NICHI CAPITAL LIMITED
ESCROW AGREEMENT
AGREEMENT dated this 22nd day of August, 1997 among Citibank, N.A. (the "Escrow
Agent") and Nichi Capital Limited , a New York corporation (the "Placement
Agent") and Nichi Capital Limited, a New York corporation (the "Company")
WHEREAS, the Company proposes to offer a minimum of 600,000 Shares up to
a maximum of 1,800,000 Shares of the Company's Private Placement (the "Shares")
at $5.00 per Share for aggregate offering proceeds of up to $ 9,000,000 (the
"Offering Proceeds"); and
WHEREAS, the Company may sell the Shares, through members of the
National Association of Securities Dealers, Inc. on an "all or none" basis for
the first 600,000 Shares (the "Minimum") and on a "best efforts basis for the
remaining Shares, in a public offering pursuant to the Securities Act of 1933,
as amended (the "Offering") and
WHEREAS, the Company desires to establish an escrow account in which
funds received from subscribers will be deposited, pending completion of the
sale of the Minimum Shares or escrow period; and
WHEREAS, the Escrow Agent to serve as escrow agent in accordance with
the terms and conditions set forth herein.
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NICHI CAPITAL LIMITED
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 1 212-566-4143
NOW, THEREFORE, the parties hereto agree as follows:
1. Establishment of Escrow Account. On or prior to the date of the
commencement of the Offering, the Company hereto shall establish a non-interest
bearing escrow account with the Escrow Agent, which escrow shall be entitled
"Nichi Capital Limited. Escrow Account" (the "Escrow Account"). The Escrow Agent
undertakes to deposit the escrow funds in accordance with the Rule 15C2-4 under
the Securities Exchange Act of 1934.
2. Delivery of Checks. The Company will instruct subscribers to make
checks for subscriptions payable to the order of Citibank as Escrow Agent for
Nichi Capital limited and delivered to the Escrow Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ #▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Attention: Branch Manager. Any checks
received that are made payable to a party other than the Escrow Agent shall be
returned directly to the sender (together with any Subscription Information, as
defined below, or other documents delivered therewith) by noon of the second
business day following receipt of such check by Escrow Agent, and such check
shall be deemed not to have been delivered to the Escrow Agent pursuant to the
terms of this Agreement.
3. Escrow Period The Company shall deliver to the Escrow Agent a
certificate setting forth the date when the Offering shall expire, which
certificate shall be attached as Exhibit A, and when and if the Offering is
extended, at least two business days prior to the effective date of such
extension with a certificate setting forth the date when the Offering, as
extended, shall expire (such initial or extended date is hereinafter referred to
as the "Expiration Date").
4. Deposits in the Escrow Account. The Company agrees that it shall, by
noon the next business day, deliver all monies received from subscribers for the
payment of the Shares to the Escrow Agent for deposit in the Escrow Account
together with a written account of each sale, which account shall set forth,
among other things. the subscriber's name, address and certified taxpayer
identification number, the number of Shares purchased, the amount paid therefore
(collectively the "Subscription Information"), and whether the consideration
received was in the form of a check, draft or money order. The Escrow Agent
shall not be required to make deposits into the Escrow Account which are not
accompanied by Subscription Information. All monies so deposited in the Escrow
Account which have cleared the banking system are hereinafter referred to as the
"Escrow Amount".
5. Disbursement from the Escrow Account.
(a) If prior to the Expiration Date, the escrow agent has received
subscriptions for the Minimum Shares, and if, within up to 14 days thereafter,
the Escrow Agent is in possession of cleared funds in the amount of $ 3,000,000,
the Escrow Agent, within two business days after the clearance of such funds,
shall notify the Company and the Placement Agent, upon receipt of written
instruction from the Company and the Placement Agent, the Escrow Agent shall
disburse all funds in the Escrow Account, pursuant to said instructions to the
extent that such funds are not then subject to judicial restraint served on the
Escrow Agent.
(b) Upon presentation of a certificate signed by the Company stating
that the Company is terminating the Offering or if the Escrow Agent has
determined that it had not received, prior to the Expiration Date, subscriptions
for the Minimum Shares, or if the Escrow Agent has received subscriptions for
the Minimum Shares prior to expiration date but has determined that it has not
received cleared funds in the amount of $ 3,000,000 in the escrow account within
14 days of the expiration date, the Escrow Agent shall, as soon as possible
thereafter cause to be distributed to each subscriber the amount received from
such subscriber, to the extent that such amount is not then subject to judicial
restraint served on the Escrow Agent.
6. Collection Procedures.
(a) The Escrow Agent is hereby authorized to forward each check for
collection and, upon collection of the proceeds of such check, deposit the
collected proceeds in the Escrow Account. Any check returned unpaid to the
Escrow Agent shall be returned to the sender. In such cases, the Escrow Agent
will promptly notify the Company of such return.
(b) If the Company rejects any subscription for which the Escrow
Agent has already collected funds, the Escrow Agent shall, within two business
days, issue a refund check to the rejected subscriber upon the written request
of the Company. If the Company rejects any subscription for which the Escrow
Agent has not yet received collected funds, but has submitted the subscriber's
check for collection, the Escrow Agent shall within two business days, issue a
check in the amount of the subscriber's check to the rejected subscriber after
the Escrow Agent has cleared such funds. If the Escrow Agent has not yet
submitted a rejected subscriber's check for collections the Escrow Agent shall
promptly remit the subscriber's check directly to the subscriber. The Escrow
Agent shall not be required to comply with the provisions of this subparagraph
(b) If the funds in question are then subject to judicial restraint served on
the Escrow Agent.
7. Reimbursement of Escrow Agent. Upon completion or termination of the
Offering the Company shall reimburse the Escrow Agent for all of its
out-of-pocket expenses incurred in performance of its services there under. If
it is necessary for Escrow Agent to return funds to subscribers of the Shares,
the Company shall pay to the Escrow Agent an additional amount sufficient to
reimburse it for its actual cost in disbursing such funds. These amounts shall
be in additional to the fee in Section 8. However, no such reimbursement for
costs and expense, indemnification for any damages incurred by the Escrow Agent,
or any monies whatsoever shall be paid out of or chargeable to the funds on
deposit in the Escrow Account.
8. Fees. Upon execution of this Agreement, the Company shall pay the
Escrow Agent a fee in the amount of $1,000 which shall cover fees of the Escrow
Agent in connection with the services provided under this Agreement.
9. Escrow Agent's Rights and Duties. It is understood and agreed by the
parties to this Agreement as follows:
a) The Escrow Agent shall not be responsible for or be required to
enforce any of the terms or conditions of any agreement between a member of the
NASD and the Company. Nor shall the Escrow Agent be responsible for the
performance by a member of the NASD or the Company of their respective
obligations under any Agreement between them.
b) The Escrow Agent is not and shall not be desired to be trustee for
any party for any purpose and is merely acting as a depository and in a
ministerial capacity hereunder with the limited duties herein prescribed.
c) The Escrow agent shall be entitled to rely upon the accuracy, act in
reliance upon the contents, and assume genuineness, of any notice, instruction,
certificate, signature, instrument or other document which is given to the
Escrow Agent without verifying the truth or accuracy thereof. The Escrow Agent
shall not be obligated to make any inquiry as to the authority, capacity,
existence or identity of any person purporting to give any such notice or
instructions or the execution of any such certificate, instrument or other
document which is given to the Escrow Agent or to verify the truth or accuracy
thereof.
d) In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions with respect to the
Escrow Amount or the offering proceeds which, in its sole determination, are in
conflict either with other instructions received by it or with any provision of
the Agreement, it shall be entitled to hold the Offering Proceeds, or the
portion thereof, in the Escrow 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 dispose of the Offering Proceeds (and any other amounts that thereafter
become part of the Offering Proceeds) 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 Offering Proceeds with the Clerk of any
court, the Escrow Agent shall be relieved of all further obligations and
released from all liability there under.
e) The Escrow Agent is not and shall not be deemed to be liable for any
action taken or omitted by it in good faith and may rely upon, and act in
accordance with, the advice of its counsel without liability on its part for any
action taken or omitted in accordance with such advice. In any event, its
liability hereunder shall be limited to liability for gross negligence, willful
misconduct or bad faith on its part.
f) The Escrow Agent shall have no duty or obligation to invest any
amounts received from the prospective purchasers, or their agents, and shall
keep any and all such amounts so received deposited in a non-interest bearing
escrow account established hereunder during the term of this Agreement.
g) The Company and the Placement Agent agree to hold harmless, indemnify
and defend the Escrow Agent for, from and against any loss, damage, liability,
judgment, cost and expense whatsoever, including attorney's fees, suffered or
incurred by it by reason of, or on account of, any misrepresentation made to it
or its status or activities as Escrow Agent under this Agreement except for any
loss, damage, liability, judgment, cost or expense resulting from gross
negligence, willful misconduct or bad faith on the part of the Escrow Agent.
h) The Escrow Agent shall not be required to defend any legal proceeding
which may be instituted against it in respect of the subject matter of this
Agreement. If any such legal proceeding is instituted against it, the Escrow
Agent agrees promptly to give notice of such proceeding to the Company. The
Escrow Agent shall not be required to institute legal proceedings of any kind.
i) The Escrow Agent shall not, by act, delay, omission or otherwise, be
deemed to have waived any right or remedy it may have either under this
Agreement or generally, unless such waiver be in writing, and no waiver shall be
valid unless it is in writing, signed by the Escrow Agent, and only to the
extent expressly therein set forth. A waiver by the Escrow Agent under the terms
of this Agreement shall not be construed as a bar to, nor waiver of, the same or
any such right or remedy which it would otherwise have on any other occasion.
j) The Escrow Agent may resign as such hereunder by giving thirty (30)
days written notice thereof to the Company. Should the Escrow Agent resign as
herein provided, it shall not be required to accept any deposit, make any
disbursements or otherwise dispose of the Offering Proceeds, but its only duty
shall be to hold the Offering Proceeds for a period of not more than twenty (20)
days following the effective date of such resignation, at which time (a) if the
successor escrow agent, which shall be a bank
meeting the requirements of Rule 15c-4(b) under the Securities Exchange Act of
1934, as amended, shall be 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 Company and such Successor Escrow Agent, then the
resigning Escrow Agent shall pay over to the successor escrow agent the Offering
Proceeds; or (b) if the resigning Escrow Agent shall not have received written
notice signed by the Company and a successor escrow agent, then the resigning
Escrow Agent shall promptly refund the Offering Proceeds to each prospective
purchaser, without interest thereon or deduction therefrom, (to the extent that
such Proceeds are not then subject to Judicial restraint served on the Escrow
Agent) and the resigning Escrow Agent shall notify the Company in writing of its
liquidation and distribution of the Offering Proceeds; 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 provision of
Section 7 hereof, the resigning Escrow Agent shall not be entitled to be
reimbursed by the Company for any expenses incurred in connection with its
resignation, transfer of the Offering Proceeds to a successor escrow agent or
distribution of the Offering Proceeds pursuant to this Section 9. Each
substitute Escrow Agent shall thereafter hold any funds received by it pursuant
to the terms of this Agreement and otherwise act hereunder as if it were the
Escrow Agent originally named herein. The Escrow Agent's duties and
responsibilities hereunder shall terminate upon the disbursement of the Escrow
Amount then held in escrow according to such written instructions or upon
delivery as herein provided. This Agreement shall not otherwise be assignable by
the Escrow Agent without the prior written consent of the Company.
10. Notice. All communications hereunder will be in writing and mailed,
delivered or telegraphed and confirmed which notice shall be effective only on
receipt at the appropriate address specified in this Section 10 as follows:
If sent to the Escrow Agent:
Citibank, N.A.
Branch #003
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Branch Manager
If sent to the Company:
Nichi Capital Limited
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Wande Agunloye, President.
with a copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇
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(▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
11. General. This Agreement (a) constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof; (b) supersedes any and
all prior understandings or agreements relating to the subject matter hereof;
(c) may not be assigned, modified, amended or terminated except in a writing
signed by all the parties hereto; (d) Shall be governed by, and construed in
accordance with the laws of the State of New York; (e) shall be binding upon an
inure solely to the benefit of the parties hereto and their respective
successors and assigns; (f) shall not confer upon any person not referred to in
(e) hereof any rights or remedies of any nature whatsoever or by reason of this
Agreement; and (g) may be executed in counterparts, each of which shall be
deemed to be an original, but which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
Company: Nichi Capital Limited
By: WANDE AGUNLOYE
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Wande Agunloye, President
Escrow Agent: Citibank, N.A.
By: [SIGNATURE]
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Placement Agent: Nichi Capital Limited
By: WANDE AGUNLOYE
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Wande Agunloye, President