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Security Escrow Agreement SEA - New Mexico
| Security Escrow Agreement Form. This is a New Mexico form and can be used in Securities Blue Sky Public Regulation Commission . |
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(Rev. 01/10) SECURITY ESCROW AGREEMENT THIS ESCROW AGREEMENT made and entered into this _____ day of __________________, ______, among the persons and parties who have signed this Agreement as security holders (hereinafter collectively referred to as the "Security Holders"), the Issuer, _________________________________ the Escrow Agent, _______________________________________, and the Director of the New Mexico Securities Division (hereinafter "the Director"). WITNESSETH THAT: A. Each of the Security Holders is the owner of the number of shares of common stock of the Issuer or possesses conversion rights, warrants or options to acquire shares of stock of the Issuer listed opposite his or her name on the Exhibit A attached hereto. B. The Issuer has applied to the Director for registration of __________ shares of _____________ stock (warrants) (options) (units) for sale to the residents of New Mexico, and elsewhere. As a condition of registration the Security Holders, the Escrow Agent, the Issuer and the Director agree to be bound by this Agreement and the applicable Rules of the Director pertaining to such agreements. C. Each of the Security Holders has deposited the securities listed opposite his or her name or documents evidencing the right to acquire the securities on Exhibit A with the Escrow Agent, and the Escrow Agent hereby acknowledges receipt thereof. The securities are herein collectively referred to as "Escrowed Stock" or "Shares". NOW THEREFORE, the persons and parties hereto agree as follows: 1. DEPOSIT OF CERTIFICATES. Simultaneously with the execution of this Agreement, the Security Holder is depositing with the Escrow Agent and the Escrow Agent hereby acknowledges receipt of the certificates and documents listed on Exhibit A, representing, convertible into, exercisable for, _________ Shares of stock of the Issuer. At the written request of the Issuer, the Escrow Agent shall make available to the Issuer and any affected Security Holder, such documents as are necessary to exercise the foregoing rights. 2. TERM. The term of this Agreement and of the escrow provided herein shall commence on the date that the offering is declared effective by the Director. The certificates evidencing the securities are to be deposited with the Escrow Agent and are to be held pursuant hereto, for a period of three years, unless released earlier in accordance with the terms of this Agreement. 3. RELEASE OF SHARES. One hundred (100%) percent of the shares shall be released from escrow to Security Holders at the earliest of the following: a. The issuer's aggregate revenues are $500,000 or more, provided that neither the auditor's report nor any foot notes to the issuer's latest audited financial statement contains an opinion or statement regarding the ability of the issuer to continue as a going concern. Beginning one year from the date the offering is declared effective, two and one-half (2½%) percent of promotional shares may be released per quarter pro rata among the Security Holders. All remaining promotional shares shall be released from escrow on the second anniversary from the date the offering is declared effective; or, The issuer's aggregate revenues are $500,000 or less. Beginning two years from the date the offering is declared effective, two and one-half (2½%) percent of promotional shares held in escrow may be released each quarter pro rata among the Security b. American LegalNet, Inc. www.FormsWorkFlow.com Holders. All remaining promotional shares shall be released from escrow on the third anniversary from the date the offering is declared effective. c. The Escrowed Stock becomes a "federal covered security", as that term is defined in Section 58-13B-2G of the New Mexico Securities Act of 1986. 4. DOCUMENTATION TO ESCROW AGENT REGARDING RELEASE. A request for termination of the escrow shall be forwarded to the Escrow Agent. A request for termination of the escrow based upon paragraph 3a, above, shall be accompanied by an aggregate revenue calculation audited and reported on by an independent certified public accountant. 5. TERMINATED OR PARTIAL OFFERING. The foregoing notwithstanding, the Shares will be released by the Escrow Agent if: a. The public offering has been terminated, and no securities were sold pursuant thereto; or b. The public offering has been terminated, and all of the gross proceeds that were derived therefrom have been returned to the public investors. 6. RESTRICTION ON TRANSFER. The Escrowed Stock may be transferred by will, or pursuant to the laws of descent and distribution, operation of law, or any court of competent jurisdiction and proper venue or through appropriate legal proceedings, but in all cases the Shares shall remain in escrow and subject to the terms of this Agreement until released pursuant to paragraph 3, above. The Shares in escrow may be transferred by gift to family members, provided that the Shares shall remain subject to the terms of this Agreement. Promotional Shares, any interest therein, or any right or title thereto, may not be transferred other than as provided in this paragraph. Upon the death of the Security Holder of any Escrowed Stock, the Escrowed Stock of the deceased Security Holder may be hypothecated subject to all of the terms of this Agreement, to the extent necessary to pay the expenses of the Depositor's estate. Other than provided in this paragraph, Promotional Shares may not be pledged to secure a debt. Promotional Shares, any interest therein or any right or title thereto, may not be transferred, sold or disposed of other than as specified above until the Escrow Agent has received a written statement signed by the proposed transferee which states that the transferee has full knowledge of the terms of the Agreement, the transferee accepts the Promotional Shares subject to the terms of the Agreement and the transferee realizes that the Promotional Shares shall remain in escrow until they are released pursuant to paragraph 3, above. 7. VOTING POWER. The Escrowed Shares shall have all voting rights to which the non-escrowed shares are entitled. 8. DIVIDENDS. Any dividends paid on the Shares shall be paid to the Escrow Agent by checks of the Issuer made payable to the Escrow Agent with a notation of this Agreement thereon and any such dividends shall be held pursuant to the terms of this Agreement. The Escrow Agent shall treat such dividends as assets of the Issuer, available for distribution under the terms of Parag
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