[FORM AGREEMENT]
Escrow Services Agreement
This
Escrow Services Agreement (this “Agreement”) is made
and entered into as of January 25, 2018 by and between Prime Trust,
LLC (“Prime Trust” or “Escrow Agent”) and
Bitzumi Inc. (“Issuer”) for its offering known as
“Bitzumi”.
Recitals
WHEREAS,
Issuer proposes to offer for sale to investors as disclosed in its
offering materials, securities pursuant to Regulation A+
promulgated by the SEC as modified by final rules adopted per Title
IV of the Jumpstart Our Business Startups (JOBs) Act or other
federal or state exemption from registration, either directly
(“issuer-direct”) and/or through one or more registered
broker-dealers as a selling group (“Syndicate”), the
equity and/or debt securities of Issuer (the
“Securities”) in the amount of at least $1,000,000.00
(the “Minimum Amount of the Offering”) up to the
maximum amount of $10,000,000.00 (the “Maximum Amount of the
Offering”).
WHEREAS,
Issuer desires to establish an Escrow Account in which funds
received from prospective investors (“Subscribers”)
will be held during the Offering, subject to the terms and
conditions of this Agreement. Prime Trust agrees to serve as Escrow
Agent (“Escrow Agent”) for the Subscribers with respect
to such Escrow Account in accordance with the terms and conditions
set forth herein. This includes, without limitation, that the
Escrow Account will be held at an FDIC member bank in a separately
named (as defined below) account. For purposes of communications
and directives, Escrow Agent shall be the sole administrator of the
Escrow Account.
Agreement
NOW THEREFORE, in consideration of the foregoing, it is hereby
agreed as follows:
1.
Establishment of Escrow
Account. Prior to Issuer
initiating the Offering, and prior to the receipt of the first
investor funds, Escrow Agent shall establish an account (the
“Escrow Account”) at an FDIC insured US bank (the
“Bank”). The Escrow Account shall be a segregated,
deposit account of Escrow Agent at the Bank. All parties agree to
maintain the Escrow Account and escrowed funds in a manner that is
compliant with banking and securities
regulations.
2.
Escrow Period.
The Escrow Period shall begin with the
commencement of the Offering and shall terminate in whole or in
part upon the earlier to occur of the
following:
a.
The
date upon which the minimum number of securities required to be
sold are sold (the “Minimum”) in bona fide transactions
that are fully paid for with cleared funds, which is defined to
occur when Escrow Agent has received gross proceeds of at least
Minimum Amount of the Offering that have cleared in the Escrow
Account and the issuer has triggered a closing on those funds. Even
after a partial close, for min/ax and continuous offerings, Escrow
shall remain open in order to clear investor funds and to perform
other tasks prior to the issuer selling securities to any investor;
or
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b.
December
31, 2018 if the Minimum has not been reached; or
c.
The
date upon which a determination is made by Issuer and/or their
authorized representatives, including any lead broker or placement
agent, to terminate the Offering prior to closing.
d.
Escrow
Agent’s exercise of the termination rights specified in
Section 9.
During
the Escrow Period, the parties agree that (i) the Escrow Account
and escrowed funds will be held for the benefit of the Subscribers,
and that (ii) Issuer is not entitled to any funds received into
escrow, and that no amounts deposited into the Escrow Account shall
become the property of Issuer or any other entity, or be subject to
any debts, liens or encumbrances of any kind of Issuer or any other
entity, until the contingency has been satisfied by the sale of the
Minimum of such Securities to such investors in bona fide
transactions that are fully paid for, in accordance with Regulation
D and as specified in the offering documents. Even after a sale of
securities to investors, the Issuer may elect to continue to leave
funds in the Escrow Account in order to protect investors as
needed.
In
addition, Issuer and Escrow Agent acknowledge that the total funds
raised cannot exceed the Maximum Amount of the Offering permitted
by the Offering Memorandum. Issuer represents that no funds have
yet been raised for Bitzumi and that all funds to be raised for
Bitzumi will be deposited in the Escrow Account established by
Escrow Agent.
3.
Deposits into the Escrow
Account. All Subscribers will
be directed by the Issuer to transmit their data and funds, via
Escrow Agent’s technology systems, directly to the Escrow
Agent as the “qualified third party” that has agreed to
hold the funds for the benefit of investors and Issuer. All
Subscribers will transfer funds directly to Escrow Agent for
deposit into the Escrow Account. Escrow Agent shall process all
Escrow Amounts for collection through the banking system and shall
maintain an accounting of each deposit posted to its ledger, which
also sets forth, among other things, each Subscriber’s name
and address, the quantity of Securities purchased, and the amount
paid. All monies so deposited in the Escrow Account and which have
cleared the banking system are hereinafter referred to as the
"Escrow Amount." Issuer shall promptly, concurrent with any new or
modified subscription, provide Escrow Agent with a copy of the
Subscriber’s subscription and other information as may be
reasonably requested by Escrow Agent in the performance of their
duties under this Agreement. Escrow Agent is under no duty or
responsibility to enforce collection of any funds delivered to it
hereunder. Issuer shall assist Escrow Agent with clearing any and
all AML and ACH exceptions.
Bitzumi
has chosen not to accept checks in this offering. If Escrow Agent
does receive an investor check, the check will be promptly returned
to the investor.
Funds
Hold — clearing, settlement and risk management policy: All
parties agree that funds are considered “cleared” as
follows:
*
Wires — 24 hours after receipt of funds.
*
ACH — As transaction must clear 10 days after receipt of
funds,, and as Federal regulations provide investors with 60 days
to recall funds, for risk reduction and protection the Escrow Agent
will agree to release, starting 10 calendar days after receipt and
so long as the offering is closed, the greater of 94% of funds or
gross funds less ACH deposits still at risk of recall. Of course,
regardless of this operating policy, Issuer remains liable to
immediately and without protestation or delay return to Prime Trust
any funds recalled pursuant to Federal regulations.
Escrow
Agent reserves the right to deny, suspend or terminate
participation in the Escrow Account of any Subscriber to the extent
Escrow Agent in its sole and absolute discretion deems it advisable
or necessary to comply with applicable laws or to eliminate
practices that are not consistent with laws, rules, regulations or
best practices.
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4.
Disbursements from the Escrow
Account. In the event Escrow
Agent does not receive the Minimum prior to the termination of the
Escrow Period, Escrow Agent shall terminate Escrow and make a full
and prompt return of cleared funds so that refunds are made to each
Subscriber of their principal amounts.
In
the event Escrow Agent receives cleared funds for at least the
Minimum prior to the termination of the Escrow Period, and for any
point thereafter and Escrow Agent receives a written instruction
from Issuer (generally via notification in the API or web
dashboard), Escrow Agent shall, pursuant to those instructions,
move funds to a Prime Trust Business custodial account in the name
of Issuer, the agreement for which is hereby incorporated into this
Agreement by reference and will be considered duly signed upon
execution of this Agreement, to perform cash management and
reconciliation on behalf of Issuer and for Issuers wholly owned
funds, to make any investments as directed by Issuer, as well as to
make disbursements if and when requested. Issuer acknowledges that
there is a 24 hour (one business day) processing time once a
request has been received to break Escrow or otherwise move funds
into Issuers Prime Trust custodial account.
Issuer
hereby irrevocably authorizes Prime Trust to deduct any fees owed
to it, as well as to any third parties (and remit funds to such
parties) from the Issuers wholly owned gross funds in the custodial
account, if and when due. Furthermore, Issuer directs Escrow Agent
to accept instructions regarding fees from any registered
securities broker in the syndicate, if any.
5.
Collection Procedure.
Escrow Agent is hereby authorized,
upon receipt of Subscriber funds, to promptly deposit them in the
Escrow Account. Any Subscriber funds which fail to clear or are
subsequently reversed, including but not limited to ACH chargebacks
and wire recalls, shall be debited to the Escrow Account, with such
debits reflected on the Escrow ledger accessible via Escrow Agents
API or dashboard technology. Any and all escrow fees paid by
Issuer, including those for funds receipt and processing are
non-refundable, regardless of whether ultimately cleared, failed,
rescinded, returned or recalled. In the event of any Subscriber
refunds, returns or recalls after funds have already been remitted
to Issuer, then Issuer hereby irrevocably agrees to immediately and
without delay or dispute send equivalent funds to Escrow Agent to
cover the refund, return or recall. If Issuer has any dispute or
disagreement with its Subscriber then that is separate and apart
from this Agreement and Issuer will address such situation directly
with said Subscriber, including taking whatever actions Issuer
determines appropriate, but Issuer shall regardless remit funds to
Escrow Agent and not involve Escrow Agent in any such
disputes.
6.
Investment of Escrow
Amount. No interest shall be
paid to Issuer or Subscribers on balances in the Escrow Account or
in Issuers custodial account.
7.
Escrow Administration Fees,
Compensation of Prime Trust. Escrow Agent is entitled to escrow administration
fees from Issuer as set forth in Schedule A.
Issuer
agrees without exception that it is liable to Escrow Agent to pay
and agrees to pay Escrow Agent, even under circumstances where
Issuer has entered an agreement that said fees are to be paid by
another party. All fees are charged immediately upon receipt of
this Agreement and then immediately as they are incurred in Escrow
Agents performance hereunder, and are not contingent in any way on
the success or failure of the Offering. Furthermore, Escrow Agent
is exclusively entitled to retain as part of its compensation any
and all investment interest, gains and other income earned pursuant
to item 6 above. No fees, charges or expense reimbursements of
Escrow Agent are reimbursable, and are not subject to pro-rata
analysis. All fees and charges, if not paid by a representative of
Issuer (e.g. funding platform, lead syndicate broker, etc.), may be
made via either Issuers credit card or ACH information on file with
Escrow Agent. Escrow Agent may also collect its fee(s), at its
option, from any custodial funds due to Issuer. It is acknowledged
and agreed that no fees, reimbursement for costs and expenses,
indemnification for any damages incurred by Issuer or Escrow Agent
shall be paid out of or chargeable to the investor funds on deposit
in the Escrow Account.
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8.
Representations and
Warranties. The Issuer
covenants and makes the following representations and warranties to
Escrow Agent:
a.
It
is duly organized, validly existing, and in good standing under the
laws of the state of its incorporation or organization, and has
full power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
b.
This
Agreement has been duly approved by all necessary actions,
including any necessary shareholder or membership approval, has
been executed by its duly authorized officers, and constitutes its
valid and binding agreement enforceable in accordance with its
terms.
c.
The
execution, delivery, and performance of this Agreement is in
accordance with the agreements related to the Offering and will not
violate, conflict with, or cause a default under its articles of
incorporation, bylaws, management agreement or other organizational
document, as applicable, any applicable law, rule or regulation,
any court order or administrative ruling or decree to which it is a
party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement, including the
agreements related to the Offering, to which it is a party or any
of its property is subject.
d.
The
Offering shall contain a statement that Escrow Agent has not
investigated the desirability or advisability of investment in the
Securities nor approved, endorsed or passed upon the merits of
purchasing the Securities; and the name of Escrow Agent has not and
shall not be used in any manner in connection with the Offering of
the Securities other than to state that Escrow Agent has agreed to
serve as escrow agent for the limited purposes set forth in this
Agreement.
e.
No
party other than the parties hereto has, or shall have, any lien,
claim or security interest in the Escrow Funds or any part thereof.
No financing statement under the Uniform Commercial Code is on file
in any jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Funds or any part
thereof.
f.
It
possesses such valid and current licenses, certificates,
authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct its
respective businesses, and it has not received any notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such license, certificate, authorization
or permit.
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g.
Its
business activities are in no way related to Cannabis, gambling,
pornography, or firearms.
h.
The
Offering complies in all material respects with the Act and all
applicable laws, rules and regulations.
All
of its representations and warranties contained herein are true and
complete as of the date hereof and will be true and complete at the
time of any disbursement of Escrow Funds.
9.
Term and Termination.
This Agreement will remain in full
force during the Escrow Period and shall terminate upon the
following:
a.
As
set forth in Section 2.
b.
Termination
for Convenience. Any party may terminate this Agreement at any time
for any reason by giving at least thirty (30) days’ written
notice.
c.
Escrow
Agent’s Resignation. Escrow Agent may unilaterally resign by
giving written notice to Issuer, whereupon Issuer will immediately
appoint a successor escrow agent. Without limiting the generality
of the foregoing, Escrow Agent may terminate this Agreement and
thereby unilaterally resign under the circumstances specified in
Section 14. Until a successor escrow agent accepts appointment or
until another disposition of the subject matter has been agreed
upon by the parties, following such resignation notice, Escrow
Agent shall be discharged of all of its duties hereunder save to
keep the subject matter whole.
Even
after this Agreement is terminated, certain provisions will remain
in effect, including but not limited to items 3, 4, 5, 10, 11, 12,
14, and 15 of this Agreement. Escrow Agent shall be compensated for
the services rendered as of the date of the termination or
removal.
10.
Binding Arbitration, Applicable
Law, Venue, and Attorney’s Fees. This Agreement is governed by, and will be
interpreted and enforced in accordance with the laws of the State
of Nevada, as applicable, without regard to principles of conflict
of laws. Any claim or dispute arising under this Agreement may only
be brought in arbitration, pursuant to the rules of the American
Arbitration Association, with venue in Clark County, Nevada. The
parties consent to this method of dispute resolution, as well as
jurisdiction, and consent to this being a convenient forum for any
such claim or dispute and waives any right it may have to object to
either the method or jurisdiction for such claim or dispute.
Furthermore, the prevailing party shall be entitled to recover
damages plus reasonable attorney’s fees and costs and the
decision of the arbitrator shall be final, binding and enforceable
in any court.
11.
Limited Capacity of Escrow
Agent. This Agreement expressly
and exclusively sets forth the duties of Escrow Agent with respect
to any and all matters pertinent hereto, and no implied duties or
obligations shall be read into this Agreement against Escrow Agent.
Escrow Agent acts hereunder as an escrow agent only and is not
associated, affiliated, or involved in the business decisions or
business activities of Issuer, Portal, or Subscriber. Escrow Agent
is not responsible or liable in any manner whatsoever for the
sufficiency, correctness, genuineness, or validity of the subject
matter of this Agreement or any part thereof, or for the form of
execution thereof, or for the identity or authority of any person
executing or depositing such subject matter. Escrow Agent shall be
under no duty to investigate or inquire as to the validity or
accuracy of any document, agreement, instruction, or request
furnished to it hereunder, including, without limitation, the
authority or the identity of any signer thereof, believed by it to
be genuine, and Escrow Agent may rely and act upon, and shall not
be liable for acting or not acting upon, any such document,
agreement, instruction, or request. Escrow Agent shall in no way be
responsible for notifying, nor shall it be responsible to notify,
any party thereto or any other party interested in this Agreement
of any payment required or maturity occurring under this Agreement
or under the terms of any instrument deposited herewith. Escrow
Agent’s entire liability and exclusive remedy in any cause of
action based on contract, tort, or otherwise in connection with any
services furnished pursuant to this Agreement shall be limited to
the total fees paid to Escrow Agent by Issuer.
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12.
Indemnity. Issuer agrees to defend, indemnify and hold Escrow
Agent and its related entities, directors, employees, service
providers, advertisers, affiliates, officers, agents, and partners
and third-party service providers (collectively “Escrow Agent
Indemnified Parties”) harmless from and against any loss,
liability, claim, or demand, including attorney’s fees
(collectively “Expenses”), made by any third party due
to or arising out of (i) this Agreement or a breach of any
provision in this Agreement, or (ii) any change in regulation or
law, state or federal, and the enforcement or prosecution of such
as such authorities may apply to or against Issuer. This indemnity
shall include, but is not limited to, all Expenses incurred in
conjunction with any interpleader that Escrow Agent may enter into
regarding this Agreement and/or third-party subpoena or discovery
process that may be directed to Escrow Agent Indemnified Parties.
It shall also include any action(s) by a governmental or trade
association authority seeking to impose criminal or civil sanctions
on any Escrow Agent Indemnified Parties based on a connection or
alleged connection between this Agreement and Issuers business
and/or associated persons. These defense, indemnification and hold
harmless obligations will survive termination of this
Agreement.
Escrow
Agent reserves the right to control the defense of any such claim
or action and all negotiations for settlement or compromise, and to
select or approve defense counsel, and Issuer agrees to fully
cooperate with Escrow Agent in the defense of any such claim,
action, settlement, or compromise negotiations.
13.
Entire Agreement, Severability
and Force Majeure. This
Agreement contains the entire agreement between Issuer and Escrow
Agent regarding the Escrow Account. If any provision of this
Agreement is held invalid, the remainder of this Agreement shall
continue in full force and effect. Furthermore, no party shall be
responsible for any failure to perform due to acts beyond its
reasonable control, including acts of God, terrorism, shortage of
supply, labor difficulties (including strikes), war, civil unrest,
fire, floods, electrical outages, equipment or transmission
failures, internet interruptions, vendor failures (including
information technology providers), or other similar
causes.
14.
Changes. Escrow Agent may, at its sole discretion, comply
with any new, changed, or reinterpreted regulatory or legal rules,
laws or regulations, law enforcement or prosecution policies, and
any interpretations of any of the foregoing, and without necessity
of notice, Escrow Agent may (i) modify either this Agreement or the
Escrow Account, or both, to comply with or conform to such changes
or interpretations or (ii) terminate this Agreement or the Escrow
Account or both if, in the sole and absolute discretion of Escrow
Agent, changes in law enforcement or prosecution policies (or
enactment or issuance of new laws or regulations) applicable to the
Issuer might expose Escrow Agent to a risk of criminal or civil
prosecution, and/or of governmental or regulatory sanctions or
forfeitures if Escrow Agent were to continue its performance under
this Agreement. Furthermore, all parties agree that this Agreement
shall continue in full force and be valid, unchanged and binding
upon any successors of Escrow Agent. Changes to this Agreement will
be sent to Issuer via email.
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15.
Waivers. No waiver by any party to this Agreement of any
condition or breach of any provision of this Agreement will be
effective unless in writing. No waiver by any party of any such
condition or breach, in any one instance, will be deemed to be a
further or continuing waiver of any such condition or breach or a
waiver of any other condition or breach of any other provision
contained in this Agreement.
16.
Notices. Any notice to Escrow Agent is to be sent to
escrow@primetrust.com.
Any notices to Issuer will be to
scohen@icofund.com.
Any
party may change their notice or email address giving notice
thereof in accordance with this Paragraph. All notices hereunder
shall be deemed given: (1) if served in person, when served; (2) if
sent by facsimile or email, on the date of transmission if before
6:00 p.m. Eastern time, provided that a hard copy of such notice is
also sent by either a nationally recognized overnight courier or by
U.S. Mail, first class; (3) if by overnight courier, by a
nationally recognized courier which has a system of providing
evidence of delivery, on the first business day after delivery to
the courier; or (4) if by U.S. Mail, on the third day after deposit
in the mail, postage prepaid, certified mail, return receipt
requested. Furthermore, all parties hereby agree that all current
and future notices, confirmations and other communications
regarding this Agreement specifically, and future communications in
general between the parties, may be made by email, sent to the
email address of record as set forth above or as otherwise from
time to time changed or updated in Prime Trusts systems, directly
by the party changing such information, without necessity of
confirmation of receipt, delivery or reading, and such form of
electronic communication is sufficient for all matters regarding
the relationship between the parties. If any such
electronically-sent communication fails to be received for any
reason, including but not limited to such communications being
diverted to the recipients’ spam filters by the recipients
email service provider or technology, or due to a recipients’
change of address, or due to technology issues by the
recipients’ service provider, the parties agree that the
burden of such failure to receive is on the recipient and not the
sender, and that the sender is under no obligation to resend
communications via any other means, including but not limited to
postal service or overnight courier, and that such communications
shall for all purposes, including legal and regulatory, be deemed
to have been delivered and received. No physical, paper documents
will be sent to Issuer or Portal, including statements, and if such
documents are desired then that party agrees to directly and
personally print, at their own expense, the electronically-sent
communication(s) or dashboard reports and maintaining such physical
records in any manner or form that they desire. Your Consent is
Hereby Given: By signing this Agreement electronically, you
explicitly agree to this Agreement and to receive documents
electronically, including your copy of this signed Agreement as
well as ongoing disclosures, communications and
notices.
17.
Language. It is expressly agreed that it is the will of all
parties, including Escrow Agent and Issuer that this Agreement and
all related pages, forms, emails, alerts and other communications
have been drawn up and/or presented in English.
18.
Counterparts; Facsimile; Email;
Signatures; Electronic Signatures. This Agreement may be executed in counterparts,
each of which will be deemed an original and all of which, taken
together, will constitute one and the same instrument, binding on
each signatory thereto. This Agreement may be executed by
signatures, electronically or otherwise, and delivered by email in
..pdf format, which shall be binding upon each signing party to the
same extent as an original executed version
hereof.
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19.
Substitute Form
W–9: Taxpayer
Identification Number certification and backup withholding
statement.
PRIVACY
ACT STATEMENT: Section 6109 of the Internal Revenue Code requires
you (Issuer) to provide us with your correct Taxpayer
Identification Number (TIN).
|
Name of
Business:
|
Bitzumi Inc.
|
|
Tax
Identification Number:
|
82186815
|
Under
penalty of perjury, by signing this Agreement below I certify that:
1) the number shown above is our correct business taxpayer
identification number; 2) our business is not subject to backup
withholding unless we have informed Prime Trust in writing to the
contrary; and 3) our Company is a U.S. domiciled
business.
Consent is Hereby Given: By
signing this Agreement electronically, Issuer explicitly agrees to
receive documents electronically including its copy of this signed
Agreement and the Business Custodial Agreement as well as ongoing
disclosures, communications, and notices.
Agreed as of the date set forth above by and between:
Bitzumi, Inc.
By:__________________
Name:__________________
Title:__________________
Prime Trust, LLC
By:__________________
Name:__________________
Title:__________________
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