EXHIBIT 10.12
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of this 15th day of
March, 2001, by and between RETRACTABLE TECHNOLOGIES, INC. (the "Company") and
TEXAS BANK (the "Escrow Agent").
WHEREAS, the Company is offering investors up to 2,000,000 shares of
Common Stock in a public offering upon the terms and conditions set forth in a
Prospectus, copies of which have been delivered to the Escrow Agent.
WHEREAS, The Company desires to make appropriate arrangements with the
Escrow Agent for placing in escrow certain monies paid by Subscribers for the
purchase of such Common Stock and for the delivery of such monies to the
respective investor or the Company, as the case may be.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
herein contained, the parties hereto, intending to be legally bound, and to set
forth in this Agreement their respective rights, duties and obligations in
connection with the holding and delivery of the Escrow Funds, hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms, wherever used in this Escrow Agreement, shall have
the following meanings:
1.01 "Escrow Agent" shall mean TEXAS BANK.
1.02 "Escrow Account" shall mean the account established by the Company
with Escrow Agent for the purpose of receiving and holding Escrow
Funds.
1.02 "Escrow Agreement" shall mean this Escrow Agreement and as
appropriate, all amendments and supplements thereof, if any.
1.03 "Escrow Funds" shall mean monies paid by Subscribers for the
purchase of the Common Stock delivered to the Escrow Agent
pursuant to the Escrow Agreement.
1.04 "Offering" shall mean the Offering of the Common Stock pursuant to
the terms of the Prospectus.
1.05 "Company" shall mean RETRACTABLE TECHNOLOGIES, INC., a Texas
corporation.
1.06 "Prospectus" shall mean the Form SB-2 Registration Statement of
the Company dated December 22, 2001 and as such may be
subsequently amended.
1.07 "Subscriber" shall mean each person committing to purchase Common
Stock by executing a Subscription Agreement and delivering to the
Escrow Agent such document and the funds necessary for payment in
full for said Common Stock; and, "Subscribers" shall mean all such
Subscribers collectively.
1.08 "Termination Date" shall mean the earliest to occur of the
following:
(a) The sale of 2,000,000 shares of Common Stock, or
(b) November 1, 2001, unless extended by the Company in
writing for an additional ninety (90) days to
January 30, 2002.
1.09 "Common Stock" shall mean 2,000,000 shares of the Company's Common
Stock at $15 per share each and offered pursuant to the
Prospectus.
ARTICLE II
ACCEPTANCE OF APPOINTMENT
DELIVERY OF ESCROW FUNDS, COMPENSATION
2.01 Acceptance of Appointment. Escrow Agent hereby agrees to act as
Escrow Agent under this Escrow Agreement.
2.02 Delivery of Escrow Funds. All funds committed by Subscribers for
the subscription of Common Stock will be promptly deposited with
the Escrow Agent and will be held by the Escrow Agent in escrow,
as provided in this Escrow Agreement for the benefit of the
Company and the Subscribers, pending delivery of Escrow Funds to
the Company or return thereof to the Subscribers pursuant to the
terms thereof. The Escrow Agent may reject any check which is not
properly endorsed or accompanied by a Subscription Agreement. The
Escrow Agent shall immediately deposit such check for collection
and shall not be accountable for the proceeds of such check until
the proceeds are received by the Escrow Agent in final, collected
funds. The Company shall simultaneously with the delivery of such
funds, deliver to Escrow Agent executed counterparts of the
Subscription Agreement related to the particular Escrow Funds so
delivered.
2.03 Investment of Escrow Funds; Compensation. The Escrow Agent shall,
during the term of the escrow provided for hereby, deposit the
Escrow Funds in such accounts permitted by the appropriate
Government Agency, if any, and the NASD, such as money market
accounts issued by banks or short-term government obligations. The
Escrow Account shall bear interest at the prevailing rate and the
funds may be deposited or withdrawn upon immediate notice and
without penalty and with no time maturity. No interest will accrue
on such Escrow Funds until five (5) days after deposit in the
Escrow Account.
ARTICLE III
CONDITION OF ESCROW
3.01 Duration of Escrow and Delivery of Escrow Funds. The Escrow Agent
shall hold all of the Escrow Funds until the occurrence of one of
the following events, and upon such occurrence shall deliver the
Escrow Funds as follows:
(a) If the Escrow Agent shall have received written notice from
the Company that less than 30,000 shares of Common Stock have
been sold as of the Termination Date, or any extension
thereof, all Escrow Funds shall promptly be released from
escrow and returned to the respective Subscribers at the
addresses specified on the signature page of their
Subscription Agreement.
(b) If the Escrow Agent shall have received written notice from
the Company prior to the Termination Date, or any extension
thereof, that at least 30,000 shares of Common Stock have
been sold, the Escrow Agent shall release from escrow and
deliver to the Company the Escrow Funds.
(c) If the Escrow Agent shall have received written notice from
the Company prior to the termination date, or any extension
thereof, that more than 30,000 shares of Common Stock have
been sold, the Escrow Agent shall release from escrow and
deliver to the Company, all of said Escrow Funds. All funds
will be returned to those Subscribers not selected by the
Company to participate in the Common Stock Offering.
3.02 Rights, Privileges, Immunities and Liabilities of Escrow Agent.
The following shall govern the rights, privileges, immunities and
liabilities of the Escrow Agent:
(a) The Escrow Agent is not a party to, and is not bound by any
agreements with the Company or the Subscribers relating to
this offering, other than this Agreement.
(b) The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action permitted by it to be taken or
omitted, in good faith and in the exercise of its own best
judgment, and may rely conclusively and shall be protected in
acting upon any order, notice, demand, certificate, opinion
or advice of counsel (including counsel chosen by the Escrow
Agent), statement, instrument, report or other paper or
document (not only as to its due execution and the validity
and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which
is believed by the Escrow Agent to be genuine and to be
signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or
any waiver, modification, termination or rescission of this
Agreement unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if
the duties or rights of the Escrow Agent are affected, unless
it shall have given its prior written consent thereto. The
Escrow Agent shall not be responsible for the sufficiency or
accuracy, the form of, or the execution, validity, value or
genuineness of, any document or property received, held or
delivered by it hereunder, or of any signature of endorsement
thereon, or for any lack of endorsement thereon, or for any
description therein, nor shall the Escrow Agent be
responsible or liable in any respect on account of the
identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any document
or property paid or delivered by the Escrow Agent pursuant to
the provisions hereof.
(c) The obligations of the Escrow Agent to the Subscribers under
this Agreement shall not be terminated by the death or
incapacity of a Subscriber or the occurrence of any other
event, or in the case the Subscriber is acting on
behalf of a trust, by the death of any trustee or the
termination of the trust. If a Subscriber should die or
become incapacitated or, in the case of a trust, if the trust
should terminate, or if any other such event occurs before
the termination of this Agreement, the Escrow Agent is
authorized and directed to deal with the Escrow Funds in
accordance with the provisions of this Agreement, as if such
death, incapacity, termination or other event had not
occurred, regardless of whether the Escrow Agent receives
notice thereof.
(d) The Escrow Agent shall be indemnified and held harmless by
the Company from and against any expenses, including counsel
fees and disbursements, or loss suffered by the Escrow Agent
in connection with any action, suit or other proceeding
involving any claim, or in connection with any claim or
demand, which in any way directly or indirectly, arises out
of or relates to this Agreement, the services of the Escrow
Agent hereunder, the monies or other property held by it
hereunder or any such expense or loss. Promptly after the
receipt by the Escrow Agent of notice of any demand or claim
or the commencement of any action, suit or proceeding, the
Escrow Agent shall, if a clam in respect thereof shall be
made against the Company, notify the Company thereof in
writing; but the failure by the Escrow Agent to give such
notice shall not relieve the Company from any liability which
the Company may have to the Escrow Agent hereunder. The
Escrow Agent, however, shall not be indemnified for its own
willful misconduct or gross negligence.
(e) Notwithstanding any obligation to make payments and
deliveries hereunder, the Escrow Agent may retain and hold
for such time as it deems necessary such amount of monies or
property as it shall from time to time in its sole discretion
deem sufficient to indemnify itself for any loss or expense
or for any amounts due it. For the purposes hereof, the term
"expense or loss" shall include all amounts paid or payable
to satisfy any claim, demand or liability, or in settlement
of any claim, demand, action, suit or proceeding settled with
the express written consent of the Escrow Agent, and all
costs and expenses, including but not limited to, counsel
fees and disbursements paid or incurred in investigating or
defending any such claim, demand, action, suit or proceeding.
(f) In the event of any disagreement between the Company or the
Subscribers resulting in adverse claims or demands being made
in connection with the Escrow Funds, 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 may, at its
discretion, refuse to comply with any claims or demands on
it, or refuse to take any other action hereunder, so long as
such disagreement continues or such doubt exists, and in such
event, the Escrow Agent shall not be or become liable in any
way or to any person for its failure or refusal to act. The
Escrow Agent shall be entitled to continue to refrain from
acting until (i) the rights of all interested parties shall
have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have
been adjusted and all doubt resolved by agreement among all
of the interested parties, and the Escrow Agent shall have
been notified thereof in writing, signed by all such parties.
The rights of the Escrow Agent under this paragraph are
cumulative of all other rights which it may have by law or
otherwise.
(g) After the Escrow Agent has delivered all of the Escrow Funds
pursuant to the terms of this Escrow Agreement, it shall be
discharged from any further obligations hereunder, and
released from all liability under this Escrow Agreement.
(h) The Escrow Agent may resign at any time and be discharged
from its duties as escrow agent hereunder by its giving the
Company at least thirty (30) days prior written notice
thereof. As soon as practicable after its resignation, the
Escrow Agent shall turn over to a successor escrow agent
appointed by the Company all monies and property held
hereunder (less such amount as the Escrow Agent is entitled
to retain pursuant to other provisions in this Escrow
Agreement) upon presentation of the document appointing the
new escrow agent and its acceptance thereof. If no new agent
is so appointed within the thirty (30) day period following
the giving of such notice of resignation, the Escrow Agent
may deposit the Escrow Funds with any court it deems
appropriate. The Escrow Agent shall resign and be discharged
from its duties as escrow agent hereunder if so requested in
writing at any time by the Company, provided, however, that
such resignation shall become effective only upon acceptance
of appointment by a successor escrow agent as provided in
this subsection.
(i) From time to time on and after the date hereof, the Company
shall deliver or cause to be delivered to the Escrow Agent
such further documents and instruments and shall do or cause
to be done such further acts as the Escrow Agent shall
reasonably request (it being understood that the Escrow Agent
shall have no obligation to make such request) to carry out
more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure
itself that it is protected hereunder.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 Notices. Any and all notices permitted or required to be given
under the terms hereof shall be in writing and may be served by
certified mail, return receipt requested, postage prepaid, and
addressed to the party to be notified at the appropriate address
specified below, or by delivering the same in person to such
party, or by prepaid telegram, cablegram, or radiogram, addressed
to the party to be notified at said address. Any notice given in
any authorized manner shall be effective only if and when
received. The mailing addresses of the parties are as follows:
The Company Retractable Technologies, Inc.
000 Xxxx Xxxx, X.X. Xxx 0
Xxxxxx Xxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
The Escrow Agent Texas Bank
000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Lea Xxx Xxxxxx
The Subscribers Address specified in their
Subscription Agreements
4.02 Successors. This Escrow Agreement shall be binding upon and inure
to the benefit of the Company and the Escrow Agent, and their
respective successors and assigns and each Subscriber, his heirs,
successors, assigns, and legal representatives (upon execution and
delivery to the Escrow Agent of a Subscription Agreement).
4.03 Article and Paragraph Headings. The article and paragraph headings
contained in this Escrow Agreement are for reference purposes only
and shall not affect in any way the mean of interpretation of this
Escrow Agreement.
4.04 Choice of Law. This Escrow Agreement shall be construed and
enforced in accordance with the laws of the State of Texas, and
venue in any action arising hereunder shall be in a court of
competent jurisdiction in Xxxxxx County, Texas.
4.05 Holidays. Wherever under the terms and provisions of this Escrow
Agreement the time for performance of a condition falls upon a
Saturday, Sunday or holiday, such time for performance shall be
extended to the next business day.
4.06 Pronouns. The necessary grammatical changes required to make the
provisions of this Escrow Agreement apply in singular or the
plural sense, the masculine or the feminine gender and to either
corporations, associations, partnerships, fiduciaries or
individuals, shall in all instances be assigned as though each
were fully expressed.
4.07 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
4.08 Effective Date. The effective date of this Escrow Agreement as
between the Company and the Escrow Agent shall be the 15th day of
March 2001, and shall be effective as to each Subscriber upon
the execution and delivery of the signature page of his
Subscription Agreement.
4.09 This Escrow Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except
by an instrument in writing signed by the party to be charged.
EXECUTED this 15th day of March 2001.
The "Company" The "Escrow Agent"
Retractable Technologies, Inc. Texas Bank
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxx Xxx Xxxxxx
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Xxxxxx X. Xxxx, Xxx Xxx Xxxxxx
President and CEO Executive Vice President
