ESCROW AGREEMENT (For the Self-Underwritten Public Offering of Pinpoint Recovery Solutions Corp.)
(For
the Self-Underwritten Public Offering
THIS
ESCROW AGREEMENT, dated as of January 17, 2008, is entered into by and between
Pinpoint Recovery Solutions Corp., a Delaware corporation (the “Company”),
and
American Stock Transfer (the “Escrow
Agent”).
WITNESSETH:
WHEREAS,
pursuant to the terms of a Registration Statement on Form SB-2 filed by the
Company with the Securities and Exchange Commission (the “Commission”)
on
October 26, 2007 (File No. 333-146970), as the same may be amended from time
to
time before and/or after declaration by the Commission of the effectiveness
thereof (the “Registration
Statement”),
the
Company desires to offer for sale to the public on a self-underwritten basis
(the “Offering”)
a
minimum of 333,334 shares (“Minimum”)
and a
maximum of 1,666,667 shares (“Maximum”)
of its
common stock, par value $0.001 per share (the “Shares”),
at a
price per share of $3.00 (the “Purchase
Price”),
or an
aggregate of $1 million if the Minimum are sold (“Minimum
Amount”)
or an
aggregate of $5 million if the Maximum are sold (“Maximum
Amount”);
WHEREAS,
the Offering shall commence after declaration by the Commission of the
effectiveness of the Registration Statement and shall terminate on or before
5:00 p.m. New York time on the 90th
day
thereafter, unless extended by the Company for up to an additional 90-day period
(the “Termination
Date”),
provided that the Minimum has been accepted prior to the Termination Date (if
and as so extended, the “Final
Termination Date”);
and
WHEREAS,
the Company desires to establish an escrow account with Escrow Agent into which
payments of the Purchase Price of up to one hundred twenty (120) persons
subscribing for Shares in the Offering shall be deposited, by wire transfer,
check or other instruments for the payment of money made payable to the order
of
“American
Stock Transfer, as Escrow Agent for Pinpoint Recovery Solutions
Corp.”
and
Escrow Agent is willing to accept the same for the payment of money in
accordance with the terms herein set forth;
NOW,
THEREFORE, IT IS AGREED as follows:
1. Delivery
Of Escrow Funds.
(a)(i)
Subscribers for the purchase of Shares (“Subscribers”)
shall
be directed pursuant to the Registration Statement to deliver to the Escrow
Agent checks received from Subscribers made payable to the order of
“American
Stock Transfer, as Escrow Agent for Pinpoint Recovery Solutions
Corp.”
The
Escrow Agent may also receive money from Subscribers by means of wire transfer,
whereby money shall be wired to “American
Stock Transfer, as Escrow Agent for Pinpoint Recovery Solutions
Corp.,”
in
accordance with wire transfer instructions provided by the Escrow Agent to
the
Subscriber upon request by the Subscriber.
(ii)
The
Company shall provide to the Escrow Agent the name, address and social security
number or taxpayer identification number corresponding to each individual or
entity making payment.
(iii) All
such
funds, whether received by check, wire or otherwise, shall be deposited into
a
non interest-bearing account at American Stock Transfer entitled “American
Stock Transfer, as Escrow Agent for Pinpoint Recovery Solutions
Corp.”
(the
“Escrow
Account”).
Subscriptions shall be accepted by the Escrow Agent until 5:00 p.m. (Eastern
time) on the Termination Date (if not extended) or Final Termination Date (if
extended).
(b) The
collected funds deposited into the Escrow Account are referred to as the
“Escrow
Funds.”
(c) The
Escrow Agent shall have no duty or responsibility to enforce the collection
or
demand payment of any funds deposited into the Escrow Account. If, for any
reason, any check deposited into the Escrow Account shall be returned unpaid
to
the Escrow Agent, the sole duty of the Escrow Agent shall be to return the
check
to Subscriber and advise the Company promptly thereof.
2. Release of Escrow Funds. The Escrow Funds shall be paid by the Escrow Agent in accordance with the following:
(a) Withdrawal
of the Offering.
If the
Company advises the Escrow Agent in writing that the Offering has been
withdrawn, the Escrow Agent shall return the funds paid by each Subscriber
to
said Subscriber without interest or deduction, penalty or expense;
(b) Extension
of the Offering.
If
prior to 5:00 P.M. (Eastern time) on the Termination Date, the Escrow Agent
receives written notification, in form of Exhibit
A
attached
hereto, signed by the Company stating that the Termination Date has been
extended for up to 90 additional days, or any date prior to the Final
Termination Date, the date shall be so extended. If the Termination Date or
the
date stated in Exhibit
A
is not a
banking day, then the Termination Date or the Final Termination Date, as
applicable, shall be the following banking day. A “banking day” is any day other
than a Saturday, Sunday or a day that the Bank is not legally obligated to
be
open in New York City, New York.
(c) Upon
Receipt of Minimum Amount.
If,
prior to the Termination Date or the Final Termination Date (as applicable),
the
Escrow Agent has received Escrow Funds by 5:00 p.m. (Eastern time) at least
equal to the Minimum Amount, the Escrow Agent shall, upon receipt
of:
(i)
written instructions from the Company, in the form of Exhibit B attached hereto
authorizing
and directing the payment of the Escrow Funds and the issuance to the
Subscribers of certificates
representing the common stock of the Company, and
(ii)
an
opinion of Company’s legal counsel (a) that all conditions for the release of
the Escrow
Funds have been met and that the Escrow Agent is therefore authorized to release
the funds,
and (b) as to the fully paid, validly issued and non-assessable nature of the
Shares as well as
to
their having been issued pursuant to an effective registration statement, and
such other customary
language as the Escrow Agent may reasonably request;
pay
the
Escrow Funds as directed by the Company, such payment or payments to be made
by
wire transfer or bank check, and issue such certificates to the
Subscribers.
(d) (i) If
by
5:00 P.M. (Eastern time) on a date which is no later than seven (7) banking
days
after the Termination Date (if not extended) or Final Termination Date (if
extended), the Escrow Agent has not received written instructions from the
Company regarding the disbursement of the Escrow Funds that have been received
in an amount equal to at least the Minimum Amount, the Escrow Agent shall
release the Escrow Funds to the Company; or
(ii) if
by
5:00 P.M. (Eastern time) on a date which is no later than seven (7) banking
days
after the Termination Date (if not extended) or Final Termination Date (if
extended), the Escrow Agent has not received Escrow Funds in an amount at least
equal to the Minimum Amount, then the Escrow Agent shall promptly return the
Escrow Funds to the Subscribers and so notify the Company in writing;
it
being
understood, in either case, that the seven (7) banking days are being provided
to accommodate the clearing of Escrow Funds which have been properly deposited
into the Escrow Account prior to the Termination Date (if not extended) or
Final
Termination Date (if extended). The instructions to disburse Escrow Funds as
Exhibit
B
may be
delivered anytime within 7 banking days after the Termination Date (if not
extended) or Final Termination Date (if extended), and Escrow Funds shall not
be
sent back to Subscribers by the Escrow Agent until after such date.
(e) The
Escrow Agent shall not be required to pay any uncollected funds or any funds
that are not available for withdrawal.
3. Acceptance
by Escrow Agent.
The
Escrow Agent hereby accepts and agrees to perform its obligations hereunder,
provided that:
(a) The
Escrow Agent may act in reliance upon any signature believed by it to be
genuine, and may assume that any person who has been designated by the Company
to give any written instructions, notice or receipt, or make any statements
in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent shall have no duty to make inquiry as to the genuineness, accuracy or
validity of any statements or instructions or any signatures on statements
or
instructions. The names and true signatures of each individual authorized to
act
singly on behalf of the Company are stated in Schedule
A,
which
is attached hereto and made a part hereof. The Company may each remove or add
one or more of its authorized signers stated on Schedule A by notifying the
Escrow Agent in accordance with this Agreement of such change, which notice
shall include the true signature for any new authorized
signatories.
(b) The
Escrow Agent may act relative hereto in reliance upon advice of counsel in
reference to any matter connected herewith. The Escrow Agent shall not be liable
for any mistake of fact or error of judgment or law, or for any acts or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.
(c) The
Company shall indemnify and hold the Escrow Agent harmless from and against
any
and all claims, losses, costs, liabilities, damages, suits, demands, judgments
or expenses (including but not limited to attorney’s fees) claimed against or
incurred by Escrow Agent arising out of or related, directly or indirectly,
to
the Escrow Agreement, unless such claim is due to the willful misconduct or
gross negligence of the Escrow Agent.
(d) If
the
Escrow Agent shall be uncertain as to its duties or rights hereunder, the Escrow
Agent shall be entitled to (i) refrain from taking any action other than to
keep
safely the Escrow Funds until it shall be directed otherwise by a court of
competent jurisdiction, or (ii) deliver the Escrow Funds to a court of competent
jurisdiction.
(e) The
Escrow Agent shall have no duty, responsibility or obligation to interpret
or
enforce the terms of any agreement other than Escrow Agent’s obligations
hereunder, and the Escrow Agent shall not be required to make a request that
any
monies be delivered to the Escrow Account, it being agreed that the sole duties
and responsibilities of the Escrow Agent shall be to the extent not prohibited
by applicable law (i) to accept checks or other instruments for the payment
of
money and wire transfers delivered to the Escrow Agent for the Escrow Account
and deposit said checks and wire transfers into the non-interest-bearing Escrow
Account, and (ii) to disburse or refrain from disbursing the Escrow Funds as
stated above, provided that the checks received by the Escrow Agent have been
collected and are available for withdrawal.
4. Resignation of the Escrow Agent. The Escrow Agent may resign at any time by giving 30 days’ notice of such resignation to the Company. Upon providing such notice, the Escrow Agent shall have no further obligation hereunder except to hold as depositary the Escrow Funds that it has received as of the date on which it provided the notice of resignation. In such event, the Escrow Agent shall not take any action until the Company has designated a banking corporation, trust company, attorney or other person as successor. Upon receipt of such written instructions signed by the Company, the Escrow Agent shall promptly deliver the Escrow Funds to such successor and shall thereafter have no further obligations hereunder. If such instructions are not received within 30 days following the effective date of such resignation, then the Escrow Agent may deposit the Escrow Funds and any other amounts held by it pursuant to this Agreement with a clerk of a court of competent jurisdiction pending the appointment of a successor. In either case provided for in this paragraph, the Escrow Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Escrow Funds and all interest earned thereon.
5. Termination.
The
Company may terminate the appointment of the Escrow Agent hereunder upon written
notice specifying the date upon which such termination shall take effect, which
date shall be at least 30 days from the date of such notice. In the event of
such termination, the Company shall, within 30 days of such notice, appoint
a
successor escrow agent and the Escrow Agent shall, upon receipt of written
instructions signed by the Company, turn over to such successor escrow agent
all
of the Escrow Funds; provided, however, that if the Company fails to appoint
a
successor escrow agent within such 30-day period, such termination notice shall
be null and void and the Escrow Agent shall continue to be bound by all of
the
provisions hereof. Upon receipt of the Escrow Funds, the successor escrow agent
shall become the Escrow Agent hereunder and shall be bound by all of the
provisions hereof and American Stock Transfer shall be relieved of all further
obligations and released from all liability thereafter arising with respect
to
the Escrow Funds.
6.
Investment.
All
funds received by the Escrow Agent shall be invested only in non-interest
bearing bank accounts at American Stock Transfer & Trust Co.
7.
Compensation.
Escrow
Agent shall be entitled, for the duties to be performed by it hereunder, to
a
fee of $5,000.00, which fee shall be paid by the Company upon the signing of
this Agreement. Neither the modification, termination, cancellation or
rescission of this Agreement nor the resignation or termination of the Escrow
Agent shall affect the right of the Escrow Agent to retain the $5,000.00 fee.
Should the number of Subscribers purchasing Shares pursuant to the Offering
exceed one hundred twenty (120), the fee paid to Escrow agent shall be increased
in proportion to the number of such subscribers in excess of 120.
8. Notices.
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be in writing and shall be deemed to have been duly given
if sent by hand-delivery, by facsimile followed by first-class mail, by
nationally recognized overnight courier service or by prepaid registered or
certified mail, return receipt requested, to the addresses set forth
below.
If
to the
Company, to:
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Attention:
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Fax:
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With
copies to:
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Fax:
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and:
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& ▇▇▇ ▇▇▇▇▇▇ LLP
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Attention:
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Fax:
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If
to the
Escrow Agent, to:
American
Stock Transfer & Trust Co.
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Attention:
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Fax:
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9. General
(a) This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York applicable to agreements made and to be entirely
performed within such State, without regard to choice of law
principles.
(b) This
Agreement sets forth the entire agreement and understanding of the parties
in
respect to the matters contained herein and supersedes all prior agreements,
arrangements and understandings relating thereto.
(c) All
of
the terms and conditions of this Agreement shall be binding upon, and inure
to
the benefit of and be enforceable by, the parties hereto.
(d) This
Agreement may be amended, modified, superseded or canceled, and any of the
terms
or conditions hereof may be waived, only by a written instrument executed by
each party hereto or, in the case of a waiver, by the party waiving compliance.
The failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver of any party of any condition, or of the breach of any
term
contained in this Agreement, whether by conduct or otherwise, in any one or
more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement. No party may assign any rights,
duties or obligations hereunder unless all other parties have given their prior
written consent.
(e) If
any
provision included in this Agreement proves to be invalid or unenforceable,
it
shall not affect the validity of the remaining provisions.
(f) This
Agreement and any amendment or modification of this Agreement may be executed
in
several counterparts or by separate instruments and all of such counterparts
and
instruments shall constitute one agreement, binding on all of the parties
hereto.
(g) The
parties hereto agree to accept a facsimile transmission copy of their respective
actual signatures as evidence of their actual signatures to this Agreement
and
any amendment or modification of this Agreement; provided, that each party
who
produces a facsimile signature shall promptly after transmission by fax, provide
an original copy of his or her signature in overnight mail to the address of
the
other party.
*
*
*
[The
signatures hereto are set forth on the following page.]
IN
WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as of
the
date first set forth above.
By:
_____________________________
Name:
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Title:
Chief
Executive Officer
AMERICAN
STOCK TRANSFER & TRUST CO.
By:
_________________________________
Name:
Title