Exhibit 10.03
KEY BANK NATIONAL ASSOCIATION
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made and executed this ______
day of _______________________, 2001, by and among Instanet, Inc. (the
"Company"), whose address is 00 Xxxx Xxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000 and CORPORATE STOCK TRANSFER, INC., a Colorado corporation
("CST"), whose address is 0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000 (collectively, the "Depositors"), and KEY BANK NATIONAL
ASSOCIATION, Cherry Creek Branch ("Escrow Holder"), whose address is 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxx (facsimile number
303-329-5325).
1. Deposits. Depositors shall deposit with Escrow Holder the funds
described below (the "Funds"), which Funds shall be held and disbursed in
accordance with and subject to the terms and conditions of this Agreement. Such
Funds constitute the following: Funds generated by the sale of shares of its
common stock by the Company to subscribers pursuant to the Registration
Statement on Form SB-2 declared effective by the Securities and Exchange
Commission on _______________, 2001, a copy of which has been delivered to
Escrow Holder. Escrow Holder will hold all Funds in the escrow account free from
any lien, claim or offset until the conditions set forth in this Agreement have
been fully satisfied.
The Escrow Holder shall be provided the name and address of each subscriber
and amounts to be deposited into the escrow by CST. CST shall also confirm that
all subscribers have been accepted.
2. Disbursements. The Funds are to be disbursed by Escrow Holder as follows
upon the occurrence of the following events:
The escrow account will remain open until receipt by the Escrow Holder of
Funds totaling a minimum of $150,000 at which time Escrow Holder shall provide
written notice to all parties to this Agreement at such time as the collected
Funds of $150,000 have been deposited and shall deliver the $150,000 directly to
the Company.
Following receipt of the $150,000, the escrow account may remain open until
the close of the selling period set forth in the Registration Statement, which
is _________________, 2001. In such event the Escrow Holder will continue to
disburse Funds received to the Company on a weekly basis.
3. Automatic Termination of Escrow. If at least $150,000 has not been
deposited in the escrow account by __________________ , 2001, then Escrow Holder
shall mail the Funds to the subscribers without deduction or interest.
All Funds shall be returned to the subscribers referred to in paragraph 1
at a fee of $10.00 per check payable by the Company.
Upon mailing Funds to the proper persons or entities pursuant to this
paragraph 3, Escrow Holder shall be relieved of and released from any and all
further obligations, duties and liability pursuant to this Agreement, and,
subject to the survival of paragraph 8 below, this Agreement immediately shall
terminate and shall be of no further force and effect.
4. Notices. Any notice required or desired to be given to any party to this
Agreement may be given either by personal delivery, or by telegram, by facsimile
transmission, or by certified mail, return receipt requested, postage prepaid;
provided, however, any notice given by facsimile transmission, to be effective,
shall be followed by delivery of same by personal delivery or by certified mail,
return receipt requested. All such notices shall be sent to a party at its
address noted above, and such notice shall for all purposes be as effectual as
though served upon such party in person at the time of personal delivery, or on
the date of receipt in the case of transmission by telegram, or on the date of
receipt of the original, in the case of transmission by facsimile, or two
business days after the date of deposit in the U.S. mail, as applicable.
5. Limitations on Duties. Escrow Holder shall hold and disburse the Funds
in accordance with the terms and conditions of this Agreement. If at any time in
the performance of its duties as set forth in this Agreement it is necessary for
Escrow Holder to receive, accept or act upon any notice or writing purported to
have been executed or issued by or on behalf of any of the parties hereto, it
shall not be necessary for Escrow Holder to ascertain whether or not the person
or persons who have executed, signed or otherwise issued or authenticated the
writing had the authority to so execute, sign or otherwise issue or authenticate
said writing, or that they are the same persons named therein or otherwise to
pass upon any requirements of such instruments that may be essential for their
validity. Further, Escrow Holder shall have no responsibility or liability for
the sufficiency or correctness as to form, manner, execution or validity of any
instrument deposited or delivered pursuant to this Agreement, nor as to the
truth or accuracy of any information contained therein, nor as to the identity,
authority, capacity or rights of any person executing the same, nor for the
failure to comply with the provisions, requirements or conditions of any
agreement, contract or other instrument deposited with or delivered to Escrow
Holder or referred to herein. Rather, the duties of Escrow Holder pursuant to
this Agreement in all events shall be limited to the safekeeping of the Funds,
documents and other items actually received by Escrow Holder and the disposition
of same in accordance with the instructions set forth above.
6. No Liability for Actions Taken in Good Faith. Escrow Holder shall not be
personally liable for any act it may do or omit to do hereunder while acting in
good faith and in the exercise of its own subjective best judgment, and any act
done or omitted by it pursuant to the advice of its own attorney shall be
conclusive evidence of such good faith and best judgment.
7. Notices and Warnings. Escrow Holder is hereby expressly authorized and
directed to disregard any and all notices or warnings given by any of the
parties hereto, or by any other person or entity, except as otherwise expressly
set forth in this Agreement and except for orders or process of court, and
Escrow Holder is expressly authorized to comply with and obey any and all
orders, judgments or decree of any court. Escrow Holder shall not be liable to
any of the parties hereto or to any other person or entity by reason of
compliance with any order, judgment or decree of any court, even if such order,
judgment or decree is reversed, modified, annulled, set aside or vacated, or is
found to have been entered without jurisdiction.
8. Indemnity. In consideration of the acceptance of this escrow by Escrow
Holder, the Company covenants and agrees to pay Escrow Holder its charges, costs
and expense hereunder and to indemnify and hold Escrow Holder harmless as to any
liability by it incurred to any person or entity by reason of its having
accepted the same, or in connection with any performance by Escrow Holder in its
capacity as the escrow holder pursuant to this Agreement. Further, the Company
covenants and agrees to reimburse Escrow Holder for all costs and expenses,
including, among other things, counsel fees and court costs incurred in
connection with this Agreement and/or the deposited Funds. In case of any suit,
proceeding, cause of action, demand or other claim to which Escrow Holder is or
at any time may be a party, the Company agrees to pay, promptly upon Escrow
Holder's demand, any and all costs and expenses, including without limit
attorneys' fees, incurred by Escrow Holder in connection with same.
Notwithstanding any contrary provision of this Agreement, the provisions of this
paragraph 10 shall survive the expiration and/or termination of this Agreement.
9. Interpleader. If at any time a dispute shall exist as to the duty of
Escrow Holder under the terms of this Agreement, or if at any time conflicting
demands are served upon Escrow Holder, whether verbally or in writing,
concerning the possession of, title to or proceeds of any or all of the Funds,
or if any dispute arises between or among the parties and/or any other person or
entity relating in any way to any item deposited, held or disbursed pursuant to
or otherwise relating to this Agreement, Escrow Holder may deposit this
Agreement and the items then or thereafter held by it pursuant to this Agreement
with the Clerk of the District Court of the City and County of Denver, State of
Colorado, and may interplead the parties hereto. Upon so depositing this
Agreement and such items and filing its complaint in interpleader, Escrow Holder
shall be relieved of and released from all liability under the terms hereof as
to the items so deposited. If the Court does not provide for reimbursement to
Escrow Holder for its attorney fees, costs and expenses related to the
interpleader action out of the interplead Funds, then Escrow Holder shall have a
claim enforceable by separate action in Court against the parties, jointly and
severally, for said attorney fees, costs and expenses.
10. FDIC Insurance. In consideration of the fee paid to Escrow Holder as
set forth in this Agreement and the covenants and agreements of the parties as
set forth above, Escrow Holder agrees to hold the Funds in accordance and
subject to the terms of this Agreement. During the escrow period, the Funds will
be deposited in an FDIC-insured depository (which depository may be Escrow
Holder or any other bank owned or controlled by Key Corp.). Under no
circumstances shall Escrow Holder have liability for loss of Funds due to bank,
savings and loan association or other depository failure, suspension or
cessation of business, or any action or inaction on the part of the bank,
savings and loan association or other depositor, or any delivery service
transporting Funds to and from such depository.
11. Successors; No Third Party Rights. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns. This Agreement is only for the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, and no other person or entity shall be
entitled to rely on, receive any benefit from or to enforce against any party
hereto any provisions of this Agreement.
12. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada.
13. Entire Agreement; Waiver. This Agreement constitutes the entire
understanding between the parties with respect to the escrow arrangement
contemplated herein, and all prior or contemporaneous oral agreements,
understandings, discussions, representations and statements relating to said
escrow are superseded by this Agreement. The waiver of any particular condition
precedent, provision or remedy provided by this Agreement shall not constitute
the waiver of any other.
14. Business Day. If any date herein set forth for the performance of any
obligation by Escrow Holder or for the delivery of any Funds, instrument or
notice as herein provided, is a Saturday, Sunday or legal holiday, the
compliance with such obligation or delivery shall be deemed acceptable if
effected on the next business day following such Saturday, Sunday or legal
holiday. As used herein, the term "legal holiday" means any state or federal
holiday for which financial institutions or post offices are generally closed in
the State of Colorado for observance thereof.
15. Construction. This Agreement shall not be construed more strictly
against one party than against any other merely by virtue of the fact that it
may have been prepared by counsel for one of the parties, it being recognized
that Escrow Holder and the Company have contributed substantially and materially
to the preparation of this Agreement. The headings of various paragraphs in this
Agreement are for convenience only and are not to be utilized in construing the
content or meaning of the substantive provisions hereof.
16. Time is of the Essence. All times, wherever specified herein, are of
the essence of this Agreement.
17. Validity. If any term or provision of this Agreement shall be held
illegal and unenforceable or inoperative as a matter of law, the remaining terms
and provisions of this Agreement shall not be affected thereby, but each such
term and provision shall be valid and shall remain in full force and effect.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be taken to be one and the same instrument, to the same effect as if all of the
parties hereto had signed the same signature page. Any signature page of this
Agreement may be detached from any counterpart of this Agreement without
impairing the legal effect of any signatures thereon and may be attached to
another counterpart of this Agreement identical in form hereto but having
attached to it one or more additional signature pages.
19. Escrow Fee. The parties agree that Escrow Holder's fee for its services
pursuant to this Agreement shall be $ ______________ , payable in full upon the
Company's execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the date first above written.
ESCROW AGENT: KEY BANK NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Its:
THE COMPANY: INSTANET, INC.
By:
---------------------------------------
Xxxxxxx Xxxxxx, President
CORPORATE STOCK TRANSFER INC.
By:
---------------------------------------
Xxxxxxx X. Xxxx, President
