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Exhibit 99
ESCROW AGREEMENT
FOR FANZ ENTERPRISES, INC.
PUBLIC OFFERING FUNDS
In consideration of the mutual covenants herein contained, FanZ
Enterprises, Inc., a Delaware corporation, (hereinafter referred to as the
"Company") and FIRSTAR BANK, N.A., Corporate Trust Department, Milwaukee,
Wisconsin (hereinafter referred to as the "Escrow Agent"), or its successor,
represent and agree as follows:
1. The Company proposes to offer up to 2,500,000 shares of its common
stock par value $.01 per share (hereinafter referred to as "Shares") in a public
offering made pursuant to a Registration Statement on Form SB-2 and Prospectus
filed with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended (hereinafter referred to as the "Public
Offering"). The Company will also file an application to register securities
with the applicable authorities of states in which the Public Offering will be
made.
2. The Company desires to meet the requirements of the Securities Act
of 1933 and the various state regulatory statutes and regulations, and desires
to protect the investors in the Public Offering by providing, under the terms
and conditions herein set forth, for the return to subscribers of the money
which they may pay on account of purchases of Shares in the Public Offering if
the Minimum Escrow Deposit (as hereinafter defined) is not deposited with the
Escrow Agent.
3. Until the Initial Closing has been held, all proceeds from sales of
Shares in the Public Offering shall be delivered to the Escrow Agent by noon of
the fifth business day following receipt of such check by the Company, endorsed
(if appropriate) to the order of the Escrow Agent, together with an appropriate
written statement setting forth the name, address and social security number of
each person purchasing Shares, the number of Shares purchased, and the amount
paid by each such Purchaser.
4. To the extent any such proceeds are deposited with the Escrow Agent
in accordance with Section 3 in the form of uncollected checks, the Escrow Agent
promptly shall present the checks for collection through customary banking and
clearing house facilities. The Escrow Agent shall invest all cash or collected
funds deposited with it as soon after receipt as is reasonable in an account
(sometimes hereinafter referred to as the "Escrow Account") and shall reinvest
said funds, principal and interest, in the Firstar U.S. Treasury Money Market
Fund or upon the sale or maturity of any securities or assets purchased
hereunder, all such investments or reinvestments to be as directed by the
Company and only in short-term government obligations, securities issued or
guaranteed by government agencies, funds investing only in government
obligations or government agency securities, and time or demand deposits in
commercial banks. The Escrow Agent shall, upon written request therefor, provide
the Company with a list of the securities and assets then on hand, their
identification, location and maturity date, together with a complete accounting
of the total cash income earned by such securities or others previously
purchased, sold or matured, as interest or otherwise. The Escrow Account shall
be created and maintained subject to the customary rules and regulations of the
Escrow Agent pertaining to such accounts. Unless and until the amounts so
deposited in the Escrow Account shall equal at least the Minimum Escrow Deposit
(as hereinafter defined), all amounts so deposited in the Escrow
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Account shall not become the property of the Company, or be subject to the debts
of the Company, or any other person.
5. The Escrow Agent shall send a written notice to the Company every
seven days acknowledging the receipt and the amount of the deposited funds from
the Company. The Escrow Agent shall give the Company prompt written notice when
funds deposited in the Escrow Account total $10,000,000. No certificate of
deposit, stock certificates or any other instrument or document representing any
interest in the deposited funds shall be issued by the Escrow Agent.
6. Until funds are paid by the Escrow agent to the Company at the
initial disbursement of the Minimum Escrow Deposit, the Escrow Agent shall
compute the amount of interest earned on funds deposited with the Escrow Agent
upon request by the Company. In the event the Minimum Escrow Deposit is not
reached prior to the termination of this Agreement, the Escrow Agent shall
compute the amount of interest earned on the funds deposited with the Escrow
Agent for each subscriber for Shares based pro rata on the average daily rate
for the number of days that funds received from such subscriber are held in the
Escrow. At the time funds are paid by the Escrow Agent to the Company at the
initial disbursement of the Minimum Escrow Deposit as provided in Section 9, the
Escrow Agent shall report to the Company the amount of interest computed with
respect to all of the escrowed funds. The interest shall be paid to the Company,
together with the payment of funds to the Company, at the initial disbursement
of the Minimum Escrow Deposit or any subsequent disbursement as provided in
Section 9.
If the funds held in the Escrow Account are returned to the purchasers
as provided in Section 10, the Escrow Agent shall pay to each of the purchasers
the amount of interest earned on the funds of each purchaser, computed as
provided in the foregoing paragraph.
7. The Escrow Period is the period beginning on the date of this
Agreement and ending on the earlier of (i) the date the escrow funds are
disbursed pursuant to Sections 9 or 10 of this Agreement or (ii) the Termination
Date. The Termination Date is the date nine (9) months after the date of
effectiveness of the Registration Statement, unless the Termination Date is
extended. The Company may extend the Termination Date for two periods of ninety
(90) days each.
8. Until termination of the Escrow Period as described in Section 7, or
until payment of the Escrow Account proceeds of the Public Offering over to the
Company, purchasers in the Public Offering whose funds are held in the Escrow
Account will be deemed to be only subscribers for Shares, in view of the fact
that no Shares will be issued and distributed to such purchasers until such
Escrow Account proceeds are paid over to the Company at Closings held for that
purpose.
9. At the time (and in the event) that the amount on deposit in the
Escrow Account shall, during the Escrow Period, equal or exceed $10,000,000 in
subscription proceeds (exclusive of interest, hereafter "Minimum Escrow
Deposit"), the Escrow Agent shall, after receiving written approval from the
Company, disburse all the funds on deposit to the Company on its demand. Any
amounts deposited with the Escrow Agent subsequent to attainment of the Minimum
Escrow Deposit shall be disbursed by the Escrow Agent, after receiving written
approval of the Company, to the Company on its demand. Upon the making of the
disbursement
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of the Minimum Escrow Deposit, plus interest, the Escrow Agent shall be
completely discharged and released of any and all further responsibilities
hereunder.
10. If the Escrow Period has ended after the expiration of the
Termination Date and the Minimum Escrow Deposit has not been attained, the
Escrow Agent shall return to each of the purchasers of the Shares in the Public
Offering, as promptly as possible after such termination of the Escrow Period
and on the basis of its records pertaining to the Escrow Account, the sum each
purchaser initially paid on account of purchases of the Shares in the Public
Offering and shall also distribute interest as provided in Section 6 hereof.
Each amount paid or payable to each subscriber or purchaser pursuant to this
section shall be deemed to be the property of each such subscriber or purchaser,
free and clear of any and all claims of the Company, any agents employed by the
Company, or any other person or of any creditors of the Company, any such
agents, or such other persons; and the respective purchases of the Shares made
and entered into in the Public Offering shall thereupon be deemed, IPSO FACTO,
to be canceled without any further liability of the purchasers or any of them to
pay for the Shares purchased. At such time as the Escrow Agent shall have made
the payments and remittances, and given all notices provided for in this
section, the Escrow Agent shall be completely discharged and released of any and
all further liability and responsibilities hereunder.
11. The Company will deliver a copy of the Prospectus to the Escrow
Agent within two weeks of the effective date of the Registration Agreement. The
Escrow Agent will have no responsibility to examine the Prospectus with regard
to the Escrow Account or otherwise.
12. The Escrow Agent shall be compensated as set forth on EXHIBIT A
hereof. The Escrow Agent shall not receive compensation with respect to
Purchasers whose funds are paid directly to the Company after the minimum number
of Shares 1,000,000 is sold. It is understood and agreed that the Escrow Agent
and/or Firstar Investment Research and Management Company, an affiliate of the
Escrow Agent, will receive fees from the Firstar U.S. Treasury Money Market Fund
for their services as investment advisor, custodian, transfer agent and fund
accountant and that Escrow Agent will share in a portion of these fees.
13. The Company does hereby agree to indemnify and hold the Escrow
Agent harmless against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and counsel fees, which
may be imposed upon the Escrow Agent in connection with its acceptance or
appointment hereunder for the performance of its duties, including any
litigation arising from this Escrow Agreement or involving the subject matter
hereof. This Agreement to indemnify and hold harmless, however, shall not
absolve the Escrow Agent in the event of any damages, losses, claims,
liabilities or expenses as herein contemplated in the event they are the result
of the Escrow Agent's own negligence or willful default.
14. Any notices provided for herein, or which any party hereto may
desire to give to any other party, may be given by registered or certified mail,
return receipt requested, postage prepaid, or orally or by telephone if
confirmed in writing, to the respective parties at the respective addresses
stated below:
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TO THE COMPANY: FanZ Enterprises, Inc.
3020-I Prosperity Church Road
Suite 293
Charlotte, NC 28269-7197
Attention: J. Roe Hitchcock
Telephone: (317) 815-1128
TO THE ESCROW AGENT: Firstar Bank, N.A.
Corporate Trust Department
1555 North River Center Dr.
Suite 301
Milwaukee, Wisconsin 53212
Attention: Charles F. Pedersen, Vice President
Telephone: (414) 905-5013
Notices given my mail shall be deemed to have been given when mailed in
accordance herewith.
15. The validity, interpretation and construction of this Agreement and
of each part hereof shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their
signatures as of this 15th day of February 2001.
FANZ ENTERPRISES, INC.
By: /s/ Frederick L. Mcdonald, II
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Frederick L. McDonald, II
President
FIRSTAR BANK, N.A., CORPORATE TRUST
DEPARTMENT, MILWAUKEE WISCONSIN
By: /s/ Charles F. Pedersen
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Charles F. Pedersen,
Vice President
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EXHIBIT A TO FANZ ENTERPRISES, INC. ESCROW AGREEMENT
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Initial one-time fee for appointment $3,000
- includes initial document review and account set-up
through final funds disbursement once funding levels
are met
- does not include reimbursable expenses such
as postage Fed-X or wire transfer charges
should they be incurred by Firstar on your behalf
Checks issued back to the investors $30.00 per check