ESCROW AGREEMENT
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THIS ESCROW AGREEMENT ("Agreement") is entered into by and among NEOSURG
TECHNOLOGIES, INC., LTD. ("Customer"), FIRST COMMUNITY BANK ("Bank") and
Investors Trading Corp. d/b/a Oxford Financial Group ("Oxford").
WHEREAS, the Customer is in the process of effecting a public offering of
its shares common stock (the "Shares") under which Oxford will be soliciting
subscription funds in the form of cash, check, or other immediately available
funds (the "Escrowed Funds") from Investors at a price of $6.75 per share (the
"Offering") in the offering; and
WHEREAS, on September _____, 2000, the Securities and Exchange Commission
declared effective the Customer's Registration Statement on Form SB-2 for the
purpose of registering for sale under the Securities Act of 1933, as amended,
592,592 shares (the "Minimum Number of Shares") to 2,400,000 shares of its
common stock in the Offering;
WHEREAS, the subscription period for the Offering will expire at 4:00 p.m.,
C.S.T. on December 31, 2000, subject to the Customer's right to extend the
subscription period without notice until March 31, 2001, or terminate the
Offering at any time (the "Expiration Date") and subject further to the right of
Oxford, in its sole discretion, to permit Investors to submit irrevocable orders
together with legally binding commitments for payment for Shares of for which
they subscribe at any time prior to the Expiration Date with payment to be
received at any time prior to 24 hours before completion of the Offering (the
"Closing"); and
WHEREAS, the Customer and Oxford desire that such funds be deposited at the
Bank in an interest bearing escrow account for safekeeping pending the results
of the offering of the Shares; and
WHEREAS, the parties desire to enter into certain agreements regarding said
escrow account;
NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties do hereby agree as follows:
1. Appointment, Acceptance, and Compensation
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(a) The Customer and Oxford hereby appoint the Bank, a state banking
association, as its escrow agent under this Agreement and the Bank
hereby accepts such appointment. This Agreement will govern the
relationship between the Bank, Oxford and the Customer with respect
to the Escrowed Funds (as defined in Section 3 below).
(b) The Bank shall receive no compensation for its services hereunder.
However, the Bank shall be reimbursed for all out-of-pocket
expenses, including, but not limited to, reasonable attorney's fees,
incurred in connection with the services rendered by the Bank
pursuant to this Agreement. Customer shall pay all expenses of the
Bank under this Agreement directly, and none of such expenses shall
be charged against or paid from the Escrowed Funds.
2. Establishment of Escrow Account. The Bank shall establish a
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bank account under the name "NeoSurg Technologies, Inc., Escrow Account" (the
"Escrow Account"). The Escrow Account shall be separate from any account of the
Customer. The Escrow Account shall bear interest at the prevailing rate.
Oxford will instruct Investors to make checks for subscriptions payable to the
order of or wire transfer funds directly to Oxford which shall promptly transmit
such funds to the Escrow Agent for deposit into the Escrow Account in accordance
with the provisions of Rule 15c2-4 of the Securities Exchange Act of 1934, as
amended.
3. Deposits to Escrow Account. The Customer and Oxford may, from time
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to time, deliver, or cause to be delivered, to the Bank, for deposit into
the Escrow Account, funds received from Investors. Such funds may be delivered
by check or other instrument, or may be effected by wire transfer. Funds shall
be drawn on domestic branches of United States banks, shall be payable in United
States dollars, and shall be made payable to the order of "NeoSurg Technologies,
Inc., Escrow Account." All funds delivered by the Customer or Oxford to the
Bank, when cleared and collected, shall be referred to herein as the "Escrowed
Funds." The Bank is hereby authorized, on behalf of the Customer, to endorse
and forward for presentment and collection all checks received on account of
subscriptions for Shares. If, after the receipt and deposit by the Bank of any
check tendered in connection with any subscription, such check shall be returned
as uncollectible, the Bank shall immediately return such check to Oxford for
disposition.
The Customer will deposit or cause to be deposited with the Escrow Agent
all proceeds from the sale of the Shares received from Investors, accompanied by
executed Order Forms and Certifications in the form attached hereto as Exhibit
"A" and "B." The Escrow Agent shall (i) make copies of all subscription checks,
Order Forms and Certificates received by it, (ii) promptly deposit such checks
for collection in the Escrow Account to be maintained hereunder, (iii) retain a
copy of each Order Form and Certificate for its records and (iv) promptly
forward to the Customer and Oxford a copy of each such check and the executed
original of each such Order Form and Certificate if received. The Escrow Agent
shall promptly notify the Customer and Oxford of any subscription received
without accompanying subscription documents or where the subscription does not
exactly match the subscription document ("Unidentified Subscriptions"). Any
Unidentified Subscriptions and accompanying documents not identified in writing
by the Customer or Oxford within three (3) business days of such notification
shall be returned by the Escrow Agent to the Investor. All Unidentified
Contributions that are subsequently identified shall be immediately deposited
into escrow.
Based upon information set forth in the Order Forms delivered hereunder,
the Escrow Agent shall maintain a written record of names and addresses of the
Investors, the amount of the Shares subscribed for by each Investor and the
amounts received from each Investor
4. Safekeeping of Funds. The Bank shall hold all funds deposited in
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the Escrow Account in safekeeping until (i) the release of the Escrowed Funds
to Customer pursuant to Section 5 below, or (ii) the return of the Escrowed
Funds to the Investors pursuant to Sections 7 and 8 below. Additionally, the
Bank will:
(a) allow the administrators of the states listed in Schedule A the
right to inspect and make copies of the records of the Bank at
any reasonable time wherever the records are located;
(b) notify the administrators of such states in writing upon the release
of the Escrowed Funds pursuant to Sections 5 and 8 below;
(c) release and return the Escrowed Funds to the Investors with interest
and without any deductions for expenses, including expenses of the
Bank, in the event that the subscriptions for the Shares are
insufficient to meet the minimum offering amount within the time
specified in this Agreement
5. Escrow Release The Escrow Agent shall notify the Customer and Oxford
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at such time as it has received, in payment for the Shares, cash and
subscriptions aggregating $4,000,000 (the "Target Amount").
(a) At such time as the conditions for the release of the Escrowed Funds
shall have been met, as described in Section (b) below (the "Escrow
Release"), the Bank shall immediately release and deliver the
Escrowed Funds to Customer.
(b) As a condition to the release of the Escrowed Funds to Customer, (i)
the total amount of the Escrowed Funds must equal or exceed the
Target Amount; and (ii) Customer must provide the Bank with (A) a
certificate, executed by the Customer under penalties of perjury,
that it has received subscriptions for the Minimum Number of Shares
and (B) written Disbursement Instructions outlined in 5(c) below
from the Customer and Oxford.
(c) Each Disbursement Instruction shall be signed by two officers of the
Customer and Oxford and shall contain the following information: (i)
a reference to this Agreement, (ii) the identity of the person to
whom a disbursement of Escrow Funds is to be made, (iii) the amount
of Escrow Funds to be disbursed (including the interest thereon),
(iv) instructions as to the form or method and destination of the
disbursement (e.g., cashier's, wire transfer instructions) and (v)
a summary statement of the event or condition which has occasioned
the delivery of the Disbursement Instruction.
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6. Additional Deposits. After the Target Amount of cleared funds has
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been received, the Escrow Agent shall continue collecting Investor's funds,
pursuant to the procedure set forth above, until jointly notified by the
Customer and Oxford to either disburse such funds to the Customer or return the
Investors' amounts exceeding the Target Amount to such Investors presenting
funds over the Target Amount, with interest accrued thereon. The Escrow Agent
shall immediately disburse such funds to the Customer from time to time upon
written joint notification from the Customer and Oxford that such subscriptions
have been accepted by the Customer.
7. Rejected Subscriptions. In the event that the Customer rejects any
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subscription for any reason, the Bank shall, upon receipt of written
instructions from the Customer, return and deliver the Escrowed Funds
attributable thereto, with interest, if any, and without deduction, to the
Investor from whom the Escrowed Funds were received at the address provided to
the Bank by the Customer. Such funds shall be returned by certified mail,
return receipt requested, and the Bank may complete the return receipt to such
certified mail so that such receipts are returned to the Customer.
8. Failure to Achieve Escrow Release. In the event that Escrow Release
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does not occur on or before ________________, 2001, the Bank shall promptly,
deliver to each Investor, at the addresses provided by the Customer to the Bank,
the Escrowed Funds held on behalf of each Investor.
9. Ownership of Funds. The Bank does hereby acknowledge and agree that
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all Escrowed Funds held in the Escrow Account shall, until disbursed to Customer
in accordance with the provisions of this Agreement, be held for the benefit of
each Investor and each Investor shall be considered the owner of its respective
Escrowed Funds for all purposes.
10. Successor Escrow Agents. The Bank, or any successor escrow agent,
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may resign from its duties under this Agreement at any time by giving notice in
writing to the Customer and Oxford and shall be discharged from its duties under
this Agreement on the first to occur of the appointment of a successor escrow
agent as provided in this Section, or the expiration of thirty (30) calendar
days after such notice is given, and may be discharged from its duties under
this Agreement upon receipt from the Customer and Oxford of five (5) days prior
written notice of such discharge. In the event of any resignation or discharge
of the Bank, a successor escrow agent shall be appointed, which shall be
acceptable to Oxford and the Customer. A successor escrow agent shall be
selected from among those state or national banks possessing trust powers whose
principal office is located in the United States of America. Any successor
escrow agent shall deliver to the Customer, Oxford and the Bank a written
instrument accepting appointment under this Agreement, and thereupon it shall
succeed to all of the rights and duties of the Bank hereunder, and shall be
entitled to receive the Escrowed Funds. Upon the resignation or discharge of
the Bank, the Bank shall deliver all Escrowed Funds in its possession pursuant
to the terms of this Agreement to such person or persons as the Customer and
Oxford shall jointly designate in writing.
11. Rights, Privileges, Immunities and Liabilities of the Bank: The
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following shall govern the rights, privileges, immunities and liabilities of the
Bank:
(a) Not Party to Other Agreements. The Bank is not a party to, and is
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not bound by, any agreements involving the Customer or Oxford
other than this Agreement.
(b) Indemnification. In the event the Bank becomes involved in any
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suit, litigation, or other investigative or legal proceeding in
connection with this Agreement, the Escrowed Funds, or any matter
related thereto, the Customer agrees to indemnify and save the Bank
and Oxford harmless from all loss, costs, damage, expense,
liability, and attorney's fees suffered or incurred by the Bank or
Oxford as a result thereof, except any such loss, cost, damage,
expense, liability, or attorney's fees that arise as a result,
directly or indirectly, of the Bank's gross negligence or willful
misconduct.
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(c) Acting on Notices. The Bank shall have no responsibility for the
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genuineness or validity of any document or other item deposited
with it, and shall be protected in acting in accordance with any
written notice, request, waiver, consent, certificate, receipt,
authorization, power of attorney, or other document or instrument
that the Bank, in good faith, believes to be genuine and signed by
the proper parties.
(d) Standard of Care. The Bank shall not be liable for anything that
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it may do or refrain from doing in connection herewith provided
that it acts in good faith.
(e) Consultation with Counsel. The Bank may consult with legal counsel
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in the event of any dispute or question as to the construction
of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in
acting in accordance with the opinion and instructions of such
counsel.
(f) Discharge of Obligations. The Bank, having transferred the
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Escrowed Funds to the Customer or the Investors in accordance with
The provisions of this Agreement, shall be discharged from any
further obligations hereunder.
12. Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been duly given if delivered or mailed,
first class, certified or registered, postage prepaid, return receipt requested,
addressed to the party for whom they are intended at the following addresses:
A. If to Bank: 0000 Xxx Xxxx Xxxx.
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President
B. If to Customer: 00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
C. If to Oxford 0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Such names and addresses may be changed by written notice.
13. Entire Agreement and Amendments. This Agreement contains the
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entire understanding of the parties hereto with respect to the subject matter
contained herein and may be amended or terminated (except as expressly provided
herein) only by a written instrument executed by all parties, or their
respective successors or assigns. There are no restrictions, promises,
warranties, covenants, or undertakings other than those expressly set forth
herein.
14. Headings. The section and paragraph headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15. Applicable Law. This Agreement shall be construed and enforced in
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accordance with the laws of the state of Texas without regard to its conflict of
law rules.
16. Parties in Interest. This Agreement shall inure to the benefit of
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and be binding upon the Bank, the Customer, Oxford, the Investors, and their
successors and assigns.
17. Provisions Severable. If any one or more covenants, agreements, or
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provisions herein shall be held for any reason whatsoever invalid or
unenforceable, then such covenants, agreements, or provisions shall be null and
void and shall be deemed severable from the remainder of this Agreement and in
no way affect the validity of any such remainder.
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18. Number and Gender. Whenever required by the context, any reference
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herein to the singular shall include the plural, any reference to the plural
shall include the singular, and the gender of any pronoun shall mean and include
the appropriate gender, whether masculine, feminine, or neuter.
19. Counterparts. This Agreement may be executed simultaneously in
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multiple counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
20. Taxpayer Information. Prior to any investment of Escrow Funds, the
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Customer shall provide the Escrow Agent with written certification of its
taxpayer identification number, and in any event, with appropriate W-8 or W-9
forms within 30 days from the date hereof. Failure to provide such information
and forms may result in a penalty and require the Escrow Agent to withhold tax
on any interest payable hereunder.
EXECUTED this the ___ day of _______, 2000.
NEOSURG TECHNOLOGIES, INC.
BY: /s/ Xxxxx X. O'Heeron
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XXXXX X. O'HEERON, President
FIRST COMMUNITY BANK
BY: /s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX, President
INVESTORS TRADING CORP., d/b/a
OXFORD FINANCIAL GROUP
BY: /s/ Xxxxxxx Xxxx
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XXXXXXX XXXX, President
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