Exhibit 99(f)
ESCROW AGREEMENT
ESCROW AGREEMENT made this 1st day of July, 2002, by and between a
PRACTICAL PLASTICS, INC. ("Company"), and Xxxxx X. Xxxxxxx, Esq., (the "Escrow
Agent").
RECITALS
WHEREAS, the Company proposes to offer for sale in a Prospectus contained
in the Form SB-2 Registration Statement to be filed with the Securities and
Exchange Commisison pursuant to the provisions of the Securities Act of 1933, as
amended (the "Act"), up to 375,000 shares maximum, at an offering price of $0.40
per share (the authorization, issuance, and offering of the shares hereinafter
referred to as the "Public Offering"); and
WHEREAS, pursuant to the Prospectus, provision must be made to impound in
escrow such proceeds as shall be received from the sale of such of the shares as
may be sold; and
WHEREAS, the Company and the Escrow Agent desire to enter into this
Agreement for the purpose of fulfilling the escrow requirement established by
the Company;
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual covenants,
terms and conditions hereinafter set forth, the parties hereto hereby agree as
follows:
1. TRANSMISSION OF FUNDS; ETC. The Company agrees that it shall, as soon as
shall be practicable following receipt thereof, but in no event later than by
noon of the next business day following receipt thereof, deliver to the Escrow
Agent all proceeds from the sale of the shares in the Prospectus in an amount
not exceeding $150,000.00, together with a copy of the subscriber's subscription
agreement, which shall set forth, among other things, the subscriber's name and
address, Social Security or Tax Identification number, the number of shares
purchased and the amount paid therefore, and all checks and other orders for the
payment of money shall be made payable to the order of Escrow Account.
2. THE ESCROW ACCOUNT. All funds or remittances delivered to the Escrow
Agent pursuant hereto shall be deposited immediately by the Escrow Agent into
his attorney trust account as follows: "Xxxxx X. Xxxxxxx Arizona Bar Foundation
IOLTA Account (the "Escrow Account"). The Escrow Account shall be created and
maintained subject to the customary rules and regulations of the Escrow Agent
pertaining to such accounts.
3. STATUS OF ESCROWED FUNDS. During the Escrow period (hereinafter defined)
none of the amounts deposited into the Escrow Account shall become the property
of the Company or of any other entity or be subject to the debts of the Company
or of any other entity except as expressly provided herein with respect to
payment by the Escrow Agent to the Company, and the Escrow Agent shall neither
make nor permit any disbursements from the Escrow Account except as expressly
provided herein.
4. THE ESCROW PERIOD.
a. The Escrow Period shall begin on the effective date of the
Registration Statement.
b. The Escrow Period shall terminate upon the earlier to occur of:
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x. Xxxxx proceeds of $50,000.00 funds having been deposited into
the Escrow Account and the Company having notified the Escrow Agent in writing
that is has accepted subscriptions for 125,000 shares; or
ii. The later of February 1, 2003, or 180 days from the effective
date of the Registration Statement. If 125,000 shares shall have been sold by
the expiration of the period specified above in this paragraph 4(b)(ii), but
less that all of the proceeds of such sales shall then have been collected, then
the Escrow Period shall be extended for up to an additional 10 days to permit
delivery and collection of such proceeds.
5. CLOSING OUT OF ESCROW. Should the Escrow Period terminate pursuant to
the provisions of paragraph 4(b)(i) hereof, the Escrow Agent shall deliver and
pay over to the Company on the Closing Date all amounts deposited into the
Escrow Account. On the making of the payment by the Escrow Agent as provided for
in this paragraph, the Escrow Agent shall be discharged completely and released
of any further liabilities or responsibilities hereunder.
6. ABANDONMENT OF OFFERING. Should the Escrow period terminate pursuant to
the provisions of paragraph 4(b)(ii) hereof, then the Escrow Agent shall, within
ten (10) business days following such termination and on the basis of its Escrow
Account records, return to each of the subscribers for the shares the respective
amounts paid or payable to each subscriber pursuant to this paragraph. These
monies shall be deemed to be the property of such subscriber, free and clear of
any or all claims of the Company or of any creditors, and the respective
agreements to purchase the shares made and entered into under the Prospectus
shall be deemed canceled without any further liabilities and responsibilities
hereunder. The Company shall pay to the Escrow Agent the costs of mailing for
each check written by the Escrow Agent in the course of returning funds to
subscribers pursuant to this paragraph. This per-check amount shall not be
deducted from funds deposited into the Escrow Account, but shall be paid by the
Company promptly upon receipt of an invoice therefore from the Escrow Agent.
7. NOTICE OF EXTENSION. The Company agrees to deliver to the Escrow Agent
appropriate written notice of any extension of the offering period and of the
Closing Date.
8. DISCRETION OF THE ESCROW AGENT. In acting pursuant to this Agreement,
the Escrow Agent shall be fully protected in every possible exercise of its
discretion and shall have no obligation hereunder either to the Company or to
any party except as expressly set forth herein.
9. FEES AND EXPENSES OF ESCROW AGENT. The Company shall be responsible for
the payment of all reasonable expenses incurred by the Escrow Agent in the
course of performing hereunder, including the sums required by Section 6 hereof.
No such expense, however, shall be chargeable to or paid from the funds
deposited into the Escrow Account. No separate fees shall be due to the Escrow
Agent for his services hereunder.
10. INVESTMENT OF ESCROWED FUNDS. The Escrow Agent shall have no obligation
to anyone to invest any of the deposited funds or to pay interest thereon.
11. NOTICE BY ESCROW AGENT. The Escrow Agent shall deliver from time to
time to the Company written notice acknowledging receipt of the funds deposited
by the Company. The Escrow Agent shall give the Company prompt written notice
when collected funds deposited into the Escrow Account total $50,000.00, at
which time the funds shall be distributed to the Company. The Escrow Agent
shall, after it disburses funds from the Escrow Account pursuant to paragraph 5
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or 6 of this Agreement, promptly render a written accounting thereof to the
Company. The Escrow Agent shall not be responsible for any fees or charges in
connection with the issuance or transfer of the shares.
12. LIABILITY OF ESCROW AGENT LIMITED. In performing any of its duties
hereunder, the Escrow Agent shall not incur any liability to anyone for any
damages, losses or expenses, except for willful default or negligence, and it
shall, accordingly, not incur any such liability with respect to (a) any action
taken or omitted in good faith upon advice of its counsel given with respect to
any questions relating to the duties and responsibilities of the Escrow Agent
under this Agreement, or (b) any action taken or omitted in reliance upon any
instrument, including the written advises provided for herein, not only as to
its due execution and the validity and effectiveness of its provisions, but also
as to the truth and accuracy of any information contained therein, which the
Escrow Agent shall in good faith believe to be genuine, to have been signed or
presented by a proper person or persons, and to conform with the provisions of
the Agreement.
13. RELIANCE BY ESCROW AGENT; INDEMNITY; ETC. The Company agrees to provide
to the Escrow Agent all information necessary to facilitate the administration
of this Agreement, and the Escrow Agent may rely upon any representation so
made. In performing any of its duties hereunder, the Escrow Agent may not be
held to take notice of any terms of any agreement or rights with respect thereto
unless specifically stated herein. The Company hereby agrees to indemnify and
hold harmless the Escrow Agent against any and all claims, losses, damages,
liabilities, costs and expenses, including reasonable costs of investigation and
counsel fees and disbursements, which may be imposed upon the Escrow Agent or
incurred by the Escrow Agent hereunder or the performance of its duties
hereunder, including any litigation arising from this Agreement or involving the
subject matter hereof. Such indemnity, however, shall not include acts or
omissions to act of the Escrow Agent which involve gross negligence or willful
misconduct.
14. INTERPLEADER. If at any time a dispute shall exist as to the duties of
the Escrow Agent and the terms hereof, of the Escrow Agent shall not have been
able to locate a subscriber(s) to return his (their) funds, the Escrow Agent may
deposit said funds with the Clerk of the U.S. Federal Court, District of
Arizona, and may interplead the other party hereto. Upon so depositing such
funds and filing its complaint in interpleader, the Escrow Agent shall be
completely discharged and released from all further liability or responsibility
under the terms hereof. The parties hereto, for themselves, their heirs,
successors and assigns, do hereby submit themselves to the jurisdiction of said
Court and do hereby appoint the Clerk of said Court as their agent for service
of all process in connection with the proceedings mentioned in this paragraph.
15. COMPLIANCE WITH COURT ORDERS; ETC. The Escrow Agent is hereby expressly
authorized and directed to disregard any and all notices or warnings not
specifically called for in or permitted by this Agreement, or by any other
person or corporation, excepting only orders or process of court, and is hereby
expressly authorized to comply with and obey any and all orders, judgments, or
decrees of any court, and in case the Escrow Agent obeys or complies with any
such order, judgment or decree of any court, it shall not be liable to any of
the parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding that any such order, judgment, or decree may be
subsequently reversed, modified, annulled, set aside or vacated, or found to
have been entered without jurisdiction.
16. NOTICES TO PARTIES AND COUNSEL All notices, demands or requests
required or authorized hereunder shall be deemed given sufficiently if in
writing and sent by registered mail or certified mail, return receipt requested
and postage prepaid, to, in the case of the Company:
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Xxxxxxxx X. Xxxxxxxxx, President
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
and in the case of the Escrow Agent, to:
Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
17. GOVERNING LAWS. The validity, interpretation and construction of this
agreement and of each part hereof shall be governed by the laws of the State of
Arizona.
18. OBTAINING ACCOUNT INFORMATION. The persons named on Schedule 1 to this
agreement are authorized at any time, one or more times, to obtain without delay
the balance and other information concerning the Escrow Account, in person or by
telephone.
IN WITNESS WHEREOF, the Company and the Escrow Agent have executed this Escrow
Agreement on the day and year of the first above written.
PRACTICAL PLASTICS, INC.
/s/ Xxxxxxxx X. Xxxxxxxxx
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By: Xxxxxxxx X. Xxxxxxxxx
Its: President
ESCROW AGENT
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
SCHEDULE 1
Xxxxxxxx X. Xxxxxxxxx
Xxxxx X. XxXxxxx
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