PROCEEDS IMPOUND & ESCROW AGREEMENT
THIS PROCEEDS IMPOUND & ESCROW AGREEMENT (this "Agreement") is made and
entered into this _____ day of _________, 2002 by and between Java Express,
Inc. (the "Company"), and Centennial Bank, a Utah Banking Corporation (the
"Escrow Agent").
Premises
The Company proposes to offer for sale to the general public in the
States Nevada and Utah, Shares of Common stock (the "Common Stock"), par value
of $.001, at an offering price of $0.05 per Share in accordance with the
registration provisions of the Securities Divisions of the States of Nevada
and Utah and the Securities Act of 1933, as amended, and pursuant to a
registration statement (the "Registration Statement") filed with the
Securities Divisions of the States of Nevada and Utah and the United States
Securities and Exchange Commission. The Company agrees herein to offer for
sale the Common Stock in accordance with the terms of the offering prospectus
filed with the Divisions of Securities of the States of Nevada and Utah. In
accordance with the terms of the Registration Statement, the Company desires
to provide for the impound and escrow of the gross subscription payments for
Common Stock until the amount, as set forth below, has been received.
Agreement
NOW, THEREFORE, the parties hereto agree as follows:
1. The proceeds to the company or to any officer or representative of the
company from subscriptions for the purchase of common stock in the subject
offering shall be deposited promptly with the Escrow Agent, but in any event
no later than five business days following receipt.
2. Concurrently with transmitting funds to the Escrow Agent, the company
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 the Escrow Agent, or judgements 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, at least $60,000.00 has been deposited pursuant
to this Agreement, the Escrow Agent shall confirm the receipt of such funds to
the company.
4. If, within six (6) months after the effective date of the Registration
Statement, the Company and its agents have not deposited at least $60,000.00
in good funds with the Escrow Agent, the Escrow Agent shall notify the company
and shall promptly transmit to those investors who subscribed for the purchase
of 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 this escrow the Escrow Agent
is advised by the Division of Securities of the State of Nevada and Utah or
the Securities and Exchange Commission that a stop order has been issued with
respect to the registration statement, the Escrow Agent shall thereon return
all funds to the respective subscribers.
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
its agents and holding and disbursing such monies in accordance with this
Agreement.
7. The Escrow Agent is not a party to, and is not bound by any agreement
between the company and any other party 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 be required to take or be bound by notice of
any default of any person or to take any action with respect to such default
involving any expense or liability, unless notice in writing is given to an
officer of the Escrow Agent or 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.
10. 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.
11. The Escrow Agent shall not be liable for any error of judgement 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 herein, except its own willful misconduct.
12. 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.
13. 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.
14. In the event of any disagreement between the undersigned or any of
them, the person or persons named in the forgoing instructions, 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
refrain and refuse to so act until:
(a) the rights of adverse claimants have been finally adjudicated in
a court assuming and having jurisdiction of the parties and the money, 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 thereof in writing signed by all of the persons
interested.
15. There shall be no fee or set-up charges by the Escrow Agent. However,
if a minimum of $60,000 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 receive a fee of $5.00 per check for such
service. The fee agreed upon 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 arises 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 attorney's fees, occasioned
by any delay, controversy, litigation, or event and the same may be
recoverable only from the company.
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.
BY: ____________________________________
Duly Authorized Officer
Centennial Bank hereby acknowledges receipt of this Agreement and agrees to
act in accordance with said Agreement and on the terms and conditions above
set forth this _____ day of ____________ 2002.
BY: ____________________________________
Xxxxx Xxxxxxxx, President
Java Express, Inc.
