Exhibit 1.3
ESCROW AGREEMENT
(Multiple Depositors)
This Escrow Agreement ("Agreement") is entered into among Silicon Valley Bank
("Escrow Agent"), having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Rush Financial Technologies, Inc. (Company) and Invest
Linc Securities, LLC (Investor Representative), collectively referred to herein
as "Parties."
Escrow Account #:_________________
Company and Investor Representative desire to establish this Agreement for the
purpose of facilitating and regularizing the receipt of monies due, and
disbursement of those monies in connection with a public offering of Company
Common Stock (the "Transaction"). The Escrow Agent will receive funds due and
disburse the funds per instructions described in this Escrow Agreement.
The Investor Representative has been duly appointed by the purchasers or
investors listed on Exhibit B ("Purchasers") to provide instructions to the
Escrow Agent relating to the disbursement of funds in accordance with the
Transaction.
The parties hereby agree as follows:
1. Appointment of the Escrow Agent. Company and Investor Representative do
hereby appoint, constitute and designate Silicon Valley Bank as their
Escrow Agent for the purposes set forth herein, and the Escrow Agent
accepts the agency created under this Agreement and agrees to perform the
obligations as stated herein.
2. Conflict with Other Agreements. Company and Investor Representative agree
that this Agreement supersedes any conflicting terms contained in any other
agreement or understanding pertaining to the monies.
3. Deliveries to Escrow Agent. Each Purchaser shall deliver to the Escrow
Agent the sum indicated alongside its name on Exhibit B attached hereto,
and Escrow Agent shall acknowledge receipt of such amount and agrees to
hold and disburse said amount (collectively, the "Escrow Amount") in
accordance with the terms and conditions of this Escrow Agreement and for
the uses and purposes stated herein. Such amount shall be delivered into
escrow by each Purchaser in accordance with the instructions in Exhibit C.
If Investor Representative or any other broker acting through the Investor
Representative shall obtain any Purchaser's funds for any reason, it shall
transmit them to Escrow Agent no later than noon on the next business day
following receipt.
4. Investment of Funds. All such funds will be deposited to the Escrow
Account, which shall be a noninterest bearing account.
5. Responsibilities of Escrow Agent. The duties and responsibilities of the
Escrow Agent shall be those expressly set forth in this Agreement. No
implied duties of the Escrow Agent shall be read into this Agreement and
the Escrow Agent shall not be subject to, or obligated to recognize any
other agreement between or direction or instruction of, any or all of the
parties hereto. The Escrow Agent shall also not be responsible for the
duties of Company and Investor Representative to each other.
6. Disbursements.
6.1 On or after ________________, 20__ Company and Investor Representative
agree that they shall deliver to the Escrow Agent joint written
instructions, substantially in the form of
Exhibit D hereto executed by both the Company and Investor Representative
("Disbursement Instructions") indicating whether or not the Transaction has
been approved.
6.2 In the event that Company and Investor Representative deliver a joint
written notice that the Transaction has been approved, then Escrow Agent
shall release the entire Escrow Amount, less any fees payable in connection
with this Escrow, to the Company in accordance with the wire transfer
instructions contained therein.
6.3 In the event the Company and Investor Representative do not deliver
such joint written notice by ________________, 20__ or such notice
indicates that the Transaction has not been approved Exhibit E), then
Escrow Agent shall return the portion of the Escrow Amount that was
contributed by each Purchaser, to the respective Purchaser, by check to
such address as provided by each Purchaser, after such time as the Company
and Investor Representative determine that the Transaction has not been
approved.
6.4 Escrow Agent's actions under this Section 6 shall occur promptly after
receipt or non receipt of written notice by Company but in no event before
___________________, 20 and no later than ___________________, 20__.
7. Fees. The fees of the Escrow Agent for services rendered in connection with
this Escrow Agreement are outlined in Exhibit A. It is the responsibility
of the Company to pay the required fees to the Escrow Agent. Any fees not
paid by the Company will be deducted from the Escrow Amount prior to
disbursement of the funds.
8. Collection by the Escrow Agent. Unless otherwise specifically indicated
herein, the Escrow Agent shall proceed as soon as practicable to collect
any checks or other collection items at any time deposited or received
hereunder. All such collections shall be subject to the usual collection
agreement regarding items received by its commercial banking department for
deposit or collection. Except as provided in this Agreement, the Agent
shall not be required or have duty to notify anyone of any payment or
maturity under the terms of any instrument deposited or received hereunder,
nor to take any legal action to enforce payment of any check, note,
security deposited or received hereunder. The Escrow Agent shall have no
liability for any interest on money deposited or received hereunder.
9. Returned Items. Escrow Agent will charge the Escrow Account for any
deposited item that is returned unpaid. Escrow Agent agrees to notify both
the Company and Investor Representative by fax, directed to the fax numbers
set forth below the parties' signatures, of any deposit items that are
returned. Company agrees to immediately pay the Escrow Agent by check or
otherwise the amount of any net deficit upon receipt of such notification.
If the Company does not immediately pay then the Investor Representative
shall pay.
10. Instructions and Directions to Agent. The Escrow Agent is authorized, in
its sole discretion, to disregard any and all notices or instructions given
by any person or entity, except notices or instructions as provided for in
this Agreement (Disbursement Instructions) and orders or process of any
court entered or issued with or without jurisdiction. 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, judgment, or decree shall be made or entered
by any court affecting such property or any party hereto, 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 with which it
is advised by legal counsel of its own choosing, and if it complies with
any such order, writ, judgment or decree it shall not be liable to any
other party 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.
11. Agent's Right to Rely on Genuineness of Instrument. The Escrow Agent may
rely, and shall be protected in acting or refraining from acting, upon any
instrument furnished to it hereunder and believed by it to be genuine and
believed by it to have been signed or presented by the appropriate party or
parties described in this Agreement. The Escrow Agent shall not be
responsible nor liable in any respect on account of the lack of authority,
or lack of right of any such person executing, or delivering or purporting
to execute, deposit or deliver any such document, funds or endorsement of
this Agreement or on account of or by reason of forgeries, or false
representations.
12. Indemnity and Hold Harmless of Bank. Company and Investor Representative
hereby agree to indemnify and hold harmless Escrow Agent, its affiliates
and their respective directors, officers, agents and employees
("Indemnified Persons") against any and all claims, causes of action,
liabilities, lawsuits, demands and damages (each, a "Claim") arising from
this Agreement, including without limitation, any and all court costs and
reasonable attorneys' fees, in any way related to or arising out of or in
connection with this Agreement or any action taken or not taken pursuant
hereto, including, but not limited to, any Claims arising as a result of
Escrow Agent's adherence to instructions from Company and Investor
Representative; provided that no Indemnified Person shall be entitled to be
indemnified to the extent that such Claims result from an Indemnified
Person's gross negligence or willful misconduct. This provision shall
survive the termination of this Agreement.
13. Disagreements. In the event of any disagreement between the parties and/or
any other person, resulting in an adverse claim or demand being made in
connection with this Agreement, Escrow Agent shall not become liable to the
parties for damages or interest for Escrow Agent's failure or refusal to
comply with conflicting or adverse demands, and Escrow Agent may continue
to refuse to act until the disagreement is resolved by the parties or by
the court in which the Escrow Agent files a request for interpleader.
14. Relationship of the Parties. Other than the escrow agency described herein,
nothing in this Agreement shall create any other agency or fiduciary
relationship between Company, Investor Representative and Escrow Agent.
15. Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT OR ANYWHERE ELSE, COMPANY AND INVESTOR REPRESENTATIVE EACH WAIVE,
AND THEY AGREE THAT THEY SHALL NOT SEEK FROM ESCROW AGENT UNDER ANY THEORY
OF LIABILITY (INCLUDING WITHOUT LIMITATION ANY THEORY IN TORT), ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING IN CONNECTION
WITH THIS AGREEMENT.
16. Jury Trial Waiver. COMPANY, INVESTOR REPRESENTATIVE AND ESCROW AGENT EACH
WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, OR ANY CONTEMPLATED TRANSACTION
HEREIN, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
17. Governing Law and Jurisdiction. The parties hereto agree that this
Agreement shall be governed exclusively under and in accordance with the
laws of the State of California. All parties hereto each submit to the
exclusive jurisdiction of the State and Federal courts in Santa ▇▇▇▇▇
County, California.
18. Attorneys' Fees. Costs and Expenses. In any action or proceeding between
Escrow Agent and any other party to this Agreement, the prevailing party
will be entitled to recover its reasonable attorneys' fees and other
reasonable costs and expenses incurred, in addition to any other relief to
which it may be entitled.
19. Term and Termination. Unless terminated earlier, this Agreement shall
remain in effect until all funds have been remitted to the Escrow Agent and
all amounts received by the Escrow Agent have been disbursed as provided
herein above. In no case will the termination of this Agreement relieve
the parties of their responsibility to pay any fees due to the Escrow Agent
and payable under this Agreement.
20. Resignation of the Agent. The Agent reserves the right to resign as Escrow
Agent at any time by giving thirty days advance written notice to Company
and Investor Representative. Within thirty days after receipt of said
notice of resignation, Company and Investor Representative shall inform the
Escrow Agent of a successor escrow agent to which the Escrow Agent shall
distribute the property then held hereunder, less its fees, costs and
expenses (including counsel fees and expenses). If Company and Investor
Representative are unable to appoint a successor escrow agent within thirty
days and there is property held under this Agreement, then Company and
Investor Representative shall cause the property to be disbursed in
accordance with Section 6.
21. Amendment. The provisions of this Agreement may only be altered, modified
or amended by instrument in writing duly executed by all of the Parties
hereto.
22. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed as original of one and the same document.
23. Notices. Any notice or other communication shall be in writing and shall be
sent by United States mail, overnight courier or facsimile to the noted
addresses set forth below the parties' signatures. For all purposes hereof
any notice so mailed shall be as effectual as though served upon the person
of the party to whom it was mailed at the time of the deposit in the United
States mail or faxed.
24. Business Days. Unless otherwise specified herein, all "days" referred to in
this Agreement shall be business days. Whenever under the terms hereof the
time giving a notice or performing an act falls upon a Saturday, Sunday or
federal holiday, such time shall be extended to the next following business
day.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
The Company and Investor Representative each states that they have read the
foregoing Agreement, understands and agrees to it, and acknowledges receipt of a
copy of the same. The Company and the Investor Representative further
acknowledge that this Agreement shall not be effective until signed by the Bank
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year of the last signature below.
Company: Investor Representative:
Rush Financial Technologies, Inc Invest Linc Securities, LLC
By:________________________________ By:________________________________
Name & Title:______________________ Name & Title:______________________
Date:______________________________ Date:______________________________
Address for Notices: Address for Notices:
Attn:______________________________ Attn:______________________________
___________________________________ ___________________________________
___________________________________ ___________________________________
___________________________________ ___________________________________
Tel:_______________________________ Tel:_______________________________
Fax:_______________________________ Fax:_______________________________
Email:_____________________________ Email:_____________________________
Escrow Agent:
Silicon Valley Bank
By:________________________________
Name & Title:______________________
Date:______________________________
Address for Notices:
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Deposit Escrow Services
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Silicon Valley Bank
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Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Exhibit A
Fees Schedule
In accordance with Section 7 of this Agreement, the following fees are due to
the Escrow Agent:
Escrow Fee: $3,000 (non-refundable) payable at the time the escrow
account is established
Disbursement Fee: $35.00 per disbursement per payee
Fees are payable by the Company
Exhibit B
Schedule of Purchasers / Investors
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Purchaser /Investor Purchase Price/ Investment
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TOTAL $
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Exhibit C
Delivery Instructions
In accordance with Section 3 of this Agreement, all funds to be deposited to the
Escrow Account should be delivered as follows:
Remittance Via Check:
Payable To: Rush Financial Technologies, Inc Escrow Account
Account #______________________
Mailed To: Deposit Escrow Services
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Silicon Valley Bank
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Remittance Via Wire Transfer:
Account Name: Rush Financial Technologies, Inc Escrow Account
Bank: Silicon Valley Bank
Account #: ______________________
ABA #: ▇▇▇▇▇▇▇▇▇
Address: Silicon Valley Bank
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Exhibit D
Escrow Account Disbursement Instructions
(Transaction Approved)
Silicon Valley Bank
Deposit Escrow Services
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Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Escrow Agreement dated:______________________
Company: Rush Financial Technologies, Inc
Investor Representative: Invest Linc Securities, LLC
This letter is delivered pursuant to Section 6 of the Escrow Agreement, by and
among the Company, the Investor Representative and Silicon Valley Bank as Escrow
Agent.
The Transaction relating to this Agreement has been approved. The Company and
Investor Representative hereby instruct Escrow Agent to release the entire
Escrow Amount, less any fees payable in connection with this Escrow, to the
Company's operating account number held by Silicon Valley Bank.
The undersigned has caused its duly authorized representative to execute this
letter as of the date hereof.
Sincerely,
COMPANY INVESTOR REPRESENTATIVE
By:________________________________ By:________________________________
Name & Title:______________________ Name & Title:______________________
Date: _____________________________ Date: _____________________________
Exhibit E
Escrow Account Disbursement Instructions
(Transaction Not Approved)
Silicon Valley Bank
Deposit Escrow Services
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Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Escrow Agreement dated:__________________________________
Company: Rush Financial Technologies, Inc
Investor Representative: Invest Linc Securities, LLC
This letter is delivered pursuant to Section 6 of the Escrow Agreement, by and
among the Company, the Investor Representative and Silicon Valley Bank as Escrow
Agent.
The Transaction relating to this Agreement has not been approved. The Escrow
Amount should be returned to the Purchasers listed on Exhibit B, via check, in
the amounts initially contributed by each Purchaser. Addresses for each
Purchaser are included with this letter. The Company will pay any fees payable
in connection with these remittances.
The undersigned has caused its duly authorized representative to execute this
letter as of the date hereof.
Sincerely,
COMPANY INVESTOR REPRESENTATIVE
By:________________________________ By:________________________________
Name & Title:______________________ Name & Title:______________________
Date: _____________________________ Date: _____________________________