EXHIBIT 10.7
CoBiz
Private Asset Management
A Division of Colorado Business Bank
Subscription Escrow Agreement
Account Number: ________________________________
Account Name: _____________________________________________________________
Offering Name: Mountain States Lending, Inc. ("Offering")
This Subscription Escrow Agreement ("Agreement") is dated _______________.
This Agreement exists between Mountain States Lending, Inc. ("Issuer") on
behalf of the Issuer and various Subscribers/Investors ("Subscribers") in the
Offering and Colorado Business Bank, Private Asset Management ("Subscription
Escrow Agent").
Issuer and Subscription Escrow Agent agree:
1. Subscription Escrow Deposits
Issuer appoints Subscription Escrow Agent to hold and invest deposits (the
"Subscription Funds") received by Issuer and forwarded to the Subscription
Escrow Agent for deposit into the Subscription Escrow Account (the "Account").
Issuer acknowledges that Subscribers have agreed to the establishment of the
Account and the appointment of the Subscription Escrow Agent.
2. Subscription Escrow Instructions
Subscription Escrow Agent will hold and distribute Subscription Funds in
accordance with this Agreement and the Supplementary Schedule (the "Schedule")
attached, which is hereby incorporated by reference.
3. Investment of Subscription Funds
Escrow Agent has no duty to invest any Escrow Property, except as provided
on Supplementary Schedule.
4. Allocation of Interest and Dividends on Subscription Funds
Unless otherwise instructed on the Schedule, Subscription Escrow Agent will
not allocate, and will not be liable for the allocation of, dividends or
interest ("Earnings") earned on the Sweep Vehicle back to the Subscribers.
5. Cleared Funds and Cash Required for Disbursement
Issuer, on its own behalf and on behalf of the Subscribers, agrees that the
Subscription Escrow Agent shall be unable to make distribution of Subscription
Funds until it has cleared funds and/or cash on deposit. The Subscription
Escrow Agent, in its sole discretion, shall be entitled to place a hold on any
funds deposited into the Account to ensure that such funds are cleared and
collected.
Page 1
6. Subscription Escrow Agent Wire Instructions
Wire instructions to remit funds to Subscription Escrow Agent:
Colorado Business Bank
ABA 102003206
Trust Division Clearing Account #30-061522
For Mountain States Lending, Inc. Subscription Escrow
7. Issuance of Certificates
The Issuer shall make appropriate arrangements for the issuance and delivery
of certificates or other evidence of ownership of the securities sold in the
Offering. The Subscription Escrow Agent shall have no obligation or
responsibility to assure such issuance or delivery.
8. Amendments
This Agreement may be amended, modified, supplemented or revoked only in
writing signed by Issuer and Subscription Escrow Agent and upon payment to
Subscription Escrow Agent of its additional fees and expenses.
9. Assignments of Interest
Assignments, transfers, hypothecations or conveyances of any right, title or
interest in Subscription Funds are not binding upon Subscription Escrow Agent.
10. Authority of Depositors
Subscription Escrow Agent is under no duty or obligation to ascertain the
authority, and/or rights of the Issuer or the Subscribers or their respective
agents who are executing, delivering or purporting to execute or deliver
instructions and/or performance hereunder. Subscription Escrow Agent is under
no duty or obligation to confirm the identity or suitability of the
Subscribers.
11. Compensation of Subscription Escrow Agent
Issuer agrees to pay Subscription Escrow Agent its fees and expenses for
services, including any extraordinary fees and expenses that may arise, such
as fees of counsel and court costs. Subscription Escrow Agent has a first and
prior lien on Subscription Funds to secure any unpaid fees and expenses.
Subscription Escrow Agent is authorized to deduct any unpaid fees and expenses
from Subscription Funds. Any fees and expenses owed but unpaid shall accrue
interest at the rate of 12% per annum.
12. Complete Agreement and Other Contracts or Agreements
This Agreement and the Schedule constitute the complete and entire Agreement
of Issuer with Subscription Escrow Agent. Other than this Agreement,
Subscription Escrow Agent has not reviewed any contracts or documentation,
including, without limitation, any agreement of a Subscriber in connection
with such Subscriber's subscription in the Offering.
Subscription Escrow Agent is not a party to or bound by any agreement other
than this Agreement, whether or not an original copy of such agreement is held
as Subscription Escrow Property or is in the files of Subscription Escrow
Agent. Subscription Agent is not a party to any agreement with the
Subscribers.
Page 2
13. Disagreements
In the event of any disagreement or dispute between Issuer or any Subscribers
concerning the meaning or validity of any provision under this Agreement,
including the Schedule, or concerning any other matter relating to this
Agreement, Subscription Escrow Agent:
a. shall be under no obligation to act, except under process or order of
court, or until it has been adequately indemnified to its full satisfaction,
and shall sustain no liability for its failure to act pending such process or
court order or indemnification; and
b. may deposit, in its sole and absolute discretion, Subscription Funds or
that portion of Subscription Funds it then holds with the then Clerk of the
District Court of the City and County of Denver, State of Colorado, to
interplead Depositors. Upon such deposit and filing of interpleader,
Subscription Escrow Agent shall be relieved of all liability as to
Subscription Escrow Property and shall be entitled to recover from Issuer its
attorneys' fees and costs incurred in commencing and maintaining such action
and shall have a first and prior lien on Subscription Funds to secure such
fees and costs. Issuer, by signing this Agreement, submits to the
jurisdiction of such Court and does appoint the then Clerk of such Court as
its agent for the service of all process in connection with such proceedings.
In no event shall the institution of such interpleader action impair the
rights of Subscription Escrow Agent described in paragraph 17.
14. Extension of Benefits
This Agreement and Schedule extend to and bind the heirs, legal
representatives and successors and assigns all of the parties to this
Agreement.
15. Governing Law
The substantive laws of the State of Colorado shall apply to the
interpretation, construction and enforcement of this Agreement.
16. Headings of Paragraphs
The titles of these numbered paragraphs to this Agreement exist for
convenience only and in no way shall they restrict or modify any Agreement or
provision.
17. Indemnification and Hold Harmless
Issuer agrees to indemnify and hold harmless Subscription Escrow Agent from
any liability, cost or expense whatsoever, including attorneys fees and costs
that it has or will incur by reason of accepting Subscription Funds and this
Agreement.
18. Non-Liability
Subscription Escrow Agent shall not be liable for any act it may do or omit to
do as Subscription Escrow Agent while acting in good faith and in the exercise
of its own best judgment. Any act done or omitted by Subscription Escrow
Agent pursuant to the advice of its attorneys shall be conclusive evidence of
such good faith. Subscription Escrow Agent shall have the right to consult
with counsel whenever any question arises concerning Agreement and shall incur
no liability whatsoever, for any cost or delay reasonably required to obtain
such advice of counsel.
Page 3
19. Discharge and Release of Subscription Escrow Agent
After the Subscription Escrow Agent has made all payments and remittances
provided for in the Agreement, it shall be fully discharged and released from
any and all further liabilities and responsibilities hereunder.
20. Notices
Any notices will be given by delivery, by mailing, via first class mail,
postage prepaid or by facsimile promptly followed by mailing such notice via
first class mail, postage prepaid, to the addresses and/or facsimile numbers
provided in Agreement. Notice shall be effective as of the time of receipt,
as of the time of deposit in the mail, or in the event of initial facsimile
transmission, upon the sending of such facsimile, except that any notice given
to Subscription Escrow Agent shall not be deemed given until actually received
by an employee of Subscription Escrow Agent working in the Private Asset
Management Division of Subscription Escrow Agent. All such notices to
Subscription Escrow Agent must contain the Account Number. The Issuer shall
give the Subscription Escrow Agent appropriate written notice of any extension
of any time periods described on the Schedule.
21. Removal or Resignation of Subscription Escrow Agent
Subscription Escrow Agent may resign at any time by furnishing written notice
of its resignation to Issuer. Issuer may remove Subscription Escrow Agent at
any time by furnishing to Subscription Escrow Agent a written notice of its
removal executed by Issuer. Such resignation or removal, as the case may be,
shall be effective 30 days after delivery of such notice.
22. Statute of Limitations and Laches
Subscription Escrow Agent is not liable for the outlawing, lapse or
invalidation of any rights under any Statute of Limitations or due to laches
with respect to Agreement or Subscription Funds.
23. Validity and Sufficiency of Subscription Funds and Schedule Attachment
Subscription Escrow Agent assumes no responsibility for the validity and/or
sufficiency of any Subscription Funds or other funds, securities, instruments
or instructions whatsoever.
24. Waivers
The failure of any party to Agreement at any time or times to require
performance of any provision under this Agreement shall in no manner affect
the right at a later time to enforce the same performance. A waiver by any
party to Agreement of any such condition or breach of any term, covenant,
representation or warranty contained in this Agreement, in any one or more
instances, shall neither be construed as a further or continuing waiver of any
such condition or breach nor a waiver of any other condition or breach of any
other term, covenant, representation or warranty contained in this Agreement.
Execution Date: ____________________________
The undersigned officer of Issuer warrants that he has authority to bind
Issuer under this Agreement. IN WITNESS WHEREOF, the undersigned has affixed
his signature and hereby adopts as part of this instrument the Schedule which
is incorporated by reference.
Page 4
ISSUER
Mountain States Lending, Inc.
(Issuer Name)
By: ________________________________
Authorized Officer
Mark Massa, President
Mountain States Lending, Inc.
7435 East Peakview Avenue
Englewood, Colorado 80111
Telephone: (303) 740-5455
Facsimile: (303) 740-7950
SUBSCRIPTION ESCROW AGENT
Colorado Business Bank, N.A.
By: ________________________________
Authorized Officer
CoBiz Private Asset Management
821 17th Street
Denver, CO 80241
Telephone: (303) 312-0603
Facsimile: (303) 293-0700
Page 5
Subscription Escrow Agreement Supplementary Schedule
Account Number: ________________________________
Issuer Name: Mountain States Lending, Inc., a Colorado corporation
(Please provide Form of Issuer Organization; Jurisdiction of Organization;
Agent Name (using additional sheets if necessary.)
A. Summary of Offering (including detail regarding securities offered)
This offering is being conducted by Mark E. Massa and Timothy J. Brasel,
Officers and Directors of Mountain States Lending, on a "best efforts,"
250,000 share minimum, 500,000 share maximum basis, at an offering price of
$1.00 per Share.
All proceeds from subscriptions will be deposited by noon of the first
business day following receipt into an escrow account with Colorado Business
Bank, Denver, Colorado, as Escrow Agent pursuant to an Escrow Agreement
between Mountain States Lending and such Escrow Agent. After the sale of the
initial 250,000 shares, the remaining 250,000 shares will be offered on a
"best efforts" basis, but without any required escrow, until 90 days after the
date of the Prospectus, unless extended an additional 90 days, or such earlier
date as all such 500,000 shares are sold or we determine in our sole
discretion to discontinue the offering. Once 250,000 shares have been sold,
we may elect to have an initial closing to disburse the proceeds to us. We
may then elect to continue the offering until the maximum 500,000 shares have
been sold or the offering period is terminated. All checks for our shares
should be made payable to "Colorado Business Bank, Escrow Agent for Mountain
States Lending, Inc." In the event the minimum 250,000 shares are not sold
within the 90-day period (subject to the 90-day extension period described
above), funds will be refunded promptly to the subscribers in full without
deduction therefrom or interest thereon. During the 90-day offering period
and any extension, no subscriber will be entitled to a refund of any
subscription.
B. Amount of Offering
Minimum (include dollar amount and number of securities)
$250,000; 250,000 shares
Maximum (include dollar amount and number of securities)
$500,000; 500,000 shares
Initial Closing Date ______________________________
Extension Date __________________________________
Termination Date ________________________________
C. Method of Subscribing (what documents do the Subscribers complete; who
is reviewing and holding the documents)
Subscribers will complete a subscription agreement which will be held by
the Issuer and reviewed by Issuer's legal counsel.
Page 6
D. Method of Allocating Earnings, if applicable
Not applicable.
E. Subscription Funds Placed in Escrow (include type of deposit, i.e. check,
wire, etc.)
Checks and wires.
F. Investment Instructions
Not applicable.
G. Special Instructions (include any time-of-day deadlines and instructions
relative to returning funds to Subscribers/Investors)
Not applicable.
Page 7