EXHIBIT 10(iv)
ESCROW AGREEMENT
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ESCROW AGREEMENT
This Escrow Agreement is made the 16th day of March, 2000 at San
Francisco, California, by and between XXXXXXXX.XXX, INC., a California
corporation (the "Customer"), and THE PACIFIC BANK, N.A., a national bank (the
"Bank"), with respect to the following facts.
The Customer wishes to retain the Bank to serve as an escrow holder
("Escrow Holder") for the purpose of holding in escrow certain funds
received by the Customer via Subscription Agreements executed by
investors in an SB-1 Offering conducted by the Customer. The Bank
agrees to serve as Escrow Holder subject to the terms set forth below
1. DEPOSITS INTO ESCROW:
A. The Customer shall deliver to the Bank all checks, drafts,
money orders and funds ("Subscription Payments") and all
Subscription Agreements and other related documents
("Subscription Documents") received by the Customer for the
purchase of the Shares from the purchasers thereof
("Subscribers"). All Subscription Payments shall be made
payable to "The Pacific Bank, N.A., as Escrow Holder for
XXXXXXXX.XXX." All Funds shall be accompanied by evidence of
valuation as provided by the issuing government entity. The
Customer shall also provide a signed IRS Form W-8/W9 to the
Bank.
2. CLOSING:
A. Unless this escrow is either canceled or the Bank's
obligations hereunder are terminated as provided herein, the
Bank shall hold all property and documents deposited into the
Escrow until the occurrence of a CLOSING EVENT, defined as
follows:
The CLOSING EVENTS:
TERMINATION OF THE OFFERING: If the Bank has not received on
or before March 16, 2004, Subscription Payments and/or Funds
in an aggregate amount of not less than $500,000, then the
Bank shall, upon approval by the California Commissioner of
Corporations (the "Commissioner"), release all Subscription
Payments together with the corresponding Subscription
Documents and all interest earned, if any, on a pro rata
basis, to each Subscriber respectively, at the address given
by such Subscriber in the Subscription Agreement. Cash
disbursements by the Bank pursuant to the section shall be
made by the Bank's usual escrow checks and shall be mailed by
first class United States Postal Services mail, postage
pre-paid, as soon as practicable but not later than the third
business day after the Termination Date. All Funds received by
the Bank shall be returned in the same manner.
B. CLOSING OF OFFERING: If the Bank has received on or before
March 16, 2004, Subscription Payments and/or Funds in an
aggregate amount of not less than $500,000, and written
acceptance of each Subscriber by the Customer, and the
Commissioner orders the release of the Subscription Payments,
then the Bank shall disburse all Subscription Payments, plus
all interest accrued on such funds, to the Customer, in
immediately available funds.
This Escrow shall be deemed in a condition to close when a
CLOSING EVENT has occurred and the Bank is otherwise able to
disburse all property held in this Escrow in accordance with
the instructions in Paragraph 2.A or 2.B.
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3. CANCELLATION OF ESCROW:
A. If this Escrow is not closed or in a position to close on
March 16, 2004, this Escrow shall be immediately and
automatically canceled without further notice to, or
instructions from, any party.
B. This Escrow may be canceled by delivery to Bank of notice in
writing signed by all parties hereto stating that the Escrow
is canceled.
C. Upon cancellation of this Escrow, the Bank shall disburse and
deliver the Escrow Funds to the Investors in accordance with
the terms of Paragraph 2.A.
4. ESCROW FEE:
3. The Customer agrees to pay the Bank an Escrow fee of two
thousand five hundred ($2,500) dollars per annum for services
the bank performs hereunder.
4. Upon closing or cancellation of Escrow the Bank is authorized
to deduct said fees from the funds held in Escrow.
5. INVESTMENT OF DEPOSITED FUNDS:
The Escrow funds shall be invested by the Bank in The Pacific Bank
Money Market Trust Savings or other investments of The Pacific Bank,
NA. Funds deposited into Escrow in the form of cash or its equivalent
shall be invested in said account on the day of receipt, if receipt is
before 3:00 P.M., otherwise on the next business day. The amount of the
check, draft or similar instrument deposited into Escrow shall be
invested on the second business day following its receipt by the Bank.
Interest earned on the Escrow funds shall be credited against the
Escrow fee.
6. LIMITATION OF LIABILITY OF BANK:
A. The Bank=s obligations as Escrow Holder are to be determined
solely by these instructions and any subsequent amendments or
supplemental instructions jointly submitted in writing by all
parties hereto. The Bank is not responsible for knowing or
interpreting any provisions of any agreement(s) on which these
instructions may be based, and shall not rely on any knowledge
or understanding the Bank may have of any such agreement(s) in
ascertaining or performing its duties as Escrow Holder. The
Bank will not accept in Escrow any separate contract or
agreement between the parties hereto, or any writing that
purports to be a contract or agreement on which the Bank=s
Escrow instructions are based.
B. The Bank shall be protected in acting in good faith upon any
written notice, request, waiver, consent, receipt or other
paper document furnished to it, not only as to its due
execution and the validity and effectiveness of its provisions
but also as to the truth and accuracy of any information
therein contained. The Bank is relieved from the necessity of
satisfying itself as to the authority of the persons executing
this Escrow Agreement in a representative capacity and shall
not be liable or responsible for forgeries or false
impersonation. Instead, the Bank=s sole concern and
responsibility shall be to hold whatever documents, property
and funds are deposited into this Escrow until the occurrence
of a Closing Event, or until this Escrow or the Bank=s
obligations hereunder are otherwise terminated or canceled as
provided herein.
C. The Bank 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
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or refrain from doing in connection herewith, except as a
result of its own gross negligence or willful misconduct.
D. The bank may consult with, and obtain advice from, legal
counsel in the event of any dispute or controversy that may
arise between the parties hereunder, and it shall incur no
liability and shall be fully protected in acting in good faith
in accordance with the opinion and instructions of such
counsel. The Customer shall be responsible for reasonable
costs incurred by the Bank for such counsel=s services.
E. In case any property deposited under this Escrow Agreement
shall be attached, garnished or if any other judgment or
decree shall be made or entered by a court affecting such
property, or any part thereof, or any act of the Bank, the
Bank is hereby authorized in its own discretion to obey and
comply with all writs, orders, judgments, or decrees so
entered or issued by a court; and if the Bank obeys or
complies with any such writ, order, judgment or decree, the
Bank shall not be liable to any of the parties hereto or to
any other person, firm or corporation by reason of such
compliance.
F. The Customers hereby agree to hold harmless and to indemnify
the Bank from and against all costs, damages, judgments,
attorney=s fees, obligations and liabilities of every kind or
nature (other than its normal and usual operating expenses
incurred in the Bank=s performance hereunder) which, in good
faith, the bank may incur or sustain in connection with or
arising out of this Agreement.
7. REMOVAL OF BANK AS ESCROW HOLDER:
The Customer may at any time remove the Bank as Escrow Holder by
delivery to the Bank of a written notice signed by the Customer stating
that the Bank is being removed as Escrow Holder and instructing the
Bank to deliver all documents and property held in Escrow hereunder to
a successor escrow holder designated in said notice. Upon delivery of
all documents and property held in Escrow hereunder to such successor
escrow holder, the Bank shall be relieved of any and all liability.
8. RESIGNATION BY BANK:
The Bank may resign at any time by giving written notice to the parties
to this Escrow Agreement, and in such event, the Bank shall be absolved
from any and all liabilities upon delivery of all documents and
property held in Escrow hereunder to such successor escrow holder as is
designated in a writing signed by the Customer. In the event that no
successor escrow holder is so designated within 15 business days after
such notice, the Bank at its option may be relieved from any and all
liability hereunder by filing a suit in interpleader as provided in
Paragraph 9.C of this Agreement.
9. CONFLICTING DEMANDS:
In the event that conflicting demands are made upon the Bank with
respect to the Escrow account, the parties hereto acknowledge and agree
that the Bank shall have the absolute right to elect to do any or all
of the following:
A. withhold and stop all further proceedings in performance of
this Agreement until all parties jointly agree in writing as
to how the Bank should proceed hereunder; or
B. resign as set forth in Paragraph 8 above; or
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C. file a suit in interpleader and obtain an order from a court
with jurisdiction over such matter which requires the parties
to interplead and litigate in such court their several claims
and rights against each other. In the event an interpleader
suit is brought, the Bank, at its election, shall be fully
released and discharged from all obligations imposed upon it
under this Agreement, and the Customer agrees to pay and
reimburse the Bank for all reasonable costs, expenses and
attorney=s fees expended or incurred by it in the defense or
prosecution of such interpleader suit as such amounts shall be
fixed and deemed reasonable by the court.
10. COUNTERPARTS:
More than one counterpart of this Agreement may be executed by the
parties hereto, and each fully executed counterpart shall be deemed an
original.
11. GOVERNING LAW:
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California as applied to agreements solely
among California residents to be executed and performed entirely within
California. The parties hereto hereby confer jurisdiction to enforce
any provision of this Agreement upon the courts of California
12. SUCCESSORS AND ASSIGNS:
This Agreement shall not be amended, modified or supplemented except by
a writing executed between the parties hereto.
13. NOTICES:
All instructions, notices and demands provided for herein shall be in
writing, and shall be either served personally; sent by express,
registered, or certified first-class mail, postage prepaid; or
delivered by commercial courier to the parties as follows:
If to the Customer, to:
XXXXXXXX.XXX, INC.
Attention: Xxxxxx Xxxxxxx, President
c/x Xxxxx & Xxxxxxxxxxx, LLP
000 Xxxxxxxxxx Xxxxxx, 00
Xxx Xxxxxxxxx, XX 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to the Bank, to:
The Pacific Bank, N.A.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Trust Division
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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14. CUSTOMER REPRESENTATION
The Customer represents and agrees that it has not made nor will it in the
future make any representation that states or implies that the Bank has
endorsed, recommended or guaranteed the purchase, value or repayment of the
securities offered for sale by the Customer. The Customer further agrees that it
will insert in any prospectus, offering circular, advertisement, subscription
agreement or other document made available to prospective purchasers of the
Securities that following statement in bold face type: "The Pacific Bank,
National Association is acting only as an Escrow Holder in connection with the
offering of securities described herein, and has not endorsed, recommended or
guaranteed the purchase, value or repayment of such securities." The Customer
will furnish to the Bank a copy of each such prospectus, offering circular,
advertisement, subscription agreement or other document at least 5 business days
prior to its distribution to prospective purchasers of the securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered the day and year first above written.
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CUSTOMER XXXXXXXX.XXX,INC.
a California corporation
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
By: Xxxxxx X. Xxxxxxx
Its: President
BANK THE PACIFIC BANK, N.A.
--------------------------------
By:
Its:
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