EXHIBIT 1(vi)
Escrow Agreement
ESCROW AGREEMENT
Escrow Agreement dated as of ____________, 1998 by and among The Chase
Manhattan Bank, a New York State chartered bank with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Xetal, Inc., a Utah corporation with offices
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corp., a Delaware corporation with offices at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H
WHEREAS, Xetal, Inc. (the Issuer-Corporation) has filed a registration
statement on Form SB-2 under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission, File No. 333-20525 (the Registration
Statement), relating to the subscription for and sale of a maximum of 540,000
shares (the Shares) of common stock, $0.001 par value per share (the Common
Stock) and 540,000 redeemable common stock purchase warrants (the Public
Warrants) in the Issuer-Corporation, with a minimum investment required of
300,000 shares of Common Stock at a price of $5.00 per Share and 300,000 Public
Warrants at a price of $0.10 per Public Warrant; and
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp. (the Depositor-Agent) has been named as the
Underwriter in connection with the proposed offering of the Common Stock and
the Public Warrants (collectively the Securities)in accordance with the terms
of the Underwriting Agreement dated as of _____________, 1998 among the
Issuer-Corporation and the Depositor-Agent (the Underwriting Agreement); and
WHEREAS, in compliance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended, the Issuer-Corporation and the Depositor-Agent propose to
establish an escrow fund with The Chase Manhattan Bank (the Bank-Escrowee);
and
WHEREAS, the offering of the Securities will terminate no later than sixty
(60) days of the date the Registration Statement is declared effective by the
Securities and Exchange Commission (the Effective Date) unless extended by
the Issuer-Corporation for an additional thirty (30) days (the Offering
Termination Date). If subscriptions for at least 300,000 shares of Common
Stock ($1,500,000) and 300,000 Public warrants ($30,000) ($1,530,000 in
aggregate) have not been received by the Offering Termination Date, no
Securities will be sold; and WHEREAS, the Bank-Escrowee has agreed to act as
escrow agent in connection with the proposed fund;
NOW, THEREFORE, it is agreed as follows:
1. For a period commencing on the Effective Date and terminating at the latest
of the Offering Termination Date, Closing Date or the Option Closing Date, as
the latter two terms are defined in the Underwriting Agreement and as the same
is set forth in the Registration Statement of the Issuer-Corporation, the
Bank-Escrowee shall act as escrow agent and agrees to receive and disburse the
proceeds from the sale of the the Securities in accordance herewith. The
Depositor-Agent and the Issuer-Corporation agree to notify the Bank-Escrowee
(a) promptly after the Registration Statement has been declared effective by
the Securities and Exchange Commission, (b) if the proposed offering of the
Securities is extended as provided in the Underwriting Agreement, (c) of the
Offering Termination Date and (d) of the Closing Date and each Option Closing
Date.
2. All moneys received by the Depositor-Agent and the Issuer-Corporation in
connection with the sale of the Securities shall be deposited by the
Depositor-Agent and the Issuer-Corporation in a non-interest escrow account to
be established for this purpose by the Bank-Escrowee.
3. If at least 300,000 shares of Common Stock and 300,000 Public Warrants have
been subscribed for and any funds remain in the escrow account on the later of
the Closing Date, Option Closing Date or the Offering Termination Date, such
funds will be promptly paid to or credited to the account of, or otherwise
transferred to the Issuer-Corporation less expenses (as specified in written
instructions from the Issuer-Corporation and the Depositor-Agent, signing
jointly).
4. Upon receipt by the Bank-Escrowee of appropriate written instructions at the
Closing Date and Option Closing Date as the case may be, from the
Issuer-Corporation and the Depositor-Agent, jointly, giving notice of the
events described herein, the Bank-Escrowee shall pay to or credit to the
account of, or otherwise transfer (as specified in such instructions) to, the
Issuer-Corporation and other instructed parties such portion of the deposited
funds then held in escrow as specified in such instructions.
5. If at least 300,000 shares of Common Stock and 300,000 Public Warrants have
not been subscribed for by the Offering Termination Date, then the
Depositor-Agent and the Issuer-Corporation promptly shall so advise the
Bank-Escrowee, shall furnish to the Bank-Escrowee a list containing the name
and address of, the amount received from each subscriber whose funds have been
deposited and shall authorize the Bank-Escrowee to return the subscription
funds theretofore received, without interest, to the subscribers as named.
6. In the event of either (a) the occurrence of all the events contemplated by
Sections 3 and 4 hereof, or (b) at least 300,000 shares of Common Stock and
300,000 Public Warrants not having been subscribed for by the Offering
Termination Date and the repayment to the subscribers of the amounts provided
in Section 5 hereof, the Bank-Escrowee shall be relieved of all liabilities in
connection with the escrow deposits provided for herein.
7. The Issuer-Corporation hereby agrees to (i) pay the Bank-Escrowee upon
execution of this Agreement reasonable compensation for the services to be
rendered hereunder, as described on Schedule I attached hereto, and (ii) pay or
reimburse the Bank-Escrowee upon request for all expenses, disbursements and
advances, including reasonable attorneys fees, incurred or made by it in
connection with this agreement.
8. It is understood and agreed, further, that the Bank-Escrowee shall: (a) be
under no duty to enforce payment of any subscription which is to be paid to and
held by it hereunder;
(b) be under no duty to accept funds, checks, drafts or instructions for the
payment of money from anyone other than the Depositor-Agent and the
Issuer-Corporation or to give any receipt therefor except to the
Depositor-Agent and the Issuer-Corporation; (c) be protected in acting under
any notice, request, certificate, approval, consent or other paper believed by
it to be genuine, signed by the proper party or parties and in accordance with
the terms of this Agreement; (d) be deemed conclusively to have given and
delivered any notice required to be given or delivered hereunder if the same is
in writing, signed by any one of its authorized officers, and mailed by
registered or certified mail, or delivered by hand, to the Depositor-Agent, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and the
Issuer-Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇.: ▇▇. ▇▇▇ ▇▇▇▇▇
with a copy to Doros & Brescia, P.C., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and with a copy to B. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq., ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and be deemed
conclusively to have received any notice required to be given or delivered
hereunder if the same is in writing, signed by any one of the authorized
officers of the Depositor-Agent and the Issuer-Corporation, and mailed, by
registered or certified mail, or delivered by hand, to the Bank-Escrowees
Corporate Trust Department, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attn.: Escrow Administration: 15th Floor.
(e) be indemnified by the Depositor-Agent and the Issuer-Corporation against
any claim made against it by reason of its action or failing to act in
connection with any of the transactions contemplated hereby and against any
loss it may sustain in carrying out the terms of this Agreement, except such
claims which are occasioned by its bad faith, gross negligence or willful
misconduct. Anything in this agreement to the contrary notwithstanding, in no
event shall the Bank-Escrowee be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Bank-Escrowee has been advised of the likelihood of such
loss or damage and regardless of the form of action;
(f) promptly notify the Depositor-Agent and the Issuer-Corporation of any
discrepancy between the amounts set forth on any statement delivered by the
Depositor-Agent or the Issuer-Corporation, as the case may be, and the sum or
sums delivered to the Bank-Escrowee therewith;
(g) have no duty to inquire into the terms and conditions of this Agreement,
such duties being purely ministerial in nature;
(h) be permitted to consult with counsel of its choice, including in-house
counsel, and shall not be liable for any action taken, suffered or omitted by
it in accordance with the advice of such counsel, provided, however that
nothing in this subsection (h), nor any action taken by the Bank-Escrowee, or
suffered or omitted by it in accordance with the advice of any counsel, shall
relieve the Bank-Escrowee from liability for any claims that are occasioned by
its bad faith, gross negligence or willful misconduct, all as provided in
subsection (e) above;
(i) not be bound by any modification, amendment, termination, cancellation,
recision or supersession of this Agreement, unless the same shall be in writing
and signed by all parties hereto;
(j) have no liability for following the instructions herein or expressly
provided for, or written instructions given by the Depositor-Agent or the
Issuer-Corporation; and
(k) have the right, at any time, to resign hereunder by given written notice of
its resignation to take effect, and upon the effective date of such resignation
all cash and other payments and all other property then held by the
Bank-Escrowee hereunder shall be delivered by it to such person as may be
designated in writing by the other parties executing this Agreement, whereupon
the Bank-Escrowees obligations hereunder shall cease and terminate. If no
such person has been designated by such date, all obligations of the
Bank-Escrowee hereunder shall, nevertheless, cease and terminate. The
Bank-Escrowees sole responsibility thereafter shall be to keep safely all
property then held by it and to deliver the same to a person designated by the
other parties executing this Agreement or in accordance with the directions of
a final order or judgment of a court of competent jurisdiction.
9. If any checks or other instruments deposited in the escrow account
established hereunder prove uncollectible, the Issuer-Corporation shall deliver
the returned checks or other instruments to the Issuer-Corporation.
10. Nothing in this Agreement is intended to or shall confer upon anyone other
than the parties hereto any legal right, remedy or claim. This Agreement shall
be construed in accordance with the laws of the State of New York and may be
modified only in writing.
11. (a) In the event funds transfer instructions are given (other than in
writing at the time of execution of the Agreement), whether in writing, by
telecopier or otherwise the Bank-Escrowee is authorized to seek confirmation of
such instructions by telephone call-back to person or persons designed on
Schedule 1 hereto, and the Bank-Escrowee may rely upon the confirmations of
anyone purporting to be the person or persons so designated. The persons and
telephone numbers for call-backs may be changed only in a writing actually
received and acknowledged by the Bank-Escrowee. The parties to this Agreement
acknowledge that such security procedure is commercially reasonable.
(b) It is understood that the Bank-Escrowee and the beneficiarys bank in any
funds transfer may rely solely upon any account numbers or similar identifying
number provided by either of the other parties hereto identify (i) the
beneficiary, (ii) the beneficiarys bank, or (iii) an intermediary bank. The
Bank-Escrowee may apply any of the escrowed funds for any payment order it
executes using any such identifying number, even where its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a
bank other than the beneficiarys bank or an intermediary bank designated.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
THE CHASE MANHATTAN BANK
By:
XETAL, INC.
By:
▇▇. ▇▇▇ ▇▇▇▇▇,
Chief Executive Officer
By:
▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORP.
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Schedule 1
$2,500 per annum, or any part thereof, without proration for partial years.
$5.00 per check.
Schedule 2
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Issuer-Corporation:
Name
Telephone Number
1. ▇▇. ▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
2. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
If to Depositor-Agent:
Name
Telephone Number
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
2. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
