EXHIBIT 1.2
FORM OF PROCEEDS ESCROW AGREEMENT
THIS PROCEEDS ESCROW AGREEMENT (the "Agreement") is made and entered into this
__ day of ________, 2001, by and between ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. a California
corporation (the "Company"), and San Diego National Bank (the "Escrow Agent").
Premises
The Company proposes to offer for sale to the general public in certain states a
minimum of 500,000 shares of common stock up to a maximum of 5,000,000 shares of
common stock, par value $0.001, at an offering price of $0.10 per share (the
"Shares"), pursuant to the registration provisions of the Securities Act of
1933, as amended, and pursuant to an registration statement on Form SB-2 (the
"Registration Statement"), S.E.C. File No. ______, on file with the Securities
and Exchange Commission (the "Commission"). The Company will offer the Shares
for sale through its officers and directors on the basis of a minimum of 500,000
shares and a maximum of 5,000,000 shares in accordance with the terms of the
prospectus (the "Prospectus") included in the Registration Statement. The
Company may also enter into agreements with certain selected dealers to sell the
Shares, in which event the Company will pay a sales commission of ten percent
(10%) to such selected dealers for actual sales. In accordance with the terms of
the Prospectus, the Company desires to provide for the escrow of the minimum
subscription payments for Shares until the amount, as set forth below, has been
received.
Agreement
NOW, THEREFORE, the parties hereto agree as follows:
1. Until termination of this Agreement, all funds collected by the Company or
any dealers from subscriptions for the purchase of Shares in the subject
offering shall be deposited promptly with the trust department of the Escrow
Agent, but in any event no longer than noon of the next business day following
receipt.
2. Concurrently with transmitting funds to the trust department of the Escrow
Agent, the Company and any dealers shall also deliver to the Escrow Agent a
schedule setting forth the name and address of each subscriber whose funds are
included in such transmittal, the number of Shares subscribed for, and the
dollar amount paid. All funds so deposited shall remain the property of the
subscriber and shall not be subject to any lien or charges by Escrow Agent, or
judgments or creditors claims against the Company until released to it in the
manner hereinafter provided.
3. If at any time prior to the expiration of the minimum offering period, as
specified in paragraph 4, $50,000 has been deposited pursuant to this Agreement,
the Escrow Agent shall promptly confirm the receipt of such funds to the Company
and on written request of the Company, promptly transmit 10% of the amount
deposited in escrow to those dealers, if any, as designated by the Company as
their compensation for commissions in connection with their sale of the Shares;
and the balance to the Company (such event is hereinafter referred to as the
"Closing"). Thereafter, the Escrow Agent shall continue to accept deposits from
the Company and any such dealers and transmit without further request or
instruction, 10% percent of the amounts deposited to those dealers, if any, as
designated by the Company and the balance to the Company until the offering is
terminated.
4. If within 90 days after the effective date of the Registration Statement
(unless extended by the Company for an additional 90 days), the Company and any
dealers have not deposited $50,000 in good funds with the Escrow Agent, the
Escrow Agent shall so notify the Company and shall promptly transmit to those
investors who subscribed for the purchase of the Shares the amount of money each
such investor so paid. The Escrow Agent shall furnish to the Company an
accounting for the refund in full to all subscribers.
5. If at any time prior to the termination of the escrow the Escrow Agent is
advised by the Commission that a stop order has been issued with respect to the
Registration Statement, the Escrow Agent shall, 20 days after the date of any
such stop order, return all funds to the respective subscribers unless it
receives written notice within such 20-day period that the stop order has been
lifted.
6. It is understood and agreed that the duties of the Escrow Agent are entirely
ministerial, being limited to receiving monies from the Company and the dealers,
if any, and holding and disbursing such monies in accordance with this
Agreement. The Escrow Agent shall have no obligation to invest the offering
proceeds.
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7. The Escrow Agent is not a party to, and is not bound by, any agreement
between the Company and the dealers, if any, which may be evidenced by or arise
out of the foregoing instructions.
8. The Escrow Agent acts hereunder as a depository only, and is not responsible
or liable in any manner whatsoever for the sufficiency, correctness,
genuineness, or validity of any instrument deposited with it, or with respect to
the form or execution of the same, or the identity, authority or rights of any
person executing or depositing the same.
9. The Escrow Agent shall not take any action pursuant to additional escrow
instructions not included herein unless such instructions are in writing and
have been signed by the Company.
10. The Escrow Agent shall not be required to take or be bound by notice of any
default of any person or to take such default involving any expense or
liability, unless notice in writing is given to an officer of the Escrow Agent
of such default by the undersigned or any of them, and unless it is indemnified
in a manner satisfactory to it against any expense or liability arising
therefrom.
11. The Escrow Agent shall not be liable for acting on any notice, request,
waiver, consent, receipt, or other paper or document believed by the Escrow
Agent to be genuine and to have been signed by the proper party or parties.
12. The Escrow Agent shall not be liable for any error of judgment or for any
act done or step taken or omitted by it in good faith, or for any mistake of
fact or law, or for anything which it may do or refrain from doing in connection
herewith, except its own willful misconduct.
13. The Escrow Agent shall not be answerable for the default or misconduct of
any agent, attorney, or employee appointed by it if such agent attorney, or
employee shall have been selected with reasonable care.
14. The Escrow Agent may consult with legal counsel in the event of any dispute
or question as to the consideration of the foregoing instructions or the Escrow
Agent's duties hereunder, and the Escrow Agent shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such counsel.
15. In the event of any disagreement between the Company and the Escrow Agent
and/or any other person, resulting in adverse claims and/or demands being made
in connection with or for any papers, money, or property involved herein or
affected hereby, the Escrow Agent shall be entitled at its option to refuse to
comply with any such claim, or demand so long as such disagreement shall
continue and, in so refusing, the Escrow Agent shall not be or become liable to
the undersigned or any of them or to any person named in the foregoing
instructions for the failure or refusal to comply with such conflicting or
adverse demands, and the Escrow Agent shall be entitled to continue to so
refrain and refuse to so act until (a) the rights of adverse claimants have been
fully adjudicated in a court assuming and having jurisdiction of the parties and
the securities, monies, papers, and property involved herein or affected hereby;
and/or (b) all differences shall have been adjusted by agreement and the Escrow
Agent shall have been notified in writing signed by all of the interested
parties.
16. The Escrow Agent reserves the right to resign hereunder, upon ten (10) days
prior written notice to the Company. In the event of said resignation, and prior
to the effective date thereof, the Company, by written notice to the Escrow
Agent, shall designate a successor escrow agent to assume the responsibilities
of the Escrow Agent under this Agreement, and the Escrow Agent immediately shall
deliver any undisbursed offering proceeds to such successor escrow agent. If the
Company shall fail to designate such a successor escrow agent within such time
period, the Escrow Agent may deliver any undisbursed offering proceeds into the
registry of any court having jurisdiction.
17. The consideration for its agreement to act as the Escrow Agent is $_____,
the receipt of which is hereby acknowledged. In addition, if $50,000 is not
received in escrow within the escrow period and the Escrow agent is required to
return funds to investors as provided in section 4, the Escrow Agent shall
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receive a fee of $____ per check for such services. The fee agreed on for
services rendered hereunder is intended as full compensation for the Escrow
Agent's services as contemplated by this Agreement; however, in the event that
the conditions of this Agreement are not fulfilled, the Escrow Agent renders any
material service not contemplated by this Agreement, there is any assignment of
interest in the subject matter of this Agreement, there is any material
modification hereof, any material controversy arising hereunder, or the Escrow
Agent is made a party to or justifiably intervenes in any litigation pertaining
to this Agreement or the subject matter hereof, the Escrow Agent shall be
reasonably compensated for such extraordinary expenses, including reasonable
attorneys' fees, occasioned by any delay, controversy, litigation, or event. Any
additional compensation to the Escrow Agent arising as a result of litigation
pertaining to this Agreement and any other additional compensation to the Escrow
Agent shall be paid by the Company.
18. This Agreement shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns, including any
successor to the Escrow Agent in the event of its liquidation; provided,
however, that no party may assign this Agreement or any interest herein without
the prior written consent of the other parties.
19. This Agreement shall be governed by and interpreted in accordance with the
laws of the State of California and the laws of the United States applicable to
he State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers, as of the date first above
written.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a California Corporation
/S/
Its President
I, _____________________, a duly authorized officer of the Escrow Agent,
hereby acknowledge receipt of this Agreement and agree to act as Escrow Agent
in accordance with said Agreement and on the terms and conditions above set
forth this __ day of ______, 2001.
San Diego National Bank
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