EXHIBIT 10.2
ESCROW AGREEMENT
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is entered into as of March 8, 2004
by and among Spectrum Law Group - Indeglia, P.C., a California corporation (the
"Escrow Agent"), Longbow Mining Corp., a Nevada corporation (the "Company"), and
each stockholder of the Company listed on the Stockholder Signature Page hereto
(each a "Stockholder and collectively the "Stockholders").
RECITALS
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A. The Company has offered for sale to the Stockholders up to 6,250,000
shares (the "Restricted Shares") of common stock, par value $.001 per share (the
"Common Stock") at a price of $0.80 per Restricted Share, pursuant to a
Subscription Agreement and Representations for Common Shares (a "Subscription
Agreement").
B. The Stockholders have each subscribed to purchase the number of
Restricted Shares set forth opposite each Stockholder's name on the Stockholder
Signature Page hereto for U.S. $0.80 per Share pursuant to a Subscription
Agreement, and the Company has agreed to accept such subscriptions against
payment of the Purchase Price (as defined below).
C. The Stockholders are each the record holder of such number of shares
(the "Free Trading Shares") of Common Stock of the Company as set forth on the
Stockholder Signature Page hereto.
D. The Stockholders intend to sell their Free Trading Shares on the
terms and conditions set forth herein.
E. Upon completion of the sale of the Free Trading Shares, the Stock-
holders intend to complete the purchase of the Restricted Shares pursuant to the
Subscription Agreements.
F. The Stockholders and the Company desire to establish an escrow
account with the Escrow Agent in which funds received from the sale of the Free
Trading Shares will be deposited pending completion of the sale of the
Restricted Shares.
NOW THEREFORE, in consideration of the foregoing and of the mutual
agreements hereinafter contained, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Escrow Agent. The Company and the Stockholders hereby appoint
Spectrum Law Group - Indeglia, P.C. as the Escrow Agent in accordance with the
terms and conditions set forth herein, and the Escrow Agent hereby accepts such
appointment. The Escrow Agent is hereby empowered on behalf of the Stockholders
to accept the certificates representing the Free Trading Shares, deposit all
Free Trading Shares into a brokerage account established by Escrow Agent with a
NASD member broker-dealer, and receive and disburse the proceeds from the sale
of the Free Trading Shares in accordance with the terms of this Agreement.
2. Escrow Agent Not Counsel. The parties understand and acknowledge
that the Escrow Agent is not counsel to any party hereto and that the Escrow
Agent is not performing legal services in connection with this Agreement, but is
only acting as an escrow holder.
3. Deposit of Free Trading Shares into Escrow. Upon execution of this
Agreement, the Stockholders shall deposit the Free Trading Shares into escrow by
delivering to the Escrow Agent the certificates representing the Free Trading
Shares, duly endorsed or delivered with blank stock powers appropriately
executed, in either case with medallion signature guarantees (or other signature
guarantee satisfactory to the transfer agent of the Company), in the name of
"Spectrum Law Group - Indeglia, P.C. Attorney Client Trust Fund."
4. Sale of Free Trading Shares. As soon as reasonably practicable after
the Free Trading Shares are deposited with the Escrow Agent, the Escrow Agent
shall sell, or cause to be sold, the Free Trading Shares pursuant to the terms
and conditions of this Agreement. The Escrow Agent shall sell, or cause to be
sold, the Free Trading Shares pursuant to specific instruction of the
Stockholders (or the specific instruction of any person to whom the Stockholders
have granted power of attorney). Such instructions may be made verbally, but for
each such verbal instruction so given, the Stockholders (or any person to whom
the Stockholders have granted power of attorney) shall deliver to the Escrow
Agent written confirmation of such instruction within twenty-four (24) hours of
the delivery of such verbal instruction. The proceeds from the sales of Free
Trading Shares shall be allocated pro-rata to each Stockholder. The Escrow Agent
may pay reasonable and customary brokerage fees and commissions in connection
with the sale of the Free Trading Shares.
5. Closings. The Escrow Agent shall pay to the Company the net proceeds
from the sale of Free Trading Shares, in $500,000 increments, against delivery
by the Company of certificates evidencing the Restricted Shares being purchased
by such net proceeds pursuant to the Subscription Agreements (each a "Closing").
On or before the first Closing, the Company shall provide the Escrow Agent with
instructions for the transfer of such subscription amounts. The purchase of the
Restricted Shares shall be allocated pro-rata to each Stockholder. At each
Closing, or as soon thereafter as practicable, the Company will cause to be
issued to each Stockholder the certificates representing the Restricted Shares
purchased by such Stockholder. Each such Restricted Share shall be in definitive
form and registered in the name of each Purchaser, as set forth on the
Stockholder Signature Page hereto.
6. Voting Rights, Dividends, etc. So long as the Escrow Agent is the
record holder of any Free Trading Shares or Restricted Shares (collectively, the
"Shares"):
6.1 Voting Rights. The Stockholders shall be entitled to
exercise any and all voting or other consensual rights pertaining to the Shares,
or any part thereof, on a pro-rata basis, for any purpose not inconsistent with
the terms of this Agreement.
6.2 Dividend and Distribution Rights. The Stockholders shall
be entitled, on a pro rata basis, to receive and to retain and use any and all
dividends or distributions paid in respect of the Shares; provided, however,
that any and all such dividends be, and the certificates representing such
capital stock forthwith shall be delivered to the Escrow Agent to hold as
Escrowed Property (with any necessary endorsements and stock powers).
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7. Representation and Warranties of the Company and the Stockholders.
The Company and the Stockholders represent and warrant that the following
statements are true and correct in all material respects as of the date hereof
and will be true and correct in all material respects at Closing, except as
expressly qualified or modified herein.
7.1 The offer, issue, sale and delivery of the Restricted
Shares will constitute an exempted transaction under the Securities Act of 1933,
as amended and now in effect ("Securities Act"), and registration of the Shares
under the Securities Act is not required. The Company shall make such filings as
may be necessary to comply with the Federal securities laws and the blue sky
laws of any state, which filings will be made in a timely manner.
7.2 The Free-Trading Shares may be sold without registration
under the Securities Act pursuant to Section 4(1) of the Securities Act, and may
be sold without registration or qualification under any applicable state "blue
sky" laws.
7.3 No Stockholder is an officer, director, or the beneficial
owner of more than ten percent (10%) of the Common Stock of the Company, and no
person to whom the Stockholders have granted power of attorney for the purpose
of executing this Agreement, is an officer, director, or the beneficial owner of
more than ten percent (10%) of the Common Stock of the Company.
7.4 No Stockholder, and no person to whom any Stockholder has
granted power of attorney with respect to this Agreement, is in possession of
any material non-public information concerning the Company.
7.5 No transaction or portion of any transaction discussed
herein shall be in contravention or violation of any federal securities law or
regulation, nor shall any transaction or portion of any transaction discussed
herein be part of any scheme or plan to evade any federal securities laws or
rules promulgated thereunder.
8. Location of Escrowed Property. Subject to the terms and conditions
of this Agreement, all Free Trading Shares, funds, and Restricted Shares
(collectively, the "Escrowed Property") received by the Escrow Agent pursuant to
the terms of this Agreement and any interest earned thereon shall be held,
pending disbursement, in the Escrow Agent's designated brokerage account.
9. Duty of Escrow Agent for Escrowed Property. The Escrow Agent shall
not be under any duty to give the property held by it hereunder any greater
degree of care than it gives its own similar property.
10. No Implied Duties. This Agreement expressly sets forth all the
duties of the Escrow Agent with respect to any and all matters pertinent hereto.
No implied duties or obligations shall be read into this Agreement against the
Escrow Agent. The Escrow Agent shall not be bound by the provisions of any
agreement between the parties except this Escrow Agreement.
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11. Limitation on Liability. The Escrow Agent shall not be liable,
except for its own gross negligence or willful misconduct and, except with
respect to claims based upon such gross negligence or willful misconduct that
are successfully asserted against the Escrow Agent, the Company shall indemnify
and hold harmless the Escrow Agent from and against any and all losses,
liabilities, claims, actions, damages and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, arising out of or in
connection with this Escrow Agreement.
12. Reliance of Escrow Agent. The Escrow Agent shall be entitled to
rely upon any order, judgment, certification, demand, notice, instrument or
other writing delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein or the propriety or
validity of the service thereof. The Escrow Agent may act in reliance upon any
instrument or signature believed by it to be genuine and may assume that any
person purporting to give receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to do
so. The Escrow Agent shall be fully protected in any action taken hereunder in
good faith and shall not be responsible for any failure or inability of the
Company or any Stockholder to honor any of the provisions of this Agreement. The
Escrow Agent shall be under no liability to the other parties to any document
(except this Agreement) or to anyone else by reason of any failure on the part
of any such party to perform such party's obligations under such agreement.
13. Advice of Counsel. The Escrow Agent may act pursuant to the
advice of counsel with respect to any matter relating to this Agreement and
shall not be liable for any action taken or omitted in accordance with such
advice.
14. Fees and Expenses; Lien on Escrowed Property. The Escrow Agent, for
services rendered under this Agreement, shall receive a fee of $10,000.00, which
shall be paid by the Company within ten (10) days from the execution of this
Agreement. The Company shall pay or reimburse the Escrow Agent upon request for
any and all expenses, if any, incurred by the Escrow Agent in connection with
this Agreement and transfer taxes or other taxes relating to the Escrowed
Property incurred in connection herewith and shall indemnify and hold harmless
the Escrow Agent from any amounts that it is obligated to pay in the way of such
expenses and taxes. In the event that the Company fails to pay the fees, costs,
or expenses of the Escrow Agent in accordance with this provision, the Escrow
Agent shall be granted a first priority lien and security interest on the
Escrowed Property, and the fees of the Escrow Agent, any reimbursement for costs
and expenses, indemnification for any damages incurred by the Escrow Agent, or
any monies whatsoever shall be paid out of, deducted from, offset against, or
otherwise chargeable to the Escrowed Property. Except as set forth in this
Section, the Escrow Agent does not have any interest in the Escrowed Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof.
15. No Representation. The Escrow Agent makes no representation as to
the validity, value, genuineness or the collectability of any security or other
document or instrument held by or delivered to it.
16. Resignation of Escrow Agent. The Escrow Agent may at any time
resign as such by delivering the Escrowed Property to any successor Escrow Agent
designated by the Stockholders and the Company in writing, or to any court of
competent jurisdiction, whereupon the Escrow Agent shall be discharged of and
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from any and all further obligations arising in connection with this Agreement.
The resignation of the Escrow Agent will take effect on the earlier of (a) the
appointment of a successor (including a court of competent jurisdiction) or (b)
the day that which is 30 days after the date of delivery of its written notice
of resignation to the Stockholders and the Company. If at that time the Escrow
Agent has not received a designation of a successor Escrow Agent, the Escrow
Agent's sole responsibility after that time shall be to safekeep the Escrowed
Property until receipt of a designation of successor Escrow Agent or a written
disposition instruction by the Company or a final order of a court of competent
jurisdiction.
17. Disputes Regarding Escrowed Property. In the event of any
disagreement resulting in adverse claims or demands being made in connection
with the Escrowed Property, or in the event that the Escrow Agent in good faith
is in doubt as to what action it should take hereunder, the Escrow Agent shall
be entitled to retain the Escrowed Property until the Escrow Agent shall have
received (i) a final non-appealable order of a court of competent jurisdiction
directing delivery of the Escrowed Property or (ii) a written agreement executed
by the parties to the dispute directing delivery of the Escrowed Property, in
which event the Escrow Agent shall disburse the Escrowed Property in accordance
with such order or agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to the Escrow Agent to
the effect that said opinion is final and non-appealable.
18. Jurisdiction and Venue. The parties hereto hereby irrevocably
submit to the jurisdiction of any California State or federal court sitting in
Orange County, in any action or proceeding arising out of or relating to this
Agreement, and the parties hereby irrevocably agree that all claims in respect
of such action or proceeding arising out of or relating to this Agreement, shall
be heard and determined in such a California State or federal court. The parties
hereto hereby consent to and grant to any such court jurisdiction over the
persons of such parties and over the subject matter of any such dispute and
agree that delivery or mailing of any process or other papers in the manner
provided herein above, or in such other manner as may be permitted by law, shall
be valid and sufficient service thereof.
19. Amendments. No printed or other matter in any language which
mentions the Escrow Agent's name or the rights, powers, or duties of the Escrow
Agent shall be issued by the parties hereto or on such parties' behalf unless
the Escrow Agent shall first have given its specific written consent thereto.
20. Termination. Notwithstanding anything to the contrary contained
herein, the Escrow Agent's duties and obligations hereunder, and this Agreement,
shall terminate upon the release and distribution of the Escrowed Property in
accordance with the terms of this Agreement. Notwithstanding the preceding
sentence, paragraphs 10 and 3 hereof shall survive the resignation of the Escrow
Agent or the termination of this Agreement.
21. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and upon and to each of their
respective successors, heirs and assigns. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by any of the parties hereto
without the prior consent of the other.
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22. Governing Law. This Agreement shall be governed by the laws of the
State of California, except with regard to its conflict of law provisions.
23. Attorney's Fees. If any action be brought to interpret or enforce
this Agreement, or any part thereof, the Company and the Stockholders jointly
and severally agree to pay to Escrow Agent all Escrow Agent's attorney fees,
accounting fees, special and extra service fees and other costs related to such
action.
23. Completion. The obligations of the Escrow Agent hereunder shall
be completed and this Agreement shall terminate upon the delivery of all of the
proceeds of the escrow account pursuant to this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
ESCROW AGENT
Spectrum Law Group - Indeglia, P.C.
By:
---------------------------------
Xxxx X. Xxxxxxxx, President
COMPANY
Longbow Mining Corp., a Nevada corporation
By:
---------------------------------
Xxxxxx X. Xxxxxx, Secretary
[SIGNATURES CONTINUED ON STOCKHOLDER SIGNATURE PAGE]
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STOCKHOLDER SIGNATURE PAGE
Stockholder Number of Free Trading Shares Number of Restricted Shares
500,000 1,250,000
-----------------------------------------------
LAW HEI MAN
By: YUNG Nam, pursuant to power of attorney
attached hereto as Exhibit A
500,000 1,250,000
-----------------------------------------------
XXXXX XXX XXXX
By: XXXX Xxx, pursuant to power of attorney
attached hereto as Exhibit B
500,000 1,250,000
-----------------------------------------------
NG CHI WAI BEBE
By: YUNG Nam, pursuant to power of attorney
attached hereto as Exhibit C
500,000 1,250,000
-----------------------------------------------
LI XXXX XXX
By: XXXX Xxx, pursuant to power of attorney
attached hereto as Exhibit D
500,000 1,250,000
-----------------------------------------------
MAK XXXX XXX
By: YUNG Nam, pursuant to power of attorney
attached hereto as Exhibit E
EXHIBIT A
POWER OF ATTORNEY
A-1
EXHIBIT B
POWER OF ATTORNEY
B-1
EXHIBIT C
POWER OF ATTORNEY
X-0
XXXXXXX X
XXXXX XX XXXXXXXX
X-0
EXHIBIT E
POWER OF ATTORNEY
E-1