EXHIBIT 10.3
FLEXXTECH CORPORATION
MAY ▇▇▇▇▇ GROUP, INC.
ESCROW AGREEMENT
WITH
FIRST UNION NATIONAL BANK
This Agreement is made and entered into as of August 14, 2001 by and among
FLEXXTECH CORPORATION (the "Company"), a Nevada corporation, MAY ▇▇▇▇▇ GROUP,
INC. (the "Placement Agent"), a Maryland corporation, and FIRST UNION NATIONAL
BANK, a national banking association with a principal New York corporate trust
office at ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Escrow
Agent").
WHEREAS, the Company proposes to offer for sale to several investors
through the Placement Agent (a) up to $500,000 of the Company's debentures due
August 8, 2003 (the "Debentures") convertible into shares of the Common Stock,
$.001 par value per share (the "Common Stock") at the rate set forth therein and
(b) up to $10,000,000 of the Common Stock. The Debentures are being offered
through the Placement Agent pursuant to the terms of a Securities Purchase
Agreement (the "Purchase Agreement") being entered into between the Company and
the buyers named therein, and the Stock is being offered through the Placement
Agent pursuant to the terms of an Equity Line of Credit Agreement (the "Equity
Line of Credit Agreement") being entered into between the Company and one or
more investors.
WHEREAS, all such investments will be made in reliance upon registration
under the Securities Act of 1933, as may be amended.
WHEREAS, the offering of Debentures under the Purchase Agreement will be
consummated at a closing (the "Debenture Closing") to be held pursuant to the
terms and conditions of the Purchase Agreement
WHEREAS, the offering of Common Stock under the Equity Line of Credit
Agreement will terminate at the close of business thirty-six (36) calendar
months after the date the registration statement covering the Common Stock is
declared effective (the "Termination Date").
WHEREAS, with respect to all investment payments for the Debentures and the
Common Stock received from investors, the Company proposes to establish a single
escrow account with the Escrow Agent at the office of its Corporate Trust
Department, ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
.
WHEREAS, the Company and the Placement Agent desire to establish an escrow
account ("Escrow Fund Account") in which those funds received from purchasers of
the Debentures will be deposited pending the Closing and in which those funds
received from the investors of the Common Stock (the "Subscribers") will be
deposited pending receipt of the number of shares of Common Stock being
purchased. The Escrow Agent agrees to serve as escrow agent in accordance with
the terms and conditions set forth herein.
NOW THEREFORE, the parties hereto agree as follows:
1. The Escrow Agent shall hold the Escrow Fund Account subject to the
terms of this Escrow Agreement and shall act in accordance with the instructions
contained in this Escrow Agreement.
2. Upon the written instructions of the Placement Agent and the
Company, the Escrow Agent shall deliver all or a part of the funds in the Escrow
Fund Account and any Common Stock it may receive as Escrow Agent, at such times
and in such manner as shall be set forth in such written instructions.
Wire transfers to the Company shall be made as follows:
Beneficiary Account Name: North Texas Circuit Board Co., Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Beneficiary Account No.: 867713
ABA/Transit No.: ▇▇▇▇▇▇▇▇▇
Beneficiary Bank: Legacy Bank of Texas
With notice to: ▇▇▇▇▇ ▇▇▇▇▇
3. Unless otherwise instructed by the Placement Agent, any cash balances
held under this Escrow Agreement shall be invested in the Evergreen Cash
Management Treasury Money Market Fund # 765. All income earned from the Escrow
Fund Account shall be retained by the Escrow Agent and disbursed for any fees,
expenses or other amounts due to the Escrow Agent.
4. This Escrow Agreement shall terminate upon the final distribution of
all amounts in the Escrow Account and any income earned thereon, unless
terminated sooner by the written instructions of the Company and Placement
Agent.
5. (a) The Escrow Agent shall not in any way be bound or affected
by any notice of modification or cancellation of this Escrow Agreement unless in
writing signed by the Company and the Placement Agent, nor shall the Escrow
Agent be bound by any modification hereof unless the same shall be satisfactory
to it. The Escrow Agent shall be entitled to rely upon any notice,
certification, demand or other writing delivered to it hereunder by the Company
and/or the Placement Agent without being required to determine the authenticity
or the correctness of any facts stated therein, the propriety or validity of the
service thereof, or the jurisdiction of the court issuing any judgment.
(b) The Escrow Agent may act in reliance upon any signature
believed by it to be genuine, and may assume that any person purporting to give
any notice or receipt, or make any statements in connection with the provisions
hereof has been duly authorized to do so.
(c) The Escrow Agent may act relative hereto in reliance upon
advice of counsel in reference to any matter connected herewith, and shall not
be liable for any mistake of fact or error or judgment, or for any acts or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.
(d) The Escrow Agent may resign and be discharged of its duties as
Escrow Agent hereunder by giving ten (10) days written notice to the Company and
the Placement Agent. Such resignation shall take effect ten (10) days after the
giving of such notice, or upon receipt by the Escrow Agent of an instrument of
acceptance executed by a successor escrow agent and upon delivery by the Escrow
Agent to such successor of all of the escrowed documents and funds or securities
then held by it. If no successor escrow agent is appointed in writing ten (10)
days after giving such notice, the Escrow Agent shall deliver all funds in the
Escrow Account to the Company.
(e) The Company and the Placement Agent hereby agree to jointly
and severally, indemnify and hold the Escrow Agent harmless from any loss,
liability or expense, arising out of or related to this Escrow Agreement, and
for all costs and expenses, including the fees and expenses of counsel, incurred
in connection with this Escrow Agreement. The provisions of this paragraph
shall survive the termination of this Agreement.
(f) The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this Agreement and the Escrow
Agent shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Escrow Agreement. The Escrow
Agent shall have no liability or duty to inquire into the terms and conditions
of any agreement to which it is not a party.
(g) If a controversy arises between one or more of the parties
hereto, or between any of the parties hereto and any person not a party hereto,
as to whether or not or to whom the Agent shall deliver the Escrow Account or
any portion thereof or as to any other matter arising out of or relating to this
Agreement or the Escrow Account deposited hereunder, the Escrow Agent shall not
be required to determine same and need not make any delivery of the funds in the
Escrow Account or any portion thereof but may retain such funds until the rights
of the parties to the dispute shall have finally been determined by agreement or
by final order of court of competent jurisdiction, provided, however, that the
time of appeal of any such final order has expired without an appeal having been
made. The Escrow Agent shall deliver the Escrow Account or any portion thereof
within 15 days after the Escrow Agent has received written notice of any such
agreement or final order (accompanied by an affidavit that the time for appeal
has expired without an appeal having been made). The Escrow Agent shall be
entitled to assume that no such controversy has arisen unless it has received a
written notice that such a controversy has arisen which refers specifically to
this Agreement and identifies by name and address the adverse claimants to the
controversy. If a controversy of the type referred to in this paragraph arises,
the Escrow Agent may, in its sole discretion but shall not be obligated to,
commence interpleader or similar actions or proceedings for determination of the
controversy.
(h) The Escrow Agent shall not be required to institute or defend
any action (including interpleader) or legal process involving any matter
referred to herein which in any manner affects it or its duties or liabilities
hereunder. In the event the Escrow Agent shall institute or defend any such
action or legal process, it shall do so only upon receiving full indemnity in an
amount and of such character as it shall require, against any and all claims
liabilities, judgments, attorney's fees and other expenses of every kind in
relation thereto, except in the case of its own willful misconduct or gross
negligence.
(i) In the event that the Escrow Agent receives or becomes aware
of conflicting demands or claims with respect to any funds, securities, property
or documents deposited or delivered in connection herewith, or the parties
disagree about the interpretation of this Agreement, or about the rights and
obligations, or the propriety, of any action contemplated by the Escrow Agent
hereunder, or if the Escrow Agent otherwise has any doubts as to the proper
disposition of funds or the execution of any of its duties hereunder, the Escrow
Agent shall have the right to discontinue any or all further acts on its part
until such conflict, disagreement or doubt is resolved to its satisfaction. In
addition, the Escrow Agent may, in its sole discretion, file an action in
interpleader in any court of competent jurisdiction to resolve the dispute or
uncertainty. The Placement Agent and the Company agree, jointly and severally,
to indemnify the Escrow Agent and hold it harmless from and against all costs,
including reasonable attorney's fees and expenses incurred by it in connection
with such action. In the event that the Escrow Agent files an action in
interpleader, it shall thereupon be fully released and discharged from all
further obligations to perform any and all duties or obligations imposed upon it
by this Agreement, other than safekeeping of the assets in the Escrow Account,
if not paid into Court.
6. Any notice, direction, request, instruction, legal process, or other
instrument to be given or served hereunder by any party to another shall be in
writing, shall be delivered personally or sent by certified mail, return receipt
requested, to the respective party or parties at the following addresses, and
shall be deemed to have been given when received.
IF TO THE COMPANY,
Flexxtech Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel.: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Tax ID#
WITH A COPY TO,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: 214 740.1400
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
IF TO THE PLACEMENT AGENT,
Hunter Singer
May ▇▇▇▇▇ Group, Inc.
c/o National Securities
28th Floor
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID#
WITH A COPY TO,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
McGuireWoods LLP
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ 10 019
Tel.: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
If to the Escrow Agent:
First Union National Bank
Corporate Trust Department
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its or his address by written notice to each of
the other parties.
7. The Escrow Agent's fee for acting under this Escrow Agreement shall
be set forth in Schedule A attached hereto. The Escrow Agent's fees and
expenses, including counsel fees, shall be paid by the Company. The Escrow
Agent is hereby given a first priority lien on the Escrow Fund to protect,
indemnify and reimburse itself for all fees, costs, expenses and liabilities
arising out of this Escrow Agreement and the performance of its duties
hereunder.
8. This Escrow Agreement shall be binding upon the parties hereto and
the Escrow Agent, and their respective successors, legal representatives and
assigns.
FLEXXTECH CORPORATION MAY ▇▇▇▇▇ GROUP, INC.
By: ________________________________ By: __________________________
FIRST UNION NATIONAL BANK
ESCROW AGENT
Date: ______________________________ By: __________________________
FIRST UNION NATIONAL BANK
SCHEDULE A
I. INITIAL SET-UP FEE $ 500
II. ADMINISTRATION FEE $1,500
-up to 10 Subscribers/Holders,
thereafter, $50.00 per Subscriber/Holder
III. PER CLOSING FEE $
-for each closing after the first closing-,
$ 500 per closing.
The above-mentioned fees are basic charges and do not include out-of-pocket
expenses, which will be billed in addition to the regular charges as required.
Out-of-pocket expenses shall include, but are not limited to: telephone tolls,
stationery and postage expenses.
FIRST UNION NATIONAL BANK
CORPORATE TRUST DEPARTMENT
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
[GRAPHIC OMITED]
Wiring Instructions US Mail/Overnight Courier
-------------------- ---------------------------
FIRST UNION NATIONAL BANK FIRST UNION NATIONAL BANK
Charlotte NC Corporate Trust Department
ABA# 053 000 219 ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
Credit a/c 5000000016439 37th Floor
FFC: 3572000513 MAYDAVIS/FLEXX ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: CT 4882 NEW YORK Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
