public investors; and thereafter the Depositors shall participate without the
public investors until they shall have received cash or other property in an
amount or value equal to the price paid by the Depositors for the escrowed
securities; and thereafter the public investors and the Depositors shall
participate equally according to the terms of their securities. Any
Depositor(s) seeking release of all or any part of the escrowed securities
pursuant to this paragraph 7 shall furnish the commissioner a written
statement that none of the escrowed securities nor any interests therein have
been sold, transferred (except as provided in paragraph 4) or otherwise
disposed of, without the consent of the commissioner, as a condition of the
release from escrow.
8. This Agreement shall not be construed to prohibit any Depositor from
participating in any distribution of securities of any corporation other than
the Issuer resulting from the sale of assets of the Issuer or a merger or
consolidation of the Issuer with or into any other corporation or
corporations. In the event of such a transaction, the Escrow Agent should
obtain written authorization from the commissioner prior to the release of
the escrowed securities, and, any such distribution payable in securities of
any corporation other than the Issuer paid with respect to the escrowed
securities shall be delivered to the Escrow Agent and held pursuant to a
Supplemental Escrow Agreement prepared and executed as described in paragraph
7. In the event of the merger or consolidation of the Issuer with or into
any other corporation or corporations, any securities shall be delivered to
the Escrow Agent and held pursuant to a Supplemental Escrow Agreement
prepared and executed as described in paragraph 6.
9. The Escrow Agent may conclusively rely upon and shall be protected in
acting upon any statement, certificate, notice, request, consent, order, or
other document believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall have no
duty or liability to verify any such statement, certificate, notice, request,
consent, order, or other document and its sole responsibility shall be to act
only as expressly set forth in this Agreement. The Escrow Agent shall be
under no obligation to institute or defend any action, suit, or proceeding in
connection with this Agreement unless first indemnified to its satisfaction.
The Escrow Agent may consult counsel in respect of any question arising under
this Agreement and the Escrow Agent shall not be liable for any action taken
or omitted in good faith upon advice of such counsel. All securities held by
Escrow Agent pursuant to this Agreement shall constitute trust property for
the purposes for which they are held and the Escrow Agent shall not be liable
for any interest thereon.
10. The Escrow Agent shall be entitled to receive from the Company
reasonable compensation as set forth in Annex B, attached hereto and made a
part hereof, for its services as contemplated herein. In the event that the
Escrow Agent shall render any additional services not provided for herein or
that any controversy shall arise hereunder or that the Escrow Agent shall be
made a party or shall intervene in any
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action, suit or proceeding pertaining to this Agreement, it shall be entitled
to receive reasonable compensation from the Company for such additional
services.
11. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their heirs, successors, and assigns.
12. This Agreement shall terminate in its entirety when all escrowed
securities covered hereby and by any Agreements supplemental hereto have been
released as provided in paragraph 1.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
Escrow Agent: Depositors:
NORWEST BANK MINNESOTA, /s/Xxxxxxx X. Xxxxxxxx
NATIONAL ASSOCIATION -----------------------
Xxxxxxx X. Xxxxxxxx
By: /s/Xxxx Xxxxxxxxx /s/ Xxxxx X. Xxxxxx
-------------------------- -----------------------
Xxxx Xxxxxxxxx Xxxxx X. Xxxxxx
Its: Corporate Trust Officer
/s/Xxxxxxx X. Xxxxxxx
-----------------------
and Xxxxxxx X. Xxxxxxx
By: Not applicable
-------------------------
Xxxxxxxx Xxxxx /s/Xxxxx X. Xxxxxxx
-----------------------
Xxxxx X. Xxxxxxx
Its: Administrative Assistant
Issuer:
MICHIGAN BREWERY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
Accepted for filing: Its: President and Chief Executive
Officer
and
/s/Xxxxx X. Xxxxxxx By: /s/Xxxxxxx X. Xxxxxxxxxx
---------------------------- ----------------------------
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxxxx
Commissioner of Commerce Its: Chief Financial Officer
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ANNEX A
NAME COMMON STOCK (#)
-------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxx 840,008
-------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx 675,007
-------------------------------------------------------------------------------
Xx. Xxxxx X. Xxxxxx 635,007
-------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 136,989(1)
-------------------------------------------------------------------------------
Total 2,287,011
-------------------------------------------------------------------------------
(1) Includes 6,000 shares of Common Stock subject to currently exercisable
warrants.
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ANNEX B
ESCROW FEE SCHEDULE
ACCEPTANCE FEE: $1,000.00
For initial services including examination of the Escrow Agreement and all
supporting documents this is a one-time fee payable upon the OPENING of the
account.
ADMINISTRATION FEE: $1,000.00*
An annual charge OR ANY PORTION of a 12-month period thereof. This fee is
payable upon the OPENING of the account and annually thereafter. This charge
is not prorated for the first year.
*Assumes use of Norwest Funds for funds on deposit.
TRANSACTION FEE:
Wire transfer of funds $25.00
Asset transactions (purchases/sales/calls/etc) $20.00
No charge for Norwest Funds transactions other than those disclosed in the
Fund Prospectus.
EXTRAORDINARY SERVICES:
For any services other than those covered by the aforementioned, a special
per hour charge will be made to commensurate with the character of the
service, time required and responsibility involved. Such services include
but are not limited to excessive administrative time, attendance at closings,
specialized reports and record-keeping, unusual certifications, etc.
FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND ADJUSTMENT.
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