EXHIBIT 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") dated as of this ______ day of
November, 2000 by and among Twin Lakes, Inc., a Nevada corporation, with an
address at 1700 W. Horizon Ridge Parkway, Suite 101, Henderson, NV 89102 (the
"Corporation"), and Southwest Escrow Company, a financial institution chartered
under the laws of the State of Nevada, with an address at 401 North Buffalo,
Suite 205, Las Vegas, NV 89145 (the "Agent").
W I T N E S S E T H:
WHEREAS, the Corporation is offering, on a "best efforts" basis (the
"Offering"), 600,000 units (the "Units"), each Unit consisting of one share of
common stock, $.001 par value (the "Common Stock"), and one-third Class A
Redeemable Common Stock Purchase Warrant ("Class A Warrants"), whereby the
holder of three (3) Units is entitled to exercise one Class A Warrant to
purchase one share of Common Stock and one Class B Redeemable Stock Purchase
Warrant (the "Class B Warrants" and, together with the Class A Warrants, the
"Warrants") to purchase one share of Common Stock;
WHEREAS, each subscriber in the Offering will enter into a Subscription
Agreement with the Corporation;
WHEREAS, the non-public stockholders of the Corporation have purchased an
aggregate of 3,000,000 shares of Common Stock and 1,000,000 Class A Warrants
(the "Non- Public Stockholders");
WHEREAS, the Corporation is a "blank check" company within the meaning of
Rule 419 ("Rule 419") of the Securities Act of 1933, as amended (the "Act"); and
WHEREAS, Rule 419 provides that:
(a) The securities to be issued and the funds received in the Offering and
from the Non-Public Stockholders be deposited and held in an escrow account
until an acquisition meeting specified criteria is completed;
(b) Before the acquisition can be completed and before the funds and
securities can be released, the Corporation is required to update its
Registration Statement on Form SB-2 first filed on September 13, 2000 with the
Securities and Exchange Commission (the "Registration Statement") with a
post-effective amendment (the "Post-Effective Amendment") and, after the
effective date of the Post-Effective Amendment (the "Effective Date"), the
Corporation is required to furnish the subscribers and the Non-Public
Stockholders with a supplemental prospectus (which forms a part of the
Post-Effective Amendment to the Registration Statement) containing specified
information, including a discussion of the business and the audited financial
statements of the proposed acquisition candidates;
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(c) The subcribers and the Non-Public Stockholders must have no less than
20 and no more than 45 days (the "Option Period") from the Effective Date to
decide whether to remain a subscriber or Non-Public Stockholder or require the
return of their funds ("Optional Investor Termination");
(d) Any subscriber or Non-Public Stockholder not making any decision within
the Option Period is automatically deemed an Optional Investor Termination;
(e) Unless at least 80% in interest of the subscribers and the Non-Public
Stockholders elect to remain subscribers and Non-Public Stockholders, all of the
funds held in escrow by the Agent must be returned to all subscribers and
Non-Public Stockholders and none of the securities will be issued ("Mandatory
Investor Termination"); and
(f) If the Corporation does not complete an acquisition meeting the
specified criteria within 18 months, all of the deposited funds must be returned
to the subscribers and the Non-Public Stockholders ("Company Termination").
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound, the parties hereby agree as follows:
1. Appointment of Agent. The Corporation hereby appoints Southwest Escrow
Company as escrow agent in accordance with the terms and conditions set forth
herein, and the Agent hereby accepts such appointment.
2. Delivery of Subscription Proceeds and Units.
2.1 All checks, drafts, or other instruments received from subscribers
and Non-Public Stockholders for the Units will be delivered by the
Corporation to the Agent, made payable to "Southwest Escrow Company, as
Escrow Agent for Twin Lakes, Inc." or "Twin Lakes, Inc.-Southwest Escrow
Company, as Escrow Agent" together with, as to each subscriber or
Non-Public Stockholder, his name, address, social security number or
employer identification number, number of Units subscribed for or
purchased, and the amount paid in connection with such subscription or
purchase. The Agent is hereby empowered on behalf of the Corporation to
endorse and collect all checks, drafts, wire funds transfers, promissory
notes or other instruments received on account of subscriptions for or
purchase of Units. Upon Agent's confirmation of receipt of funds from the
subscribers and the Non-Public Stockholders, it shall telephonically advise
the Corporation, or the Corporation's designated attorney or agent, of the
amount of funds the Agent has received.
2.2 Upon receipt of each Agent's notice provided for in Section 2.1,
the Corporation shall deliver to the Agent Common Stock certificates and
Warrants representing the proportionate number of Units subscribed for or
purchased by each such subscriber or Non- Public Stockholder.
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3. Agent to Hold and Disburse Funds and/or Units. The Agent will hold in a
special account established for the benefit of the Corporation and disburse all
funds, Common Stock certificates and Warrants received by it pursuant to the
terms of this Agreement, as follows:
3.1 In the event that neither a Mandatory Investor Termination nor a
Company Termination has occurred and the Corporation completes an
acquisition meeting the specified criteria, the Agent will, pursuant to
written instructions signed by the Corporation, pay to the Corporation,
and/or to any other person designated in such instructions, the proceeds
received by the Agent from the sale of such Units available after deducting
the funds returned pursuant to subsection 3.3 and deliver the Units to the
subscribers and the Non-Public Stockholders other than those subscribers
and the Non-Public Stockholders requesting their subscription funds
returned pursuant to subsection 3.3.
3.2 In the event of either a Mandatory Investor Termination or a
Company Termination, as the case may be, the Agent shall, within 15
business days after such date, as the case may be, return to the
subscribers and the Non-Public Stockholders the respective amounts which
such subscribers or Non-Public Stockholders have paid, with interest, and
return the Common Stock certificates and Warrants to the Corporation.
3.3 In the event of an Optional Investor Termination, the Agent will,
pursuant to written instructions signed by such subscriber or Non-Public
Stockholder, return to such subscriber or Non-Public Stockholder the amount
which such subscriber or Non-Public Stockholder paid, with interest and
return a proportionate number of Common Stock certificates and Warrants to
the Corporation.
3.4 All funds received by the Agent pursuant to the terms of this
Agreement may be invested in a bank money market account or invested in
United States Government instruments.
4. Exculpation and Indemnification of Agent.
4.1 The Agent shall have no duties or responsibilities other than
those expressly set forth herein. The Agent shall have no duty to enforce
any obligation of any person to make any payment or delivery, or to direct
or cause any payment or delivery to be made, or to enforce any obligation
of any person to perform any other act. The Agent shall be under no
liability to the other parties hereto or to anyone else by reason of any
failure on the part of any party hereto or any maker, guarantor, endorser
or other signatory of any document or any other person to perform such
person's obligations under any such document. Except for amendments to this
Agreement referred to below, and except for instructions given to the Agent
by the Corporation, the subscribers and the Non-Public Stockholders
relating to the escrow deposit under this Agreement, the Agent shall not be
obligated to recognize any agreement between any and all of the persons
referred to herein, notwithstanding that references thereto may be made
herein and whether or not it has knowledge thereof.
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4.2 The Agent shall not be liable to the Corporation or to anyone else
for any action taken or omitted by it, or any action suffered by it to be
taken or omitted, in good faith and in the exercise of its own best
judgment. The Agent may rely conclusively and shall be protected in acting
upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Agent), statement, instrument, report or
other paper or document (not only as to its due execution and the validity
and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained), which is believed by
the Agent to be genuine and to be signed or presented by the proper person
or persons. The Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement or any of
the terms thereof, unless evidenced by a writing delivered to the Agent
signed by the proper party or parties and, if the duties or rights of the
Agent are affected, unless it shall give its prior written consent thereto.
4.3 The Agent shall not be responsible for the sufficiency or accuracy
of the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon,
or for any description therein; nor shall the Agent be responsible or
liable to the other parties hereto or to anyone else in any respect on
account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any document or property or
this Agreement. The Agent shall have no responsibility with respect to the
use or application of any funds or other property paid or delivered by the
Agent pursuant to the provisions hereof. The Agent shall not be liable to
the Corporation or to anyone else for any loss which may be incurred by
reason of any investment of any monies which it holds hereunder provided
the Agent has complied with the provisions of Section 3 hereunder.
4.4 The Agent shall have the right to assume in the absence of written
notice to the contrary from the proper person or persons that a fact or an
event by reason of which an action would or might be taken by the Agent
does not exist or has not occurred, without incurring liability to the
other parties hereto or to anyone else for any action taken or omitted, or
any action suffered by it to be taken or omitted, in good faith and in the
exercise of its own best judgment, in reliance upon such assumption.
4.5 To the extent that the Agent becomes liable for the payment of
taxes, including withholding taxes, in respect of income derived from the
investment of funds held hereunder or any payment made hereunder, the Agent
may pay such taxes. The Agent may withhold from any payment of monies held
by it hereunder such amount as the Agent estimates to be sufficient to
provide for the payment of such taxes not yet paid, and may use the sum
withheld for that purpose. The Agent shall be indemnified and held harmless
against any liability for taxes and for any penalties or interest in
respect of taxes, on such investment income or payments in the manner
provided in Section 4.6.
4.6 The Agent will be indemnified and held harmless by the
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Corporation from and against any and all expenses, including reasonable
counsel fees and disbursements, or loss suffered by the Agent in connection
with any action, suit or other proceeding involving any claim, or in
connection with any claim or demand, which in any way, directly or
indirectly, arises out of or relates to this Agreement, the services of the
Agent hereunder, the monies or other property held by it hereunder or any
income earned from investment of such monies. The Agent shall have a lien
for the amount of any such expenses or loss on the monies and other
property held by it hereunder and shall be entitled to reimburse itself
from such monies or property for the amount of any such expense or loss.
Promptly after the receipt by the Agent or notice of any demand or claim or
the commencement of any action, suit or proceeding, the Agent shall, if a
claim in respect thereof is to be made against the Corporation, notify the
Corporation thereof in writing, but the failure by the Agent to give such
notice shall not relieve the Corporation from any liability which the
Corporation may have to the Agent hereunder. Notwithstanding any obligation
to make payments and deliveries hereunder, the Agent may retain and hold
for such time as it deems necessary such amount of monies or property as it
shall, from time to time, in its sole discretion, deem sufficient to
indemnify itself for any such loss or expense and for any amounts due it
under Section 7.
4.7 For the purposes hereof, the term "expense or loss" shall include
all amounts paid or payable to satisfy any claim, demand or liability, or
in settlement of any claim, demand, action, suit or proceeding settled with
the express written consent of the Agent, and all costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements,
paid or incurred in investigating or defending against any such claim,
demand, action, suit or proceeding.
5. Termination of Agreement and Resignation of Agent.
5.1 This Agreement shall terminate on the final disposition of the
monies and property held in escrow hereunder, provided that the rights of
the Agent and the obligations of the other parties hereto under Sections 4
and 7 shall survive the termination hereof.
5.2 The Agent may resign at any time and be discharged from its duties
as Agent hereunder by giving the Corporation, the subscribers and the
Non-Public Stockholders at least 30 days' notice thereof. As soon as
practicable after its resignation, the Agent shall turn over to a successor
escrow agent appointed by the Corporation all monies and property held
hereunder (less such amount as the Agent is entitled to retain pursuant to
Section 7) upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new Agent is so appointed within
the 60-day period following such notice of resignation, the Agent may
deposit the aforesaid monies and property with any court it deems
appropriate.
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6. Form of Payments by Agent.
6.1 Any payments by the Agent to subscribers, the Non-Public
Stockholders or to persons other than the Corporation pursuant to the terms
of this Agreement shall be made by check, payable to the order of each
respective subscriber or other person.
6.2 All amounts referred to herein are expressed in United States
Dollars and all payments by the Agent shall be made in such dollars.
7. Compensation of Agent. For services rendered, the Agent shall receive
$_________ as compensation. The Agent shall also be entitled to reimbursement
from the Corporation for all expenses paid or incurred by it in the
administration of its duties hereunder, including, but not limited to, all
counsel, advisors' and Agents' fees and disbursements and all reasonable taxes
or other governmental charges. It is anticipated that such disbursement shall
not exceed $________ barring any unforeseen circumstances.
8. Notices. All notices, requests, demands and other communications
provided for herein shall be in writing, shall be delivered by hand or by
first-class mail, shall be deemed given when received and shall be addressed to
the parties hereto at their respective addresses listed below or to such other
persons or addresses as the relevant party shall designate as to itself from
time to time in writing delivered in like manner.
if to the Corporation:
Twin Lakes, Inc.
1700 W. Horizon Ridge Parkway
Henderson, NV 89102
Attention: Johnny R. Thomas, Chief Executive Officer
Tel. # (702) 614-1750
Fax # (702) 614-1790
with a copy to:
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Attention: Elliot Lutzker
Tel. # (212) 687-3860
Fax # (212) 949-7052
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if to the Agent:
Southwest Escrow Company
401 North Buffalo, Suite 205
Las Vegas, NV 89145
Attention: Mr. Dale Puhl
Tel. # (702) 838-0300
Fax # (702) ________
9. Further Assurances: From time to time on and after the date hereof, the
Corporation shall deliver or cause to be delivered to the Agent such further
documents and instruments and shall do and cause to be done such further acts as
the Agent shall reasonably request (it being understood that the Agent shall
have no obligation to make any such request) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure itself that it is protected in acting hereunder.
10. Consent to Service of Process. The Corporation hereby irrevocably
consents to the jurisdiction of the courts of the State of Nevada and of any
federal court located in such State in connection with any action, suit or other
proceeding arising out of or relating to this Agreement or any action taken or
omitted hereunder, and waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made by certified or
registered mail directed to the Corporation at its address for purposes of
notices hereunder.
11. Miscellaneous.
11.1 If for any reason the escrow deposit is not received by the Agent
as contemplated herein, the Corporation shall reimburse the Agent for all
expenses, including reasonable counsel fees and disbursements, paid or
incurred by it in making preparations for providing the services
contemplated hereby.
11.2 This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing
such instrument to be drafted. The terms "hereby", "hereof", "hereto",
"hereunder" and any similar terms, as used in this Agreement, refer to the
Agreement in its entirety and not only to the particular portion of this
Agreement where the term is used. The word "person" shall mean any natural
person, partnership, Corporation, government and any other form of business
or legal entity. All words or terms used in this Agreement, regardless of
the number or gender in which they are used, shall be deemed to include any
other number and any other gender as the context may require. This
Agreement shall not be admissible in evidence to construe the provisions of
any prior agreement. The rule of ejusdem generis shall not be applicable
herein to limit a general statement, which is followed by or referable to
an enumeration of specific matters, to matters similar to the matters
specifically mentioned.
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11.3 This Agreement and the rights and obligations hereunder of the
Corporation may be assigned by the Corporation only to a successor to the
Corporation's entire business. This Agreement and the rights and
obligations hereunder of the Agent may be assigned by the Agent only to a
successor to its entire business. This Agreement shall be binding upon and
inure to the benefit of each party's respective successors, heirs and
permitted assigns. No other person shall acquire or have any rights under
or by virtue of this Agreement. This Agreement may not be changed orally or
modified, amended or supplemented without an express written agreement
executed by the Agent and the Corporation. This Agreement is intended to be
for the sole benefit of the parties hereto, and (subject to the provisions
of this Section 11.3) their respective successors, heirs and assigns, and
none of the provisions of this Agreement are intended to be, nor shall they
be construed to be, for the benefit of any third person.
11.4 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Nevada. The representations and
warranties contained in this Agreement shall survive the execution and
delivery hereof and any investigations made by any party. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect any of the terms hereof.
12. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signature of all of the parties reflected hereon as the signatures.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the day and year first above written.
SOUTHWEST ESCROW COMPANY
By: /s/ Dale E. Puhl
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Name: Dale E. Puhl
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Title: President
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TWIN LAKES, INC.
By: /s/ Johnny R. Thomas
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Name: Johnny R. Thomas
Title: Chief Executive Officer
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