Exhibit 1.3
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is made and entered into this ____ day
of __________, 1998, by and between Xxxxxxx Capital Management Holdings, Inc., a
corporation organized under the laws of the State of Maryland (the "Company"),
The Xxxxxxx Co., a corporation organized under the laws of the State of Maryland
(the "Underwriter"), and UMB BANK, N.A., a national banking association
organized and existing under the laws of the United States of America, as Escrow
Agent (the "Escrow Agent").
W I T N E S S E T H :
WHEREAS, the Company is a corporation organized under the laws of the State of
Maryland and the Underwriter is a corporation organized under the laws of the
State of Maryland and is a wholly-owned direct subsidiary of the Company;
WHEREAS, the Company desires to offer for sale a maximum of 1,250,000 shares
(the "Maximum Offering") of its common stock, $0.001 par value, (the "Shares");
and
WHEREAS, the Company has filed a Registration Statement on Form SB-2 (the
"Registration Statement") under the Securities Act of 1933, as amended, and has
made filings with certain state securities commissions under applicable state
"blue sky" laws relating to the issuance and sale of the Shares;
WHEREAS, in compliance with the terms of the proposed offering set forth in the
Preliminary and Final Prospectuses which are a part of the Registration
Statement (the "Prospectus"), the Company will establish a segregated escrow
account with the Escrow Agent (the "Escrow Account") into which proceeds (the
"Subscription Proceeds") from subscriptions submitted by subscribers (the
"Applicants") to purchase Shares (the "Subscriptions") will be deposited;
WHEREAS, THE OFFERING PERIOD FOR Subscriptions shall commence upon the
effectiveness of the Registration Statement, which date of effectiveness will be
certified in writing to the Escrow Agent by the Company and the Underwriter (the
"Effective Date");
WHEREAS, the termination date of the offering period for Subscriptions will be
on the earlier to occur of: the date selected by the Company, which date will be
certified in writing to the Escrow Agent by the Company and the Underwriter; the
date of the sale of the Maximum Offering; or the date that is one hundred eighty
(180) days after the Effective Date, unless extended by the Company for one or
more additional periods not to exceed an additional thirty (30) days in the
aggregate (the "Additional Periods"), in which case, on that date which such
Additional Periods expire, provided that such Additional Periods are certified
in writing to the Escrow Agent by the Company and the Underwriter, and provided
further that the receipt of such notice by the Escrow Agent is prior to the
termination of this Escrow Agreement (the "Termination Date" and the
period from the Effective Date until the Termination Date is hereinafter
referred to as the "Offering Period");
WHEREAS, upon the receipt by the Escrow Agent of not less than the Minimum
Amount of Subscription Proceeds, the Escrow Agent shall notify the Underwriter
and deliver the Subscription Proceeds to the order of the Company. The Escrow
Agent shall continue to receive and deliver any Subscription Proceeds to the
Company until the end of the Offering Period, on which date the Escrow Account
shall terminate (the "Closing Date"); and
WHEREAS, the Escrow Agent has agreed to act as escrow agent in connection with
and under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
l. Until the Closing Date, the Escrow Agent shall act as escrow
agent hereunder and agrees to receive and hold the Subscriptions in
accordance with this Agreement.
2. All Subscriptions and checks received and not rejected by the
Underwriter on behalf of the Company pursuant to the Prospectus during the
Offering Period shall be transmitted directly to the Escrow Agent by 12:00
Noon Central Time of the next business day after the receipt thereof by
the Underwriter, and shall be deposited by the Escrow Agent in the Escrow
Account. In addition, the Underwriter shall deliver to the Escrow Agent
names, addresses and a completed Form W-9 for each Applicant and such
other information regarding any Applicant as the Escrow Agent may from
time to time request in writing. In the event that the Minimum Amount (as
hereafter defined in Section 8 hereof) is fully subscribed on the date of
initial deposit to the Escrow Agent pursuant to Section 8 hereof, the
information required by the immediately preceding sentence shall not be
required. The Escrow Agent shall provide the Underwriter a statement of
the assets held and transactions of the Escrow Account as the Underwriter
shall from time to time request in writing.
3. Notwithstanding the provisions of Paragraph 2 hereof, if at any
time the Underwriter shall provide written notice to the Escrow Agent that
any Subscription is invalid or unacceptable, in whole or in part, or that
any Subscription Proceeds deposited with the Escrow Agent cannot be
lawfully accepted, in whole or in part, the Escrow Agent shall promptly
(within not less than ten (10) days) deliver to the Applicant submitting
such Subscription , without deduction, the Subscription Proceeds (or
portion thereof) which has been rejected.
4. Upon acceptance of any Subscription and the deposit of the
related Subscription Proceeds into the Escrow Account, the Underwriter
shall provide prompt written notice to the Applicant of such acceptance.
5. Promptly upon the Escrow Agent's receipt of Subscription
Proceeds from the Underwriter, the Escrow Agent shall proceed to collect
upon such payment instrument(s).
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All such collection efforts shall be subject to the Escrow Agent's
collection procedures in the ordinary course of its banking business;
provided, however, that if any payment instrument at any time delivered to
Escrow Agent hereunder shall be returned to Escrow Agent as being
uncollectable, Escrow Agent shall attempt a second time to collect such
item before returning such item to the Underwriter as uncollectable.
Subject to the foregoing, Escrow Agent shall promptly give written notice
to the Underwriter of any uncollected item delivered to Escrow Agent under
this Agreement. Escrow Agent shall not be required or have a duty to take
legal action to enforce payment of any uncollected item delivered to it
under this Agreement. The Escrow Agent shall have no duty or obligation to
collect (except for collection in the ordinary course of its banking
business) any amounts at any time due in respect of any Subscriptions, and
shall not be responsible for any defaults thereunder or hereunder by any
other party, or for the application of any funds received by it from the
Applicants after payment of such funds by it to the Company as herein
provided. In the event that Escrow Agent shall have disbursed Subscription
Proceeds to the Company or returned such moneys to the Applicant in
accordance with this Agreement with respect to any payment instrument and
subsequently it shall be determined that such item shall be uncollectable,
the Company shall upon Escrow Agent's demand reimburse it for the amount
so disbursed.
6. Escrow Agent shall invest all Subscription Proceeds deposited
with it hereunder, and earnings thereon, if any, in obligations of the
United States Government or any agency thereof with maturities of no
greater than ninety (90) days or in bank money market deposits or funds as
the Company shall from time to time direct in writing, and the Escrow
Agent shall incur no liability when investing in accordance with such
direction.
7. The Company and the Underwriter agree to certify in writing to
the Escrow Agent the Effective Date and any Additional Periods. The
Offering Period shall commence on the Effective Date and shall expire on
the Termination Date.
8. If Subscription Proceeds for not less than__________Dollars
($_______________) (the "Minimum Amount") are received and accepted by
the Underwriter and not less than the Minimum Amount in Subscription
Proceeds have been delivered to the Escrow Agent (along with other items
required by Section 2 hereof), have cleared the banking system and are on
deposit in available funds with the Escrow Agent, the Escrow Agent will
notify the Underwriter and pay over to the order of the Company all of the
Subscription Proceeds then on deposit in the Escrow Account, together with
all interest or other income, if any, earned on the Subscription Proceeds
held hereunder. Following such payment, the Escrow Agent shall continue to
receive Subscription Proceeds as provided in Paragraph 2 hereof, and upon
receipt of available funds on or before the Closing Date, shall deliver
such Subscription Proceeds, from time to time, to the order of the
Company. On the Closing Date, all duties and responsibilities of the
Escrow Agent shall cease and terminate, including without limitation, the
obligation to receive and collect Subscription Proceeds and deliver same
to Company.
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9. If Subscription Proceeds for not less than the Minimum Amount
have not been received by the Escrow Agent in available funds by 4:00 P.M.
Central Time on the final day of the Offering Period, Subscription
Proceeds held hereunder by the Escrow Agent will be returned by the Escrow
Agent to the Applicants and any interest earned upon the Subscription
Proceeds shall be paid over to the order of the Company promptly following
the expiration of the Offering Period.
10. Prior to delivery to it of the Subscription Proceeds, the
Company shall have no title, right, claim, lien or any other interest in
the funds held in escrow hereunder, and such funds shall under no
circumstances be available to the Company or its creditors for payment or
reimbursement for liabilities or indebtedness.
11. It is understood and agreed, further, that the Escrow Agent
shall:
A. have no duty to compel delivery of any Subscription by
the Underwriter or the Company and shall be under no duty to
deliver any Subscription, or to pay and transfer any moneys
hereunder, unless the same shall have been first received by
the Escrow Agent pursuant to the provisions of this Agreement;
B. be under no duty to enforce payment of any
Subscription which is to be paid to and held by it hereunder;
C. be under no duty to accept any information from any
person or entity other than the Underwriter and the Company,
or their designated agents, and then only to the extent and in
the manner expressly provided for in this Agreement;
D. act hereunder as a depository only and be protected in
acting upon any Subscription, and related items supplied
pursuant to Section 2 hereof, and the information contained
therein without responsibility to determine the validity or
sufficiency of the same, and be protected in acting upon any
other notice, opinion, request, certificate, approval, consent
or other paper delivered to it and represented to it to be
genuine and to be signed by the proper party or parties;
E. be deemed conclusively to have given and delivered any
notice required to be given or delivered hereunder if the same
is in writing, signed by any one of its authorized officers
and (1) mailed, by registered or certified mail, postage
prepaid, or (2) by hand delivery, in a sealed wrapper,
addressed to the Underwriter or the Company and manually
receipted for by the addressee;
F. be indemnified and held harmless by the Company and the
Underwriter, jointly and severally, against any claim made
against it by reason of its acting or failing to act in
connection with any of the transactions contemplated hereby
and against any loss, liability, cost, suit or expense,
including attorneys' fees and other expense of defending
itself against any claim of liability it may sustain in
carrying
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out the terms of this Agreement except such claims which are
occasioned by its gross negligence or willful misconduct;
G. have no liability or duty to inquire into the terms and
conditions of the Prospectus, Registration Statement,
Subscriptions or any of the exhibits annexed thereto, nor to
ascertain or compel compliance by the Company or the
Underwriter with any of the requirements thereof or of law or
regulation, and that its duties and responsibilities shall be
limited to those expressly set forth under this Agreement and
are purely ministerial in nature;
H. be permitted to consult with counsel of its choice,
including in-house counsel, and shall not be liable for any
action taken, suffered or omitted by it in good faith in
accordance with the advice of such counsel, provided, however,
that nothing contained in this Subparagraph H, nor any action
taken by the Escrow Agent, or of any such counsel, shall
relieve the Escrow Agent from liability for any claims which
are occasioned by its gross negligence or willful misconduct,
all as provided in Subparagraph F above;
I. not be bound by any amendment or revocation of this
Agreement, unless the same shall be in writing and signed by
all of the parties to this Agreement;
J. be entitled, should it be uncertain as to its duties
and rights hereunder (including, without limitation,
uncertainty resulting from receipt of conflicting instructions
or directions from any of the parties hereto), to refrain from
taking any action other than to keep all property held by it
in escrow hereunder until it shall be directed otherwise in
writing by the Underwriter and the Company, or by a final
judgment by a court of competent jurisdiction;
K. have no liability for following the instructions herein
contained or expressly provided for, or written instructions
given, by the Underwriter or the Company;
L. have the right, at any time, to resign hereunder by
giving written notice of its resignation to the Underwriter
and the Company at their address as set forth in Paragraph 12
hereof, at least thirty (30) days before the date specified
for such resignation to take effect, and upon the effective
date of such resignation:
(l) all cash and other funds and all other property
then held by the Escrow Agent hereunder shall be delivered
by it to such successor Escrow Agent as may be designated
in writing by the Company, whereupon the Escrow Agent's
obligations hereunder shall cease and terminate;
(2) if no such successor Escrow Agent has been
designated by such date, all obligations of the Escrow
Agent hereunder shall, nevertheless, cease and terminate,
and the Escrow Agent's sole responsibility thereafter
shall be to
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keep all property then held by it and to deliver the same
to a person designated in writing by the Company or in
accordance with the directions of a final order or
judgment of a court of competent jurisdiction; yet, if no
such designation, order or judgment is received by Escrow
Agent within thirty (30) days after its giving such
resignation notice, it is unconditionally and irrevocably
authorized and empowered to petition a court of competent
jurisdiction for directions.
M. be reimbursed by the Company at the termination of the
escrow for all reasonable costs, fees, charges, expenses,
disbursements and advances (including, but not limited to,
acceptance and administration fees and expenses as
provided in Exhibit A hereto, as well as legal, consultant
and advisor fees and charges) incurred or made by it in
accordance with any provision of this Agreement, or as a
result of the acceptance of this Agreement.
12. By acceptance of its duties hereunder, the Escrow Agent makes
no representation as to and is not responsible or liable in any manner for
the sufficiency, correctness, genuineness, or validity of this Agreement,
the Shares, the Registration Statement, the Prospectus, or any related
document or instrument.
13. All deliveries and notices to the Escrow Agent shall be
effective upon receipt by the Escrow Agent and shall be in writing and
sent or delivered to:
UMB BANK, N.A.
ATTN: Corporate Trust Division
000 Xxxxx Xxxxxx
P. O. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Any notice given on behalf of the Company or the Underwriter shall
be signed by one or more of the officers of the Company or the
Underwriter, as the case may be, and shall be sufficient for all purposes
hereunder.
All deliveries and notices hereunder to the Company and the
Underwriter shall be in writing and shall be sent or delivered to:
The Company at:
Xxxxxxx Capital Management Holdings, Inc.
Attn: Xxxxxx X. Xxxxxxx, Xx.
World Trade Center - Baltimore
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
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The Underwriter at:
The Xxxxxxx Co.
Attn: Xxxxxx X. Xxxxxxx, Xx.
World Trade Center - Baltimore
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
A copy of each delivery, notice and/or report, whether given by
the Underwriter, the Company or the Escrow Agent, shall be simultaneously
sent or delivered to each of the other parties to this Agreement.
14. Any invalidity, in whole or in part, of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement.
15. Nothing in this Agreement is intended to or shall confer upon
anyone other than the parties hereto any legal or equitable right, remedy
or claim. This Agreement shall be construed in accordance with the laws of
the State of Missouri and may be amended or resolved only by a writing
executed by the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto as of the day and year first above
written.
Xxxxxxx Capital Management
Holdings, Inc.,
Company
By:
-----------------------------
Title
--------------------------
The Xxxxxxx Co.,
Underwriter
By:
-----------------------------
Title:
--------------------------
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UMB BANK, N.A., as Escrow Agent,
Escrow Agent
By:
----------------------------
Title
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EXHIBIT A
Acceptance and Annual Fee - review
escrow agreement and establish and
maintain account $1,500.00
Transaction Fees
(a) per subscriber deposit 2.00
(b) per subscriber interest payment 3.00
(c) per subscriber return of
subscription amount if
minimum amount not sold 5.00
(d) per subscriber subscription rejection 10.00
(e) per returned check 10.00
(f) per Form 1099 (Int., B or Misc.) 1.00
In addition to the specified fees, all expenses related to the administration of
the Agreement and the Escrow Account (other than normal overhead expenses of the
regular staff) such as, but not limited to, travel, postage, shipping, courier,
telephone, facsimile, supplies, legal fees, accounting fees, etc., will be
reimbursable. The acceptance and annual fee will be payable by Xxxxxxx Capital
Management Holdings, Inc. at the termination of the escrow. Other fees and
expenses will be billed as incurred or at the termination of the escrow.
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