Exhibit 10.9

 

ESCROW DEPOSIT AGREEMENT

 

This ESCROW DEPOSIT AGREEMENT (this “Agreement”) dated as of this 9th day of
June 2015 by and among REALCO INTERNATIONAL, INC., a Nevada corporation (the
“Company”), having an address at 154 Thames Street, Newport, Rhode Island 02840,
[______] (the “Placement Agent”), having an address at 1900 Avenue of the Stars,
Suite 310, Los Angeles, California 90067 and SIGNATURE BANK (the “Escrow
Agent”), a New York State chartered bank, having an office at 261 Madison
Avenue, New York, New York 10016. All capitalized terms not herein defined shall
have the meaning ascribed to them in that certain Confidential Private Placement
Memorandum, dated June 10, 2015, as amended or supplemented from time-to-time,
including all attachments, schedules and exhibits thereto (the “Memorandum”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the terms of the Memorandum, the Company desires to sell
(the “Offering”) a minimum of $2,500,000 (the “Minimum Amount”) of Units (the
“Units”) and a maximum of $3,000,000 of Units at a per Unit price of $0.60. Each
Unit consists of one share (a “Share”) of common stock, $0.00001 par value per
share (“Common Stock”), and one Common Stock purchase warrant to purchase a
Share at an exercise price of $0.72 per Share; and

 

WHEREAS, unless the Minimum Amount is sold by July 17, 2015 (the “Termination
Date”), the Offering shall terminate and all funds shall be returned to the
subscribers in the Offering; provided, however, that, in the event that the
Minimum Amount is not sold on or before the Termination Date, the Termination
Date may be extended by the Company and the Placement Agent for an additional 30
calendar days (the “Final Termination Date”); and

 

WHEREAS, the Company and Placement Agent desire to establish an escrow account
with the Escrow Agent into which the Company and Placement Agent shall instruct
subscribers introduced to the Company by the Placement Agent (the “Subscribers”)
to deliver funds by wire transfer to the order of “Realco International, Inc.,
Signature Bank as Escrow Agent” pursuant to the instructions herein and Escrow
Agent is willing to accept said funds in accordance with the terms hereinafter
set forth; and

 

WHEREAS, the Company, as issuer, and Placement Agent, as an introducing
broker-dealer, each, severally and not jointly, represents and warrants to the
Escrow Agent that it will comply with all of their respective obligations under
applicable state and federal securities laws and regulations with respect to
sale of the Offering; and

 

WHEREAS, the Placement Agent represents and warrants to the Escrow Agent that it
has performed due diligence on all Subscribers and complied with all applicable
state and federal securities laws and regulations with respect to sale of the
Offering; and

 

WHEREAS, the Company and Placement Agent each, severally and not jointly,
represents and warrants to the Escrow Agent that it has not stated to any
individual or entity that the Escrow Agent’s duties will include anything other
than those duties stated in this Agreement; and

 

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WHEREAS, the Company and Placement Agent each, severally and not jointly,
represents and warrants to the Escrow Agent that a copy of each document that
has been delivered to Subscribers and third parties that include Escrow Agent’s
name and duties, has been attached hereto as Schedule I.

 

NOW, THEREFORE, IT IS AGREED as follows:

 

1. Delivery of Escrow Funds.

 

(a) Placement Agent and the Company shall instruct Subscribers to deliver to
Escrow Agent funds by wire transfer to Signature Bank, 261 Madison Avenue, New
York, New York 10016, ABA No. 026013576 (Swift Code: SIGNUS33) for credit to
Realco International, Inc., Signature Bank as Escrow Agent, Account No.
1502567264, in each case, with the name and address of the individual or entity
making payment. In the event that any Subscriber’s address is not provided to
Escrow Agent by the Subscriber, then Placement Agent and/or the Company agree to
promptly provide Escrow Agent with such information in writing. The funds shall
be deposited into a non interest-bearing account at Signature Bank entitled
“Realco International, Inc., Signature Bank as Escrow Agent” (the “Escrow
Account”).

 

(b) The collected funds deposited into the Escrow Account are referred to as the
“Escrow Funds.”

 

(c) The Escrow Agent shall have no duty or responsibility to enforce the
collection or demand payment of any funds deposited into the Escrow Account.

 

2. Release of Escrow Funds. The Escrow Funds shall be paid by the Escrow Agent
in accordance with the following:

 

(a) In the event that the Company and Placement Agent advise the Escrow Agent in
writing that the Offering has been terminated (the “Termination Notice”), the
Escrow Agent shall promptly return the funds paid by each Subscriber to said
Subscriber without interest or offset.

 

(b) If prior to 3:00 p.m. (New York City time) on the Termination Date, the
Escrow Agent receives written notice, in the form of Exhibit B, attached hereto
and made a part hereof, and signed by the Company and Placement Agent, stating
that the Termination Date has been extended to the Final Termination Date
(“Extension Notice”), then the Termination Date shall be so extended.

 

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(c) Provided that the Escrow Agent does not receive the Termination Notice in
accordance with paragraph 2(a), and there is the Minimum Amount deposited in the
Escrow Account on or prior to the later of the Termination Date or the date
stated in an Extension Notice, if any, received by the Escrow Agent in
accordance with paragraph 2(b) above, the Escrow Agent shall, upon receipt of
written instructions, in the form of Exhibit A, attached hereto and made a part
hereof, or in a form and substance satisfactory to the Escrow Agent, received
from the Company and Placement Agent, pay the Escrow Funds in accordance with
such written instructions, which instructions shall be limited to payments to
the Placement Agent and service providers in the Offering, payment to the Escrow
Agent and payment of the balance of funds to the Company. Such payment or
payments shall be made by wire transfer on the same day as receipt of such
written instructions or, if the day of receipt of such instructions is not a
Business Day, on the first Business Day following the day of receipt of such
instructions. Such instructions must be received by the Escrow Agent no later
than 3:00 p.m. (New York City time) on a Business Day for the Escrow Agent to
process such instructions on that Business Day.

 

(d) If by 3:00 p.m. (New York City time) on the Termination Date or the Final
Termination Date, as applicable, the total amount of the Escrow Funds is less
than the Minimum Amount, then the Escrow Agent shall promptly return the Escrow
Funds to the Subscribers without interest or offset. The Escrow Funds returned
to each Subscriber shall be free and clear of any and all claims of the Escrow
Agent.

 

(e) The Escrow Agent shall not be required to pay any uncollected funds or any
funds that are not available for withdrawal.

 

(f) If the Termination Date, the Final Termination Date or any date that is a
deadline under this Agreement for giving the Escrow Agent notice or instructions
or for the Escrow Agent to take action is not a Business Day, then such date
shall be the Business Day that immediately precedes that date. A “Business Day”
is any day other than a Saturday, Sunday or a Bank holiday.

 

3. Acceptance by Escrow Agent. The Escrow Agent hereby accepts and agrees to
perform its obligations hereunder, provided that:

 

(a) The Escrow Agent may act in reliance upon any signature believed by it to be
genuine, and may assume that any person who has been designated by Placement
Agent or the Company to give any written instructions, notice or receipt, or
make any statements in connection with the provisions hereof has been duly
authorized to do so. Escrow Agent shall have no duty to make inquiry as to the
genuineness, accuracy or validity of any statements or instructions or any
signatures on statements or instructions. The names and true signatures of each
individual authorized to act singly on behalf of the Company and Placement Agent
are stated in Schedule II, which is attached hereto and made a part hereof. The
Company and Placement Agent may each remove or add one or more of its authorized
signers stated on Schedule II by notifying the Escrow Agent of such change in
accordance with this Agreement, which notice shall include the true signature
for any new authorized signatories.

 

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(b) The Escrow Agent may act relative hereto in reliance upon advice of counsel
in reference to any matter connected herewith. The Escrow Agent shall not be
liable for any mistake of fact or error of judgment or law, or for any acts or
omissions of any kind, unless caused by its willful misconduct or gross
negligence.

 

(c) Placement Agent and the Company agree to indemnify and hold the Escrow Agent
harmless from and against any and all claims, losses, costs, liabilities,
damages, suits, demands, judgments or expenses (including but not limited to
reasonable attorney’s fees) claimed against or incurred by Escrow Agent arising
out of or related, directly or indirectly, to this Escrow Agreement unless
caused by the Escrow Agent’s gross negligence or willful misconduct.

 

(d) In the event that the Escrow Agent shall be uncertain as to its duties or
rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking
any action other than to keep safely the Escrow Funds until it shall be directed
otherwise by a court of competent jurisdiction, or (ii) deliver the Escrow Funds
to a court of competent jurisdiction.

 

(e) The Escrow Agent shall have no duty, responsibility or obligation to
interpret or enforce the terms of any agreement other than Escrow Agent’s
obligations hereunder, and the Escrow Agent shall not be required to make a
request that any monies be delivered to the Escrow Account, it being agreed that
the sole duties and responsibilities of the Escrow Agent shall be to the extent
not prohibited by applicable law (i) to accept checks or other instruments for
the payment of money and wire transfers delivered to the Escrow Agent for the
Escrow Account and deposit said checks and wire transfers into the non-interest
bearing Escrow Account, and (ii) to disburse or refrain from disbursing the
Escrow Funds as stated above, provided that the checks received by the Escrow
Agent have been collected and are available for withdrawal.

 

4. Escrow Account Statements and Information. The Escrow Agent agrees to send to
the Company and/or the Placement Agent a copy of the Escrow Account periodic
statement, upon request in accordance with the Escrow Agent’s regular practices
for providing account statements to its non-escrow clients and to also provide
the Company and/or Placement Agent, or their designee, upon request other
deposit account information, including Escrow Account balances, by telephone or
by computer communication, to the extent practicable. The Company and Placement
Agent agree to complete and sign all forms or agreements required by the Escrow
Agent for that purpose. The Company and Placement Agent each consent to the
Escrow Agent’s release of such Escrow Account information to any of the
individuals designated by Company or Placement Agent, which designation has been
signed in accordance with paragraph 3(a) by any of the persons in Schedule II. 
Further, the Company and Placement Agent have an option to receive e-mail
notification of incoming and outgoing wire transfers. If this e-mail
notification service is requested and subsequently approved by the Escrow Agent,
the Company and Placement Agent agrees to provide a valid e-mail address and
other information necessary to set-up this service and sign all forms and
agreements required for such service. The Company and Placement Agent each
consent to the Escrow Agent’s release of wire transfer information to the
designated e-mail address(es). The Escrow Agent’s liability for failure to
comply with this section shall not exceed the cost of providing such
information.

 

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5. Resignation and Termination of the Escrow Agent. The Escrow Agent may resign
at any time by giving 30 days’ prior written notice of such resignation to the
Placement Agent and the Company. Upon providing such notice, the Escrow Agent
shall have no further obligation hereunder except to hold as depository the
Escrow Funds that it receives until the end of such 30-day period. In such
event, the Escrow Agent shall not take any action, other than receiving and
depositing Subscribers checks and wire transfers in accordance with this
Agreement, until the Company has designated a banking corporation, trust
company, attorney or other person as successor. Upon receipt of such written
designation signed by Placement Agent and the Company, the Escrow Agent shall
promptly deliver the Escrow Funds to such successor and shall thereafter have no
further obligations hereunder. If such instructions are not received within 30
days following the effective date of such resignation, then the Escrow Agent may
deposit the Escrow Funds held by it pursuant to this Agreement with a clerk of a
court of competent jurisdiction pending the appointment of a successor. In
either case provided for in this paragraph, the Escrow Agent shall be relieved
of all further obligations and released from all liability thereafter arising
with respect to the Escrow Funds.

 

6. Termination. The Company and Placement Agent may terminate the appointment of
the Escrow Agent hereunder upon written notice specifying the date upon which
such termination shall take effect, which date shall be at least 30 days from
the date of such notice. In the event of such termination, the Company and
Placement Agent shall, within 30 days of such notice, appoint a successor escrow
agent and the Escrow Agent shall, upon receipt of written instructions signed by
the Company and Placement Agent, turn over to such successor escrow agent all of
the Escrow Funds; provided, however, that if the Company and Placement Agent
fail to appoint a successor escrow agent within such 30-day period, such
termination notice shall be null and void and the Escrow Agent shall continue to
be bound by all of the provisions hereof. Upon receipt of the Escrow Funds, the
successor escrow agent shall become the escrow agent hereunder and shall be
bound by all of the provisions hereof and the Escrow Agent shall be relieved of
all further obligations and released from all liability thereafter arising with
respect to the Escrow Funds and under this Agreement.

 

7. Investment. All funds received by the Escrow Agent shall be held only in
non-interest bearing bank accounts at Escrow Agent.

 

8. Compensation. Escrow Agent shall be entitled, for the duties to be performed
by it hereunder, to a fee of $4,000, which fee shall be paid by the Company upon
the signing of this Agreement. In addition, the Company shall be obligated to
reimburse Escrow Agent for all fees, costs and expenses incurred or that become
due in connection with this Agreement or the Escrow Account, including
reasonable attorney’s fees. Neither the modification, cancellation, termination
or rescission of this Agreement nor the resignation or termination of the Escrow
Agent shall affect the right of Escrow Agent to retain the amount of any fee
which has been paid, or to be reimbursed or paid any amount which has been
incurred or becomes due, prior to the effective date of any such modification,
cancellation, termination, resignation or rescission. To the extent the Escrow
Agent has incurred any such expenses, or any such fee becomes due, prior to any
closing, the Escrow Agent shall advise the Company and the Company shall direct
all such amounts to be paid directly at any such closing. Escrow Agent shall be
entitled to a fee of $1,000 in the event that this Agreement is amended for any
reason in accordance with Section 10(d) other than an amendment that solely
relates to the extension of the Termination Date.

 

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9. Notices. All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if sent by hand-delivery, by facsimile (followed by first-class
mail), by nationally recognized overnight courier service or by prepaid
registered or certified mail, return receipt requested, to the addresses set
forth below:

 

If to Placement Agent:

 

  [________________________]                      

 

 

If to the Company:

 

  Realco International, Inc.     154 Thames Street     Newport, Rhode Island
02840     Attention: _____________     Facsimile: _____________  

 

 

If to Escrow Agent:

 

  Signature Bank     261 Madison Avenue     New York, New York, 10016    
Attention: Cliff Broder, Group Director and Senior Vice President     Fax: (646)
822-1359  

 

10. General.

 

(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to agreements made and to be
entirely performed within such State, without regard to choice of law principles
and any action brought hereunder shall be brought in the courts of the State of
New York, located in the County of New York. Each party hereto irrevocably
waives any objection on the grounds of venue, forum nonconveniens or any similar
grounds and irrevocably consents to service of process by mail or in any manner
permitted by applicable law and consents to the jurisdiction of said courts.
Each of the parties hereto hereby waives all right to trial by jury in any
action, proceeding or counterclaim arising out of the transactions contemplated
by this Agreement.

 

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(b) This Agreement sets forth the entire agreement and understanding of the
parties with respect to the matters contained herein and supersedes all prior
agreements, arrangements and understandings relating thereto.

 

(c) All of the terms and conditions of this Agreement shall be binding upon, and
inure to the benefit of and be enforceable by, the parties hereto, as well as
their respective successors and assigns.

 

(d) This Agreement may be amended, modified, superseded or canceled, and any of
the terms or conditions hereof may be waived, only by a written instrument
executed by each party hereto or, in the case of a waiver, by the party waiving
compliance. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect its right at a later time to
enforce the same. No waiver of any party of any condition, or of the breach of
any term contained in this Agreement, whether by conduct or otherwise, in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or a waiver of any other
condition or of the breach of any other term of this Agreement. No party may
assign any rights, duties or obligations hereunder unless all other parties have
given their prior written consent.

 

(e) If any provision included in this Agreement proves to be invalid or
unenforceable, it shall not affect the validity of the remaining provisions.

 

(f) This Agreement and any modification or amendment of this Agreement may be
executed in several counterparts or by separate instruments and all of such
counterparts and instruments shall constitute one agreement, binding on all of
the parties hereto.

 

11. Form of Signature. The parties hereto agree to accept a facsimile
transmission copy of their respective actual signatures as evidence of their
actual signatures to this Agreement and any modification or amendment of this
Agreement; provided, however, that each party who produces a facsimile signature
agrees, by the express terms hereof, to place, promptly after transmission of
his or her signature by fax, a true and correct original copy of his or her
signature in overnight mail to the address of the other party.

 

12. No Third-Party Beneficiaries.  This Agreement is solely for the benefit of
the parties and their respective successors and permitted assigns, and no other
person has any right, benefit, priority or interest under or because of the
existence of this Agreement.

 

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first set forth above.

 

REALCO INTERNATIONAL, INC.   [_____________________]               By: /s/ Jay
M. Lasky   By:       Name: Jay M. Lasky     Name:        Title:  CEO     Title:
   

 

 

SIGNATURE BANK

 

By: /s/ Steven Deneff     Name: Steven Deneff     Title: VP               By:
/s/ Cliff Broder     Name: Cliff Broder     Title:   Senior VP  

 

 

 

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Schedule I

 

OFFERING DOCUMENTS

 

 

Confidential Private Placement Memorandum, dated June 10, 2015.

 

 

 

 

 

 

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Schedule II

 

The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by any one of the following on behalf of the Company
and Placement Agent.

 

 

REALCO INTERNATIONAL, INC.

 

  Name   True Signature                Jay M. Lasky    /s/ Jay M. Lasky        
             

 

 

[______________________________]

 

  Name   True Signature                Richard Rappaport                        
     

 

 

 

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Exhibit A

 

FORM OF ESCROW RELEASE NOTICE

 

 

Date: ________ ___, 2015

 

Signature Bank

261 Madison Avenue,

New York, New York 10016

Attention: Cliff Broder, Group Director and Senior Vice President

Fax: (646) 822-1359

 

Dear Mr. Broder:

 

In accordance with the terms of paragraph 2(b) of the Escrow Deposit Agreement,
dated as of June 9, 2015, by and among Realco International, Inc. (the
"Company"), Signature Bank (the "Escrow Agent") and [________________]
("Placement Agent"), the Company and Placement Agent hereby notify the Escrow
Agent that the closing will be held on ______ ___, 2015 for gross proceeds of
$__________________.

 

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions
attached):

 

  : $             : $             : $           Signature Bank (Escrow Fee):  
$4,000  

 

 

 

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Very truly yours,

 

Realco International, Inc.

 

By:     Name:     Title:    

 

 

[_________________]

 

By:     Name:     Title:    

 

 

 

[Signature Page to Realco Escrow Release Notice]

 

 

 

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Exhibit B

 

EXTENSION NOTICE

 

  

Date: __________________

 

 

Signature Bank

261 Madison Avenue,

New York, New York 10016

Attention: Cliff Broder, Group Director and Senior Vice President

Fax: (646) 822-1359

 

Dear Mr. Broder:

 

In accordance with the terms of paragraph 2(b) of an Escrow Deposit Agreement
dated June 9, 2015, by and among Realco International, Inc. (the "Company"),
Signature Bank (the "Escrow Agent") and [________________] ("Placement Agent"),
the Company and Placement Agent hereby notifies the Escrow Agent that the
Termination Date has been extended to __________ __, 2015, the Final Termination
Date.

 

 

 

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Very truly yours,

 

Realco International, Inc.

 

By:     Name:     Title:    

 

 

[_____________]

 

By:     Name:     Title:    

 

 

 

 

[Signature Page to Realco Escrow Extension Notice]

 

 

 

 

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