ESCROW AGREEMENT
[FOR SECURITIES OFFERING UNDERWRITTEN
ON "ALL OR NONE" OR "MIN/MAX" BASIS]
THIS ESCROW AGREEMENT, dated as of January 12, 2004 ("Escrow Agreement"),
is by and between Charleston Capital Corporation, a Delaware corporation
("Charleston"); NanoPierce Technologies, Inc., a Nevada corporation ("Issuer");
and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
Escrow Agent hereunder ("Escrow Agent").
BACKGROUND
A. Issuer has engaged Charleston as its agent to sell up to 20,000,000
shares of the Company's Common Stock (the "Shares") on a "best efforts" basis,
pursuant to the offering document or registration statement attached hereto as
Exhibit B (the "Offering Document"). For every share of Common Stock purchased
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by an investor, such investor shall receive a Warrant, to purchase one (1) share
of Common Stock at an exercise price equal to $.25. One (1) Share and one (1)
Warrant are herein referred to as a unit (singly a "Unit" cumulatively the
"Units"). The Units are being offered through Charleston at $.10 per Unit.
B. In accordance with the Offering Document, subscribers to the Units
(the "Subscribers" and individually, a "Subscriber") will be required to
submit full payment for their respective investments at the time they enter
into subscription agreements.
C. In accordance with the Offering Document, all payments received
by Charleston in connection with subscriptions for Units shall be promptly
forwarded to Escrow Agent, and Escrow Agent has agreed to accept, hold, and
disburse such funds deposited with it and the earnings thereon in
accordance with the terms of this Escrow Agreement.
D. In order to establish the escrow of funds and to effect the provisions
of the Offering Document, the parties hereto have entered into this Escrow
Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Definitions. In addition to the terms defined above, the following
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terms shall have the following meanings when used herein:
"Cash Investment" shall mean the number of Units to be purchased by
any Subscriber multiplied by the offering price per Share as set forth in the
Offering Document.
"Cash Investment Instrument" shall mean a check, money order or
similar instrument, made payable to or endorsed to Escrow Agent in the manner
described in Section 3(c) hereof, in full payment for the Units to be purchased
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by any Subscriber.
"Escrow Funds" shall mean the funds deposited with the Escrow Agent
pursuant to this Escrow Agreement, together with any interest and other income
thereon.
"Expiration Date" means the date so designated on Exhibit A.
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"Minimum Offering" shall mean the number Units so designated on
Exhibit A hereto.
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"Minimum Offering Notice" shall mean a written notification, signed by
Charleston, pursuant to which Charleston shall represent (1) that subscriptions
for the Minimum Offering have been received, (2) that, to the best of
Charleston's knowledge after due inquiry and review of its records, Cash
Investment Instruments in full payment for that number of Units equal to or
greater than the Minimum Offering have been received, deposited with and
collected by Escrow Agent, (3) and that such subscriptions have not been
withdrawn, rejected or otherwise terminated, and (4) that the Subscribers have
no statutory or regulatory rights of rescission without cause or all such rights
have expired.
"Pro Rata Basis," with respect to the allocation among Subscribers of
interest and other earnings held in the Escrow Funds, shall mean, for each
Subscriber, the Subscriber's Cash Investment multiplied by the number of days
the Cash Investment of such Subscriber was held in interest-bearing investments
pursuant to Section 6 hereof, multiplied by the average yield earned on the
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Escrow Funds during such period of days.
"Subscription Accounting" shall mean an accounting of all
subscriptions for Units received and accepted by Charleston as of the date of
such accounting, indicating for each subscription the Subscriber's name, social
security number and address, the number and total purchase price of subscribed
Units, the date of receipt by Charleston of the Cash Investment Instrument, and
notations of any nonpayment of the Cash Investment Instrument submitted with
such subscription, any withdrawal of such subscription by the Subscriber, any
rejection of such subscription by Charleston, or other termination, for whatever
reason, of such subscription.
2. Appointment of and Acceptance by Escrow Agent. Issuer and
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Charleston hereby appoint Escrow Agent to serve as escrow agent hereunder, and
Escrow Agent hereby accepts such appointment in accordance with the terms of
this Escrow Agreement.
3. Deposits into Escrow. a. Upon receipt by Charleston of any Cash
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Investment Instrument for the purchase of Units, Charleston shall forward to
Escrow Agent, by 12:00 noon on the next business day, the Cash Investment
Instrument for deposit into the escrow account of the Escrow Agent described on
Exhibit A hereto.
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Each such deposit shall be accompanied by the following documents:
(1) a report containing such Subscriber's name, social security
number or taxpayer identification number, address and other
information required for withholding purposes;
(2) a Subscription Accounting; and
(3) instructions regarding the investment of such deposited funds in
accordance with Section 6 hereof.
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ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS
ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR
CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST ISSUER UNTIL
RELEASED OR ELIGIBLE TO BE RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a)
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HEREOF.
b. Charleston and Issuer understand and agree that all Cash
Investment Instruments received by Escrow Agent hereunder are subject to
collection requirements of presentment and final payment, and that the funds
represented thereby cannot be drawn upon or disbursed until such time as final
payment has been made and is no longer subject to dishonor. Upon receipt,
Escrow Agent shall process each Cash Investment Instrument for collection, and
the proceeds thereof shall be held as part of the Escrow Funds until disbursed
in accordance with Section 4 hereof. If, upon presentment for payment, any Cash
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Investment Instrument is dishonored, Escrow Agent's sole obligation shall be to
notify Charleston of such dishonor and to return such Cash Investment Instrument
to Charleston. Notwithstanding the foregoing, if for any reason any Cash
Investment Instrument is uncollectible after payment or disbursement of the
funds represented thereby has been made by Escrow Agent, Issuer shall
immediately reimburse Escrow Agent upon receipt from Escrow Agent of written
notice thereof.
Upon receipt of any Cash Investment Instrument that represents payment
of an amount less than or greater than the Cash Investment, Escrow Agent's sole
obligation shall be to notify Issuer and Charleston of such fact and to return
such Cash Investment Instrument to Charleston.
c. All Cash Investment Instruments shall be made payable to the
order of, or endorsed to the order of, "Wachovia Bank, National
Association/[__ISSUER NAME__] - Escrow
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Account," and Escrow Agent shall not be obligated to accept, or present for
payment, any Cash Investment Instrument that is not payable or endorsed in that
manner.
4. Disbursements of Escrow Funds.
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a. Completion of Minimum Offering. Subject to the provisions of
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Section 10 hereof, Escrow Agent shall pay to Issuer the liquidated value of the
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Escrow Funds, by certified or bank check or by wire transfer, no later than
fifteen (15) business days following receipt of the following documents:
(1) A Minimum Offering Notice;
(2) Subscription Accounting, substantiating the sale of the Minimum
Offering;
(3) The documents described on Exhibit C attached hereto and
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incorporated herein by reference; and
(4) Such other certificates, notices or other documents as Escrow
Agent shall reasonably require.
Notwithstanding the foregoing, Escrow Agent shall not be obligated to
disburse the Escrow Funds to Issuer if Escrow Agent has reason to believe that
(a) Cash Investment Instruments in full payment for that number of Units equal
to or greater than the Minimum Offering have not been received, deposited with
and collected by the Escrow Agent, or (b) any of the certifications and opinions
set forth in the Minimum Offering Notice or the documents described in Exhibit C
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attached hereto are incorrect or incomplete.
After the initial disbursement of Escrow Funds to Issuer pursuant to this
Section 4(a), Escrow Agent shall pay to Issuer any additional funds received
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with respect to the Units, by certified or bank check or wire transfer, no later
than fifteen (15) business days after receipt.
b. Rejection of Any Subscription or Termination of the Offering.
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No later than fifteen (15) business days after receipt by Escrow Agent of
written notice (i) from Issuer or Charleston that Charleston intends to reject a
Subscriber's subscription, (ii) from Issuer or Charleston that there will be no
closing of the sale of Units to Subscribers, (iii) from any federal or state
regulatory authority that any application by Issuer to conduct a banking
business has been denied, or (iv) from the Securities and Exchange Commission or
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any other federal or state regulatory authority that a stop or similar order has
been issued with respect to the Offering Document and has remained in effect for
at least twenty (20) days, Escrow Agent shall pay to the applicable
Subscriber(s), by certified or bank check and by first-class mail, the amount of
the Cash Investment paid by each Subscriber, and shall pay all interest income
on the Escrow Funds in the manner set forth on Exhibit A hereto.
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c. Expiration of Offering Period. Notwithstanding anything to the
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contrary contained herein, if Escrow Agent shall not have received a Minimum
Offering Notice on or before the Expiration Date, Escrow Agent shall, within
fifteen (15) business days after such Expiration Date and without any further
instruction or direction from Charleston or Issuer, return to each Subscriber,
by certified or bank check and by first-class mail, the Cash Investment made by
such Subscriber, and shall pay all interest income on the Escrow Funds in the
manner set forth on Exhibit A hereto.
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5. Suspension of Performance or Disbursement Into Court. If, at any
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time, (i) there shall exist any dispute between Charleston, Issuer, Escrow
Agent, any Subscriber or any other person with respect to the holding or
disposition of all or any portion of the Escrow Funds or any other obligations
of Escrow Agent hereunder, or (ii) if at any time Escrow Agent is unable to
determine, to Escrow Agent's sole satisfaction, the proper disposition of all or
any portion of the Escrow Funds or Escrow Agent's proper actions with respect to
its obligations hereunder, or (iii) if Charleston and Issuer have not within 30
days of the furnishing by Escrow Agent of a notice of resignation pursuant to
Section 7 hereof appointed a successor Escrow Agent to act hereunder, then
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Escrow Agent may, in its sole discretion, take either or both of the following
actions:
a. suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this Escrow Agreement
until such dispute or uncertainty shall be resolved to the sole satisfaction of
Escrow Agent or until a successor Escrow Agent shall have been appointed (as the
case may be).
b. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any venue convenient
to Escrow Agent, for instructions with respect to such dispute or uncertainty,
and to the extent required or permitted by law, pay into such court all funds
held by it in the Escrow Funds for holding and disposition in accordance with
the instructions of such court.
Escrow Agent shall have no liability to Charleston, Issuer, any Subscriber or
any other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the disbursement of the Escrow Funds or any delay in or with
respect to any other action required or requested of Escrow Agent.
6. Investment of Funds. Escrow Agent shall invest and reinvest the
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Escrow Funds as Charleston shall direct (subject to applicable minimum
investment requirements) in writing; provided, however, that no investment or
reinvestment may be made except in the following:
a. direct obligations of the United States of America or
obligations the principal of and the interest on which are unconditionally
guaranteed by the United States of America; or
b. savings accounts of any bank, trust company or national banking
association (including Escrow Agent and its affiliates).
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If Escrow Agent has not received written instructions from Charleston
at any time that an investment decision must be made, Escrow Agent shall invest
the Escrow Funds, or such portion thereof as to which no written instructions
have been received, in investments described in clause (b) above. Each of the
foregoing investments shall be made in the name of Escrow Agent in its stated
capacity as escrow agent. No investment shall be made in any instrument or
security that has a maturity of greater than six (6) months. Notwithstanding
anything to the contrary contained herein, Escrow Agent may, without notice to
Charleston or Issuer, sell or liquidate any of the foregoing investments at any
time if the proceeds thereof are required for any disbursement of Escrow Funds
permitted or required hereunder. All investment earnings shall become part of
the Escrow Funds and investment losses shall be charged against the Escrow
Funds. Escrow Agent shall not be liable or responsible for any loss in the
value of any investment made pursuant to this Escrow Agreement or for any loss,
cost or penalty resulting from any sale or liquidation of the Escrow Funds. With
respect to any Escrow Funds or any written investment instruction of Charleston
received by Escrow Agent after ten o'clock, a.m., Charlotte, North Carolina,
time, Escrow Agent shall not be required to invest such funds or to effect such
investment instruction until the next day upon which banks in Charlotte, North
Carolina are open for business.
7. Resignation of Escrow Agent. Escrow Agent may resign and be
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discharged from the performance of its duties hereunder at any time by giving
ten (10) days prior written notice to the Charleston and the Issuer specifying a
date when such resignation shall take effect. Upon any such notice of
resignation, the Charleston and Issuer jointly shall appoint a successor Escrow
Agent hereunder prior to the effective date of such resignation. The retiring
Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall
pay all Escrow Funds to the successor Escrow Agent, after making copies of such
records as the retiring Escrow Agent deems advisable and after payment by Issuer
or deduction from Escrow Funds (to the extent of Issuer's rights therein) of all
fees and expenses (including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by the retiring Escrow Agent in
connection with the performance of its duties and the exercise of its rights
hereunder. After any retiring Escrow Agent's resignation, the provisions of
this Escrow Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Escrow Agent under this Escrow Agreement.
Any corporation or association into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any corporation or
association to which all or substantially all of the escrow business of the
Escrow Agent's corporate trust line of business may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.
8. Liability of Escrow Agent.
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a. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no duties shall be implied. The Escrow Agent
shall have no liability under and no duty to inquire as to the provisions of any
agreement other than this Escrow Agreement, including without limitation the
Offering Document. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith except to the extent that a court of competent
jurisdiction determines
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that the Escrow Agent's gross negligence or willful misconduct was the primary
cause of any loss to the Issuer, Charleston or any Subscriber. Escrow Agent's
sole responsibility shall be for the safekeeping and disbursement of the Escrow
Funds in accordance with the terms of this Escrow Agreement. Escrow Agent shall
have no implied duties or obligations and shall not be charged with knowledge or
notice of any fact or circumstance not specifically set forth herein. Escrow
Agent may rely upon any notice, instruction, request or other instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein, which Escrow Agent
shall believe to be genuine and to have been signed or presented by the person
or parties purporting to sign the same. In no event shall Escrow Agent be liable
for incidental, indirect, special, consequential or punitive damages (including,
but not limited to lost profits), even if the Escrow Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action.
Escrow Agent shall not be obligated to take any legal action or commence any
proceeding in connection with the Escrow Funds, any account in which Escrow
Funds are deposited, this Escrow Agreement or the Offering Document, or to
appear in, prosecute or defend any such legal action or proceeding. Without
limiting the generality of the foregoing, Escrow Agent shall not be responsible
for or required to enforce any of the terms or conditions of any subscription
agreement with any Subscriber or any other agreement between Issuer, Charleston
and/or any Subscriber. Escrow Agent shall not be responsible or liable in any
manner for the performance by Issuer or any Subscriber of their respective
obligations under any subscription agreement nor shall Escrow Agent be
responsible or liable in any manner for the failure of Issuer, Charleston or any
third party (including any Subscriber) to honor any of the provisions of this
Escrow Agreement. Escrow Agent may consult legal counsel selected by it in the
event of any dispute or question as to the construction of any of the provisions
hereof or of any other agreement or of its duties hereunder, or relating to any
dispute involving any party hereto, and shall incur no liability and shall be
fully indemnified from any liability whatsoever in acting in accordance with the
opinion or instruction of such counsel. Issuer shall promptly pay, upon demand,
the reasonable fees and expenses of any such counsel.
b. The Escrow Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court's
jurisdiction in the matter. If any portion of the Escrow Funds is at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree which it is advised by legal counsel selected by it is binding upon it
without the need for appeal or other action; and if the Escrow Agent complies
with any such order, writ, judgment or decree, it shall not be liable to any of
the parties hereto or to any other person or entity by reason of such compliance
even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
9. Indemnification of Escrow Agent. From and at all times after the
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date of this Escrow Agreement, Issuer shall, to the fullest extent permitted by
law, indemnify and hold harmless the
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Escrow Agent and each director, officer, employee, attorney, agent and affiliate
of Escrow Agent (collectively, the "Indemnified Parties") against any and all
actions, claims (whether or not valid), losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys' fees, costs and expenses) incurred by or asserted against
any of the Indemnified Parties from and after the date hereof, whether direct,
indirect or consequential, as a result of or arising from or in any way relating
to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation Issuer or Charleston,
whether threatened or initiated, asserting a claim for any legal or equitable
remedy against any person under any statute or regulation, including, but not
limited to, any federal or state securities laws, or under any common law or
equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Escrow Agreement or any transactions contemplated herein, whether or not
any such Indemnified Party is a party to any such action, proceeding, suit or
the target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for any
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of Issuer under this
Section 9 shall survive any termination of this Escrow Agreement and the
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resignation or removal of Escrow Agent.
10. Compensation to Escrow Agent.
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a. Fees and Expenses. Issuer shall compensate Escrow Agent for
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its services hereunder in accordance with Exhibit A attached hereto and, in
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addition, shall reimburse Escrow Agent for all of its reasonable out-of-pocket
expenses, including attorneys' fees, travel expenses, telephone and facsimile
transmission costs, postage (including express mail and overnight delivery
charges), copying charges and the like. The additional provisions and
information set forth on Exhibit A are hereby incorporated by this reference,
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and form a part of this Escrow Agreement. All of the compensation and
reimbursement obligations set forth in this Section 10 shall be payable by
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Issuer upon demand by Escrow Agent. The obligations of Issuer under this
Section 10 shall survive any termination of this Escrow Agreement and the
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resignation or removal of Escrow Agent.
b. Disbursements from Escrow Funds to Pay Escrow Agent. The
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Escrow Agent is authorized to and may disburse from time to time, to itself or
to any Indemnified Party from the Escrow Funds (to the extent of Issuer's rights
thereto), the amount of any compensation and reimbursement of out-of-pocket
expenses due and payable hereunder (including any amount to which Escrow Agent
or any Indemnified Party is entitled to seek indemnification pursuant to Section
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9 hereof). Escrow Agent shall notify Issuer of any disbursement from the Escrow
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Funds to itself or to any Indemnified Party in respect of any compensation or
reimbursement hereunder and shall furnish to Issuer copies of all related
invoices and other statements.
c. Security and Offset. Issuer hereby grants to Escrow Agent and
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the Indemnified Parties a security interest in and lien upon the Escrow Funds
(to the extent of Issuer's rights thereto) to secure all obligations hereunder,
and Escrow Agent and the Indemnified Parties
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shall have the right to offset the amount of any compensation or reimbursement
due any of them hereunder (including any claim for indemnification pursuant to
Section 9 hereof) against the Escrow Funds (to the extent of Issuer's rights
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thereto.) If for any reason the Escrow Funds available to Escrow Agent and the
Indemnified Parties pursuant to such security interest or right of offset are
insufficient to cover such compensation and reimbursement, Issuer shall promptly
pay such amounts to Escrow Agent and the Indemnified Parties upon receipt of an
itemized invoice.
11. Representations and Warranties; Legal Opinions. a. Each of
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Charleston and the Issuer respectively makes the following representations and
warranties to Escrow Agent:
(1) It is a corporation or limited liability company duly
organized, validly existing, and in good standing under the laws of the state of
its incorporation or organization, and has full power and authority to execute
and deliver this Escrow Agreement and to perform its obligations hereunder;
(2) This Escrow Agreement has been duly approved by all necessary
corporate action, including any necessary shareholder or membership approval,
has been executed by its duly authorized officers, and constitutes its valid and
binding agreement, enforceable in accordance with its terms.
(3) The execution, delivery, and performance of this Escrow
Agreement will not violate, conflict with, or cause a default under its articles
of incorporation, articles of organization or bylaws, operating agreement or
other organizational documents, as applicable, any applicable law or regulation,
any court order or administrative ruling or decree to which it is a party or any
of its property is subject, or any agreement, contract, indenture, or other
binding arrangement to which it is a party or any of its property is subject.
The execution, delivery and performance of this Escrow Agreement is consistent
with and accurately described in the Offering Document, and the allocation of
interest and other earnings to Subscribers, as set forth in Sections 4(b) and
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4(c) hereof, has been properly described therein.
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(4) It hereby acknowledges that the status of Escrow Agent is that
of agent only for the limited purposes set forth herein, and hereby represents
and covenants that no representation or implication shall be made that the
Escrow Agent has investigated the desirability or advisability of investment in
the Units or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Units other than to state
that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(5) All of its representations and warranties contained herein are
true and complete as of the date hereof and will be true and complete at the
time of any deposit to or disbursement from the Escrow Funds.
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b. Issuer makes the following further representations and
warranties to Escrow Agent:
(1) No party other than the parties hereto and the prospective
Subscribers have, or shall have, any lien, claim or security interest in the
Escrow Funds or any part thereof. No financing statement under the Uniform
Commercial Code is on file in any jurisdiction claiming a security interest in
or describing (whether specifically or generally) the Escrow Funds or any part
thereof.
c. Charleston makes the following further representations and
warranties to Escrow Agent:
(1) The deposit with Escrow Agent by Charleston of Cash Investment
Instruments pursuant to Section 3 hereof shall be deemed a representation and
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warranty by Charleston that such Cash Investment Instrument represents a bona
fide sale to the Subscriber described therein of the amount of Units set forth
therein, subject to and in accordance with the terms of the Offering Document.
12. Tax Reporting. All earnings or interest paid hereunder will be
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reported by the recipient thereof to the Internal Revenue Service or other
taxing authority. Notwithstanding the foregoing, Escrow Agent shall report to
the Internal Revenue Service or such other taxing authority such earnings as its
deems appropriate or as required by any applicable law or regulation. In
addition, Escrow Agent shall withhold any taxes it deems appropriate and shall
remit such taxes to the appropriate authorities.
13. Identifying Information. Issuer and Charleston acknowledge that a
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portion of the identifying information set forth on Exhibit A is being requested
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by the Escrow Agent in connection with the USA Patriot Act, Pub.L.107-56 (the
"Act"), and Issuer and Charleston agree to provide any additional information
requested by the Escrow Agent in connection with the Act or any similar
legislation or regulation to which Escrow Agent is subject, in a timely manner.
The Issuer and Charleston each represents that its respective identifying
information set forth on Exhibit A, including without limitation, its Taxpayer
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Identification Number assigned by the Internal Revenue Service or any other
taxing authority, is true and complete on the date hereof and will be true and
complete at the time of any disbursement of the Escrow Funds.
14. Consent to Jurisdiction and Venue. In the event that any party
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hereto commences a lawsuit or other proceeding relating to or arising from this
Escrow Agreement, the parties hereto agree that the Colorado Courts Federal
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Courts shall have the sole and exclusive jurisdiction over any such proceeding.
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If such court lacks federal subject matter jurisdiction, the parties agree that
the Colorado State Courts shall have sole and exclusive jurisdiction. Any of
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these courts shall be proper venue for any such lawsuit or judicial proceeding
and the parties hereto waive any objection to such venue. The parties hereto
consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept service of process to vest personal
jurisdiction over them in any of these courts.
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15. Notice. All notices, approvals, consents, requests, and other
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communications hereunder shall be in writing and shall be deemed to have been
given when the writing is delivered if given or delivered by hand, overnight
delivery service or facsimile transmitter (with confirmed receipt) to the
address or facsimile number set forth on Exhibit A hereto, or to such other
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address as each party may designate for itself by like notice, and shall be
deemed to have been given on the date deposited in the mail, if mailed, by
first-class, registered or certified mail, postage prepaid, addressed as set
forth on Exhibit A hereto, or to such other address as each party may designate
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for itself by like notice.
16. Amendment or Waiver. This Escrow Agreement may be changed, waived,
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discharged or terminated only by a writing signed by Charleston, Issuer and
Escrow Agent. No delay or omission by any party in exercising any right with
respect hereto shall operate as a waiver. A waiver on any one occasion shall
not be construed as a bar to, or waiver of, any right or remedy on any future
occasion.
17. Severability. To the extent any provision of this Escrow Agreement
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is prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
18. Governing Law. This Escrow Agreement shall be construed and
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interpreted in accordance with the internal laws of the State of Nevada without
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giving effect to the conflict of laws principles thereof.
19. Entire Agreement. This Escrow Agreement constitutes the entire
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agreement between the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in their entirety
the obligations and duties of the Escrow Agent with respect to the Escrow Funds.
20. Binding Effect. All of the terms of this Escrow Agreement, as
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amended from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of Charleston, Issuer and
Escrow Agent.
21. Execution in Counterparts. This Escrow Agreement may be executed
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in two or more counterparts, which when so executed shall constitute one and the
same agreement.
22. Termination. Upon the first to occur of the disbursement of all
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amounts in the Escrow Funds or deposit of all amounts in the Escrow Funds into
court pursuant to Section 5 or Section 8 hereof, this Escrow Agreement shall
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terminate and Escrow Agent shall have no further obligation or liability
whatsoever with respect to this Escrow Agreement or the Escrow Funds.
23. Dealings. The Escrow Agent and any stockholder, director, officer
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or employee of the Escrow Agent may buy, sell, and deal in any of the securities
of the Issuer and become pecuniarily
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interested in any transaction in which the Issuer may be interested, and
contract and lend money to the Issuer and otherwise act as fully and freely as
though it were not Escrow Agent under this Escrow Agreement. Nothing herein
shall preclude the Escrow Agent from acting in any other capacity for the Issuer
or any other entity.
[SIGNATURES CONTINUED ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed under seal as of the date first above written.
NANOPIERCE TECHNOLOGIES, INC.
[CORPORATE SEAL] By: /s/Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Xxxx X. Xxxxxxxxx its President and
CEO
ATTEST:
/s/Xxxxxx X. Xxxxxxxx
-----------------------
Secretary
CHARLESTON CAPITAL CORPORATION
[CORPORATE SEAL] By: /s/Xxx Xxxxxxxx
----------------------------------------
Title: Xxx Xxxxxxxx its President
ATTEST:
_______________________
Secretary
WACHOVIA BANK, NATIONAL
ASSOCIATION, AS ESCROW AGENT
By: ______________________________
Title: ______________________________
-12-
EXHIBIT A
---------
1. Definitions. "Minimum Offering" means 12,500,000 Units equal to
----------- $1,250,000. "Expiration Date" means January 28, 2004.
2. Escrow Account.
---------------
Wachovia Bank, National Association
ABA# 000000000
Account Name: NANOPIER TCH ESC
Account No. 3572001905
ATTN: Corporate Trust - Bond Administration
3. Escrow Agent Fees.
-------------------
Acceptance Fee: $ 500.00
----------
Escrow Administration Fee: $ 1,500.00
----------
Out-of-Pocket Expenses: -At Cost
[Transactional Costs]: $500.00 per closing after first 5 closings
------------------------------------------
TOTAL $ 2,000.00
----------
The Acceptance Fee and the Annual Escrow Fee are payable upon execution of
the escrow documents. In the event the escrow is not funded, the Acceptance
Fee and all related expenses remain due and payable, and if paid, will not
be refunded. Annual fees cover a full year in advance, or any part thereof,
and thus are not pro-rated in the year of termination.
The fees quoted in this schedule apply to services ordinarily rendered in
the administration of an Escrow Account and are subject to reasonable
adjustment based on final review of documents, or when the Escrow Agent is
called upon to undertake unusual duties or responsibilities, or as changes
in law, procedures, or the cost of doing business demand. Services in
addition to and not contemplated in this Escrow Agreement, including, but
not limited to, document amendments and revisions, non-standard cash and/or
investment transactions, calculations, notices and reports, and legal fees,
will be billed as extraordinary expenses.
Unless otherwise indicated, the above fees relate to the establishment of
one escrow account. Additional sub-accounts governed by the same Escrow
Agreement may incur an additional charge. Transaction costs include charges
for wire transfers, checks, internal transfers and securities transactions.
4. Taxpayer Identification Numbers.
--------------------------------
Charleston: 00-0000000
----------
Issuer: 00-0000000
----------
Exhibit A, Page 1
5. Termination and Disbursement. In the event there is any termination or
------------------------------
failure of the offering pursuant to Sections 4b or 4c of the Escrow
------------ --
Agreement, the Escrow Agent shall, in accordance with the Offering Document
(select one):
[ ] Pay as soon as practicable to the applicable Subscriber(s), by
certified or bank check and by first-class mail, each Subscriber's
share of interest income earned on the Escrow Funds, each such share
to be calculated on a Pro Rata Basis (as defined in the Escrow
Agreement).
[ ] Pay all monies representing interest and other earnings as soon as
practicable by certified or bank check, subject to Section 10 of the
Escrow Agreement, to Issuer.
6. Notice Addresses.
-----------------
Principal Place of
Business, if different
If to Issuer at: NanoPierce Technologies, Inc.
----------------------------- ------------------------
000 00xx Xxxxxx Xxxxx 0000
----------------------------- ------------------------
Xxxxxx, XX 00000
----------------------------- ------------------------
ATTN: Xxxx X. Xxxxxxxxx
----------------------------- ------------------------
Phone: 000-000-0000
Facsimile: 000-000-0000
If to Charleston at: Charleston Capital Corp.
----------------------------- ------------------------
000 Xxxx 00xx Xxxxxx, 0xx Floor
----------------------------- ------------------------
Xxx Xxxx, XX 00000
----------------------------- ------------------------
ATTN: Xxx Xxxxxxxx
----------------------------- ------------------------
Facsimile: 000-000-0000
Phone: 000-000-0000
If to the Escrow
Agent at: Wachovia Bank, National Association, as Escrow Agent
Corporate Trust Bond Administration
Xxx Xxxx Xxxxx, Xxxxx 0000
------------------------------------------------
Xxx Xxxx, XX 00000
------------------------------------------------
ATTENTION: Xxxxxxxx Xxxx
--------------------------------------
Facsimile Number: (000) 000-0000
--- ------------------------
Exhibit A, Page 2
EXHIBIT B
---------
Offering Document
or
SEC Registration Statement
EXHIBIT C
---------
Additional Documents Required
for Release of Escrow Funds
Pursuant to Section 4(a)
1. Certificate of XXXX X. XXXXXXXXX, PRESIDENT AND CEO of Issuer, that (a)
----------------- -----------------
the Units described in the Offering Document have been registered or are
exempt from registration under the Securities Act of 1933, and have been
registered or are exempt from registration under applicable state
securities laws, (b) no stop or similar order has been issued or threatened
to be issued by the SEC or any other federal or state regulatory authority
in connection with the Offering Document or the offering of Shares pursuant
thereto, and (c) all representations and warranties of the Issuer set forth
in the Escrow Agreement are true and correct in all material respects on
and as of the date of such certificate as if made on the date thereof; and
2. An opinion of counsel to NanoPierce Technologies, Inc. that (a) the
Shares described in the Offering Document have been registered or are
exempt from registration under the Securities Act of 1933 and have been
registered or are exempt from registration under applicable state
securities laws, and (b) to the best of its knowledge, no stop or similar
order has been issued or threatened to be issued by the SEC or any other
federal or state regulatory authority in connection with the Offering
Document or the offering of Shares pursuant thereto.
