Stock Escrow Agreement Form - 2003 (Page 3 of 4) in pdf

Stock escrow agreement — continued from previous page

7. Dividends on dissolution or liquidation:

In the event of dissolution of the company, or the partial or complete liquidation of all or substantially all of its assets,

or in the event of bankruptcy or insolvency, the escrowed shares shall not participate in any distribution dividend by

virtue thereof, and the promoters do hereby waive such distribution dividend, until all other issued and

outstanding shares shall have received a distribution dividend at least equal to $

per share.

Thereafter, such escrowed shares may participate on a pro rata basis with all other shares in any further distribution

dividend. This paragraph shall apply equally in the event of a merger or consolidation or sale of assets. The amount

per share may be adjusted in the event of a stock split or reclassification of shares.

8. Stock splits or other reclassifications:

Any shares issued the promoters pursuant to a stock split or reclassification of shares shall be deposited in escrow in

such number as to maintain the percentage of escrowed promotional shares specified in Paragraph 4, and such

deposited shares shall be subject to the terms and conditions of the agreement. Similarly, any and all distributions of

shares or cash, other than from earned surplus and issued by reason of the ownership of the promotional shares, shall

likewise be placed in escrow subject to the terms and conditions of this agreement.

9. Earnings requirement:

All escrowed shares shall be held in escrow until such time as the company has demonstrated net earnings after taxes

for two successive years of at least (enter 5 percent of public offering price)

per share per year,

based on all of the issued and outstanding shares including the escrowed shares. In addition, the company's current

assets shall exceed its current liabilities and its total assets shall exceed its total liabilities. However, this balance sheet

requirement may be waived by the director in unusual or special circumstances.

10. Audited financial statements:

Such earnings and financial conditions shall be demonstrated by the submission to the director of audited financial

statements prepared by an independent certified public accountant or licensed public accountant in conformance with

generally accepted accounting principals, consistently applied. This requirement may be waived by the director in

unusual or special circumstances.

11. Duration and termination; release:

The term of this agreement is seven years; it will expire (date)

, 20

If by such expiration date the conditions for release have not been met, the escrowed shares are to be returned to the

company in the manner described in Paragraph 4, and the escrow agent shall be relieved of all further obligations.

This agreement will terminate automatically if the company ceases to exist and no successor becomes a party to this

agreement. Except as expressly provided herein, the escrow agent shall not release any of the escrowed shares without

the written consent of the director.

12. Inspection of records:

The director may, at any time, inspect the records of the company and may inspect the records of the escrow agent or

promoters, insofar as they relate to this escrow agreement, for the purpose of making any determination.

13. Additional requirements:

All parties to this agreement shall take whatever action as may be required or necessary to implement this agreement,

including issuing additional shares, surrendering shares, depositing additional shares in escrow, and making such

reports and furnishing such information as shall be deemed advisable or necessary.

14. Lien of escrow agents:

The escrow agent has the right to retain and is hereby given a lien upon all documents and other things of value held

by it until all of its compensation, fees, costs and expenses shall have been paid, which the promoter and/or company,

promise and agree to pay upon demand.

Page 3 of 4

440-3438 10/03/COM/WEB)

Stock Escrow Agreement Form - 2003 Page 3

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