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Escrow Agreement

 

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Title:

Escrow Agreement

Entities:

Entropin, Inc.; LaSalle Bank National Association

Date:

2003

Size:

Preview shows 6KB of 28KB total

Price:

$41

ID:

#299912

 

 

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                                ESCROW AGREEMENT



This ESCROW AGREEMENT is made and entered into as of DECEMBER 15, 2003
by and between Entropin, Inc., a Delaware corporation (the "Company"), and
LaSalle Bank National Association, a national banking association, as escrow
agent (the "Escrow Agent").

RECITALS

A. The Company intends to sell shares of Common Stock of the
Company (the "Shares") pursuant to an offering (the "Offering") registered under
the Securities Act of 1933.

B. The Company will not close the Offering until the Company
has received and accepted subscriptions for Shares totaling at least $500,000
(the "Minimum Condition") and the satisfaction of those other conditions
contained in Section 4 hereto. The Offering will terminate on the earliest of
(1) the date on which the Company accepts subscriptions for all unsold Shares
which it intends to sell in the Offering, (2) February 13, 2004, unless the
Minimum Condition has been satisfied and the Company has delivered notice under
Section 4(a) by such date, in which event the Company may extend the Offering
for up to an additional 60 days, or (3) the date the Company elects, in its sole
discretion, to terminate the Offering (the date on which the Offering terminates
being referred to herein as the "Termination Date").

C. The Escrow Agent has agreed to serve as the escrow agent
for the Offering on the terms and conditions contained herein.

AGREEMENTS

In consideration of the recitals and mutual covenants and
agreements set forth herein, the parties hereby covenant and agree as follows:

1. APPOINTMENT. The Company appoints the Escrow Agent as
escrow agent for the purpose of holding the Escrow Funds (as defined below). The
Escrow Agent hereby accepts its appointment and agrees to act as escrow agent
under the terms and conditions contained in this Escrow Agreement.

2. DELIVERY OF FUNDS. The Company agrees that the Company will
deliver to the Escrow Agent, promptly after receipt of any subscriptions for the
Shares, the subscription funds (which shall be equal to the gross offering price
for the Shares subscribed) in the form of a personal, bank, cashier's check or
wire transfer payable to "LaSalle Bank National Association, Escrow Agent, for
Entropin, Inc.," and to provide the Escrow Agent, in writing, with the name,
address and Taxpayer Identification Number of each subscriber and the number of
Shares for which each subscriber has subscribed. The Escrow Agent agrees to

{PAGE}

place any subscription funds so received (the "Escrow Funds") in an account
maintained by the Escrow Agent under the designation "Entropin, Inc." (the
"Escrow Account"). Following the Termination Date and once all of the Escrow
Funds and any interest or earnings accrued thereon have been disbursed pursuant
to this Escrow Agreement, the Escrow Agent shall take all necessary action to
close the Escrow Account.

Unless otherwise specifically directed herein, the Escrow Agent shall
proceed as soon as practicable to collect any checks or other collection items
at any time deposited or received hereunder. All such collections shall be
subject to the usual collection agreement regarding items received by its
commercial banking department for deposit or collection. The Escrow Agent shall
have no duty to (i) notify anyone of any payment or maturity under the terms of
any instrument deposited or received hereunder or (ii) take any legal action to
enforce payment of any check, note or security deposited or received hereunder.
In the event that any funds, including cleared funds, deposited in the Escrow
Account prove uncollectible after the funds represented thereby have been
released by the Escrow Agent pursuant to this Agreement, the Company shall
immediately reimburse the Escrow Agent upon request for the face amount of such
check or checks, together with reasonable and customary charges and expenses
related thereto, and the Escrow Agent shall deliver the returned checks or other
instruments to the Company. The Company acknowledges that its obligation in the
preceding sentence shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent. The Escrow Agent (in its capacity as
escrow agent hereunder) shall have no liability for, or obligation to pay,
interest on any money deposited or received hereunder, except as provided in
Section5. The Escrow Agent will not be required to lend to, or advance, or pay
out of its own funds any sums whatsoever for the account of the Company.

If the Company rejects any subscription for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check to
the rejected subscriber. If the Company rejects any subscription for which the
Escrow Agent has not yet collected funds but has submitted the subscriber's
check for collection, the Escrow Agent shall promptly issue a check in the
amount of the subscriber's check to the rejected subscriber after the Escrow
Agent has cleared such funds. If the Escrow Agent has not yet submitted a
rejected subscriber's check for collection, the Escrow Agent shall promptly
remit the subscriber's check directly to the subscriber.

3. ESCROW. The Escrow Agent agrees to hold the Escrow Funds
received by the Escrow Agent in accordance with Section 2 hereof until the
release of the Escrow Funds pursuant to Section 4 hereof.

4. RELEASE OF THE ESCROW FUNDS. The Escrow Agent shall not
release any part of the Escrow Funds to any party except as provided in this
Section 4.

(a) DISBURSEMENT OF OFFERING PROCEEDS. If the Escrow

 

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