ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of ________________, 1998 ("Escrow
Agreement"), is by and between JTH Tax Inc, a Delaware corporation ("Issuer");
and FIRST UNION NATIONAL BANK, a national banking association, as Escrow Agent
hereunder ("Escrow Agent").
BACKGROUND
A. Issuer will be directly offering (no Underwriter) to sell up to 310,000
shares of Class A stock, $1.00 par, for $12.50 per share (the "Shares") on a
"best efforts" basis, pursuant to Registration Statement No. _____________ filed
with the Securities and Exchange Commission (the "SEC") and attached hereto as
Exhibit A (the "Offering Document").
B. In accordance with the Offering Document, subscribers to the Shares (the
"Subscribers" and individually, a "Subscriber") will be required to submit full
payment for their respective investments at the time they enter into
subscription agreements.
C. In accordance with the Offering Document, all payments received by
Issuer in connection with subscriptions for Shares shall be promptly forwarded
to Escrow Agent, and Escrow Agent has agreed to accept, hold, and disburse such
funds deposited with it and the earnings thereon in accordance with the terms of
this Escrow Agreement.
D. In order to establish the escrow of funds and to effect the provisions
of the Offering Document, the parties hereto have entered into this Escrow
Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Definitions. The following terms shall have the following meanings when
used herein:
"Cash Investment" shall mean the number of Shares to be purchased by any
Subscriber multiplied by the offering price per Share of $12.50 as set forth in
the Offering Document.
"Cash Investment Instrument" shall mean a check, money order or similar
instrument, made payable to the "First Union National Bank/JTH Tax Inc.- Escrow
Account," in full payment for the Shares to be purchased by any Subscriber.
"Escrow Funds" shall mean the funds deposited with the Escrow Agent
pursuant to this Agreement, together with any interest and other income thereon.
"Minimum Offering" shall mean 40,000 Shares.
"Minimum Offering Notice" shall mean a written notification, signed by
Issuer, which shall specify that subscriptions for the Minimum Offering have
been received; that, to the best of Issuer knowledge after due inquiry and
review of its records, Cash Investment Instruments in full payment for that
number of Shares equal to or greater than the Minimum Offering have been
received, deposited with and collected by Escrow Agent; and that such
subscriptions have not been withdrawn, rejected or otherwise terminated.
"Pro Rata Basis," with respect to the allocation among Subscribers of
interest and other earnings held in the Escrow Funds, shall mean, for each
Subscriber, the Subscriber's Cash Investment multiplied by the number of days
the Cash Investment of such Subscriber was held in interest-bearing investments
pursuant to Section 6 hereof, multiplied by the average yield earned on the
Escrow Funds during such period of days.
"Shares" shall have the meaning set forth in the section of this Escrow
Agreement titled "Background".
"Subscriber" or "Subscribers" shall have the meaning set forth in the
section of this Escrow Agreement titled "Background".
"Subscription Accounting" shall mean an accounting of all subscriptions for
Shares received and accepted by Issuer as of the date of such accounting,
indicating for each subscription the Subscriber's name, social security number
and address, the number and total purchase price of subscribed Shares, the date
of receipt by Issuer of the Cash Investment Instrument, and notations of any
nonpayment of the Cash Investment Instrument submitted with such subscription,
any withdrawal of such subscription by the Subscriber, any rejection of such
subscription by Issuer, or other termination, for whatever reason, of such
subscription.
2. Appointment of and Acceptance by Escrow Agent. Issuer hereby appoints
Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby accepts
such appointment in accordance with the terms of this Escrow Agreement.
3. Deposits into Escrow. a. Upon receipt by Issuer of any Cash Investment
Instrument for the purchase of Shares, Issuer shall forward to Escrow Agent, by
12:00 noon of the next business day, the Cash Investment Instrument for deposit
into the following escrow account:
First Union National Bank
ABA: #053000219
Acct: #465946
Acct Name: Corp. Trust Ops.
ATTN: B. Michie, CT-VA (804-343-6094)
Ref: JTH Tax Escrow
Each such deposit shall be accompanied by the following documents:
(1) a report containing such Subscriber's name, social security number or
taxpayer identification number, address and other information required for
withholding purposes;
(2) a Subscription Accounting; and
(3) instructions regarding the investment of such deposited funds in
accordance with Section 6 hereof.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS
ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR
CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST ISSUER UNTIL
RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a) HEREOF.
b. Issuer understands and agrees that all checks and similar instruments
received by Escrow Agent hereunder are subject to collection requirements of
presentment and final payment, and that the funds represented thereby cannot be
drawn upon or disbursed until such time as final payment has been made and is no
longer subject to dishonor. Upon receipt, Escrow Agent shall process each Cash
Investment Instrument for collection, and the proceeds thereof shall be held as
part of the Escrow Funds until disbursed in accordance with Section 4 hereof.
If, upon presentment for payment, any Cash Investment Instrument is dishonored,
Escrow Agent's sole obligation shall be to notify Issuer of such dishonor and to
return such Cash Investment Instrument to Issuer to take whatever action it
deems necessary. Notwithstanding the foregoing, if for any reason any Cash
Investment Instrument is uncollectible after payment of the funds represented
thereby has been made by Escrow Agent, Issuer shall immediately reimburse Escrow
Agent upon receipt from Escrow Agent of written notice thereof.
Upon receipt of any Cash Investment Instrument that represents payment less
than or greater than the Cash Investment, Escrow Agent's sole obligation shall
be to notify Issuer of such fact and to return such Cash Investment Instrument
to Issuer.
c. All Cash Investment Instruments shall be made payable to the order of,
or endorsed to the order of, "First Union National Bank/JTH Tax Inc. - Escrow
Account," and Escrow Agent shall not be obligated to accept, or present for
payment, any Cash Investment Instrument that is not payable or endorsed in that
manner.
4. Disbursements of Escrow Funds.
a. Completion of Minimum Offering. Subject to the provisions of Section 10
hereof, Escrow Agent shall pay to Issuer the liquidated value of the Escrow
Funds, by certified or bank check or by wire transfer, no later than fifteen
(15) business days following receipt of the following documents:
(1) A Minimum Offering Notice;
(2) Subscription Accounting, substantiating the sale of the Minimum
Offering;
(3) The documents described on Exhibit B attached hereto and incorporated
herein by reference; and
(4) Such other certificates, notices or other documents as Escrow Agent
shall reasonably require.
Notwithstanding the foregoing, Escrow Agent shall not be obligated to
disburse the Escrow Funds to Issuer if Escrow Agent has grounds to believe that
(a) Cash Investment Instruments in full payment for that number of Shares equal
to or greater than the Minimum Offering have not been received, deposited with
and collected by the Escrow Agent, or (b) any of the certifications and opinions
set forth in the documents described in Exhibit B attached hereto are incorrect
or incomplete.
After the initial disbursement of Escrow Funds to Issuer pursuant to this
Section 4(a), Escrow Agent shall pay to Issuer any additional funds received
with respect to the Shares, by certified or bank check or wire transfer, no
later than fifteen (15) business days after receipt.
b. Rejection of Any Subscription or Termination of the Offering. No later
than fifteen (15) business days after receipt by Escrow Agent of written notice
(i) from Issuer that Issuer intends to reject a Subscriber's subscription, (ii)
from Issuer that there will be no closing of the sale of Shares to Subscribers,
or (iii) from the SEC or any other federal or state regulatory authority that a
stop order has been issued with respect to the Offering Document and has
remained in effect for at least twenty (20) days, Escrow Agent shall pay to the
applicable Subscriber(s), by certified or bank check and by first class mail,
the amount of the Cash Investment paid by each Subscriber, and shall pay as soon
as practicable to the applicable Subscriber(s), by certified or bank check and
by first class mail, each Subscriber's share of income earned on the Escrow
Funds, each such share to be calculated on a Pro Rata Basis.
c. Expiration of Offering Period. Notwithstanding anything to the contrary
contained herein, if Escrow Agent shall not have received a Minimum Offering
Notice on or before thirty days after registration statement becomes effective,
Escrow Agent shall, within fifteen (15) business days after such date and
without any further instruction or direction from Issuer, return to each
Subscriber, by certified or bank check and by first class mail, the Cash
Investment made by such Subscriber, and shall pay as soon as practicable to the
applicable Subscriber(s), by certified or bank check and by first class mail,
each Subscriber's share of income earned on the Escrow Funds, each such share to
be calculated on a Pro Rata Basis.
5. Suspension of Performance or Disbursement Into Court. If, at any time,
there shall exist any dispute between Issuer, Escrow Agent, any Subscriber or
any other person with respect to the holding or disposition of any portion of
the Escrow Funds or any other obligations of Escrow Agent hereunder, or if at
any time Escrow Agent is unable to determine, to Escrow Agent's sole
satisfaction, the proper disposition of any portion of the Escrow Funds or
Escrow Agent's proper actions with respect to its obligations hereunder, or if
Issuer has not within 30 days of the furnishing by Escrow Agent of a notice of
resignation pursuant to Section 7 hereof appointed a successor Escrow Agent to
act hereunder, then Escrow Agent may, in its sole discretion, take either or
both of the following actions:
a. suspend the performance of any of its obligations under this Escrow
Agreement until such dispute or uncertainty shall be resolved to the sole
satisfaction of Escrow Agent or until a successor Escrow Agent shall have been
appointed (as the case may be); provided however, that Escrow Agent shall
continue to invest the Escrow Funds in accordance with Section 6 hereof; and/or
b. petition (by means of an interpleader action or any other appropriate
method) any court of competent jurisdiction in Richmond,Virginia, for
instructions with respect to such dispute or uncertainty, and pay into such
court all funds held by it in the Escrow Funds for holding and disposition in
accordance with the instructions of such court.
Escrow Agent shall have no liability to Issuer, any Subscriber or any other
person with respect to any such suspension of performance or disbursement into
court, specifically including any liability or claimed liability that may arise,
or be alleged to have arisen, out of or as a result of any delay in the
disbursement of funds held in the Escrow Funds or any delay in or with respect
to any other action required or requested of Escrow Agent.
6. Investment of Funds. Escrow Agent shall invest and reinvest the Escrow
Funds as Issuer shall direct (subject to applicable minimum investment
requirements) in writing; provided, however, that no investment or reinvestment
may be made except in the following:
a. direct obligations of the United States of America or obligations the
principal of and the interest on which are unconditionally guaranteed by the
United States of America; or
b. repurchase agreements with any bank, trust company, or national banking
association (including Escrow Agent and its affiliates; or
c. any money market fund substantially all of which is invested in the
foregoing investment categories, including any money market fund managed by
Escrow Agent and any of its affiliates.
If Escrow Agent has not received written instructions from Issuer at any
time that an investment decision must be made, Escrow Agent shall invest the
Escrow Funds, or such portion thereof as to which no written instructions have
been received, in investments described in clause (c) above. Each of the
foregoing investments shall be made in the name of Escrow Agent in its stated
capacity as escrow agent. No investment shall be made in any instrument or
security that has a maturity of greater than six (6) months. Notwithstanding
anything to the contrary contained herein, Escrow Agent may, without notice to
Issuer or Issuer, sell or liquidate any of the foregoing investments at any time
if the proceeds thereof are required for any release of funds permitted or
required hereunder, and Escrow Agent shall not be liable or responsible for any
loss, cost or penalty resulting from any such sale or liquidation. With respect
to any funds received by Escrow Agent for deposit into the Escrow Funds or any
written investment instruction of Issuer received by Escrow Agent after ten
o'clock, a.m., Richmond, Virginia, time, Escrow Agent shall not be required to
invest such funds or to effect such investment instruction until the next day
upon which banks in Richmond, Virginia, are open for business.
7. Resignation and Removal of Escrow Agent. Escrow Agent may resign from
the performance of its duties hereunder at any time by giving ten (10) days'
prior written notice to Issuer or may be removed, with or without cause, by
Issuer, acting jointly in writing, at any time by the giving of ten (10) days'
prior written notice to Escrow Agent. Such resignation or removal shall take
effect upon the appointment of a successor Escrow Agent as provided herein. Upon
any such notice of resignation or removal, Issuer jointly shall appoint a
successor Escrow Agent hereunder, which shall be a commercial bank, trust
company or other financial institution with a combined capital and surplus in
excess of $10,000,000. Upon the acceptance in writing of any appointment as
Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Escrow Agent, and the retiring Escrow
Agent shall be discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for actions taken as
escrow agent hereunder prior to such succession. After any retiring Escrow
Agent's resignation or removal, the provisions of this Escrow Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement.
8. Liability of Escrow Agent.
a. Escrow Agent shall have no liability or obligation with respect to the
Escrow Funds except for Escrow Agent's willful misconduct or gross negligence.
Escrow Agent's sole responsibility shall be for the safekeeping, investment, and
disbursement of the Escrow Funds in accordance with the terms of this Escrow
Agreement. Escrow Agent shall have no implied duties or obligations and shall
not be charged with knowledge or notice of any fact or circumstance not
specifically set forth herein. Escrow Agent may rely upon any instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein which Escrow Agent shall
in good faith believe to be genuine, to have been signed or presented by the
person or parties purporting to sign the same and to conform to the provisions
of this Escrow Agreement. In no event shall Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages. Escrow Agent
shall not be obligated to take any legal action or commence any proceeding in
connection with the Escrow Funds or any account in which Escrow Funds are
deposited or this Escrow Agreement, or to appear in, prosecute or defend any
such legal action or proceeding. Without limiting the generality of the
foregoing, Escrow Agent shall not be responsible for or required to enforce any
of the terms or conditions of any subscription agreement with any Subscriber or
any other agreement between Issuer and/or any Subscriber. Escrow Agent shall not
be responsible or liable in any manner for the performance by Issuer or any
Subscriber of their respective obligations under any subscription agreement nor
shall Escrow Agent be responsible or liable in any manner for the failure of
Issuer, or any third party (including any Subscriber) to honor any of the
provisions of this Escrow Agreement. Escrow Agent may consult legal counsel
selected by it in the event of any dispute or question as to the construction of
any of the provisions hereof or of any other agreement or of its duties
hereunder, and shall incur no liability and shall be fully indemnified from any
liability whatsoever in acting in accordance with the opinion or instruction of
such counsel. Issuer shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel.
b. The Escrow Agent is authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Escrow Funds,
without determination by the Escrow Agent of such court's jurisdiction in the
matter. If any portion of the Escrow Funds 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 part thereof, then and in any such
event, the Escrow Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree which it is advised by
legal counsel selected by it is binding upon it without the need for appeal or
other action; and if the Escrow Agent complies with any such order, writ,
judgment or decree, it shall not be liable to any of the parties hereto or to
any other person or entity by reason of such compliance even though such order,
writ, judgment or decree may be subsequently reversed, modified, annulled, set
aside or vacated.
9. Indemnification of Escrow Agent. From and at all times after the date of
this Escrow Agreement, Issuer shall, to the fullest extent permitted by law,
indemnify and hold harmless the Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the
"Indemnified Parties") against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever (including without limitation reasonable attorneys' fees, costs and
expenses) incurred by or asserted against any of the Indemnified Parties from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim, demand, suit,
action or proceeding (including any inquiry or investigation) by any person,
including without limitation Issuer, whether threatened or initiated, asserting
a claim for any legal or equitable remedy against any person under any statute
or regulation, including, but not limited to, any federal or state securities
laws, or under any common law or equitable cause or otherwise, arising from or
in connection with the negotiation, preparation, execution, performance or
failure of performance of this Escrow Agreement or any transactions contemplated
herein, whether or not any such Indemnified Party is a party to any such action,
proceeding, suit or the target of any such inquiry or investigation; provided,
however, that no Indemnified Party shall have the right to be indemnified
hereunder for any liability finally determined by a court of competent
jurisdiction, subject to no further appeal, to have resulted solely from the
gross negligence or willful misconduct of such Indemnified Party. If any such
action or claim shall be brought or asserted against any Indemnified Party, such
Indemnified Party shall promptly notify Issuer in writing, and Issuer shall
assume the defense thereof, including the employment of counsel and the payment
of all expenses. Such Indemnified Party shall, in its sole discretion, have the
right to employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such
Indemnified Party, except that Issuer shall be required to pay such fees and
expenses (a) Issuer agrees to pay such fees and expenses, or (b) Issuer shall
fail to assume the defense of such action or proceeding or shall fail, in the
reasonable discretion of such Indemnified Party, to employ counsel satisfactory
to the Indemnified Party in any such action or proceeding, (c) Issuer is the
plaintiff in any such action or proceeding or (d) the named parties to any such
action or proceeding (including any impleaded parties) include both Indemnified
Party and Issuer, and Indemnified Party shall have been advised by counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to Issuer. Issuer shall be liable to pay fees
and expenses of counsel pursuant to the preceding sentence. All such fees and
expenses payable by Issuer pursuant to the foregoing sentence shall be paid from
time to time as incurred, both in advance of and after the final disposition of
such action or claim. The obligations of Issuer under this Section 9 shall
survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent.
10. Compensation to Escrow Agent.
a. Fees and Expenses. Issuer shall compensate Escrow Agent for its services
hereunder in accordance with Exhibit C attached hereto and, in addition, shall
reimburse Escrow Agent for all of its reasonable out-of-pocket expenses,
including attorneys' fees, travel expenses, telephone and facsimile transmission
costs, postage (including express mail and overnight delivery charges), copying
charges and the like. All of the foregoing compensation and reimbursement
obligations shall be payable by Issuer upon demand by Escrow Agent. The
obligations of Issuer under this Section 10 shall survive any termination of
this Escrow Agreement and the resignation or removal of Escrow Agent.
b. Disbursements from Escrow Funds to Pay Escrow Agent. The Escrow Agent is
authorized to and may disburse from time to time, to itself or to any
Indemnified Party from the Escrow Funds (to the extent of Issuer's rights
thereto), the amount of any compensation and reimbursement of out-of-pocket
expenses due and payable hereunder (including any amount to which Escrow Agent
or any Indemnified Party is entitled to seek indemnification pursuant to Section
9 hereof). Escrow Agent shall notify Issuer of any disbursement from the Escrow
Funds to itself or to any Indemnified Party in respect of any compensation or
reimbursement hereunder and shall furnish to Issuer copies of all related
invoices and other statements.
c. Security and Offset. Issuer hereby grants to Escrow Agent and the
Indemnified Parties a security interest in and lien upon the Escrow Funds (to
the extent of Issuer's rights thereto) to secure all obligations hereunder, and
Escrow Agent and the Indemnified Parties shall have the right to offset the
amount of any compensation or reimbursement due any of them hereunder (including
any claim for indemnification pursuant to Section 9 hereof) against the Escrow
Funds (to the extent of Issuer's rights thereto.) If for any reason the Escrow
Funds available to Escrow Agent and the Indemnified Parties pursuant to such
security interest or right of offset are insufficient to cover such compensation
and reimbursement, Issuer shall promptly pay such amounts to Escrow Agent and
the Indemnified Parties upon receipt of an itemized invoice.
11. Representations and Warranties; Legal Opinions. a. Issuer makes the
following representations and warranties to Escrow Agent:
(1) Issuer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has full power and
authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder;
(2) This Escrow Agreement has been duly approved by all necessary corporate
action of Issuer, including any necessary shareholder approval, has been
executed by duly authorized officers of Issuer, and constitutes a valid and
binding agreement of Issuer, enforceable in accordance with its terms.
(3) The execution, delivery, and performance by Issuer of this Escrow
Agreement will not violate, conflict with, or cause a default under the articles
of incorporation or bylaws of Issuer, any applicable law or regulation, any
court order or administrative ruling or decree to which Issuer is a party or any
of its property is subject, or any agreement, contract, indenture, or other
binding arrangement to which Issuer is a party or any of its property is
subject. The execution, delivery and performance of this Agreement is consistent
with and accurately described in the Offering Document, and the allocation of
interest and other earnings to Subscribers, as set forth in Sections 4(b) and
4(c) hereof, has been properly described therein.
(4) No party other than the parties hereto and the prospective Subscribers
have, or shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. 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 Funds or any part thereof.
(5) Issuer hereby acknowledges that the status of Escrow Agent is that of
agent only for the limited purposes set forth herein, and hereby represents and
covenants that no representation or implication shall be made that the Escrow
Agent has investigated the desirability or advisability of investment in the
Shares or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Shares other than to
state that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(6) All of the representations and warranties of Issuer contained herein
are true and complete as of the date hereof and will be true and complete at the
time of any deposit to or disbursement from the Escrow Funds.
12. Consent to Jurisdiction and Venue. In the event that any party hereto
commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the Eastern District of Virginia shall have the sole and exclusive jurisdiction
over any such proceeding. If all such courts lack federal subject matter
jurisdiction, the parties agree that the Circuit Court of the City of Richmond,
Virginia shall have sole and exclusive jurisdiction. Any of these courts shall
be proper venue for any such lawsuit or judicial proceeding and the parties
hereto waive any objection to such venue. The parties hereto consent to and
agree to submit to the jurisdiction of any of the courts specified herein and
agree to accept service or process to vest personal jurisdiction over them in
any of these courts.
13. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities, and addressed to the party to be notified as follows:
If to Issuer at:
JTH Tax Inc.
2610 Potters Road
Virginia Beach, VA 23452
ATTENTION: John Hewitt
Facsimile Number: (757) 340-7612
If to the Escrow
Agent at: First Union National Bank, as Escrow Agent
Bond Administration
800 East Main Street, Lower Mezzanine
Richmond, Virginia 23219
ATTENTION: ______________________
Facsimile Number: (804) 343-6699
or to such other address as each party may designate for itself by like notice.
14. Amendment or Waiver. This Escrow Agreement may be changed, waived,
discharged or terminated only by a writing signed by Issuer and Escrow Agent. No
delay or omission by any party in exercising any right with respect hereto shall
operate as a waiver. A waiver on any one occasion shall not be construed as a
bar to, or waiver of, any right or remedy on any future occasion.
15. Severability. To the extent any provision of this Escrow Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
16. Governing Law. This Escrow Agreement shall be construed and interpreted
in accordance with the internal laws of the Commonwealth of Virginia without
giving effect to the conflict of laws principles thereof.
17. Entire Agreement. This Escrow Agreement constitutes the entire
agreement between the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in their entirety
the obligations and duties of the Escrow Agent with respect to the Escrow Funds.
18. Binding Effect. All of the terms of this Escrow Agreement, as amended
from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of Issuer and Escrow Agent.
19. Execution in Counterparts. This Escrow Agreement may be executed in two
or more counterparts, which when so executed shall constitute one and the same
agreement.
20. Termination. Upon the first to occur of the disbursement of all amounts
in the Escrow Funds or deposit of all amounts in the Escrow Funds into court
pursuant to Section 5 hereof, this Escrow Agreement shall terminate and Escrow
Agent shall have no further obligation or liability whatsoever with respect to
this Escrow Agreement or the Escrow Funds.
21. Dealings. The Escrow Agent and any stockholder, director, officer or
employee of the Escrow Agent may buy, sell, and deal in any of the securities of
the Issuer and become pecuniarily interested in any transaction in which the
Issuer may be interested, and contract and lend money to the Issuer and
otherwise act as fully and freely as though it were not Escrow Agent under this
Agreement. Nothing herein shall preclude the Escrow Agent from acting in any
other capacity for the Issuer or any other entity.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed under seal as of the date first above written.
JTH Tax Inc. (ISSUER)
[CORPORATE SEAL] By: /s/ John T. Hewitt
------------------------------------
Title: President/CEO
------------------------------------
ATTEST:
/s/ Donna Halligan
- ------------------
Secretary
FIRST UNION NATIONAL BANK, as Escrow Agent
By: /s/ W.F. Michie, III
--------------------------------
Title: Corporate Trust Officer
--------------------------------
Exhibit A
Offering Document
Exhibit B
Additional Documents Required
for Release of Escrow Funds
Pursuant to Section 4(a)
1. Certificate of John T. Hewitt, President of Issuer, that (a) the
Offering Document has been declared effective under the Securities Act of 1933,
and (b) no stop order has been issued or threatened to be issued by the SEC or
any other federal or state regulatory authority in connection with the Offering
Document or the offering of Shares pursuant thereto; and
Exhibit C
Fees Payable to Escrow Agent
One Thousand Five Hundred ($1,500.00)