K-KITZ, INC. ESCROW AGREEMENT
K-KITZ,
INC.
THIS ESCROW AGREEMENT (the
"Agreement"), is made and entered into as of the ___ day of __________ 2009, by
and between K-Kitz, Inc., a Delaware corporation (the "Corporation") with a
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and Fifth
Third Bank, _________________________________ (the "Escrow Agent").
WHEREAS, the Corporation is
raising additional capital through the sale of up 2,000,000 shares of Common
Stock at a price of $0.05 per share (the "Shares" or the "Securities"), and this
is a "best efforts/no minimum" offering (the "Offering"), all as described in
the Subscription Agreement;
WHEREAS, the Corporation is
authorized and desires to commence this Offering promptly;
WHEREAS, the Corporation
wishes by this Agreement to provide for the periodic receipt, deposit,
safekeeping and disbursement of payments and subscription documents submitted by
persons subscribing to shares of common stock pursuant to the Offering;
and
WHEREAS, the Escrow Agent has
agreed to act as such for the Corporation for the Offering subject to the terms
and conditions of this Agreement.
WITNESSETH:
NOW, THEREFORE, for and in
consideration of certain payments to be made by Corporation to the Escrow Agent
in consideration of its services hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Corporation and the Escrow Agent do hereby covenant and agree as
follows:
1. Appointment of Escrow
Agent. The Corporation does hereby appoint the Escrow Agent as
escrow agent for the Offering to perform the functions and provide the services
hereinafter provided, and the Escrow Agent does hereby accept the appointment as
Escrow Agent upon the terms and conditions set forth in this
Agreement.
2. Receipt and Deposit of
Funds. Persons wishing to subscribe for Securities interests
under the offering are required to execute a Subscription Agreement. Prospective
investors must pay cash for their subscription. The prospective investor must
forward the Subscription Agreement and their subscription cash payment to the
Escrow Agent. Funds received by the Escrow Agent pursuant to the Offering shall
be held in escrow and deposited promptly and the Subscription Agreement shall be
held for the benefit of the Corporation pending disbursement in accordance with
the terms and conditions hereof. Checks and money orders should be made payable
to "Fifth Third Bank, K-Kitz, Inc. Escrow Account.” Recognizing that
in some cases checks and money orders may be made payable to the Corporation,
the Corporation does hereby appoint the Escrow Agent as its lawful
attorney-in-fact for the purposes of endorsing said checks and money orders,
which promptly upon receipt shall be deposited in a non-interest bearing escrow
account for the benefit of the Corporation pending disbursement and release of
the funds in accordance with the terms and conditions of this Agreement. The
Escrow Agent shall be charged with responsibility to exercise reasonable care
and due diligence in the deposit of funds received by it pursuant to the
Offering.
3. Records to Be Kept by the
Escrow Agent. The Escrow Agent shall maintain records of the
name, address, and subscription payments for each subscription it receives under
the Offering Bank. Subscription Agreements forwarded to the Escrow Agent shall
be directed to Fifth Third Bank at the above address for the Escrow Agent, or to
such other person as Escrow Agent shall designate in writing. Upon request, the
Escrow Agent shall forward to the Corporation a summary of subscriptions
received to date.
4. Funds and Documents to Be
Returned If Conditions Not Met. Subject to the other
provisions of this Agreement, the Escrow Agent shall return subscription
payments, and the proceeds of all closed subscription loans, plus the
Subscription Agreement to any subscriber from whom (a) the Corporation has not
accepted the Subscription Agreement, (b) has submitted a Subscription Agreement
after the termination of the Offering, which will be 180 days after the
offering, unless extended by the Corporation for an additional 90 days, or (c)
in the event that 1,000,000 shares are not sold within the 180 days, or within
the additional 90 days if extended. If at least 1,000,000 shares are sold within
180 days, or within the additional 90 days, if extended, all money received by
us will be retained by us and there will be no refund. There are no minimum
purchase requirements for each individual investor. The foregoing
notwithstanding, the Escrow Agent shall not be obligated, in any manner, to
return any subscription payments which have been disbursed by it in accordance
with Section 5 hereof. If the Escrow Agent is required to return documents and
the subscription payments pursuant to this paragraph, it shall do so within 14
days after termination of the Offering Period, including any extension
thereof.
5. Funds May Be Paid to
Corporation Once Subscription Conditions Are Met. Upon receipt
by the Escrow Agent of: (a) Executed acceptances by Corporation of Subscription
Agreements and (b) upon certification by securities counsel for Corporation that
the terms of the Offering have been met, and that the Corporation's Stock
Transfer Agent has been authorized and notified to duly issue certificates
evidencing ownership of the shares of the Corporation's corporate stock to each
investor whose Subscription Agreement has been accepted, then Escrow Agent shall
disburse the funds held by it in escrow to the Corporation. Funds will be held
in escrow by Fifth Third Bank until the Corporation sells at least 1,000,000
shares of common stock. Once the Corporation sells at least 1,000,000 shares of
common stock, Fifth Third Bank will release the funds from escrow to the
Corporation. If the Corporation does not accept the subscription of a
subscriber, as evidenced by written notice to the Escrow Agent, then the Escrow
Agent shall return the Subscription Agreement, all related documents, and
subscription payment without interest to the Subscriber.
6. Compensation for Escrow
Agent's Services. It is understood and agreed between the
parties to this Agreement that the compensation to be paid to the Escrow Agent
hereunder is intended primarily to compensate the Escrow Agent for the
record-keeping and processing associated with the performance of its obligations
hereunder. The compensation to be paid to the Escrow Agent for its services
rendered in connection with this Agreement shall be at its usual and customary
rates and it shall be reimbursed any and all expenses it incurs in performing
its duties herein.
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7. Escrow Agent's Duties
Limited. The sole responsibility of the Escrow Agent shall be
to receive, hold and release the aforesaid Subscription Agreements, documents,
and funds in accordance with the provisions hereof. In disbursing funds, the
Escrow Agent may rely solely upon documents and events specified in this
Agreement. The Escrow Agent shall have no duties and obligations except such as
are specifically stated herein. It is specifically understood that Escrow Agent
has not rendered any other services or given advice regarding the Offering
including, but not limited to, the applicable securities laws or securities
aspects of this transaction, the tax laws or tax effect of this transaction, or
any assessment of the risks involved in the Offering or the qualifications for
any of the Subscribers, or given any investment advice or recommendations, and
will decline to do so if asked by the Corporation or any other party to this
transaction.
8. Escrow Agent's Liability
Limited. The Escrow Agent shall not be liable for any error of
judgment or act done or committed by it in good faith in connection with its
duties as Escrow Agent.
9. Reliance by Escrow Agent On
Documents Presented. The Escrow Agent hereby is authorized to
act upon the assumption that all agreements or documents delivered to it by
Corporation and the subscribers to this Offering are genuine and have been duly
signed by the proper party or parties. The Escrow Agent shall not be bound by
any modification of this Agreement unless the same shall be in writing and be
signed by all parties hereto.
10. Escrow Agent's Duties In the
Event of Adverse Claims. In the event of disagreement between
subscribers and Corporation, or upon the presentation an adverse claim or demand
on the escrowed funds, the Escrow Agent may, at its option, refuse to perform
its duties as Escrow Agent until such time as the disagreement or adverse claim
or demand has been fully resolved, judicially or otherwise, and in this regard
Escrow Agent shall not be liable for failure to perform its duties during this
time.
11. Escrow Agent Held
Harmless. It is expressly understood and agreed by the parties
to this Agreement, and their respective successors and assigns, that the Escrow
Agent shall be free and harmless from any and all claims, disputes or defenses
which may arise between Corporation or its legal successors and assigns, and the
subscribers or any other person which may for any reason have a claim against
the funds escrowed hereunder or against Corporation. Corporation hereby agrees
to hold the Escrow Agent harmless from and indemnify it for any liability or
expense that may be incurred by the Escrow Agent by virtue of any claim,
dispute, or defense. If any such claim is asserted, the Escrow Agent may engage
counsel of its choice and shall be entitled to reimbursement of reasonable legal
fees and expenses to defend it against such claim and, in the event any such
claimant is successful in establishing such a claim, Corporation will hold the
Escrow Agent harmless and make all payments required to be made pursuant to any
final order or judgment that may be entered against the Escrow Agent by a court
of competent jurisdiction.
12. Termination. This
Agreement may be terminated at any time by the written agreement of all
parties.
13. Notices. Until
further notice, all communications and notices given with respect to this
Agreement shall be made to the addresses first written above.
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14. Headings. All
headings contained in this Agreement are for convenience and reference only, and
shall not constitute a part of this Agreement.
15. Entire
Agreement. This Agreement is the entire agreement and
understanding between the Corporation and the Escrow Agent, and there are no
representations, warranties, promises, inducements, covenants or conditions made
by any of the parties except as expressly contained herein.
16. Binding
Effect. This Agreement shall inure to the benefit, and the
binding upon, the representatives, successors and assigns of each
party.
17. Governing
Law. This Agreement shall be governed by and interpreted in
conformity with, the laws of the Commonwealth of Kentucky without regard to its
provisions governing the choice of laws.
18. Authority. Both
signatories to this Agreement warrant and represent that he has the appropriate
authority to execute this Agreement and bind the entity for whom he is signing
the Agreement.
IN WITNESS WHEREOF, the
parties have hereunto affixed the following signatures as of the day and year
first above written.
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K-KITZ,
INC.
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By:
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▇▇▇▇▇▇▇▇
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President
and Chief Executive Officer
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FIFTH
THIRD BANK, as Escrow Agent
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By:
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Name:
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Title:
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