EXHIBIT 99.1
FORM OF ESCROW AGREEMENT
This Escrow Agreement is entered into as of [effective date of
Registration Statement], by and between X. X. Xxxxxx Xxxxx Bank (the "Escrow
Agent"), American Stock Transfer & Trust Company (the "Transfer Agent"),
Civilian Capital, Inc. (the "Underwriter") and Xxxxx Dead, Inc. (the "Company"),
for the benefit of investors in the Company's initial public offering of
securities (the "Investors"). The Company, the Underwriter and the Investors are
herein referred to as the "Interested Parties".
WHEREAS, the Company intends to complete an initial public offering of
900,000 shares of Series A Preferred Stock (the "Shares") at a price of $8.75
per share (the "Offering");
WHEREAS, Underwriter intends to conduct the Offering on a best efforts
"all or none" basis; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent for proceeds
raised in the Offering subject to the terms and conditions of this Escrow
Agreement.
NOW THEREFORE, IN CONSIDERATION OF THE PROMISES AND THE MUTUAL COVENANTS
CONTAINED HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE ACKNOWLEDGED BY EACH OF THE PARTIES, THE PARTIES AGREE
AS FOLLOWS:
SECTION 1. APPOINTMENT OF ESCROW AGENT. The Escrow Agent is hereby
constituted and appointed the escrow agent hereunder.
SECTION 2. ESTABLISHMENT OF ESCROW ACCOUNT. The Company hereby represents
and warrants to the Escrow Agent and to the Transfer Agent that the Securities
and Exchange Commission has declared effective the Company's Registration
Statement on Form SB-2 with respect to the Offering (the "Offering Commencement
Date"). The Underwriter agrees to deposit all subscriptions received by it from
the Investors ("Offering Proceeds") into an interest bearing account (the
"Escrow Account") to be established by the Escrow Agent for the benefit of the
Investors (the "Escrow Account").
SECTION 3. RELEASE OF ESCROW FUNDS; INFORMATION RIGHTS.
(a) At such time as the Escrow Agent has received Offering Proceeds
representing all of the Shares being sold in the Offering (an aggregate of
$7,875,000), then the Escrow Agent shall promptly notify the Company, the
Underwriter and the Transfer Agent, and, at the written election of the Company
(signed by its Chief Executive Officer), the Escrow Agent will release such
Offering Proceeds, together with all interest accrued thereon, subject to
deduction for expenses (including any fees charged by the Escrow Agent) promptly
to the Company. The written instruction from the Company shall be accompanied by
a written opinion of counsel to the Company and by a written confirmation from
the Underwriter that all conditions to the release of the Offering Proceeds have
been satisfied.
(b) If the Escrow Agent has not received Offering Proceeds representing
all of the Shares being sold in the Offering by close of business on the 90th
day after the Offering Commencement Date (the "Expiration Date"), which
Expiration Date may be extended for an additional 90 days if so elected in
writing by the Company and the Underwriter, with a copy of such election to
extend the Expiration Date to be delivered by the Company to the Escrow Agent
and the Transfer Agent, then the Escrow Agent, through the Transfer Agent as its
agent, will release and return the proceeds directly to the Investors, together
with all interest accrued thereon, subject only to deduction for expenses
(including any fees charged by the Escrow Agent), provided such expenses and
fees do not exceed the amount of accrued interest, in which case the excess of
such fees and expenses shall be payable by the Company.
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SECTION 4. OBLIGATIONS OF THE ESCROW AGENT.
(a) Each Interested Party acknowledges that the Escrow Agent: (i) SHALL BE
OBLIGATED ONLY FOR THE PERFORMANCE OF SUCH DUTIES AS ARE EXPRESSLY AND
SPECIFICALLY SET FORTH IN THIS ESCROW AGREEMENT ON ITS PART TO BE PERFORMED,
EACH OF WHICH IS MINISTERIAL (AND SHALL NOT BE CONSTRUED TO BE FIDUCIARY) IN
NATURE, AND NO IMPLIED DUTIES OR OBLIGATIONS OF ANY KIND SHALL BE READ INTO THIS
ESCROW AGREEMENT AGAINST OR ON THE PART OF THE ESCROW AGENT; (ii) shall not be
obligated to take any legal or other action hereunder that might in its judgment
involve or cause it to incur any expense or liability unless it shall have been
furnished with acceptable indemnification; (iii) may rely on and shall be
protected in acting or refraining from acting upon any written notice,
instruction (including, without limitation, wire transfer instructions, whether
incorporated herein or provided in a separate written instruction), instrument,
statement, certificate, request or other document furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper
person, and shall have no responsibility for making inquiry as to or determining
the genuineness, accuracy or validity thereof, or of the authority of the person
signing or presenting the same; (iv) may consult counsel satisfactory to it,
including in-house counsel, and the opinion or advice of such counsel in any
instance shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or advice of such counsel; and (v) may engage
accountants or other professionals if the Escrow Agent deems the services of
such professionals necessary in the discharge of the Escrow Agent's duties
hereunder. Documents and written materials referred to in this paragraph
include, without limitation, e-mail and other electronic transmissions capable
of being printed, whether or not they are in fact printed; and any such e-mail
or other electronic transmission may be deemed and treated by the Escrow Agent
as having been signed or presented by a person if it bears, as sender, the
person's e-mail address; and (vi) is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrow Account, the Offering Proceeds or this Agreement, without determination
by the Escrow Agent of such court's jurisdiction in the matter. If any Offering
Proceeds then held in the Escrow Account are 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 in any such
events 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 of its own choosing is binding upon it, and if the Escrow Agent
complies with any such order, writ, judgment, or decree, it shall not be liable
to depositor, or to any other person, firm or corporation by reason of such
compliance even though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
(b) The Escrow Agent shall not be liable to the other parties hereto for
any of its own acts or omissions of any kind, except for its own gross
negligence. In no event shall the Escrow Agent be liable for indirect, punitive,
special or consequential damage or loss, even if the Escrow Agent has been
informed of the likelihood of such loss or damage and regardless of the form of
action.
(c) Notwithstanding any term in this Escrow Agreement to the contrary, in
no instance shall the Escrow Agent be required or obligated to distribute any of
the Offering Proceeds (or take other action that may be called for hereunder to
be taken by the Escrow Agent) sooner than two business days after it has
received the applicable documents required under this Escrow Agreement.
(d) The Company agrees to compensate the Escrow Agent in accordance with
the fee schedule attached as EXHIBIT A to this Agreement, and to reimburse the
Escrow Agent and the Transfer Agent on
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demand for all costs and expenses incurred in connection with the administration
of this Escrow Agreement or the escrow created hereby or the performance or
observance of its duties hereunder.
(e) The Company and the Underwriter shall jointly and severally indemnify
and hold harmless the Escrow Agent, its agents and employees against any cost or
expenses (including attorneys' fees and fees and costs associated with any
complaint in interpleader), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation arising out of or pertaining to this Escrow
Agreement or the administration of its duties hereunder (collectively, the
"Damages"), except to the extent such Damages are caused by the Escrow Agent's
gross negligence, bad faith or willful misconduct. The foregoing indemnification
and agreement to hold harmless shall survive the termination of this Escrow
Agreement.
(f) The Escrow Agent shall not have any ownership interest in the Offering
Proceeds deposited hereunder.
(g) The Escrow Agent may resign and be discharged from its obligations
hereunder by mailing written notice to the Company and the Underwriter of such
resignation specifying a date when such resignation shall take effect; PROVIDED,
HOWEVER, that no such resignation shall take effect until a successor escrow
agent, which shall be a bank, shall have been appointed and qualified and shall
have executed an escrow agreement substantially in the form hereof.
(h) In the event the Escrow Agent is notified of any dispute, disagreement
or legal action between the parties hereto (other than the Escrow Agreement), or
any third parties, relating to or arising in connection with the Escrow Account
or the performance of the Escrow Agent's duties under this Agreement, the Escrow
Agent shall be authorized and entitled to suspend further performance hereunder
and to retain and hold the Offering Proceeds then in the Escrow Account. The
Escrow Agent may take no further action with respect thereto until the matter
has been fully resolved, as evidenced by written notification signed by the
parties and any other parties to such dispute, disagreement or legal action.
(i) With regard to any litigation among the parties hereto, or if the
Escrow Agent reasonably believes, in its sole discretion that it may become
involved in litigation, Agent is authorized to deposit the Offering Proceeds
then held in the Escrow Account with the Clerk of Supreme Court, New York
County, New York, New York("Court") and interplead the parties to this
Agreement. Upon so depositing the Offering Proceeds and filing its complaint in
interpleader, the Escrow Agent shall be completely discharged and released from
all further liability or responsibility under the terms hereof. If the Escrow
Agent deposits said Offering Proceeds as provided in this paragraph, the parties
hereto, for themselves, their heirs, successors and assigns, do hereby submit
themselves to the jurisdiction of the Court and do hereby appoint the Clerk of
the Court as their agent of service of all proceeds in connection with the
proceeding mentioned in this paragraph.
SECTION 5. MISCELLANEOUS.
(a) This Escrow Agreement shall be binding upon and inure to the benefit
of the parties named herein and their respective successors and permitted
assigns.
(b) This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
(c) The section headings contained in this Escrow Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
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(d) Any notice or other communication hereunder shall be in writing and
shall be deemed duly given two business days after it is sent by (i) registered
or certified mail, return receipt requested, postage prepaid, or (ii) a
nationally recognized overnight courier to the applicable address set forth
below (unless later updated) to the last known address of such party.
(e) This Escrow Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws
of any jurisdiction other than the State of New York. Each of the Parties
submits to the jurisdiction of any state or federal court sitting in New York,
New York in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. EACH OF THE PARTIES IRREVOCABLY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY MATTER WHATSOEVER ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
(f) No amendment of any provision of this Escrow Agreement shall be valid
unless the same shall be in writing and signed by each of the parties hereto. No
waiver by any party of any default or misrepresentation hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent default
or misrepresentation hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(g) Any term or provision of this Escrow Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
(h) The Escrow Agent shall not be responsible for delays or failures in
performance resulting from acts beyond its control. Such acts shall include but
not limited to acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations superimposed after the fact, fire, communication line
failures, computer viruses, power failures, earthquakes or other disasters.
(i) This Escrow Agreement shall terminate on the date on which the
Offering Proceeds have been distributed (or refunded) in their entirety in
accordance with the terms hereof.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement
to be effective as of the date hereof.
XXXXX DEAD, INC.
By:______________________________
Xxxxxxx X. Xxxx III
Chief Executive Officer
CIVILIAN CAPITAL, INC.
By:______________________________
Xxxxx XxXxxxxxx
Chief Executive Officer
X. X. XXXXXX CHASE BANK, INC., as ESCROW AGENT
By:______________________________
Name:
Authorized Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: ______________________________
Name:
Authorized Officer
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EXHIBIT A
Escrow Agent Fees
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