Exhibit 10.1
FORM OF SUBSCRIPTION ESCROW AGREEMENT
Letter of Escrow Instructions
To: Corporate Trust/Agency Administration
Apex Wealth Enterprises Limited- Subscription Escrow,
__________________ Bank Escrow No. ___________
The undersigned will cause to be delivered, to _____________, hereinafter
called Escrow Agent, the papers, money or property hereinafter described to be
held and disposed of by Escrow Agent in accordance with the following
instructions and upon the terms and conditions hereinafter set forth, to which
the undersigned agree:
1 ESCROW PURPOSE:
1.1 This escrow is a single party clearing and holding escrow
established by Apex Wealth Enterprises Limited, of the British
Virgin Islands, (the "Company"). There are no other parties to this
escrow.
1.2 The purpose of this escrow is to receive, clear and hold
subscription payments ("Subscription Funds") from certain persons
("Subscribers") who subscribe to purchase up to 2,000,000 shares of
the $0.01 par value common stock ("Common Stock") of the Company.
The Common Stock will be offered to the public at a price of $0.01
per share for a period of 90 days commencing on _____________ and
ending on _____________ (the "Termination Date"). The offering
will be conducted on a "best-efforts, all nor none basis" pursuant to
an effective registration statement under the Securities Act of 1933
(Registration No. 333-___________).
1.3 The Company reserves the right to close the escrow at any time after
the receipt of subscriptions for 2,000,000 shares of Common Stock,
but shall not be obligated to do so. The Company also reserves the
right to terminate the offering and instruct the escrow agent to
return the Subscription Funds to the Subscribers.
2 ESCROW DEPOSITS:
2.1 The Escrow Deposits will be in the form of checks, bank wire
transfers and other instruments of payment in favor of
"____________ Bank - Subscription Escrow Agent for Apex Wealth
Enterprises Limited."
2.2 The Subscribers will deliver checks and other instruments of
payment directly to Escrow Agent together with manually signed
original Subscription Agreements and such other documents as may be
necessary to establish the Subscriber's name, address and social
security number, and number of shares subscribed to the satisfaction
of the Escrow Agent. In accordance with Rule 15c2-4 under the
Securities Exchange Act of 1934, the Company agrees to deliver any
subscription documents and instruments of payment received by it
to the Escrow Agent by noon of the next business day after receipt
thereof
2.3 The Escrow Agent shall accept deposits to the Escrow Account for
the entire offering period, without reference to the amount of
Subscription Funds then on deposit therein. The Subscription
Funds on deposit in the Escrow Account shall not become the property
of the Company until the Escrow Agent has received and cleared
subscriptions for at least $20,000. Upon deposit, however, all
Subscription Funds will be subject to the terms of this Agreement. The
Subscription Funds are to be invested by Escrow Agent from time to
time in a ________________________ account without further instruction.
2.4 Any checks or other instruments of payment that have been
presented for payment and have been dishonored are to be presented
for payment a second time. Any checks or other instruments of
payment that have been dishonored twice are to be immediately
returned to the Subscriber, with copies to the Company.
3 ESCROW DISBURSEMENTS:
3.1 In the event the Escrow Agent has not received and cleared a total of
$20,000 in Subscription Funds on the Termination Date, or the
Company has not delivered to the Escrow Agent a certificate that all
other conditions precedent to the sale of the Common Stock have
been satisfied, the Escrow Agent shall promptly refund to each
Subscriber the Subscription Funds submitted on his behalf, together
with interest, if any, earned on such Subscription Funds during the
time the Subscription Funds have been collected and are available
for investment. Escrow Agent shall distribute the interest earned
on the Escrow Account to the Subscriber, pro rata, according to the
amount and date of each deposit. Notwithstanding the foregoing, the
Subscribers are not parties to this Escrow. No checks, funds or
other property are to be disbursed to any Subscriber except in
accordance with the provisions of this Section 3.
3.2 If the collected Subscription Funds on deposit in the escrow
are more than $20,000 on the Termination Date, the Escrow Agent
shall prepare a summary compilation that identifies each
Subscriber, states the date when the Subscription was received by
the Escrow Agent, and states the number of shares of common stock
subscribed for. The Company shall then promptly review the compilation
prepared by the Escrow Agent and reject sufficient subscriptions to
eliminate any excess subscriptions and reduce the total
Subscription Funds to exactly $20,000. The Company reserves the
right to partially reject subscriptions and shall endeavor to
reject subscriptions in a manner reasonably calculated to result
in an even distribution of its Common Stock among the Subscribers.
After completing this process, the Company shall prepare a
definitive list that identifies each Subscriber and states the
number of shares of Common Stock that will be sold to such Subscriber.
3.3 Upon receipt of the definitive subscription list prepared by the
Company, Escrow Agent shall promptly remit to each Subscriber who
has submitted a subscription that was rejected in whole or in part
by the Company any excess Subscription Funds attributable to
his Subscription, together with interest during the time the
Subscription Funds have been collected and are available for
investment.
3.4 When the Company has rejected any excess subscriptions, the excess
Subscription Funds have been refunded to the Subscribers, the Escrow
Agent has retained exactly $20,000 in Subscription Funds, and the
Company has delivered to the Escrow Agent a certificate that all
conditions precedent to the sale of the Common Stock have been
satisfied, the Escrow Account shall close and all of the funds then
on deposit in the Escrow Account shall then be promptly and
directly transferred to the Rule 419 escrow that has been created
by the Company and the Escrow Agent pursuant to an agreement of even
date.
4 NO MODIFICATION:
4.1 After the deposit of any Subscription Funds or checks, these
instructions shall not be modified, rescinded or amended.
5 TERMINATION OF ESCROW:
5.1 This Escrow shall terminate on ________________. On the termination
of this Escrow all Subscription Funds shall be disbursed in the
manner described above. In no event will the Escrow Agent
be required to disburse its own funds or any uncollected funds.
6 GENERAL PROVISIONS:
6.1 All parties understand and agree that Escrow Agent is not a
principal, participant, or beneficiary of the underlying transaction
that necessitates this Agreement. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically
set forth herein and may rely and shall be protected in acting or
refraining from acting on any instrument believed by it to be
genuine and to have been signed or presented by the proper party or
parties, their officers, representatives or agents. The Escrow
Agent shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized hereby, nor for
action taken or omitted by it in accordance with the advice of its
counsel. Escrow Agent shall be responsible for holding, investing and
disbursing the Escrowed Assets pursuant to the Agreement, but in
no event shall be liable for any exemplary or consequential damages in
excess of Escrow Agent's fee hereunder.
6.2 Unless otherwise provided herein, the Escrow Agent shall accept the
Escrowed Assets pursuant to the Agreement and invest such assets at
the written request of the parties hereto specifying with
particularity or by accompanying schedule the type and identity of
the assets to be deposited. Acceptance of the Escrowed Assets
shall be communicated by Escrow Agent to parties by account
statement or otherwise in writing as soon as practicable after
receipt, and any discrepancies shall be noted to Escrow Agent by the
parties in writing within forty five (45) days of receiving such
communication. Failure to note any discrepancies shall be deemed
confirmation of the description of Escrowed Assets listed on the
report regardless of any variations from the original schedule.
Any request to invest assets shall be in writing or facsimile and
specify the type of investment to be made, the maturity date, and
the principal amount to be invested. The Escrow Agent shall not
be liable for delay or failure to invest funds without written
instructions or for losses on any investments made by it pursuant to
and in compliance with such instructions.
6.3 Should any controversy arise between the undersigned with respect to
this Escrow Agreement or with respect to the right to receive the
Escrowed Assets, Escrow Agent shall have the right to consult counsel
and/or to institute a bill of interpleader in any court of
competent jurisdiction to determine the rights of the parties.
In the event it is a party to any dispute, Escrow Agent shall have the
additional right to refer such controversy to binding arbitration.
Should such actions be necessary, or should Escrow Agent become
involved in litigation in any manner whatsoever on account of this
Escrow Agreement of the Escrowed Assets made hereunder, the
undersigned hereby bind and obligate themselves, their heirs and
legal representatives to pay Escrow Agent, in addition to any
charge made hereunder for acting as Escrow Agent, reasonable
attorney's fees incurred by Escrow Agent, and any other disbursements,
expenses, losses, costs and damages in connection with and resulting
from such actions.
6.4 The Escrow Agent shall have no liability under, or duty to inquire
beyond the terms and provisions of the Agreement, and it is agreed
that its duties are purely ministerial in nature, and that the
Escrow Agent shall incur no liability whatsoever except for willful
misconduct or gross negligence so long as it has acted in good faith.
The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this Escrow
Agreement unless the same shall be in writing and signed by all of
the other parties hereto and, if its duties as Escrow Agent hereunder
are affected thereby, unless it shall have given prior written
consent thereto.
6.5 The Escrow Agent may at any time resign hereunder by giving written
notice of its resignation to the other parties hereto, at their
address set forth herein, at least ten (10) days prior to the date
specified for such resignation to take effect, and upon the effective
date of such resignation, the Escrowed Assets hereunder shall be
delivered to such person as may be designated in writing by the
appropriate parties executing this Escrow Agreement, whereupon
all the Escrow Agent's obligations hereunder shall cease and
terminate. The Escrow Agent's sole responsibility until such
termination shall be to keep safely all Escrowed Assets and
to deliver the same to a person designated by the appropriate parties
executing this Escrow Agreement or in accordance with the directions
of a final order or judgment of a court of competent jurisdiction.
6.6 The parties agree to indemnify, defend and hold the Escrow Agent
harmless from and against any and all loss, damage, tax, liability
and expense that may be incurred by the Escrow Agent arising out of
or in connection with its acceptance or appointments as Escrow
Agent hereunder, including costs and expenses of defending itself
against any claim or liability in connection with its performance
hereunder.
6.7 The parties jointly and severally agree to pay to the Escrow
Agent its fees for the services rendered pursuant to the
provisions of this Escrow Agreement and will reimburse the Escrow
Agent for reasonable expenses, including reasonable attorney's fees
incurred in connection with the negotiations, drafting and
performance of such services. Except as otherwise noted, this fee
covers account acceptance, set up and termination expenses; plus
usual and customary related administrative services such as
safekeeping, investment and payment of funds specified herein or
in the exhibits attached. Activities requiring excessive administrator
time or out-of-pocket expenses such as optional substitution of
collateral or securities shall be deemed extraordinary expenses
for which related costs, transaction charges, and additional fees will
be billed at Escrow Agent's standard charges for such items. A fee
schedule has been provided to all parties to this Escrow.
6.8 The parties warrant to the Escrow Agent that there are no Federal,
State or local tax liability or filing requirements whatsoever
concerning the Escrow Agent's actions contemplated hereunder and
warrant and represent to the Escrow Agent that the Escrow Agent has
no duty to withhold or file any report of any tax liability under any
Federal of State income tax, local or State property tax, local
or State sales or use taxes, or any other tax by any taxing
authority. The parties hereto agree to jointly and severally
indemnify the Escrow Agent fully for any tax liability, penalties or
interest incurred by the Escrow Agent arising hereunder and agree
to pay in full any such tax liability together with penalty and
interest if any tax liability is ultimately assessed against the
Escrow Agent for any reason as a result of its action hereunder
(except for the Escrow Agent's individual income tax liability arising
from its income fees).
6.9 The Escrow Agent shall have no liability for loss arising from
any cause beyond its control, including, but not limited to, the
following: (a) the act, failure or neglect of any agent or
correspondent selected by the Escrow Agent or the parties hereto;
(b) any delay, error, omission or default connected with the
remittance of funds; (c) any delay, error, omission or default of any
mail, telegraph, cable or wireless agency or operator; (d) the acts or
edicts of any government or governmental agency or other group
or entity exercising governmental powers.
6.10 This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The parties hereto
expressly waive such duties and liabilities, it being their intent to
create solely an agency relationship and hold the Escrow Agent liable
only in the event of its gross negligence or willful misconduct
in order to obtain the lower fee schedule rates as specifically
negotiated with the Escrow Agent.
7 NOTICES:
7.1 All notices, demands, requests or payments provided for or given
pursuant to this Escrow must be in writing or facsimile. All such
notices shall be deemed to have been properly given or served by
personal delivery or by depositing the same in the United States mail
addressed to the person entitled to receive such notice at the address
set forth below.
To the Company:
To the Escrow Agent:
___________________ Bank, N.A.
Corporate Trust/Agency Administration
7.2 All notices shall be effective when received.
Approved and accepted by the Parties this ________ day of _______, 2003.
Apex Wealth Enterprises Limited _________________ Bank, N.A.
By: By:
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(Name and Title of Signatory)