EXHIBIT 99.3
ESCROW AGREEMENT
THIS AGREEMENT ("Agreement") made this ____ day of _______________,
1998, is by and between TUMBLEWEED, INC., a Delaware corporation (the
"Issuer"), and NATIONAL CITY BANK OF KENTUCKY (the "Escrow Agent").
W I T N E S S E T H
WHEREAS, the Issuer has prepared a Registration Statement on Form S-1
(the "Registration Statement") in connection with the proposed direct public
offering (the "Offering") of its securities (the "Securities") to investors
on the terms described in the attached Information Sheet; and
WHEREAS, the Issuer proposes to establish an escrow account (the "Escrow
Account") to which subscription monies which are received by the Escrow Agent
from subscribers in the Offering ("Subscribers") are to be credited, and the
Escrow Agent is willing to establish the Escrow Account on the terms and
subject to the conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. INFORMATION SHEET. Each capitalized term not otherwise defined in
this Agreement shall have the meaning set forth for such term on the Information
Sheet.
2. ESTABLISHMENT OF THE BANK ACCOUNT.
2.1 The Escrow Agent shall establish a bank account (the "Bank
Account") for the purpose of (a) depositing all subscription monies (checks,
cash or wire transfers) which are received by the Escrow Agent from
Subscribers (directly, or indirectly from broker/dealers) who have submitted
Valid Subscriptions (as defined in Section 3.1), (b) holding subscription
monies which are collected through the banking system, and (c) for disbursing
collected funds, all as described herein. All broker/dealers must transmit
subscription monies directly to the Escrow Agent by noon of the next business
day after receipt.
2.2 The Escrow Agent shall invest all subscription monies
deposited in the Bank Account in the Investment Fund, which shall be invested
only in investments permitted for the subscription monies under Rule 15c2-4
promulgated by the Securities and Exchange Commission. Individual records of
the amount deposited by each Subscriber and interest earned thereon shall be
maintained by the Escrow Agent.
2.3 The offering period ("Offering Period") shall consist of the
period of time set forth on the Information Sheet. The Offering Period shall
be extended by an additional period of time (the "Extension Period") only if
the Escrow Agent shall have received written notice thereof at least two (2)
business days prior to the expiration of the Offering Period. The Extension
Period shall be deemed to commence on the next calendar day following the
expiration of the Offering Period and shall end on the date set forth on the
Information Sheet. The last day of the Offering Period, or the last day of
the Extension Period (if the Escrow Agent has received written notice thereof
as hereinabove provided), is referred to herein as the "Termination Date."
Except as provided in Section
4.3 hereof, after the Termination Date, the Escrow Agent shall not accept any
additional amounts from Subscribers.
3. DEPOSITS TO THE BANK ACCOUNT.
3.1 Promptly after receiving subscription monies in the form of
check, cash or wire transfer ("Subscription Funds") from any Subscriber who
has submitted a subscription (a "Subscription"), the Escrow Agent shall
determine whether the Subscription is a Valid Subscription. The Escrow Agent
shall not be required to accept for credit to the Escrow Account or for
deposit into the Bank Account checks which are not accompanied by a Valid
Subscription. Wire transfers and cash representing Subscription Funds shall
not be deemed deposited in the Escrow Account until the Escrow Agent has
received Valid Subscriptions with respect to such payments. A Subscription
shall be deemed a "Valid Subscription" only if:
(a) the Subscription Funds are accompanied by a Subscription
Agreement in the form of Exhibit B hereto which contains
(i) the name, address and social security (or taxpayer
ID) number of the Subscriber,
(ii) the number of the Shares subscribed for by the
Subscriber,
(iii) the aggregate dollar amount of such Subscription
(which shall be $10.00 multiplied by the number of Shares subscribed for by
the Subscriber (the "Subscription Amount")), and
(iv) the Subscriber's signature,
(b) the Subscription Funds accompanying such Subscription are
in the exact amount of the Subscription Amount, and
(c) the state listed in the Subscription Agreement as part of the
Subscriber's address shall be one of the states listed on Exhibit C hereto
(which list may be modified from time to time by the Issuer through notice to
the Escrow Agent), and
(d) if the Subscription Funds are represented by a check, the
check is payable to "National City Bank of Kentucky, Escrow Agent for
Tumbleweed, Inc."
If the Escrow Agent is unable to determine whether the Subscription is a
Valid Subscription, the Escrow Agent shall forward the Subscription Agreement
to the Issuer who shall make such determination, which determination by the
Issuer shall be conclusive for purposes of this Agreement. If the
Subscription for any Subscriber is not a Valid Subscription, the Escrow Agent
shall deliver the Subscription Agreement to the Issuer. If the Escrow Agent
has not received a Valid Subscription for such Subscriber within 15 days of
such delivery (or such sooner date that is specified by the Issuer),
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then the Escrow Agent shall return to such Subscriber all Subscription Funds
(or if the Subscription Funds are represented by a check, such check)
received from such Subscriber.
3.2 With respect to each Valid Subscription, the Escrow Agent
shall deposit the related Subscription Funds into the Bank Account. Amounts
of monies so deposited are hereinafter referred to as "Escrow Amounts." The
Escrow Agent shall process all Escrow Amounts for collection through the
banking system. Promptly following the deposit of Subscription Funds in the
Bank Account, the Escrow Agent shall forward the original Subscription
Agreement relating thereto to the Issuer and retain a copy thereof.
3.3 The Escrow Agent shall not be required to accept in the Escrow
Account any Subscription Funds, whether by check, cash or wire, except during
the Escrow Agent's regular business hours.
3.4 Those Escrow Amounts received from Subscribers who have
submitted Valid Subscriptions ("Escrow Subscribers") which have been
deposited in the Bank Account and which have cleared the banking system and
have been collected by the Escrow Agent are herein referred to as the "Fund."
4. DISBURSEMENT FROM THE BANK ACCOUNT.
4.1 If so instructed by the Issuer, at any time, or subject to
Section 4.3 below, if by the close of regular banking hours on the
Termination Date, the Escrow Agent determines that the amount in the Fund is
less than the Minimum Dollar Amount, then the Escrow Agent shall promptly
refund to each Escrow Subscriber the amount of payment received from such
Escrow Subscriber or which thereafter clears the banking system, plus
interest earned and paid from investment of such payment in the Investment
Fund, by drawing checks on the Bank Account for the amounts of such payments
and transmitting them to the Escrow Subscribers. In such event, the Escrow
Agent shall promptly notify the Issuer in writing of these payments.
4.2 Subject to Section 4.3 below, if at any time up to the close
of regular banking hours on the Termination Date, the Escrow Agent determines
that the amount in the Fund is at least equal to the Minimum Dollar Amount,
the Escrow Agent shall promptly notify the Issuer of such fact in writing.
The Escrow Agent shall promptly disburse the Fund, by drawing checks on the
Bank Account in accordance with instructions in writing signed by the Issuer
as to the disbursement of the Fund, promptly after it receives such
instructions. Thereafter the Escrow Agent shall disburse such additional
amounts as may be deposited from time to time in the Fund, by drawing checks
on the Bank Account in accordance with instructions in writing signed by the
Issuer as to the disbursement of additional amounts deposited in the Fund,
promptly after it receives such instructions. Such instructions of the
Issuer may include from time to time directions to the Escrow Agent to refund
to a particular Escrow Subscriber the amount of payment received from such
Escrow Subscriber or which thereafter clears the banking system, plus
interest accumulated from investment of such payment in the Investment Fund,
by drawing checks on the Bank Account for the amounts of such payments and
transmitting them to the Escrow Subscribers.
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4.3 If the Escrow Agent has on hand at the close of business on
the Termination Date any uncollected amounts which when added to the Fund
would raise the amount in the Fund to the Minimum Dollar Amount, a collection
period ("Collection Period") consisting of the number of business days set
forth on the Information Sheet shall be utilized to allow such uncollected
amounts to clear the banking system. During the Collection Period, the
Escrow Agent shall not accept any additional Subscription Funds. If at the
close of business on the last day of the Collection Period an amount
sufficient to raise the amount in the Fund to the Minimum Dollar Amount shall
not have cleared the banking system, the Escrow Agent shall promptly notify
the Issuer in writing of such fact and shall promptly return all amounts then
in the Fund, and any amounts which thereafter clear the banking system, to
the Escrow Subscriber as provided in Section 4.1 hereof.
4.4 Upon disbursement of the Fund pursuant to the terms of this
Article 4, the Escrow Agent shall be relieved of all further obligations and
released from all liability under this Agreement. It is expressly agreed and
understood that in no event shall the aggregate amount of payments made by
the Escrow Agent exceed the amount of the Fund.
5. RIGHTS, DUTIES AND RESPONSIBILITIES OF ESCROW AGENT. It is
understood and agreed that the duties of the Escrow Agent are purely
ministerial in nature, and that:
5.1 The Escrow Agent shall notify the Issuer, when requested, of
the Escrow Amounts which have been deposited in the Bank Account and of the
amounts, constituting the Fund, which have cleared the banking system and
have been collected by the Escrow Agent.
5.2 The Escrow Agent shall be under no duty or responsibility to
enforce collection of any check delivered to it hereunder. The Escrow Agent,
within a reasonable time, shall return to the Issuer any check received which
is dishonored, together with the Subscription Agreement which accompanied
such check.
5.3 If the Escrow Agent is uncertain as to its duties or rights
hereunder or shall receive instructions with respect to the Bank Account, the
Escrow Amounts or the Fund which, in its sole determination, are in conflict
either with other instructions received by it or with any provision of this
Agreement, it shall be entitled to hold the Escrow Amounts, the Fund, or a
portion thereof, in the Bank Account pending the resolution of such
uncertainty to the Escrow Agent's sole satisfaction, by final judgment of a
court or courts of competent jurisdiction or otherwise; or the Escrow Agent,
at its sole option, may deposit the Fund (and any other Escrow Amounts that
thereafter become part of the Fund) with the clerk of a court of competent
jurisdiction in a proceeding to which all parties in interest are joined.
Upon the deposit by the Escrow Agent of the Fund with the clerk of any court,
the Escrow Agent shall be relieved of all further obligations and released
from all liability hereunder.
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5.4 The Escrow Agent shall not be liable for any action taken or
omitted hereunder, or for the misconduct of any employee, agent or attorney
appointed by it, except in the case of willful misconduct or gross
negligence. The Escrow Agent shall be entitled to consult with counsel of its
own choosing and shall not be liable for any action taken, suffered or
omitted by it in accordance with the advice of such counsel.
5.5 The Escrow Agent shall have no responsibility at any time to
ascertain whether or not any security interest exists in the Escrow Amounts,
the Fund or any part thereof or to file any financing statement under the
Uniform Commercial Code with respect to the Fund or any part thereof.
6. AMENDMENT; RESIGNATION. This Agreement may be altered or amended
only with the written consent of the Issuer and the Escrow Agent. The Escrow
Agent may resign for any reason three (3) business days after giving written
notice to the Issuer. Should the Escrow Agent resign as herein provided, it
shall not be required to accept any deposit, make any disbursement or
otherwise dispose of the Escrow Amounts or the Fund, but its only duty shall
be to hold the Escrow Amounts until they clear the banking system and the
Fund for a period of not more than five (5) business days following the
effective date of such resignation, at which time (a) if a successor escrow
agent shall have been appointed and written notice thereof (including the
name and address of such successor escrow agent) shall have been given to the
resigning Escrow Agent by the Issuer and such successor escrow agent, then
the resigning Escrow Agent shall pay over to the successor escrow agent the
Fund, less any portion thereof previously paid out in accordance with this
Agreement; or (b) if the resigning Escrow Agent shall not have received
written notice signed by the Issuer and a successor escrow agent, then the
resigning Escrow Agent shall promptly refund the amount in the Fund to the
Issuer, without interest thereon or deduction therefrom; whereupon, in either
case, the Escrow Agent shall be relieved of all further obligations and
released from all liability under this Agreement. Without limiting the
provisions of Section 8 hereof, the resigning Escrow Agent shall be entitled
to be reimbursed by the Issuer for any expenses incurred in connection with
its resignation, transfer of the Fund to a successor escrow agent or
distribution of the Fund pursuant to this Section 6.
7. REPRESENTATIONS AND WARRANTIES. The Issuer hereby represents and
warrants to the Escrow Agent that:
7.1 No party other than the parties hereto and the prospective
purchasers have, or shall have, any lien, claim or security interest in the
Escrow Amounts or the Fund or any part thereof.
7.2 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 Escrow Amounts or the Fund or any
part thereof.
7.3 The Subscription Agreement submitted with each deposit shall,
at the time of submission and at the time of the disbursement of the Fund, be
deemed a representation and warranty
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that such deposit represents a bona fide payment by the Subscriber described
therein for the amount of Securities set forth in such Subscription
Information.
7.4 All of the information contained in the Information Sheet is,
as of the date hereof, and will be, at the time of any disbursement of the
Fund, true and correct.
8. FEES AND EXPENSES. The Escrow Agent shall be entitled to the
escrow agent fees ("Escrow Agent Fees") set forth on the Information Sheet,
payable as and when stated therein. In addition, the Issuer agrees to
reimburse the Escrow Agent for any reasonable expenses incurred in connection
with this Agreement, including, but not limited to, reasonable counsel fees.
Upon receipt of the Minimum Dollar Amount, the Escrow Agent shall have a lien
upon the Fund to the extent of its fees for services as Escrow Agent.
9. INDEMNIFICATION AND CONTRIBUTION.
9.1 The Issuer agrees to indemnify the Escrow Agent and its
officers, directors, employees, agents and shareholders (collectively
referred to as the "Indemnitees") against, and hold them harmless of and
from, any and all loss, liability, cost, damage and expense, including
without limitation, reasonable counsel fees, which the Indemnitees may suffer
or incur by reason of any action, claim or proceeding brought against the
Indemnitees arising out of or relating in any way to this Agreement or any
transaction to which this Agreement relates, unless such action, claim or
proceeding is the result of the willful misconduct or gross negligence of the
Indemnitees.
9.2 If the indemnification provided for in Section 9.1 is
applicable, but for any reason is held to be unavailable, the Issuer shall
contribute such amounts as are just and equitable to pay, or to reimburse the
Indemnitees for, the aggregate of any and all losses, liabilities, costs,
damages and expenses, including counsel fees, actually incurred by the
Indemnitees as a result of or in connection with, and any amount paid in
settlement of, any action, claim or proceeding brought against the
Indemnitees arising out of or relating in any way to this Agreement or any
transaction to which this Agreement relates, unless such action, claim or
proceeding is the result of the willful misconduct or gross negligence of the
Indemnitees.
9.3 The provisions of this Article 9 shall survive any termination
of this Agreement, whether by disbursement of the Fund, resignation of the
Escrow Agent or otherwise.
10. GOVERNING LAW AND ASSIGNMENT. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of Kentucky and
shall be binding upon the parties hereto and their respective successors and
assigns; provided, however, that any assignment or transfer by any party of
its rights under this Agreement or with respect to the Escrow Amounts or the
Fund shall be void against the Escrow Agent unless (a) written notice thereof
shall be given to the Escrow Agent; and (b) the Escrow Agent shall have
consented in writing to such assignment or transfer.
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11. NOTICES. All notices required to be given in connection with this
Agreement shall be sent by registered or certified mail, return receipt
requested, or by hand delivery with receipt acknowledged, or by the Express
Mail service offered by the United States Post Office, and addressed, if to
the Issuer, at its address set forth on the Information Sheet, and if to the
Escrow Agent, to the attention of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, National City Bank of
Kentucky, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇.
12. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be determined to be
invalid or unenforceable, the remaining provisions of this Agreement or the
application of such provision to persons or circumstances other than those to
which it is held invalid or unenforceable shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law.
13. EXECUTION IN SEVERAL COUNTERPARTS. 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.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings (written or oral) of the
parties in connection therewith.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
NATIONAL CITY BANK OF KENTUCKY
By: __________________________________
Name: __________________________________
Its: __________________________________
TUMBLEWEED, INC.
By: __________________________________
Name: __________________________________
Its: __________________________________
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ESCROW AGREEMENT INFORMATION SHEET
1. THE ISSUER
Name: TUMBLEWEED, INC.
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
State of incorporation or organization: Delaware
2. THE SHARES
Description of the Securities to be offered: Common Stock
Par value, if any: $.01
Offering price per share: $10.00
3. MINIMUM AMOUNTS REQUIRED FOR DISBURSEMENT OF THE ESCROW ACCOUNT
Aggregate dollar amount which must be collected before the Escrow Account
may be disbursed to the Issuer, exclusive of any interest earned
thereon after deposit ("Minimum Dollar Amount"): $7,000,000.00
4. PLAN OF DISTRIBUTION OF THE SECURITIES
Offering Period:
End of Extension Period:
Collection Period: 7 business days
5. TITLE OF ESCROW ACCOUNT: National City Bank of Kentucky, Escrow Agent
for Tumbleweed, Inc.
6. INVESTMENT FUND: ARMADA GOVERNMENT SECURITIES FUND
7. ESCROW AGENT FEES
Amount due upon completion of the Escrow Account: $1,500.00
Fee for each Subscription: $20.00
For each check received by Escrow Agent and returned as uncollected (e.g.,
insufficient funds or stop payment): $10.00
For each check issued to Subscribers pursuant to Section 3.1, Section 4.1
or Section 4.2: $10.00
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