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EXHIBIT 1.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of
March __, 1997, by and among Imperial Trust Company, a wholly-owned subsidiary
of Imperial Bank, a California state banking corporation (the "Escrow Agent"),
having its principal place of business at 201 North Figueroa Street, Suite 610,
Los Angeles, California 90012 and Cuidao Holding Corp., a Florida corporation
(the"Company"), having its principal place of business at 3201 West Griffin
Road, Suite 204, Ft. Lauderdale, Florida 33312-6900.
RECITALS
A. The Company proposes to offer for sale to investors up to 260,000
Units, each Unit consisting of one share of the Company's common stock, $.0001
par value ("Common Stock") and one Common Stock Purchase Warrant, for a maximum
aggregate offering price of $1,495,000 (the "Proceeds").
B. The Company has engaged West America Securities Corp., a member of
the National Association of Securities Dealers, Inc. (the "Placement Agent") to
use its best efforts to sell, as exclusive agent for the Company, the Units. The
Placement Agent shall be bound by this Agreement. However, for purposes of
communications and directives, the Escrow Agent need only accept those signed by
the Company.
C. The Company desires to establish an escrow account in which funds
received from subscribers for the Units will be deposited pending completion of
the escrow period. Imperial Trust Company agrees to serve as Escrow Agent in
accordance with the terms and conditions set forth herein and subject to the
approval of the state securities administrators set forth on the list attached
hereto as Exhibit "A" (hereinafter referred to as the "State Administrators").
The purpose of this Agreement is to comply with the provisions of Rules 10(b)-9
and 15c2-4 promulgated under the Securities Exchange Act of 1934, as amended,
and under the applicable securities laws of all states in which the offering of
Units (the "Offering") is made.
D. The Escrow Agent must be satisfactory to the State Administrators
and it is not affiliated with the Company.
AGREEMENT
1. ESTABLISHMENT OF ESCROW ACCOUNT. Effective as of the date of the
commencement of the Offering, the parties hereby establish an escrow account
with the Escrow Agent, which escrow account shall be entitled "Cuidao Holding
Corp./Imperial Trust Company Escrow Account (the "Escrow Account"). The Company
and the Placement Agent will instruct subscribers to make checks for
subscriptions payable to "IMPERIAL TRUST COMPANY, AS ESCROW AGENT FOR CUIDAO
HOLDING CORP." until a minimum of 95,000 Units have been sold in the Offering.
Any checks received that are made payable to a party other than the Escrow Agent
shall be returned to the Company or the Placement Agent.
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2. ESCROW PERIOD. The period for the existence of the escrow (the
"Escrow Period") shall begin with the commencement of the Offering and shall
terminate upon the earlier to occur of the following dates:
A. The date upon which the Escrow Agent confirms to the State
Administrators as hereinafter provided that it has received in the Escrow
Account gross proceeds of $546,250 in deposited funds (the "Minimum Offering
Amount"); or
B. The expiration of ninety (90) days from the date of
commencement of the Offering (unless extended as permitted in the Registration
Statement filed with the Securities and Exchange Commission in connection with
the Offering for an additional ninety (90) days at the sole discretion of the
Company with a copy of such extension to the Escrow Agent and the State
Administrators); or
C. The date upon which a determination is made by the Company to
terminate the Offering prior to the sale of the Minimum Offering Amount.
During the Escrow Period, the Company is aware and understands that it is
not entitled to any funds received into escrow and no amounts deposited in the
Escrow Account shall become the property of the Company or any other entity, or
be subject to the debts of the Company or any other entity.
3. DEPOSITS INTO THE ESCROW ACCOUNT. All monies received from
subscribers of the Units will be deposited with the Escrow Agent by twelve
o'clock noon of the next business day after receipt of said monies from
subscribers, together with a written account of each sale, which account shall
set forth, among other things, the subscriber's name and address, the number of
Units purchased, the amount paid therefor, whether the consideration received
was in the form of a check, draft, or money order, the date of said check,
draft, or money order, and the date received and delivered to the Escrow Agent.
All monies so deposited in the Escrow Account are hereinafter referred to as the
"Escrow Amount." The State Administrators shall have the authority to inspect
the Escrow Account without obtaining any further permission from the Company
and/or the Escrow Agent.
4. DISBURSEMENTS FROM THE ESCROW ACCOUNT.
4.1. In the event the Escrow Agent does not receive deposits
totalling the Minimum Offering Amount prior to the termination of the Escrow
Period, the Escrow Agent shall promptly notify the State Administrators by
telephone, confirmed in writing, of such fact and shall, upon approval by the
State Administrators, promptly thereafter refund to each subscriber the amount
received from the subscriber, without deduction, penalty, or expense to
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the subscriber, and the Escrow Agent shall notify the Company and the Placement
Agent of its distribution of the funds. The purchase money returned to each
subscriber shall be free and clear of any and all claims of the Company or any
of its creditors.
4.2. In the event the Escrow Agent receives the Minimum Offering
Amount prior to termination of the Escrow Period, the Escrow Amount will not be
released to the Company until such amount is received by the Escrow Agent in
collected funds and the release provisions set forth in paragraph C below are
complied with. For purposes of this Agreement, the term "collected funds" shall
mean all funds received by the Escrow Agent which have cleared normal banking
channels and are in the form of cash. The Minimum Offering Amount may be met by
funds that are deposited from the effective date of the Offering up to and
including the date on which the contingency must be met, i.e., during the Escrow
Period. However, escrow cannot be broken and the Offering may not proceed to
closing until customer checks have been collected through the normal banking
channels in an aggregate amount sufficient to meet the Minimum Offering Amount.
Purchases made after the Escrow Period has terminated, but prior to the date
escrow is broken pending clearance of subscribers' funds, may not subsequently
be counted to meet the Minimum Offering Amount should checks tendered prior to
the termination of the Escrow Period fail to clear the banking system. In no
event may the Placement Agent substitute its own good check for the check of a
purchaser that has insufficient funds nor otherwise purchase Units to satisfy
the offering contingency unless purchasing for investment prior to the
termination of the Escrow Period and the offering document discloses the maximum
amount of such potential purchase and such arrangement has been approved by the
State Administrators.
4.3. Upon the release of any funds from the Escrow Account to
the Company, Escrow Agent shall notify the State Administrators in writing of
said release.
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5. COLLECTION PROCEDURE.
5.1. The Escrow Agent is hereby authorized to forward each check
for collection and, upon collection of the proceeds of each check, deposit the
collected proceeds in the Escrow Account. As an alternative, the Escrow Agent
may telephone the bank on which the check is drawn to confirm that the check has
been paid.
5.2. Any check returned unpaid to the Escrow Agent shall be
returned to the Company or the Placement Agent. In such cases, the Escrow Agent
will promptly notify the Company of such return.
5.3. If the Company rejects any subscription for which the Escrow
Agent has already collected funds, the Escrow Agent shall promptly issue a
refund check to the rejected subscriber. If the Company rejects any subscription
for which the Escrow Agent has not yet collected funds but has submitted the
subscriber's check for collection, the Escrow Agent shall promptly 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 rejected subscriber's check which
has been submitted for collection by the Escrow Agent is uncollectible, and if
the Escrow Agent has issued a check to the rejected subscriber hereunder, then
the Escrow Agent shall notify the Company and the Company shall immediately
reimburse the Escrow Agent for the amount of such funds. If the Escrow Agent has
not yet submitted a rejected subscriber's check for collection, the Escrow Agent
shall promptly remit the subscriber's check directly to the subscriber.
6. INVESTMENT OF ESCROW AMOUNT. The Escrow Agent may invest the Escrow
Amount only in such accounts or investments as the Company may specify by
written notice. The Company may only specify investment in (1) bank accounts,
(2) bank money-market accounts, (3) short-term certificates of deposit issued by
a bank, or (4) short-term securities issued or guaranteed by the U.S.
Government.
7. COMPLIANCE WITH TAXATION MATTERS.
7.1. The Company shall provide the Escrow Agent with a completed
Internal Revenue Service ("IRS") Form W-9 upon the execution of this
Agreement. The Escrow Agent may delay accepting escrow funds until the IRS forms
have been provided. For purposes of reporting to tax authorities, the Escrow
Agent will treat all income earned by the Escrow Agent as paid to the Company at
the time income is received by the Escrow Account.
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7.2. The Company shall be responsible for determining any
requirements for paying taxes or reporting any payments for tax purposes. The
Company shall give written directions to the Escrow Agent to prepare and file
tax information or to withhold any payments hereunder for tax purposes. The
Company covenants and agrees to indemnify and hold the Escrow Agent harmless
against all liability for tax withholding and/or reporting for any payments made
by the Escrow Agent pursuant to this Agreement.
8. ESCROW AGENT.
8.1. Nothing contained in this Agreement shall constitute Escrow
Agent as trustee for any party hereto or impose on the Escrow Agent any duties
or obligations other than those for which there is an express provision herein.
Except as provided herein, Escrow Agent shall have no responsibility or
liability for delivery of the Escrow Account funds.
8.2. For all purposes connected herewith Escrow Agent shall be
entitled to assume that the Company is exclusively entitled to the Escrow Agent
funds in accordance with this Agreement (and any amendments hereto) and is
fully authorized and empowered, without affecting the rights of any third
parties, to appoint Escrow Agent as the escrow agent in accordance with the
terms and provisions hereof.
8.3. Escrow Agent shall be obliged to render statements of account
only with respect to the Escrow Agent funds deposited to the parties referred to
herein and Escrow Agent shall not be under any obligation to render statements
of account to any third parties unless Escrow Agent so consents.
9. COMPENSATION OF ESCROW AGENT.
9.1. The Company shall pay the Escrow Agent a fee for its escrow
services hereunder in accordance with the fee schedule attached hereto as
Exhibit "B". However, no such fee or any monies whatsoever shall be paid out of
or chargeable to the funds on deposit in the Escrow Account.
9.2. In the event Escrow Agent performs any service not
specifically provided hereinabove, or that there is any assignment or attachment
of any interest in the subject matter of this escrow or modification thereof, or
that any controversy arises hereunder, or that Escrow Agent is named a party to,
or intervenes in, any litigation pertaining to this escrow or the subject matter
thereof, Escrow Agent shall be reasonably compensated therefor and reimbursed
for all costs and expenses including attorneys' fees occasioned thereby. Escrow
Agent shall have a first lien on the property and papers held by it hereunder
for such compensation and expenses, and the Company agrees to pay the same.
10. RESIGNATION OF ESCROW AGENT. The Escrow Agent reserves the right to
resign as escrow agent at any time, and may further do so upon giving five (5)
days written notice of such resignation to the Company at the address set forth
hereinbelow. On the effectiveness of such resignation, the Escrow Agent shall
deliver to any escrow agent appointed by the Company (or if there is no escrow
agent appointed by the Company, then to the purchasers of the Units), all
documents and money in the Escrow Account, and thereupon the Escrow Agent will
be released of any further responsibility or obligation in connection with the
Escrow Account or this Agreement.
11. LIABILITY OF THE ESCROW AGENT.
11.1. It is understood and agreed that Escrow Agent shall incur no
liability (except for acts of gross negligence or willful misconduct) and be
under no obligation, except as expressly set forth herein. Escrow Agent shall
be under no obligation to take any steps or action (whether by commencement of
legal proceedings or otherwise) to ensure that any funds are actually received
by the Escrow Agent.
11.2. None of the provisions hereof shall be construed so as to
require Escrow Agent to expend or risk any of its own funds or otherwise incur
any liability in the performance of its duties under this Agreement and it
shall be under no obligation to make any payment except out of the funds
received by it from the offering of the Units.
11.3. If it becomes illegal or impossible for Escrow Agent to carry
out any of the provisions hereof, Escrow Agent shall incur no liability as a
consequence of the enforceability or lack thereof of any agreements referred to
herein.
11.4. Escrow Agent shall not be liable to any party hereto in
acting upon any written notice, request, waiver, consent, receipt or other paper
or document believed by Escrow Agent to be signed by the proper party or
parties. Escrow Agent will be entitled to treat as genuine any letter, paper,
telex or other documents furnished or caused to be furnished to Escrow Agent by
any party to this Agreement, and believed by Escrow Agent to be genuine and to
have been transmitted by the proper party or parties. Escrow Agent shall have no
liability with respect to any good faith action taken or allowed by it
hereunder.
11.5. Escrow Agent shall not be liable for any error or judgment or
for act done or step taken or omitted by it in good faith or for any mistake of
fact or law (except for acts of gross negligence or willful misconduct), or for
anything which it may do or refrain from doing in connection herewith, and
Escrow Agent shall have no duties to any one except those signing this
Agreement.
11.6. Escrow Agent may consult with legal counsel in the event of
any dispute or questions with respect to the interpretation or construction of
this Agreement or Escrow Agent's duties hereunder, and Escrow Agent shall incur
no liability and shall be fully protected in acting in accordance with the
opinion and instructions of counsel. Any fees or costs so incurred shall be
borne by Escrow Agent.
11.7. In the event of any disagreement or dispute involving the
Escrow Account and resulting in adverse claims and demands being made in
connection with or for any monies involved therein or affected thereby, Escrow
Agent shall be entitled at its option to refuse to comply with any such claims
or demands, so long as such disagreement or dispute shall continue, and in so
doing, Escrow Agent shall not be or become liable for damages or interest to
the Company, or to any person named in this Agreement, for its refusal to
comply with such conflicting or adverse demands, and Escrow Agent shall be
entitled to continue to refrain and refuse to so act until:
11.7.1. the rights of the adverse claimants have been finally
adjudicated in a court or by arbitration as set forth below assuming and having
jurisdiction of the parties and the monies involved therein and affected
thereby; or
11.7.2. all differences have been adjudicated by agreement and
Escrow Agent has been notified thereof in writing by all of the persons
interested.
11.8. In the event of any disagreement or dispute involving the
Escrow Agent, Escrow Agent, in its discretion, may file a suit in interpleader
or for declaratory relief for the purpose of having the respective rights of all
claimants adjudicated, and deposit with the court all documents and property
held hereunder, and the Company agrees to pay the Escrow Agent's fee and all
reasonable costs and reasonable counsel fees incurred in such action and said
costs and fees shall be included in the judgment of any such action.
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12. MAINTENANCE OF RECORDS. The Escrow Agent shall at all times keep and
maintain a complete set of books, records and accounts relating to the
subscriptions received by the Escrow Agent hereunder, and the disposition by the
Escrow Agent of the proceeds thereof. All such records maintained by the Escrow
Agent shall be available for inspection by the State Administrators, and the
Escrow Agent shall furnish to the State Administrators, upon demand, at such
place designated in such demand, true, correct, complete and current copies of
any or all of such records.
13. MISCELLANEOUS.
13.1. All notices, reports, instructions, requests and other
communications given under this Agreement shall be either (a) sent in writing
and served personally by delivery to a responsible officer at the party's
offices listed on the signature pages hereto; or delivered by first class
registered or certified U.S. mail, return receipt requested, postage prepaid; or
(b) sent by telex or telecopier and then acknowledged as received by return
telex or telecopier by the intended recipient. Notices shall be deemed received
only upon receipt. Notices shall be directed to the addresses or telex or
telecopier numbers indicated on the signature pages hereto; provided that a
party may change its address or numbers for notices by giving notice to all
other
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parties in accordance with this paragraph. Escrow Agent shall be protected in
acting upon any notice, request, waiver, consent, receipt or other paper or
document believed by Escrow Agent to be signed by the proper party or parties.
13.2. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California. This
Agreement, together with any exhibits and/or schedules referred to herein,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
undertakings of the parties in connection herewith.
13.3. All of the terms, covenants, conditions and provisions of
this Agreement shall bind and inure to the benefit of the parties hereto and to
their respective representatives, successors and assigns.
13.4. No failure or delay on the part of the Escrow Agent in
exercising any right, power or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power or remedy
preclude any other or further exercise of any other right, power or remedy.
13.5. The invalidity of any provision hereof shall in no way affect
the validity of any other provision hereof. Each of the parties hereto shall at
the request of the other party, deliver to the requesting party all further
documents or other assurances as may reasonably be necessary or desirable in
connection with this Agreement.
13.6. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
13.7. All disputes which may arise between or among the parties
hereto under or with respect to this Agreement will be resolved solely by
arbitration in Los Angeles, California in accordance with the rules of the
American Arbitration Association (AAA) pursuant to the procedure set forth in
this paragraph. The aggrieved party shall serve upon the other party a notice
in writing requiring arbitration and jointly designating one (1) arbitrator.
Within five (5) business days thereafter, the other party shall designate a
second arbitrator. The two (2) arbitrators thus chosen shall appoint a third
arbitrator within five (5) business days thereafter. If the third arbitrator is
not appointed within such five (5) business day period, then either party may
secure the appointment of a third arbitrator by application to the AAA. When
appointed, the three (3) arbitrators shall determine the subject controversy by
majority vote, except that if there is only one arbitrator mentioned above,
then the first arbitrator appointed shall be the sole arbitrator. If any
vacancy occurs on the board of arbitrators appointed hereunder by reason of
death, resignation, refusal to act, physical incapacity or otherwise, a new
arbitrator shall be appointed by the remaining arbitrators. The costs of the
arbitration shall be borne by the party which does not prevail in the matter.
All determinations by the duly appointed arbitrators shall be final, binding
and conclusive upon all parties thereto and shall be rendered in such form that
it may be judicially confirmed under the laws of the State of California.
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J. In the event the escrow created by this Agreement is canceled
for any reason, the Company will nevertheless pay the escrow fee, plus all other
costs and expenses of Escrow Agent, as established under Section 9 of this
Agreement. Should the Escrow Agent resign as escrow hereunder pursuant to
Section 10 of this Agreement, Escrow Agent shall be entitled to reimbursement
only for those costs and expenses incurred by Escrow Agent to date of such
resignation.
The Company and the Escrow Agent have entered into this Agreement on this
___ day of March, 1998 in multiple counterparts, each of which shall be
considered an original. Escrow Agent, by its signature hereon, accepts the
escrow agency created by this Agreement, and agrees to carry out its duties as
escrow agent pursuant to the terms and conditions contained herein.
COMPANY
Cuidao Holding Corp.
By:________________________________________
C. Michael Fisher, President
Address for Notices:
3201 West Griffin Road, Suite 204
Ft. Lauderdale, Florida 33312-6900
Facsimile: (954) 964-7087
ESCROW AGENT
Imperial Trust Company
By:________________________________________
Authorized Officer
Address for Notices:
201 North Figueroa Street
Suite 610
Los Angeles, California 90012
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EXHIBIT A
STATE SECURITIES COMMISSIONS
1. Colorado Department of Regulatory Agencies, Division of Securities
2. Delaware Division of Securities
3. Florida Division of Securities and Investor Protection
4. Georgia Secretary of State, Securities Division
5. Illinois Securities Department
6. Maryland Office of the Attorney General, Division of Securities
7. New Jersey Department of Law and Public Safety, Division of Consumer
Affairs, Bureau of Securities
8. New York Department of Law
9. North Carolina Secretary of State, Securities Division
10. Virginia Corporation Commission, Division of Securities and Retail
Franchising
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EXHIBIT B
ESCROW FEE SCHEDULE
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