EXHIBIT 10.23
CAN-CAL RESOURCES, LTD.
MAY DAVIS GROUP, INC.
ESCROW AGREEMENT
WITH
FIRST UNION NATIONAL BANK
This Agreement is made and entered into as of October __, 2001 by and among
CAN-CAL RESOURCES, LTD. (the "Company"), a Nevada corporation, MAY DAVIS GROUP,
INC. (the "Placement Agent"), a Maryland corporation, and FIRST UNION NATIONAL
BANK, a national banking association with a principal New York corporate trust
office at First Union National Bank, Corporate Trust Group, 21 South Street, 3rd
Floor, Morristown, New Jersey 07960 (the "Escrow Agent").
WHEREAS, the Company proposes to offer for sale to several investors
through the Placement Agent up to $8,000,000 of the Common Stock of the Company.
The Common Stock is being offered through the Placement Agent pursuant to the
terms of an Investment Agreement (the "Investment Agreement") being entered into
between the Company and one or more investors.
WHEREAS, all such investments will be made in reliance upon registration
under the Securities Act of 1933, as may be amended.
WHEREAS, the offering of Common Stock under the Investment Agreement will
terminate at the close of business thirty-six (36) calendar months after the
date the registration statement covering the Common Stock is declared effective
(the "Termination Date").
WHEREAS, with respect to all investment payments for the Common Stock
received from investors, the Company proposes to establish a single escrow
account with the Escrow Agent at the office of its Corporate Trust Department,
Corporate Trust Group, 21 South Street, 3rd Floor, Morristown, New Jersey 07960.
WHEREAS, the Company and the Placement Agent desire to establish an escrow
account ("Escrow Fund Account") in which those funds received from investors of
the Common Stock (the "Subscribers") will be deposited pending receipt of the
number of shares of Common Stock being purchased. The Escrow Agent agrees to
serve as escrow agent in accordance with the terms and conditions set forth
herein.
NOW THEREFORE, the parties hereto agree as follows:
1. The Escrow Agent shall hold the Escrow Fund Account subject to the terms
of this Escrow Agreement and shall act in accordance with the instructions
contained in this Escrow Agreement.
2. Upon the written instructions of the Placement Agent and the Company,
the Escrow Agent shall deliver all or a part of the funds in the Escrow Fund
Account and any Common Stock it may receive as Escrow Agent, at such times and
in such manner as shall be set forth in such written instructions.
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3. Unless otherwise instructed by the Placement Agent, any cash balances
held under this Escrow Agreement shall be invested in the Evergreen Cash
Management Treasury Money Market Fund # 765. All income earned from the Escrow
Fund Account shall be retained by the Escrow Agent and disbursed for any fees,
expenses or other amounts due to the Escrow Agent.
4. This Escrow Agreement shall terminate upon the final distribution of all
amounts in the Escrow Account and any income earned thereon, unless terminated
sooner by the written instructions of the Company and Placement Agent.
5. (a) The Escrow Agent shall not in any way be bound or affected by any
notice of modification or cancellation of this Escrow Agreement unless in
writing signed by the Company and the Placement Agent, nor shall the Escrow
Agent be bound by any modification hereof unless the same shall be satisfactory
to it. The Escrow Agent shall be entitled to rely upon any notice,
certification, demand or other writing delivered to it hereunder by the Company
and/or the Placement Agent without being required to determine the authenticity
or the correctness of any facts stated therein, the propriety or validity of the
service thereof, or the jurisdiction of the court issuing any judgment.
(b) The Escrow Agent may act in reliance upon any signature believed by
it to be genuine, and may assume that any person purporting to give any notice
or receipt, or make any statements in connection with the provisions hereof has
been duly authorized to do so.
(c) The Escrow Agent may act relative hereto in reliance upon advice of
counsel in reference to any matter connected herewith, and shall not be liable
for any mistake of fact or error or judgment, or for any acts or omissions of
any kind, unless caused by its willful misconduct or gross negligence.
(d) The Escrow Agent may resign and be discharged of its duties as
Escrow Agent hereunder by giving ten (10) days written notice to the Company and
the Placement Agent. Such resignation shall take effect ten (10) days after the
giving of such notice, or upon receipt by the Escrow Agent of an instrument of
acceptance executed by a successor escrow agent and upon delivery by the Escrow
Agent to such successor of all of the escrowed documents and funds or securities
then held by it. If no successor escrow agent is appointed in writing ten (10)
days after giving such notice, the Escrow Agent shall deliver all funds in the
Escrow Account to the Company.
(e) The Company and the Placement Agent hereby agree to jointly and
severally, indemnify and hold the Escrow Agent harmless from any loss, liability
or expense, arising out of or related to this Escrow Agreement, and for all
costs and expenses, including the fees and expenses of counsel, incurred in
connection with this Escrow Agreement. The provisions of this paragraph shall
survive the termination of this Agreement.
(f) The duties and obligations of the Escrow Agent shall be determined
solely by the express provisions of this Agreement and the Escrow Agent shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Escrow Agreement. The Escrow Agent shall have no
liability or duty to inquire into the terms and conditions of any agreement to
which it is not a party.
(g) If a controversy arises between one or more of the parties hereto,
or between any of the parties hereto and any person not a party hereto, as to
whether or not or to whom the Agent shall deliver the Escrow Account or any
portion thereof or as to any other matter arising out of or relating to this
Agreement or the Escrow Account deposited hereunder, the Escrow Agent shall not
be required to determine same and need not make any delivery of the funds in the
Escrow Account or any portion thereof but may
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retain such funds until the rights of the parties to the dispute shall have
finally been determined by agreement or by final order of court of competent
jurisdiction, provided, however, that the time of appeal of any such final order
has expired without an appeal having been made. The Escrow Agent shall deliver
the Escrow Account or any portion thereof within 15 days after the Escrow Agent
has received written notice of any such agreement or final order (accompanied by
an affidavit that the time for appeal has expired without an appeal having been
made). The Escrow Agent shall be entitled to assume that no such controversy has
arisen unless it has received a written notice that such a controversy has
arisen which refers specifically to this Agreement and identifies by name and
address the adverse claimants to the controversy. If a controversy of the type
referred to in this paragraph arises, the Escrow Agent may, in its sole
discretion but shall not be obligated to, commence interpleader or similar
actions or proceedings for determination of the controversy.
(h) The Escrow Agent shall not be required to institute or defend any
action (including interpleader) or legal process involving any matter referred
to herein which in any manner affects it or its duties or liabilities hereunder.
In the event the Escrow Agent shall institute or defend any such action or legal
process, it shall do so only upon receiving full indemnity in an amount and of
such character as it shall require, against any and all claims liabilities,
judgments, attorney's fees and other expenses of every kind in relation thereto,
except in the case of its own willful misconduct or gross negligence.
(i) In the event that the Escrow Agent receives or becomes aware of
conflicting demands or claims with respect to any funds, securities, property or
documents deposited or delivered in connection herewith, or the parties disagree
about the interpretation of this Agreement, or about the rights and obligations,
or the propriety, of any action contemplated by the Escrow Agent hereunder, or
if the Escrow Agent otherwise has any doubts as to the proper disposition of
funds or the execution of any of its duties hereunder, the Escrow Agent shall
have the right to discontinue any or all further acts on its part until such
conflict, disagreement or doubt is resolved to its satisfaction. In addition,
the Escrow Agent may, in its sole discretion, file an action in interpleader in
any court of competent jurisdiction to resolve the dispute or uncertainty. The
Placement Agent and the Company agree, jointly and severally, to indemnify the
Escrow Agent and hold it harmless from and against all costs, including
reasonable attorney's fees and expenses incurred by it in connection with such
action. In the event that the Escrow Agent files an action in interpleader, it
shall thereupon be fully released and discharged from all further obligations to
perform any and all duties or obligations imposed upon it by this Agreement,
other than safekeeping of the assets in the Escrow Account, if not paid into
Court.
6. Any notice, direction, request, instruction, legal process, or other
instrument to be given or served hereunder by any party to another shall be in
writing, shall be delivered personally or sent by certified mail, return receipt
requested, to the respective party or parties at the following addresses, and
shall be deemed to have been given when received.
IF TO THE COMPANY,
CAN-CAL Resources, Ltd.
8221 Cretan Blue Lane
Las Vegas, NV 89128
Attention: Ronald D. Sloan, President
Telephone: 702-240-6565
Facsimile: 702-243-1869
Tax ID# 88-0336988
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WITH A COPY TO,
The Law Office of Stephen E. Rounds
4635 East Eighteenth Avenue
Denver, Colorado USA 80220
Attention: Stephen E. Rounds, Esq.
Telephone: 303-377-6997
Facsimile: 303-377-0231
IF TO THE PLACEMENT AGENT,
Hunter Singer
May Davis Group, Inc.
Tel.:
Fax:
Tax ID#
WITH A COPY TO,
Joseph B. LaRocco, Esq.
49 Locust Avenue, Suite 107
New Canaan, CT 06840
Tel.: 203-966-0566
Fax: 203-966-0363
IF TO THE ESCROW AGENT:
First Union National Bank
Corporate Trust Group
21 South Street, 3rd Floor
Morristown, New Jersey 07960
Tel: (973) 898-7163
Fax: (973) 682-4531
Any party may change its or his address by written notice to each of the
other parties.
7. The Escrow Agent's fee for acting under this Escrow Agreement shall be
set forth in Schedule A attached hereto. The Escrow Agent's fees and expenses,
including counsel fees, shall be paid by the Company. The Escrow Agent is hereby
given a first priority lien on the Escrow Fund to protect, indemnify and
reimburse itself for all fees, costs, expenses and liabilities arising out of
this Escrow Agreement and the performance of its duties hereunder.
8. This Escrow Agreement shall be binding upon the parties hereto and the
Escrow Agent, and their respective successors, legal representatives and
assigns.
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CAN-CAL RESOURCES, LTD. MAY DAVIS GROUP, INC.
By: __________________________ By: _____________________________________
FIRST UNION NATIONAL BANK
ESCROW AGENT
Date: ________________________ By: _____________________________________
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FIRST UNION NATIONAL BANK
SCHEDULE A
I. INITIAL SET-UP FEE $ 500
II. ADMINISTRATION FEE $1,500
-up to 10 Subscribers/Holders,
thereafter, $50.00 per Subscriber/Holder
III. PER CLOSING FEE $
-for each closing after the first closing-,
$ 500 per closing.
The above-mentioned fees are basic charges and do not include out-of-pocket
expenses, which will be billed in addition to the regular charges as required.
Out-of-pocket expenses shall include, but are not limited to: telephone tolls,
stationery and postage expenses.
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FIRST UNION NATIONAL BANK
CORPORATE TRUST GROUP
21 SOUTH STREET, 3RD FLOOR
MORRISTOWN, NEW JERSEY 07960
(973) 898-7163 TELEPHONE
(973) 682-4531 FACSIMILE
Wiring Instructions US Mail/Overnight Courier
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FIRST UNION NATIONAL BANK FIRST UNION NATIONAL BANK
Charlotte NC Corporate Trust Department
ABA# 053 000 219 21 South Street, 3rd Floor
Credit a/c Morristown, New Jersey 07960
FFC:
Attn:
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