IMAGINENET CORP.
ESCROW AGREEMENT
AGREEMENT made as of the 4th day of October, 2001 among Xxxxxx, Xxxx &
Associates (the "Escrow Agent") and ImagineNet Corp. (the "Issuer").
1. Property Deposited in Escrow. The Issuer and the Escrow Agent shall
establish an attorney escrow account with Citibank, N.A. (the
"Depository") in Bethesda, Maryland entitled "ImagineNet Corp. IPO
Escrow Account" (the "Escrow Account"). All proceeds (the "Proceeds")
of subscriptions (together with a list setting forth the names and
addresses of each subscriber and the amounts and dates of receipt of
their respective subscriptions and copies of the Subscription Agreement
and Power of Attorney executed by the subscriber) for shares of limited
issuer interest (the "Shares") in the Issuer received during the
Offering Period (as defined in paragraph 2.6 below) shall be forwarded
to the Escrow Agent by noon of the next business day after receipt of
such subscriptions, with copies to the Issuer for determination of
whether to accept such subscriptions. The Issuer shall deliver to all
such prospective subscribers interim receipts for the amount of the
funds deposited in the Escrow Account and copies of such receipts shall
be delivered to the Escrow Agent, said interim receipts to be
substantially in the form of Exhibit A hereto.
2. Authority of Escrow Agent. The Escrow Agent shall collect, hold, deal
with and dispose of the Proceeds and any other property at any time
held by it hereunder in the following manner:
2.1 If subscriptions for 100,000-1,000,000 shares ($100,000 -
$1,000,000) or more have been received during the Initial
Offering Period (as defined in paragraph 2.6 below), all
property deposited in the Escrow Account (excluding all
interest accumulated on the Proceeds paid to subscribers
pursuant to paragraph 2.2 below) shall as soon as practicable
be paid over and delivered to the Issuer upon its written
request, upon the certification by the Issuer to the Escrow
Agent that subscriptions aggregating not less than such
100,000-01,000,000 shares ($100,000 - $1,000,000) minimum have
been received and accepted, and upon certification by the
Escrow Agent to the Issuer that the Escrow Agent has received
not less than such $100,000 minimum in good clear funds for
deposit in the Escrow Account.
2.2 If such subscriptions for 100,000-1,000,000 shares ($100,000 -
$1,000,000) or more have not been received within the Offering
Period (as defined in paragraph 2.6 below), prompt remittance
(within 10 days following termination of the offering) of the
Proceeds deposited in the Escrow Account shall be made by the
Escrow Agent to the subscribers at their respective addresses
shown on the list of subscriber names, addresses and social
security numbers delivered to the Escrow Agent pursuant to
paragraph 1 in the amounts shown thereon and without
deductions of any kind or character. Additionally, any
interest which shall be accrued on the Proceeds during the
period of this Agreement shall concurrently be paid to the
subscribers in proportion to their respective subscriptions
(taking into account time of deposit and amount).
2.3 Prior to delivery of the escrowed Proceeds to the Issuer as
described above, the Issuer shall have any title to or
interest in the Proceeds on deposit in the Escrow Account or
in any interest earned thereon and such Proceeds and interest
shall under no circumstances be subject to the liabilities or
indebtedness of the Issuer.
10.1-1
2.4 The Escrow Agent shall not be responsible for investment
management of the subscription funds deposited with it.
Instead, the Issuer shall cause all Proceeds deposited with it
pursuant to this Agreement to be maintained and invested as
the Issuer shall from time to time direct by written
instrument delivered to the Escrow Agent, in certificates of
deposit, savings accounts (of banks including the Escrow
Agent) or direct United States Government obligations which
can be readily liquidated on twenty-four hours notice so that
100% of the Proceeds so deposited with interest thereon can,
if necessary, be returned to subscribers in accordance with
paragraph 2.2 above. It is expressly agreed that the Escrow
Agent is not guaranteeing that any interest or profits will
accrue on the subscription funds deposited with it. If the
100% of the Proceeds so deposited are not realized upon such
liquidation, the Issuer shall pay the difference into the
Escrow Account for distribution to the subscribers. The Escrow
Agent shall incur no liability for any loss suffered so long
as the Escrow Agent follows such directions.
2.5 At any time prior to the termination of this Agreement, for
whatever reason, the Issuer may notify the Escrow Agent that a
Subscription Agreement of a subscriber has not been accepted
or has only been partially accepted, and the Issuer may direct
the Escrow Agent to return as soon thereafter as may be
practicable any Proceeds held in the Escrow Account for the
benefit of such subscriber directly to such subscriber,
without interest. If any check transmitted to the Escrow Agent
in connection with a subscription shall remain uncollected for
any reason, the Escrow Agent shall return such check, together
with any other material or documents received by it in
connection with the subscription, to the Issuer.
2.6 The "Offering Period" shall mean a period of not more than 90
days commencing on the date of the Prospectus, subject to an
extension of 60 days if the Issuer so determines, and subject
to earlier termination. The Issuer shall give the Escrow Agent
prompt notice of when the Offering Period commences.
2.7 The Escrow Agent shall not be obligated to inquire as to the
form, manner of execution or validity of any documents
herewith or hereafter deposited pursuant to the provisions
hereof, nor shall the Escrow Agent be obligated to inquire as
to the identity, authority or rights of the persons executing
the name. In case of conflicting demands upon it, the Escrow
Agent may withhold performance under this Agreement until such
time as said conflicting demands shall have been withdrawn or
the rights of the respective parties shall have been settled
by court adjudication, arbitration, joint order or otherwise.
2.8 The Escrow Agent shall not be required to separately record on
its books the name, address and amount of each subscription as
received, but shall keep the lists delivered to it pursuant to
paragraph 1 above.
3. Fees and Expenses of Escrow Agent. The fees and expenses of the Escrow
Agent shall be fixed at $500.
4. Liability of Escrow Agent. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith in accordance with the
advice of its counsel and in no event shall it be liable or responsible
except for its won negligence or willful misconduct. The Escrow Agent
shall not be responsible for any loss to the Proceeds resulting from
the investment thereof in accordance with the terms of this Agreement.
10.1-2
5. Identification of Escrow Agent. The Issuer agrees to indemnify and hold
harmless the Escrow Agent and its officers, employees and agents from
and against reasonable fees and expenses of the Escrow Agent, including
but not limited to judgments, reasonable attorneys' fees and other
liabilities which the Escrow Agent may incur or sustain by reason of or
in connection with this Agreement.
6. Representations and Warranties of the Issuer. The Issuer warrants to
and agrees with the Escrow Agent that, unless otherwise expressly set
forth in this Agreement, there is no security interest in the Proceeds
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
Proceeds or any part thereof; and the Escrow Agent shall have no
responsibility at any time to ascertain whether or not any security
interest exists in the Proceeds or any part thereof or to file any
financing statement under the Uniform Commercial Code with respect to
the Proceeds or any part thereof.
7. Escrow Agent's Compliance with Court Orders, Etc. If any property
subject hereto 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, writ, judgment or decree shall
be made or entered by any court affecting such property, or any part
hereof, then in any of such events, the escrow Agent is authorized to
rely upon and comply with any such order, writ judgment or decree about
which it is advised by legal counsel of its own choosing is binding
upon it, and if it 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, 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.
8. Resignation of Escrow Agent. The Escrow Agent may resign by giving ten
days written notice by certified mail, return receipt requested, sent
to the undersigned at their respective addresses herein set forth; and
thereafter, subject to the provisions of the preceding paragraph hereof
shall deliver all remaining deposits in the Escrow Account to a
successor escrow agent acceptable to all other parties hereto, which
acceptance shall be evidenced by the joint written and signed order of
the undersigned. If no such order is received by the Escrow Agent
within thirty days after mailing such notice, it is unconditionally and
irrevocably authorized and empowered to send any and all items
deposited hereunder by registered mail to the respective depositors
thereof.
9. Amendments. The Escrow Agent's duties and responsibilities shall be
limited to those expressly set forth in this Agreement and shall not be
subject to, nor obliged to recognize, any other agreement between, or
direction or instruction of, any or all of the parties hereto unless
reference thereto is made herein; provided, however, with the Escrow
Agent's written consent, this Agreement may be amended at any time or
times by an instrument in writing signed by all of the undersigned.
10. Governing Law. This Agreement shall be construed, enforced and
administered in accordance with the laws of the State of Maryland
applicable to contracts made and to be performed in that State.
11. Effectiveness. This Agreement shall not become effective (and the
Escrow Agent shall have no responsibility hereunder except to return
the property deposited in the Escrow Account to the subscribers) until
the Escrow Agent shall have received a certificate as to the names and
specimen signatures of the Issuer and shall have advised each of the
Issuers in writing that the same are in form and substance satisfactory
to the Escrow Agent.
10.1-3
12. Termination. This agreement shall terminate upon completion of the
obligations provided in either paragraphs 2.1 or 2.2 hereof or as
otherwise provided by written instruction from the Issuer to the Escrow
Agent.
13. Notices.
13.1 Subject to the provisions of paragraph 13.2 thereof, any notice
required or permitted to be given hereunder shall be effective when
delivered by messenger, or dispatched by certified mail, return receipt
requested, cable or telex, to the respective party at its address
specified below, namely if to Xxxxxx, Xxxx & Associates, addressed to
it at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 Attn: Xxxx X.
Xxxxxx and if to the Issuer at 000 Xxxxxxxx Xxxxxx - Xxxxx 000, Xxxx
Xxxx Xxxxx, Xxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxxxx, or to such other
address as such party may have furnished in writing to each of the
other parties hereto.
13.2 Any notice which the Escrow Agent is required or desires to give
hereunder to any of the undersigned shall be in writing and may be
given by mailing the same to the address of the undersigned (or to such
other address as said undersigned may have theretofore substituted by
written notification to the Escrow Agent), by certified mail, return
receipt requested, postage prepaid. Notices to or from the Escrow Agent
hereunder shall be in writing and shall not be deemed to be given until
actually received by the Escrow Agent or by the person to whom it was
mailed, respectively. Whenever under the terms hereof the time for
giving notice or performing an act falls upon a Saturday, Sunday or
bank holiday, such time shall be extended to the Escrow Agent's next
business day.
Parties to the Escrow
IMAGINENET CORP. (ISSUER)
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
XXXXXX, XXXX & ASSOCIATES (ESCROW AGENT)
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Managing Partner
10.1-4
EXHIBIT A
Investor Address
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Re: ImagineNet Corp.. ("Issuer")
Dear Investor:
This letter is to acknowledge receipt of your purchase of ________
shares of Issuer at $____ per share (with aggregate proceeds of $______________)
are being held in the Issuer's Attorney Escrow Agent in the manner described in
the Issuer's Prospectus until the $100,000 minimum offering is achieved. If you
have any questions concerning your purchase, please call us at (561) 000- 0000
IMAGINENET CORP.
By: ____________________________
Xxxxxxx X. Xxxxxxxx, President
10.1-5
