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Promotional Shares Escrow Agreement Form. This is a Florida form and can be use in Blue Sky Secretary Of State.
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Tags: Promotional Shares Escrow Agreement, OFR-S-14-97, Florida Secretary Of State, Blue Sky
STATE OF FLORIDA
OFFICE OF FINANCIAL REGULATION
PROMOTIONAL SHARES ESCROW AGREEMENT
This Promotional Shares Escrow Agreement (“Agreement”), which was entered into on the ______ day of
_________________, _____, by and between ________________________ (“Issuer”), whose principal place of
business is located in ________________________, and _____________, ____________, ____________,
_____________, (the “Depositors”); and __________________________, (the “Escrow Agent”), whose principal
place of business is located in ______________________, and which is domiciled in ____________________;
(all of whom are herein collectively referred to as “Signatories”), witnesses that:
A. The Issuer has filed an application with the Office of Financial Regulation to register certain of its Equity
Securities for sale to public investors who are residents of that state;
B. The Depositors are the owners of the shares of common stock or similar securities and/or possess
convertible securities, warrants, options or rights which may be converted into, or exercised to purchase
shares of common stock or similar securities (“Equity Securities”) listed opposite their name on Exhibit A ;
C. As a condition to register the Issuer’s Equity Securities, the Depositors, who are security holders of the Issuer
and who, for the purpose of this Agreement, are deemed to be Promoters of the Issuer, have agreed to
deposit the Equity Securities listed opposite their names on Exhibit A (“Promotional Shares”), which is
attached hereto and made part hereof, with the Escrow Agent; and
The Signatories have agreed to be bound by the terms of this agreement.
THEREFORE, the Signatories agree as follows:
1. DEPOSIT OF PROMOTIONAL SHARES. The Depositors’ Promotional Shares have been deposited into an
Escrow Account (“Escrow”) with the Escrow Agent, and the Escrow Agent hereby acknowledges the receipt
thereof.
2. EXERCISE OR CONVERSION OF PROMOTIONAL SHARES. If the Promotional Shares have exercise
rights or conversion rights, the Escrow Agent shall, upon receipt of the Issuer’s written request, provide the
documents that evidence and/or which are necessary to execute the exercise rights or conversion rights. The
exercised or converted Promotional Shares shall remain in escrow subject to the terms of this Agreement.
3. TERM. The term of this agreement and the escrow shall begin on the date that the public securities offering
related thereto (‘public offering”) is declared effective by the Office. The Promotional Shares shall be held by
the Escrow Agent until they are released in accordance with paragraph 4., below.
4. RELEASE OF PROMOTIONAL SHARES.
a. Subject to the documentation requirements in paragraph 5., below, the Escrow Agent shall release the
Promotional Shares in the following manner.
(1) When the Issuer has submitted financial statements prepared in accordance with Rule 3E-300.002(6)
evidencing that the Issuer has net earnings, after tax and before extraordinary items, based on the
shares to be outstanding after a successful completion of the offering of five percent (5%) of the
public offering price for two (2) consecutive fiscal years, or ten percent (10%) for one (1) fiscal year,
FOLLOWING THE PUBLIC OFFERING.
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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(a) The maximum length of time for shares escrowed shall be five (5) years from the date on
completion of the offering at which time the Escrow Agreement shall automatically be terminated
and the shares released.
b. In the event of a dissolution, liquidation, merger, consolidation, reorganization, sale or exchange of the
Issuer’s assets or securities (including by way of tender offer), or any other transaction or proceeding with
a person who is not a Promoter, which results in the distribution of the Issuer’s assets or securities
(“Distribution”), while this Agreement remains in effect, the Depositors agree that:
(1) All holders of the Issuer’s Equity Securities will initially share on a pro rata, per share basis in the
Distribution, in proportion to the amount of cash or other consideration that they paid per share for
their Equity Securities, until the shareholders who purchased the Issuer’s Equity Securities pursuant
to the public offering (“Public Shareholders”) have received, or have had irrevocably set aside for
them, an amount that is equal to one hundred percent (100%) of the public offering’s price per share
times the number of shares of Equity Securities that they purchased pursuant to the public offering
and which they still hold at the time of the Distribution, adjusted for stock splits, stock dividends,
recapitalizations and the like; and
(2) All holders of the Issuer’s Equity Securities shall there after participate on an equal, per share basis
times the number of shares of Equity Securities they hold at the time of the Distribution, adjusted for
stock splits, stock dividends, recapitalizations and the like.
c.
The Distribution may proceed on lesser terms and conditions that the terms and conditions stated
in paragraph 4.b., above, if a majority of the Equity Securities that are not held by Depositors, officers,
directors or Promoters of the Issuer, or their associates or affiliates vote, or consent by consent
procedure, to approve the lesser terms and conditions.
d. In the event of a dissolution, liquidation, merger, consolidation, reorganization, sale or exchange of the
Issuer’s assets or securities (including by way of a tender offer), or any other transaction or proceeding
with a person who is a Promoter, which results in a Distribution while this Agreement remains in effect,
the Depositor’s Promotional Shares shall remain in escrow subject to the terms of this Agreement.
e. In the event securities in the escrow become “Covered Securities,” as defined by the National Securities
Markets Improvement Act of 1996, all securities held in escrow shall be released.
5. DOCUMENTATION REGARDING THE RELEASE OF PROMOTIONAL SHARES.
a. A written request for release of the Promotional Shares (“request for release”), based upon paragraph 4.,
above, shall be forwarded to the Escrow Agent.
(1) A request for release based upon paragraph 4., above, shall be accompanied by a certification from
the underwriter (if applicable) and the Issuer’s Chief Executive Officer or Chief Financial Officer which
states that the public offering has terminated and that the conditions of paragraph 4., above, have
been met.
6. RESTRICTION ON THE TRANSFER, SALE OR DISPOSAL OF PROMOTIONAL SHARES. While this
Agreement is in effect, no Promotional Shares, any interest therein or any right to title thereto, may be sold,
transferred, hypothecated or otherwise disposed of (“transfer” or “transferred”), except as noted below, and
the Escrow Agent shall not recognize any transfer that violates the terms of this Agreement. The Promotional
Shares may not be transferred until the Escrow Agent has received a written statement, signed by the
proposed transferee (“transferee”), which states that the transferee has full knowledge of the terms of this
Agreement, and the transferee realizes that the Promotional Shares shall remain subject to the terms of the
Agreement until they are released pursuant to paragraph 4., above.
a. Promotional Shares may be transferred by will, the laws of descent and distribution, the operation of law,
or by order of any court of competent jurisdiction and proper venue.
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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b. Promotional Shares of a deceased Depositor may be hypothecated to pay the expenses of the deceased
Depositor’s estate. The hypothecated Promotional Shares shall remain subject to the terms of this
Agreement. Promotional Shares in accordance with the Depositors’ written instructions.
7. VOTING POWER. With the exception of paragraphs 4.b. and c., above, the Promotional Shares shall have
the same voting rights as similar, non-escrowed Equity Securities. If the Promotional Shares are registered in
the Escrow Agent’s name, the Escrow Agent shall vote those Promotional Shares in accordance with the
Depositors’ written instructions.
8. DIVIDENDS, STOCK SPLITS AND RECAPITALIZATIONS. All certificates representing stock dividends and
shares resulting from stock splits of escrowed shares, recapitalizations and the like, that are granted to or
received by Depositors while their Promotional Shares are held in escrow shall be deposited with and held by
the Escrow Agent subject to the Terms of this Agreement. Any cash dividends that are granted to or received
by the Depositors while their Promotional Shares are held in escrow, shall be promptly deposited with and
held by the Escrow Agent subject to the terms of this Agreement unless such cash dividends are approved by
a majority of the independent directors of the Issuer. The Escrow Agent shall invest cash dividends as
directed by the Depositors.
9. ADDITIONAL SHARES. With respect to Equity Securities received by the Depositors as the result of the
conversion of the Depositor’s convertible securities and/or the exercise of Depositors’ options, warrants or
rights, while their Promotional Shares are held in escrow, shall be promptly deposited with the Escrow Agent
as Promotional Shares subject to the terms of this Agreement. These Promotional Shares shall be
distributed to the Depositors when their Promotional Shares are released from escrow pursuant to paragraph
4., above.
10. RELIANCE BY ESCROW AGENT. The Escrow Agent shall be protected if it acts in good faith upon any
statement, certificate, notice, request, consent, order or other document which it believes to be genuine,
conforms with the provisions of the Agreement and is signed by the proper party. The Escrow Agent’s sole
responsibility shall be to act in accordance with the terms expressly set forth in this Agreement. The Escrow
Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this
Agreement unless it receives reasonable indemnification and advancement fees and costs. The Escrow
Agent shall not be liable for any action taken or omitted, in good faith, upon the advice of counsel. In
performing its duties hereunder, the Escrow Agent shall not be liable to anyone for any damage, loss,
expense or liability other than for that which arises from the Escrow Agent’s failure to abide by the terms of
this Agreement.
11. ESCROW AGENT’S COMPENSATION. The Escrow Agent shall be entitled to receive reasonable
compensation from the Issuer for its services as set forth in Exhibit B, which is attached hereto and made part
hereof. If the Escrow Agent is required to render additional services that are not expressly set forth therein,
or if it is made a party to or intervenes in any action, suit or proceedings pertaining to this Agreement
(“Additional Services”), it shall be entitled to receive reasonable compensation from the Issuer and the
Depositors. If Additional Services are provided, the Escrow Agent, after giving written notice to the
Depositors and the Issuer, may deduct reasonable compensation from the cash dividends, interest and
proceeds being held for distribution pursuant to paragraphs 4.b., c. and d., or 8., above.
12. ESCROW AGENT’S INDEMNIFICATION. The Issuer and the Depositors agree to hold the Escrow Agent
harmless from, and indemnify the Escrow Agent for, any cost or liability regarding any administrative
proceeding, investigation, litigation, interpretation, implementation or interpleading relating to this Agreement,
including the release of Promotional Shares, the Distribution, and the disbursement of dividends, interest or
proceeds, unless the cost or liability arises from the Escrow Agent’s failure to abide by the terms of this
Agreement.
13. INDEPENDENCE OF THE ESCROW AGENT. The Issuer hereby represents that all of its officers, directors
and Promoters are listed on Exhibit C, which is attached hereto and made a part hereof. The Escrow Agent
hereby represents that it is not affiliated with the Issuer, the Depositors, or the Issuer’s officers, directors or
Promoters who are named in Exhibit A or Exhibit C.
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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14. SCOPE. This Agreement shall inure to the benefit of and be binding upon the Depositors, their heirs and
assignees, and upon the Issuer, Escrow Agent and their successors.
15. SUBSTITUTE ESCROW AGENT. The Escrow Agent may, upon not less than sixty (60) days prior written
notice to the Issuer, Depositors, and the Office, resign as the Escrow Agent. The Issuer and the Depositors
shall, before the effective date of the Escrow Agent'’ resignation, enter into a new identical Escrow Agreement
with a substitute Escrow Agent. The successor Escrow Agent must be satisfactory to the Office. If the Issuer
and the Depositors fail to enter into a new Escrow Agreement and appoint a successor Escrow Agent within
sixty (60) days after the Escrow Agent has given notice of its resignation, the Escrow Agent serving under
this Agreement shall retain the Promotional Shares in escrow until a new, identical Escrow Agreement has
been executed and a successor Escrow Agent has been appointed. The Escrow Agent shall not be liable for
retaining the Promotional Shares in escrow for a reasonable time to determine the proper disposition of those
shares.
16. TERMINATION. Except for the compensation and indemnification provisions of paragraphs 11. And 12.,
above, which shall survive until they are satisfied, this Agreement shall terminate in its entirety when all of the
Promotional Shares have been released, or the Issuer’s Equity Securities and/or assets have been
distributed pursuant to paragraph 4., above.
17. Pursuant to the requirements of this Agreement, the Signatories have entered into this Agreement, which may
be written in multiple counterparts and each of which shall be considered an original. The Signatories have
signed the Agreement in the capacities, and on the dates, indicated.
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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IN WITNESS WHEREOF, the Signatories have executed this Agreement.
______________________________
(Print or type the Depositors’ name)
______________________________
(Signature)
_________________________
(Date)
______________________________
(Print or type the Depositor’s name)
______________________________
(Signature)
__________________________
(Date)
______________________________
(Print or type the Depositor’s name)
______________________________
(Signature)
__________________________
(Date)
ISSUER
By ___________________________
President
__________________________
(Date)
By ___________________________
Secretary
__________________________
(Date)
ESCROW AGENT
_______________________________
(Name)
By ____________________________
__________________________
(Date)
Title:___________________________
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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EXHIBIT A
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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EXHIBIT B
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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EXHIBIT C
OFR-S-14-97, Promotional Shares Escrow Agreement, Effective 11/22/10, Incorporated by Reference in
Rule 69W-301.002, F.A.C.
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