5G Wireless Communications, Inc. May Davis Group, Inc. ESCROW AGREEMENT With FIRST UNION NATIONAL BANK
5G Wireless Communications, Inc.
May ▇▇▇▇▇ Group, Inc.
With
FIRST UNION NATIONAL BANK
This Agreement is made and entered into as of November __, 2001 by and among 5G
Wireless Communications, Inc. (the "Company"), May ▇▇▇▇▇ Group, Inc. (the "Placement
Agent"), and FIRST UNION NATIONAL BANK, a national banking association with a principal
New York corporate trust office at First Union National Bank, Corporate Trust Office, ▇▇ ▇▇▇▇
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WHEREAS, the Company proposes to offer for sale to investors through the Placement
Agent (a) up to $400,000 of the Company's 6% convertible notes (the "Notes"). The Notes are
being offered through the Placement Agent at various face amounts and up to $400,000 of the
Company's Common Stock. The Notes 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 Common Stock is being offered
through the Placement Agent pursuant to the terms of the Purchase Agreement (the "Investment
Agreement") being entered into between the Company and one or more investors.
WHEREAS, the Company proposes to offer for sale to investors through the Placement
Agent up to $10,000,000 of the Company's common stock, $.001 par value per share (the
"Common Stock"). The Common Stock is being offered through the Placement Agent pursuant
to the terms of a Private Equities Subscription Agreement ("Subscription Agreement") being
entered into between the Company and two investors.
WHEREAS, the Securities are being offered and sold through the Placement Agent only
to persons who have advised the Company that they are "accredited investors" as defined under
Regulation D promulgated under the Securities Act of 1933, as amended.
WHEREAS, the offering of Notes will terminate at the close of business on November
9July 20, 2001 (the "Termination Date"), unless otherwise terminated or extended by mutual
agreement of the Company and the Placement Agent, and if acceptable subscriptions have not
been received by the Company on or before such date, no Notes will be sold and all payments
made by subscribers of the Notes ("Subscribers") will be refunded by the Escrow Agent, without
interest, upon written authorization of fund destination by the Subscribers. The Placement Agent
reserves the right, in its sole discretion, to reject any subscription, in whole or in part, for the
purchase of the Notes offered hereby. In the case of orders which are rejected or partially
rejected, the Escrow Agent will promptly refund, without interest, the amount of the subscription
price representing the entire rejected order or that portion thereof which has not been accepted.
WHEREAS, the offering of Common Stock under the Subscription 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 (a) all subscription payments for the Notes received from
Subscribers and (b) all payments for the Common Stock received from investors pursuant to the
Investment Agreement, the Company proposes to establish an escrow account with the Escrow
Agent at the office of its Corporate Trust Office, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
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WHEREAS, the Placement Agent intends to sell the Notes as the Company's placement
agent on a "best efforts" basis up to $400,000, (the "Maximum Offering").
WHEREAS, the Company and the Placement Agent desire to establish an escrow account
("Escrow Fund Account") in which funds received from Subscribers of Notes will be deposited
pending completion of the escrow period. 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, at such times
and in such manner as shall be set forth in such instructions.
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.
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,
5G WIRELESS COMMUNICATIONS, INC.
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Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Tax ID#
IF TO THE PLACEMENT AGENT,
Hunter Singer
May ▇▇▇▇▇ Group, Inc.
C/O National Securities
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Tel.: ▇▇▇-▇▇▇-▇▇▇▇
Fax:
Tax ID#
If to the Escrow Agent:
First Union National Bank
Corporate Trust ▇▇▇▇▇▇
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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 a separate letter and agreed to by the party or parties responsible for payment. 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.
5G Wireless Communications, Inc. May ▇▇▇▇▇ Group, Inc.
By: ________________________________ By:_______________________________________
FIRST UNION NATIONAL BANK
Escrow Agent
Date: ______________________________ By:_______________________________________
FIRST UNION NATIONAL BANK
ESCROW AGENT
FEE SCHEDULE
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 $ 500
-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.
Unless otherwise directed, all Escrow Funds will be automatically invested into the Evergreen
Cash Management Treasury Money Market Fund, # 765.
The Initial Fee and Administration Fee are payable at the closing of this transaction. Thereafter
any out-of-pocket expenses will be billed upon the termination of the Subscription Escrow
Agreement.
Please execute one copy and return to my attention.
By:__________________________ Date:________________________
First Union National Bank
By:__________________________ Date:_________________________
5G Wireless Communications, Inc.
First Union National Bank
Corporate Trust ▇▇▇▇▇▇
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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 ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FFC: 3572000434
Attn: CT4882 New York
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FGWC.FirstUnionEscrowAgmt z/8