ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made as of the date last set
forth below by and between Microsourceonline Inc., a Delaware corporation
("MSO"), and ____________________________________, a _________ Bank ("Escrow
Agent"), with reference to and in reliance upon the following facts:
Recitals
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A. MSO is preparing to conduct an Initial Public Offering (the
"Offering") of shares ("Shares") of MSO's common stock. To that end, MSO has
filed or is in the process of filing a registration statement ("the Registration
Statement") covering the Shares with the U.S. Securities and Exchange
Commission. Upon the Registration Statement's effectiveness, MSO shall commence
offering the Shares for public sale pursuant to the Offering. The purchasers of
Shares shall hereinafter be referred to as "Investors."
B. The Registration Statement provides that all proceeds for Shares
received by MSO in the Offering ("Proceeds") shall be held in escrow and
released to MSO only at such time as the total Proceeds reach the amount of Six
Hundred Thousand Dollars ($600,000), or else such Proceeds shall be returned to
the Investors.
C. The Escrow Agent has agreed to hold and deal with the Proceeds in
accordance herewith.
Now, therefore, in consideration of the premises, mutual covenants, and
conditions set forth below, and for other good and valuable consideration, the
receipt and adequacy of which are acknowledged, the parties agree as follows:
ARTICLE 1
APPOINTMENT OF ESCROW AGENT AND SUCCESSORS
1.1 Purpose of Agreement. This Agreement and the escrow created herein has
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been executed, delivered, and established for the purpose of holding and either
delivering the Proceeds to MSO, or returning the Proceeds to the Investors, in
accordance with the terms of the Registration Statement.
1.2 Appointment of Escrow Agent. MSO hereby appoints the Escrow Agent to
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act as the escrow agent hereunder, and the Escrow Agent accepts its appointment
and designation as such pursuant and subject to the terms and conditions herein.
1.3 Successors. The Escrow Agent may at any time resign by giving not less
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than 10 business days prior written notice to each of the other parties hereto,
and shall be discharged of its duties hereunder upon the expiration of the said
10 business days or upon the earlier appointment of a successor. In the event of
such resignation, a successor escrow agent will be selected by MSO in writing,
and Escrow Agent shall deliver to and such successor shall thereupon receive the
Proceeds herein, and shall succeed to all the rights and duties of the Escrow
Agent as set forth herein. If prior to the expiration of 10 business days after
the delivery of a resignation notice to MSO, the Escrow Agent shall have
received no written instructions from MSO designating a successor Escrow Agent,
it shall deliver the Proceeds held by it in escrow to such person as shall be
directed by an order of court having competent jurisdiction.
ARTICLE 2
ESCROW ARRANGEMENTS
2.1 Delivery of Proceeds. Following the effective date of the Registration
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Statement, MSO shall deliver any Proceeds MSO receives, or cause the Proceeds to
be directly delivered by the Investors or their agents to and deposited with,
the Escrow Agent as such Proceeds are received, to be held and dealt with in
accordance with the terms of this Agreement. MSO covenants to expeditiously
deliver to the Escrow Agent from time to time as requested by the Escrow Agent
such other documents as may be reasonably required to permit the Escrow Agent to
deal with the Proceeds as contemplated herein. The Escrow Agent shall hold and
deal with the Proceeds for the benefit of MSO and the Investors in accordance
with the terms of the Registration Statement and this Agreement.
2.2 Investment. Escrow Agent shall maintain the Proceeds in immediately
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available funds in lawful currency of the United States of America.
ARTICLE 3
TERMINATION OF ESCROW
3.1 Termination of Escrow. This Agreement and the rights and obligations
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of the parties hereto shall terminate when either (a) Six Hundred Thousand
Dollars ($600,000) of Proceeds have been deposited into escrow by MSO and/or
Investors, at which time all Proceeds shall be delivered by Escrow Agent to MSO,
and all further Proceeds shall be delivered to MSO without deposit into escrow,
or (b) the Offering terminates as specified in the Registration Statement
without Six Hundred Thousand Dollars ($600,000) of Proceeds being deposited, in
which case all Proceeds shall be returned by Escrow Agent to the paying
Investor(s).
ARTICLE 4
RIGHTS, DUTIES AND REMUNERATION OF THE ESCROW AGENT
4.1 Fees. MSO will indemnify the Escrow Agent for its reasonable fees and
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expenses for acting as escrow agent hereunder. Escrow Agent's fees shall be
computed based upon Escrow Agent's standard billing rates in effect at the time
the services are rendered.
4.2 Rights of the Escrow Agent. The Escrow Agent may act upon any
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instrument or other writing or transmission reduced to writing believed by it in
good faith to be genuine and to be signed or presented by the proper person. The
Escrow Agent shall not be liable to MSO for any liability or losses sustained by
it as a result of any action taken or omitted to be taken by Escrow Agent in
good faith unless a court of competent jurisdiction determines that the Escrow
Agent's willful misconduct or gross negligence was the primary cause of any such
loss. The Escrow Agent shall have full and complete authorization and protection
for any action taken or omitted by it hereunder in good faith and in accordance
with the opinion of its counsel.
4.3 Indemnity. MSO agrees to indemnify and save harmless the Escrow Agent
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from all costs, expenses (including legal fees and disbursements on a solicitor
and own client basis), liabilities, and losses that may be incurred by Escrow
Agent as a result of being named a party to or responding to any litigation
arising from the performance of its duties hereunder, except such litigation
that arises from any act or failure to act by the Escrow Agent that is
determined by a court of competent jurisdiction to constitute willful misconduct
or gross negligence of the Escrow Agent.
4.4 No Liability. The duties and responsibilities of the Escrow Agent
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hereunder shall be determined solely by the express provisions of this
Agreement, and no other or further duties or responsibilities shall be implied.
The Escrow Agent shall not have any liability under, and shall have no duty to
inquire into the terms and provisions of, any other Agreement, or instructions,
other than as set forth or contemplated in this Agreement.
4.5 Directions. If the Escrow Agent is uncertain as to its duties or
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rights hereunder or shall receive instructions, claims or demands from MSO
which, in its opinion, conflict with any of the provisions of this Agreement,
the Escrow Agent shall be entitled to refrain from taking any action and its
sole obligation shall be to keep safely the Proceeds until it shall be directed
otherwise in a written notice reasonably satisfactory to the Escrow Agent from
MSO or by a final order or judgment of a court of competent jurisdiction.
4.6 Interpleader. In the event the Escrow Agent reasonably deems it
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necessary for its protection to do so, the Escrow Agent may deposit the Proceeds
into a court of competent jurisdiction and, subject to any order of such court,
shall thereafter have no further duties in connection therewith to any of the
parties hereto.
4.7 Directions from MSO. The Escrow Agent shall be entitled to rely upon
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directions from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, MSO's President or such other individual(s) as
he may appoint in writing.
ARTICLE 5
MISCELLANEOUS
5.1 Notices. All notices, requests, demands and other communications
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pursuant to this Agreement shall be in writing, addressed to the respective
parties hereto at their addresses referred to below (or to such other address as
any party may advise the other parties of by notice) and shall be deemed to have
been given and received: (i) the next business day, if by hand delivery or
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overnight courier sent on a business day; (ii) three business days following
post-paid registered or certified mailing if mailed in the United States of
America, or (iii) upon written acknowledgment of facsimile transmission;
provided, however, that in all cases, all notices, requests, demands, and other
communications to the Escrow Agent shall be deemed to have been given and
received on the date actually received by the Escrow Agent:
To MSO: Microsourceonline Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to Wasserman, Comden, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the Escrow Agent: ________________________
________________________
________________________
Attention: _______________
Facsimile: _______________
5.2 Governing Law. This Agreement shall be governed by the internal laws
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of the State of New York.
5.3 Waiver of Conflict of Interest. The parties acknowledge that Escrow
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Agent has previously provided banking services, and continues to provide banking
services, to MSO. Notwithstanding the knowledge of this relationship between
Escrow Agent and MSO, the parties to this Agreement hereby waive any conflict of
interest that may arise from the existing professional relationship between
Escrow Agent and MSO.
EXECUTED by the parties as of the date last written below.
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"MSO:" "ESCROW AGENT:"
Microsourceonline Inc. _________________________
A Delaware Corporation _________________________
By:__________________________ By:____________________________
Name:________________________ Name:__________________________
Title:_______________________ Title:_________________________
Dated:_________________, 2002 Dated:___________________, 2002
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